Date: July 1, 2019 Dear Mr. Epstein,
Date:
July 1, 2019
Dear
Xx. Xxxxxxx,
This appointment letter (the "Letter
Agreement") shall record all
the agreements and understandings between MobileSmith, Inc., a
Delaware Corporation (the "Company") and Xx. Xxxxxxx (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 285,000 Shares of the Company (the
“Options”) which constitute as of the date
hereof .4% 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 $1.85
(or market price as of the day of signing this Agreement). The
Options shall vest on a quarterly basis over a period of
5 years beginning on
September, 30,
2019 (the "Date of
Grant"). The term of the
options will be 10 years beginning July 1,
2019.
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/ Xxxxx Xxxxxx
Xxxxx
Xxxxxx, Chairman of the Board
MobileSmith,
Inc
Acknowledged
and agreed:
/s/ Xxxxxx Xxxxxxx
Xx.
Xxxxxx Xxxxxxx
MobileSmith,
Inc. ● 0000 Xxxxxxx Xx, Xxxxx 000, Xxxxxxx, XX
00000
