Date: March 20, 2018 Dear Mr. Lepore,
Date: March 20, 2018
Dear Xx. Xxxxxx,
This appointment letter (the "Letter
Agreement") shall record all
the agreements and understandings between MobileSmith, Inc., a
Delaware Corporation (the "Company") and Xx. Xxxxxx (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 366,980 Shares of the Company (the
“Options”) which constitute as of the date
hereof .63% 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
April 2,
2018 (the "Date of
Grant"). The term of the
options will be 7 years beginning April 2,
2018.
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/ Xxxxx Xxxxxx
Xx. Xxxxx Xxxxxx
MobileSmith, Inc. ● 0000 Xxxxxxx Xx, Xxxxx 000, Xxxxxxx, XX
00000
