Annual
Reports and Form 10-K
Copies
of our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, may be obtained without charge by writing to the
Company’s Secretary, Cipherloc Corporation, 6836 Bee Cave Rd, Bldg. 1, S#279, Austin, TX 78746. The Notice, our Annual Report on
Form 10-K and this proxy statement are also available online at .
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By
Order of the Board of Directors
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/s/
Tom Wilkinson
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Tom
Wilkinson
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Chairman
of the Board of Directors
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July 15, 2021
APPENDIX
A
CIPHERLOC
CORPORATION
2021 OMNIBUS EQUITY INCENTIVE PLAN
Section
1. Purpose of Plan.
The
name of the Plan is the Cipherloc Corporation 2021 Omnibus Equity Incentive Plan (the “Plan”). The purposes
of the Plan are to (i) provide an additional incentive to selected employees, directors, and independent contractors of the Company or
its Affiliates whose contributions are essential to the growth and success of the Company, (ii) strengthen the commitment of such individuals
to the Company and its Affiliates, (iii) motivate those individuals to faithfully and diligently perform their responsibilities and (iv)
attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company.
To accomplish these purposes, the Plan provides that the Company may grant Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Other Stock-Based Awards or any combination of the foregoing.
Section
2. Definitions.
For
purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Administrator”
means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 3 hereof.
(b) “Affiliate”
means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified as of any date of determination.
(c) “Applicable
Laws” means the applicable requirements under U.S. federal and state corporate laws, U.S. federal and state securities laws,
including the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any
other country or jurisdiction where Awards are granted under the Plan, as are in effect from time to time.
(d) “Award”
means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit or Other Stock-Based Award granted under the Plan.
(e) “Award
Agreement” means any written notice, agreement, contract or other instrument or document evidencing an Award, including through
electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine, consistent
with the Plan.
(f) “Beneficial
Owner” (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.
(g) “Board”
means the Board of Directors of the Company.
(h) “Bylaws”
mean the bylaws of the Company, as may be amended and/or restated from time to time.
(i) “Cause”
has the meaning assigned to such term in any individual service, employment or severance agreement or Award Agreement with the Participant
or, if no such agreement exists or if such agreement does not define “Cause,” then “Cause” means, with respect
to a Participant, the occurrence of any of the following: (i) a conviction of a Participant for a felony crime or the failure of a Participant
to contest prosecution for a felony crime; (ii) a Participant’s misconduct, fraud, disloyalty or dishonesty (as such terms may
be defined by the Committee in its sole discretion); (iii) any unauthorized use or disclosure of confidential information or trade secrets
by a Participant; (iv) a Participant’s negligence, malfeasance, breach of fiduciary duties, neglect of duties; (v) any material
violation by a Participant of a written Company or Subsidiary or Affiliate policy or any material breach by a Participant of a written
agreement with the Company or Subsidiary or Affiliate; or (vi) any other act or omission by a Participant that, in the opinion of the
Committee, could reasonably be expected to adversely affect the Company’s or a Subsidiary’s or an Affiliate’s business,
financial condition, prospects and/or reputation. A Participant’s employment or provision of services shall be deemed to have terminated
for Cause if, after the Participant’s employment or provision of services has terminated, facts and circumstances are discovered
that would have justified a termination for Cause, including, without limitation, violation of material Company policies or breach of
noncompetition, confidentiality or other restrictive covenants that may apply to the Participant. Any voluntary termination of employment
or service by the Participant in anticipation of an involuntary termination of the Participant’s employment or service, as applicable,
for Cause shall be deemed to be a termination for Cause.
(j) “Change
in Capitalization” means any (i) merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase
or other reorganization or corporate transaction or event, (ii) special or extraordinary dividend or other extraordinary distribution
(whether in the form of cash, Common Stock or other property), stock split, reverse stock split, share subdivision or consolidation,
(iii) combination or exchange of shares or (iv) other change in corporate structure, which, in any such case, the Administrator determines,
in its sole discretion, affects the Shares such that an adjustment pursuant to Section 5 hereof is appropriate.
(k) “Change
in Control” means the first occurrence of an event set forth in any one of the following paragraphs following the Effective
Date:
(1) any
Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially
Owned by such Person which were acquired directly from the Company or any Affiliate thereof) representing more than fifty percent (50%)
of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph (3) below; or
(2) the
date on which individuals who constitute the Board as of the Effective Date and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation,
relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were
directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended cease
for any reason to constitute a majority of the number of directors serving on the Board; or
(3) there
is consummated a merger or consolidation of the Company or any direct or indirect Subsidiary with any other corporation or other entity,
other than (i) a merger or consolidation (A) which results in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any Subsidiary, fifty percent (50%) or more of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (B) following
which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the
Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger or consolidation is
then a Subsidiary, the ultimate parent thereof, or (ii) a merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company
(not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates)
representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities; or
(4) the
stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than (A) a sale or disposition
by the Company of all or substantially all of the Company’s assets to an entity, more than fifty percent (50%) of the combined
voting power of the voting securities of which are owned by stockholders of the Company following the completion of such transaction
in substantially the same proportions as their ownership of the Company immediately prior to such sale or (B) a sale or disposition of
all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately
prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if
such entity is a subsidiary, the ultimate parent thereof.
Notwithstanding
the foregoing, (i) a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series
of integrated transactions immediately following which the holders of Common Stock immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of transactions and (ii) to the extent required to avoid accelerated
taxation and/or tax penalties under Section 409A of the Code, a Change in Control shall be deemed to have occurred under the Plan with
respect to any Award that constitutes deferred compensation under Section 409A of the Code only if a change in the ownership or effective
control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred
under Section 409A of the Code. For purposes of this definition of Change in Control, the term “Person” shall not include
(i) the Company or any Subsidiary thereof, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the
Company or any Subsidiary thereof, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership
of shares of the Company.
(l) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.
(m) “Committee”
means any committee or subcommittee the Board may appoint to administer the Plan. Subject to the discretion of the Board, the Committee
shall be composed entirely of individuals who meet the qualifications of a “non-employee director” within the meaning of
Rule 16b-3 under the Exchange Act and any other qualifications required by the applicable stock exchange on which the Common Stock is
traded.
(n) “Common
Stock” means the common stock of the Company, par value $0.01.
(o) “Company”
means Cipherloc Corporation, a Texas corporation (or any successor company, except as the term “Company” is used in
the definition of “Change in Control” above).
(p) “Disability”
has the meaning assigned to such term in any individual service, employment or severance agreement or Award Agreement with the Participant
or, if no such agreement exists or if such agreement does not define “Disability,” then “Disability” means that
a Participant, as determined by the Administrator in its sole discretion, (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees
of the Company or an Affiliate thereof.
(q) “Effective
Date” has the meaning set forth in Section 17 hereof.
(r) “Eligible
Recipient” means an employee, director or independent contractor of the Company or any Affiliate of the Company who has been
selected as an eligible participant by the Administrator; provided, however, to the extent required to avoid accelerated
taxation and/or tax penalties under Section 409A of the Code, an Eligible Recipient of an Option or a Stock Appreciation Right means
an employee, non-employee director or independent contractor of the Company or any Affiliate of the Company with respect to whom the
Company is an “eligible issuer of service recipient stock” within the meaning of Section 409A of the Code.
(s) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time.
(t) “Exempt
Award” shall mean the following:
(1) An
Award granted in assumption of, or in substitution for, outstanding awards previously granted by a corporation or other entity acquired
by the Company or any of its Subsidiaries or with which the Company or any of its Subsidiaries combines by merger or otherwise. The terms
and conditions of any such Awards may vary from the terms and conditions set forth in the Plan to the extent the Administrator at the
time of grant may deem appropriate, subject to Applicable Laws.
(2) An
award that an Eligible Recipient purchases at Fair Market Value (including awards that an Eligible Recipient elects to receive in lieu
of fully vested compensation that is otherwise due) whether or not the Shares are delivered immediately or on a deferred basis.
(u) “Exercise
Price” means, (i) with respect to any Option, the per share price at which a holder of such Option may purchase Shares issuable
upon exercise of such Award, and (ii) with respect to a Stock Appreciation Right, the base price per share of such Stock Appreciation
Right.
(v) “Fair
Market Value” of a share of Common Stock or another security as of a particular date shall mean the fair market value as determined
by the Administrator in its sole discretion; provided, that, (i) if the Common Stock or other security is admitted to trading on a national
securities exchange, the fair market value on any date shall be the closing sale price reported on such date, or if no shares were traded
on such date, on the last preceding date for which there was a sale of a share of Common Stock on such exchange, or (ii) if the Common
Stock or other security is then traded in an over-the-counter market, the fair market value on any date shall be the average of the closing
bid and asked prices for such share in such over-the-counter market for the last preceding date on which there was a sale of such share
in such market.
(w) “Free
Standing Rights” has the meaning set forth in Section 8.
(x) “Good
Reason” has the meaning assigned to such term in any individual service, employment or severance agreement or Award Agreement
with the Participant or, if no such agreement exists or if such agreement does not define “Good Reason,” “Good Reason”
and any provision of this Plan that refers to “Good Reason” shall not be applicable to such Participant.
(y) “Grandfathered
Arrangement” means an Award which is provided pursuant to a written binding contract in effect on November 2, 2017, and which
was not modified in any material respect on or after November 2, 2017, within the meaning of Section 13601(e)(2) of P.L. 115.97, as may
be amended from time to time (including any rules and regulations promulgated thereunder).
(z) “Incentive
Compensation” means annual cash bonus and any Award.
(aa) “ISO”
means an Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of the Code.
(bb) “Nonqualified
Stock Option” shall mean an Option that is not designated as an ISO.
(cc) “Option”
means an option to purchase shares of Common Stock granted pursuant to Section 7 hereof. The term “Option” as used in the
Plan includes the terms “Nonqualified Stock Option” and “ISO.”
(dd) “Other
Stock-Based Award” means a right or other interest granted pursuant to Section 10 hereof that may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock, including, but not limited to, unrestricted
Shares, dividend equivalents or performance units, each of which may be subject to the attainment of performance goals or a period of
continued provision of service or employment or other terms or conditions as permitted under the Plan.
(ee) “Participant”
means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority provided for in Section 3
below, to receive grants of Awards, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case
may be.
(ff) “Person”
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.
(gg) “Plan”
means this 2021 Omnibus Equity Incentive Plan.
(hh) “Related
Rights” has the meaning set forth in Section 8.
(ii) “Restricted
Period” has the meaning set forth in Section 9.
(jj) “Restricted
Stock” means a Share granted pursuant to Section 9 below subject to certain restrictions that lapse at the end of a specified
period (or periods) of time and/or upon attainment of specified performance objectives.
(kk) “Restricted
Stock Unit” means the right granted pursuant to Section 9 hereof to receive a Share at the end of a specified restricted period
(or periods) of time and/or upon attainment of specified performance objectives.
(ll) “Rule
16b-3” has the meaning set forth in Section 3.
(mm) “Section
16 Officer” means any officer of the Company whom the Board has determined is subject to the reporting requirements of Section
16 of the Exchange Act, whether or not such individual is a Section 16 Officer at the time the determination to recoup compensation is
made.
(nn) “Shares”
means Common Stock reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, consolidation
or other reorganization) security.
(oo) “Stock
Appreciation Right” means a right granted pursuant to Section 8 hereof to receive an amount equal to the excess, if any, of
(i) the aggregate Fair Market Value, as of the date such Award or portion thereof is surrendered, of the Shares covered by such Award
or such portion thereof, over (ii) the aggregate Exercise Price of such Award or such portion thereof.
(pp) “Subsidiary”
means, with respect to any Person, as of any date of determination, any other Person as to which such first Person owns or otherwise
controls, directly or indirectly, more than 50% of the voting shares or other similar interests or a sole general partner interest or
managing member or similar interest of such other Person.
(qq) “Transfer”
has the meaning set forth in Section 15.
Section
3. Administration.
(a) The
Plan shall be administered by the Administrator and shall be administered, to the extent applicable, in accordance with Rule 16b-3 under
the Exchange Act (“Rule 16b-3”).
(b) Pursuant
to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to
it by the Board, shall have the power and authority, without limitation:
(1) to
select those Eligible Recipients who shall be Participants;
(2) to
determine whether and to what extent Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based
Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;
(3) to
determine the number of Shares to be covered by each Award granted hereunder;
(4) to
determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder (including, but not
limited to, (i) the restrictions applicable to Restricted Stock or Restricted Stock Units and the conditions under which restrictions
applicable to such Restricted Stock or Restricted Stock Units shall lapse, (ii) the performance goals and periods applicable to Awards,
(iii) the Exercise Price of each Option and each Stock Appreciation Right or the purchase price of any other Award, (iv) the vesting
schedule and terms applicable to each Award, (v) the number of Shares or amount of cash or other property subject to each Award and (vi)
subject to the requirements of Section 409A of the Code (to the extent applicable) any amendments to the terms and conditions of outstanding
Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the payment schedules of such Awards
and/or, to the extent specifically permitted under the Plan, accelerating the vesting schedules of such Awards);
(5) to
determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing
Awards;
(6) to
determine the Fair Market Value in accordance with the terms of the Plan;
(7) to
determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the
Participant’s service or employment for purposes of Awards granted under the Plan;
(8) to
adopt, alter and repeal such administrative rules, regulations, guidelines and practices governing the Plan as it shall from time to
time deem advisable;
(9) to
construe and interpret the terms and provisions of, and supply or correct omissions in, the Plan and any Award issued under the Plan
(and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and
authorities either specifically granted under the Plan or necessary and advisable in the administration of the Plan; and
(10) to
prescribe, amend and rescind rules and regulations relating to sub-plans established for the purpose of satisfying applicable non-United
States laws or for qualifying for favorable tax treatment under applicable non-United States laws, which rules and regulations may be
set forth in an appendix or appendixes to the Plan.
(c) Subject
to Section 5, neither the Board nor the Committee shall have the authority to (i) reprice or cancel and regrant any Award at a lower
exercise, base or purchase price or cancel any Award with an exercise, base or purchase price in exchange for cash, property or other
Awards without first obtaining the approval of the Company’s stockholders.
(d) All
decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including
the Company and the Participants.
(e) The
expenses of administering the Plan shall be borne by the Company and its Affiliates.
(f) If
at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall
be exercised by the Committee. Except as otherwise provided in the Articles of Incorporation or Bylaws of the Company, any action of
the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly
constituted or unanimous written consent of the Committee’s members.
Section
4. Shares Reserved for Issuance Under the Plan.
(a) Subject
to Section 5 hereof, the number of shares of Common Stock that are reserved and available for issuance pursuant to Awards granted under
the Plan shall be equal to the sum of (i)_8,000,000_ shares, plus (ii) an annual increase on the first day of each calendar year beginning
with the first January 1 following the Effective Date and ending with the last January 1 during the initial ten-year term of the Plan,
equal to the lesser of (A) five percent (5%) of the Shares outstanding (on an as-converted basis, which shall include Shares issuable
upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for Shares, including without
limitation, preferred stock, warrants and employee options to purchase any Shares) on the final day of the immediately preceding calendar
year and (B) such lesser number of Shares as determined by the Board; provided, that, shares of Common Stock issued under
the Plan with respect to an Exempt Award shall not count against such share limit.
(b) Shares
issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired
by the Company in the open market, in private transactions or otherwise. If an Award entitles the Participant to receive or purchase
Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award
against the aggregate number of Shares available for granting Awards under the Plan. If any Shares subject to an Award are forfeited,
cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of Shares to the Participant,
the Shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or
expiration, again be available for granting Awards under the Plan. Notwithstanding the foregoing, (i) any Shares reacquired by the Company
on the open market or otherwise using cash proceeds from the exercise of Options; and (ii) Shares surrendered or withheld as payment
of either the Exercise Price of an Award (including Shares otherwise underlying a Stock Appreciation Right that are retained by the Company
to account for the Exercise Price of such Stock Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be
available for grant under the Plan. In addition, (i) to the extent an Award is denominated in shares of Common Stock, but paid or settled
in cash, the number of shares of Common Stock with respect to which such payment or settlement is made shall again be available for grants
of Awards pursuant to the Plan and (ii) shares of Common Stock underlying Awards that can only be settled in cash shall not be counted
against the aggregate number of shares of Common Stock available for Awards under the Plan. Upon the exercise of any Award granted in
tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of Shares as to which the Award is exercised
and, notwithstanding the foregoing, such number of Shares shall no longer be available for grant under the Plan.
(c) No
more than 8,000,000__ Shares (as increased on an annual basis, on the first day of each calendar year beginning with the first January
1 following the Effective Date and ending with the last January 1 during the initial ten-year term of the Plan, by the lesser of (A)
five percent (5%) of the Shares outstanding (on an as-converted basis, which shall include Shares issuable upon the exercise or conversion
of all outstanding securities or rights convertible into or exercisable for Shares, including without limitation, preferred stock, warrants
and employee options to purchase any Shares) on the final day of the immediately preceding calendar year; (B) _2,000,000__ Shares, and
(C) such lesser number of Shares as determined by the Board) shall be issued pursuant to the exercise of ISOs.
(d) Director
Compensation Limits. Notwithstanding any provision to the contrary in the Plan, the sum of the grant date Fair Market Value of equity-based
Awards (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Top
718, or any successor thereto) plus any cash fees paid by the Company for serving as a non-employee director of the Board during any
calendar year shall not exceed $_120,000__, increased to $ 150,000___ in the calendar year of his or her initial service as a non-employee
director.
Section
5. Equitable Adjustments.
In
the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made in (i) the aggregate number
and kind of securities reserved for issuance under the Plan pursuant to Section 4, (ii) the kind, number of securities subject to, and
the Exercise Price subject to outstanding Options and Stock Appreciation Rights granted under the Plan, (iii) the kind, number and purchase
price of Shares or other securities or the amount of cash or amount or type of other property subject to outstanding Restricted Stock,
Restricted Stock Units or Other Stock-Based Awards granted under the Plan; and/or (iv) the terms and conditions of any outstanding Awards
(including, without limitation, any applicable performance targets or criteria with respect thereto); provided, however,
that any fractional shares resulting from the adjustment shall be eliminated. Such other equitable substitutions or adjustments shall
be made as may be determined by the Administrator, in its sole discretion. Without limiting the generality of the foregoing, in connection
with a Change in Capitalization, the Administrator may provide, in its sole discretion, but subject in all events to the requirements
of Section 409A of the Code, for the cancellation of any outstanding Award granted hereunder in exchange for payment in cash or other
property having an aggregate Fair Market Value equal to the Fair Market Value of the Shares, cash or other property covered by such Award,
reduced by the aggregate Exercise Price or purchase price thereof, if any; provided, however, that if the Exercise Price
or purchase price of any outstanding Award is equal to or greater than the Fair Market Value of the shares of Common Stock, cash or other
property covered by such Award, the Administrator may cancel such Award without the payment of any consideration to the Participant.
Further, without limiting the generality of the foregoing, with respect to Awards subject to foreign laws, adjustments made hereunder
shall be made in compliance with applicable requirements. Except to the extent determined by the Administrator, any adjustments to ISOs
under this Section 5 shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3)
of the Code. The Administrator’s determinations pursuant to this Section 5 shall be final, binding and conclusive.
Section
6. Eligibility and Award Limits.
The
Participants in the Plan shall be selected from time to time by the Administrator, in its sole discretion, from those individuals that
qualify as Eligible Recipients.
Section
7. Options.
(a) General.
Options granted under the Plan shall be designated as Nonqualified Stock Options or ISOs. Each Participant who is granted an Option shall
enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole
discretion, including, among other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability
of the Option, and whether the Option is intended to be an ISO or a Nonqualified Stock Option (and in the event the Award Agreement has
no such designation, the Option shall be a Nonqualified Stock Option). The provisions of each Option need not be the same with respect
to each Participant. More than one Option may be granted to the same Participant and be outstanding concurrently hereunder. Options granted
under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement.
(b) Exercise
Price. The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at
the time of grant, but in no event shall the exercise price of an Option be less than one hundred percent (100%) of the Fair Market Value
of a share of Common Stock on the date of grant.
(c) Option
Term. The maximum term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten (10)
years after the date such Option is granted. Each Option’s term is subject to earlier expiration pursuant to the applicable provisions
in the Plan and the Award Agreement. Notwithstanding the foregoing, subject to Section 4(d) of the Plan, the Administrator shall have
the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator,
in its sole discretion, deems appropriate.
(d) Exercisability.
Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of performance
goals, as shall be determined by the Administrator in the applicable Award Agreement. The Administrator may also provide that any Option
shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole
or in part, based on such factors as the Administrator may determine in its sole discretion.
(e) Method
of Exercise. Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number
of whole Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or
its equivalent, as determined by the Administrator. As determined by the Administrator, in its sole discretion, with respect to any Option
or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise
procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise), (ii) in the form of unrestricted
Shares already owned by the Participant which have a Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Administrator and permitted
by Applicable Laws or (iv) any combination of the foregoing.
(f) ISOs.
The terms and conditions of ISOs granted hereunder shall be subject to the provisions of Section 422 of the Code and the terms, conditions,
limitations and administrative procedures established by the Administrator from time to time in accordance with the Plan. At the discretion
of the Administrator, ISOs may be granted only to an employee of the Company, its “parent corporation” (as such term is defined
in Section 424(e) of the Code) or a Subsidiary of the Company.
(1) ISO
Grants to 10% Stockholders. Notwithstanding anything to the contrary in the Plan, if an ISO is granted to a Participant who owns
shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company at the time of grant, its
“parent corporation” (as such term is defined in Section 424(e) of the Code) or a Subsidiary of the Company, the term of
the ISO shall not exceed five (5) years from the time of grant of such ISO and the Exercise Price shall be at least one hundred and ten
percent (110%) of the Fair Market Value of the Shares on the date of grant.
(2) $100,000
Per Year Limitation For ISOs. To the extent the aggregate Fair Market Value (determined on the date of grant) of the Shares for which
ISOs are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds $100,000,
such excess ISOs shall be treated as Nonqualified Stock Options.
(3) Disqualifying
Dispositions. Each Participant awarded an ISO under the Plan shall notify the Company in writing immediately after the date the Participant
makes a “disqualifying disposition” of any Share acquired pursuant to the exercise of such ISO. A “disqualifying disposition”
is any disposition (including any sale) of such Shares before the later of (i) two years after the date of grant of the ISO and (ii)
one year after the date the Participant acquired the Shares by exercising the ISO. The Company may, if determined by the Administrator
and in accordance with procedures established by it, retain possession of any Shares acquired pursuant to the exercise of an ISO as agent
for the applicable Participant until the end of the period described in the preceding sentence, subject to complying with any instructions
from such Participant as to the sale of such Shares.
(g) Rights
as Stockholder. A Participant shall have no rights to dividends, dividend equivalents or distributions or any other rights of a stockholder
with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, and has paid
in full for such Shares and has satisfied the requirements of Section 15 hereof.
(h) Termination
of Employment or Service. Treatment of an Option upon termination of employment of a Participant shall be provided for by the Administrator
in the Award Agreement.
(i) Other
Change in Employment or Service Status. An Option shall be affected, both with regard to vesting schedule and termination, by leaves
of absence, including unpaid and un-protected leaves of absence, changes from full-time to part-time employment, partial Disability or
other changes in the employment status or service status of a Participant, in the discretion of the Administrator.
Section
8. Stock Appreciation Rights.
(a) General.
Stock Appreciation Rights may be granted either alone (“Free Standing Rights”) or in conjunction with all or part
of any Option granted under the Plan (“Related Rights”). Related Rights may be granted either at or after the time
of the grant of such Option. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants
of Stock Appreciation Rights shall be made. Each Participant who is granted a Stock Appreciation Right shall enter into an Award Agreement
with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, including, among
other things, the number of Shares to be awarded, the Exercise Price per Share, and all other conditions of Stock Appreciation Rights.
Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates. The
provisions of Stock Appreciation Rights need not be the same with respect to each Participant. Stock Appreciation Rights granted under
the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award
Agreement.
(b) Awards;
Rights as Stockholder. A Participant shall have no rights to dividends or any other rights of a stockholder with respect to the shares
of Common Stock, if any, subject to a Stock Appreciation Right until the Participant has given written notice of the exercise thereof
and has satisfied the requirements of Section 15 hereof.
(c) Exercise
Price. The Exercise Price of Shares purchasable under a Stock Appreciation Right shall be determined by the Administrator in its
sole discretion at the time of grant, but in no event shall the exercise price of a Stock Appreciation Right be less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.
(d) Exercisability.
(1) Stock
Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Administrator in the applicable Award Agreement.
(2) Stock
Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options to which
they relate shall be exercisable in accordance with the provisions of Section 7 hereof and this Section 8 of the Plan.
(e) Payment
Upon Exercise.
(1) Upon
the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal
in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price per share specified in the Free Standing
Right multiplied by the number of Shares in respect of which the Free Standing Right is being exercised.
(2) A
Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option. Upon such exercise and
surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess
of the Fair Market Value as of the date of exercise over the Exercise Price specified in the related Option multiplied by the number
of Shares in respect of which the Related Right is being exercised. Options which have been so surrendered, in whole or in part, shall
no longer be exercisable to the extent the Related Rights have been so exercised.
(3) Notwithstanding
the foregoing, the Administrator may determine to settle the exercise of a Stock Appreciation Right in cash (or in any combination of
Shares and cash).
(f) Termination
of Employment or Service. Treatment of a Stock Appreciation Right upon termination of employment of a Participant shall be provided
for by the Administrator in the Award Agreement.
(g) Term.
(1) The
term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than ten (10)
years after the date such right is granted.
(2) The
term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten
(10) years after the date such right is granted.
(h) Other
Change in Employment or Service Status. Stock Appreciation Rights shall be affected, both with regard to vesting schedule and termination,
by leaves of absence, including unpaid and un-protected leaves of absence, changes from full-time to part-time employment, partial Disability
or other changes in the employment or service status of a Participant, in the discretion of the Administrator.
Section
9. Restricted Stock and Restricted Stock Units.
(a) General.
Restricted Stock or Restricted Stock Units may be issued under the Plan. The Administrator shall determine the Eligible Recipients to
whom, and the time or times at which, Restricted Stock or Restricted Stock Units shall be made. Each Participant who is granted Restricted
Stock or Restricted Stock Units shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator
shall determine, in its sole discretion, including, among other things, the number of Shares to be awarded; the price, if any, to be
paid by the Participant for the acquisition of Restricted Stock or Restricted Stock Units; the period of time restrictions, performance
goals or other conditions that apply to Transferability, delivery or vesting of such Awards (the “Restricted Period”);
and all other conditions applicable to the Restricted Stock and Restricted Stock Units. If the restrictions, performance goals or conditions
established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Stock or Restricted Stock Units,
in accordance with the terms of the grant. The provisions of the Restricted Stock or Restricted Stock Units need not be the same with
respect to each Participant.
(b) Awards
and Certificates. Except as otherwise provided below in Section 9(c), (i) each Participant who is granted an Award of Restricted
Stock may, in the Company’s sole discretion, be issued a share certificate in respect of such Restricted Stock; and (ii) any such
certificate so issued shall be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions appliable to any such Award. The Company may require that the share certificates, if any, evidencing Restricted
Stock granted hereunder be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition
of any Award of Restricted Stock, the Participant shall have delivered a share transfer form, endorsed in blank, relating to the Shares
covered by such Award. Certificates for shares of unrestricted Common Stock may, in the Company’s sole discretion, be delivered
to the Participant only after the Restricted Period has expired without forfeiture in such Restricted Stock Award. With respect to Restricted
Stock Units to be settled in Shares, at the expiration of the Restricted Period, share certificates in respect of the shares of Common
Stock underlying such Restricted Stock Units may, in the Company’s sole discretion, be delivered to the Participant, or his or
her legal representative, in a number equal to the number of shares of Common Stock underlying the Restricted Stock Units Award. Notwithstanding
anything in the Plan to the contrary, any Restricted Stock or Restricted Stock Units to be settled in Shares (at the expiration of the
Restricted Period, and whether before or after any vesting conditions have been satisfied) may, in the Company’s sole discretion,
be issued in uncertificated form. Further, notwithstanding anything in the Plan to the contrary, with respect to Restricted Stock Units,
at the expiration of the Restricted Period, Shares, or cash, as applicable, shall promptly be issued (either in certificated or uncertificated
form) to the Participant, unless otherwise deferred in accordance with procedures established by the Company in accordance with Section
409A of the Code, and such issuance or payment shall in any event be made within such period as is required to avoid the imposition of
a tax under Section 409A of the Code.
(c) Restrictions
and Conditions. The Restricted Stock or Restricted Stock Units granted pursuant to this Section 9 shall be subject to the following
restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or,
subject to Section 409A of the Code where applicable, thereafter:
(1) The
Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions
in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including,
but not limited to, the attainment of certain performance goals, the Participant’s termination of employment or service with the
Company or any Affiliate thereof, or the Participant’s death or Disability. Notwithstanding the foregoing, upon a Change in Control,
the outstanding Awards shall be subject to Section 11 hereof.
(2) Except
as provided in the applicable Award Agreement, the Participant shall generally have the rights of a stockholder of the Company with respect
to Restricted Stock during the Restricted Period; provided, however, that dividends declared during the Restricted Period
with respect to an Award, shall only become payable if (and to the extent) the underlying Restricted Stock vests. Except as provided
in the applicable Award Agreement, the Participant shall generally not have the rights of a stockholder with respect to Shares subject
to Restricted Stock Units during the Restricted Period; provided, however, that, subject to Section 409A of the Code, an
amount equal to dividends declared during the Restricted Period with respect to the number of Shares covered by Restricted Stock Units
shall, unless otherwise set forth in an Award Agreement, be paid to the Participant at the time (and to the extent) Shares in respect
of the related Restricted Stock Units are delivered to the Participant. Certificates for Shares of unrestricted Common Stock may, in
the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture
in respect of such Restricted Stock or Restricted Stock Units, except as the Administrator, in its sole discretion, shall otherwise determine.
(3) The
rights of Participants granted Restricted Stock or Restricted Stock Units upon termination of employment or service as a director or
independent contractor to the Company or to any Affiliate thereof terminates for any reason during the Restricted Period shall be set
forth in the Award Agreement.
(d) Form
of Settlement. The Administrator reserves the right in its sole discretion to provide (either at or after the grant thereof) that
any Restricted Stock Unit represents the right to receive the amount of cash per unit that is determined by the Administrator in connection
with the Award.
Section
10. Other Stock-Based Awards.
Other
Stock-Based Awards may be issued under the Plan. Subject to the provisions of the Plan, the Administrator shall have sole and complete
authority to determine the individuals to whom and the time or times at which such Other Stock-Based Awards shall be granted. Each Participant
who is granted an Other Stock-Based Award shall enter into an Award Agreement with the Company, containing such terms and conditions
as the Administrator shall determine, in its sole discretion, including, among other things, the number of shares of Common Stock to
be granted pursuant to such Other Stock-Based Awards, or the manner in which such Other Stock-Based Awards shall be settled (e.g., in
shares of Common Stock, cash or other property), or the conditions to the vesting and/or payment or settlement of such Other Stock-Based
Awards (which may include, but not be limited to, achievement of performance criteria) and all other terms and conditions of such Other
Stock-Based Awards. In the event that the Administrator grants a bonus in the form of Shares, the Shares constituting such bonus shall,
as determined by the Administrator, be evidenced in uncertificated form or by a book entry record or a certificate issued in the name
of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such
bonus is payable. Notwithstanding anything set forth in the Plan to the contrary, any dividend or dividend equivalent Award issued hereunder
shall be subject to the same restrictions, conditions and risks of forfeiture as apply to the underlying Award.
Section
11. Change in Control.
Unless
otherwise determined by the Administrator and evidenced in an Award Agreement, in the event that (a) a Change in Control occurs, and
(b) the Participant is employed by the Company or any of its Affiliates immediately prior to the consummation of such Change in Control
then upon the consummation of such Change in Control, the Administrator, in its sole and absolute discretion, may:
(a) provide
that any unvested or unexercisable portion of any Award carrying a right to exercise become fully vested and exercisable; and
(b) cause
the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to an Award granted under the Plan to
lapse and such Awards shall be deemed fully vested and any performance conditions imposed with respect to such Awards shall be deemed
to be fully achieved at target performance levels.
If
the Administrator determines in its discretion pursuant to Section 3(b)(4) hereof to accelerate the vesting of Options and/or Share Appreciation
Rights in connection with a Change in Control, the Administrator shall also have discretion in connection with such action to provide
that all Options and/or Stock Appreciation Rights outstanding immediately prior to such Change in Control shall expire on the effective
date of such Change in Control.
Section
12. Amendment and Termination.
The
Board may amend, alter or terminate the Plan at any time, but no amendment, alteration or termination shall be made that would impair
the rights of a Participant under any Award theretofore granted without such Participant’s consent. The Board shall obtain approval
of the Company’s stockholders for any amendment that would require such approval in order to satisfy the requirements of any rules
of the stock exchange on which the Common Stock is traded or other Applicable Law. Subject to Section 3(c), the Administrator may amend
the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 5 of the Plan and the immediately
preceding sentence, no such amendment shall materially impair the rights of any Participant without his or her consent.
Section
13. Unfunded Status of Plan.
The
Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made to
a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general
creditor of the Company.
Section
14. Withholding Taxes.
Each
Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant
for purposes of applicable taxes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of an
amount up to the maximum statutory tax rates in the Participant’s applicable jurisdiction with respect to the Award, as determined
by the Company. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and
the Company shall, to the extent permitted by Applicable Laws, have the right to deduct any such taxes from any payment of any kind otherwise
due to such Participant. Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount
sufficient to satisfy any applicable withholding tax requirements related thereto. Whenever Shares or property other than cash are to
be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount
sufficient to satisfy any related taxes to be withheld and applied to the tax obligations; provided, that, with the approval
of the Administrator, a Participant may satisfy the foregoing requirement by either (i) electing to have the Company withhold from delivery
of Shares or other property, as applicable, or (ii) delivering already owned unrestricted shares of Common Stock, in each case, having
a value not exceeding the applicable taxes to be withheld and applied to the tax obligations. Such already owned and unrestricted shares
of Common Stock shall be valued at their Fair Market Value on the date on which the amount of tax to be withheld is determined and any
fractional share amounts resulting therefrom shall be settled in cash. Such an election may be made with respect to all or any portion
of the Shares to be delivered pursuant to an award. The Company may also use any other method of obtaining the necessary payment or proceeds,
as permitted by Applicable Laws, to satisfy its withholding obligation with respect to any Award.
Section
15. Transfer of Awards.
Until
such time as the Awards are fully vested and/or exercisable in accordance with the Plan or an Award Agreement, no purported sale, assignment,
mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or
creation of a security interest in or lien on, any Award or any agreement or commitment to do any of the foregoing (each, a “Transfer”)
by any holder thereof in violation of the provisions of the Plan or an Award Agreement will be valid, except with the prior written consent
of the Administrator, which consent may be granted or withheld in the sole discretion of the Administrator. Any purported Transfer of
an Award or any economic benefit or interest therein in violation of the Plan or an Award Agreement shall be null and void ab initio
and shall not create any obligation or liability of the Company, and any Person purportedly acquiring any Award or any economic benefit
or interest therein transferred in violation of the Plan or an Award Agreement shall not be entitled to be recognized as a holder of
such Shares or other property underlying such Award. Unless otherwise determined by the Administrator in accordance with the provisions
of the immediately preceding sentence, an Option or a Stock Appreciation Right may be exercised, during the lifetime of the Participant,
only by the Participant or, during any period during which the Participant is under a legal Disability, by the Participant’s guardian
or legal representative.
Section
16. Continued Employment or Service.
Neither
the adoption of the Plan nor the grant of an Award shall confer upon any Eligible Recipient any right to continued employment or service
with the Company or any Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or any
Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time.
Section
17. Effective Date.
The
Plan was approved by the Board on May 12, 2021, and shall be adopted and become effective on the date that it is approved by the
Company’s stockholders (the “Effective Date”).
Section
18. Electronic Signature.
Participant’s
electronic signature of an Award Agreement shall have the same validity and effect as a signature affixed by hand.
Section
19. Term of Plan.
No
Award shall be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date, but Awards theretofore granted may
extend beyond that date.
Section
20. Securities Matters and Regulations.
(a) Notwithstanding
anything herein to the contrary, the obligation of the Company to sell or deliver Shares with respect to any Award granted under the
Plan shall be subject to all Applicable Laws, rules and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. The Administrator
may require, as a condition of the issuance and delivery of certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator,
in its sole discretion, deems necessary or advisable.
(b) Each
Award is subject to the requirement that, if at any time the Administrator determines that the listing, registration or qualification
of Shares is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Shares, no such Award
shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions not acceptable to the Administrator.
(c) In
the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under
the Securities Act and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent
required by the Securities Act or regulations thereunder, and the Administrator may require a Participant receiving Common Stock pursuant
to the Plan, as a condition precedent to receipt of such Common Stock, to represent to the Company in writing that the Common Stock acquired
by such Participant is acquired for investment only and not with a view to distribution.
Section
21. Section 409A of the Code.
The
Plan as well as payments and benefits under the Plan are intended to be exempt from, or to the extent subject thereto, to comply with
Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted in accordance therewith. Notwithstanding
anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section
409A of the Code, the Participant shall not be considered to have terminated employment or service with the Company for purposes of the
Plan and no payment shall be due to the Participant under the Plan or any Award until the Participant would be considered to have incurred
a “separation from service” from the Company and its Affiliates within the meaning of Section 409A of the Code. Any payments
described in the Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not
be treated as deferred compensation unless Applicable Law requires otherwise. Notwithstanding anything to the contrary in the Plan, to
the extent that any Awards (or any other amounts payable under any plan, program or arrangement of the Company or any of its Affiliates)
are payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest
charges imposed under Section 409A of the Code, the settlement and payment of such awards (or other amounts) shall instead be made on
the first business day after the date that is six (6) months following such separation from service (or death, if earlier). Each amount
to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A
of the Code. The Company makes no representation that any or all of the payments or benefits described in this Plan will be exempt from
or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment.
The Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A.
Section
22. Notification of Election Under Section 83(b)
of the Code.
If
any Participant shall, in connection with the acquisition of shares of Common Stock under the Plan, make the election permitted under
Section 83(b) of the Code, such Participant shall notify the Company of such election within ten (10) days after filing notice of the
election with the Internal Revenue Service.
Section
23. No Fractional Shares.
No
fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Administrator shall determine whether cash,
other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.
Section
24. Beneficiary.
A
Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator
and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or
administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.
Section
25. Paperless Administration.
In
the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation,
granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation,
granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.
Section
26. Severability.
If
any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be
applied as if the invalid or unenforceable provision had not been included in the Plan.
Section
27. Clawback.
(a) If
the Company is required to prepare a financial restatement due to the material non-compliance of the Company with any financial reporting
requirement, then the Committee may require any Section 16 Officer to repay or forfeit to the Company, and each Section 16 Officer agrees
to so repay or forfeit, that part of the Incentive Compensation received by that Section 16 Officer during the three-year period preceding
the publication of the restated financial statement that the Committee determines was in excess of the amount that such Section 16 Officer
would have received had such Incentive Compensation been calculated based on the financial results reported in the restated financial
statement. The Committee may take into account any factors it deems reasonable in determining whether to seek recoupment of previously
paid Incentive Compensation and how much Incentive Compensation to recoup from each Section 16 Officer (which need not be the same amount
or proportion for each Section 16 Officer), including any determination by the Committee that a Section 16 Officer engaged in fraud,
willful misconduct or committed grossly negligent acts or omissions which materially contributed to the events that led to the financial
restatement. The amount and form of the Incentive Compensation to be recouped shall be determined by the Committee in its sole and absolute
discretion, and recoupment of Incentive Compensation may be made, in the Committee’s sole and absolute discretion, through the
cancellation of vested or unvested Awards, cash repayment or both.
(b) Notwithstanding
any other provisions in this Plan, any Award which is subject to recovery under any Applicable Laws, government regulation or stock exchange
listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such Applicable Law, government
regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation
or stock exchange listing requirement).
Section
28. Governing Law.
The
Plan shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to principles of conflicts
of law of such state.
Section
29. Indemnification.
To
the extent allowable pursuant to applicable law, each member of the Board and the Administrator and any officer or other employee to
whom authority to administer any component of the Plan is designated shall be indemnified and held harmless by the Company from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim,
action, suit, or proceeding to which he or she may be a party or in which he or she may be a party or in which he or she may be involved
by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction
of judgment in such action, suit, or proceeding against him or her; provided, however, that he or she gives the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled pursuant
to the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.
Section
30. Titles and Headings, References to Sections of
the Code or Exchange Act.
The
titles and headings of the sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any
amendment or successor thereto.
Section
31. Successors.
The
obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all
of the assets and business of the Company.
Section
32. Relationship to other Benefits.
No
payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing,
group insurance, welfare, or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.
APPENDIX
B
AGREEMENT
AND PLAN OF MERGER
OF
CIPHERLOC
CORPORATION
(a Texas corporation)
WITH
AND INTO
CIPHERLOC
CORPORATION
(a Delaware corporation)
RECITALS
WHEREAS,
Cipherloc Corporation (“Cipherloc Texas”) is a for-profit corporation duly organized and existing under
the laws of the State of Texas;
WHEREAS,
Cipherloc Corporation (“Cipherloc Delaware”) is a corporation duly organized and existing under the laws of
the State of Delaware, and a direct wholly owned subsidiary of Cipherloc Texas;
WHEREAS,
the parties hereto desire that, upon the terms and subject to the conditions stated herein, Cipherloc Texas be merged with and into Cipherloc
Delaware, and that Cipherloc Delaware be the surviving corporation of such merger (the “Merger”);
WHEREAS,
the Merger will effectuate a reincorporation of Cipherloc Texas from the State of Texas to the State of Delaware (the “Reincorporation”);
WHEREAS,
for U.S. federal income tax purposes, it is intended that the Merger qualify as a reorganization within the meaning of Section 368(a)(1)(F)
of the U.S. Internal Revenue Code and this agreement represents a plan of reorganization within the meaning of Section 368 of the
Code;
WHEREAS,
the Board of Directors of Cipherloc Delaware has (i) determined that the Merger is advisable, fair to, and in the best interests of Cipherloc
Delaware and its sole stockholder, (ii) approved and declared advisable this Agreement and Plan of Merger (this “Agreement”)
and the consummation of the transactions contemplated hereby, including the Merger, in accordance with the terms and conditions set
forth in this Agreement, pursuant to Section 252 of the General Corporation Law of the State of Delaware (the “DGCL”),
and (iii) recommended that the sole stockholder of Cipherloc Delaware approve the adoption of this Agreement and the transactions contemplated
hereby, including the Merger;
WHEREAS,
the Board of Directors of Cipherloc Texas has (i) determined that the Merger and the Reincorporation are advisable and in the
best interest of Cipherloc Texas and its shareholders, (ii) approved and declared advisable this Agreement and the consummation of the
transactions contemplated hereby, including the Merger and the Reincorporation, in accordance with the terms and conditions set forth
in this Agreement, pursuant to Section 10.001 of the Texas Business Organizations Code (the “TBOC”) and (iii)
submitted the adoption of this Agreement and the transactions contemplated hereby, including the Merger and the Reincorporation, to its
shareholders for their consideration and approval;
WHEREAS,
the Certificate of Incorporation of Cipherloc Delaware is as set forth in Exhibit A; and
WHEREAS,
the Bylaws of Cipherloc Delaware are as set forth in Exhibit B;
NOW,
THEREFORE, in consideration of the foregoing, the agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound, hereby agree as follows:
Section
1
Merger
1.1
In accordance with the DGCL and the TBOC, and subject to, and upon the terms and conditions of, this Agreement, at the Effective Time,
Cipherloc Texas shall be merged with and into Cipherloc Delaware, the separate corporate existence of Cipherloc Texas shall cease, and
Cipherloc Delaware will continue as the surviving corporation of the Merger (the “Surviving Corporation”).
The name of the Surviving Corporation shall be “CIPHERLOC CORPORATION”.
1.2
The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL and the TBOC. Without limiting
the generality of the foregoing, and subject to Section 259 of the DGCL and Section 10.008 of the TBOC, at the Effective Time,
the separate existence of Cipherloc Texas will cease, and Cipherloc Delaware will possess all the rights, privileges, immunities, powers
and franchises of a public as well as of a private nature, and be subject to all of the restrictions, disabilities and duties, of Cipherloc
Texas; and all the rights, privileges, immunities, powers and franchises of Cipherloc Texas, and all property, whether real, personal
or mixed, all stock registered in the name of Cipherloc Texas, and all debts due to Cipherloc Texas on whatever account, and all subscriptions
and all choses in action of or belonging to Cipherloc Texas, will be vested in Cipherloc Delaware and all such property, rights, privileges,
immunities, powers and franchises will be thereafter as effectually the property of Cipherloc Delaware as they were of Cipherloc Texas,
and the title to any real estate vested by deed or otherwise in Cipherloc Texas will not revert or be in any way impaired by reason of
the Merger but will be vested in Cipherloc Delaware; and all rights of creditors and all liens upon any property of Cipherloc Texas will
be preserved unimpaired, and all debts, liabilities and duties of Cipherloc Texas will be preserved unimpaired, and all debts, liabilities
and duties of Cipherloc Texas will attach to Cipherloc Delaware and may be enforced against it to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it, and any claim existing or action or proceeding pending by or against Cipherloc Texas
may be prosecuted against Cipherloc Delaware. All acts, plans, policies, agreements, arrangements, approvals and authorizations of Cipherloc
Texas and its agents which were valid and effective immediately prior to consummation of the Merger will be taken for all purposes as
the acts, plans, policies, agreements, arrangements, approvals and authorizations of Cipherloc Delaware and will be as effective and
binding thereon, in each case as the same were with respect to Cipherloc Texas.
Section
2
Conversion
of Shares
2.1
At the Effective Time, by virtue of the Merger and without any action on the part of the parties hereto, the holders of any shares of
capital stock of such parties, or any other person or entity:
a.
Each share of Common Stock of Cipherloc Delaware, par value $0.001 per share, issued and outstanding immediately prior to the Effective
Time, shall be cancelled and shall cease to exist, and no consideration shall be issued in respect thereof or in exchange therefor.
b.
Each share of Common Stock of Cipherloc Texas, par value $0.01 per share, held in Cipherloc Texas’s treasury immediately prior
to the Effective Time, shall be converted into one share of Common Stock of the Surviving Corporation, par value $0.01 per share, held
in the Surviving Corporation’s treasury.
c.
Each share of Common Stock of Cipherloc Texas, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time,
shall be converted into one share of Common Stock of the Surviving Corporation, par value $0.01 per share.
Section
3
Conversion Mechanics
3.1
At and after the Effective Time, each share certificate which immediately prior to the Effective Time represented outstanding shares
of Common Stock of Cipherloc Texas (a “Cipherloc Texas Certificate”) shall be deemed for all purposes to evidence
ownership of, and to represent, the number of shares of Common Stock of Cipherloc Delaware into which the shares of Common Stock of Cipherloc
Texas represented by such Cipherloc Texas Certificate immediately prior to the Effective Time have been converted pursuant to this Agreement.
The registered holder of any Cipherloc Texas Certificate outstanding immediately prior to the Effective Time, as such holder appears
in the books and records of Cipherloc Texas (or of the transfer agent in respect of the Common Stock of Cipherloc Texas), immediately
prior to the Effective Time, shall, until such Cipherloc Texas Certificate is surrendered for transfer or exchange, have and be entitled
to exercise any voting and other rights with respect to and to receive any dividends or other distributions on the shares of Common Stock
of Cipherloc Delaware into which the shares of Common Stock of Cipherloc Texas represented by any such Cipherloc Texas Certificate
have been converted pursuant to this Agreement.
3.2
Each holder of a Cipherloc Texas Certificate shall, upon the surrender of such Cipherloc Texas Certificate to the Surviving Corporation
(or the transfer agent in respect of the Common Stock of Cipherloc Delaware) for cancellation after the Effective Time, be entitled to
receive from the Surviving Corporation (or the transfer agent in respect of the Common Stock), a certificate (a “Cipherloc
Delaware Certificate”) representing the number of shares of Common Stock of Cipherloc Delaware into which the shares of
Common Stock of Cipherloc Texas represented by such Cipherloc Texas Certificate have been converted pursuant to this Agreement.
If any such Cipherloc Delaware Certificate is to be issued in a name other than that in which the Cipherloc Texas Certificate surrendered
for exchange is registered, such exchange shall be conditioned upon (i) the Cipherloc Texas Certificate so surrendered being properly
endorsed or otherwise in proper form for transfer and (ii) the person requesting such exchange either paying any transfer or other taxes
required by reason of the issuance of the Cipherloc Delaware Certificate in a name other than that of the registered holder of the Cipherloc
Texas Certificate surrendered, or establishing to the satisfaction of the Surviving Corporation, or the transfer agent in respect of
the Common Stock that such tax has been paid or is not applicable.
3.3
Where no Cipherloc Texas Certificate has been issued in the name of a holder of shares of Common Stock of Cipherloc Texas, a “book
entry” (i.e., a computerized or manual entry) shall be made in the shareholder records of the Surviving Corporation to evidence
the issuance to such holder of an equal number of shares of Common Stock of Cipherloc Delaware.
3.4 Notwithstanding anything
in this Agreement to the contrary, the shares of Common Stock of Cipherloc Texas issued and outstanding immediately prior to the
Effective Time that are held by any person that is entitled to demand and properly demands payment of the fair value of such shares of
Common Stock of Cipherloc Texas pursuant to, and that complies in all respects with, the provisions of Section 10.356 of the TBOC, and
does not properly withdraw such demand in accordance with Section 10.357 of the TBOC or otherwise have such rights of dissent terminated
pursuant to Section 10.367 of the TBOC, in each case prior to the Effective Time (the “Dissenting Common Shares”),
shall not be converted into the right to receive the consideration as provided in Section 3.1, but, instead, such person shall
be entitled to such rights (but only such rights) as are granted by Section 10.354 of the TBOC. At the Effective Time, all Dissenting
Common Shares shall no longer be outstanding and automatically shall be cancelled and shall cease to exist and, except as otherwise provided
by the TBOC, each holder of Dissenting Common Shares shall cease to have any rights with respect to the Dissenting Common Shares, other
than such rights as are granted by Section 10.354 of the TBOC. Notwithstanding the foregoing, if any such person (i) shall have failed
to establish entitlement to relief as a dissenting shareholder as provided in Section 10.361 of the TBOC, (ii) shall have effectively
withdrawn demand for relief as a dissenting shareholder with respect to such Dissenting Common Shares under Section 10.357 of the TBOC
or lost the right to relief as a dissenting shareholder under Section 10.356 of the TBOC or (iii) shall have failed to file a petition
with the appropriate court seeking relief as to the determination of the value of all such Dissenting Common Shares within the time provided
in Section 10.361 of the TBOC, such person shall forfeit or, in the event a court of competent jurisdiction shall determine that such
person is not entitled to the relief provided by Section 10.361 of the TBOC, lose the right to relief as a dissenting shareholder with
respect to such Dissenting Common Shares, and such Dissenting Common Shares shall be deemed to have been converted at the Effective Time
into the consideration provided for such shares in Section 3.1.
Section
4
Benefit
Plans and Warrants
4.1
Effective as of the Effective Time, automatically and without any action on the part of the holder thereof: (i) each option to purchase
shares of Common Stock of Cipherloc Texas granted under any of Cipherloc equity plan (collectively, the “Cipherloc Texas
Equity Plans”) or otherwise (each option so issued, a “Cipherloc Texas Option”) that is outstanding
immediately prior to the Effective Time, whether or not then vested or exercisable, shall cease to represent a right to acquire shares
of Common Stock of Cipherloc Texas and shall be converted into an option to purchase shares of Common Stock of Cipherloc Delaware, on
substantially the same terms and conditions (including exercise price and vesting schedule) as applied to such Cipherloc Texas Option
immediately prior to the Effective Time (each as so converted, a “Cipherloc Delaware Option”) and (ii) each
right of any kind (including, without limitation, any warrants), vested or unvested, contingent or accrued, to receive shares of Common
Stock of Cipherloc Texas or benefits measured in whole or in part by reference to the value of Common Stock of Cipherloc Texas whether
granted under the Cipherloc Texas Equity Plans or otherwise outstanding as of the Effective Time, other than Cipherloc Texas Options
(each, a “Cipherloc Texas Equity Agreement”), shall, in each case, be converted into a substantially similar
award for, or with respect to, shares of Common Stock of Cipherloc Delaware on substantially the same terms and conditions (including
vesting schedule) as applied to such Cipherloc Texas Equity Agreement immediately prior to the Effective Time (each as so converted,
a “Cipherloc Delaware Equity Agreement”).
4.2
Any Cipherloc Texas Option which qualifies as an incentive stock option under Section 422 of the U.S. Internal Revenue Code and the Treasury
regulations promulgated thereunder shall be converted to a Cipherloc Delaware Option, to the extent possible, in accordance with Section
424 of the U.S. Internal Revenue Code and the Treasury regulations promulgated thereunder. Any Cipherloc Texas Option which does not
qualify as an incentive stock option under Section 422 of the U.S. Internal Revenue Code and the Treasury regulations promulgated thereunder
shall be converted to a Cipherloc Delaware Option, to the extent possible, in accordance with Section 409A of the U.S. Internal Revenue
Code and the Treasury regulations promulgated thereunder. Any Cipherloc Texas Equity Agreement shall be converted to a Cipherloc Delaware
Equity Agreement, to the extent possible, in a manner which does not violate the requirements of Section 409A of the U.S. Internal Revenue
Code and the Treasury regulations promulgated thereunder.
4.3
Prior to the Effective Time, Cipherloc Texas shall take all corporate action necessary to provide for the treatment of the Cipherloc
Texas Options, the Cipherloc Delaware Options, the Cipherloc Texas Equity Agreements and the Cipherloc Delaware Equity Agreements as
set forth in this Section 4.
4.4
A number of shares of the Surviving Corporation’s Common Stock shall be reserved for issuance upon the exercise of options, warrants
and stock purchase rights equal to the number of shares of Common Stock of Cipherloc Texas so reserved immediately before the Effective
Time.
Section
5
Effective
Time
5.1
If the adoption of this Agreement is duly approved by the sole stockholder of Cipherloc Delaware, and the Merger and the Reincorporation
are duly approved by the shareholders of Cipherloc Texas, and this Agreement is not terminated in accordance with Section 8 hereof, (i)
Cipherloc Delaware shall execute and file a Certificate of Merger (the “Delaware Certificate of Merger”) with
the Secretary of State of the State of Delaware in such form as required by, and executed in accordance with the relevant provisions
of, the DGCL; and (ii) Cipherloc Texas and Cipherloc Delaware shall each execute and file a Certificate of Merger (the
“Texas Certificate of Merger” and, together with the Delaware Certificate of Merger, the “Certificates
of Merger”) with the Secretary of State of the State of Texas in such form as required by, and executed in accordance with
the relevant provisions of, the TBOC.
5.2
The Merger shall become effective upon the later filing of the Certificates of Merger or at such later time as specified in the Certificates
of Merger (the date and time the Merger becomes effective being referred to herein as the “Effective Time”).
Section
6
Certificate
of Incorporation and By-Laws
6.1
The Certificate of Incorporation of Cipherloc Delaware, as it exists at the Effective Time shall remain in full force and effect as
the Certificate of Incorporation of the Surviving Corporation after the Effective Time until altered or amended in accordance with
its terms and the DGCL.
6.2
The Bylaws of Cipherloc Delaware as they exist at the Effective Time shall remain in full force and effect as the bylaws of the
Surviving Corporation until altered or amended in accordance with their terms and the DGCL.
Section
7
Directors
and Officers
7.1
The parties shall take all actions necessary so that the directors and officers of Cipherloc Texas immediately prior to the Effective
Time shall be the directors and officers, respectively, of the Surviving Corporation immediately following the Effective Time until their
respective successors have been duly elected or appointed and qualified or until their earlier death, resignation, or removal in accordance
with the certificate of incorporation and bylaws of the Surviving Corporation, as either may be in effect from time to time, or as otherwise
provided by law.
Section
8
Amendment
and Termination
8.1
At any time prior to the Effective Time, whether before or after approval of the adoption of this Agreement by the sole stockholder of
Cipherloc Delaware and/or the approval of the Merger and the Reincorporation by the shareholders of Cipherloc Texas, this Agreement may
be amended, to the fullest extent permitted by applicable law, by an agreement in writing duly approved by the Board of Directors of
each of Cipherloc Delaware and Cipherloc Texas; provided, however, that after the adoption of this Agreement by the sole
stockholder of Cipherloc Delaware and/or the approval of the Merger and the Reincorporation by the shareholders of Cipherloc Texas, no
amendment shall be made to this Agreement that by law requires further approval or authorization by the sole stockholder of Cipherloc
Delaware and/or the shareholders of Cipherloc Texas, without such further approval
or authorization.
8.2
At any time prior to the Effective Time, whether before or after approval of the adoption of this Agreement by the sole stockholder of
Cipherloc Delaware and/or the approval of the Merger and the Reincorporation by the shareholders of Cipherloc Texas, this Agreement and
Plan of Merger may be terminated and abandoned by either the Board of Directors of Cipherloc Delaware or the Board of Directors of Cipherloc
Texas.
Section
9
Stockholder
Vote
9.1
This Agreement will be submitted to a vote of the stockholders of the Cipherloc Texas for their consideration and adoption at a meeting
of such stockholders in accordance with the provisions of Section 10.001 of the TBOC. In the event that this Agreement shall not be adopted
by the requisite vote of the stockholders of Cipherloc Texas entitled to vote thereon, this Agreement shall thereupon terminate without
further action of the parties hereto.
Section
10
[Intentionally
Omitted]
Section
11
Miscellaneous
11.1
Additional Actions. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm,
of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets
of either Cipherloc Texas or Cipherloc Delaware acquired or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and directors of the Surviving Corporation shall be authorized
to execute and deliver, in the name and on behalf of each of Cipherloc Texas and Cipherloc Delaware, all such deeds, bills of sale, assignments
and assurances and to take and do, in the name and on behalf of each of Cipherloc Texas and Cipherloc Delaware or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in the Surviving Corporation or otherwise to carry out this Agreement.
11.2
Further Assurances. From time to time, as and when required by Cipherloc Delaware or by its successors and assigns, there will
be executed and delivered on behalf of Cipherloc Texas such deeds and other instruments, and there will be taken or caused to be taken
by Cipherloc Delaware and Cipherloc Texas such further and other actions, as shall be appropriate or necessary in order to vest or perfect
in or confirm of record or otherwise in Cipherloc Delaware the title to and possession of all property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of Cipherloc Texas, and otherwise to carry out the purposes of this Agreement, and the officers
and director of Cipherloc Delaware will be fully authorized in the name and on behalf of Cipherloc Texas or otherwise to take any and
all such action and to execute and deliver any and all such deeds and other instruments.
11.3
Governing Law. Except to the extent that the laws of the State of Texas mandatorily apply with respect to the internal affairs
of Cipherloc Texas, this Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without giving
effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application
of the laws of another jurisdiction.
11.4
Entire Agreement. This Agreement constitutes the complete and entire agreement among the parties and constitutes the complete,
final, and exclusive embodiment of their agreement with respect to the subject matter hereof.
11.5
Assignment; Binding Upon Successors and Assigns. Neither party hereto may assign any of its rights or obligations hereunder without
the prior written consent of the other party hereto. This Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.6
Severability. If any provision of this Agreement, or the application thereof, will for any reason and to any extent be invalid
or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances will be interpreted
so as reasonably to effect the intent of the parties hereto.
11.7
Counterparts. This Agreement may be executed in counterparts with the same effect as if all parties have signed the same document
and each such executed counterpart shall be deemed to be an original instrument. All executed counterparts together shall constitute
one and the same instrument.
11.8
Facsimile or Electric Signatures. This Agreement may be executed and delivered by facsimile or other electronic transmission and
upon such delivery the facsimile signature or other electronic signature will be deemed to have the same effect as if the original signature
had been delivered to the other party.
[Signature
Page Follows]
IN
WITNESS WHEREOF, each of Cipherloc Delaware and Cipherloc Texas has caused this Agreement to be executed by a duly authorized officer,
as of the __ day of ______, 202_.
|
CIPHERLOC
CORPORATION
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(a
Delaware corporation)
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|
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|
|
By:
|
/s/
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Name:
|
|
|
Title:
|
|
|
|
|
|
CIPHERLOC
CORPORATION
|
|
(a
Texas corporation)
|
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By:
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/s/
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Name:
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Title:
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[Signature
page to Agreement and Plan of Merger]
APPENDIX
C
CERTIFICATE
OF INCORPORATION OF
CIPHERLOC
CORPORATION
ARTICLE
I
The
name of the corporation is Cipherloc Corporation (the “Company”).
ARTICLE
II
The
address of the registered office of the Company in the State of Delaware is [address of registered office]. The name of its registered
agent at that address is [name of registered agent].
ARTICLE
III
The
purpose of the Company is to engage in any lawful act or activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE
IV
The
total number of shares of stock of all classes which the Company is authorized to issue is 691,000,000 shares, consisting of 681,000,000
shares of Common Stock, par value $0.001 per share (“Common Stock”), and 10,000,000 shares of Preferred Stock, par value
$0.001 per share.
The
Board of Directors is authorized, subject to any limitations prescribed by the law of the State of Delaware, to provide for the issuance
of Preferred Stock in one or more series, to establish from time to time the number of shares to be included in each such series, to
fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions
thereof, and to increase or decrease the shares of any such series (but not below the number of shares of such series then outstanding).
ARTICLE
V
The
name and mailing address of the incorporator is:
[name and address]
ARTICLE
VI
The
stockholders of the Company shall have the power to adopt, amend or repeal the Bylaws. The Board of Directors of the Company shall also
have the power to adopt, amend or repeal Bylaws of the Company, except insofar as Bylaws adopted by the stockholders shall otherwise
provide.
ARTICLE
VII
Election
of Directors need not be by written ballot unless a stockholder demands election by written ballot at a stockholder meeting and before
voting begins, or unless the Bylaws of the Company shall so provide.
ARTICLE
VIII
A
Director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the Director’s duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section
174 of the Delaware General Corporation Law or (iv) for any transactions from which the Director derived an improper personal benefit.
If
the Delaware General Corporation Law is hereafter amended to authorize the further elimination or limitation of the liability of a Director,
then the liability of a director of the Company shall be eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended.
Neither
any amendment nor repeal of this Article VIII, nor the adoption of any provision of this Certificate of Incorporation inconsistent with
this Article VIII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the
Company existing at the time of such amendment, repeal or adoption of an inconsistent provision.
ARTICLE
IX
Any
action required or permitted to be taken by the stockholders of the Company may be taken at a duly called annual or special meeting of
such holders or by consent in writing by such holders. Except as otherwise required by law, special meetings of stockholders of the Company
for any purpose or purposes may be called only (i) by the Chairman of the Board of Directors pursuant to a resolution stating the purpose
or purposes thereof or (ii) by the Board of Directors upon written request by one or more stockholders owning, in the aggregate, at least
25% of the Company’s outstanding shares entitled to vote on the matter or matters to be brought before the proposed special meeting,
determined in accordance with the provisions of the Company’s Bylaws, and who otherwise comply with such other requirements and
procedures set forth in the Company’s Bylaws, as now or hereinafter in effect.
ARTICLE
X
Each
stockholder of the Corporation and each Person holding any beneficial interest in the Corporation (whether through a broker, dealer,
bank, trust company or clearing corporation or an agent of any of the foregoing or otherwise), to the fullest extent permitted by law,
(i) irrevocably agrees that any claims, suits, actions or proceedings arising out of or relating in any way to this Certificate of Incorporation
(including any claims, suits or actions to interpret, apply or enforce (A) the provisions of this Certificate of Incorporation or the
Bylaws, (B) the duties, obligations or liabilities of the Corporation to the stockholders of the Corporation, or of stockholders of the
Corporation to the Corporation, or among stockholders of the Corporation, (C) the rights or powers of, or restrictions on, the Corporation
or any stockholder of the Corporation, (D) any provision of the DGCL, or (E) any other instrument, document, agreement or certificate
contemplated by any provision of the DGCL relating to the Corporation (regardless of whether such claims, suits, actions or proceedings
(x) sound in contract, tort, fraud or otherwise, (y) are based on common law, statutory, equitable, legal or other grounds, or (z) are
derivative or direct claims)), shall be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does
not have subject matter jurisdiction thereof, any other court in the State of Delaware with subject matter jurisdiction; (ii) irrevocably
submits to the exclusive jurisdiction of such courts in connection with any such claim, suit, action or proceeding; (iii) irrevocably
agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject to
the jurisdiction of such courts or any other court to which proceedings in such courts may be appealed, (B) such claim, suit, action
or proceeding is brought in an inconvenient forum, or (C) the venue of such claim, suit, action or proceeding is improper; (iv) expressly
waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; (v) consents to process
being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such
party at the address in effect for notices hereunder, and agrees that such service shall constitute good and sufficient service of process
and notice thereof; provided , that nothing in clause (v) hereof shall affect or limit any right to serve process in any other manner
permitted by law; and (vi) irrevocably waives any and all right to trial by jury in any such claim, suit, action or proceeding.
[signature
page follows]
THE
UNDERSIGNED, being the sole incorporator, for the purpose of forming a corporation pursuant to the General Corporation Law of the State
of Delaware and the acts amendatory thereof and supplemental thereto, does make and file this Certificate of Incorporation, hereby declaring
and certifying that the facts stated herein are true, and accordingly hereunto has set my hand and seal this __ day of _________ ___.
|
|
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[name
of incorporator], Incorporator
|
APPENDIX
D
CIPHERLOC
CORPORATION
BYLAWS
ADOPTED:
__________, 2021
CIPHERLOC
CORPORATION
BYLAWS
ARTICLE
1. OFFICES
|
Section
1.1
|
Registered
Office
|
|
Section
1.2
|
Other
Offices
|
ARTICLE
2. MEETINGS OF STOCKHOLDERS
|
Section
2.1
|
Annual
Meeting
|
|
Section
2.2
|
Special
Meetings
|
|
Section
2.3
|
Time
and Place of Special Meetings
|
|
Section
2.4
|
Notice
|
|
Section
2.5
|
Quorum
|
|
Section
2.6
|
Adjournment
|
|
Section
2.7
|
Organization
of Meetings
|
|
Section
2.8
|
Voting
and Record Date
|
|
Section
2.9
|
Conduct
of Meeting
|
|
Section
2.10
|
Action
Without Meeting
|
ARTICLE
3. DIRECTORS
|
Section
3.1
|
Number
|
|
Section
3.2
|
Term,
Qualification, Vacancies, and Newly Created Directorships
|
|
Section
3.3
|
Removal
|
|
Section
3.4
|
Powers
|
|
Section
3.5
|
Meetings
of the Board
|
|
Section
3.6
|
Quorum
|
|
Section
3.7
|
Vote
Necessary to Act and Participation by Conference Telephone
|
|
Section
3.8
|
Executive
and Other Committees
|
|
Section
3.9
|
Compensation
|
|
Section
3.10
|
Rules
of Procedure
|
|
Section
3.11
|
Action
Without Meeting
|
ARTICLE
4. OFFICERS
|
Section
4.1
|
Officers
|
|
Section
4.2
|
Number
of Offices
|
|
Section
4.3
|
Terms
|
|
Section
4.4
|
Duties
of the Executive Officers
|
|
Section
4.5
|
Chairman
of the Board
|
ARTICLE
5. INDEMNIFICATION, advancement, AND INSURANCE
|
Section
5.1
|
Right
of Indemnification and Advancement
|
|
Section
5.2
|
Right
of Claimant to Bring Suit
|
|
Section
5.3
|
Non-Exclusivity
of Rights
|
|
Section
5.4
|
Insurance
|
|
Section
5.5
|
Setoff
of Indemnification Remedies; Subrogation
|
|
Section
5.6
|
Amendment
or Repeal
|
|
Section
5.7
|
Severability
|
ARTICLE
6. MISCELLANEOUS
|
Section
6.1
|
Certificates
of Stock
|
|
Section
6.2
|
Transfer
of Stock
|
|
Section
6.3
|
Stockholders
of Record
|
|
Section
6.4
|
Corporate
Seal
|
|
Section
6.5
|
Fiscal
Year
|
|
Section
6.6
|
Books
and Records
|
|
Section
6.7
|
Notices
|
|
Section
6.8
|
Amendments
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Article
7. Construction and Defined Terms
|
Section
7.1
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Construction
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Section
7.2
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Defined
Terms
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BYLAWS
OF
CIPHERLOC
CORPORATION
ARTICLE
1. OFFICES
Section
1.1. Registered Office. The address of the registered office of the Corporation1 in Delaware shall be 1209 Orange
Street, in the City of Wilmington, County of New Castle. The registered agent at such address in charge thereof shall be The Corporation
Trust Company, all of which shall be subject to change from time to time as permitted by applicable law.
Section
1.2. Other Offices. The Corporation may also have an office or offices or place or places of business within or without the
State of Delaware as the Board may from time to time designate.
ARTICLE
2. MEETINGS OF STOCKHOLDERS
Section
2.1. Annual Meeting. If required by applicable law, an annual meeting of Stockholders for the election of Directors shall
be held within or without the State of Delaware on such date and at such time and place as may be designated by resolution of the Board
from time to time. Other proper business may be transacted at such meeting.
Section
2.2. Special Meetings. Special meetings of Stockholders for any purpose or purposes may be called at any time (a) by
the Board; (b) by a committee of the Board whose power and authority, either as expressly provided in a resolution of the Board
or as may be provided in the Corporate Documents, includes the power to call such meetings; or (c) upon the request to the Board
in writing of Stockholders holding Shares having not less than twenty-five (25) percent of the votes that would be cast at a
meeting at which all Shares entitled to vote in the election of Directors were present and voted.
Section
2.3. Time and Place of Special Meetings. Special meetings of Stockholders shall be held at such times and at such places,
within or without the State of Delaware, as may from time to time be designated by the Board with regard to special meetings called by
it or called upon the request of Stockholders, or as may be otherwise designated by the committee calling any such meeting.
Section
2.4. Notice. Written notice of any Stockholders’ meeting, stating the place, date, and hour thereof, the purpose or
purposes thereof in the case of a special meeting, and the record date for determining Stockholders entitled to vote thereat if such
date is different from the record date for determining Stockholders entitled to notice thereof, shall be given to each Stockholder entitled
to notice of such meeting. If mailed, such notice shall be deemed to have been given when deposited in the United States mails, postage
prepaid, addressed to the Stockholder at his, her, or its address as it appears on the records of the Corporation. Notwithstanding the
foregoing, such notice may be given by a form of electronic transmission to the extent permitted by law, including Section 232 of the
DGCL.
1
Definitions of capitalized terms are provided in Section 6.2 of the Bylaws.
Section
2.5. Quorum. Except as may otherwise be provided by applicable law or the Corporate Documents, the presence in person or by
proxy, at any meeting of Stockholders, of Shares having not less than a majority of the votes that would be cast at such meeting if all
Shares entitled to vote at such meeting were present and voted shall constitute a quorum; provided, however, that, in the absence
of a quorum and until a quorum is secured, the meeting may be adjourned by the chairman of the meeting without a vote or, in the absence
of a chairman, by the Stockholders by the vote of Shares having not less than a majority of the votes that could be cast by all the Shares
present and entitled to vote at the meeting. If the time and place of the adjourned meeting are announced at the meeting at which the
adjournment is taken, no further notice of such adjourned meeting need be given.
Section
2.6. Adjournment. Any meeting of Stockholders may be adjourned at the meeting, either by the chairman of the meeting, for
an announced proper purpose, or by the Stockholders entitled to vote at such meeting, for any purpose, to reconvene at a later time and
at the same or some other place, and, unless otherwise provided by applicable law, notice need not be given of any such adjourned meeting
if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Stockholders
may transact any business that might have been transacted at the original meeting. If a quorum is present at any meeting, any adjournment
of such meeting by the chairman of the meeting may be overruled by the vote of Shares having not less than a majority of the votes that
could be cast by all the Shares present and entitled to vote at the meeting.
Section
2.7. Organization of Meetings. Any meeting of Stockholders shall be presided over by the chairman of the meeting, who shall
be one of the following, here listed in the order of preference: (a) the chairman of the Board, if any; or (b) in such
chairman’s absence, the president, if any; or (c) in the president’s absence, the chief executive officer, if any;
or (d) in the chief executive officer’s absence, a vice president, if any; or (e) in the absence of the foregoing
persons or persons with functionally equivalent executive titles, the person so designated by the Board; or (f) in the absence
of any such designation, a chairman of the meeting chosen by the Stockholders at the meeting. The secretary of the Corporation shall
act as secretary of the meeting, but in his or her absence, the chairman of the meeting shall appoint a secretary of the meeting.
Section
2.8. Voting and Record Date. Unless otherwise provided in the Certificate of Incorporation, each Stockholder entitled to vote
shall, at every meeting of Stockholders, be entitled to one vote, in person or by proxy, for each Share of voting Stock held by him,
her, or it, but no proxy shall be voted on after three years from its date, unless it provides for a longer period. A Stockholder may
revoke any proxy that is not irrevocable by attending the meeting and voting in person, or by tendering to the Corporation at or before
the meeting either an instrument in writing revoking the proxy or another duly executed proxy bearing a later date. Voting at meetings
need not be by written ballot and need not be conducted by inspectors of election unless otherwise required by applicable law (e.g.,
8 Del. C. § 231) as prescribed in accordance with Section 2.9. At all meetings of Stockholders for the election of Directors,
a plurality of the votes cast shall be sufficient to elect Directors. Unless otherwise provided by applicable law or the Corporate Documents,
any other election or matter shall be determined by the vote of Shares having not less than a majority of the votes that could be cast
by all the Shares present and entitled to vote at the meeting on such election or matter. The fixing of a record date for the determination
of Stockholders entitled to notice, and, if different, of a record date for the determination of Stockholders entitled to vote, shall
be as provided by applicable law.
Section
2.9. Conduct of Meeting. Subject to and to the extent permitted by applicable law, the Board may adopt by resolution such
rules and regulations for the conduct of meetings of Stockholders as it shall deem appropriate. Except to the extent inconsistent with
applicable law or such rules and regulations as adopted by the Board, the chairman of any meeting of Stockholders shall have the right
and authority to prescribe such rules, regulations, and procedures and to do all such acts as, in the judgment of such chairman, are
appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures, whether adopted by the Board or prescribed
by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of
business for the meeting and announcement of the date and time of the opening and closing of the polls for each matter upon which Stockholders
will vote at the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c)
limitations on attendance at or participation in the meeting to Stockholders, their duly authorized and constituted proxies, or such
other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for
the commencement thereof; (e) limitations on the time allotted to questions or comments by participants; and (f) appointment
of inspectors of election and other voting procedures, including those procedures set out in 8 Del. C. § 231. Unless and
to the extent determined otherwise by the Board or the chairman of the meeting, meetings of Stockholders shall not be required to be
held in accordance with rules of parliamentary procedure.
Section
2.10. Action Without Meeting. Any action permitted or required to be taken at any meeting of Stockholders may be taken by
written consent without a meeting subject to and to the extent permitted by the Corporate Documents and applicable law.
ARTICLE
3. DIRECTORS
Section
3.1. Number. The Board shall consist of one or more Directors, the total number thereof to be fixed from time to time by resolution
of the Board.
Section
3.2. Term, Qualification, Vacancies, and Newly Created Directorships.
(a)
Each Director shall hold office until the next annual election and until such Director’s successor is elected and qualified, or
until the earlier of such Director’s death, resignation, or removal. Directors need not be Stockholders.
(b)
If there be a vacancy in the Board by reason of death, resignation, or otherwise, or if there be any newly created directorships resulting
from an increase in the total number of Directors, such vacancy or newly created directorship shall be filled by the vote of a majority
of the Directors then in office, although less than a quorum. Any Director chosen by reason of such vacancy or such newly created directorship
shall hold office until the next annual meeting and until such Director’s successor is elected and qualified, or until the earlier
of such Director’s death, resignation, or removal.
Section
3.3. Removal. Any Director may be removed at any time, with or without cause, by the vote of Shares having not less than a
majority of the votes that would be cast at a meeting at which all Shares entitled to vote in the election of Directors were present
and voted.
Section
3.4. Powers. The Board shall manage the property and the business and affairs of the Corporation, and shall have all such
powers and authority as may be exercised by the board of directors of a stock corporation organized under the DGCL, including but not
limited to the power to declare dividends on the common and preferred stock of the Corporation.
Section
3.5. Meetings of the Board.
(a)
Regular meetings of the Board may be held within or without the State of Delaware at such time and place as may be fixed from time to
time by resolution of the Board. No notice of regular meetings shall be required.
(b)
Special meetings of the Board may be called by any Director. Notice of the date, time, and place of the meeting shall be given by or
at the direction of the person or persons calling the meeting, and, unless otherwise stated in the notice thereof, any and all business
may be transacted at any meeting without specification of such business in the notice. Unless the Board prescribes different periods
of time for notice, notice shall be provided to each Director at least twenty-four hours in advance of the special meeting if notice
is by personal service, by telephone, by a form of electronic transmission, or in person, and at least seven days in advance of the special
meeting if notice is by mail. Special meetings of the Board may be held within or without the State of Delaware as is indicated in the
notice or waiver of notice thereof.
Section
3.6. Quorum. A majority of the total number of Directors constituting the whole Board shall constitute a quorum for the transaction
of business, but a smaller number may adjourn from time to time, without further notice, until a quorum is secured.
Section
3.7. Vote Necessary to Act and Participation by Conference Telephone. The vote of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board, except as may otherwise be provided by applicable law or the Corporate
Documents. Participation in a meeting by conference telephone or similar means by which all participating Directors can hear each other
shall constitute presence in person at such meeting.
Section
3.8. Executive and Other Committees.
(a)
The Board may, by resolution passed by a majority of the total number of Directors, designate one or more committees, including an executive
committee, each committee to consist of two or more Directors. Any such committee, to the extent provided in such resolution or in the
Corporate Documents, shall have and may exercise the powers and authority of the Board in the management of the business and affairs
of the Corporation, except in reference to powers or authority expressly forbidden such a committee by applicable law, and may authorize
the seal of the Corporation to be fixed to all papers that may require it.
(b)
If any member of a committee, including an executive committee, is absent or disqualified, the member or members thereof present at any
meeting and not disqualified, whether or not he, she, or they constitute a quorum, may unanimously appoint another Director to act at
the meeting in the place of such absent or disqualified member. Subject to the foregoing, no committee shall have the power or authority
to fill vacancies in its own membership, which vacancies shall be filled by the Board.
(c)
The executive committee, if any, shall have and shall exercise, between meetings of the Board, the full power and authority of the Board
in the management of the business and affairs of the Corporation, including the power and authority to declare a dividend, to call meetings
of Stockholders, and to authorize the issuance of Stock, except in reference to power and authority expressly forbidden by applicable
law, and may authorize the seal of the Corporation to be affixed to all papers that require it; provided, however, that the executive
committee shall not have the power or authority to fill vacancies in the membership of committees.
(d)
Any committee shall meet at stated times or on notice to all of its members. A majority shall constitute a quorum, but the vote of a
majority of the whole committee shall be necessary to act in every case. In all other respects, any committee shall fix its own rules
of procedure.
Section
3.9. Compensation. The Board shall fix the compensation, if any, of Directors for their service as Directors.
Section
3.10. Rules of Procedure. Subject to applicable law and the Corporate Documents, the Board shall fix its own rules of procedure
and conduct from time to time.
Section
3.11. Action Without Meeting. Any action permitted or required to be taken at any meeting of the Board may be taken by unanimous
written consent without a meeting, subject to and to the extent permitted by applicable law and the Corporate Documents.
ARTICLE
4. OFFICERS
Section
4.1. Officers. The Board shall elect a president and secretary (by those or any other functionally equivalent executive titles),
and may elect other officers and agents, including one or more vice presidents. All officers of the Corporation shall be chosen by the
Board by the vote of a majority of the Directors present at a meeting at which a quorum is present or by written consent pursuant to
applicable law and the Corporate Documents. No officer need be a Stockholder, and no officer other than the chairman of the Board, if
any, need be a Director.
Section
4.2. Number of Offices. Any number of offices may be held by the same person.
Section
4.3. Terms. Each officer of the Corporation shall hold office until such officer’s successor is chosen and qualifies,
or until such officer’s earlier death, resignation, or removal. Any officer may resign at any time by written notice to the Corporation
and may be removed at any time, with or without cause, by the vote of a majority of the total number of Directors. If the office of any
officer becomes vacant for any reason, the vacancy may be filled by the Board in the same manner as any officer is chosen.
Section
4.4. Duties of Officers. The officers of the Corporation shall have such powers and shall perform such duties, executive or
otherwise, as from time to time may be prescribed or assigned to them by the Board or the Corporate Documents, and to the extent not
so prescribed or assigned, as generally pertain to their respective offices, subject to the control of the Board. The Board shall assign
to one officer the duty to record the proceedings of the meetings of the Stockholders and Board in a book to be kept for that purpose.
Section
4.5. Chairman of the Board. Only a Director may be elected and may serve as chairman of the Board. The chairman of the Board,
if any, shall, if present, preside at all meetings of the Board and exercise and perform such other powers and duties as may be from
time to time assigned to him or her by the Board or the Corporate Documents.
ARTICLE
5. INDEMNIFICATION, ADVANCEMENT, AND INSURANCE
Section
5.1. Definitions. As used in this Article 5,
(a)
“Covered Person” means any individual who is or was a Director or officer of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, or agent of an Other Entity, including, without limitation, service
with respect to employee benefit plans.
(b)
“Loss” means any expense, liability, or loss (including, without limitation, attorney’s fees, judgments, fines,
amounts paid in settlement, and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974).
(c)
“Other Entity” means another corporation or a partnership, limited liability company, joint venture, trust, or other
enterprise, whether for-profit or nonprofit.
(d)
“Proceeding” means any threatened, pending, or completed action, suit, alternative-dispute-resolution procedure, or
other proceeding, whether civil, criminal, administrative, or investigative, including, without limitation, any action by or in the right
of the Corporation, involving a Covered Person (whether as a party, a witness, or otherwise) by reason of the fact that such Covered
Person is or was a Director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer,
employee, or agent of an Other Entity, including, without limitation, service with respect to employee benefit plans.
Section
5.2. Right to Indemnification. Any Covered Person shall be indemnified and held harmless by the Corporation to the fullest
extent permitted by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification rights than the DGCL permitted the Corporation to provide
prior to such amendment), against all Loss reasonably incurred or suffered by such Covered Person in connection with a Proceeding, and
such indemnification shall inure to the benefit of such Covered Person’s heirs, executors, administrators, and legal or personal
representatives; provided, however, that (a) except as otherwise provided in Section 5.4, the Corporation shall indemnify
a Covered Person seeking indemnification in connection with a Proceeding (or part thereof) initiated by such Covered Person only if the
initiation of such Proceeding (or part thereof) was authorized by the Board, and (b) indemnification under this Article 5 shall
not be available to a Covered Person in connection with any Proceeding (or part thereof) in which judgment is entered against such Covered
Person for disgorgement of profits made from the purchase or sale by such Covered Person of securities of the Corporation, pursuant to
the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any federal, state, or local
statute or regulation.
Section
5.3. Right to Advancement of Expenses. The rights conferred in this Article 5 shall be contract rights and shall include the
right of a Covered Person who is or was a Director or officer of the Corporation to be paid by the Corporation the expenses (including,
without limitation, attorney’s fees) incurred by such Covered Person in defending a Proceeding or in prosecuting a suit against
the Corporation to enforce such Covered Person’s rights under this Article 5, in each case in advance of the final disposition
of such Proceeding or suit; provided, however, that the payment of such expenses incurred by such Covered Person in such Covered
Person’s capacity as a Director or officer of the Corporation (and not in any other capacity in which service is or was rendered
by such Covered Person while a Director or officer of the Corporation, including, without limitation, service to an employee benefit
plan) in advance of the final disposition of such Proceeding or suit shall be made only upon delivery to the Corporation of an undertaking
by or on behalf of such Covered Person to repay all amounts so advanced if it shall ultimately be determined by a final, non-appealable
order of a court of competent jurisdiction that such Covered Person is not entitled to be indemnified under this Article 5 or otherwise.
Such undertaking shall itself be sufficient without the need for further evaluation of any credit aspects of the undertaking or with
respect to such advancement.
Section
5.4. Right of Claimant to Bring Suit. If (a) a written claim under Section 5.2 is not paid in full by the Corporation
within sixty (60) days after such claim, together with reasonable evidence as to the amount of such claim, has been received by the Corporation,
or (b) a written claim under Section 5.3 is not paid in full by the Corporation within twenty (20) days after such claim, together
with reasonable evidence as to the amount of such claim, has been received by the Corporation, then at any time thereafter, the Covered
Person making such claim may bring suit against the Corporation to recover the unpaid amount of such claim, and if successful in whole
or in part, such Covered Person shall also be entitled to be paid the expense, including, without limitation, attorney’s fees,
of prosecuting such suit. It shall be a defense to any such suit, other than a suit brought to enforce a claim for advancement of expenses
where the required undertaking, if any is required, has been tendered to the Corporation, that such Covered Person has not met the applicable
standard of conduct that makes it permissible under the DGCL for the Corporation to indemnify such Covered Person for the amount claimed,
but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including the Board or a
committee thereof, independent legal counsel, or the Stockholders) to have made a determination prior to the commencement of such suit
that indemnification of such Covered Person is proper in the circumstances because such Covered Person has met the applicable standard
of conduct set forth in the DGCL, nor an actual determination by the Corporation (including the Board or a committee thereof, independent
legal counsel, or the Stockholders) that such Covered Person has not met such applicable standard of conduct, shall be a defense to such
suit or create a presumption that such Covered Person has not met the applicable standard of conduct. In any suit brought by a Covered
Person to enforce a right under this Article 5, or by the Corporation to recover an advancement of expenses, the burden of proving that
the Covered Person is not entitled to indemnification or advancement under this Article 5 or otherwise shall be on the Corporation.
Section
5.5. Non-Exclusivity of Rights. The rights to indemnification and the advancement of expenses conferred in this Article 5
shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the Corporate
Documents, agreement, or vote of Stockholders or disinterested Directors, or otherwise.
Section
5.6. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any Director, officer, employee,
or agent of the Corporation or of an Other Entity against any Loss, whether or not the Corporation would have the power to indemnify
such person against such Loss under the DGCL.
Section
5.7. Setoff of Indemnification Remedies; Subrogation. In the case of a claim for indemnification or advancement of expenses
against the Corporation under this Article 5 arising out of acts, events, or circumstances for which the Covered Person, who was at the
relevant time serving as a Director, officer, employee, or agent of an Other Entity at the request of the Corporation, may be entitled
to indemnification or advancement of expenses pursuant to such Other Entity’s certificate of incorporation, bylaws, or other governing
document, or pursuant to an agreement between such Covered Person and such Other Entity, such Covered Person shall first seek indemnification
or advancement of expenses pursuant to any such certificate of incorporation, bylaws, other governing document, or agreement. To the
extent that amounts to be paid in indemnification or advancement to a Covered Person under this Article 5 are paid by such Other Entity,
such Covered Person’s right to indemnification and advancement of expenses under this Article 5 shall be reduced. In the event
and to the extent that any Covered Person receives indemnification or advancement of expenses pursuant to this Article 5, (a)
the Corporation shall be subrogated, to the fullest extent permitted by law, to any right of action that such Covered Person may have
against any third person respecting the Loss so indemnified or the expenses so advanced, and (b) such Covered Person shall hold
in trust for, and pay to, the Corporation any amounts that such Covered Person may recover in damages or settlement from any third person
respecting the Loss so indemnified or the expenses so advanced.
Section
5.8. Amendment or Repeal. The rights to indemnification and the advancement of expenses conferred in this Article 5 shall
not be eliminated or impaired by an amendment to the Corporate Documents after the occurrence of the act or omission that is the subject
of the Proceeding for which indemnification or advancement of expenses is sought.
Section
5.9. Severability. Whenever possible, each term and provision of this Article 5 shall be interpreted in such a way as to be
effective and valid under applicable law. If any term or provision of this Article 5 is found to be illegal, or if the application thereof
to any person or any circumstance shall to any extent be judicially determined to be invalid or unenforceable, the remainder of this
Article 5, or the application of such term or provision to persons or circumstances other than those to which its application is judicially
determined to be invalid or unenforceable, shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted
by law.]]
ARTICLE
6. MISCELLANEOUS
Section
6.1. Certificates of Stock. Certificates of Stock shall be signed, manually or by facsimile signature, by the president or
a vice president, and by the secretary or an assistant secretary, treasurer, or assistant treasurer; provided, however, that the
Board may authorize officers in addition to or in place of any of the foregoing to sign certificates of Stock. If a certificate of Stock
be allegedly lost, stolen, or destroyed, another may be issued in its stead upon proof of loss, theft, or destruction and the giving
of a satisfactory bond of indemnity in an amount sufficient to indemnify the Corporation against any associated claim or loss. A new
certificate may be issued without requiring bond when, in the judgment of the Board, it is proper to do so.
Section
6.2. Transfer of Stock. All transfers of Shares shall be made upon the books of the Corporation by the holder of the Shares
in person or by his, her, or its lawfully constituted representative, upon surrender of certificates of Stock, duly endorsed or with
acceptable power attached thereto, for cancellation.
Section
6.3. Stockholders of Record. The Corporation shall be entitled to treat the holder of record of any Shares as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such Shares on the part of
any other person whether or not the Corporation shall have express or other notice thereof, save as expressly provided by applicable
law.
Section
6.4. Corporate Seal. The corporate seal, if any, shall have inscribed thereon the name of the Corporation, the year of its
incorporation, and the words “Corporate Seal Delaware”.
Section
6.5. Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board.
Section
6.6. Books and Records. The books, records, and accounts of the Corporation, except as may otherwise be required by applicable
law, may be kept within or without the State of Delaware at such place or places as may from time to time be designated by resolution
of the Board or the Corporate Documents.
Section
6.7. Notices. Any written waiver of notice, signed by the person entitled to notice, whether executed before or after the
event to which such waiver pertains, shall be deemed equivalent to proper notice. Attendance of a person at a meeting shall constitute
waiver of notice of such meeting, except where attendance is for the express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not lawfully called or convened.
Section
6.8. Amendments. The Board is expressly authorized to adopt, amend or repeal the bylaws of the Corporation. Any adoption,
amendment or repeal of the bylaws of the Corporation by the Board shall require the approval of a majority of the authorized number of
directors. The stockholders also shall have power to alter or repeal any bylaws of the Corporation, whether adopted by them or otherwise,
at any annual or special meeting of stockholders, provided that notice of such proposed adoption,
amendment or repeal is given in the notice of such meeting of stockholders.
ARTICLE
7. CONSTRUCTION AND DEFINED TERMS
Section
7.1. Construction. As appropriate in context, whenever the singular number is used in the Bylaws, the same includes the plural,
and whenever the plural number is used in the Bylaws, the same includes the singular. As used in the Bylaws, each of the neuter, masculine,
and feminine genders includes the other two genders. As used in the Bylaws, “include”, “includes”, and “including”
shall be deemed to be followed by “without limitation”.
Section
7.2. Defined Terms. As used in the Bylaws:
“Board”
means the board of directors of the Corporation.
“Bylaws”
means these bylaws of the Corporation, as the same may be amended from time to time.
“Certificate
of Incorporation” means the Certificate of Incorporation of the Corporation, as the same may be amended from time to time.
“Corporate
Documents” means the Certificate of Incorporation and the Bylaws.
“Corporation”
means Cipherloc Corporation.
“DGCL”
means the General Corporation Law of the State of Delaware, as the same may be amended from time to time.
“Director”
means a member of the Board.
“Share”
means an issued and outstanding share of Stock. For the avoidance of doubt, treasury shares of Stock are not Shares.
“Stock”
means the authorized stock of the Corporation.
“Stockholder”
means a holder of record of Shares.
APPENDIX
E
Certificate
of Amendment
of
Certificate
of Incorporation
of
Cipherloc
Corporation
Under
Section 242 of the Delaware General Corporation Law
Cipherloc
Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Company”) hereby certifies
as follows:
FIRST:
The Certificate of Incorporation of the Company is hereby amended by adding the following to Article IV:
This
amendment shall be effective as of ____ a.m., New York City time on ___, 201__ (the “Effective Time”). As of the Effective
Time, every ____ (___) shares of the Company’s Common Stock (the “Old Common Stock”), issued and outstanding immediately
prior to the Effective Time, will be automatically reclassified as and converted into one (1) share of Common Stock of the Company (the
“New Common Stock”) (such formula herein, the “Determined Ratio”). Further, every right, option and warrant to
acquire shares of Old Common Stock outstanding immediately prior to the Effective Time shall, as of the Effective Time and without any
further action, automatically be reclassified into the right to acquire one (1) share of New Common Stock based on the Determined Ratio
of shares of Old Common Stock to shares of New Common Stock, but otherwise upon the terms of such right, option or warrant (except that
the exercise or purchase price of such right, option or warrant shall be proportionately adjusted).
Notwithstanding
the immediately preceding paragraph, the Company shall not be required to issue or deliver any fractional shares of New Common Stock.
At the Effective Time any such fractional interest in such shares of New Common Stock shall be rounded up to the next whole share. Shares
of Common Stock that were outstanding prior to the Effective Time and that are not outstanding after the Effective Time shall resume
the status of authorized but unissued shares of Common Stock.
Each
stock certificate that, immediately prior to the Effective Time, represented shares of Old Common Stock shall, from and after the Effective
Time, represent that number of whole shares of New Common Stock into which the shares of Old Common Stock represented by such certificate
shall have been reclassified (as well as the right to receive whole shares in lieu of any fractional shares of New Common Stock as set
forth above); provided, however, that each holder of record of a certificate that represented shares of Old Common Stock shall receive,
upon surrender of such certificate, a new certificate representing the number of whole shares of New Common Stock into which the shares
of Old Common Stock represented by such certificate shall have been reclassified, as well as any whole share in lieu of fractional shares
of New Common Stock to which such holder may be entitled pursuant to the immediately preceding paragraph.
SECOND:
The foregoing amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation law of the
State of Delaware by the vote of not less than a majority of each class of outstanding stock of the Company entitled to vote thereon.
IN
WITNESS WHEREOF, I have signed this Certificate this __ day of ____, 20__.
APPENDIX
F
CERTIFICATE
OF AMENDMENT TO
THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
CIPHERLOC
CORPORATION
Pursuant
to the provisions of Section 3.053 of the Texas Business Organizations Code (the “TBOC”), Cipherloc
Corporation, a Texas for-profit corporation (the “Company”) hereby adopts the following Certificate of Amendment
to its Amended and Restated Articles of Incorporation (the “Restated Certificate”):
ARTICLE
I
The
name of the filing entity is Cipherloc Corporation, a Texas for-profit corporation. The file number issued to the Company by the
Secretary of State for the State of Texas is 0011557400. The date the Company was formed is June 22, 1953.
ARTICLE
II
The
Restated Certificate of the Company is hereby amended, in accordance with Section 21.208 of the TBOC, by adding a new ARTICLE NINE to
the Restated Certificate, which shall read in its entirety as follows:
“ARTICLE
NINE
No
holder of shares of stock of any class shall have any preemptive right to subscribe for or purchase any additional shares of any class,
or any bonds or convertible securities of any nature, provided however that the board of directors may, in authorizing the issuance of
shares of stock of any class, confer a preemptive right that the board of directors may deem advisable in connection with such issuance.”
ARTICLE
III
The
amendments set forth herein to the Restated Certificate have been approved in the manner required by the TBOC and by the governing documents
of the Company.
ARTICLE
IV
The
Certificate of Amendment becomes effective when filed by the State of Texas Secretary of State.
*
* *
[Signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Certificate of Amendment to be signed on its behalf by the duly authorized officer this
__ day of __________, 20__.
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CIPHERLOC
CORPORATION
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By:
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/s/
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Name:
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Title:
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APPENDIX
G
TEXAS
BUSINESS ORGANIZATIONS CODE
CHAPTER
10. MERGERS, INTEREST EXCHANGES, CONVERSIONS,
AND
SALES OF ASSETS
SUBCHAPTER
H. RIGHTS OF DISSENTING OWNERS
Sec.
10.351. APPLICABILITY OF SUBCHAPTER
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(a)
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This
subchapter does not apply to a fundamental business transaction of a domestic entity if, immediately before the effective date of
the fundamental business transaction, all of the ownership interests of the entity otherwise entitled to rights to dissent and appraisal
under this code are held by one owner or only by the owners who approved the fundamental business transaction.
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(b)
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This
subchapter applies only to a “domestic entity subject to dissenters’ rights,” as defined in Section 1.002. That
term includes a domestic for-profit corporation, professional corporation, professional association, and real estate investment trust.
Except as provided in Subsection (c), that term does not include a partnership or limited liability company.
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(c)
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The
governing documents of a partnership or a limited liability company may provide that its owners are entitled to the rights of dissent
and appraisal provided by this subchapter, subject to any modification to those rights as provided by the entity’s governing
documents.
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Sec.
10.352. DEFINITIONS. In this subchapter:
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(1)
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“Dissenting
owner” means an owner of an ownership interest in a domestic entity subject to dissenters’ rights who:
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(A)
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provides
notice under Section 10.356; and
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(B)
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complies
with the requirements for perfecting that owner’s right to dissent under this subchapter.
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(2)
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“Responsible
organization” means:
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(A)
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the
organization responsible for:
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(i)
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the
provision of notices under this subchapter; and
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(ii)
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the
primary obligation of paying the fair value for an ownership interest held by a dissenting owner;
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(B)
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with
respect to a merger or conversion:
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(i)
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for
matters occurring before the merger or conversion, the organization that is merging or converting; and
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(ii)
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for
matters occurring after the merger or conversion, the surviving or new organization that is primarily obligated for the payment of
the fair value of the dissenting owner’s ownership interest in the merger or conversion;
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(C)
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with
respect to an interest exchange, the organization the ownership interests of which are being acquired in the interest exchange;
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(D)
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with
respect to the sale of all or substantially all of the assets of an organization, the organization the assets of which are to be
transferred by sale or in another manner; and
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(E)
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with
respect to an amendment to a domestic for-profit corporation’s certificate of formation described by Section 10.354(a)(1)(G),
the corporation.
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Sec.
10.353. FORM AND VALIDITY OF NOTICE.
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(a)
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Notice
required under this subchapter:
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(1)
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must
be in writing; and
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(2)
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may
be mailed, hand-delivered, or delivered by courier or electronic transmission.
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(b)
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Failure
to provide notice as required by this subchapter does not invalidate any action taken.
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Sec.
10.354. RIGHTS OF DISSENT AND APPRAISAL.
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(a)
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Subject
to Subsection (b), an owner of an ownership interest in a domestic entity subject to dissenters’ rights is entitled to:
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(A)
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a
plan of merger to which the domestic entity is a party if owner approval is required by this code and the owner owns in the domestic
entity an ownership interest that was entitled to vote on the plan of merger;
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(B)
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a
sale of all or substantially all of the assets of the domestic entity if owner approval is required by this code and the owner owns
in the domestic entity an ownership interest that was entitled to vote on the sale;
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(C)
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a
plan of exchange in which the ownership interest of the owner is to be acquired;
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(D)
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a
plan of conversion in which the domestic entity is the converting entity if owner approval is required by this code and the owner
owns in the domestic entity an ownership interest that was entitled to vote on the plan of conversion;
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(E)
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a
merger effected under Section 10.006 in which:
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(i)
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the
owner is entitled to vote on the merger; or
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(ii)
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the
ownership interest of the owner is converted or exchanged;
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(F)
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a
merger effected under Section 21.459(c) in which the shares of the shareholders are converted or exchanged; or
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(G)
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if
the owner owns shares that were entitled to vote on the amendment, an amendment to a domestic for-profit corporation’s certificate
of formation to:
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(i)
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add
the provisions required by Section 3.007(e) to elect to be a public benefit corporation; or
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(ii)
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delete
the provisions required by Section 3.007(e), which in effect cancels the corporation’s election to be a public benefit corporation;
and
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(2)
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subject
to compliance with the procedures set forth in this subchapter, obtain the fair value of that ownership interest through an appraisal.
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(b)
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Notwithstanding
Subsection (a), subject to Subsection (c), an owner may not dissent from a plan of merger or conversion in which there is a single
surviving or new domestic entity or non-code organization, or from a plan of exchange, if:
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(1)
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the
ownership interest, or a depository receipt in respect of the ownership interest, held by the owner:
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(A)
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in
the case of a plan of merger, conversion, or exchange, other than a plan of merger pursuant to Section 21.459(c), is part of a class
or series of ownership interests, or depository receipts in respect of ownership interests, that, on the record date set for purposes
of determining which owners are entitled to vote on the plan of merger, conversion, or exchange, as appropriate, are either:
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(i)
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listed
on a national securities exchange; or
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(ii)
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held
of record by at least 2,000 owners; or
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(B)
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in
the case of a plan of merger pursuant to Section 21.459(c), is part of a class or series of ownership interests, or depository receipts
in respect of ownership interests, that, immediately before the date the board of directors of the corporation that issued the ownership
interest held, directly or indirectly, by the owner approves the plan of merger, are either:
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(i)
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listed
on a national securities exchange; or
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(ii)
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held
of record by at least 2,000 owners; or
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(2)
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the
owner is not required by the terms of the plan of merger, conversion, or exchange, as appropriate, to accept for the owner’s
ownership interest any consideration that is different from the consideration to be provided to any other holder of an ownership
interest of the same class or series as the ownership interest held by the owner, other than cash instead of fractional shares or
interests the owner would otherwise be entitled to receive; and
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(3)
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the
owner is not required by the terms of the plan of merger, conversion, or exchange, as appropriate, to accept for the owner’s
ownership interest any consideration other than:
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(A)
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ownership
interests, or depository receipts in respect of ownership interests, of a domestic entity or non-code organization of the same general
organizational type that, immediately after the effective date of the merger, conversion, or exchange, as appropriate, will be part
of a class or series of ownership interests, or depository receipts in respect of ownership interests, that are:
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(i)
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listed
on a national securities exchange or authorized for listing on the exchange on official notice of issuance; or
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(ii)
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held
of record by at least 2,000 owners;
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(B)
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cash
instead of fractional ownership interests, or fractional depository receipts in respect of ownership interests, the owner would otherwise
be entitled to receive; or
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(C)
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any
combination of the ownership interests, or fractional depository receipts in respect of ownership interests, and cash described by
Paragraphs (A) and (B).
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(c)
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Subsection
(b) shall not apply to a domestic entity that is a subsidiary with respect to a merger under Section 10.006.
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(d)
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Notwithstanding
Subsection (a), an owner of an ownership interest in a domestic for-profit corporation subject to dissenters’ rights may not
dissent from an amendment to the corporation’s certificate of formation described by Subsection (a)(1)(G) if the shares held
by the owner are part of a class or series of shares, on the record date set for purposes of determining which owners are entitled
to vote on the amendment:
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(1)
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listed
on a national securities exchange; or
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(2)
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held
of record by at least 2,000 owners.
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Sec.
10.355. NOTICE OF RIGHT OF DISSENT AND APPRAISAL.
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(a)
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A
domestic entity subject to dissenters’ rights that takes or proposes to take an action regarding which an owner has a right
to dissent and obtain an appraisal under Section 10.354 shall notify each affected owner of the owner’s rights under that section
if:
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(1)
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the
action or proposed action is submitted to a vote of the owners at a meeting; or
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(2)
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approval
of the action or proposed action is obtained by written consent of the owners instead of being submitted to a vote of the owners.
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(b)
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If
a parent organization effects a merger under Section 10.006 and a subsidiary organization that is a party to the merger is a domestic
entity subject to dissenters’ rights, the responsible organization shall notify the owners of that subsidiary organization
who have a right to dissent to the merger under Section 10.354 of their rights under this subchapter not later than the 10th day
after the effective date of the merger. The notice must also include a copy of the certificate of merger and a statement that the
merger has become effective.
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(b-1)
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If
a corporation effects a merger under Section 21.459(c), the responsible organization shall notify the shareholders of that corporation
who have a right to dissent to the plan of merger under Section 10.354 of their rights under this subchapter not later than the 10th
day after the effective date of the merger. Notice required under this subsection that is given to shareholders before the effective
date of the merger may, but is not required to, contain a statement of the merger’s effective date. If the notice is
not given to the shareholders until on or after the effective date of the merger, the notice must contain a statement of the merger’s
effective date.
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(c)
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A
notice required to be provided under Subsection (a), (b), or (b-1) must:
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(1)
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be
accompanied by a copy of this subchapter; and
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(2)
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advise
the owner of the location of the responsible organization’s principal executive offices to which a notice required under Section
10.356(b)(1) or a demand under Section 10.356(b)(3), or both, may be provided.
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(d)
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In
addition to the requirements prescribed by Subsection (c), a notice required to be provided:
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(1)
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under
Subsection (a)(1) must accompany the notice of the meeting to consider the action;
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(2)
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under
Subsection (a)(2) must be provided to:
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(A)
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each
owner who consents in writing to the action before the owner delivers the written consent; and
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(B)
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each
owner who is entitled to vote on the action and does not consent in writing to the action before the 11th day after the date the
action takes effect; and
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(3)
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under
Subsection (b-1) must be provided:
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(A)
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if
given before the consummation of the offer described by Section 21.459(c)(2), to each shareholder to whom that offer is made; or
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(B)
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if
given after the consummation of the offer described by Section 21.459(c)(2), to each shareholder who did not tender the shareholder’s
shares in that offer.
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(e)
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Not
later than the 10th day after the date an action described by Subsection (a)(1) takes effect, the responsible organization shall
give notice that the action has been effected to each owner who voted against the action and sent notice under Section 10.356(b)(1).
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(f)
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If
the notice given under Subsection (b-1) did not include a statement of the effective date of the merger, the responsible organization
shall, not later than the 10th day after the effective date, give a second notice to the shareholders notifying them of the merger’s
effective date. If the second notice is given after the later of the date on which the offer described by Section 21.459(c)(2) is
consummated or the 20th day after the date notice under Subsection (b-1) is given, then the second notice is required to be given
to only those shareholders who have made a demand under Section 10.356(b)(3).
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Sec.
10.356. PROCEDURE FOR DISSENT BY OWNERS AS TO ACTIONS; PERFECTION OF RIGHT OF DISSENT AND APPRAISAL.
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(a)
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An
owner of an ownership interest of a domestic entity subject to dissenters’ rights who has the right to dissent and appraisal
from any of the actions referred to in Section 10.354 may exercise that right to dissent and appraisal only by complying with the
procedures specified in this subchapter. An owner’s right of dissent and appraisal under Section 10.354 may be exercised by
an owner only with respect to an ownership interest that is not voted in favor of the action.
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(b)
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To
perfect the owner’s rights of dissent and appraisal under Section 10.354, an owner:
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(1)
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if
the proposed action is to be submitted to a vote of the owners at a meeting, must give to the domestic entity a written notice of
objection to the action that:
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(A)
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is
addressed to the entity’s president and secretary;
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(B)
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states
that the owner’s right to dissent will be exercised if the action takes effect;
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(C)
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provides
an address to which notice of effectiveness of the action should be delivered or mailed; and
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(D)
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is
delivered to the entity’s principal executive offices before the meeting;
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(2)
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with
respect to the ownership interest for which the rights of dissent and appraisal are sought:
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(A)
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must
vote against the action if the owner is entitled to vote on the action and the action is approved at a meeting of the owners; and
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(B)
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may
not consent to the action if the action is approved by written consent; and
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(3)
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must
give to the responsible organization a demand in writing that:
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(A)
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is
addressed to the president and secretary of the responsible organization;
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(B)
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demands
payment of the fair value of the ownership interests for which the rights of dissent and appraisal are sought;
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(C)
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provides
to the responsible organization an address to which a notice relating to the dissent and appraisal procedures under this subchapter
may be sent;
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(D)
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states
the number and class of the ownership interests of the domestic entity owned by the owner and the fair value of the ownership interests
as estimated by the owner; and
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(E)
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is
delivered to the responsible organization at its principal executive offices at the following time:
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(i)
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not
later than the 20th day after the date the responsible organization sends to the owner the notice required by Section 10.355(e) that
the action has taken effect, if the action was approved by a vote of the owners at a meeting;
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(ii)
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not
later than the 20th day after the date the responsible organization sends to the owner the notice required by Section 10.355(d)(2)
that the action has taken effect, if the action was approved by the written consent of the owners;
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(iii)
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not
later than the 20th day after the date the responsible organization sends to the owner a notice that the merger was effected, if
the action is a merger effected under Section 10.006; or
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(iv)
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not
later than the 20th day after the date the responsible organization gives to the shareholder the notice required by Section 10.355(b-1)
or the date of the consummation of the offer described by Section 21.459(c)(2), whichever is later, if the action is a merger effected
under Section 21.459(c).
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(c)
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An
owner who does not make a demand within the period required by Subsection (b)(3)(E) or, if Subsection (b)(1) is applicable, does
not give the notice of objection before the meeting of the owners is bound by the action and is not entitled to exercise the rights
of dissent and appraisal under Section 10.354.
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(d)
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Not
later than the 20th day after the date an owner makes a demand under Subsection (b)(3), the owner must submit to the responsible
organization any certificates representing the ownership interest to which the demand relates for purposes of making a notation on
the certificates that a demand for the payment of the fair value of an ownership interest has been made under this section. An owner’s
failure to submit the certificates within the required period has the effect of terminating, at the option of the responsible organization,
the owner’s rights to dissent and appraisal under Section 10.354 unless a court, for good cause shown, directs otherwise.
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(e)
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If
a domestic entity and responsible organization satisfy the requirements of this subchapter relating to the rights of owners of ownership
interests in the entity to dissent to an action and seek appraisal of those ownership interests, an owner of an ownership interest
who fails to perfect that owner’s right of dissent in accordance with this subchapter may not bring suit to recover the value
of the ownership interest or money damages relating to the action.
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Sec.
10.357. WITHDRAWAL OF DEMAND FOR FAIR VALUE OF OWNERSHIP INTEREST.
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(a)
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An
owner may withdraw a demand for the payment of the fair value of an ownership interest made under Section 10.356 before:
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(1)
payment for the ownership interest has been made under Sections 10.358 and 10.361; or
(2)
a petition has been filed under Section 10.361.
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(b)
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Unless
the responsible organization consents to the withdrawal of the demand, an owner may not withdraw a demand for payment under Subsection
(a) after either of the events specified in Subsections (a)(1) and (2).
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Sec.
10.358. RESPONSE BY ORGANIZATION TO NOTICE OF DISSENT AND DEMAND FOR FAIR VALUE BY DISSENTING OWNER.
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(a)
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Not
later than the 20th day after the date a responsible organization receives a demand for payment made by a dissenting owner in accordance
with Section 10.356(b)(3), the responsible organization shall respond to the dissenting owner in writing by:
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(1)
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accepting
the amount claimed in the demand as the fair value of the ownership interests specified in the notice; or
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(2)
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rejecting
the demand and including in the response the requirements prescribed by Subsection (c).
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(b)
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If
the responsible organization accepts the amount claimed in the demand, the responsible organization shall pay the amount not later
than the 90th day after the date the action that is the subject of the demand was effected if the owner delivers to the responsible
organization:
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(1)
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endorsed
certificates representing the ownership interests if the ownership interests are certificated; or
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(2)
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signed
assignments of the ownership interests if the ownership interests are uncertificated.
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(c)
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If
the responsible organization rejects the amount claimed in the demand, the responsible organization shall provide to the owner:
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(1)
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an
estimate by the responsible organization of the fair value of the ownership interests; and
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(2)
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an
offer to pay the amount of the estimate provided under Subdivision (1).
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(d)
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If
the dissenting owner decides to accept the offer made by the responsible organization under Subsection (c)(2), the owner must provide
to the responsible organization notice of the acceptance of the offer not later than the 90th day after the date the action that
is the subject of the demand took effect.
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(e)
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If,
not later than the 90th day after the date the action that is the subject of the demand took effect, a dissenting owner accepts an
offer made by a responsible organization under Subsection (c)(2) or a dissenting owner and a responsible organization reach an agreement
on the fair value of the ownership interests, the responsible organization shall pay the agreed amount not later than the 120th day
after the date the action that is the subject of the demand took effect, if the dissenting owner delivers to the responsible organization:
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(1)
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endorsed
certificates representing the ownership interests if the ownership interests are certificated; or
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(2)
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signed
assignments of the ownership interests if the ownership interests are uncertificated.
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Sec.
10.359. RECORD OF DEMAND FOR FAIR VALUE OF OWNERSHIP INTEREST.
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(a)
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A
responsible organization shall note in the organization’s ownership interest records maintained under Section 3.151 the receipt
of a demand for payment from any dissenting owner made under Section 10.356.
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(b)
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If
an ownership interest that is the subject of a demand for payment made under Section 10.356 is transferred, a new certificate representing
that ownership interest must contain:
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(1)
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a
reference to the demand; and
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(2)
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the
name of the original dissenting owner of the ownership interest.
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Sec.
10.360. RIGHTS OF TRANSFEREE OF CERTAIN OWNERSHIP INTEREST.
A
transferee of an ownership interest that is the subject of a demand for payment made under Section 10.356 does not acquire additional
rights with respect to the responsible organization following the transfer. The transferee has only the rights the original dissenting
owner had with respect to the responsible organization after making the demand.
Sec.
10.361. PROCEEDING TO DETERMINE FAIR VALUE OF OWNERSHIP INTEREST AND OWNERS ENTITLED TO PAYMENT; APPOINTMENT OF APPRAISERS.
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(a)
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If
a responsible organization rejects the amount demanded by a dissenting owner under Section 10.358 and the dissenting owner and responsible
organization are unable to reach an agreement relating to the fair value of the ownership interests within the period prescribed
by Section 10.358(d), the dissenting owner or responsible organization may file a petition requesting a finding and determination
of the fair value of the owner’s ownership interests in a court in:
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(1)
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the
county in which the organization’s principal office is located in this state; or
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(2)
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the
county in which the organization’s registered office is located in this state, if the organization does not have a business
office in this state.
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(b)
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A
petition described by Subsection (a) must be filed not later than the 60th day after the expiration of the period required by Section
10.358(d).
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(c)
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On
the filing of a petition by an owner under Subsection (a), service of a copy of the petition shall be made to the responsible organization.
Not later than the 10th day after the date a responsible organization receives service under this subsection, the responsible organization
shall file with the clerk of the court in which the petition was filed a list containing the names and addresses of each owner of
the organization who has demanded payment for ownership interests under Section 10.356 and with whom agreement as to the value of
the ownership interests has not been reached with the responsible organization. If the responsible organization files a petition
under Subsection (a), the petition must be accompanied by this list.
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(d)
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The
clerk of the court in which a petition is filed under this section shall provide by registered mail notice of the time and place
set for the hearing to:
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(1)
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the
responsible organization; and
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(2)
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each
owner named on the list described by Subsection (c) at the address shown for the owner on the list.
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(1)
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determine
which owners have:
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(A)
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perfected
their rights by complying with this subchapter; and
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(B)
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become
subsequently entitled to receive payment for the fair value of their ownership interests; and
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(2)
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appoint
one or more qualified appraisers to determine the fair value of the ownership interests of the owners described by Subdivision (1).
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(f)
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The
court shall approve the form of a notice required to be provided under this section. The judgment of the court is final and binding
on the responsible organization, any other organization obligated to make payment under this subchapter for an ownership interest,
and each owner who is notified as required by this section.
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(g)
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The
beneficial owner of an ownership interest subject to dissenters’ rights held in a voting trust or by a nominee on the beneficial
owner’s behalf may file a petition described by Subsection (a) if no agreement between the dissenting owner of the ownership
interest and the responsible organization has been reached within the period prescribed by Section 10.358(d). When the beneficial
owner files a petition described by Subsection (a):
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(1)
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the
beneficial owner shall at that time be considered, for purposes of this subchapter, the owner, the dissenting owner, and the holder
of the ownership interest subject to the petition; and
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(2)
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the
dissenting owner who demanded payment under Section 10.356 has no further rights regarding the ownership interest subject to the
petition.
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Sec.
10.362. COMPUTATION AND DETERMINATION OF FAIR VALUE OF OWNERSHIP INTEREST.
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(a)
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For
purposes of this subchapter, the fair value of an ownership interest of a domestic entity subject to dissenters’ rights is
the value of the ownership interest on the date preceding the date of the action that is the subject of the appraisal. Any appreciation
or depreciation in the value of the ownership interest occurring in anticipation of the proposed action or as a result of the action
must be specifically excluded from the computation of the fair value of the ownership interest.
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(b)
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In
computing the fair value of an ownership interest under this subchapter, consideration must be given to the value of the domestic
entity as a going concern without including in the computation of value any control premium, any minority ownership discount, or
any discount for lack of marketability. If the domestic entity has different classes or series of ownership interests, the relative
rights and preferences of and limitations placed on the class or series of ownership interests, other than relative voting rights,
held by the dissenting owner must be taken into account in the computation of value.
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(c)
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The
determination of the fair value of an ownership interest made for purposes of this subchapter may not be used for purposes of making
a determination of the fair value of that ownership interest for another purpose or of the fair value of another ownership interest,
including for purposes of determining any minority or liquidity discount that might apply to a sale of an ownership interest.
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Sec.
10.363. POWERS AND DUTIES OF APPRAISER; APPRAISAL PROCEDURES.
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(a)
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An
appraiser appointed under Section 10.361 has the power and authority that:
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(1)
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is
granted by the court in the order appointing the appraiser; and
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(2)
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may
be conferred by a court to a master in chancery as provided by Rule 171, Texas Rules of Civil Procedure.
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(1)
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determine
the fair value of an ownership interest of an owner adjudged by the court to be entitled to payment for the ownership interest; and
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(2)
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file
with the court a report of that determination.
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(c)
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The
appraiser is entitled to examine the books and records of a responsible organization and may conduct investigations as the appraiser
considers appropriate. A dissenting owner or responsible organization may submit to an appraiser evidence or other information relevant
to the determination of the fair value of the ownership interest required by Subsection (b)(1).
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(d)
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The
clerk of the court appointing the appraiser shall provide notice of the filing of the report under Subsection (b) to each dissenting
owner named in the list filed under Section 10.361 and the responsible organization.
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Sec.
10.364. OBJECTION TO APPRAISAL; HEARING.
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(a)
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A
dissenting owner or responsible organization may object, based on the law or the facts, to all or part of an appraisal report containing
the fair value of an ownership interest determined under Section 10.363(b).
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(b)
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If
an objection to a report is raised under Subsection (a), the court shall hold a hearing to determine the fair value of the ownership
interest that is the subject of the report. After the hearing, the court shall require the responsible organization to pay to the
holders of the ownership interest the amount of the determined value with interest, accruing from the 91st day after the date the
applicable action for which the owner elected to dissent was effected until the date of the judgment.
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(c)
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Interest
under Subsection (b) accrues at the same rate as is provided for the accrual of prejudgment interest in civil cases.
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(d)
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The
responsible organization shall:
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(1)
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immediately
pay the amount of the judgment to a holder of an uncertificated ownership interest; and
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(2)
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pay
the amount of the judgment to a holder of a certificated ownership interest immediately after the certificate holder surrenders to
the responsible organization an endorsed certificate representing the ownership interest.
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(e)
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On
payment of the judgment, the dissenting owner does not have an interest in the:
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(1)
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ownership
interest for which the payment is made; or
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(2)
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responsible
organization with respect to that ownership interest.
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Sec.
10.365. COURT COSTS; COMPENSATION FOR APPRAISER.
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(a)
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An
appraiser appointed under Section 10.361 is entitled to a reasonable fee payable from court costs.
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(b)
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All
court costs shall be allocated between the responsible organization and the dissenting owners in the manner that the court determines
to be fair and equitable.
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Sec.
10.366. STATUS OF OWNERSHIP INTEREST HELD OR FORMERLY HELD BY DISSENTING OWNER.
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(a)
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An
ownership interest of an organization acquired by a responsible organization under this subchapter:
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(1)
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in
the case of a merger, conversion, or interest exchange, shall be held or disposed of as provided in the plan of merger, conversion,
or interest exchange; and
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(2)
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in
any other case, may be held or disposed of by the responsible organization in the same manner as other ownership interests acquired
by the organization or held in its treasury.
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(b)
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An
owner who has demanded payment for the owner’s ownership interest under Section 10.356 is not entitled to vote or exercise
any other rights of an owner with respect to the ownership interest except the right to:
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(1)
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receive
payment for the ownership interest under this subchapter; and
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(2)
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bring
an appropriate action to obtain relief on the ground that the action to which the demand relates would be or was fraudulent.
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(c)
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An
ownership interest for which payment has been demanded under Section 10.356 may not be considered outstanding for purposes of any
subsequent vote or action.
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Sec.
10.367. RIGHTS OF OWNERS FOLLOWING TERMINATION OF RIGHT OF DISSENT.
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(a)
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The
rights of a dissenting owner terminate if:
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(1)
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the
owner withdraws the demand under Section 10.356;
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(2)
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the
owner’s right of dissent is terminated under Section 10.356;
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(3)
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a
petition is not filed within the period required by Section 10.361; or
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(4)
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after
a hearing held under Section 10.361, the court adjudges that the owner is not entitled to elect to dissent from an action under this
subchapter.
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(b)
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On
termination of the right of dissent under this section:
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(1)
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the
dissenting owner and all persons claiming a right under the owner are conclusively presumed to have approved and ratified the action
to which the owner dissented and are bound by that action;
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(2)
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the
owner’s right to be paid the fair value of the owner’s ownership interests ceases;
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(3)
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the
owner’s status as an owner of those ownership interests is restored, as if the owner’s demand for payment of the fair
value of the ownership interests had not been made under Section 10.356, if the owner’s ownership interests were not canceled,
converted, or exchanged as a result of the action or a subsequent action;
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(4)
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the
dissenting owner is entitled to receive the same cash, property, rights, and other consideration received by owners of the same class
and series of ownership interests held by the owner, as if the owner’s demand for payment of the fair value of the ownership
interests had not been made under Section 10.356, if the owner’s ownership interests were canceled, converted, or exchanged
as a result of the action or a subsequent action;
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(5)
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any
action of the domestic entity taken after the date of the demand for payment by the owner under Section 10.356 will not be considered
ineffective or invalid because of the restoration of the owner’s ownership interests or the other rights or entitlements of
the owner under this subsection; and
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(6)
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the
dissenting owner is entitled to receive dividends or other distributions made after the date of the owner’s payment demand
under Section 10.356, to owners of the same class and series of ownership interests held by the owner as if the demand had not been
made, subject to any change in or adjustment to the ownership interests because of an action taken by the domestic entity after the
date of the demand.
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Sec.
10.368. EXCLUSIVITY OF REMEDY OF DISSENT AND APPRAISAL.
In
the absence of fraud in the transaction, any right of an owner of an ownership interest to dissent from an action and obtain the fair
value of the ownership interest under this subchapter is the exclusive remedy for recovery of:
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(1)
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the
value of the ownership interest; or
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(2)
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money
damages to the owner with respect to the action.
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