Document:

Frankly
Co.

333
Bryant Street, Suite 240

San
Francisco, CA 94107

 

 

Dated
as of August 15, 2016

 

Steven
Chung

3921
Durand Drive

San
Mateo, CA 94403

 

Re:       Amendment
of Employment Agreement

 

Dear
Steve,

 

Reference
is made to the Employment Agreement between you (“Employee”) and Frankly Co. (Company”) dated 3/23/2015 (the
“Agreement”). In exchange for consideration, the receipt and sufficiency of which are hereby acknowledged, when signed
below, the Agreement will be further amended as follows:

 

Salary
Adjustment – For the period commencing on August 16, 2016 and ending on December 31, 2016, the salary payable to Employee
under the Agreement will be reduced from the annual rate of $360,000.00 to the annual rate of $226,667.00. Commencing on January
1, 2017, Employee’s salary rate will return to the $360,000.00 annual rate. The foregoing reduction in salary will not be
factored into the calculation of any bonus for which Employee may be eligible.

 

Except
as amended herein, the Agreement will continue in full force and effect.

 

If
the foregoing is acceptable, please return a signed copy of this Amendment to us at your earliest convenience, and we will return
a fully-executed copy to you.

 

	 	Sincerely,
	 	 
	 	Frankly Co.
	 	 	 
	 	By:	/s/
    John F. Wilk
	 	Name:	John
    F. Wilk
	 	Title:	General
Counsel
	 	 	 
	Accepted
    and Agreed:	 	 
	 	 	 
	/s/
    Steven Chung	 	 
	Steven
    ChungGannaway
Web Holdings LLC

 

This
Management Services Agreement (“Agreement”) is entered
into as of the 1st day of April, 2015, by and between Schwartz & Associates, PC, a Georgia professional corporation
(the “Management Company”), Gannaway Web Holdings LLC, a New York limited liability company (the “Company”)
and, for purposes of Section 4 below only, Louis Schwartz.

 

		1.	Engagement
                                         of the Management Company; Term; and Duties.

 

Engagement.
Subject to the terms set forth herein, the Company agrees to engage the Management Company to provide the management services
described herein, specifically the provision of the services of Louis Schwartz (the “Executive”) in the position
of “Chief Strategy Officer,” and the Management Company hereby accepts such engagement, effective as of the date first
set forth above (the “Engagement Date”). Executive shall report to the Company’s Chief Executive Officer (“CEO”),
and Executive shall serve in an executive capacity and shall perform such duties as are customary for his position and as are
directed to him by the CEO. During Management Company’s engagement with the Company, Management Company will cause Executive
to devote his best efforts and his full time and attention to the business of the Company, including, but not limited to the following
responsibilities (as more fully described hereinbelow):

 

Corporate
Development –

 

Coordination
and management of the Company’s strategic process (supporting certain merger and acquisition transactions, including post
transaction business integration), investments, asset sales and other divestitures;

 

Provide
consultation services regarding Company’s strategic channel and business sales partnerships; and

 

Product
Strategy – Provide consultation services regarding Company’s product strategy.

 

1.1       Term.
The term of Management Company’s engagement under this Agreement will be five (5) months (the “Term”),
beginning on the Engagement Date and ending on August 31, 2015.

 

1.2       Location.
Executive’s primary office location will be at the Company’s office location in Long Island City, New York.
will spend a minimum of two weeks per month in Company’s NYC office unless traveling on Company business.

 

1.3       Independent
Contractor. For all purposes under this Agreement, Management Company shall be deemed to be an independent contractor.
Neither Management Company nor Executive shall have any power or authority to bind the Company without the prior written authorization
of the Company.

 

    	 	 	 

    	 		 

    

 

	 	2.	Compensation and Benefits.

 

2.1       Base
Compensation. Management Company shall receive for services to be rendered hereunder base compensation during the Term
of $12,500 per month, paid semi-monthly (the “Base Compensation”). Tax implications will be sole responsibility
of the Management Company.

 

2.2       Special
Incentive. (a) Executive shall devote a portion of his time to manage all corporate development activities for the Company
that may include discussions with prospective purchasers and/or investors that lead to any of the following events: (i) a sale
of all, or part of the Company, (ii) a sale of all, or part of the Company’s assets, or (iii) an investment in the Company
by an inside or outside shareholder. In the event that Executive’s involvement in any of the foregoing result in a completed
transaction, Executive shall receive the following additional compensation:

 

	Transaction Type	 	Transaction Originated by Executive	 	Transaction Originated by Third Party
	Sale to Third Party of Company or Substantially All of Company’s Assets	 	Executive receives greater of $500,000 or 2.5% of total consideration received in transaction	 	Executive receives $250,000 and 2% of total amounts received in transaction in excess of $50,000,000
	Sale to Existing Company Investor	 	Executive receives $250,000 plus 2.5% of the total Company valuation in excess of $40,000,000	 	Executive receives $250,000 plus 5% of the total amounts received by GEI and Gannaway Trusts in excess of $22,500,000
	Third Party Investment in Company	 	Executive receives 2.5% of the total amount invested in Company	 	Executive receives 2.5% of the total amount invested in Company

 

The
incentive payments in this Section 2.2 will apply only with respect to transactions that are completed during the Term or during
the 12-month period following the end of the Term pursuant to a fully executed agreement entered during the Term, except that
for transactions with third parties (other than with current investors in Company) that are originated by Executive during the
Term, the incentive payments in this Section 2.3 will apply if the transaction is entered by Company during the Term or the 12-month
period following the end of the Term. Executive shall receive the incentive payment on the closing date for any transaction referenced
above.

 

(b)
Executive acknowledges that Company has previously retained Pagemill Partners to solicit interest in acquisition of the Company.
The Company has terminated the Pagemill agreement and the parties do not believe that Executive’s corporate development
activities set forth in this Section involve any potential transactions for which a Success Fee is due to Pagemill. Notwithstanding
the foregoing, in the event that Pagemill claims a Success Fee on a transaction for which an incentive fee is payable or has been
paid to Executive pursuant to Section 2.2(a), then Company will use its best efforts to mitigate the amount of such claim by Pagemill.
If Company is required to make payment to Pagemill, or otherwise settles a Pagemill claim, the incentive fee payable to Executive
pursuant to Section 2.2(a) for such transaction will be equal to the lesser of (i) the amount otherwise payable to Executive pursuant
to Section 2.2(a), or (ii) $1,800,000 minus the amount that Company is required to pay Pagemill or which Pagemill otherwise accepts
in settlement of such claim. To the extent that Executive has already received an incentive fee payment under pursuant to Section
2.2(a) prior to such Pagemill claim, then Executive will refund to Company any overpayment of Executive’s transaction fee
based on the applicable incentive fee as computed under this Section 2.2(b).

 

    	 	 2	 

    	 		 

    

 

2.3       Benefits.
During the Term, the Executive shall be entitled to the following benefits, programs and arrangements of the Company in effect
which are generally available to the executive employees of the Company, subject to and on a basis consistent with terms, conditions
and overall administration of such plans, programs and arrangements.

 

2.3.1       Leave.
During the Term, the Management Company shall be entitled to 8 days of vacation leave and 5 days of sick leave for Executive,
during which time shall continue to be paid in full.

 

2.3.2       Business
Expenses. The Company shall reimburse the Management Company, for the full amount of any hotel, travel, entertainment
and other expenses necessarily incurred by the Executive in the discharge of his duties for the Company approved expenses.

 

2.3.3       Taxes.
Management Company shall have full responsibility for applicable withholding taxes for all compensation paid to Executive, and
for compliance with all applicable labor and employment requirements with respect to Management Company self-employment, sole
proprietorship or other form of business organization, including state worker’s compensation insurance coverage requirements
and any U.S. immigration visa requirements. Management Company agrees to indemnify, defend and hold the Company harmless from
any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor or employment requirements,
including any liability for, or assessment of, withholding taxes imposed on the Company by the relevant taxing authorities with
respect to any compensation paid to Management Company or Executive.

 

		3.	TERMINATION.

 

3.1       This
Agreement may be terminated by either party at any time, but if so terminated for any of the reasons below, the appropriate provisions
of subsection 3.1.2 of this Section 3 shall apply.

 

(a)       Mutual
written agreement between the Management Company and the Company at any time;

 

(b)       Executive’s
death;

 

(c)       Executive’s
disability which renders Executive unable to perform the essential functions of his job even with reasonable accommodation;

 

(d)       For
Cause. For Cause shall mean a termination by the Company because of any one of the following events:

 

(1)       Executive’s
material breach of this Agreement;

 

(2)       Executive’s
breach of fiduciary duty to the Company;

 

(3)       Executive’s
fraud; or

 

(4)       Executive’s
indictment for, conviction of, or entry of a plea of guilty or no contest to, (1) a felony, or (2) crime involving moral turpitude.

 

    	 	 3	 

    	 		 

    

 

(e)       Executive’s
Resignation Without “Good Reason”. “Good Reason” shall mean (A) the Company, without Executive’s
written consent, (1) reduces Executive’s total compensation by more than 10%; (2) changes Executive’s position with
the Company (or its parent or subsidiary) that materially reduces Executive’s level of authority or responsibilities, (B)
Executive provides written notice to the Company of any such action within thirty (30) days of the date on which such action and
provides the Company with fifteen (15) days to remedy such action (the “Cure Period”),
(C) the Company fails to remedy such action within the Cure Period; and (D) Executive resigns within ten (10) days of the expiration
of the Cure Period.

 

(f)       Executive’s
resignation with Good Reason; or

 

(g)       “Without
Cause”. “Without Cause” shall mean any termination of by the Company which is not defined in subsections
(a) through (f) above.

 

3.1.2       Company’s
Post-Termination Obligations

 

(a)       If
this Agreement terminates for any of the reasons set forth in Sections 3.1(a) through 3.1(e) above, then the Company will pay
Management Company all accrued but unpaid fees, through the termination date.

 

(b)       If
this Agreement terminates for any of the reasons set forth in Sections 3.1(f) or 3.1(g) above, then the Company will pay Management
Company: (A) all accrued but unpaid fees through the termination date, and (B) separation fee equal to the balance of the months
remaining under the Term.

 

4.       Proprietary
Information Obligations. As a condition
of the engagement, Executive and Management Company agree to execute and abide by a Non-Disclosure, Assignment of Developments,
And Non-Solicitation Agreement (the “Confidentiality Agreement”) in reasonable form.

 

5.       Former
Engagement. Management Company represents
and warrants that its engagement by the Company will not conflict with and will not be constrained by any prior engagement or
consulting agreement or relationship. Management Company further represents and warrants that it does not possess confidential
information arising out of prior engagement which, in its best judgment, would be utilized in connection with its engagement by
the Company. Management Company also represents and warrants that Executive does not possess confidential information arising
out of any prior engagement or employment which, in its best judgment, would be utilized in connection with Management Company’s
engagement by the Company, except for information Executive obtained as an executive with entities owned or controlled by the
Company.

 

    	 	 4	 

    	 		 

    

 

6.       General
Provisions.

 

6.1       Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified; (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the
recipient, and if not during normal business hours of the recipient, then on the next business day; (c) five (5) calendar days
after having been sent by first class, registered or certified mail, return receipt requested, postage prepaid; or (d) one (1)
business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification
of receipt. All communications shall be sent to the other party hereto at such party’s address hereinafter set forth on
the signature page hereof, or at such other address as such party may designate by ten (10) days advance written notice to the
other party hereto.

 

6.2       Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, and the provision deemed invalid, illegal or unenforceable will be reformed, construed and enforced
in such jurisdiction to the greatest extent possible consistent with the general intent of the parties.

 

6.3       Waiver.
If either party should waive any breach of any provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

6.4       Complete
Agreement. This Agreement and the Confidentiality Agreement, constitute the entire agreement between Management Company
and the Company regarding its engagement terms and they are the complete, final, and exclusive embodiment of their agreement with
regard to this subject matter. It is entered into without reliance on any promise or representation other than those expressly
contained herein, and it supersedes and replaces any other agreements, representations or promises, whether written or oral. Other
than the engagement terms expressly reserved to the Company’s discretion herein, the terms of this Agreement cannot be modified
or amended except in a written agreement approved by the Board and signed by a duly authorized officer of the Company and Management
Company.

 

6.5       Counterparts.
This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party,
but all of which taken together will constitute one and the same Agreement. Facsimile signatures shall be considered the same
as original signatures.

 

6.6       Headings.
The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof
or to affect the meaning thereof.

 

6.7       Successors
and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Management Company and
the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign
any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company.

 

6.8       Choice
of Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the
law of the State of New York without regard to conflicts of laws principles.

 

    	 	 5	 

    	 		 

    

 

In
Witness Whereof, the parties have executed
this Agreement on the day and year first above written.

 

	GANNAWAY
    WEB HOLDINGS LLC	 	SCHWARTZ
    & ASSOCIATES, PC
	 	 	 	 	 
	By:
    	/s/
    Gary Gannaway                 	 	By:
	/s/ Louis Schwartz               
	Name	Gary Gannaway 	 	 	Louis
Schwartz, Managing Partner
	Title:	Chief Executive Officer	 	 	 

 

	Date:
    	May
    18, 2015 	 	Date:
    	May
    19, 2015 

 

For
purposes of Section 4 of this Agreement only:

 

	/s/
    Louis Schwartz	 
	LOUIS
    SCHWARTZ	 

 

    	 	 6

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