Mr. Ray Hemmig Allen, TX 75xxx Dear Mr. Hemmig,
EXHIBIT 10.1
August 11,
2017
▇▇. ▇▇▇ ▇▇▇▇▇▇
______________.
Allen,
TX 75xxx
Dear
▇▇. ▇▇▇▇▇▇,
This
appointment letter (the "Letter
Agreement") shall record all the agreements and
understandings between MobileSmith, Inc., a Delaware Corporation
(the "Company") and ▇▇. ▇▇▇
▇▇▇▇▇▇ (the “Board
Member” or “You”), in connection with your
appointment as an Advisor and Board Member of the Company in a
non-executive capacity and for the other purposes listed
hereunder.
Subject
to Company's shareholders’ approval and your execution below,
the terms of your engagement with the Company will be as
follows:
1.
Advisory Services. You will
serve as a member of the Company's board of directors and advise
the Company's management at reasonable times, on matters related to
Company’s actual and planned business, as requested by the
Company, including without limitation: (i) corporate strategy,
marketing and business development aspects, and product
positioning; (ii) advise the Company's CEO (as defined below) on
the strategy and business development of the Company; (iii) use
your contacts to connect the Company with high level customers,
strategic partners and/or Potential Acquirers (as defined below);
and (iv) assist the Company's CEO in closing transactions with
Potential Acquirers and other business partners and/or large
customers (the tasks listed above are collectively referred to as
the “Board
Services”).
2.
Scope. You will be expected to
devote such reasonable time as may be necessary in order to render
the board member services to the Company in a good manner.
Company's expectation is that you will attend each meeting (either
in person or via telephone) of the board of directors/advisors,
provided however that you will not be required to arrive in person
to more than one board meeting or meetings outside of the USA per
annum. As part of your Board Services you will allocate at least
one call per month with management of the company. Once a quarter
you will be required to attend the Board of Directors meeting
either on the phone or in person.
3.
Fiduciary Duty. You will be
subject to all duties, rights and responsibilities under the
Company’s articles of incorporation as shall be in force from
time to time and under any applicable law.
4.
Options. In consideration for
the Board Services and subject to the approval of the board of
directors of the Company, the Company will grant You Options to
purchase 338,146 Shares of the Company (the “Options”) which constitute as of
the date hereof 0.67% of the total shares of the Company on a fully
diluted basis (subject to adjustment to reflect any share dividend,
share split or other similar event). The exercise price of the
Options shall be USD $1.5 (or market price as of the day of signing
this Agreement). The Options shall vest on a quarterly basis over a
period of 3 years (0.0559% every three months) beginning on July 1,
2017 (the "Date of Grant").
The term of the options will be 7 years beginning July 1,
2017.
5.
Acceleration. In the event that
following the Date of Grant there shall occur a: (i) consolidation
or merger of the Company (where the Company is not the surviving
entity or in which the shareholders of the Company immediately
prior to the transaction possess less than 50% of the voting power
of the surviving entity); or (ii) sale of all or substantially all
of Company's assets or shares, or (iii) consummation of an initial
public offering of Company’s securities (each, a
“Triggering
Event”), then vesting of the Options shall be
accelerated, so that upon consummation of such Triggering Event,
all Options under Section 4 above shall immediately and
automatically vest; provided, however, that this Letter Agreement
has not expired or terminated prior thereto. Board member shall
have no more than 30 calendar days from the announcement of the
Triggering Event to exercise his Options or he shall forfeit any
right and/or Options.
6.
Additional
Compensation.
6.1.
Monthly retainer of
USD 2,500 paid with bank check or wire transfer.
7.
Each party shall
bear its own costs and expenses associated with its
responsibilities hereunder. Notwithstanding the above, the Company
shall bear any reasonable expenses actually incurred by You in
connection with the performance of the Board Services and/or
Advisory Services, provided that such expenses are approved in
advance by Company’s CEO in writing and against validly
issued receipts. Each party shall bear its own tax expenses, and
without derogating from the above, the Company shall be entitled,
subject to any applicable law, to withhold any taxes from any
amount transferred under this Letter Agreement. The Advisor will be
solely responsible for any tax liability resulting from any payment
or grant of shares/options under this Letter Agreement. You are
hereby confirming that you had sufficient opportunity to obtain the
advice of a tax counsel prior to executing of this Letter Agreement
and fully understood the content of this Section 7.
8.
Your entitlement to
the compensation specified in Sections 4-6 shall be the sole
remuneration, compensation, commission and/or fee in connection
with your engagement with the Company.
9.
You hereby agree
and undertake to comply with and observe the terms of the non
disclosure undertaking attached hereto as Exhibit
A.
10.
Board Member shall
not incur or purport to incur any liability or commitment on behalf
of the Company or make or give any promises, representations,
warranties or guarantees with respect to the Company or the
Company's products, except as such are expressly directed by
Company in writing.
11.
The Board Member
acknowledges that the Company has the exclusive right, interest and
title in and to the Company's products and other proprietary
information, and shall not, by virtue of this Letter Agreement or
otherwise, acquire any proprietary rights whatsoever in or to the
products and/or any of the Company's intellectual property rights
nor make any representation to having any interest in or to the
Company's products and/or any of the Company's intellectual
property rights.
12.
The Board Member's
rights and obligations hereunder are personal and may not be
assigned or delegated to any consultants, representatives, agents
or any other person. The relationship between you and the Company
is not of an employer-employee nature, and you are, and shall be,
an independent Board Member.
13.
No amendment to
this Letter Agreement shall be effective unless it is in writing
and signed by the CEO or Chairman of the Company.
14.
If you agree to the
terms and provisions set forth above, please sign at the designated
space below and return one copy of this Letter Agreement to the
undersigned.
Very truly yours,
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Chairman of the Board
Acknowledged
and agreed:
/s/ ▇▇▇
▇▇▇▇▇▇
▇▇. ▇▇▇
▇▇▇▇▇▇
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EXHIBIT A - MUTUTAL NON-DISCLOSURE AGREEMENT
THIS
MUTUTAL NON-DISCLOSURE AGREEMENT
(“Agreement”) is made and
entered into as of July 1,
2017 between MOBILESMITH,
INC., having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (“MobileSmith”), and
▇▇▇ ▇▇▇▇▇▇ having his
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇, ▇▇
▇▇▇▇▇(“Board
Member”).
MobileSmith and the Board Member are sometimes referred to
individually as a “party” or collectively as the
“parties.”
WHEREAS, Each party (the “Disclosing Party”) is in
possession of proprietary/confidential information and other
information which it desires to disclose to the other party (the
“Receiving
Party”); and
WHEREAS, the information provided by Disclosing Party to the
Receiving Party is not public knowledge but is confidential and
will be disclosed only under the terms, and pursuant to the intents
and purposes, of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Receiving Party. The
Receiving Party is an individual, however any of his attorneys or
accountants receiving Confidential Information, as defined below,
shall be referred to herein as the (“Receiving
Party”).
2. Disclosing Party. The
Disclosing Party and/or any of its representatives, directors,
associates, employees, attorneys or accountants disclosing
Confidential Information, as defined below, shall be referred to
herein as the (“Disclosing
Party”).
3. Representatives. The parties’ authorized
representatives (“Authorized
Representatives”) are:
MOBILESMITH:
▇▇▇
▇▇▇▇▇▇▇▇
Board
Member:
▇▇▇ ▇▇▇▇▇▇
Unless
the Receiving Party’s Authorized Representative states
otherwise in writing, Confidential Information is only to be
received by the Receiving Party’s Authorized Representative
(provided, however, that the Receiving Party’s Authorized
Representative may disclose such information to the Receiving
Party’s advisors, agents, or representatives in accordance
with Section 6(a) below) and unless the Disclosing Party’s
Authorized Representative states otherwise in writing, Confidential
Information is only to be disclosed by the Disclosing Party’s
Authorized Representative.
4. Purpose. The
purpose of this Agreement is for the parties to enter into a
relationship as described in 3. above, the Disclosing Party may
disclose to the Receiving Party certain confidential technical and
business information, which the Disclosing Party desires the
Receiving Party to treat as proprietary and confidential. The
parties hereby agree to treat Confidential Information as described
herein.
5. Description of
Confidential Information.
a. For
purposes of this Agreement (“Confidential
Information”) means any and all business, technical,
financial know-how, trade secrets, concepts, drawings, data,
forecast, intellectual property and other information that is
disclosed by the Disclosing Party to the Receiving Party, either
directly or indirectly, in writing, orally or by inspection of
tangible objects (including without limitation documents or
electronic devices).
Without the prior written consent of the
Disclosing Party or except as otherwise permitted by this
Agreement, the Receiving Party agrees not to disclose any Confidential
Information or the fact that Confidential Information has been made
available to them or that discussions are taking place concerning
the Transaction or any of the terms, conditions or other facts with
respect thereto to any other person. Except where the confidential
nature of the Confidential Information is reasonably apparent,
prior to disclosure, the Disclosing Party shall ▇▇▇▇ written
documents as confidential, and indicate the confidential nature of
oral or visual disclosures.
b.
Notwithstanding Section 5(a) above, Confidential Information shall
not include any information which: was publicly known and made
generally available in the public domain prior to the time of
disclosure by the Disclosing Party; becomes publicly known and made
generally available after disclosure by the Disclosing Party to the
Receiving Party, through no action or inaction of the Receiving
Party and without breaching a duty of confidentiality to the
Disclosing Party; is already in the possession of the Receiving
Party at the time of disclosure by the Disclosing Party as
supported by the Receiving Party’s files and records at the
time of disclosure;and the Receiving Party is not otherwise under
an obligation of confidentiality with respect to such
information;is obtained by the Receiving Party from a third party
without a breach of that third party's obligations of
confidentiality to the Disclosing Party or any other party; is
independently developed by the Receiving Party without use of or
reference to the Disclosing Party's Confidential Information; or is
required by law, regulation, supervisory authority, stock exchange
request or other applicable judicial or governmental order to be
disclosed by the Receiving Party, provided that, to the extent
permitted by applicable laws, the Receiving Party gives the
Disclosing Party prompt written notice of such requirement prior to
such disclosure and, if so requested in writing, reasonable
assistance in obtaining an order protecting the information from
public disclosure. Without the prior written consent of the
Receiving Party, the Disclosing Party agrees not to disclose to any
third party the fact that
the Receiving Party or any of its major shareholders or affiliates
is discussing or negotiating for or otherwise participating in or
associated with the Transaction as a co-investor or in any other
capacity.
6. Use of Confidential
Information.
a. Upon
receiving Confidential Information under this Agreement, the
Receiving Party has a duty to protect such Confidential
Information. The Receiving Party shall not disclose Confidential
Information to any third party individual, corporation, or other
entity without the prior written consent of the Disclosing Party.
The Receiving Party shall not use any Confidential Information for
any purpose except to evaluate and engage in discussions concerning
the Company and shall limit its disclosure to directors, employees,
advisors, agents,
or representatives having a need to know such information and who
have a duty to maintain its confidentiality; provided, however,
that in no circumstances shall Confidential Information be
communicated to the Receiving Party’s securities trading
personnel or agents.
b.
Nothing in the Agreement shall prohibit or limit either
party’s use of information (including but not limited to,
ideas, concepts, know-how, techniques, and methodologies) (i)
previously known to it without obligation of confidence, (ii)
independently developed by it, (iii) acquired by it from a third
party which is not, to its knowledge, under an obligation of
confidence with respect to such information, or (iv) which is or
becomes publicly available through no breach of this Agreement, and
which does not otherwise constitute Confidential
Information.
7. Maintenance of Confidentiality. The
Receiving Party shall take reasonable measures to protect the
secrecy of and avoid any unauthorized use or disclosure of the
Confidential Information. Without limiting the foregoing, the
Receiving Party shall use at least that degree of care that it
takes to protect its own confidential information of a similar
nature, but in no event less than reasonable care. The Receiving Party will
promptly notify the Disclosing Party in writing of any unauthorized
use or disclosure of the Confidential Information of which it is
aware.
8. Obligation. While
the parties continue their relationship, nothing herein shall
obligate either party to proceed to enter into a business
relationship with the other party, and each party reserves the
right, in its sole discretion, to terminate the discussions
contemplated by this Agreement. Any agreement for any such
relationship shall be at the discretion of the parties and shall be
evidenced by separate written agreements executed by the
parties.
9. Return of Materials. At any
time at the request of the Disclosing Party, the Receiving Party
shall immediately return or cause to be returned to the Disclosing
Party the Confidential Information delivered to the Receiving Party
and shall not retain any copies or other reproductions, reports,
extracts, notes or memoranda thereof (whether written, electronic,
magnetic or otherwise). The Receiving Party shall at any time at
the request of the Disclosing Party destroy or have destroyed all
reproductions, memoranda, notes, reports, extracts and documents
and all documents prepared by or in the possession of the Receiving
Party or its Representatives in connection with the Receiving
Party's review of the Confidential Information, except as required
by law. Furthermore, at the request of the Disclosing Party, the
Receiving Party shall provide a certificate to the Disclosing Party
that the terms and conditions of this paragraph have been complied
with. The obligation to return or destroy Confidential Information
which is in electronic form ("Electronic Data") shall not
apply to such data which has been backed up to a central storage
system provided that the Receiving Party and any person to whom
Electronic Data is disclosed under the terms of this agreement
agrees with the Disclosing Party not to access such data or permit
any other person to access it.
10. Term.
The obligations of the Receiving Party
hereunder shall survive until the earliest of (i) such time as all
Confidential Information provided by the Disclosing Party hereunder
becomes publicly known and made generally available through no
action or inaction of Receiving Party, (ii) the three years
anniversary after the date that the Disclosing Party provided the
Confidential Information to the Receiving Party or (iii)
one year from the termination of
discussions among the parties.
For the avoidance of doubt,
notwithstanding the provisions in this Section 10, the obligations
of the Receiving Party under the first sentence of Section 8 above
shall be terminated immediately upon the termination of discussions
among the parties.
11. Governing Law;Jurisdiction. This
Agreement shall be governed by the laws of the State of New York,
without reference to conflict of laws principles thereof. Each of
the parties agrees that any legal action or proceeding with respect
to this Agreement shall be brought exclusively in the courts of the
State of Delaware or of the United States in the State of Delaware
and waives any objection to venue in any such court or to any claim
that any such court is an inconvenient forum.
12. Remedies. The
parties agree that in the event of any violation or threatened
violation of this Agreement, the injured party shall be authorized
and entitled to obtain preliminary and permanent injunctive relief
as well as monetary damages available under applicable laws arising
from such violation, which rights and remedies shall be cumulative
and in addition to any other rights or remedies at law or in equity
to which the injured party may be entitled.
THE
DISCLOSING PARTY DOES NOT MAKE ANY REPRESENTATION OR WARRANTY WITH
RESPECT TO ANY CONFIDENTIAL INFORMATION PROVIDED UNDER THIS
AGREEMENT, BUT SHALL FURNISH SUCH CONFIDENTIAL INFORMATION IN GOOD
FAITH. WITHOUT RESTRICTING THE GENERALITY OF THE FOREGOING, THE
DISCLOSING PARTY DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES,
WHETHER WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED WITH RESPECT
TO THE CONFIDENTIAL INFORMATION WHICH MAY BE PROVIDED HEREUNDER,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR OF
FITNESS FOR A PARTICULAR PURPOSE. THE DISCLOSING PARTY SHALL NOT BE
LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
NATURE WHATSOEVER RESULTING FROM RECEIPT OR USE OF THE CONFIDENTIAL
INFORMATION BY THE RECEIVING PARTY.
This
Agreement shall bind and inure to the benefit of the parties hereto
and their successors and assigns. This Agreement is not assignable
and states the entire agreement between the parties as to its
subject matter and merges and supersedes all previous
communications with respect to their obligations of confidentiality
and no addition to or modification of this Agreement will be
binding on either party, unless reduced to writing and signed by
each party. Any failure to enforce any provision of this Agreement
shall not constitute a waiver thereof or of any other
provision.
13. Miscellaneous. Both
parties acknowledge that this Agreement is valid and legally
binding, that it has been executed by an authorized representative
and each party, and confirms and ratifies the terms and conditions
herein.
In the
event that any provision of this Agreement is determined to be
invalid, illegal or unenforceable by a court, the remainder of the
Agreement shall remain in full force and effect.
Headings
used in this Agreement are provided for convenience only and shall
not be used to construe meaning or intent.
This
Agreement may be executed in counterparts and by facsimile, each of
which shall be deemed to be an original, and all of which together
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
instrument as of the date and year first above
written.
MOBILESMITH,
INC.
▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇. ▇▇▇ ▇▇▇▇▇▇
Title: Chief
Executive Officer
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