In connection with the closing of the Transactions (the “Closing”), it is expected that each issued and outstanding share of common stock of Open World (“Open World Common Stock”) will be canceled and converted into the right to receive a number of shares of VerifyMe Common Stock (“Merger Consideration”) such that, immediately following the Closing, Open World will be granted approximately 132,000,000 shares of VerifyMe Common Stock, which will represent, in the aggregate, approximately ninety percent (90%) of the issued and outstanding shares of VerifyMe on a fully diluted basis after Closing.

Following the Closing, Open World shareholders are expected to own approximately 90% of the issued and outstanding shares of VerifyMe Common Stock, with legacy VerifyMe shareholders owning approximately 10% of the issued and outstanding shares, each calculated on a fully diluted basis (such contemplated ownership, the “Pro Forma Ownership”). 

At Closing, VerifyMe will be required to have a minimum cash balance of not less than $1,000,000 (the “Minimum Cash Balance”). Any cash balance of VerifyMe at Closing in excess of the Minimum Cash Balance shall be paid as a dividend to the legacy VerifyMe shareholders following the Closing, with the record date of such dividend to be set as of a date prior to the Closing.

The calculations and other share counts set forth in this Agreement are based on the current fully diluted shares of VerifyMe common stock and such calculations and approximate share counts shall be ratably adjusted as necessary to maintain the Pro Forma Ownership. 

As promptly as reasonably practicable after the date of this Agreement, the Parties shall commence negotiation of a definitive agreement relating to the consummation of the Merger and setting forth the legally binding terms thereof (the “Merger Agreement”).

If not otherwise registered, at the Closing, VerifyMe shall enter into a registration rights agreement granting shareholders of Open World customary registration rights (the “Registration Rights Agreement” and, together with the Merger Agreement, the “Definitive Agreements”).

The Definitive Agreements will include the terms summarized in this Agreement and such other representations, warranties, conditions, covenants, and other terms as are customary for transactions of this kind and not inconsistent with this Agreement. 

For a period of 60 days from the execution of this Agreement until the termination of this Agreement in accordance with its terms (the “No-Shop Period”), without the prior written consent of the other Party, each Party shall be prohibited from directly or indirectly (including through any of its affiliates, representatives or agents (collectively, “Representatives”)), soliciting, negotiating, encouraging or providing any information to or entering into any agreement with any third party, other than the other Party, concerning any Alternative Transaction (as defined below), and each Party shall cease all existing discussions and negotiations, if any, with any other third party in respect of any Alternative Transaction during such No-Shop Period; provided, that the foregoing shall not prevent VerifyMe and its board of directors, acting in good faith, from taking any action in respect of a Superior Proposal (as defined below) that it believes in good faith, following consultation with outside counsel, is required to discharge its fiduciary duties (such action, a “Fiduciary Out”), subject to first providing written notice (“Notice”) to Open World (within forty-eight (48) hours of such determination) of the details of such action.

Open World shall have the opportunity, but not the obligation, to match the consideration of a Superior Proposal within five (5) business days from receipt of such Notice.

For such purposes, “Alternative Transaction” means, collectively, an acquisition proposal for either of the Parties’, or any of their respective subsidiaries’, common stock, equity interests or assets or any other transaction the consummation of which would materially interfere with or prevent the proposed transaction or materially reduce the benefit to the other Party thereof.

For such purposes, “Superior Proposal” means an unsolicited bona fide written acquisition proposal in respect of an Alternative Transaction that, in the reasonable opinion of VerifyMe’s board of directors, following consultation with outside counsel, constitutes a commercially feasible transaction for which adequate financial arrangements have been made and which would be consummated within a time frame that is reasonable in the circumstances and, if consummated, would be a transaction materially superior to the proposed transaction from a financial point of view to VerifyMe’s shareholders. 

The obligations of each Party to execute and deliver the Merger Agreement will be subject to the satisfaction or waiver of customary conditions, including but not limited to:

(a)    Completion of due diligence to the satisfaction of each Party.

(b)    Approval of the Transactions by the board of directors of both Parties.

(c)    Receipt of a fairness opinion from VerifyMe’s financial advisor.

(d)    Delivery of the Audited Financial Statements. 

The obligations of each Party to consummate the Transactions, including the Merger, pursuant to the Merger Agreement will be subject to the satisfaction or waiver of customary conditions, including but not limited to:

(a)    Approval of the Transactions by Open World shareholders.

(b)    Approval of the issuance of Merger Consideration by VerifyMe shareholders.

(c)    Receipt of all required governmental approvals.

(d)    The initial listing application or shares of VerifyMe Common Stock issued as Merger Consideration shall have been authorized for listing on NASDAQ.

(e)    Absence of any material adverse change with respect to the business, financial condition, or operations of either Party.

(f)     VerifyMe having a cash balance at Closing sufficient to meet the Minimum Cash Balance (such condition to be for the benefit of and waivable by Open World in its sole discretion). 

At the Closing, the board of directors of VerifyMe (the “Board”) shall have seven (7) directors. Open World shall be entitled to name six (6) directors (which may include Open World’s Chief Executive Officer) and VerifyMe shall be entitled to designate one director, who is currently serving on the Board.

Committee leadership shall be held by Open World’s appointees.

At the Closing, the VerifyMe Chief Executive Officer and President will be transitioned to a new executive role within the combined company to be mutually agreed by the Parties prior to Closing, the VerifyMe Chief Financial Officer will remain in her current role and the VerifyMe Chief Legal Officer (if any) shall resign, or otherwise be replaced by the Board, with such persons as shall be designated by Open World to fill the role of the Chief Executive Officer and Chief Legal Officer of the combined company. 

Upon Closing, VerifyMe will enter into an amended and restated employment agreement with Adam Stedham for him to serve as President of Precision Logistics .  The agreement will include an annual base salary of $300,000, payment of 2025 target bonus ($150,000), accelerated vesting of all outstanding equity awards, one-year renewable term and six months of severance, in each case, subject to Board approval and customary terms and conditions for such payments and benefits.

Upon Closing, VerifyMe will enter into an employment agreement with Jen Cola for her to serve as Chief Financial Officer.  The agreement will include an annual base salary of $180,000, payment of 2025 target bonus ($90,000), grant of 130,000 shares of restricted stock vesting immediately at grant, one-year renewable term and six months of severance, in each case, subject to Board approval and customary terms and conditions for such payments and benefits.

Upon Closing, all unvested RSUs held by the current four (4) non-employee directors of VerifyMe (35,000 RSUs each, granted at VerifyMe’s last annual meeting of stockholders) shall become fully vested immediately upon the date of stockholder approval of the election of their successors.

Additional outstanding equity awards held by other executive officers, employees and consultants will vest immediately upon Closing subject to Board approval. 

Open World hereby represents and warrants to VerifyMe that this Agreement has been duly authorized, executed and delivered by Open World and constitutes a valid and binding agreement of Open World.

VerifyMe hereby represents and warrants to Open World that this Agreement has been duly authorized, executed and delivered by VerifyMe and constitutes a valid and binding agreement of VerifyMe. 

This Agreement may be terminated: (a) by mutual written consent, (b) by either Party if either Party’s board of directors does not approve the Merger Agreement or after completing due diligence no longer believes the Merger is in the best interest of its shareholders, (c) by VerifyMe due to its inability to obtain a satisfactory fairness opinion, (d) if the Closing has not occurred by June 30, 2026 (the “Outside Date”), or such other Outside Date as the Parties shall mutually agree to in a writing signed by both Parties, (e) if any judgment, injunction, order or decree permanently restraining, enjoining or otherwise prohibiting consummation of the Transactions, including the Merger, shall have become final and non-appealable or (f) in connection with VerifyMe’s Fiduciary Out.

In the event that this Agreement is terminated by VerifyMe pursuant to Section 15(f), VerifyMe shall pay to Open World, by wire transfer of immediately available funds, $500,000 (the “Expense Reimbursement Amount”). The Parties acknowledge and agree that the Expense Reimbursement Amount is not a penalty, but rather is liquidated damages in a reasonable amount that will reimburse Open World for the efforts and resources expended while negotiating this Agreement and the Definitive Agreements and in reliance on such agreements and on the expectation of the consummation of the Transactions.

In the event that this Agreement is terminated by either Party pursuant to Section 15(b) or Section 15(c) or above for any reason other than (i) the inability by either Party to obtain shareholder approval or (ii) a material change to the business, financial condition or liabilities of the other Party, the terminating Party shall pay the other Party, by wire transfer of immediately available funds, $400,000 (the “Mutual Reimbursement Amount”). The Parties acknowledge and agree that the Mutual Reimbursement Amount is not a penalty but rather is liquidated damages in a reasonable amount that will reimburse the receiving Party for the efforts and resources expended while negotiating this Agreement and the Definitive Agreements and in reliance on such agreements and on the expectation of the consummation of the Transactions. 

This Agreement and the Merger Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any jurisdiction other than the State of Nevada. Each Party hereby irrevocably (a) submits to the exclusive jurisdiction of the Nevada state courts or, in the event that such court does not have subject matter jurisdiction over the applicable action or proceeding, any Federal court located in the State of Nevada, for the purposes of any action or proceeding arising out of this Agreement or the Merger Agreement, (b) waives, and agrees not to assert, as a defense or otherwise, any claim that it is not subject to the personal jurisdiction of such courts or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate and (c) agrees not to commence any action, suit or proceeding arising out of or based on this Agreement or the subject matter hereof other than before such courts (except for actions to enforce the judgment of such courts) nor make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, suit or proceeding to any other court whether on the grounds of inconvenient forum or otherwise.

EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE DEFINITIVE AGREEMENTS OR THE TRANSACTIONS. 

Each Party acknowledges that the existence and content of this Agreement and certain information exchanged between the Parties constitutes material non-public information under United States federal securities laws. Accordingly, until such time as any such non-public information has been adequately disseminated to the public, the Parties shall not, and shall cause their respective directors, officers, employees, agents, or affiliates who are aware of this Agreement not to, purchase or sell any securities of VerifyMe, or communicate such information to any other person.

The Parties shall maintain the confidentiality of the Definitive Agreements and shall not disclose the terms therein to any other person, other than their respective representatives, and shall ensure that neither they nor their respective representatives or affiliates shall issue any press release or make any other public statement with respect to the Definitive Agreements or the existence or status of any discussions or negotiations among the Parties hereto with respect to the matters contemplated in this Agreement or the Definitive Agreements except (i) with the prior written consent of the other Party (which consent shall not be unreasonably withheld), or (ii) as required by law, rule or regulation (including applicable stock exchange rules); provided that the Parties hereto may each issue a press release announcing the execution of this Agreement, such press release to be in a form mutually agreed by the Parties, and VerifyMe may file a copy of this Agreement as an exhibit to a current report on Form 8-K filed with the SEC.