Exhibit 10.35

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is entered into as of
March 19, 2019, by and between Helix TCS, Inc., a Delaware corporation (the
“Company”), and Scott Ogur, CFA (the “Executive”).

 

WHEREAS, the Company wishes to continue to employ Executive as its Chief
Financial Officer, and Executive wishes to accept such continued employment, on
the terms set forth in this Agreement;

 

WHEREAS, Executive acknowledges and agrees that through Executive’s association
with the Company as an employee, Executive has acquired and will acquire a
considerable amount of knowledge and goodwill with respect to the business of
the Company, which knowledge and goodwill are highly valuable to the Company and
which would be detrimental to the Company if used by Executive to compete with
the Company; and

 

WHEREAS, the Company wishes to protect its investment in its business,
employees, customer relationships, and confidential information, by requiring
Executive to abide by certain restrictive covenants regarding confidentiality,
non-competition, and non-solicitation, each of which is an inducement to the
Company to enter into this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Employment At Will. Subject to the terms and conditions of this Agreement,
the Company employs Executive, and Executive accepts such employment, upon the
terms hereinafter set forth. Executive’s employment pursuant to this Agreement
will commence on the Effective Date and will continue thereafter until
terminated by either party. Executive’s employment with the Company is at-will,
and either party can terminate the employment relationship at any time, for any
or no cause or reason, and with or without prior notice, subject to Section 5(b)
below.

 

2. Position; Duties. Executive will serve as the Company’s Chief Financial
Officer and Director and will be responsible for all financial and accounting
aspects of the Company. Executive will report solely and directly to, and be
subject to the supervision of, the Company’s Chief Executive Officer (the
“CEO”). Executive will perform such services for the Company and have such
powers, responsibilities and authority as are customarily associated with the
position of Chief Financial Officer and will perform such additional duties as
may otherwise be reasonably assigned to Executive from time to time by the CEO.
Executive will devote substantially all of Executive’s full business time to the
affairs of the Company and to the duties hereunder, and will perform such duties
diligently and to the best of Executive’s ability, in compliance with the
Company’s policies and procedures and the laws and regulations that apply to the
Company’s business. Notwithstanding the foregoing, subject to CEO approval, not
to be unreasonably withheld, Executive may serve on civic, corporate or
charitable boards or committees and manage his personal investments, so long as
such activities do not materially interfere with the performance of Executive’s
responsibilities in accordance with this Agreement or otherwise violate other
terms of this Agreement. The boards the Executive currently serves on as of the
date of this Agreement are approved.

 

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3. Compensation and Benefits. As compensation for the services to be rendered by
Executive under this Agreement, the Company will provide the following
compensation and benefits during Executive’s employment hereunder.

 

(a) Base Salary. The Company will pay Executive a base salary at an annual rate
of one hundred eighty thousand dollars ($180,000) beginning on January 1, 2019
(the “Base Salary”). The Base Salary will be payable in equal installments in
accordance with the Company’s payroll practices as in effect from time to time.
The Base Salary will be reviewed by the CEO from time to time and may be
increased in the sole discretion of the CEO, subject to the rights of the
Preferred B shareholders of the Company. The Base Salary may also be decreased
by the CEO in connection with any Company-wide decrease in executive
compensation, provided that in connection with such reduction Executive will not
experience a proportional decrease greater than that of any other
executive-level employee.

 

(b) Bonus Opportunity.

 

(i) Commencing with the calendar year 2018, Executive will be eligible to
receive an annual bonus targeted at fifty percent (50%) of Executive’s Base
Salary (the “Cash Bonus”) plus up to 300,000 stock options, subject to
proportional increase if the Company’s approved stock plan is increased during
the year (the “Equity Bonus,” and together with the Cash Bonus, the “Annual
Bonus”), subject to the following provisions of this Section

 

(A) For calendar year 2018, the Executive will not receive a Cash Bonus but
Executive’s eligibility for an Equity Bonus will be contingent on whether the
Company’s total revenue for calendar year 2018, as reported by the Company,
exceeds its total revenue for calendar year 2017 by at least fifty percent
(50%). If it does, Executive will receive 300,000 stock options for 2018.

 

(B) For calendar year 2019, the Executive’s eligibility for an Annual Bonus will
be contingent on whether the Company’s total earnings before interest, taxes,
depreciation, and amortization (EBITDA) in calendar year 2019, as reported by
the Company, excluding the effects of any acquisitions after November 9, 2018
(the “Annual Bonus Basis”) is at least ($4,000,000). If the Annual Bonus Basis
is between ($4,000,000) and ($3,000,000), the Executive will receive 25% of the
Annual Bonus. If the Annual Bonus Basis is between ($2,999,999) and
($2,000,000), the Executive will receive 50% of the Annual Bonus. If the Annual
Bonus Basis is between ($1,999,999) and ($1,000,000), the Executive will receive
75% of the Annual Bonus. If the Annual Bonus Basis is higher than ($1,000,000),
the Executive will receive 100% of the Annual Bonus.

 

(C) For calendar year 2020 and thereafter, Executive’s eligibility to receive an
Annual Bonus will be based on the achievement, during the year in question, of
both personal and Company-wide objectives (including those pertaining to organic
revenue and EBITDA growth) established by the Board, or an applicable
sub-committee, by January 31st of each calendar year.

 

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(ii) The Cash Bonus for any given year will be on March 15 in the year
immediately following the year for which the Annual Bonus is determined.
Executive must be employed by the Company on the date on which the Cash Bonus is
paid in order to receive the Cash Bonus for that year, however the Company is
not permitted to terminate the Executive’s employment for the purpose of
avoiding payment of the Cash Bonus. The CEO will determine whether and to what
extent the applicable criteria have been met and the amount of the Cash Bonus in
its discretion, provided that such determination by the Board shall require the
consent of the directors appointed by Rose Capital.

 

(iii) The Equity Bonus for any given year will be granted on March 15 in the
year immediately following the year for which the Annual Bonus is determined.
Executive must be employed by the Company on the date on which the Equity Bonus
is granted in order to receive the Equity Bonus for that year. The Equity Bonus
will be granted in the form of stock options under the Company’s 2017 Omnibus
Stock Incentive Plan, as the same may be amended from time to time, and will be
memorialized by an option grant agreement to be entered between Executive and
the Company. The exercise prices of any such options will be equal to the fair
market value of the Company’s common stock on the date of grant. The options, if
any, will vest over three (3) years in three (3) equal installments on the first
three anniversaries of the date of grant, so long as Executive remains employed
by the Company through each such vesting date, subject to Section 5(b) below.
The CEO will determine whether and to what extent the applicable criteria have
been met and the amount of the Equity Bonus in its discretion, provided that
such determination by the Board shall require the consent of the directors
appointed by Rose Capital.

 

(c) Change of Control. In the event of a change of control of the Company
whereby greater than 50% of the assets of the Company are sold to an unrelated
party or an equity transaction occurs such that following such transaction the
pre-transaction shareholders own less than 50% of equity of the Company (“Change
of Control Transaction”), Company shall make a payment to the Executive equal to
one year of Executive’s prevailing annual salary at such time. This payment
shall be made within ten days of closing the Change of Control Transaction.

 

(d) Vacation. Executive will be entitled to 20 paid vacation days per year, with
no carryover at the end of each calendar year.

 

(e) General Benefits. Executive will be entitled to such other benefits, and to
participate in such benefit plans, as are generally made available to similarly
situated employees of the Company from time to time, subject to Company policy
and the terms and conditions of any applicable benefit plans. Nothing in this
Agreement will be deemed to alter the Company’s rights to modify or terminate
any such plans or programs in its sole discretion.

 

(f) Withholdings. The Company will withhold from any amounts payable under this
Agreement such federal, state, and local taxes as the Company determines are
required to be withheld pursuant to applicable law.

 

4. Reimbursement of Expenses. The Company will reimburse Executive for all
reasonable business expenses incurred by Executive in connection with the
performance of Executive’s duties hereunder, subject to Executive’s compliance
with the Company’s reimbursement policies in effect from time to time. Such
reimbursements will be made in a timely manner and in accordance with the
policies of the Company.

 

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5. Effect of Termination.

 

(a) Generally. When Executive’s employment with the Company is terminated for
any reason, Executive, or his estate, as the case may be, will be entitled to
receive the compensation and benefits earned through the effective date of
termination, along with reimbursement for any unreimbursed business expenses
incurred through the date of termination and supported by reasonable
substantiation and documentation in accordance with Company policies. In
addition, immediately upon the termination of Executive’s employment with the
Company for any reason, Executive will be deemed to have resigned from all
positions as an officer or director of the Company or any affiliates thereof.
However if Executive shall have resigned from the Company other than for Good
Reason, Executive shall have the ability to remain a board member so long as
Executive beneficially owns a minimum of 70% of the shares Executive held on the
date of executing this Agreement and such shareholding is at least 5% of the
total outstanding voting shares of the Company. If Executive shall have resigned
from the Company for Good Reason, Executive shall have the ability to remain a
board member so long as Executive beneficially owns a minimum of 50% of the
shares Executive held on the date of executing this Agreement and such
shareholding is at least 3% of the total outstanding voting shares of the
Company. In furtherance of the preceding sentences, Executive will execute and
return to the Company all letters and documents that the Company may reasonably
require in order to evidence such resignation(s), but Executive’s failure to
execute and return such documents will not have the effect of delaying or in any
way invalidating the resignation(s) provided for by the preceding sentence.

 

(b) Separation Benefits upon Certain Terminations. If the Company terminates
Executive’s employment without Cause (as defined below) or if Executive resigns
for Good Reason (as defined below), then conditioned upon Executive executing
and not revoking a Release (as defined below) following such termination
Executive will be entitled to receive the following “Separation Benefits”: (i)
Executive will be entitled to receive continued payment of Executive’s
then-current Base Salary for a period of twelve (12) months (the “Salary
Continuation”), (ii) Executive will be entitled to sell to the Company at the
trailing 10 day VWAP sufficient shares owned by Executive (directly or through a
holding company) to generate proceeds equal to the difference between $800,000
and the cumulative amounts received by Executive from all previous sales he has
made of Company stock, and (iii) all outstanding options to purchase common
stock of the Company then held by Executive will, to the extent unvested, vest
ratably by month over the ensuing 12 months and any unexercised options shall
expire 15 months after termination, and, to the extent such options are
designated as non-statutory stock options, the post-termination exercise period
of such options will be extended to two years after the date of termination (but
in no event beyond the original expiration date of the option). The Salary
Continuation will be payable to Executive over time in accordance with the
Company’s payroll practices and procedures beginning on the thirtieth (30th) day
following the termination of Executive’s employment with the Company, provided
that the first installment will include all installments that would have been
paid if the payments had begun immediately following the date of termination.
Notwithstanding the foregoing, if Executive is entitled to receive the Salary
Continuation but violates in any material respects any provisions of Section 6
or Section 8 hereof after termination of employment, the Company will be
entitled to immediately stop paying any further installments of the Salary
Continuation, in addition to any other remedies that may be available to the
Company in law or at equity. Executive agrees that other than with respect to
the share sales described in clause 5(b)(ii) above, for a period of 18 months
following termination, he will not sell an amount of shares each day that
exceeds 10% of the trailing 10 trading day average volume) of Helix common
stock.

 

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(c) Cause. For purposes of this Agreement, “Cause” means: (i) Executive’s fraud,
embezzlement, material act of dishonesty (including, without limitation, the
falsification of any material report) or misappropriation with respect to the
Company; (ii) Executive’s willful or negligent misconduct that has or may
reasonably be expected to have a material adverse effect on the property,
business, or reputation of the Company; (iii) Executive’s material breach of
this Agreement; (iv) Executive’s willful failure or refusal to perform
Executive’s material duties under this Agreement or willful failure to follow
any specific lawful instructions of the CEO; (v) Executive’s conviction or plea
of nolo contendere in respect of a felony or of a misdemeanor involving moral
turpitude; (vi) Executive’s alcohol or substance abuse which has a material
adverse effect on Executive’s ability to perform Executive’s duties under this
Agreement or the property, business, or reputation of the Company; (vii)
Executive’s breach of fiduciary duty, or (viii) Executive’s material failure to
comply with the Company’s workplace rules, policies, or procedures. In the event
that the Company concludes that Executive has engaged in acts constituting in
Cause as defined in clause (iii) or (iv) above, prior to terminating this
Agreement for Cause the Company will provide Executive with at least fifteen
(15) days’ advance notice of the circumstances constituting such Cause, and an
opportunity to correct such circumstances, to the extent such circumstances are
susceptible of being corrected. In the event the Company terminates Executive’s
employment for Cause, none of the Separation Benefits shall apply.

 

(d) Good Reason. For purposes of this Agreement, “Good Reason” means the
occurrence of any of the following events without Executive’s consent: (i) a
material reduction of Executive’s Base Salary not generally applicable to other
executive-level employees of the Company or in which Executive experiences a
proportional decrease greater than that of any other executive-level employee;
(ii) a material diminution of the Executive’s authority, duties, or
responsibilities as in effect on the date hereof; (iii) a requirement that
Executive’s primary work location be more than fifty (50) miles from its
location on the date hereof; (iv) any act by the Company, its Board, its
shareholders, or any of their affiliates whose actions or language that attacks
Executive’s reputation, disparages Executive, or makes the Executive’s ability
to execute his duties more difficult; or (v) the Company’s material breach of
this Agreement. In order for Executive to resign for Good Reason, Executive must
provide written notice to the Company of the existence of the Good Reason
condition within thirty (30) days of the initial existence of such Good Reason
condition, and if such written notice is not timely provided, Executive may not
resign for Good Reason as a result of the existence of such Good Reason
condition. Upon receipt of such notice, the Company will have fifteen (15) days
during which it may attempt to remedy the Good Reason condition. If so remedied,
Executive may not resign for Good Reason on that basis. If the Good Reason
condition is not remedied within such fifteen (15) day period, Executive may
resign based on the Good Reason condition specified in the notice effective
ninety (90) days following the expiration of the fifteen (15) day cure period.

 

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If Executive resigns other than for Good Reason, clause 5(b)(i) shall not apply,
however the remaining Separation Benefits shall still apply provided that
Executive provides Company with 90 days’ notice prior to terminating his
employment.

 

(e) Application of Internal Revenue Code Section 409A. The parties intend that
this Agreement and the payments made hereunder will be exempt from, or comply
with, the requirements of Section 409A of the Internal Revenue Code and the
regulations and other guidance thereunder and any state law of similar effect
(collectively “Section 409A”), and this Agreement will be interpreted and
applied to the greatest extent possible in a manner that is consistent with the
requirements for avoiding taxes or penalties under Section 409A. Notwithstanding
anything to the contrary set forth herein, any payments and benefits provided
under this Section 5 that constitute “deferred compensation” within the meaning
of Section 409A will not commence in connection with Executive’s termination of
employment unless and until Executive has also incurred a “separation from
service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)),
unless the Company reasonably determines that such amounts may be provided to
Executive without causing Executive to incur the additional 20% tax under
Section 409A. The parties intend that each installment of the Salary
Continuation payments provided for in this Agreement is a separate “payment” for
purposes of Section 409A. For the avoidance of doubt, the parties intend that
the Separation Benefits satisfy, to the greatest extent possible, the exemptions
from the application of Section 409A provided under Treasury Regulation Sections
1.409A-1(b)(4), 1.409A-1(b)(5), and 1.409A-1(b)(9). However, if the Company
determines that the Salary Continuation constitutes “deferred compensation”
under Section 409A and Executive is, as if the separation from service, a
“specified employee” of the Company or any successor entity thereto, as such
term is defined in Section 409A, then, solely to the extent necessary to avoid
the incurrence of the adverse personal tax consequences under Section 409A, the
timing of the Salary Continuation payments will be delayed until the earlier to
occur of: (i) the date that is six months and one day after Executive’s
separation from service, or (ii) the date of Executive’s death (such applicable
date, the “Specified Employee Initial Payment Date”), and the Company (or the
successor entity thereto, as applicable) will (A) pay to Executive a lump sum
amount equal to the sum of the Salary Continuation payments that Executive would
otherwise have received through the Specified Employee Initial Payment Date if
the commencement of the payment of the Salary Continuation had not been so
delayed pursuant to this Section, and (B) commence paying the balance of the
Salary Continuation in accordance with the applicable payment schedules set
forth in this Agreement.

 

(f) No Further Obligations. Except as expressly provided above or as otherwise
required by law, the Company will have no obligations to Executive in the event
of the termination of this Agreement for any reason.

 

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6. Confidential Information.

 

(a) Executive acknowledges that the Company will give Executive access to
certain highly-sensitive, confidential, and proprietary information belonging to
the Company (or third parties who may have furnished such information under
obligations of confidentiality), relating to and used in the Company’s business
(collectively, “Confidential Information”). Executive acknowledges that
Confidential Information includes, but is not limited to, the following
categories of Company related confidential or proprietary information and
material: financial statements and information; budgets, forecasts, and
projections; business and strategic plans; marketing, sales, and business
development strategies; research and development projects; records relating to
any intellectual property developed by, owned by, controlled, or maintained by
the Company; information related to the Company’s inventions, research,
products, designs, methods, formulae, techniques, systems, processes; customer
lists; non-public information relating to the Company’s customers, suppliers,
distributors, or investors; the specific terms of the Company’s agreements or
arrangements, whether oral or written, with any customer, supplier, vendor, or
contractor with which the Company may be associated from time to time; and any
and all information relating to the operation of the Company’s business which
the Company may from time to time designate as confidential or proprietary or
that Executive reasonably knows should be, or has been, treated by the Company
as confidential or proprietary. Confidential Information encompasses all formats
in which information is preserved, whether electronic, print, or any other form,
including all originals, copies, notes, or other reproductions or replicas
thereof.

 

(b) Confidential Information does not include any information that: (i) at the
time of disclosure is generally known to, or readily ascertainable by, the
public; (ii) becomes known to the public through no fault of Executive or other
violation of this Agreement; or (iii) is disclosed to Executive by a third party
under no obligation to maintain the confidentiality of the information.

 

(c) Executive acknowledges that the Confidential Information is owned or
licensed by the Company (or is possessed by the Company with the permission of
its owner); is unique, valuable, proprietary and confidential; derives
independent actual or potential commercial value from not being generally known
or available to the public; and is subject to reasonable efforts to maintain its
secrecy. Executive hereby relinquishes, and agrees that Executive will not at
any time claim, any right, title or interest of any kind in or to any
Confidential Information.

 

(d) During and after Executive’s employment with the Company, Executive will
hold in trust and confidence all Confidential Information, and will not disclose
any Confidential Information to any person or entity, except in the course of
performing duties assigned by the Company or as authorized in writing by the
Company. Executive further agrees that during and after Executive’s employment
with the Company, Executive will not use any Confidential Information for the
benefit of any third party, except in the course of performing duties assigned
by the Company or as authorized in writing by the Company.

 

(e) Notwithstanding the covenants in Section 6(d) above, Executive may disclose
Confidential Information solely to the extent that Executive is required to
disclose such information by law, provided that Executive (i) notifies the
Company of the existence and terms of such obligation, (ii) gives the Company a
reasonable opportunity to seek a protective or similar order to prevent or limit
such disclosure, and (iii) only discloses that information actually required to
be disclosed.

 

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(f) Nothing in this Agreement is intended to or will prohibit Executive from
communicating with any governmental authority, or making a report in good faith
and with a reasonable belief of any violations of law or regulation to a
governmental authority, or from filing, testifying or participating in a legal
proceeding relating to such violations, including making disclosures protected
or required by any whistleblower law or regulation to the Securities and
Exchange Commission, the Department of Labor, or any other appropriate
government authority charged with the enforcement of any applicable laws. In
addition, nothing in this Agreement is intended to or will limit any employee’s
right to discuss the terms, wages, and working conditions of their employment,
as protected by applicable law. Pursuant to the Defend Trade Secrets Act of
2016, an individual will not be held criminally or civilly liable under any
federal or state trade secret law for the disclosure of a trade secret that (i)
is made (A) in confidence to a federal, state or local government official,
either directly or indirectly, or to an attorney; and (B) solely for the purpose
of reporting or investigating a suspected violation of law; or (ii) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such
filing is made under seal. An individual who files a lawsuit for retaliation by
an employer for reporting a suspected violation of law may disclose the trade
secret to his or her attorney and use the trade secret information in the court
proceeding, if the individual files any document containing the trade secret
under seal, and does not disclose the trade secret, except pursuant to court
order.

 

(g) Return of Property. Upon request during employment and immediately at the
termination of Executive’s employment, Executive will return to the Company all
Confidential Information in any form (including all copies and reproductions
thereof) and all other property whatsoever of the Company in Executive’s
possession or under Executive’s control. If requested by the Company, Executive
will certify in writing that all such materials have been returned to the
Company. Executive also expressly agrees that immediately upon the termination
of Executive’s employment with the Company for any reason, Executive will cease
using any secure website, computer systems, e-mail system, or phone system or
voicemail service provided by the Company for the use of its employees.

 

7. Assignment of Inventions.

 

(a) Executive agrees that all developments or inventions (including without
limitation any and all software programs (source and object code), algorithms
and applications, concepts, designs, discoveries, improvements, processes,
techniques, know-how and data) initiated, conceived, discovered, reduced to
practice, or made by Executive, either alone or in conjunction with others,
during his employment with the Company that result from work performed by
Executive for the Company or relate to the business of the Company, whether or
not patentable or registrable under copyright or similar statutes or subject to
analogous protection (“Inventions”), will be the sole and exclusive property of
the Company or its nominees. Executive will and hereby does assign to the
Company all rights in and to such Inventions upon the creation of any such
Invention, including, without limitation: (i) patents, patent applications and
patent rights throughout the world; (ii) rights associated with works of
authorship throughout the world, including copyrights, copyright applications,
copyright registrations, mask work rights, mask work applications and mask work
registrations; (iii) rights relating to the protection of trade secrets and
confidential information throughout the world; (iv) rights analogous to those
set forth herein and any other proprietary rights relating to intangible
property; and (v) divisions, continuations, renewals, reissues and extensions of
the foregoing (as applicable), now existing or hereafter filed, issued or
acquired (collectively, the “IP Rights”).

 

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(b) For avoidance of doubt, if any Invention falls within the definition of
“work made for hire” as such term is defined in 17 U.S.C. § 101, such
Invention(s) will be considered “work made for hire” and the copyright of such
Invention(s) will be owned solely and exclusively by the Company. If any
Invention does not fall within such definition of “work made for hire” then
Executive’s right, title and interest in and to such Invention(s) will be
assigned to the Company pursuant to Section 7(a) above.

 

(c) The Company and its nominees will have the right to use and/or to apply for
statutory or common law protections for such Inventions in any and all
countries. Executive further agrees, at the Company’s expense, to: (i)
reasonably assist the Company in obtaining and from time to time enforcing such
IP Rights relating to Inventions, and (ii) execute and deliver to the Company or
its nominee upon reasonable request all such documents as the Company or its
nominee may reasonably determine are necessary or appropriate to effect the
purposes of this Section 7, including assignments of inventions. Such documents
may be necessary to: (1) vest in the Company or its nominee clear and marketable
title in and to Inventions; (2) apply for, prosecute and obtain patents,
copyrights, mask works rights and other rights and protections relating to
Inventions; or (3) enforce patents, copyrights, mask works rights and other
rights and protections relating to Inventions. Executive’s obligations pursuant
to this Section 7 will continue beyond the termination of Executive’s employment
with the Company. Executive hereby irrevocably designates and appoints the
Company and its then-current Chief Executive Officer as Executive’s agent and
attorney-in-fact to act for and in behalf and instead of Executive, to execute
and file any such application and to do all other lawfully permitted acts to
further the prosecution and issuance of patents, trademarks, copyrights or other
rights thereon with the same legal force and effect as if executed by Executive,
if the Company is unable for any reason to secure Executive’s signature to any
lawful and necessary document required to apply for or execute any patent,
trademark, copyright or other applications with respect to any Inventions
(including renewals, extensions, continuations, divisions or continuations in
part thereof).

 

(d) The obligations of Executive under Section 7 above will not apply to any
Invention that Executive developed entirely on Executive’s own time without
using the Company’s equipment, supplies, facility or trade secret information,
except for those Inventions that (i) relate to the Company’s Business or actual
or demonstrably anticipated research or development, or (ii) result from any
work performed by Executive for Company. Executive will bear the burden of proof
in establishing the applicability of this subsection to a particular
circumstance.

 

8. Restrictive Covenants.

 

(a) Purpose. Executive understands and agrees that the purpose of this Section 8
is solely to protect the Company’s legitimate business interests, including, but
not limited to its confidential and proprietary information, customer
relationships and goodwill, and the Company’s competitive advantage, and will
not unduly impair Executive’s ability or right to work or earn a living.
Therefore, Executive agrees to be subject to restrictive covenants under the
following terms.

 

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(b) Definitions. As used in this Agreement, the following terms have the
meanings given to such terms below.

 

(i) “Business” means (A) providing technology, compliance, and/or security
services to businesses in the cannabis industry; and (B) the business(es) in
which the Company was engaged at the time of, or during the twelve (12) month
period prior to, the termination of Executive’s employment with the Company for
any reason, provided that this clause (B) will only apply if Executive was
materially involved with such other business.

 

(ii) “Company Employee” means any person who is or was an employee or consultant
of the Company at the time of, or during the twelve (12) month period prior to,
the termination of Executive’s employment with the Company for any reason.

 

(iii) “Customer” means any person or entity who is or was a customer of the
Company at the time of, or during the twelve (12) month period prior to, the
termination of Executive’s employment with the Company for any reason and with
whom Executive had dealings on behalf of the Company in the course of
Executive’s employment with the Company during such period, or about whom
Executive received Confidential Information.

 

(iv) “Prospective Customer” means any person or entity to whom, within the three
(3) months immediately prior to the termination of Executive’s employment with
the Company for any reason the Company had submitted proposals to for services
of which Executive has knowledge, whether or not such proposals have yet to be
executed into contracts; provided that the Company has a legitimate expectation
of doing business with such person or entity and provided further that Executive
has had material business contacts with such person or entity on behalf of the
Company during such six-month period, whether such contact was initiated by the
person or entity or by Executive.

 

(v) “Restricted Period” means the period commencing on the date of termination
of Executive’s employment with the Company for any reason and ending eighteen
(18) months after such date, provided, however, that this period will not run
during any time Executive is in violation of this Section 8, it being the intent
of the parties that the Restricted Period will be extended for any period of
time in which Executive is in violation of this Section

 

(vi) “Restricted Territory” means the United States of America. In the event
that the preceding definition of Restricted Territory is deemed by a court of
competent jurisdiction to be too broad to be enforced under the circumstances,
then “Restricted Territory” will mean:

 

(A) the State of Colorado;

 

(B) each state, province, or similar political subdivision in which the Company
engaged in material business at the time of, or during the twelve (12) month
period prior to, the termination of Executive’s employment with the Company for
any reason;

 

(C) each state, province, or similar political subdivision in which the Company
engaged in material business with respect to which Executive provided material
services on behalf of the Company at the time of, or during the twelve (12)
month period prior to, the termination of Executive’s employment with the
Company for any reason;

 

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(D) each city, county, township, or similar political subdivision in which the
Company engaged in material business at the time of, or during the twelve (12)
month period prior to, the termination of Executive’s employment with the
Company for any reason; and

 

(E) each city, county, township, or similar political subdivision in which the
Company engaged in material business with respect to which Executive provided
material services on behalf of the Company at the time of, or during the twelve
(12) month period prior to, the termination of Executive’s employment with the
Company for any reason.

 

(c) Non-Competition. During Executive’s employment with the Company and during
the Restricted Period, Executive will not, on Executive’s own behalf or on
behalf of any other person, engage in any business competitive with or adverse
to that of the Company. In addition, during Executive’s employment with the
Company and during the Restricted Period, Executive will not hold a position
based in or with responsibility for all or part of the Restricted Territory,
with any person or entity engaging in the Business, whether as employee,
consultant, or otherwise, in which Executive will have duties, or will perform
or be expected to perform services for such person or entity, that is or are the
same as or substantially similar to the position held by Executive or those
duties or services actually performed by Executive for the Company within the
twelve (12) month period immediately preceding the termination of Executive’s
employment with the Company, or in which Executive will use or disclose or be
reasonably expected to use or disclose any Confidential Information.

 

(d) Non-Solicitation. During Executive’s employment with the Company and during
the Restricted Period, Executive will not, directly or indirectly, on
Executive’s own behalf or on behalf of any other party:

 

(i) Call upon, solicit, divert, encourage or attempt to call upon, solicit,
divert, or encourage any Customer or Prospective Customer for purposes of
marketing, selling, or providing products or services to such Customer or
Prospective Customer that are competitive with those offered by the Company;

 

(ii) Accept as a customer any Customer or Prospective Customer for purposes of
marketing, selling, or providing products or services to such Customer or
Prospective Customer that are competitive with those offered by the Company;

 

(iii) Induce, encourage, or attempt to induce or encourage any Customer or
Prospective Customer to purchase or accept products or services that are
competitive with those offered by the Company from any person or entity (other
than the Company) engaging in the Business;

 

(iv) Induce, encourage, or attempt to induce or encourage any Customer to
reduce, limit, or cancel its business with the Company;

 

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(v) Solicit, induce, or attempt to solicit or induce any Company Employee to
terminate his or her employment or engagement with the Company; or

 

(vi) Otherwise interfere with or engage in any conduct that would have the
effect of interfering with the business relationship between the Company and any
of its vendors, suppliers, consultants, or contractors.

 

(e) Executive Acknowledgements. Executive acknowledges and agrees that the
restrictive covenants in this Agreement (i) are essential elements of
Executive’s employment by the Company and are reasonable given Executive’s
access to the Company’s Confidential Information and the substantial knowledge
and goodwill Executive will acquire with respect to the business of the Company
as a result of Executive’s employment with the Company, and the unique and
extraordinary services to be provided by Executive to the Company and (ii) are
reasonable in time, territory, and scope, and in all other respects. Executive
further acknowledges and agrees that given his position, duties, and authority,
Executive is “executive and management personnel” for purposes of Section
8-2-113 of the Colorado Revised Statutes.

 

(f) Consideration. Executive acknowledges and agrees that the covenants set
forth in this Agreement are supported by adequate consideration, including, but
not limited to continued employment with the Company, the Company’s promise to
pay separation benefits as described in Section 5(b) above, and the Company’s
other promises as described in this Agreement. The Company would not have agreed
to enter into this Agreement but for Executive’s agreement to the restrictions
imposed by this Section 8.

 

(g) Judicial Modification. Should any part or provision of this Section 8 be
held invalid, void, or unenforceable in any court of competent jurisdiction,
such invalidity, voidness, or unenforceability will not render invalid, void, or
unenforceable any other part or provision of this Agreement. The parties further
agree that if any portion of this Section 8 is found to be invalid or
unenforceable by a court of competent jurisdiction because its duration,
territory, or other restrictions are deemed to be invalid or unreasonable in
scope, the parties intend that the Court will, to the maximum extent permitted
by law, replace the invalid or unreasonable terms with terms that are valid and
enforceable and that come closest to expressing the intention of such invalid or
unenforceable terms.

 

9. Enforcement. Executive acknowledges and agrees that the Company will suffer
irreparable harm in the event that Executive breaches any of Executive’s
obligations under Sections 6, 7, or 8 of this Agreement and that monetary
damages would be inadequate to compensate the Company for such breach.
Accordingly, Executive agrees that, in the event of a breach by Executive of any
of Executive’s obligations under Sections 6, 7, or 8 of this Agreement, the
Company will be entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief in order to prevent or to restrain
any such breach, without the need for posting bond or other security. The
Company will be entitled to recover its costs incurred in connection with any
action to enforce Sections 6, 7, or 8 of this Agreement, including reasonable
attorneys’ fees to the maximum extent permitted by law.

 

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10. Miscellaneous.

 

(a) Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements (whether written or oral and whether express or implied) between the
parties to the extent related to such subject matter.

 

(b) Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the parties and their respective successors, permitted assigns and,
in the case of Executive, heirs, executors, and/or personal representatives. The
Company may freely assign or transfer this Agreement to an affiliated company
and must assign to a successor following a merger, consolidation, sale of
assets, or other business transaction. Executive may not assign, delegate or
otherwise transfer any of Executive’s rights, interests or obligations in this
Agreement without the prior written approval of the Company.

 

(c) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original but all of which together will
constitute one and the same agreement. Facsimile or PDF reproductions of
original signatures will be deemed binding for the purpose of the execution of
this Agreement.

 

(d) Notices. Any notice pursuant to this Agreement must be in writing and will
be deemed effectively given to the other party on (i) the date it is actually
delivered by personal delivery of such notice in person; (ii) one day after
deposit in the custody of a reputable overnight courier service (such as FedEx);
or (iii) three days after its deposit in the custody of the U.S. mail, certified
or registered postage prepaid, return receipt requested; in each case to the
appropriate address shown below (or to such other address as a party may
designate by notice to the other party):

 

  If to Executive: Scott Ogur     10200 E. Girard Avenue, Suite B420     Denver,
CO 80231         If to Company: Helix TCS, Inc.     10200 E. Girard Avenue,
Suite B420     Denver, CO 80231     Attention: Chief Executive Officer

 

(e) Amendments and Waivers. No amendment of any provision of this Agreement,
including variations to the terms in Section 3, will be valid unless the
amendment is in writing and signed by the Company and Executive and approved
pursuant to Section 3.10(j) of the Company’s Investor Rights Agreement. No
waiver of any provision of this Agreement will be valid unless the waiver is in
writing and signed by the waiving party. The failure of a party at any time to
require performance of any provision of this Agreement will not affect such
party’s rights at a later time to enforce such provision. No waiver by a party
of any breach of this Agreement will be deemed to extend to any other breach
hereunder or affect in any way any rights arising by virtue of any other breach.

 

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(f) Severability. Each provision of this Agreement is severable from every other
provision of this Agreement. Any provision of this Agreement that is determined
by any court of competent jurisdiction to be invalid or unenforceable will not
affect the validity or enforceability of any other provision. Any provision of
this Agreement held invalid or unenforceable only in part or degree will remain
in full force and effect to the extent not held invalid or unenforceable.

 

(g) Construction. The section headings in this Agreement are inserted for
convenience only and are not intended to affect the interpretation of this
Agreement. The word “including” in this Agreement means “including without
limitation.” This Agreement will be construed as if drafted jointly by the
Company and Executive and no presumption or burden of proof will arise favoring
or disfavoring the Company or Executive by virtue of the authorship of any
provision in this Agreement. All words in this Agreement will be construed to be
of such gender or number as the circumstances require.

 

(h) Survival. The terms of Sections 6, 7, 8, 9, and 10 will survive the
termination of this Agreement for any reason.

 

(i) Remedies Cumulative. The rights and remedies of the parties under this
Agreement are cumulative (not alternative) and in addition to all other rights
and remedies available to such parties at law, in equity, by contract or
otherwise.

 

(j) Governing Law. This Agreement will be governed by the laws of the State of
Colorado without giving effect to any choice or conflict of law principles of
any jurisdiction.

 

(k) Venue. The parties agree that any litigation arising out of or related to
this Agreement or Executive’s employment by Company will be brought exclusively
in any state or federal court in Arapahoe County, Colorado. Each party (i)
consents to the personal jurisdiction of said courts, (ii) waives any venue or
inconvenient forum defense to any proceeding maintained in such courts, and
(iii) except as expressly provided above, agrees not to bring any proceeding
arising out of or relating to this Agreement or Executive’s employment by
Company in any other court.

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.

 

EXECUTIVE:   COMPANY:             Helix TCS, Inc.       /s/ Scott Ogur   By: /s/
Zachary L. Venegas Scott Ogur, CFA   Zachary L. Venegas       CEO

 

 

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