Axon Enterprise, Inc 8-K, filed Nov 5, 2026
Axon Enterprise, Inc. (AXON)
8-K
2026-11-05
For: 2026-11-05
View Original
Added on
November 05, 2026
About this 8-K
Axon Enterprise, Inc filed this 8-K on November 5, 2026.
Axon Enterprise, Inc. announced approximately $1.2 billion investment in Skydio, Inc., expected to increase ownership from approximately 15% to approximately 37% fully diluted. Consideration is expected to be approximately 60% cash, or approximately $720 million, with the remainder in common stock. AI summary
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
________________________________________________________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of principal executive offices, including zip code)
(1-800 ) 978-2737
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 o
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. o
Item 1.01 Entry into a Material Definitive Agreement.
On November 5, 2026, Axon Enterprise, Inc. (“Axon”) announced an incremental minority investment of approximately $1.2 billion in Skydio, Inc., a Delaware corporation (“Skydio”, and such transaction, the “Skydio Investment”), which is expected to increase Axon’s ownership from approximately 15% as of September 30, 2026, to approximately 37% on a fully diluted basis after giving effect to the Skydio Investment. As further described below, the approximately $1.2 billion of consideration is expected to consist of approximately 60% cash, or approximately $720 million, with the remainder to be paid in shares of Axon’s common stock (“Axon Stock”). The final mix of cash and equity is subject to the settlement of the Series G transactions described herein. The initial closing of the Skydio Investment (the “Primary Purchase”) occurred on November 5, 2026 under the Primary Purchase Agreement (as defined below), and Axon expects the remaining transactions comprising the Skydio Investment to close during the fourth quarter of 2026 and first quarter of 2027, subject to customary closing conditions.
Series G Preferred Stock Purchase Agreement
On November 5, 2026, Axon entered into a Series G Preferred Stock Purchase Agreement (the “Primary Purchase Agreement”) with Skydio and closed on the Primary Purchase of 25,000,000 shares of Skydio’s non-voting Series G Preferred Stock, par value $0.00002 per share (the “Series G Preferred Stock”), at a purchase price of $10.19617 per share (the “Per Share Purchase Price”), for an aggregate purchase price of approximately $254.9 million (the “Purchase Price”). The consideration for the Purchase Price consists of a combination of (i) cash in an amount equal to 50% of the Purchase Price and (ii) shares of Axon Stock, valued based on the volume-weighted average price per share of Axon Stock on the Nasdaq Global Select Market for the ten consecutive trading days ending on the trading day immediately preceding two business days prior to the settlement of the Tender Offer (as defined below), in an amount equal to 50% of the Purchase Price (the “Equity Consideration”). The Equity Consideration will be issued to Skydio following settlement of the Tender Offer, expected during the fourth quarter of 2026, and such Axon Stock will be subject to a customary lock-up. In no event will the number of shares of Axon Stock issued as Equity Consideration, together with all other shares of Axon Stock issued or issuable in connection with the Skydio Investment (including pursuant to the Primary Purchase Agreement, the Secondary Purchase Agreement (as defined below), the Tender Offer and the Committed Secondary), exceed 19.99% of the shares of Axon Stock outstanding immediately prior to the Primary Closing (as defined below), and any portion of the Equity Consideration in excess of such cap will instead be paid in cash (the “Issuance Cap”).
The closing of the Primary Purchase (the “Primary Closing”) occurred concurrently with the execution of the Primary Purchase Agreement. In connection with the Primary Closing, Axon, Skydio and certain of Skydio’s stockholders entered into certain ancillary agreements, including an investors’ rights agreement, a right of first refusal and co-sale agreement and a voting agreement.
Within ten business days following the Primary Closing, Axon will commence a tender offer for shares of Series G Preferred Stock, at a price per share equal to the Per Share Purchase Price, to acquire up to an aggregate of 68,451,508 additional shares of Series G Preferred Stock (the “Tender Offer”). Eligible holders of Skydio capital stock will have the right to participate in the Tender Offer, pursuant to which, immediately prior to and conditioned upon the settlement of the Tender Offer, Skydio will exchange the tendering holders’ existing shares of Skydio capital stock for an equivalent number of shares of Series G Preferred Stock on a one-for-one basis and for no additional consideration, after which the tendering holders will sell the resulting shares of Series G Preferred Stock to Axon. The consideration payable to each tendering holder of Skydio preferred stock is a combination of cash and Axon Stock, with the portion paid in Axon Stock not to exceed 60% of any tendering holder’s purchase price and in no event exceeding the Issuance Cap. Tendering holders of Skydio common stock will receive consideration in the Tender Offer of all cash. Axon expects the settlement of the Tender Offer to occur during the fourth quarter of 2026.
Following the settlement of the Tender Offer, Axon will purchase from certain Skydio stockholders (the “Committed Sellers”) an aggregate of 1,548,492 shares of Series G Preferred Stock, at a price per share equal to the Per Share Purchase Price, payable entirely in cash (the “Committed Secondary”). The maximum number of shares that each Committed Seller may sell in the Tender Offer will be reduced by the number of shares to be purchased from such Committed Seller in the Committed Secondary. Axon expects the closing of the Committed Secondary to occur during the first quarter of 2027.
The foregoing description of the Primary Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Primary Purchase Agreement that is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Secondary Stock Purchase and Exchange Agreement
Concurrently with the Primary Closing, Axon entered into a Secondary Stock Purchase and Exchange Agreement (the “Secondary Purchase Agreement”) with Skydio and certain stockholders of Skydio (the “Sellers”), pursuant to which Axon agreed to purchase shares of Series G Preferred Stock from the Sellers at the Per Share Purchase Price with the target of acquiring an aggregate of 120,000,000 shares of Series G Preferred Stock through the Primary Purchase Agreement, the Secondary Purchase Agreement, the Tender Offer, the Committed Secondary and a separate secondary stock purchase and exchange agreement entered into among Axon, Skydio and a Skydio stockholder on August 21, 2026 (the “Secondary Agreement”). Immediately prior to and conditioned upon the closing of the Secondary Purchase Agreement (the “Secondary Closing”), Skydio will exchange the Sellers’ existing shares of Skydio capital stock for an equivalent number of shares of Series G Preferred Stock on a one-for-one basis and for no additional consideration, after which the Sellers will sell the resulting shares of Series G Preferred Stock to Axon.
The consideration payable to each Seller is a combination of cash and Axon Stock, valued based on the volume-weighted average price per share of Axon Stock on the Nasdaq Global Select Market for the ten consecutive trading days ending on the trading day immediately preceding two business days prior to the Secondary Closing, and subject to a customary lock-up. The portion of such consideration paid in Axon Stock is not to exceed 60% of any Seller’s purchase price and in no event is to exceed the Issuance Cap. The Secondary Closing will occur five business days following the settlement of the Tender Offer. In connection with the Secondary Purchase Agreement, Axon has agreed to enter into a registration rights agreement with the Sellers, pursuant to which Axon will provide each Seller with customary resale registration rights with respect to the shares of Axon Stock received by such Seller as part of the portion paid in Axon Stock. Each Skydio stockholder that receives Axon Stock in the Tender Offer will also be entitled to these customary registration rights with respect to the shares of Axon Stock received in the Tender Offer. Axon expects the Secondary Closing to occur during the fourth quarter of 2026.
The foregoing description of the Secondary Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Secondary Purchase Agreement that is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 above with respect to the shares of Axon Stock to be issued pursuant to the Skydio Investment is incorporated into this Item 3.02 by reference, insofar as it relates to the unregistered sales of equity securities.
The shares of Axon Stock will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D promulgated thereunder. Axon is relying, in part, upon representations from each of the Sellers and each tendering holder that, among other things, it is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act, is a sophisticated investor familiar with similar transactions and has adequate information concerning Skydio.
Item 7.01 Regulation FD Disclosure.
A copy of the press release announcing the Skydio Investment is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 7.01 of this Current Report on Form 8-K, including the information contained in Exhibit 99.1, is being furnished to the U.S. Securities and Exchange Commission, and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by a specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d)Exhibits
Exhibit Number | Exhibit Description | |||||||
| 10.1*±+ | ||||||||
| 10.2*±+ | ||||||||
| 99.1** | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
* Filed herewith.
** Furnished herewith.
± Certain exhibits and schedules to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.
± Certain exhibits and schedules to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.
+ Certain confidential portions of this Exhibit were omitted by means of marking such portions [**] because the identified confidential portions are not material.
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.
| Dated: November 5, 2026 | Axon Enterprise, Inc. | ||||||||||
| By: | /s/ BRITTANY BAGLEY | ||||||||||
| Brittany Bagley Chief Operating Officer and Chief Financial Officer | |||||||||||
DB1/ 173243953.13 SKYDIO, INC. SERIES G PREFERRED STOCK PURCHASE AGREEMENT THIS SERIES G PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”), is made as of November 5, 2026, by and between Skydio, Inc., a Delaware corporation (the “Company”), and Axon Enterprise, Inc., a Delaware corporation (the “Purchaser”). The parties hereby agree as follows: 1. Purchase and Sale of Preferred Stock. 1.1 Sale and Issuance of Series G Preferred Stock. (a) The Company has adopted and filed with the Secretary of State of the State of Delaware on or before the Closing (as defined below) the Eighth Amended and Restated Certificate of Incorporation in the form of Exhibit B attached to this Agreement (the “Restated Certificate”). (b) Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing, and the Company agrees to sell and issue to the Purchaser at the Closing, 25,000,000 shares of the Company’s Series G Preferred Stock, $0.00002 par value per share (the “Series G Preferred Stock”), at a purchase price of $10.19617 per share (the “Series G Original Issue Price”). The aggregate purchase price payable by the Purchaser for such shares of Series G Preferred Stock (the “Purchase Price”) shall be equal to the product of (i) 25,000,000 and (ii) the Series G Original Issue Price, as set forth opposite the Purchaser’s name on Exhibit A. The Purchase Price shall be payable in the form of Cash Consideration and Equity Consideration, as set forth in Subsection 1.2(c). 1.2 Closing; Delivery. (a) The purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures on the date of this Agreement at such time as is mutually agreed upon, orally or in writing, by the Company and the Purchaser (the “Closing”). (b) The shares of Series G Preferred Stock issued to the Purchaser pursuant to this Agreement shall be referred to in this Agreement as the “Shares”. (c) At the Closing, the Company shall deliver to the Purchaser a certificate representing the Shares being purchased by the Purchaser at the Closing against payment of the Purchase Price, which the Purchaser shall pay as follows: (i) an amount equal to 50% of the Purchase Price (the “Cash Consideration”) by wire transfer to a bank account designated by the Company; and (ii) an amount equal to the remainder of the Purchase Price (the “Equity Consideration Amount”) by delivery to the Company (registered in the name of the Company), on the Equity Consideration Delivery Date (as defined below) and in accordance with Subsection 1.2(e), of that number of shares of Purchaser’s common stock (“Purchaser Stock”) equal to the quotient obtained by dividing (x) the Equity Consideration Amount by (y)
the Reference Price, rounded down to the nearest whole share (the shares of Purchaser Stock so delivered, the “Equity Consideration”). Notwithstanding the foregoing, in no event shall the number of shares of Purchaser Stock issued as Equity Consideration hereunder, together with all other shares of Purchaser Stock issued or issuable by the Purchaser to the Company or any of the Company’s securityholders in connection with the Purchaser’s acquisition of equity securities of the Company (including pursuant to the Secondary Purchase and Exchange Agreement, any tender offer by the Purchaser for shares of the Company’s capital stock and the Committed Secondary), exceed 19.99% of the shares of Purchaser Stock outstanding immediately prior to the Closing (the “Issuance Cap”); and to the extent the number of shares of Purchaser Stock that would otherwise be deliverable as Equity Consideration would cause the aggregate number of shares of Purchaser Stock so issued to exceed the Issuance Cap, the portion of the Equity Consideration Amount corresponding to such excess shall instead be paid by the Purchaser to the Company in cash by wire transfer of immediately available funds on the Equity Consideration Delivery Date. The Equity Consideration shall be issued in book-entry form registered in the name of the Company, and the Purchaser shall deliver to the Company, at or promptly following the Equity Consideration Delivery Date, a statement or other written confirmation from the Purchaser’s transfer agent evidencing such book-entry issuance. (d) For purposes of this Subsection 1.2: (i) “Reference Price” means the volume-weighted average price per share of Purchaser Stock on the Nasdaq Global Select Market for the ten (10) consecutive trading days ending on (and including) the trading day immediately preceding two (2) Business Days prior to the settlement of the Tender Offer (such end date, the “Reference Date”), as reported by S&P Capital IQ or any other source mutually acceptable to the Company and the Purchaser; (ii) in lieu of any fractional share of Purchaser Stock that would otherwise be deliverable as Equity Consideration, the Purchaser shall pay to the Company an amount in cash (rounded to the nearest whole cent) equal to the product of such fractional share and the Reference Price; and (iii) if, during the measurement period described in clause (i) or between the Reference Date and the Equity Consideration Delivery Date, the outstanding shares of Purchaser Stock are changed into a different number of shares or a different class by reason of any stock split, reverse stock split, stock dividend, subdivision, reclassification, recapitalization, combination or similar transaction, the Reference Price shall be equitably and proportionately adjusted to provide the Company and the Purchaser the same economic effect as contemplated by this Agreement immediately prior to such event. It is the intention of the parties that the Reference Price be identical to the reference price used to determine the number of shares of Purchaser Stock issuable as consideration in the Tender Offer. (e) Notwithstanding anything to the contrary in this Agreement, the Equity Consideration Amount shall be paid, and the Equity Consideration shall be issued and delivered, on a date (the “Equity Consideration Delivery Date”) that is no later than two (2) Business Days after the Reference Price is determined, with the number of shares of Purchaser Stock comprising the Equity Consideration determined in accordance with Subsection 1.2(c). The Purchaser’s obligation to issue and deliver the Equity Consideration (and to pay any cash amounts payable under Subsection 1.2(c) or this Subsection 1.2(e) in respect thereof) is absolute, unconditional and irrevocable from and after the Closing, is not subject to any condition. When issued and delivered on the Equity Consideration Delivery Date, the Equity Consideration will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of all liens and restrictions on transfer (other than restrictions arising under applicable securities law or the
Transaction Agreements), and the representations and warranties of the Purchaser set forth in Section 3 with respect to the Purchaser Stock shall be true and correct as of the Equity Consideration Delivery Date as though made on and as of such date. If the Purchaser declares or pays any dividend or distribution on the Purchaser Stock with a record date on or after the date of the Closing and prior to the Equity Consideration Delivery Date, the Purchaser shall, upon delivery of the Equity Consideration, pay or deliver to the Company the dividends or distributions that would have been payable in respect of the Equity Consideration had it been issued and outstanding as of the date of the Closing. If the Purchaser fails to issue and deliver the Equity Consideration when required by this Subsection 1.2(e), then, in addition to any other remedies available to the Company (including specific performance, which the parties agree is an appropriate remedy), the Company may, at its option, require the Purchaser to pay the Equity Consideration Amount (to the extent not satisfied by delivery of Purchaser Stock) in cash by wire transfer of immediately available funds. On or prior to the Equity Consideration Delivery Date, the column in Exhibit A labeled “Number of Shares of Purchaser Stock” shall be updated by the Company to include the Equity Consideration following the Purchaser’s confirmation (via email being sufficient) of the Equity Consideration to be issued to the Company in accordance with this Agreement. 1.3 Use of Proceeds. The Company shall use the Cash Consideration from the sale of the Shares hereunder for working capital and general corporate purposes. 1.4 Defined Terms Used in this Agreement. In addition to the terms defined above, the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below. (a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one (1) or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person. (b) “Board of Directors” means the board of directors of the Company. (c) “Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of California are authorized or obligated by law to close. (d) “Closing Representations” means the Company’s representations and warranties set forth in Subsections 2.1 (Organization, Good Standing, Corporate Power and Qualification), 2.4 (Authorization), 2.5 (Valid Issuance of Shares) and clauses (a), (b) and (d) and the first sentence of clause (f) of 2.8 (Intellectual Property). (e) “Code” means the Internal Revenue Code of 1986, as amended.
(f) “Company Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any Person listed in the first paragraph of Rule 506(d)(1). (g) “Company Intellectual Property” means all patents, patent applications, registered and unregistered trademarks, trademark applications, registered and unregistered service marks, service mark applications, tradenames, copyrights, trade secrets, domain names, mask works, information and proprietary rights and processes, similar or other intellectual property rights, subject matter of any of the foregoing, tangible embodiments of any of the foregoing, in any and all such cases that are owned or used by the Company in the conduct of the Company’s business as now conducted and as presently proposed to be conducted. (h) “Fundamental Representations” means the Company’s representations and warranties set forth in Subsections 2.1 (Organization, Good Standing, Corporate Power and Qualification), 2.2(a) and (b) (Capitalization), 2.4 (Authorization), 2.5 (Valid Issuance of Shares), clause (i) of the first sentence of 2.9 (Compliance with Other Instruments), and the first sentence of 2.21 (Corporate Documents). (i) “Investors’ Rights Agreement” means the agreement among the Company, the Purchaser and certain other stockholders of the Company, dated as of the date of the Closing, in the form of Exhibit D attached to this Agreement. (j) “Key Employee” means any executive-level officer of the Company. (k) “Knowledge” including the phrase “to the Company’s knowledge” shall mean the actual knowledge (after reasonable investigation) of Adam Bry. (l) “Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company; provided, however, that Material Adverse Effect shall not include any changes or effects resulting from (i) changes in general economic, regulatory, weather or political conditions or changes that affect generally companies in the same or similar industries, (ii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates, (iii) acts of war, armed hostilities or terrorism, or the escalation or worsening thereof, (iv) any changes in applicable laws or accounting rules (including U.S. GAAP (as defined below)), (v) any natural or man-made disaster or acts of God, (vi) the announcement, pendency or completion of the Transactions; (vii) epidemics, pandemics or disease outbreaks (including any escalation or general worsening of any such epidemic, pandemic or disease outbreak), earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world; or (viii) any failure by the Company to meet any internal or published projections, forecasts or revenue or earnings predictions (but not the underlying reason for such failure).
(m) “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity. (n) “Preferred Stock” means, collectively, the shares of Series 1 Preferred Stock, Series Seed Preferred Stock, Series A Preferred Stock, Series B Preferred Stock, Series C-1 Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, and Series G Preferred Stock. (o) “Right of First Refusal and Co-Sale Agreement” means the agreement among the Company, the Purchaser, and certain other stockholders of the Company, dated as of the date of the Closing, in the form of Exhibit E attached to this Agreement. (p) “Secondary Purchase and Exchange Agreement” means that certain Secondary Stock Purchase and Exchange Agreement, dated as of the Closing, by and among the Company, the Purchaser and the Company’s stockholders identified therein, pursuant to which the Purchaser will purchase shares of Series G Preferred Stock from certain of the Company’s stockholders. (q) “Secondary Transaction” means the purchase by the Purchaser of shares of Series G Preferred Stock pursuant to the Secondary Purchase and Exchange Agreement. (r) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. (s) “Series 1 Preferred Stock” means the shares of the Company’s Series 1 Preferred Stock, par value $0.00002 per share. (t) “Series A Preferred Stock” means the shares of the Company’s Series A Preferred Stock, par value $0.00002 per share. (u) “Series B Preferred Stock” means the shares of the Company’s Series B Preferred Stock, par value $0.00002 per share. (v) “Series C Preferred Stock” means the shares of the Company’s Series C Preferred Stock, par value $0.00002 per share. (w) “Series D Preferred Stock” means the shares of the Company’s Series D Preferred Stock, par value $0.00002 per share. (x) “Series E Preferred Stock” means the shares of the Company’s Series E Preferred Stock, par value $0.00002 per share. (y) “Series F Preferred Stock” means the shares of the Company’s Series F Preferred Stock, par value $0.00002 per share. (z) “Series Seed Preferred Stock” means the shares of the Company’s Series Seed Preferred Stock, par value $0.00002 per share.
(aa) “Transactions” means the purchase by the Purchaser, and the sale by the Company or the Company’s stockholders, as applicable, of shares of Series G Preferred Stock under this Agreement, under the Secondary Purchase and Exchange Agreement and in the Committed Secondary. (bb) “Transaction Agreements” means this Agreement, the Investors’ Rights Agreement, the Right of First Refusal and Co-Sale Agreement and the Voting Agreement. (cc) “Voting Agreement” means the agreement among the Company, the Purchaser and certain other stockholders of the Company, dated as of the date of the Closing, in the form of Exhibit F attached to this Agreement. 2. Representations and Warranties of the Company. Except as set forth on the Disclosure Schedule attached as Exhibit C to this Agreement (the “Disclosure Schedule”), which exceptions shall be deemed to be part of the representations and warranties made hereunder, the Company hereby makes the following representations and warranties to the Purchaser. The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 only to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections. 2.1 Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect. 2.2 Capitalization. (a) Upon the filing of the Restated Certificate, the authorized capital of the Company will consist of the shares set forth in this Section 2.2. The number of issued and outstanding shares set forth below is stated as of immediately prior to the Closing: (i) 545,700,000 shares of common stock, $0.00002 par value per share (the “Common Stock”), 76,410,048 shares of which are issued and outstanding. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. (ii) 417,013,810 shares of Preferred Stock, 2,426,779 of which have been designated Series 1 Preferred Stock, all of which are issued and outstanding, 15,345,540 of which have been designated Series Seed Preferred Stock, all of which are issued and outstanding, 26,340,300 of which have been designated Series A Preferred Stock, all of which are issued and outstanding, 27,269,585 of which have been designated Series B Preferred Stock, all of which are issued and outstanding, 7,498,765 of which have been designated Series C-1 Preferred Stock, 6,420,050 of which are issued and outstanding, 50,924,060 of which have been designated Series C Preferred Stock, all of which are issued and outstanding, 54,956,995 of
which have been designated Series D Preferred Stock, all of which are issued and outstanding, 94,878,612 of which have been designated Series E Preferred Stock, 94,847,704 of which are issued and outstanding, 17,373,174 of which have been designated Series F Preferred Stock, 16,562,559 of which are issued and outstanding, and 120,000,000 of which are designated Series G Preferred Stock upon the filing of the Restated Certificate, none of which are issued and outstanding. The rights, privileges and preferences of the Preferred Stock are as stated in the Restated Certificate and as provided by the Delaware General Corporation Law. (b) The Company’s 2014 Equity Incentive Plan, duly adopted by the Board of Directors and approved by the Company stockholders (the “2014 Plan”), has expired in accordance with its terms, and no further awards may be granted thereunder. Under the 2014 Plan, 44,973,050 shares have been issued pursuant to restricted stock purchase agreements and/or the exercise of options and are currently outstanding, options to purchase 68,461,485 shares have been granted and are currently outstanding, and 147,764 shares are subject to outstanding restricted stock units granted pursuant to the 2014 Plan (“RSUs”). Any shares subject to awards granted under the 2014 Plan that are forfeited, cancelled, expire or are otherwise returned may not be reissued under the 2014 Plan and instead may become available for issuance under the 2024 Plan (as defined below) pursuant to the terms of the 2024 Plan (such shares, “Pourover Shares”). The Company has furnished to the Purchaser complete and accurate copies of the 2014 Plan and forms of agreements used thereunder. The Company has reserved 69,492,573 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to its 2024 Equity Incentive Plan duly adopted by the Board of Directors and approved by the Company stockholders (the “2024 Plan”), which number is subject to increase by the number of Pourover Shares that may recycle into the 2024 Plan pursuant to the terms of the 2024 Plan. Of such reserved shares, 1,580,900 shares have been issued pursuant to restricted stock purchase agreements and/or the exercise of options and are currently outstanding, options to purchase 59,525,145 shares have been granted and are currently outstanding, no shares are subject to outstanding RSUs granted pursuant to the 2024 Plan, and 8,386,528 shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the 2024 Plan. The Company has furnished to the Purchaser complete and accurate copies of the 2024 Plan and forms of agreements used thereunder. (c) Except for (A) the conversion privileges of the Preferred Stock, (B) the rights provided in Section 4 of the Investors’ Rights Agreement, and (C) the securities and rights described in Subsection 2.2(b) of this Agreement and Subsection 2.2(c) of the Disclosure Schedule, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock. All outstanding shares of Common Stock and all shares of Common Stock underlying outstanding options are subject to (i) a right of first refusal in favor of the Company upon any proposed transfer (other than transfers for estate planning purposes); and (ii) a lock-up or market standoff agreement of not less than one hundred eighty (180) days following the Company’s initial public offering pursuant to a registration statement filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act.
(d) None of the Company’s stock purchase agreements or stock option documents contains a provision for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such agreement or understanding upon the occurrence of any event or combination of events, including without limitation in the case where the Company’s stock plans are not assumed in an acquisition. The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means. Except as set forth in the Restated Certificate, the Company has no obligation (contingent or otherwise) to purchase or redeem any of its capital stock. (e) The Company has obtained valid waivers of any rights by other parties to purchase any of the Shares covered by this Agreement. 2.3 Subsidiaries. The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement. 2.4 Authorization. All corporate action required to be taken by the Board of Directors and the Company’s stockholders in order to authorize the Company to enter into the Transaction Agreements, and to issue the Shares at the Closing and the Common Stock issuable upon conversion of the Shares, has been taken or will be taken prior to the Closing. All action on the part of the officers of the Company necessary for the execution and delivery of the Transaction Agreements, the performance of all obligations of the Company under the Transaction Agreements to be performed as of the Closing, and the issuance and delivery of the Shares has been taken or will be taken prior to the Closing. The Transaction Agreements, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (iii) to the extent the indemnification provisions contained in the Investors’ Rights Agreement may be limited by applicable federal or state securities laws. 2.5 Valid Issuance of Shares. (a) The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements or any other agreement entered into between the Purchaser and the Company on or around the date hereof, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Purchaser. Assuming the accuracy of the representations of the Purchaser in Section 3 of this Agreement and subject to the filings described in Subsection 2.6 below, the Shares will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Shares has been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated
Certificate, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements or any other agreement entered into between the Purchaser and the Company on or around the date hereof, applicable federal and state securities laws and liens or encumbrances created by or imposed by a Purchaser. Based in part upon the representations of the Purchaser in Section 3 of this Agreement, and subject to Subsection 2.5(b) below, the Common Stock issuable upon conversion of the Shares will be issued in compliance with all applicable federal and state securities laws. (b) No “bad actor” disqualifying event described in Rule 506(d)(1)(i)- (viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Company Covered Person, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3) is applicable. 2.6 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the Transactions, except for (i) the filing of the Restated Certificate, which will be filed as of the Closing, and (ii) filings pursuant to Regulation D of the Securities Act, and/or applicable state securities laws, which have been made or will be made in a timely manner. 2.7 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or, to the Company’s knowledge, investigation pending or to the Company’s knowledge, currently threatened in writing (i) against the Company or any officer, director or Key Employee of the Company arising out of their employment or board relationship with the Company; (ii) to the Company’s knowledge, that questions the validity of the Transaction Agreements or the right of the Company to enter into them, or to consummate the Transactions; or (iii) to the Company’s knowledge, that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor, to the Company’s knowledge, any of its officers, directors or Key Employees is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality (in the case of officers, directors or Key Employees, such as would affect the Company). There is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers. 2.8 Intellectual Property. (a) The Company owns or possesses or believes it can acquire on commercially reasonable terms sufficient legal rights to all Company Intellectual Property without any known conflict with, or infringement of, the rights of others.
(b) To the Company’s knowledge, no product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any intellectual property rights of any other party. (c) Other than with respect to Standard IP Agreements, the Company has not granted any licenses to Company Intellectual Property to a third party, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other Person. “Standard IP Agreements” means: (i) standard end-user license or services agreements for the Company's products and services on substantially the Company's standard forms made available to the Purchaser; (ii) standard license or services agreements for commercially available software products and cloud services non-exclusively licensed to the Company under standard terms; (iii) backup licenses from employees and contractors granted in connection with providing services to the Company; (iv) licenses to Open Source Software; (v) customary nondisclosure agreements entered into by the Company in the ordinary course of business; (vi) nonexclusive feedback licenses and nonexclusive licenses to use trademarks, in each case that are incidental to the subject matter of the applicable agreement in which they are incorporated; and (vii) licenses to a service provider solely for the purpose of allowing such service provider to provide services to the Company, or licenses to the Company solely for the purpose of enabling the Company to provide services to the licensor. (d) The Company has not received any (i) communications alleging that the Company has violated, or by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any other Person or (ii) written claim, demand, notice or other communication, and there is no action, suit or proceeding pending, alleging that the Company has infringed, misappropriated or otherwise violated, or that the conduct of the Company's business infringes, misappropriates or otherwise violates, any intellectual property rights of any other Person, except, in each case, for any such communication, claim, demand, notice, communication, action, suit or proceeding that would not reasonably be expected to result in a material impairment of (I) the Company Intellectual Property, taken as a whole, or (II) the Company's ability to conduct its business. (e) The Company has obtained and possesses valid licenses to use all of the software programs present on the computers and other software-enabled electronic devices that it owns or leases or that it has otherwise provided to its employees for their use in connection with the Company’s business. (f) To the Company’s knowledge, it will not be necessary to use any inventions of any of its employees or consultants (or Persons it currently intends to hire) made prior to their employment by the Company. Each employee and consultant has assigned to the Company all intellectual property rights he or she owns that, with respect to employees, are related to the Company’s business as now conducted and as presently proposed to be conducted and that with respect to both employees and contractors were created in the course of performance of services by such persons for the Company.
(g) Subsection 2.8(g) of the Disclosure Schedule lists all patents, patent applications, registered trademarks, trademark applications, registered service marks, service mark applications, tradenames, and registered copyrights. (h) The Company has not embedded any open source, copyleft or community source code (including but not limited to any libraries or code licensed under any General Public License, Lesser General Public License or similar license arrangement, or other distribution model described by the Open Source Initiative at www.opensource.org) (collectively, “Open Source Software”), in any of its products or services, regardless of whether those products or services are generally available or in development, in a manner that would restrict the ability of the Company to protect its proprietary interests in any such product or service or in any manner that requires, or purports to require (i) any software or other technology embodying Company Intellectual Property (other than the Open Source Software itself) be disclosed or distributed in source code form or be licensed for the purpose of making derivative works; (ii) any restriction on the consideration to be charged for the distribution of any Company Intellectual Property or embodiments thereof; (iii) the creation of any obligation for the Company with respect to Company Intellectual Property owned by the Company, or the grant to any third party of any rights or immunities under Company Intellectual Property owned by the Company; or (iv) any other limitation, restriction or condition on the right of the Company with respect to its use or distribution of any Company Intellectual Property. For purposes of this Subsection 2.8, the Company shall be deemed to have knowledge of a patent right if the Company has actual knowledge of the patent right or would be found to be on notice of such patent right as determined by reference to United States patent laws. 2.9 Compliance with Other Instruments. The Company is not in violation or default (i) of any provisions of its Certificate of Incorporation or Bylaws, (ii) of any instrument, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, (iv) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule, or (v) to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Company, and with respect to clauses (ii) through (iv), the violation of which would have a Material Adverse Effect. The execution, delivery and performance of the Transaction Agreements and the consummation of the Transactions will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement; or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company. 2.10 Agreements; Actions. (a) Except for the Transaction Agreements, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $500,000, (ii) the license of any patent, copyright, trademark or trade
secret to or from the Company other than Standard IP Agreements, or (iii) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other Person that limit the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products. (b) The Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or incurred any other liabilities individually in excess of $500,000, (iii) made any loans or advances to any Person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. For the purposes of (a) and (b) of this Subsection 2.10, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsection. (c) The Company is not a guarantor or indemnitor of any indebtedness of any other Person. 2.11 Certain Transactions. (a) Other than (i) standard employee benefits generally made available to all employees, (ii) standard director and officer indemnification agreements approved by the Board of Directors, and (iii) the purchase of shares of the Company’s capital stock and the issuance of options to purchase shares of Common Stock, in each instance, approved in the written minutes of the Board of Directors (previously provided to the Purchaser or their counsel), there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, consultants or Key Employees, or any Affiliate thereof. (b) The Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business or employee relocation expenses and for other customary employee benefits made generally available to all employees. None of the Company’s directors, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company. 2.12 Rights of Registration and Voting Rights. Except as provided in the Investors’ Rights Agreement, the Company is not under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities. To the Company’s knowledge, except as contemplated in the Voting Agreement and in agreements with the Purchaser, no stockholder of the Company has entered into any agreements with respect to the voting of capital shares of the Company.
2.13 Property. The property and assets that the Company owns are free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets. With respect to the property and assets it leases, the Company is in compliance with such leases and, to its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances other than those of the lessors of such property or assets. The Company does not own any real property. 2.14 Financial Statements. The Company has delivered to the Purchaser its audited financial statements for the fiscal year ended January 31, 2026 and its unaudited financial statements (including balance sheet, income statement and statement of cash flows) as of July 31, 2026 (the “Balance Sheet Date”) and for the six-month period ended on the Balance Sheet Date (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by GAAP. The Financial Statements fairly present in all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments. Except as set forth in the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to the Balance Sheet Date; (ii) obligations under contracts and commitments incurred in the ordinary course of business; and (iii) liabilities and obligations of a type or nature not required under GAAP to be reflected in the Financial Statements, which, in all such cases, individually and in the aggregate would not have a Material Adverse Effect. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP. 2.15 Changes. Since the Balance Sheet Date and through the Closing, there has not been: (a) any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the Financial Statements, except changes in the ordinary course of business that have not caused, in the aggregate, a Material Adverse Effect; (b) any damage, destruction or loss, whether or not covered by insurance, that would have a Material Adverse Effect; (c) any waiver or compromise by the Company of a valuable right or of a material debt owed to it; (d) any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and the satisfaction or discharge of which would not have a Material Adverse Effect; (e) any material change to a material contract or agreement by which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder; (g) any resignation or termination of employment of any officer or Key Employee of the Company; (h) any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, with respect to any of its material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets; (i) any loans or guarantees made by the Company to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business; (j) any declaration, setting aside or payment or other distribution in respect of any of the Company’s capital stock, or any direct or indirect redemption, purchase, or other acquisition of any of such stock by the Company; (k) any sale, assignment or transfer of any Company Intellectual Property that could reasonably be expected to result in a Material Adverse Effect; (l) receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company; (m) to the Company’s knowledge, any other event or condition of any character, other than events affecting the economy or the Company’s industry generally, that could reasonably be expected to result in a Material Adverse Effect; or (n) any arrangement or commitment by the Company to do any of the things described in this Subsection 2.15. 2.16 Employee Matters. (a) To the Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict with the Company’s business. Neither the execution or delivery of the Transaction Agreements, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as now conducted and as presently proposed to be conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated. (b) The Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or
amounts required to be reimbursed to such employees, consultants or independent contractors. The Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification and collective bargaining. The Company has withheld and paid to the appropriate governmental entity or is holding for payment not yet due to such governmental entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing. (c) To the Company’s knowledge, no Key Employee intends to terminate employment with the Company or is otherwise likely to become unavailable to continue as a Key Employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. Except as set forth in Subsection 2.16(c) of the Disclosure Schedule or as required by law, upon termination of the employment of any such employees, no severance or other payments will become due. Except as set forth in Subsection 2.16(c) of the Disclosure Schedule, the Company has no policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services. (d) The Company has not made any representations regarding equity incentives to any officer, employee, director or consultant that are inconsistent with the share amounts and terms set forth in the minutes of meetings of the Board of Directors. (e) Each former Key Employee whose employment was terminated by the Company has entered into an agreement with the Company providing for the full release of any claims against the Company or any related party arising out of such employment. (f) Subsection 2.16(f) of the Disclosure Schedule sets forth as of the date hereof each employee benefit plan maintained, established or sponsored by the Company, or which the Company participates in or contributes to, which is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied in all material respects with all applicable laws for any such employee benefit plan. (g) The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Company, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Company’s knowledge, threatened, which could have a Material Adverse Effect, nor is the Company aware of any labor organization activity involving its employees. (h) To the Company’s knowledge, none of the Key Employees or directors of the Company has been (a) subject to voluntary or involuntary petition under the federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent
or similar officer by a court for his business or property; (b) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (c) subject to any order, judgment or decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise imposing limits or conditions on his engagement in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or (d) found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated any federal or state securities, commodities, or unfair trade practices law, which such judgment or finding has not been subsequently reversed, suspended, or vacated. 2.17 Tax Returns and Payments. There are no federal, state, county, local or foreign taxes due and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, county, local or foreign taxes of the Company which are due, whether or not assessed or disputed. There have been no examinations or audits of any tax returns or reports by any applicable federal, state, local or foreign governmental agency. The Company has duly and timely filed all federal, state, county, local and foreign tax returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year. 2.18 Insurance. The Company has in full force and effect fire and casualty insurance policies with extended coverage, sufficient in amount (subject to reasonable deductions) to allow it to replace any of its properties that might be damaged or destroyed. 2.19 Employee Agreements. Each current and former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms delivered to the counsel for the Purchaser (the “Confidential Information Agreements”). No current or former Key Employee has excluded works or inventions from his or her assignment of inventions pursuant to such Key Employee’s Confidential Information Agreement. Each current and former Key Employee has executed a non-solicitation agreement substantially in the form or forms delivered to counsel for the Purchaser. The Company is not aware that any of its Key Employees is in violation of any agreement covered by this Subsection 2.19. 2.20 Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which could reasonably be expected to have a Material Adverse Effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority. 2.21 Corporate Documents. The Restated Certificate and Bylaws of the Company are in the form provided to the Purchaser. The copy of the minute books of the Company provided to the Purchaser contains minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by the directors and stockholders since the date of incorporation and accurately reflects in all material respects all actions by the directors (and any committee of directors) and stockholders with respect to all transactions referred to in such minutes.
2.22 83(b) Elections. To the Company’s knowledge, all elections and notices under Section 83(b) of the Code have been or will be timely filed by all individuals who have acquired unvested shares of Common Stock. 2.23 Environmental and Safety Laws. Except as could not reasonably be expected to have a Material Adverse Effect to the best of its knowledge (a) the Company is and has been in compliance with all Environmental Laws; (b) there has been no release or to the Company’s knowledge threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste or petroleum or any fraction thereof (each a “Hazardous Substance”), on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any governmental authority in the United States; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB- containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The Company has made available to the Purchaser true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies and environmental studies or assessments. For purposes of this Subsection 2.23, “Environmental Laws” means any law, regulation, or other applicable requirement relating to (a) releases or threatened release of Hazardous Substance; (b) pollution or protection of employee health or safety, public health or the environment; or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances. 2.24 Disclosure. The Company has made available to the Purchaser all the information reasonably available to the Company that the Purchaser has requested for deciding whether to acquire the Shares, including certain of the Company’s projections describing its proposed business plan (the “Business Plan”). No representation or warranty of the Company contained in this Agreement, as qualified by the Disclosure Schedule, and no certificate furnished or to be furnished to the Purchaser at the Closing contains any untrue statement of a material fact or, to the Company’s knowledge, omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. The Business Plan was prepared in good faith; however, the Company does not warrant that it will achieve any results projected in the Business Plan. It is understood that this representation is qualified by the fact that the Company has not delivered to the Purchaser, and has not been requested to deliver, a private placement or similar memorandum or any written disclosure of the types of information customarily furnished to purchasers of securities. 2.25 Foreign Corrupt Practices Act. Neither the Company nor any of the Company’s directors, officers, employees or agents have, directly or indirectly, made, offered, promised or authorized any payment or gift of any money or anything of value to or for the benefit of any “foreign official” (as such term is defined in the U.S. Foreign Corrupt Practices
Act of 1977, as amended, the “FCPA”), foreign political party or official thereof or candidate for foreign political office for the purpose of (i) influencing any official act or decision of such official, party or candidate, (ii) inducing such official, party or candidate to use his, her or its influence to affect any act or decision of a foreign governmental authority, or (iii) securing any improper advantage in the case of (i), (ii) and (iii) above in order to assist the Company or any of its affiliates in obtaining or retaining business for or with, or directing business to, any person. Neither the Company nor any of its directors, officers, employees or agents have made or authorized any bribe, rebate, payoff, influence payment, kickback or other unlawful payment of funds or received or retained any funds in violation of any law, rule or regulation. The Company further represents that it has maintained, and has caused each of its subsidiaries and affiliates to maintain, systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA or any other applicable anti-bribery or anti-corruption law. Neither the Company, nor, to the Company’s knowledge, any of its officers, directors or employees are the subject of any allegation, voluntary disclosure, investigation, prosecution or other enforcement action related to the FCPA or any other anti-corruption law (collectively, “Enforcement Action”). 2.26 Data Privacy. In connection with its collection, storage, transfer (including, without limitation, any transfer across national borders) and/or use of any personally identifiable information from any individuals, including, without limitation, any customers, prospective customers, employees and/or other third parties (collectively “Personal Information”), the Company is and has been, to the Company’s knowledge, in compliance with all applicable laws in all relevant jurisdictions, the Company’s privacy policies and the requirements of any contract or codes of conduct to which the Company is a party. The Company has commercially reasonable physical, technical, organizational and administrative security measures and policies in place to protect all Personal Information collected by it or on its behalf from and against unauthorized access, use and/or disclosure. The Company is and has been, to the Company’s knowledge, in compliance in all material respects with all laws relating to data loss, theft and breach of security notification obligations. 2.27 Compliance with Securities Laws. The Company understands and acknowledges that, in reliance upon the representations and warranties made by the Company herein, the Purchaser Stock is not being registered with the SEC under the Securities Act, but instead is being issued under an exemption or exemptions from the registration requirements of the Securities Act and other applicable securities laws which impose certain restrictions on the Company’s ability to transfer the Purchaser Stock. 2.28 Securities Law Restrictions on Transfer. The Company understands that Company may not transfer the Purchaser Stock unless such Purchaser Stock is registered under the Securities Act and any other applicable securities laws or an exemption from such registration requirements is available. The Company acknowledges that the Purchaser is under no obligation to register the Purchaser Stock under the Securities Act or any other applicable securities laws. 2.29 Rule 144. The Company is aware of the provisions of Rule 144 of the Securities Act (“Rule 144”) and that any resale of Purchaser Stock in reliance on Rule 144 must satisfy the applicable requirements of Rule 144.
3. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that: 3.1 Authorization. The Purchaser has full power and authority to enter into the Transaction Agreements. The Transaction Agreements to which the Purchaser is a party, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, or (b) to the extent the indemnification provisions contained in the Investors’ Rights Agreement may be limited by applicable federal or state securities laws. All corporate action required to be taken by the Purchaser’s board of directors and stockholders in order to authorize the Purchaser to enter into the Transaction Agreements and to issue the Purchaser Stock to the Company has been taken or will be taken prior to the Closing. All action on the part of the officers of the Purchaser necessary for the execution and delivery of the Transaction Agreements and the issuance and delivery of the Purchaser Stock to the Company has been taken or will be taken prior to the Closing or the Equity Consideration Delivery Date, as applicable. 3.2 Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the Shares to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Shares. The Purchaser has not been formed for the specific purpose of acquiring the Shares. 3.3 Disclosure of Information. The Purchaser has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Shares with the Company’s management and has had an opportunity to review the Company’s facilities. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchaser to rely thereon. 3.4 Restricted Securities. The Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares, or the Common Stock into which it may be converted, for resale except as set forth in the Investors’ Rights Agreement. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy. 3.5 No Public Market. The Purchaser understands that no public market now exists for the Shares, and that the Company has made no assurances that a public market will ever exist for the Shares. 3.6 Legends. The Purchaser understands that the Shares and any securities issued in respect of or exchange for the Shares, may be notated with one or all of the following legends: “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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, AS AMENDED.” (a) Any legend set forth in, or required by, the other Transaction Agreements. (b) Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate, instrument, or book entry so legended. 3.7 Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. 3.8 Foreign Investors. If the Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Code), the Purchaser hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. The Purchaser’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Purchaser’s jurisdiction. 3.9 CFIUS Foreign Person Status. The Purchaser is not a “foreign person” or a “foreign entity,” as defined in Section 721 of the Defense Production Act of 1950, as amended,
including all implementing regulations thereof (the “DPA”). The Purchaser is not controlled by a “foreign person,” as defined in the DPA. The Purchaser does not permit any foreign person affiliated with the Purchaser, whether affiliated as a limited partner or otherwise, to obtain through the Purchaser any of the following with respect to the Company: (i) access to any “material nonpublic technical information” (as defined in the DPA) in the possession of the Company; (ii) membership or observer rights on the Board of Directors or equivalent governing body of the Company or the right to nominate an individual to a position on the Board of Directors or equivalent governing body of the Company; (iii) any involvement, other than through the voting of shares, in the substantive decision-making of the Company regarding (x) the use, development, acquisition, or release of any “critical technology” (as defined in the DPA), (y) the use, development, acquisition, safekeeping, or release of “sensitive personal data” (as defined in the DPA) of U.S. citizens maintained or collected by the Company, or (z) the management, operation, manufacture, or supply of “covered investment critical infrastructure” (as defined in the DPA); or (iv) “control” of the Company (as defined in the DPA). 3.10 No General Solicitation. Neither the Purchaser, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Shares. 3.11 Exculpation Among Purchasers. The Purchaser acknowledges that it is not relying upon any Person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company. 3.12 Residence. If the Purchaser is an individual, then the Purchaser resides in the state or province identified in the address of the Purchaser set forth on Exhibit A; if the Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of the Purchaser in which its principal place of business is identified in the address or addresses of the Purchaser set forth on Exhibit A. 3.13 Valid Issuance of Purchaser Stock. The Purchaser Stock, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer set forth in any agreement entered into between Purchaser and the Company on or around the date hereof, under applicable state and federal securities laws and liens or encumbrances created by or imposed by the Company. Assuming the accuracy of the representations of the Company in Section 2 of this Agreement, the Purchaser Stock will be issued in compliance with all applicable federal and state securities laws. 3.14 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Company in Section 2 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Purchaser in connection with the consummation of the Transactions, except for filings pursuant to applicable state securities laws, which have been made or will be made in a timely manner and in connection with the Transactions.
3.15 Compliance with Other Instruments. The Purchaser is not in violation or default (i) of any provisions of its Amended and Restated Certificate of Incorporation or its Bylaws, (ii) of any instrument, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, or (iv) under any agreement or contract to which it is a party or by which it is bound, or (v) to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Purchaser and with respect to clauses (i) through (v), the violation of which would have a material adverse effect on the Purchaser or the Purchaser Stock. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated thereby, including the issuance of the Purchaser Stock, will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement; or (ii) an event which results in the creation of any lien, charge or encumbrance upon the Purchaser Stock. 3.16 SEC Filings. The Purchaser has filed or furnished, on a timely basis, all reports, schedules, forms, statements and other documents required to be filed or furnished by it with the SEC since January 1, 2024 (collectively, and together with all exhibits and schedules thereto and documents incorporated by reference therein, the “SEC Reports”). As of their respective filing dates (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing), each of the SEC Reports complied in all material respects with the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley Act of 2002, and the rules and regulations of the SEC promulgated thereunder, in each case as in effect on the applicable filing date. As of their respective filing dates (or, if amended or superseded, as of the date of the last such amendment or superseding filing), none of the 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; provided that, with respect to any financial statements or other financial information subsequently restated, revised or corrected in the Purchaser’s Annual Report on Form 10-K/A filed with the SEC on May 7, 2025, the foregoing representation shall apply to such financial statements and financial information as so restated, revised or corrected and not as originally reported. The financial statements of the Purchaser included in the SEC Reports, in each case giving effect to any restatement, revision or correction thereof reflected in any SEC Report filed prior to the date hereof, were prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited interim statements, as permitted by Form 10-Q, and subject, in the case of unaudited interim statements, to normal year-end audit adjustments) and fairly present in all material respects the consolidated financial position of the Purchaser and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the periods then ended. 4. Conditions to the Purchaser’s Obligations at Closing. The obligations of the Purchaser to purchase Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived: 4.1 Representations and Warranties.
(a) The representations and warranties of the Company contained in Section 2 of this Agreement (other than the Fundamental Representations) shall be true and correct as of the Closing (or, in the case of representations and warranties that speak as of a specified date, as of such specified date), except as would not constitute a Material Adverse Effect. (b) The Fundamental Representations shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a specified date, which shall be true and correct in all material respects as of such date. 4.2 Performance. The Company shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing. 4.3 Compliance Certificate. The President of the Company shall deliver to the Purchaser at the Closing a certificate certifying that the conditions specified in Subsections 4.1 and 4.2 have been fulfilled. 4.4 Investors’ Rights Agreement. The Company and the Purchaser (other than the Purchaser relying upon this condition to excuse such Purchaser’s performance hereunder) shall have executed and delivered the Investors’ Rights Agreement. 4.5 Right of First Refusal and Co-Sale Agreement. The Company, the Purchaser (other than the Purchaser relying upon this condition to excuse such Purchaser’s performance hereunder), and the other stockholders of the Company named as parties thereto shall have executed and delivered the Right of First Refusal and Co-Sale Agreement. 4.6 Voting Agreement. The Company, the Purchaser (other than the Purchaser relying upon this condition to excuse such Purchaser’s performance hereunder), and the other stockholders of the Company named as parties thereto shall have executed and delivered the Voting Agreement. 4.7 Restated Certificate. The Company shall have filed the Restated Certificate with the Secretary of State of Delaware on or prior to the Closing, which shall continue to be in full force and effect as of the Closing. 4.8 Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser at the Closing a certificate certifying (i) the Bylaws of the Company, (ii) resolutions of the Board of Directors approving the Transaction Agreements and the Transactions, and (iii) resolutions of the stockholders of the Company approving the Restated Certificate. 4.9 Certificate of Good Standing. The Company shall have delivered a certificate of good standing, dated not more than five days prior to the Closing, issued by the Secretary of State of the State of Delaware.
4.10 Opinion of Counsel. The Purchaser shall have received from Wilson Sonsini Goodrich & Rosati, P.C. (“WSGR”), counsel for the Company, an opinion dated as of the date of the Closing, in substantially the form attached hereto as Exhibit G. 5. Conditions to the Company’s Obligations at Closing. The obligations of the Company to sell Shares to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived: 5.1 Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3 of this Agreement shall be true and correct in all material respects as of the Closing, except for representations and warranties that speak as of a specified date, which shall be true and correct in all material respects as of such date. 5.2 Performance. The Purchaser shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 5.3 Compliance Certificate. The Chief Operating Officer and Chief Financial Officer of the Purchaser shall deliver to the Company at the Closing a certificate certifying that the conditions specified in Subsections 5.1 and 5.2 have been fulfilled. 5.4 Investors’ Rights Agreement. The Purchaser shall have executed and delivered the Investors’ Rights Agreement. 5.5 Right of First Refusal and Co-Sale Agreement. The Purchaser and the other stockholders of the Company named as parties thereto shall have executed and delivered the Right of First Refusal and Co-Sale Agreement. 5.6 Voting Agreement. The Purchaser and the other stockholders of the Company named as parties thereto shall have executed and delivered the Voting Agreement. 6. Tender Offer. 6.1 As soon as practicable following the date hereof (and, in any event, within 10 Business Days following such date), the Purchaser shall commence a tender offer (the “Tender Offer”) to purchase up to 68,451,508 shares of Series G Preferred Stock (after giving effect to the Exchange (as defined in the Secondary Purchase and Exchange Agreement)) from certain stockholders of the Company (which stockholders shall not include any Person listed on Schedule A of the Secondary Purchase and Exchange Agreement), at a price per share equal to the Series G Original Issue Price (as defined in the Restated Certificate) and pursuant to the terms and conditions set forth in definitive documents with respect to the Tender Offer (the “Tender Offer Documents”), and on such other terms as are mutually agreed between the Company and the Purchaser in good faith, including an undersubscription mechanic that allows fully tendering equity holders to sell in excess of the initial participation cap if the Tender Offer is undersubscribed. Notwithstanding the foregoing, any period during which commencement of the Tender Offer is delayed as a result of the Company’s review of, comments on or approval of the applicable Tender Offer Documents pursuant to Section 6.4 shall extend the applicable
period for commencement of the Tender Offer under this Section 6.1 on a Business Day-for- Business Day basis. 6.2 In the Tender Offer, each tendering holder, (i) in respect of shares that were shares of Common Stock immediately prior to the Exchange, shall receive 100% of the consideration for shares accepted for purchase in cash, and (ii) in respect of shares that were shares of Preferred Stock immediately prior to the Exchange, shall receive up to sixty percent (60%) of the consideration for shares accepted for purchase in shares of Purchaser Stock, with the balance in cash. The number of shares of Purchaser Stock so issued shall be determined by dividing the dollar amount payable in Purchaser Stock by the Reference Price (measured as of the settlement of the Tender Offer). In no event shall any single “Ultimate Parent Entity” (as defined under the Hart–Scott–Rodino Antitrust Improvements Act of 1976 (the “HSR Act”)) of any institutional investor that receives Purchaser Stock in the Tender Offer (each, a “Selling Stockholder”) receive Purchaser Stock (when considered with any other Purchaser Stock owned by such Selling Stockholder) with a value in excess of $133,000,000.00. Notwithstanding the foregoing, in no event shall the aggregate number of shares of Purchaser Stock issued in the Tender Offer, together with all other shares of Purchaser Stock issued or issuable by the Purchaser to the Company or any of the Company’s securityholders in connection with the Purchaser’s acquisition of equity securities of the Company (including pursuant to this Agreement, the Secondary Purchase and Exchange Agreement and Committed Secondary), exceed the Issuance Cap; and to the extent the number of shares of Purchaser Stock that would otherwise be issued as consideration in the Tender Offer would cause the aggregate number of shares of Purchaser Stock so issued to exceed the Issuance Cap, the portion of the consideration corresponding to such excess shall instead be paid in cash. The Purchaser agrees that each Selling Stockholder that receives Purchaser Stock in the Tender Offer shall be given the opportunity to have its shares of Purchaser Stock registered for resale on the Registration Statement to be filed under the Registration Rights Agreement entered into by the Purchaser in connection with the Secondary Purchase and Exchange Agreement (the “Registration Rights Agreement”; and capitalized terms used in this Section 6.2 and not otherwise defined in this Agreement shall have the meanings given to them in the Registration Rights Agreement), on the same terms, and subject to the same conditions, procedures and limitations, as apply to the Registrable Securities of the Holders thereunder, including pursuant to any amendment or waiver of any terms thereunder (including as to the timing of the filing and effectiveness thereof). For such purpose, such shares of Purchaser Stock shall be treated as Registrable Securities, and such Selling Stockholders shall be entitled to be treated as Holders, under the Registration Rights Agreement, and the Purchaser shall (and shall reasonably cooperate with the Company to) take all actions necessary to give effect to the foregoing. For the avoidance of doubt, if no Backstop Closing (as defined in the Secondary Purchase and Exchange Agreement) occurs, the Purchaser shall nonetheless register the resale of such shares of Purchaser Stock on substantially the same terms, and within substantially the same timeframe, as would have applied to the Registrable Securities under the Registration Rights Agreement. Each Selling Stockholder that receives Purchaser Stock in the Tender Offer is an intended third party beneficiary of the registration rights set forth in this Section 6.2 and shall have the right, power and authority to enforce such provisions directly against the Purchaser as though it were a party hereto. 6.3 The Tender Offer Documents shall provide that each Selling Stockholder that receives Purchaser Stock shall be subject to a lock-up, with a full release on the forty-fifth
(45th) day following the closing of the Tender Offer, and that for the twelve (12) months thereafter, no Selling Stockholder may sell, on any trading day, Purchaser Stock in excess of 5% of the 30-day average daily trading volume of Purchaser Stock (measured as of the immediately preceding trading day), except that for the period from November 1, 2027 through December 15, 2027 such daily cap shall be 2%; provided that a Selling Stockholder may distribute Purchaser Stock to its limited partners and/or general partners so long as each such partner agrees in writing to be bound by the foregoing. 6.4 Prior to the commencement of the Tender Offer, the Company will provide the Purchaser with drafts of the Tender Offer Documents and a reasonable opportunity to review and comment on the same, and the final versions of the Tender Offer Documents shall be in form and substance reasonably acceptable to the Company and the Purchaser. The Tender Offer shall remain open for twenty (20) Business Days (the “Offer Period”) and, following the commencement of the Offer Period, neither the Purchaser nor the Company will amend the terms of the Tender Offer in a manner that would require any extension of the Offer Period under applicable law unless both parties provide prior written consent to such an amendment. Without limiting Section 6.1, the Company shall be primarily responsible for communications, interactions and processes with current and former employees and other eligible holders in connection with the Tender Offer, as well as the applicable information and paying agent(s), and the Purchaser shall not be required to communicate directly with any such party except to the extent reasonably necessary to comply with applicable law, resolve a matter that cannot reasonably be addressed by the Company or the applicable information and paying agent(s), or consummate the purchase of such holder’s shares. 6.5 Following the Tender Offer, if the Purchaser has not acquired (or, solely in the case of the Committed Secondary Shares, agreed to acquire) a total of 120,000,000 shares of Series G Preferred Stock via this Agreement, Secondary Purchase and Exchange Agreement, the Slade Secondary Agreement (as defined in the Secondary Purchase and Exchange Agreement), the Committed Secondary and the Tender Offer (the “Target Series G Shares”), then the Company stockholders listed on Schedule A of the Secondary Purchase and Exchange Agreement will pursuant to and in accordance with the procedures set forth in the Secondary Purchase and Exchange Agreement sell to the Purchaser a number of shares of Series G Preferred Stock (after giving effect to the Exchange (as defined in the Secondary Purchase and Exchange Agreement)) to ensure that the Purchaser acquires the Target Series G Shares. 6.6 Following the settlement of the Tender Offer and on or before January 22, 2027 (or such later date as the Company, the Purchaser and the applicable Committed Seller may agree in writing) (the “Committed Secondary Outside Date”), the Purchaser shall purchase from the Persons listed on Exhibit H hereto (each, a “Committed Seller,” and collectively, the “Committed Sellers”) an aggregate of 1,548,492 shares of Series G Preferred Stock (after giving effect to the exchange of the Committed Sellers’ shares of the Company’s capital stock for an equivalent number of shares of Series G Preferred Stock, on a one-for-one basis, conditioned upon and effective immediately prior to the transfer thereof to the Purchaser) (such shares, the “Committed Secondary Shares,” and such purchase, the “Committed Secondary”), in the respective amounts set forth opposite each Committed Seller’s name on Exhibit H (each, an “Allocation”), at a price per share equal to the Series G Original Issue Price, payable in cash. The Committed Secondary shall be effected pursuant to a secondary stock purchase and
exchange agreement that the Purchaser and the Company shall enter into with each Committed Seller prior to the commencement of the Tender Offer, in substantially the form of the Slade Secondary Agreement, providing for the purchase and sale of such Committed Seller’s Allocation with a closing to occur on or before the Committed Secondary Outside Date (each, a “Committed Secondary Agreement”). Each Committed Seller shall be eligible to participate in the Tender Offer on the same terms as other eligible holders, except that the maximum number of shares that such Committed Seller may sell in the Tender Offer shall be reduced, on a share- for-share basis, by such Committed Seller’s Allocation (and, for this purpose, a Committed Seller and its Affiliates, family members, trusts and other estate planning vehicles shall be treated as a single holder and their respective Allocations aggregated). No Committed Seller shall be eligible to sell shares under the Secondary Purchase and Exchange Agreement. The Purchaser acknowledges that any breach by it of this Section 6 shall cause irreparable harm to the Company and/or Committed Sellers which may not be adequately compensable by money damages. Accordingly, in the event of a breach or threatened breach by the Purchaser or by any Committed Seller of Section 6 of this Agreement, the Company and each Committed Seller, or the Purchaser, respectively, shall be entitled to seek the remedies of specific performance, injunction or other preliminary or equitable relief, without having to prove irreparable harm or actual damages. The foregoing right shall be in addition to such other rights or remedies as may be available for such breach or threatened breach. Each Committed Seller is an express third party beneficiary of this Section 6.6. 6.7 Each of the Company and the Purchaser agrees that any information provided by or on behalf of such party for inclusion in, or otherwise in connection with, the Tender Offer or Tender Offer Documents will not, at the time such information is provided and at the time the applicable Tender Offer Documents are distributed to eligible holders, contain any untrue statement of a material fact or omit to state any material fact necessary to make the information so provided, in light of the circumstances under which it was provided, not misleading. Each party shall promptly notify the other party if it becomes aware of any change in or to any information provided by or on behalf of such party that would cause such information to contain an untrue statement of a material fact or omit to state a material fact necessary to make such information, in light of the circumstances under which it was provided, not misleading, and shall promptly provide such updated or corrected information as may be reasonably necessary. 7. Miscellaneous. 7.1 Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Purchaser or the Company. 7.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
7.3 Governing Law. This Agreement shall be governed by the internal law of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware. 7.4 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 7.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 7.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, or (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next Business Day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next Business Day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Subsection 7.6. If notice is given to the Company, a copy (which shall not constitute notice) shall also be sent to Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, CA 94304, Attention: Rezwan Pavri, rpavri@wsgr.com. 7.7 No Finder’s Fees. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees or representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 7.8 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Subsection 7.8 shall be binding upon the Purchaser and each transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future holder of all such securities, and the Company.
7.9 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 7.10 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 7.11 Entire Agreement. This Agreement (including the Exhibits hereto), the Restated Certificate and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled. 7.12 Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT. 7.13 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 7.14 Waiver of Conflicts. Each party to this Agreement acknowledges that WSGR, counsel for the Company, may have in the past performed, and may continue to or in the future perform, legal services for the Purchaser in matters that are similar, but not substantially related, to the transactions described in this Agreement, including the representation of the Purchaser in venture capital financings and other matters. Accordingly, each party to this Agreement hereby acknowledges that (a) they have had an opportunity to ask for information relevant to this disclosure, and (b) WSGR represents only the Company with respect to the Agreement and the transactions contemplated hereby. The Company gives its informed consent to WSGR’s existing and/or future representation of such Purchaser in matters not substantially related to this Agreement, and the Purchaser hereby gives its informed consent to WSGR’s representation of the Company in connection with this Agreement and the transactions contemplated hereby. [Remainder of Page Intentionally Left Blank]
[Signature Page to Series G Preferred Stock Purchase Agreement] IN WITNESS WHEREOF, the parties have executed this Series G Preferred Stock Purchase Agreement as of the date first written above. COMPANY: SKYDIO, INC. By: /s/ Adam Bry Name: Adam Bry Title: Chief Executive Officer Address: 3000 Clearview Way San Mateo, CA 94402
[Signature Page to Series G Preferred Stock Purchase Agreement] IN WITNESS WHEREOF, the parties have executed this Series G Preferred Stock Purchase Agreement as of the date first written above. PURCHASER: AXON ENTERPRISE, INC. By: /s/ Brittany Bagley Name: Brittany Bagley Title: Chief Operating Officer & Chief Financial Officer Address: 17800 N. 85th St. Scottsdale, AZ 85255 Email: legal@axon.com
E X H IB IT A S C H E D U L E O F P U R C H A S E R S C L O S IN G : N ov em b er 5 , 2 02 6 F or m o f C on si d er at io n N am e of P u rc h as er S er ie s G S h ar es P u rc h as ed S er ie s G A gg re ga te P u rc h as e P ri ce C as h P ay m en t A m ou n t N u m b er o f S h ar es of P u rc h as er S to ck 1 A X O N E N T E R P R IS E , I N C . 17 80 0 N . 8 5t h S t. S co tt sd al e, A Z 8 52 55 E m ai l: le ga l@ ax on .c om w it h a co py ( w hi ch s ha ll n ot c on st it ut e no ti ce ) to : M O R G A N , L E W IS & B O C K IU S L L P 22 22 M ar ke t S tr ee t P hi la de lp hi a, P A 1 91 03 -3 00 7 A tt en ti on : A ar on D . S uh , J ef fr ey P . B od le E m ai l: a ar on .s uh @ m or ga nl ew is .c om ; je ff re y. bo dl e@ m or ga nl ew is .c om 25 ,0 00 ,0 00 $2 54 ,9 04 ,2 50 $1 27 ,4 52 ,1 25 [_ _] 1 T o be u pd at ed o n or p ri or to th e E qu ity C on si de ra ti on D el iv er y D at e pu rs ua nt to S ec ti on 1 .2 (e ).
Execution Version Certain confidential portions of this Exhibit were omitted by means of marking such portions [**] because the identified confidential portions are not material. DB1/ 173449794.10 SECONDARY STOCK PURCHASE AND EXCHANGE AGREEMENT This Secondary Stock Purchase and Exchange Agreement (this “Agreement”) is made and entered into as of November 5, 2026 (the “Effective Date”), by and among Skydio, Inc., a Delaware corporation (the “Company”), the entities executing this Agreement (each, a “Seller” and, collectively, the “Sellers”), each of which is a member of one of the investor groups set forth on Schedule A (each such group, a “Seller Group”), and Axon Enterprise, Inc. (the “Purchaser”). WHEREAS, concurrently with the execution of this Agreement, the Purchaser is purchasing shares of the Company’s Series G Preferred Stock, par value $0.00002 per share (the “Series G Preferred Stock”), pursuant to a Series G Preferred Stock Purchase Agreement (the “Primary Transactions Agreement”) between the Company and the Purchaser. WHEREAS, promptly following the Effective Date, the Purchaser shall conduct a tender offer to acquire up to 68,451,508 shares of Series G Preferred Stock (after giving effect to the Exchange as defined herein) from holders of the Company’s capital stock (the “Tender Offer”); provided, that no Seller shall be permitted to participate in the Tender Offer. WHEREAS, following the settlement of the Tender Offer, each Seller Group desires to sell to the Purchaser a number of shares, collectively, such that following the Backstop Closing (as defined below) and the purchase of 1,548,492 shares of Series G Preferred Stock in connection with the Committed Secondary (as defined in the Primary Transactions Agreement), the Purchaser will have acquired an aggregate of 120,000,000 shares of Series G Preferred Stock (the “Target Series G Shares”) pursuant to the Primary Transactions Agreement, the Tender Offer, that certain Secondary Stock Purchase and Exchange Agreement dated August 21, 2026, by and among the Company, the Purchaser, and Michael B. Slade (the “Slade Secondary Agreement”), the Committed Secondary, and this Agreement. WHEREAS, concurrently with entry into the Primary Transactions Agreement, the Company, the Purchaser and the Sellers are entering into this Agreement under which, following the settlement of the Tender Offer, the Company shall exchange, as necessary in connection with the Backstop Closing, with each Seller, shares of the Company’s capital stock held by the Sellers and identified opposite such Sellers’ names on Schedule A (such shares, collectively, the “Pre- Exchange Shares”) in the allocations listed on Schedule A for an equivalent number of shares of Series G Preferred Stock (such exchange for the Backstop Closing, the “Exchange”), on a one- for-one basis and for no additional consideration, such that immediately following the Exchange and prior to the Backstop Closing, each Seller shall hold shares of Series G Preferred Stock in lieu of the Pre-Exchange Shares previously held by such Seller. WHEREAS, in connection with the Backstop Closing, the Purchaser has agreed to provide each Seller with customary resale registration rights with respect to the Purchaser Stock (as defined below) received by such Seller, as set forth in a Registration Rights Agreement to be entered into by the Purchaser and such Sellers substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”). NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which
DB1/ 173449794.10 are hereby acknowledged, the parties hereby agree as follows: 1. Backstop; Waiver of Transfer Restrictions. 1.1 Backstop. Following the settlement of the Tender Offer, if the number of Backstop Shares (as defined below) is greater than zero, each Seller Group, severally and not jointly, hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase, at a purchase price of $10.19617 per share (the “Series G Price”), a number of shares equal to the product of the Backstop Shares and such Seller Group’s Pro Rata Percentage set forth opposite such Seller Group’s name on Schedule A, rounded to the nearest whole share (such transaction, the “Backstop Purchase” and each Seller Group’s pro rata portion, the “Group Backstop Portion”), which Group Backstop Portion shall be allocated among, and sold by, the Sellers within such Seller Group as provided in Section 1.7 (each such Seller’s allocated portion, its “Seller Backstop Portion”). “Backstop Shares” shall refer to the difference of (a) the Target Series G Shares and (b) the sum of (i) the aggregate number of shares of Series G Preferred Stock acquired by the Purchaser pursuant to the Primary Transactions Agreement, the Slade Secondary Agreement, and the Tender Offer, and (ii) the number of shares to be purchased in connection with the Committed Secondary, whether or not the Committed Secondary has been consummated as of the Backstop Closing. As used in this Agreement, “Shares” means the shares of Series G Preferred Stock received by each Seller in the Exchange and sold and transferred to the Purchaser pursuant to the Backstop Purchase. 1.2 Backstop Consideration. The aggregate purchase price payable to each Seller for its Seller Backstop Portion at the Backstop Closing shall be the product of the Seller Backstop Portion and the Series G Price (the “Purchase Price”) and shall be paid in a combination of cash (such cash portion, the “Cash Consideration”) and shares of common stock of the Purchaser (the “Purchaser Stock” and such shares, the “Equity Consideration”). The portion of each Seller’s Purchase Price payable in the form of Equity Consideration shall not exceed sixty percent (60%) of such Seller’s Purchase Price, and the remainder of such Seller’s Purchase Price shall be payable in the form of Cash Consideration; provided, however, that in no event shall the aggregate value of the Equity Consideration issued to any “Ultimate Parent Entity” (as defined under the Hart–Scott–Rodino Antitrust Improvements Act of 1976) of any Seller (valued at the Reference Price (as defined below)) exceed $133,000,000.00. The number of shares of Purchaser Stock issuable to each Seller as Equity Consideration shall equal the quotient obtained by dividing (x) the dollar amount of such Seller’s Purchase Price payable in the form of Equity Consideration by (y) the Reference Price, rounded down to the nearest whole share. Notwithstanding the foregoing, in no event shall the aggregate number of shares of Purchaser Stock issued as Equity Consideration under this Agreement, together with all other shares of Purchaser Stock issued or issuable by the Purchaser to the Company or any of the Company’s securityholders in connection with the Purchaser’s acquisition of equity securities of the Company (including pursuant to the Primary Transactions Agreement, any tender offer by the Purchaser for shares of the Company’s capital stock and the Committed Secondary), exceed 19.99% of the shares of Purchaser Stock outstanding immediately prior to the Effective Date (the “Issuance Cap”); and to the extent the number of shares of Purchaser Stock that would otherwise be deliverable as Equity Consideration hereunder would cause the aggregate number of shares of Purchaser Stock so issued to exceed the Issuance Cap, the portion of the Equity Consideration corresponding to such excess shall instead be paid by the Purchaser to the applicable Sellers in cash, allocated among such Sellers pro rata
DB1/ 173449794.10 based on their respective Equity Consideration, by wire transfer of immediately available funds at the Backstop Closing. 1.3 Backstop Share Transfer Restrictions. From and after the Effective Date until the earlier of (i) the Backstop Closing and (ii) the date on which the Purchaser’s obligation to consummate the Backstop Purchase terminates in accordance with this Agreement, each Seller shall (A) continue to beneficially and of record own, and shall not, directly or indirectly, sell, assign, transfer, pledge, hypothecate, encumber or otherwise dispose of, or enter into any agreement, arrangement or understanding to sell, assign, transfer, pledge, hypothecate, encumber or otherwise dispose of, the Maximum Group Backstop Portion (as defined below), (B) not take, or omit to take, any action that would reasonably be expected to prevent, materially delay or impair such Seller’s ability to consummate the Backstop Purchase in accordance with the terms of this Agreement, and (C) not, and cause its Affiliates not to, tender, offer to tender or otherwise submit any shares of the Company’s capital stock held by such Seller for purchase pursuant to the Tender Offer, or otherwise participate in the Tender Offer. “Maximum Group Backstop Portion” means, with respect to each Seller Group, the product of (x) 94,800,000 less the number of shares to be purchased in connection with the Committed Secondary and (y) such Seller Group’s Pro Rata Percentage set forth opposite such Seller Group’s name on Schedule A, rounded to the nearest whole share. For purposes of this Section 1.3, references to Maximum Group Backstop Portion shall include the shares of capital stock of the Company held by such Seller that are to be exchanged for Series G Preferred Stock pursuant to Section 2.7 in order to satisfy such Seller’s obligations with respect to its Maximum Group Backstop Portion. 1.4 Reference Price; Fractional Shares. For purposes of this Agreement, (i) the “Reference Price” means the volume-weighted average price per share of Purchaser Stock on the Nasdaq Global Select Market for the ten (10) consecutive trading days ending on (and including) the trading day immediately preceding two (2) Business Days prior to the Backstop Closing (such end date, the “Reference Date”), as reported by S&P Capital IQ or any other source mutually acceptable to the Company and the Purchaser; (ii) in lieu of any fractional share of Purchaser Stock that would otherwise be deliverable as Equity Consideration, the Purchaser shall pay to each Seller an amount in cash (rounded to the nearest whole cent) equal to the product of such fractional share and the Reference Price; and (iii) if, during the measurement period described in clause (i) or between the Reference Date and the Backstop Closing, the outstanding shares of Purchaser Stock are changed into a different number of shares or a different class by reason of any stock split, reverse stock split, stock dividend, subdivision, reclassification, recapitalization, combination or similar transaction, the Reference Price shall be equitably and proportionately adjusted to provide each Seller and the Purchaser the same economic effect as contemplated by this Agreement immediately prior to such event. 1.5 Waiver of Transfer Restrictions. The Company hereby consents to (a) the Exchange as described in Section 2.7 and (b) the sale of the Shares in the Secondary Transactions, and, in each case, waives and relinquishes any restrictions on transfer or rights of first refusal the Company may have under the Company’s bylaws, any agreement under which the Pre-Exchange Shares were originally acquired, or under any other agreement binding on the Company and Seller (such restrictions, the “Transfer Restrictions”).
DB1/ 173449794.10 1.6 Rights in Shares. Until the Exchange, each Seller shall be deemed the holder of the Pre-Exchange Shares and shall possess all rights with respect thereto. Immediately upon the Exchange, each Seller shall hold the Shares and, given the non-voting nature of the Series G Preferred Stock, shall have no voting rights with respect thereto, but shall retain the right to receive dividends (if declared) until delivery of the Shares to the Purchaser at the Backstop Closing. Until such time as the Shares are delivered to the Purchaser at the Backstop Closing, each Seller shall retain all incidents of ownership except (i) the right of possession thereof and (ii) the right to sell, assign, pledge, hypothecate or otherwise dispose of or encumber such Shares or any interest therein. 1.7 Seller Allocation. Each Seller Group’s Pro Rata Percentage and Maximum Group Backstop Portion shall be fixed on the Effective Date, with each Seller Group obligated to sell its Group Backstop Portion determined in accordance with Section 1.1. The allocation of that aggregate obligation among the Sellers within each Seller Group shall be determined after the Effective Date and prior to the Backstop Closing in accordance with this Section 1.7. No later than five (5) Business Days prior to the Backstop Closing, each Seller Group shall deliver to the Company and the Purchaser a written notice (a “Seller Allocation Notice”) that (i) identifies each Seller within such Seller group that will sell shares at such Closing, (ii) specifies, for each such Seller, the number, class and series of shares of the Company’s capital stock that will constitute such Seller’s Pre-Exchange Shares to be exchanged pursuant to Section 2.7 and sold at such Closing, and (iii) sets forth the number of shares of Series G Preferred Stock to be sold by such Seller (such Seller’s Seller Backstop Portion). The shares of Series G Preferred Stock into which the Pre-Exchange Shares identified in a Seller Allocation Notice are exchanged must equal, in the aggregate, such Seller Group’s Seller Backstop Portion. Upon delivery of a Seller Allocation Notice, (A) Schedule A shall be deemed automatically updated to reflect the Sellers and Pre- Exchange Shares so identified, (B) the shares so identified shall constitute such Seller’s Pre- Exchange Shares for all purposes of this Agreement, and (C) each such Seller shall be severally (and not jointly) obligated to sell its Seller Backstop Portion at the Backstop Closing. If a Seller Group does not deliver a Seller Allocation Notice by the time specified above, the shares to be sold by such Seller Group shall be allocated among the Sellers within such Seller Group pro rata based on the total number of shares held by all Sellers within such Seller Group. 2. Closing; Delivery. 2.1 Closing. The closing of the Backstop Purchase (the “Backstop Closing”) shall occur five (5) Business Days following the settlement of the Tender Offer, or at such other time as the Purchaser, the Company and Sellers holding a majority of the shares of the Company’s capital stock held by all Sellers may agree in writing; provided, however, that, notwithstanding anything to the contrary in this Agreement, in no event shall the Backstop Closing occur later than the date that is one hundred eighty (180) days following the Effective Date (the “Outside Date”). At the Backstop Closing, (a) each Seller shall sell, assign, transfer and deliver to the Purchaser all right, title and interest in and to such Seller’s Seller Backstop Portion, free and clear of all Liens other than restrictions arising under applicable securities laws and the Transaction Agreements, and (b) the Purchaser shall deliver to each Seller the Cash Consideration and Equity Consideration payable in respect of such Seller’s Seller Backstop Portion in accordance with Section 1.1, in each case on the same terms and conditions as those contained in this Agreement. If requested by a Seller in writing prior to the Backstop Closing, the
DB1/ 173449794.10 Purchaser will delay delivery of such Seller’s portion of the Backstop Shares for up to ten (10) Business Days following the Backstop Closing. 2.2 Deliveries by Seller. Prior to the Exchange, each Seller shall deliver to the Company to be held in escrow pending the Exchange and the Backstop Closing pursuant to Subsection 2.5 below (the “Transfer Escrow”), on such Seller’s behalf (a) any stock certificates representing the Pre-Exchange Shares identified on Schedule A held by such Seller, if in such Seller’s possession (or if such certificates have been lost, stolen or destroyed, an affidavit and indemnity in a form acceptable to the Purchaser), to be exchanged pursuant to Section 2.7 and thereafter sold at the Backstop Closing, and (b) any other documentation reasonably requested by the Company or the Purchaser to effect the Exchange and the subsequent transfer of such Shares by such Seller. In addition, each Seller shall deliver to the Company and the Purchaser at or prior to the Backstop Closing, a duly authorized and executed copy of this Agreement and a duly executed counterpart of the Registration Rights Agreement, in each case the delivery of which is hereby acknowledged to be an express condition of the Company’s execution, delivery and performance pursuant to this Agreement and the transactions contemplated hereby. If the Exchange and the Backstop Closing should not occur for any reason with respect to any Seller, such Seller’s stock certificate representing the Pre-Exchange Shares then held by the Company in the Transfer Escrow shall be returned to such Seller. 2.3 Deliveries by Purchaser. It shall be an express condition for the Backstop Closing that the Purchaser shall deliver to each Seller, the full Purchase Price for the Shares being purchased from such Seller at the Backstop Closing, as set forth on Schedule A, consisting of (i) the cash portion of the Purchase Price, by wire transfer pursuant to Seller’s wire instructions, as provided to the Purchaser by the Sellers, and (ii) the Purchaser Stock portion of the Purchase Price, by delivery to each Seller the shares of Purchaser Stock issuable to such Seller in book-entry form (registered in the name of the Seller), and the Purchaser shall deliver to each Seller, at or promptly following the Backstop Closing, a statement or other written confirmation from the Purchaser’s transfer agent evidencing such book-entry issuance. In addition, the Purchaser shall deliver at or prior to the Backstop Closing to (i) the Company and Sellers, a duly authorized and executed copy of this Agreement, in each case the delivery of which is hereby acknowledged to be an express condition of the Company’s execution, delivery and performance pursuant to this Agreement and the transactions contemplated hereby and (ii) the Company, a duly authorized and executed copy of the Primary Transactions Agreement, the Transaction Agreements and any and all other documents contemplated thereby, and (iii) the Sellers, a duly executed Registration Rights Agreement. 2.4 Deliveries by the Company. The Company hereby delivers to the Sellers and the Purchaser an executed copy of this Agreement, and agrees (i) at the Exchange, to cancel each Seller’s stock certificates representing the Pre-Exchange Shares held in the Transfer Escrow and to issue to such Seller a new electronic stock certificate representing the Shares received by such Seller in the Exchange, in accordance with Subsection 2.7 below, (ii) at the Backstop Closing, to cancel each Seller’s stock certificate representing the Shares sold to the Purchaser and to issue to the Purchaser a new electronic stock certificate representing the Shares purchased by the Purchaser at the Backstop Closing, in accordance with Subsection 2.5 below, and (iii) at the Backstop Closing, to deliver to the Purchaser FIRPTA documentation consisting of (A) a notice to the Internal Revenue Service (the “IRS”), in accordance with the requirements of
DB1/ 173449794.10 Treasury Regulations Section 1.897-2(h)(2), dated as of the date of the Backstop Closing and executed by the Company, together with written authorization for the Purchaser to deliver such notice to the IRS on behalf of the Company after the Backstop Closing and (B) a FIRPTA certificate, in accordance with the requirements of Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h), dated as of the date of the Backstop Closing and executed by the Company. The Purchaser acknowledges that the Purchaser will not be issued a stock certificate for any Pre- Exchange Shares or for the Shares issued to a Seller in the Exchange, but instead will receive a stock certificate representing the Shares purchased by the Purchaser at the Backstop Closing. 2.5 Deliveries of Stock Certificate. At the Exchange, each Seller hereby instructs the Company to (a) cancel any stock certificate, electronic or otherwise, issued to such Seller representing the Pre-Exchange Shares held in the Transfer Escrow, and (b) issue a duly executed electronic stock certificate evidencing the Exchange Stock received by such Seller in the Exchange. At the Backstop Closing, each Seller hereby instructs the Company to (a) cancel the stock certificate issued to such Seller representing the Shares to be sold at the Backstop Closing, (b) issue a duly executed electronic stock certificate evidencing the Shares being purchased by the Purchaser at the Backstop Closing in Purchaser's name, and (c) issue a duly executed electronic stock certificate evidencing the number of shares of the Company’s stock, if any, remaining after the transfer to the Purchaser, in such Seller’s name, to be delivered to such Seller. 2.6 Stock Power and Transfer. Each of the parties agrees that this Agreement shall constitute a stock power or other necessary authorization to transfer, as the case may be, authorizing the Company and/or its transfer agent to record on its books and records (i) the Exchange and (ii) the transfer of the Shares from each Seller to the Purchaser, and to effect the other cancellations and issuances described herein. 2.7 Exchange. (a) Conditioned on and effective immediately prior to the Backstop Closing, the Company shall exchange with each Seller that number of Pre-Exchange Shares to be sold by such Seller to the Purchaser pursuant to this Agreement for an equivalent number of shares of Series G Preferred Stock (the “Exchange Stock”), on a one-for-one basis, for no additional consideration from the Seller, and each Seller shall exchange with the Company the Pre-Exchange Shares identified on Schedule A for the shares of Exchange Stock. (b) Immediately following the Exchange, each Seller shall hold shares of Exchange Stock in lieu of the Pre-Exchange Shares previously held by such Seller, and such Exchange Stock shall constitute the Shares sold by such Seller to the Purchaser at the Backstop Closing pursuant to Section 1.1. For the avoidance of doubt, the Purchaser shall not at any time acquire, hold, or have any right, title or interest in or to the Pre-Exchange Shares in connection with the transactions contemplated by this Agreement. (c) On or prior to the Exchange, the Company will have authorized a sufficient number of shares of Exchange Stock to effect the Exchange and Common Stock issuable upon conversion of such shares of Exchange Stock (the “Conversion Shares”), all having the rights, preferences, privileges and restrictions set forth in the Eighth Amended and
DB1/ 173449794.10 Restated Certificate of Incorporation of the Company (the “Restated Certificate”). The Company and the Purchaser hereby acknowledge and agree that the Shares shall have the rights, preferences and privileges and be subject to the obligations contained in each of the Transaction Agreements as if such shares were purchased pursuant to the terms of the Primary Transactions Agreement. 2.8 Conditions to the Closing. The obligations of the Purchaser, the Sellers and the Company to consummate the Exchange and the Backstop Closing are subject to the satisfaction or waiver (by the applicable party or parties), at or prior to the Backstop Closing, of each of the following conditions: (a) the representations and warranties of each Seller set forth in Section 4, of the Purchaser set forth in Section 3, and of the Company set forth in Section 5, shall be true and correct in all material respects as of the Effective Date and as of the Backstop Closing, except (x) for representations and warranties that speak as of a specified date, which shall be true and correct in all material respects as of such date, and (y) that, with respect to the representations and warranties of the Company incorporated pursuant to Section 5.1: (i) The representations and warranties of the Company contained in Section 2 of the Primary Transactions Agreement (other than the Fundamental Representations (as defined in the Primary Transactions Agreement)) shall be true and correct as of the Effective Date (or, in the case of representations and warranties that speak as of a specified date, as of such specified date), except as would not constitute a Material Adverse Effect (as defined in the Primary Transactions Agreement); (ii) The Fundamental Representations shall be true and correct in all material respects as of the Effective Date, except for representations and warranties that speak as of a specified date, which shall be true and correct in all material respects as of such date; (iii) The Closing Representations (as defined in the Primary Transactions Agreement) (other than the representations and warranties set forth in Section 2.8 of the Primary Transactions Agreement included in the Closing Representations) shall be true and correct in all material respects as of the Backstop Closing, except for representations and warranties that speak as of a specified date, which shall be true and correct in all material respects as of such date. The representations and warranties set forth in Section 2.8 of the Primary Transactions Agreement included in the Closing Representations shall be true and correct as of the Backstop Closing (or, in the case of representations and warranties that speak as of a specified date, as of such specified date), except where the failure of such representations and warranties to be true and correct has not resulted in, or would not reasonably be expected to result in, a material impairment of (i) the Company Intellectual Property (as defined in the Primary Transactions Agreement), taken as a whole, or (ii) the Company’s ability to conduct its business; and (iv) The representations and warranties of the Company contained in Section 2 of the Primary Transactions Agreement (other than the Closing Representations) shall be true and correct as of the Backstop Closing (or, in the case of
DB1/ 173449794.10 representations and warranties that speak as of a specified date, as of such specified date), except as would not constitute a Material Adverse Effect. (b) each party shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement required to be performed or complied with on or before the Backstop Closing; and (c) the Closing (as defined in the Primary Transactions Agreement) shall have occurred. For the avoidance of doubt, the conditions set forth in Section 2.8(a) (solely as to the representations and warranties of the Sellers) and Section 2.8(b) (solely as to the covenants, agreements and obligations of the Sellers) shall apply severally, and not jointly, with respect to each Seller, and the failure of any such condition with respect to any one Seller shall not affect the obligations of the parties to consummate the Exchange and the Backstop Closing with respect to any other Seller consistent with Section 2.2. 2.9 Termination. This Agreement may be terminated, and the Exchange and the transactions contemplated hereby may be abandoned, at any time prior to the Backstop Closing: (a) by mutual written consent of the Company, the Purchaser and the Sellers; (b) by either the Purchaser or the Company if a governmental authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered any law or a final and non-appealable order permanently enjoining or otherwise prohibiting the transactions contemplated by this Agreement; provided, that any termination pursuant to this Subsection 2.9(b) shall not be available to any party who has breached this Agreement if such breach caused, or has resulted in, such order having been issued; or (c) by the Purchaser, the Company or any Seller (in the case of any Seller, solely with respect to such Seller), if the Backstop Closing has not occurred on or before the Outside Date; provided that the right to terminate pursuant to this Section 2.9(c) shall not be available to any party whose material breach of this Agreement has been the primary cause of the failure of the Backstop Closing to occur on or before the Outside Date. 3. Representations and Warranties of the Purchaser. The Purchaser represents and warrants to the Sellers and the Company as follows: 3.1 Authorization. The Purchaser has full power and authority to enter into this Agreement and the Registration Rights Agreement and such agreements constitute its valid and legally-binding obligation, enforceable against the Purchaser in accordance with their terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. All corporate action required to be taken by the Purchaser’s board of directors and stockholders in order to authorize the Purchaser to enter into this Agreement and the Registration Rights Agreement and to issue the Purchaser Stock to the Sellers has been taken or will be taken
DB1/ 173449794.10 prior to the Backstop Closing. All action on the part of the officers of the Purchaser necessary for the execution and delivery of this Agreement and the Registration Rights Agreement and the issuance and delivery of the Purchaser Stock to the Sellers has been taken or will be taken prior to the Backstop Closing. 3.2 Purchase for Own Account for Investment. The Purchaser is purchasing the Shares (together with the Conversion Shares, the “Securities”) for the Purchaser’s own account, for investment purposes only and not with a view to, or for sale in connection with, a distribution of the Securities within the meaning of the Securities Act of 1933, as amended (the “1933 Act”). The Purchaser has no present intention of selling or otherwise disposing of all or any portion of the Securities, and the Purchaser has not granted or agreed to grant any beneficial ownership of any of the Securities to any other person (other than the members, manager, partners and/or stockholders of the Purchaser who may be deemed to have an indirect beneficial interest by virtue of their ownership interests in the Purchaser). The Purchaser was not formed for the specific purpose of acquiring the Securities. 3.3 Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act. 3.4 Access to Information. The Purchaser has had access to all information regarding the Company and its present and prospective business, assets, liabilities and financial condition that Purchaser considers important in making the decision to acquire the Securities. The foregoing does not limit or modify the representations and warranties of (i) the Company in Section 2 of the Primary Transactions Agreement or the right of the Purchaser to rely thereon, (ii) each Seller in Section 4 of this Agreement or the right of the Purchaser to rely thereon, or (iii) the Company in Section 5 of this Agreement or the right of the Purchaser to rely thereon. 3.5 Understanding of Risks. The Purchaser is fully aware of: (a) the highly speculative nature of the Securities; (b) the financial hazards involved; (c) the lack of liquidity of the Securities; (d) the qualifications and backgrounds of the management of the Company; and (e) the tax consequences of acquiring the Securities. The foregoing does not limit or modify the representations and warranties of (i) the Company in Section 2 of the Primary Transactions Agreement or the right of the Purchaser to rely thereon, (ii) each Seller in Section 4 of this Agreement or the right of the Purchaser to rely thereon, or (iii) the Company in Section 5 of this Agreement or the right of the Purchaser to rely thereon. 3.6 Purchaser’s Qualifications. The Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of this prospective investment, has the capacity to protect the Purchaser’s own interests in connection with this transaction, and is financially capable of bearing a total loss of the Securities. The foregoing does not limit or modify the representations and warranties of (i) the Company in Section 2 of the Primary Transactions Agreement or the right of the Purchaser to rely thereon, (ii) each Seller in Section 4 of this Agreement or the right of the Purchaser to rely thereon, or (iii) the Company in Section 5 of this Agreement or the right of the Purchaser to rely thereon.
DB1/ 173449794.10 3.7 No General Solicitation. At no time was the Purchaser presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television, Internet or other form of general advertising or solicitation in connection with the Securities. 3.8 Compliance with Securities Laws. The Purchaser understands and acknowledges that, in reliance upon the representations and warranties made by the Purchaser herein, the Securities are not being registered with the Securities and Exchange Commission (“SEC”) under the 1933 Act or being qualified under the California Corporate Securities Law of 1968, as amended (the “Law”), but instead are being transferred under an exemption or exemptions from the registration and qualification requirements of the 1933 Act and the Law or other applicable securities laws which impose certain restrictions on the Purchaser’s ability to transfer the Securities. 3.9 Securities Law Restrictions on Transfer. The Purchaser understands that the Purchaser may not transfer any Securities unless such Securities are registered under the 1933 Act or qualified under the Law or other applicable securities laws or unless, in the opinion of counsel to the Company, exemptions from such registration and qualification requirements are available. The Purchaser understands that only the Company may file a registration statement with the SEC or the California Commissioner of Corporations or other applicable securities commissioners and that the Company is under no obligation to do so with respect to the Securities, other than as may be required under the Investors Rights Agreement (as defined in the Primary Transactions Agreement). The Purchaser has also been advised that exemptions from registration and qualification may not be available or may not permit the Purchaser to transfer all or any of the Securities in the amounts or at the times proposed by the Purchaser. 3.10 Rule 144. The Purchaser acknowledges that, because the Securities have not been registered under the 1933 Act, the Securities must be held indefinitely unless subsequently registered under the 1933 Act or unless an exemption from such registration is available. The Purchaser is aware of the provisions of Rule 144 promulgated under the 1933 Act (“Rule 144”). In particular, the Purchaser is aware that the Securities may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. Among the conditions for use of Rule 144 is the availability of current information to the public about the Company. Such information is not now available, and the Company has no present plans to make such information available. 3.11 Access to and Review of Company Information. The Purchaser represents that it is experienced in evaluating early-stage companies such as the Company, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment. Purchaser (a) has adequate information concerning the business and financial condition of the Company to make an informed decision regarding the purchase of the Shares, (b) has been afforded an opportunity to ask questions and receive answers from the Sellers and from the Company regarding the transactions contemplated by this Agreement, and (c) has independently and without reliance upon the Sellers, and based on such information and the advice of such advisors as Purchaser has deemed appropriate, made its own analysis and decision to enter into this Agreement. Purchaser acknowledges that neither the Company, the Sellers nor any affiliates thereof is acting as a fiduciary or financial or investment adviser to the Purchaser, and has not
DB1/ 173449794.10 given the Purchaser any investment advice, opinion or other information on whether the purchase of the Shares is prudent. Purchaser acknowledges that (i) the Sellers and the Company currently may have, and later may come into possession of, information with respect to the Company that is not known to Purchaser and that may be material to a decision to purchase the Shares (“Purchaser Excluded Information”), (ii) Purchaser has determined to purchase the Shares notwithstanding its lack of knowledge of Purchaser Excluded Information and (iii) the Sellers shall not have any liability to Purchaser, and Purchaser waives and releases any claims that it might have against the Sellers whether under applicable securities laws or otherwise, with respect to the nondisclosure of Purchaser Excluded Information in connection with the purchase of the Shares and the transactions contemplated by this Agreement. Purchaser understands that the Sellers will rely on the accuracy and truth of the foregoing representations, and Purchaser hereby consents to such reliance. The foregoing does not limit or modify the representations and warranties of (i) the Company in Section 2 of the Primary Transactions Agreement or the right of the Purchaser to rely thereon, (ii) each Seller in Section 4 of this Agreement or the right of the Purchaser to rely thereon, or (iii) the Company in Section 5 of this Agreement or the right of the Purchaser to rely thereon. Notwithstanding anything to the contrary in this Section 3.11, nothing in this Section 3.11 shall limit, waive or release any claim of Purchaser for fraud, intentional misrepresentation or willful breach. 3.12 Future Gains. Neither the Sellers nor the Company have made any representation to the Purchaser concerning the advisability of the Purchaser’s decision to purchase the Sellers’ Shares or the current or potential future value thereof. The foregoing does not limit or modify the representations and warranties of (i) the Company in Section 2 of the Primary Transactions Agreement or the right of the Purchaser to rely thereon, (ii) each Seller in Section 4 of this Agreement or the right of the Purchaser to rely thereon, or (iii) the Company in Section 5 of this Agreement or the right of the Purchaser to rely thereon. 3.13 No Purchaser Reimbursement. No portion of the Purchase Price paid by the Purchaser has been or will be delivered, paid or remitted, directly or indirectly, to the Purchaser or any of its affiliates. The Purchaser has not entered and will not enter into any agreement providing for the delivery, payment or remittance, directly or indirectly, of any portion of the Purchase Price paid by the Purchaser or any of its affiliates. 3.14 Tax Matters. The Purchaser expressly acknowledges and agrees that other than as expressly stated in this Agreement and the Primary Transactions Agreement, neither the Sellers nor the Company, nor any of their respective agents has made any representation to the Purchaser with respect to the tax or other financial treatment of the transactions contemplated by this Agreement. 3.15 Valid Issuance of Purchaser Stock. The Purchaser Stock, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer set forth in the Registration Rights Agreement, under applicable state and federal securities laws and liens or encumbrances created by or imposed by a Seller. Assuming the accuracy of the representations of the Sellers in Section 4 of this Agreement, the Purchaser Stock will be issued in compliance with all applicable federal and state securities laws.
DB1/ 173449794.10 3.16 Government Consents and Filings. Assuming the accuracy of the representations made by the Sellers in Section 4 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Purchaser in connection with the consummation of the transactions contemplated by this Agreement, except for (i) the filings contemplated by the Registration Rights Agreement and (ii) filings pursuant to applicable state securities laws, which have been made or will be made in a timely manner. 3.17 Compliance with Other Instruments. The Purchaser is not in violation or default (i) of any provisions of its Amended and Restated Certificate of Incorporation or its Bylaws, (ii) of any instrument, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, or (iv) under any agreement or contract to which it is a party or by which it is bound, or (v) to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Purchaser and with respect to clauses (i) through (v), the violation of which would have a material adverse effect on the Purchaser or the Purchaser Stock. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated thereby, including the issuance of the Purchaser Stock, will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement; or (ii) an event which results in the creation of any lien, charge or encumbrance upon the Purchaser Stock. 3.18 SEC Filings. The Purchaser has filed or furnished, on a timely basis, all reports, schedules, forms, statements and other documents required to be filed or furnished by it with the SEC since January 1, 2024 (collectively, and together with all exhibits and schedules thereto and documents incorporated by reference therein, the “SEC Reports”). As of their respective filing dates (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing), each of the SEC Reports complied in all material respects with the applicable requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley Act of 2002, and the rules and regulations of the SEC promulgated thereunder, in each case as in effect on the applicable filing date. As of their respective filing dates (or, if amended or superseded, as of the date of the last such amendment or superseding filing), none of the 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; provided that, with respect to any financial statements or other financial information subsequently restated, revised or corrected in the Purchaser’s Annual Report on Form 10-K/A filed with the SEC on May 7, 2025, the foregoing representation shall apply to such financial statements and financial information as so restated, revised or corrected and not as originally reported. The financial statements of the Purchaser included in the SEC Reports, in each case giving effect to any restatement, revision or correction thereof reflected in any SEC Report filed prior to the date hereof, were prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited interim statements, as permitted by Form 10-Q, and subject, in the case of unaudited interim statements, to normal year-end audit adjustments) and fairly present in all material respects the consolidated financial position of the
DB1/ 173449794.10 Purchaser and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the periods then ended. 4. Representations and Warranties of the Sellers. Each Seller, severally and not jointly, represents and warrants to the Company and the Purchaser as follows: 4.1 Transfer for Own Account. Seller is selling the Shares for Seller’s own account only and not with a view to, or for sale in connection with, a distribution of the Shares within the meaning of the 1933 Act. No portion of the Purchase Price will be received indirectly by the Company. 4.2 No General Solicitation. At no time has Seller presented to the Purchaser or any other party with or solicited the Purchaser or any other party through any publicly issued or circulated newspaper, mail, radio, television, Internet or other form of general advertisement or solicitation in connection with the transfer of the Shares. 4.3 Title to Shares. Seller is the beneficial owner of and has valid marketable title to the Pre-Exchange Shares identified opposite Seller’s name on Schedule A, free and clear of any pledge, lien, security interest, encumbrance, trust, claim, pledge, mortgage, option, equitable interest or other restrictions of any kind other than the Transfer Restrictions, and, upon the Exchange, Seller will be the beneficial owner of and have valid marketable title to the Shares, free and clear of the same. Other than pursuant to the Transfer Restrictions, Seller has not granted any third party any rights in the Pre-Exchange Shares or the Shares, and such shares are fully vested and not subject to any vesting provisions. Upon the sale and transfer of the Shares, and payment therefor, in accordance with the provisions of this Agreement, the Purchaser will acquire absolute, valid marketable title to the Shares being acquired by the Purchaser hereunder, free and clear of any pledge, lien, security interest, encumbrance, trust, claim, pledge, mortgage, option, equitable interest or other restrictions of any kind other than pursuant to the Transfer Restrictions. Except as contemplated by the agreements entered into in connection with the Primary Transactions Agreement, Seller is not a party to, nor has knowledge of, any agreements, written or oral, relating to the acquisition, disposition or registration under the 1933 Act, or voting of, shares of the capital stock of the Company. 4.4 Consents. All consents, approvals, authorizations and orders required for the execution and delivery of this Agreement and (a) the exchange of Seller’s Pre-Exchange Shares for the Exchange Stock and (b) the transfer of the Shares under this Agreement have been obtained and are in full force and effect. 4.5 Authority. Seller has full legal right, power and authority to enter into and perform its obligations under this Agreement, to effect the Exchange of Seller’s Pre-Exchange Shares for the Exchange Stock, and to transfer the Shares under this Agreement, and Seller is not obligated to transfer or exchange the Pre-Exchange Shares or the Shares to or with any other person or entity other than pursuant to the Transfer Restrictions. 4.6 Sophisticated Seller. Seller (a) is a sophisticated individual familiar with transactions similar to those contemplated by this Agreement, (b) has adequate information concerning the business and financial condition of the Company to make an informed decision
DB1/ 173449794.10 regarding the sale of the Shares, (c) has independently and without reliance upon the Purchaser, and based on such information and the advice of such advisors as Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement. Seller acknowledges that neither the Company, the Purchaser nor any affiliates thereof is acting as a fiduciary or financial or investment adviser to Seller, and has not given Seller any investment advice, opinion or other information on whether the sale of the Shares is prudent. Seller acknowledges that (i) the Purchaser and the Company currently may have, and later may come into possession of, information with respect to the Company that is not known to Seller and that may be material to a decision to sell the Shares (“Seller Excluded Information”), (ii) Seller has determined to sell the Shares notwithstanding its lack of knowledge of Seller Excluded Information and (iii) neither the Purchaser nor the Company shall have any liability to Seller, and Seller waives and releases any claims that he might have against the Purchaser and the Company whether under applicable securities laws or otherwise, with respect to the nondisclosure of Seller Excluded Information in connection with the sale of the Shares and the transactions contemplated by this Agreement. Seller acknowledges and understands that the Shares may increase in value after the date hereof and that Seller shall not realize the upside potential with respect to the Shares. Seller understands that the Purchaser will rely on the accuracy and truth of the foregoing representations, and Seller hereby consents to such reliance. 4.7 Full Disclosure. Seller acknowledges that Seller has received all the information it considers necessary or appropriate for deciding whether to enter into this Agreement. Seller further represents that Seller has had an opportunity to ask questions and receive full answers from the Company concerning, among other things, its financial condition, its management, its prior activities and any other information which Seller considers relevant or appropriate in connection with entering into this Agreement. 4.8 Purchase Price. Seller acknowledges that the Purchase Price represents a negotiated price. 4.9 No Purchaser Reimbursement. To Seller’s knowledge, no portion of the Purchase Price paid by the Purchaser has been or will be delivered, paid or remitted, directly or indirectly, to the Purchaser or any of its affiliates. Seller has not and will not enter into any agreement providing for the delivery, payment or remittance, directly or indirectly, of any portion of the Purchase Price paid by the Purchaser or any of its affiliates. 4.10 Tax Matters. In making the decision to sell the Shares, Seller has been given an opportunity to consult with Seller’s own attorney and tax professionals regarding the federal, state, local and foreign tax consequences of this sale of the Shares and the transactions contemplated by this Agreement. Seller is not relying on any statements or representations of the Company or the Purchaser, or any counsel, advisor or agent of the Company or the Purchaser. Seller expressly acknowledges and agrees that neither the Purchaser nor the Company, nor any of their respective agents has made any representation to Seller with respect to the tax or other financial treatment of the transactions contemplated by this Agreement. Seller shall be solely responsible for the payment of any and all income, transfer, withholding and other taxes, filing and recording fees and similar charges relating to the transactions contemplated herein, including any interest, penalty or addition thereto.
DB1/ 173449794.10 4.11 No Conflicts. The execution, delivery and performance of this Agreement by Seller, and the consummation of the transactions contemplated hereby, will not (a) constitute a violation (with or without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule of any court, agency or other governmental authority applicable to Seller, (b) require any consent, approval or authorization of, or declaration, filing or registration with, any person or entity, (c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which Seller is a party or by which it is bound or to which any assets of Seller are subject, or (d) result in the creation of any lien or encumbrance upon the assets of Seller, or upon any such Shares or other securities of the Company. 4.12 Investment in Exchange Stock. Seller acknowledges that, pursuant to the Exchange, Seller will acquire shares of Exchange Stock, and represents that Seller is acquiring such shares for Seller’s own account, for investment purposes only and not with a view to distribution, except for the immediate resale to Purchaser contemplated by this Agreement. 4.13 Accredited Investor. Seller is an accredited investor as defined in Rule 501(a) of Regulation D. 4.14 Access to Information; No Reliance. Seller has had access to information regarding the Company sufficient to evaluate the Exchange and has not relied on the Company or Purchaser in making the decision to accept Series G Preferred Stock in the Exchange. 4.15 No Registration. Seller understands the Series G Preferred Stock received in the Exchange has not been registered under the 1933 Act and is subject to transfer restrictions, mitigated by the immediate, contemporaneous resale to the Purchaser at the Backstop Closing. 4.16 Compliance with Securities Laws. Seller understands and acknowledges that, in reliance upon the representations and warranties made by the Seller herein, the Purchaser Stock is not being registered with the SEC under the 1933 Act, but instead is being issued under an exemption or exemptions from the registration requirements of the 1933 Act and other applicable securities laws which impose certain restrictions on the Seller’s ability to transfer the Purchaser Stock, subject to the rights of Seller under the Registration Rights Agreement. 4.17 Securities Law Restrictions on Transfer. Seller understands that Seller may not transfer the Purchaser Stock unless such Purchaser Stock is registered under the 1933 Act and any other applicable securities laws or an exemption from such registration requirements is available. Seller acknowledges that, except as expressly provided in the Registration Rights Agreement, the Purchaser is under no obligation to register the Purchaser Stock under the 1933 Act or any other applicable securities laws. 4.18 Rule 144. Seller is aware of the provisions of Rule 144 and that any resale of Purchaser Stock in reliance on Rule 144 must satisfy the applicable requirements of Rule 144. 5. Representations and Warranties of Company. The Company represents and warrants to the Purchaser and the Sellers as follows:
DB1/ 173449794.10 5.1 Primary Transactions Agreement. The Company makes those representations and warranties to the Purchaser as, and to the same extent, set forth in Section 2 of the Primary Transactions Agreement, subject to the exceptions set forth in the Disclosure Schedule attached thereto. 5.2 Authorization. The Company has full power and authority to enter into this Agreement and to consummate the Exchange and issue the Exchange Stock in connection therewith. All corporate action required to be taken by the Board of Directors and the Company’s stockholders in order to authorize the Company to enter into this Agreement, consummate the Exchange and issue the Exchange Stock has been taken or will be taken prior to the Backstop Closing. All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement, the performance of all obligations of the Company under this Agreement to be performed as of the Backstop Closing, and the issuance and delivery of the Exchange Stock in connection with the Exchange has been taken or will be taken prior to the Backstop Closing. This Agreement constitutes its valid and legally-binding obligation, enforceable against the Company in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 5.3 No Conflicts. The execution, delivery and performance of this Agreement by the Company, and the consummation of the transactions contemplated hereby, including the Exchange or the issuance and delivery of the Exchange Stock in connection therewith, will not (a) constitute a violation (with or without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule of any court, agency or other governmental authority applicable to the Company, (b) require any consent, approval or authorization of, or declaration, filing or registration with, any person or entity, (c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company are subject, or (d) result in the creation of any lien or encumbrance upon the assets of the Company, or upon the Exchange Stock, the Conversion Shares or other securities of the Company. 5.4 Valid Issuance of Exchange Stock. The Exchange Stock, when issued and delivered in accordance with the terms of this Agreement in connection with the Exchange, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Seller or the Purchaser. Assuming the accuracy of the representations of the Sellers and the Purchaser in this Agreement, the Exchange Stock will be issued in compliance with all applicable federal and state securities laws. The Conversion Shares have been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated Certificate, will be validly issued, fully paid and nonassessable. 6. Compliance with Laws and Regulations. The Exchange and the sale and transfer of the Shares will be subject to and conditioned upon compliance by the Company, the Purchaser and Sellers with all applicable state and federal laws and regulations and with all
DB1/ 173449794.10 applicable requirements of any stock exchange or automated quotation system on which the Company’s securities may be listed or quoted at the time of such sale or transfer. 7. No Reliance. The Sellers and the Purchaser acknowledge and agree that neither the Company, nor any of its stockholders, officers, directors, employees, or agents (other than the Sellers and the Purchaser) have (a) acted as an agent, finder or broker for the Sellers or the Purchaser or their respective agents with respect to the offer, purchase and/or sale of the Shares, (b) made any representations or warranties of any kind, express or implied, to the Sellers or the Purchaser or their respective agents in connection with the Exchange or the offer, purchase and/or sale of the Shares, other than to the Purchaser as set forth in Section 5, or (c) have at any time had any duty to the Sellers or the Purchaser or their respective agents to disclose any information relating to the Company, its business, or financial condition or relating to any other matters in connection with the Exchange or the offer, purchase and/or sale of the Shares. In making the decision to exchange the Pre-Exchange Shares for Exchange Stock in the Exchange and sell the Shares, the Sellers are relying solely on their own knowledge and experience and the representations and warranties of the Purchaser (and not on any information provided by the Company or its agents). In making its decision to purchase the Shares, the Purchaser is relying solely on its own knowledge and experience and the representations and warranties of each Seller expressly set forth in this Agreement and of the Company expressly set forth in this Agreement (and not on any other information provided by the Company or its agents). 8. Restrictive Legends and Stop-Transfer Orders. 8.1 Legends. Unless otherwise agreed by the Company, the Purchaser understands and agrees that the Company will place the legends set forth below or similar legends on any stock certificate(s) evidencing the Shares, together with any other legends that may be required by (a) state or federal securities laws, (b) the Restated Certificate, as amended from time to time, or the Company’s bylaws, (c) any other agreement affecting the Shares between each Seller and the Company, or between each Seller and any third party, or (d) any other agreement applicable to Purchaser including, but not limited to, the Primary Transactions Agreement and the other Transaction Agreements: “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 OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.” “THE SHARES REPRESENTED HEREBY ARE SUBJECT TO A VOTING AGREEMENT, AS MAY BE AMENDED FROM TIME TO TIME, (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH
DB1/ 173449794.10 INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF THAT VOTING AGREEMENT, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER AND OWNERSHIP SET FORTH THEREIN.” 8.2 Stop-Transfer Instructions. The Purchaser agrees that, in order to ensure compliance with the restrictions imposed by this Agreement, the Company may issue appropriate “stop-transfer” instructions to its transfer agent, if any, and if the Company acts as its own transfer agent, it may make appropriate notations to the same effect in its own records. The Company will not be required (a) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (b) to treat as owner of such Shares, or to accord the right to vote or receive dividends, to the Purchaser or other purchasers to whom such Shares have been so transferred. The Purchaser further understands and agrees that the Company may require written assurances, in form and substance satisfactory to counsel for the Company (which may include a requirement that the Purchaser’s counsel provide a legal opinion acceptable to the Company), before the Company effects any future transfers of the Shares. 9. General Provisions. 9.1 Successors and Assigns; Assignment. Except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 9.2 Governing Law. This Agreement will be governed by and construed in accordance with the corporate laws of the State of Delaware as such laws apply to contracts entered into and wholly to be performed therein by residents of such state. 9.3 Dispute Resolution. The parties (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (ii) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (iii) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above- named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
DB1/ 173449794.10 THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 9.4 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of (a) actual receipt or (b) (i) one (1) Business Day after delivery by confirmed facsimile transmission, (ii) one (1) Business Day after the business day of deposit with a nationally recognized overnight courier service for next day delivery, freight prepaid, or (iii) three (3) Business Days after deposit with the United States Post Office for delivery by registered or certified mail, postage prepaid. Any such notice shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten (10) days’ advance written notice to the other parties: (a) In the case of the Company, to the address set forth next to the Company on its signature page with a copy (which shall not constitute notice) to Wilson Sonsini Goodrich & Rosati, P.C. (“WSGR”), 650 Page Mill Road, Palo Alto, CA 94304, Attn: Rezwan Pavri, rpavri@wsgr.com; (b) in the case of a Seller, to the address set forth next to such Seller’s name on its signature page; and (c) in the case of the Purchaser, to the address set forth next to Purchaser’s name on its signature page with a copy (which shall not constitute notice) to Morgan, Lewis & Bockius LLP, 2222 Market Street, Philadelphia, PA 19103-3007, Attn: Aaron D. Suh (aaron.suh@morganlewis.com) and Jeffrey P. Bodle (jeffrey.bodle@morganlewis.com). 9.5 Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement. 9.6 Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “Sections” and “Exhibits” will mean sections of this Agreement and exhibits hereto. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings given to them in the Primary Transactions Agreement. 9.7 Entire Agreement. This Agreement, the Primary Transactions Agreement, the other Transaction Agreements, and the agreements and documents referred to herein, together with all the schedules and exhibits hereto and thereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and
DB1/ 173449794.10 supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof. 9.8 Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement. Notwithstanding the foregoing, if the value of this Agreement based upon the substantial benefit of the bargain for any party is materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then the parties agree to substitute such provision(s) through good faith negotiations. 9.9 Amendment and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company, the Sellers and the Purchaser. Any amendment or waiver effected in accordance with this Section 9.9 shall be binding upon the parties hereto and each transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future holder of all such securities, and the Company. 9.10 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 9.11 Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom. 9.12 No Finder’s Fees. The Sellers and the Purchaser, severally and not jointly, represent to each other and the Company that such party neither is nor will be obligated for any finder’s fee or commission in connection with the transactions contemplated by this Agreement. Purchaser agrees to indemnify and to hold harmless the Company and the Sellers from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or representatives is responsible. The Sellers, severally and not jointly, agree to indemnify and to hold harmless the Company and the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which Sellers or any of their officers, employees, or representatives is responsible.
DB1/ 173449794.10 9.13 Specific Performance. Unless this Agreement has been terminated, each party to this Agreement acknowledges and agrees that any breach by it of this Agreement shall cause any (or either) of the other parties irreparable harm which may not be adequately compensable by money damages. Accordingly, except in the case of termination, in the event of a breach or threatened breach by a party of any provision of this Agreement, each party shall be entitled to seek the remedies of specific performance, injunction or other preliminary or equitable relief, without having to prove irreparable harm or actual damages. The foregoing right shall be in addition to such other rights or remedies as may be available to any party for such breach or threatened breach, including but not limited to the recovery of money damages, and the parties agree that such equitable remedies may be enforced in any federal or state courts located in the District of Delaware. 9.14 Confidentiality. The Purchaser and the Sellers agree to keep confidential and not disclose to any third party directly the terms and conditions of this Agreement, provided that nothing shall prevent any such party from disclosing such information (i) to the extent necessary in connection with the exercise of any remedy under this Agreement, (ii) to another party to this Agreement, (iii) to any federal, state, local, or foreign court, legislative, executive, or regulatory authority, or agency having jurisdiction over such party, including tax authorities, to the extent necessary and/or required to comply with such party’s obligations under any applicable law, (iv) to such party’s Representatives (as defined below) that in the reasonable judgment of such party need to know such information so long as any such Representative is directed and/or obligated to keep such information confidential, (v) to the extent such information is or becomes generally available to the public other than, through a breach of this section; (vi) pursuant to any order of any court or administrative agency, and/or request or demand by and/or of any federal, state, local, or foreign court, legislative, executive, or regulatory authority, or agency having jurisdiction over such party, or pursuant to any federal securities law or exchange rules; (vii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories, or other discovery requests; and (viii) by any Seller (or any of its Affiliates) to its and their existing or prospective partners, members, investors and other equityholders in the ordinary course of such Person’s fund reporting or fundraising activities, so long as such recipients are subject to customary confidentiality obligations. As used in this Section 9.14, (x) “Representatives” means, with respect to any party, any of such party’s or such party’s affiliates, directors, officers, employees, general partners, attorneys, accountants, financial and other advisers. The confidentiality obligations set forth in this Section shall terminate on the fifth (5th) anniversary of the Backstop Closing. 9.15 Survival. The representations, warranties, covenants and agreements made in this Agreement shall survive any investigation made by any party hereto and the closing of the transactions contemplated hereby. 9.16 Fees and Expenses. Irrespective of whether the Backstop Closing is effected, each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement and related agreements. 9.17 Waiver of Conflicts. Each party to this Agreement acknowledges that WSGR, counsel for the Company, may have in the past performed, and may continue to or in the future perform, legal services for certain of the Sellers and the Purchaser in matters that are
DB1/ 173449794.10 similar, but not substantially related, to the transactions described in this Agreement, including the representation of such Sellers and the Purchaser in venture capital financings and other matters. Accordingly, each party to this Agreement hereby acknowledges that (a) they have had an opportunity to ask for information relevant to this disclosure, and (b) WSGR represents only the Company with respect to the Agreement and the transactions contemplated hereby. The Company gives its informed consent to WSGR’s existing and/or future representation of such Sellers and the Purchaser in matters not substantially related to this Agreement, and each of the Sellers and the Purchaser hereby gives its informed consent to WSGR’s representation of the Company in connection with this Agreement and the transactions contemplated hereby. [Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. COMPANY: SKYDIO, INC. /s/ Adam Bry Adam Bry Chief Executive Officer Address: 3000 Clearview Way San Mateo, CA 94402
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. PURCHASER: AXON ENTERPRISE, INC. /s/ Brittany Bagley By: Brittany Bagley Its: Chief Operating Officer & Chief Financial Officer Address: 17800 N. 85th St. Scottsdale, AZ 85255
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: ANDREESSEN HOROWITZ LSV FUND II, L.P. By: [**] [**] Name: [**] Title: [**] ANDREESSEN HOROWITZ LSV FUND III, L.P. By: [**] [**] Name: [**] Title: [**] Address: [**]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: ANDREESSEN HOROWITZ LSV FUND IV, L.P. By: [**] [**] Name: [**] Title: [**] AH PARALLEL FUND IV, L.P. By: [**] [**] Name: [**] Title: [**] Address: [**]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: INSTITUTIONAL VENTURE PARTNERS XV, L.P. By: [**] [**] Name: [**] Title: [**] INSTITUTIONAL VENTURE PARTNERS XV EXECUTIVE FUND, L.P. By: [**] [**] Name: [**] Title: [**] Address: [**]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: LINSE CAPITAL FUND I LP By: [**] [**] Name: [**] Title: [**] LEVITATE CAPITAL SKY LLC By: [**] [**] Name: [**] Title: [**] LEVITATE CAPITAL, LP By: [**] [**] Name: [**] Title: [**] Address: [**]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: LINSE CAPITAL SKY II LLC By: [**] [**] Name: [**] Title: [**] LINSE CAPITAL SKY III LLC By: [**] [**] Name: [**] Title: [**] Address: [**]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: NEXT47 FUND 2020 L.P. By: [**] [**] Name: [**] Title: [**] NEXT47 FUND 2021 L.P. By: [**] [**] Name: [**] Title: [**] Address: [**]
IN WITNESS WHEREOF, the parties have executed this Secondary Stock Purchase and Exchange Agreement, as of the date first written above. SELLER: NEXT47 FUND 2022 L.P. By: [**] [**] Name: [**] Title: [**] NEXT47 FUND 2024 L.P. By: [**] [**] Name: [**] Title: [**] Address: [**]
Exhibit 99.1
Axon Invests $1.2 Billion in Skydio to Build the Future of Drone as First Responder
With an expanded partnership, Axon becomes exclusive Skydio distributor for public safety in the U.S. and Canada
SCOTTSDALE, Ariz., November 5, 2026 — Axon (Nasdaq: AXON), the global leader in public safety technology, today announced an additional $1.2 billion investment in Skydio. The agreement, which will add approximately 20% to Axon’s fully diluted ownership in Skydio at a $5.2 billion pre-money valuation, builds on a partnership that is already bringing Skydio drones to public safety agencies across the U.S., marking a major expansion of Axon's Drone as First Responder (DFR) program.
Axon will also become Skydio's exclusive distributor for public safety in the U.S. and Canada. Skydio serves more than 1,500 public safety customers, and more than 28 million Americans now live within two miles of a Skydio DFR dock. At agencies deploying Skydio DFR, priority response times have been reduced by as much as 65%, with drones arriving before officers on roughly 80% of calls where they are deployed. That earlier visibility can support safer responses, help de-escalate potentially deadly situations, locate missing children and other vulnerable people, and improve outcomes when every second matters.
“Within a decade, millions of drones will be working across America. Skydio is positioned to lead in every sector they touch,” said Rick Smith, Founder and CEO of Axon. “Axon is taking a major stake in one of the most valuable categories in tech, and Skydio stays free to move fast. With exclusive channel rights, Axon will widen its lead in public safety drones as Skydio builds the future of American aerial robotics. Two companies, each the best at what it does, will build something far bigger than either could alone.”
“Axon has been an incredible partner in bringing our drones to public safety customers across the U.S.,” said Adam Bry, CEO of Skydio. “We're excited to deepen that partnership with Axon becoming our exclusive channel for U.S. and Canadian public safety. This investment strengthens our ability to accelerate our technology roadmap, scale our impact in public safety and continue advancing autonomous flight across every critical industry we serve.”
Axon estimates the total addressable market for DFR at approximately $13 billion in the U.S. and Canada alone, an opportunity fully accessible through its partnered offering as thousands of agencies begin to evaluate and deploy DFR technology. That opportunity is already translating into significant commercial momentum: Skydio’s business is seeing rapid growth and expects to achieve approximately $1 billion in total bookings in its current fiscal year.
Axon's investment consists of approximately $1.2 billion comprised of a mix of cash and Axon stock, subject to final transaction terms. The investment includes both primary capital to Skydio and the purchase of shares from existing Skydio shareholders, with a portion of the cash consideration providing growth capital to accelerate innovation, expand Skydio's product portfolio and bring new drone capabilities to customers faster. Axon's larger ownership stake lets it participate in that growth. The transactions comprising the investment are expected to close in the fourth quarter of 2026 and first quarter of 2027, subject to customary closing conditions.
About Axon
Axon (Nasdaq: AXON) is the global leader in public safety technology supporting state, local, federal and international public safety agencies with technology designed to Protect Life. Complementing its mission, Axon’s growing Enterprise market focuses on protecting critical infrastructure and frontline workers across multiple industries including corporate security, hospitality, retail and healthcare. Founder-led since 1993, Axon builds products with transparency and responsibility. From TASER energy devices to today’s connected network of hardware - including cameras, drones, and robotics - cloud software, sensors, and AI-tools, the Axon ecosystem helps seamlessly protect people and places when it matters most. To ensure these technologies align with community expectations, Axon’s independent Ethics & Equity Advisory Council guides the ethical, inclusive, and accountable design of its products and services. Learn more about the EEAC and Axon’s Responsible Innovation framework at https://www.axon.com/responsibility.
Non-Axon trademarks are the property of their respective owners. Axon, TASER and the Delta Logo are trademarks of Axon Enterprise, Inc., some of which are registered in the US and other countries. For more information, visit www.axon.com/legal. All rights reserved.
Please visit https://investor.axon.com and https://www.axon.com/newsroom for more information.
About Skydio
Skydio is the largest U.S.-based drone manufacturer and world leader in flying robots. Founded in 2014, Skydio leverages breakthrough AI-backed autonomy to create drones that are easier to operate, safer to fly, and more capable in complex environments. Skydio systems are trusted by more than 4,000 agencies and organizations across the U.S. in the public safety and critical infrastructure sectors, every branch of the U.S. military, and the armed forces of 32 allied nations. Skydio designs, assembles, and supports its products in the U.S. from its headquarters in San Mateo, California. For more information, follow Skydio on LinkedIn at https://www.linkedin.com/company/skydio or visit https://www.skydio.com/
Forward-looking Statements
Forward-looking statements in this press release include, without limitation, statements regarding: Axon's future results and the benefits anticipated to be realized from the contemplated strategic investment; the expected timing and requirements for closing the strategic investment; the ongoing and future commercial relationship between Axon and Skydio; the timing and financial impacts of the strategic investment and other uncertainties and contingencies in connection with the foregoing; expectations about the market for our current and future products and services; as well as statements of management's strategies, goals and objectives and other similar expressions. Such statements give our current expectations or forecasts of future events; they do not relate strictly to historical or current facts. Words such as "may," "will," "should," "could," "would," "predict," "potential," "continue," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," and similar expressions, as well as statements in future tense, identify forward-looking statements. However, not all forward-looking statements contain these identifying words.We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. The following important factors could cause actual results to differ materially from those in the forward-looking statements: the possibility that the closing of the strategic investment does not occur or is delayed, including resulting negative impacts to the commercial relationship between Axon and Skydio; failure to satisfy the conditions to closing the strategic investment; negative effects of the announcement of the strategic investment; potential litigation associated with the strategic investment; our exposure to cancellations of government contracts due to non-appropriation clauses, exercise of a cancellation clause or non-exercise of contractually optional periods; the ability of law enforcement agencies to obtain funding, including based on tax revenues; our ability to design, introduce and sell new products, services or features; our ability to defend against litigation and protect our intellectual property, and the resulting costs of this activity; our ability to win bids through the open bidding process for governmental agencies; our ability to manage our supply chain and avoid production delays, shortages and impacts to expected gross margins; the impacts of inflation, macroeconomic conditions and global events; the impact of catastrophic events or public health emergencies; the impact of stock-based compensation expense, impairment expense and income tax expense on our financial results; customer purchase behavior, including adoption of our software as a service delivery model; negative media publicity or sentiment regarding our products; the impact of various factors on projected gross margins; defects in, or misuse of, our products; changes in the costs of product components and labor; loss of customer data, a breach of security or an extended outage, including by our third-party cloud-based storage providers; exposure to international operational risks; delayed cash collections and possible credit losses due to our subscription model; changes in government regulations in the United States and in foreign markets, especially related to the classification of our products by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives; our ability to integrate acquired businesses; the impact of declines in the fair values or impairment of our investments, including our strategic investments; our ability to attract and retain key personnel; litigation or inquiries and related time and costs; and counterparty risks relating to cash balances held in excess of federally insured limits. Many events beyond our control may determine whether results we anticipate will be achieved. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements. These factors are intended as cautionary statements for investors within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Readers can find them under the heading "Risk Factors" in our Annual and Quarterly Reports, and investors should refer to them. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
Except as required by law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Form 8-K, 10‑Q and 10‑K reports to the SEC. Our filings with the SEC may be accessed at the SEC's website at www.sec.gov.
Media Contact:
Kate MacKinnon
Vice President, Communications
press@axon.com