SECOND AMENDMENT TO
 
CONVERTIBLE SUBORDINATED NOTE PURCHASE AGREEMENT
 
AND SECOND AMENDMENT TO
 
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
 
 
 
THIS SECOND AMENDMENT TO CONVERTIBLE SUBORDINATED NOTE PURCHASE AGREEMENTAND
SECOND AMENDMENT TO CONVERTIBLE SUBORDINATED  PROMISSORY NOTE (this
“Amendment”), effective as of May 25, 2018, is made and entered into by and
between MobileSmith, Inc., a Delaware corporation (the “Company”), and the
holder (the “Holder”) of the Convertible Subordinated Promissory Note (the
“Note”) issued by the Company on December 11, 2014 pursuant to that certain
Convertible Subordinated Note Purchase Agreement, dated December 11, 2014 (as
amended through the date hereof, the “Note Purchase Agreement”) between the
Company and the Holder. Capitalized terms used but not defined herein have the
meanings assigned to them in the Note Purchase Agreement.
 
 
WITNESSETH:
 
 
WHEREAS, The Company and the Holder desires to amend the Note previously issued
pursuant to the Note Purchase Agreement to provide that the Maturity Date of the
Note be extended from November 14, 2018 to November 14, 2020, and to provide
that the definition of “Maturity Date” contained in any Additional Note issued
on or after the date hereof shall be conformed to the definition thereof
contained in the Note, as hereby amended;
 
 
WHEREAS, Section 9(a) of the Note Purchase Agreement provides that any provision
of the Note Purchase Agreement may be amended with the written consent of the
Company and the Holders of at least a Requisite Percentage;
 
 
 
WHEREAS, Section 8 of the Note provides that any provision of the Notes may be
amended with the written consent of the Company and the Holders of at least a
Requisite Percentage;
 
 
WHEREAS, the Holder listed on the signature page to this Amendment holds a
Requisite Percentage necessary to amend the provisions of each of the Note and
the Note Purchase Agreement;
 
 
NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
 
 
Section 1.                               Amendment to Note Purchase Agreement.
All references in the Note Purchase Agreement to “Note” or “Notes” shall mean
the form of Convertible Subordinated Promissory Note attached hereto as Exhibit
1.
 
 
Section 2.                               Amendment to Note.
 
 
(a) The last sentence of the first paragraph of the Note shall be deleted and
the following shall be inserted in lieu thereof:
 
                            “All unpaid principal, together with any then unpaid
and accrued interest and other amounts payable hereunder, shall be due and
payable on the earlier of (i) November 14, 2020, (ii) a Change of Control or
(iii) when, upon or after the occurrence of an Event of Default (as defined
below), such amounts are declared due and payable by                            
        Investor or made automatically due and payable in accordance with the
terms hereof (such date upon which all amounts payable hereunder are due is
referred to herein as the “Maturity Date”).”
 
(b) The Maturity Date as defined in any Additional Note issued on the date
hereof or hereafter shall be the same as provided in the Note, as hereby
amended.
 
 
Section 3.                               Ratification. Except as specifically
amended above, each of the Note and the Note Purchase Agreement shall continue
in full force and effect in accordance with its terms, and is hereby in all
respects ratified and confirmed.
 

 
 
Section 4.                               Counterparts. This Amendment may be
executed in several counterparts and by facsimile or other electronic
transmission, each of which shall be an original and all of which together shall
constitute but one and the same.
 
 
[Remainder of Page Intentionally Left Blank]
 
 
 
 
 
 

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first above written.
 
 
 
 
MOBILESMITH, INC.
 
By: /s/ Gleb Mikhailov

Name: Gleb Mikhailov
                  Title: Chief Financial Officer
 
 
UBP, UNION BANCAIRE PRIVEE
 
By: /s/ Jean-Batiste Erath

Name:  Jean-Batiste Erath

Title: Director

 
 
 
 
 
 
 
 
[Signature Page to Second Amendment to Convertible Subordinated Note Purchase
Agreement, and Second Amendment to Convertible Subordinated Promissory Note]
 
 
2
 
 
 

 
 
EXHIBIT 1
 
 
 
THE NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF (THE
“SECURITIES”) HAVE BEEN ISSUED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND
APPROPRIATE EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES LAWS OF OTHER
APPLICABLE JURISDICTIONS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION THEREFROM UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THE ISSUER SHALL BE ENTITLED TO REQUIRE AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE OF THE PROPOSED
SALE OR TRANSFER WITH THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR EXEMPTION
THEREFROM.
 
 
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
 
 
$500,000                                                                                                           
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                December 11, 2014
 
 
 
 
FOR VALUE RECEIVED, MobileSmith, Inc., a Delaware corporation (the “Company”)
promises to pay to Union Bancaire Privée, UBP SA (“Investor”), or its registered
assigns, in lawful money of the United States of America the principal sum of
Five Hundred Thousand Dollars ($500,000), or such lesser amount as shall equal
the outstanding principal amount hereof, together with interest from the date of
this Note on the unpaid principal balance at a rate equal to 8.00% per annum,
computed on the basis of the actual number of days elapsed and a year of 360
days. All unpaid principal, together with any then unpaid and accrued interest
and other amounts payable hereunder, shall be due and payable on the earlier of
(i) November 14, 2018, (ii) a Change of Control or
(iii) when, upon or after the occurrence of an Event of Default (as defined
below), such amounts are declared due and payable by Investor or made
automatically due and payable in accordance with the terms hereof (such date
upon which all amounts payable hereunder are due is referred to herein as the
“Maturity Date”).
 
 
 
This Note is one of a series of “Notes” issued pursuant to the Convertible
Subordinated Note Purchase Agreement, dated December 11, 2014 (as amended,
modified or supplemented, the “Note Purchase Agreement”), between the Company
and the Investors (as defined in the Note Purchase Agreement). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned thereto
in the Note Purchase Agreement. This Note and the Investor are subject to
certain restrictions, and are entitled to certain rights and privileges, set
forth in the Note Purchase Agreement. This Note is expressly subject to Section
8, Subordination, of the Note Purchase Agreement.
 
 
The following is a statement of the rights of Investor and the conditions to
which this Note is subject, and to which Investor, by the acceptance of this
Note, agrees:
 
 
 
1. Definitions. As used in this Note, the following capitalized terms have the
following meanings:
 
        (a) “Business Day” means any day other than a Saturday or Sunday or
other day on which the New York Stock Exchange is permitted or required by law
to close.
 
        (b) the “Company” includes the corporation initially executing this Note
and any Person which shall succeed to or assume the obligations of the Company
under this Note.
 
        (c) “Conversion Price” means One Dollar and Forty Three Cents ($1.43).
 
        (d) “Change of Control” means (i) any consolidation or merger or other
transaction or series of transactions to which the Company is a party following
which the “persons” that “beneficially owned” (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, the voting
securities of the Company immediately prior to such transaction “beneficially
own”, directly or indirectly, less than fifty percent (50%) of the voting
securities of the surviving entity (other than a financing transaction) or (ii)
the sale of all or substantially all of the assets of the Company.
 
        (e) “Event of Default” has the meaning given in Section 4 hereof.
 

 
 
        (f) “Note Purchase Agreement” has the meaning given in the introductory
paragraph hereof.
        

        (g) “Obligations” means and includes all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by the Company to Investor
of every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), now existing or
hereafter arising under or pursuant to the terms of this Note, the Note Purchase
Agreement and the Security Agreement, including, all interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Company hereunder and thereunder, in each case, whether
direct or indirect, absolute or contingent, due or to become due, and whether or
not arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U. S. C. Section 101 et seq.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.
 
        (h) “Person” means and includes an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a governmental authority.
 
        (i) “Requisite Percentage” means at least two-thirds of the aggregate
outstanding principal amount of the Notes issued pursuant to the Note Purchase
Agreement
 
        (j) “Transaction Documents” means this Note, each of the other Notes
issued under the Note Purchase Agreement, and the Note Purchase Agreement.
 
2. Interest. Accrued interest on this Note shall be payable in cash in quarterly
installments commencing on the third month anniversary of the date of issuance
of this Note with the final installment payable on the Maturity Date.
 
3.     Prepayment. This Note may not be prepaid without the consent of the
holders of a Requisite Percentage.
 
4. Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note and the other Transaction Documents:
 
        (a) Failure to Pay. The Company shall fail to pay (i) when due any
principal, or interest payment or other sum on the due date hereunder or (ii)
any other payment required under the terms of this Note or any other Transaction
Document on the date due and such failure continues for a period of five (5)
business days after the due date;
 
       (b) Non-Performance of Affirmative Covenants. The Company shall default
in the due observance or performance of any material covenant set forth in the
Note, the Note Purchase Agreement or the Security Agreement, which default shall
continue uncured for fifteen (15) days after receipt of written notice to the
Company thereof;
 
       (c) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i)
apply for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property,
(ii) be unable, or admit in writing its inability, to pay its debts generally as
they mature, (iii) make a general assignment for the benefit of its or any of
its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such
term may be defined or interpreted under any applicable statute), (vi) commence
a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent to any
such relief or to the appointment of or taking possession of its property by any
official in an involuntary case or other proceeding commenced against it, or
(vii) take any action for the purpose of effecting any of the foregoing;
 
        (d) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of the Company
or of all or a substantial part of the property thereof, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty
(60) days of commencement;
 
        (e) Judgments. One or more judgments, decrees or orders (excluding
settlement orders) for the payment of money shall be entered against the Company
or any of its subsidiaries involving in the aggregate a liability of
$1,000,000 or more, and any such judgment, decree or order shall continue
without discharge or stay for a period of sixty (60) days; or
 

 
 
        (f) Cross-Defaults. The Company or any of its subsidiaries shall default
in the performance or observance of any agreement or instrument relating to any
indebtedness, or any other event shall occur or condition exist, and the effect
of such default, event or condition is to cause or permit the holder or holders
of any such indebtedness to cause indebtedness, in excess of $500,000
individually or in the aggregate, to become due prior to its stated maturity.
 
5. Rights of Investor upon Default. Upon the occurrence or existence of any
Event of Default (other than an Event of Default described in Sections 4(c) or
4(d)) and at any time thereafter during the continuance of such Event of
Default, a default interest rate of fifteen percent (15%) will accrue on any
overdue Obligations. The holders of a Requisite Percentage may, by written
notice to the Company, declare all outstanding Obligations payable by the
Company hereunder to be immediately due and payable without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived. Upon the occurrence or existence of any Event of Default described in
Sections 4(c) and 4(d), immediately and without notice, all outstanding
Obligations payable by the Company hereunder shall automatically become
immediately due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived. In addition to the
foregoing remedies, upon the occurrence or existence of any Event of Default and
subject to the consent of the Agent, Investor may exercise any other right power
or remedy granted to it by the Transaction Documents or otherwise permitted to
it by law, either by suit in equity or by action at law, or both.
 
6.     Conversion.
 
        (a) Optional Conversion. At any time on or prior to the Maturity Date
each Investor will have the option to convert all or a portion of the entire
principal amount of the Notes outstanding into Common Stock immediately upon the
Investor’s request; provided, however, that if, at the time of any particular
conversion, the Company does not have the number of authorized shares of Common
Stock sufficient to allow for such conversion, the Investors may only convert
that portion of their Notes outstanding for which the Company has a sufficient
number of authorized shares of Common Stock. To the extent multiple Investors,
under the Note Purchase Agreement, the 2007 Note Purchase Agreement (as defined
in the Note Purchase Agreement), or both, request conversion of their Notes on
the same date, any limitations on conversion shall be applied on a pro rata
basis. In such case, the Investors may request, in writing, that the Company
call a special meeting of the stockholders of the Company specifically for the
purpose of increasing the number of authorized shares of Common Stock to cover
the remaining portion of the Notes outstanding, as well as the maximum issuances
contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90
calendar days after the Company’s receipt of the Investors’ written request.
Notwithstanding the above, the Company shall use its best efforts to increase
its number of authorized shares so as to allow for the full conversion of any
outstanding Notes on the earlier of: (1) promptly after the date on which a
request for conversion, for which there are not sufficient shares available to
effect such conversion, is received by the Company, or (2) the time of the next
shareholder meeting. The number of shares of Common Stock that this Note may be
converted into shall be determined by dividing the principal amount then
outstanding by the Conversion Price at the time of conversion. If the Investor
elects to convert this Note on demand, it shall provide the Company with written
notice of its election at least one (1) day prior to the date selected for
conversion, by submission of the notice of conversion attached as Exhibit A
hereto. Upon conversion, the Investor shall deliver to the Company the original
of this Note (or a notice to the effect that the original Note has been lost,
stolen or destroyed and an agreement reasonably acceptable to the Company
whereby the holder agrees to indemnify the Company from any loss incurred by it
in connection with this Note). However, upon such conversion of this Note, this
Note shall be deemed converted and of no further force and effect, whether or
not the Note is delivered for cancellation as set forth in the preceding
sentence. If there shall occur a Change of Control, the Company shall give
written notice to the Investor at least five (5) days prior to any closing
thereof and the Investor’s election to convert this Note shall be conditional
upon the consummation thereof.
 
      (b) Mechanics of Optional Conversion. As soon as practicable following
surrender by the Investor of the original of this Note, the Company shall issue
and deliver to Investor a certificate or certificates for the shares of Common
Stock into which the Note has been converted (bearing such legends as may be
required or advisable in the opinion of counsel to the Company). Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date selected for the conversion and the Investor shall be treated for all
purposes as the record holder or holders of such Common Stock on such date.
 
    (c) Fractional Shares; Interest; Effect of Conversion. No fractional shares
shall be issued upon conversion of this Note. In lieu of the Company issuing any
fractional shares to Investor upon the conversion of this Note, the Company
shall pay to Investor an amount equal to the product obtained by multiplying the
Conversion Price by the fraction of a share not issued pursuant to the previous
sentence. Upon conversion of this Note in full and the payment of any amounts
specified in this Section 6(c), the Company shall be released from all its
obligations and liabilities under this Note.
 

 
 
7. Successors and Assigns. Subject to the restrictions on transfer described in
Sections 9 and 10 below, the rights and obligations of the Company and Investor
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
 
8. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and the holders of a Requisite
Percentage.
 
9. Transfer of this Note or Securities Issuable on Conversion Hereof. With
respect to any offer, sale or other disposition of this Note or securities into
which such Note may be converted, Investor will give written notice to the
Company prior thereto, describing briefly the manner thereof, together with
(unless waived by the Company) a written opinion of Investor’s counsel, or other
evidence if reasonably satisfactory to the Company, to the effect that such
offer, sale or other distribution may be effected without registration or
qualification (under any federal or state law then in effect). Upon receiving
such written notice and reasonably satisfactory opinion, if so requested, or
other evidence, the Company, as promptly as practicable, shall notify Investor
that Investor may sell or otherwise dispose of this Note or such securities, all
in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 9 that the opinion of
counsel for Investor, or other evidence, is not reasonably satisfactory to the
Company, the Company shall so notify Investor promptly after such determination
has been made. Each Note thus transferred and each certificate representing the
securities thus transferred shall bear a legend as to the applicable
restrictions on transferability in order to ensure compliance with the
Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company
may issue stop transfer instructions to its transfer agent in connection with
such restrictions. Subject to the foregoing, transfers of this Note shall be
registered upon registration books maintained for such purpose by or on behalf
of the Company. Prior to presentation of this Note for registration of transfer,
the Company shall treat the registered holder hereof as the owner and holder of
this Note for the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this Note shall be
overdue and the Company shall not be affected by notice to the contrary.
Notwithstanding anything in this Section 9 to the contrary, no opinion of
counsel shall be required with respect to any transfer by an Investor to its
officers, directors, partners, members or other affiliates.
 
10. Assignment by the Company. Neither this Note nor any of the rights,
interests or obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part, by the Company without the prior written consent
of the holders of a Requisite Percentage.
 
11.     Notices. All notices, requests, demands, consents, instructions or other
communications required or
permitted hereunder shall be in writing and faxed, mailed or delivered to each
party at the respective addresses of the parties as set forth in the Note
Purchase Agreement, or at such other address or facsimile number as the Company
shall have furnished to Investor in writing. All such notices and communications
will be deemed effectively given the earlier of (i) when received, (ii) when
delivered personally, (iii) one business day after being delivered by facsimile
(with receipt of appropriate confirmation), (iv) one business day after being
deposited with an overnight courier service of recognized standing or (v) two
days after being deposited in the
U.S. mail, first class with postage prepaid.
 
12. Pari Passu Notes. Investor acknowledges and agrees that the payment of all
or any portion of the outstanding principal amount of this Note and all interest
hereon shall be pari passu in right of payment and in all other respects to the
other Notes issued pursuant to the Note Purchase Agreement or pursuant to the
terms of such Notes.
 
13. Usury. In the event any interest is paid on this Note which is deemed to be
in excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be
deemed a payment of principal and applied against the principal of this Note.
 
14. Remedies Cumulative. The remedies of Investor as provided herein and in the
Note Purchase Agreement and in any other documents governing or securing
repayment hereof shall be cumulative and concurrent and may be pursued singly,
successively, or together, at the sole discretion of Investor to the extent
provided herein and in the Note Purchase Agreement and may be exercised as often
as occasion therefore shall arise. No act or omission of the Investor, including
specifically, but without limitation, any failure to exercise any right, remedy
or recourse, shall be effective as a waiver of any right of the Investor
hereunder, unless set forth in a written document executed by the Investor, and
then only to the extent specifically recited therein. A waiver or release with
reference to one event shall not be construed as continuing, as a bar to, or as
a waiver or release of any subsequent right, remedy or recourse as to any
subsequent event. All notices, waivers, releases and/or consents by an Investor
shall be directed to the Company only through the Agent. 
 

 
 
15. No Rights of a Stockholder. Nothing contained in this Note shall be
construed as conferring upon the Investor or any other Person the right to vote
or consent or to receive notice as an stockholder in respect of meetings of
stockholders for the election of directors of the Company or any other matters
or any rights whatsoever as a stockholder of the Company prior to the time that
this Note is converted pursuant to Section 6.
 
16. Governing Law. This Note and all actions arising out of or in connection
with this Note shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the conflicts of law provisions of the
State of Delaware, or of any other state.
 
 
(Signature Page Follows)
 
 

 
 
 
The Company has caused this Note to be issued as of the date first written
above.
 
 
MOBILESMITH, INC.
a Delaware corporation
 
By:
                  Name: Gleb Mikhailov
                  Title: Chief Financial Officer
 

 
 
EXHIBIT A
 
 
FORM OF NOTICE OF CONVERSION
(To be executed by the Registered Holder in order to Convert the Note)
 
 
 
The undersigned hereby irrevocably elects to convert $___________ of the
principal amount of the above Note No. ___ into shares of Common Stock of
MobileSmith, Inc., (the “Company”) according to the conditions hereof, as of the
date written below.
 
Date of Conversion ___________________________________________________________
                                                                                                        
Applicable Conversion Price ____________________________________________________

Number of shares of the Company’s Common Stock beneficially owned or deemed
beneficially owned by the Holder on the Date of Conversion:
_______________________________________________

Signature ___________________________________________________________________
                                                                                                         
[Name]
Address: ___________________________________________________________________