Document:

sgh-ex102_345.htm

Exhibit 10.2

 

Amended and Restated Employment Agreement

Jack Pacheco

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), dated as of December 19, 2017 (the “Effective Date”), by and between SMART Modular Technologies, Inc, a California corporation (the “Company”), and Jack Pacheco (“Executive” and, together with the Company, the “Parties” individually, a “Party”).

WHEREAS, the Parties entered into that certain Employment Agreement dated as of October 10, 2011 (the “Original Agreement”);

WHEREAS, the Parties desire to amend and restate the Original Agreement as more specifically set forth herein; and

WHEREAS, Executive acknowledges that (i) Executive’s employment with the Company will provide Executive with trade secrets of, and confidential information concerning, SMART Global Holdings, Inc. (“SGH”) and all of the direct and indirect subsidiaries of SGH (collectively with SGH, the “Company Group”) and (ii) the covenants contained in this Agreement are essential to protect the business and goodwill of the Company Group.

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the Parties hereby agree as follows:

Term.

  Subject to earlier termination in accordance with the provisions of Section 6 of this Agreement, Executive shall be employed by the Company for an initial period commencing on the Effective Date and ending at 11:59 pm Pacific time on the day before the first anniversary thereof (the “Term”); provided, that the Term shall be automatically extended for successive one-year periods thereafter unless, no later than ninety (90) days prior to the expiration of the initial one-year period, or any such successive one-year renewal period, either Party shall provide to the other Party written notice of its or Executive’s desire not to extend the Term.  Upon Executive’s termination of employment with the Company for any reason, Executive shall immediately resign all positions with all members of the Company Group, including any position on the Company’s Board of Directors (the “Board”) and/or any other position as any officer or director of any other member of the Company Group.

2.Position and Duties.

Position.

  During the Term, Executive shall serve as Executive Vice President, Chief Operating Officer and Chief Financial Officer for the Company.  If requested by the board of directors of SMART Global Holdings, Inc. (the “SGH Board”; the SGH Board as well as the board of directors of any subsidiary of SMART Global Holdings, Inc., are referred to herein as the “Board”), Executive hereby agrees to serve (without additional compensation) as a member of the Board and/or as an officer or director of any other member of the Company Group. 

 

Duties.

  Executive shall have the powers, authorities, and duties of management usually vested in the offices of Executive Vice President, Chief Operating Officer and Chief Financial Officer of a corporation of a similar size and nature to the Company, subject to the legal directives of the Company’s chief executive officer, and, as applicable, the Board.  Executive shall report solely to the Company’s chief executive officer and the Board.  Executive shall devote Executive’s full business time and attention to the performance of Executive’s duties hereunder and shall not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services, either directly or indirectly; provided that, nothing herein shall preclude Executive from (i) with the prior written consent of the Board, serving on the board of directors of other for-profit companies that do not compete with the Company, (ii) serving on civic or charitable boards or committees and (iii) managing personal investments, so long as all such activities described in (i) through (iii) above do not materially interfere with the performance of Executive’s duties and responsibilities under this Agreement.  

3.Compensation.

Base Salary.

  During the Term, Executive shall receive an annual base salary (the “Base Salary”) of $425,000.16, payable in regular installments in accordance with the Company’s usual payroll practices.  Executive shall be entitled to such increases (but not decreases) in Base Salary, if any, as may be determined from time to time in the sole discretion of the Board.

Annual Bonus.

  With respect to each fiscal year of the Company ending during the Term (a “fiscal year” is the period commencing on the first Monday after the last Friday of August and ending on the last Friday of August) and subject to the achievement of the applicable performance goals of the Executive and the Company and/or members of the Company Group, Executive shall be entitled to participate in the Company’s annual bonus program pursuant to which Executive shall be eligible to earn an annual bonus with a target amount equal to 85% of the Base Salary (the “Annual Bonus”).  The applicable performance goals for the Annual Bonus shall be determined by the SGH Board (or the compensation committee thereof), and shall be communicated to Executive within the first 90 days of the applicable fiscal year.  The Annual Bonus, if any, earned for a fiscal year shall be paid to Executive on the date selected by the Company and/or the Board, which date shall fall within the two and one-half (21⁄2) month period beginning on the first day of the fiscal year following the fiscal year to which the Annual Bonus relates. The Company and/or the Board shall have the right, but not the obligation, at its sole discretion, (i) to change from time-to-time the payment periods of the Annual Bonus to be semi-annual, quarterly or otherwise, with appropriate holdbacks to year-end within the pre-year-end periods and/or (ii) to change from time-to-time the Company’s fiscal year.

Equity Compensation.

  Executive will be granted equity awards at the discrection of the SGH Board (or a compensation committee thereof).

Employee Benefits.

 

Benefit Plans.

  During the Term, Executive shall be able to participate in employee benefit plans and perquisite and fringe benefit programs on a basis no less favorable 

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than such benefits and perquisites are provided by the Company from time to time to the Company’s other senior executives.  Additionally, Executive is entitled to participate in the Company’s executive benefits program as in place from time-to-time, which currently includes an annual comprehensive physical exam, financial counseling services, life insurance, and disability benefits.

 

Expense Reimbursement.

  Executive shall be entitled to receive prompt reimbursement for all travel and business expenses reasonably incurred and properly accounted for by Executive (in accordance with the policies and procedures established from time to time by the Company) in performing services hereunder.

Indemnification; D&O Coverage.

  Executive shall be subject to the Company’s standard indemnification agreement, which agreement shall be executed by Executive and the Company on or prior to the Effective Date. 

Termination of Employment.

  The Term and Executive’s employment hereunder may be terminated under the following circumstances:

Death.

  The Term and Executive’s employment hereunder shall terminate upon Executive’s death.  Upon any termination of Executive’s employment hereunder as a result of this Section 6(a), Executive’s estate shall be entitled to receive (A) Executive’s Base Salary through the date of termination (the “Accrued Salary”), which shall be paid within fifteen (15) days following the date of termination or such earlier date as may be required by California law, and (B) any earned but unpaid Annual Bonus for any fiscal year preceding the fiscal year in which the termination occurs (the “Accrued Bonus”), which shall be paid at the same time as bonuses are paid to other senior executive officers, but in no event later than the date provided for in Section 3(b) hereof (the Accrued Bonus and the Accrued Salary, including the respective times by which such amounts are to be paid, are hereafter referred to as the “Accrued Amounts”).  All other benefits, if any, due to Executive’s estate following Executive’s termination due to death shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive’s estate shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group.  Executive’s estate shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.

Disability.

  The Company may terminate the Term and Executive’s employment hereunder for Disability.  “Disability” shall mean Executive’s inability, due to physical or mental incapacity, to perform Executive’s duties under this Agreement with substantially the same level of quality as immediately prior to such incapacity for a period of 90 consecutive days or 120 days during any consecutive six-month period.  In conjunction with determining Disability for purposes of this Agreement, Executive hereby (i) consents to any such examinations which are relevant to a determination of whether Executive is mentally and/or physically disabled and (ii) agrees to furnish such medical information as may be reasonably requested.  Upon any termination of Executive’s employment hereunder pursuant to this Section 6(b), Executive shall be entitled to receive payment of the Accrued Amounts.  All other benefits, if any, due to Executive following Executive’s termination by the Company for 

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Disability shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any payments or benefits under any other agreement or any severance plan, policy or program of the Company Group.  Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.

Termination for Cause; Voluntary Termination.

  At any time during the Term, (i) the Company may terminate the Term and Executive’s employment hereunder for “Cause” (as defined below) by Notice of Termination (as defined in Section 6(f)), and (ii) Executive may terminate the Term and Executive’s employment hereunder “voluntarily” (that is, other than by death, Disability or for Good Reason, in accordance with Section 6(a), 6(b) or 6(d), respectively); provided, that Executive will be required to give at least ninety (90) days advance written notice of such termination.  “Cause” shall mean Executive’s: (A) material breach of this Agreement, including failure to substantially perform Executive’s duties, (B) willful failure to carry out, or comply with, in any material respect, any lawful and reasonable directive of the Board, not inconsistent with the terms of this Agreement, (C) commission at any time of any act or omission that results in, or that may reasonably be expected to result in, a conviction, plea of guilty or no contest or imposition of unadjudicated probation for any felony or any crime involving moral turpitude, (D) unlawful use (including being under the influence) or possession of illegal drugs on the Company’s premises or while performing Executive’s duties and responsibilities hereunder, (E) breach of any written policies or procedures of the Company Group that are applicable to Executive and that have previously been provided to Executive, which breach causes or is reasonably expected to cause material harm to any member of Company Group, or (F) commission at any time of any act of fraud, embezzlement, misappropriation, material misconduct, or breach of fiduciary duty against any member of the Company Group (or any of their respective affiliates, predecessors or successors), which, for the avoidance of doubt, shall not include any good faith disputes regarding immaterial amounts that relate to Executive’s expense account, reimbursement claims or other de minimis matters; provided, however, in the case of (A), (B) or (E) above, if any such breach or failure is curable, such breach or failure shall only constitute Cause if Executive fails to cure such breach or failure to the reasonable satisfaction of the Board within fifteen (15) days of the date the Company delivers written notice of such breach or failure to Executive. 

Upon the termination of the Term and Executive’s employment hereunder pursuant to this Section 6(c) by the Company for Cause, Executive shall be entitled to receive Executive’s Base Salary through the date of termination.  Upon the termination of the Term and Executive’s employment hereunder pursuant to this Section 6(c) due to Executive’s voluntary termination, Executive shall be entitled to receive payment of the Accrued Amounts.  All other benefits, if any, due to Executive following Executive’s termination of employment for Cause or due to Executive’s voluntary termination pursuant to this Section 6(c) shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group.  Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.  The termination of Executive’s employment upon the expiration of the Term as a result of Executive’s delivery of a notice of 

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nonrenewal pursuant to Section 1 shall be treated as a voluntary termination by Executive pursuant to this Section 6(c).

Termination for Good Reason or Without Cause Outside of the Change in Control Protection Period.

  At any time outside of the “Change in Control Protection Period” (as defined below) during the Term, (i) Executive may terminate the Term and Executive’s employment hereunder for “Good Reason” (as defined below) and (ii) the Company may terminate the Term and Executive’s employment hereunder without Cause (that is, other than by death, Disability or for Cause, in accordance with Section 6(a), 6(b) or 6(c), respectively).  “Good Reason” shall mean the occurrence, without Executive’s written consent, of any of the following events: (A) a material reduction in the nature or scope of Executive’s responsibilities, duties or authority from those contemplated by this Agreement, (B) a reduction in the then current Base Salary, (C) causing or requiring Executive to report to any person other than the chief executive officer and/or the Board, (D) the relocation of Executive’s primary office to a location that is not within a sixty (60) mile radius of the Company’s offices in Newark, California or (E) any other breach by the Company of a material term of this Agreement, including but not limited to complying with Section 10(d)(iii) by causing any successor to the Company to expressly assume and agree to perform this Agreement; provided, that any such event described in (A) through (E) above shall not constitute Good Reason unless Executive delivers to the Company a Notice of Termination for Good Reason within ninety (90) days after Executive first learns of the existence of the circumstances giving rise to Good Reason, and within thirty (30) days following the delivery of such Notice of Termination for Good Reason the Company has failed to cure the circumstances giving rise to Good Reason.

Upon the termination of Executive’s employment hereunder pursuant to this Section 6(d), Executive shall receive (i) the Accrued Amounts and (ii) subject to Executive’s continued compliance with the provisions of Section 8 and subject to Executive’s execution, delivery and non-revocation of an effective release of all claims against each member of the Company Group substantially in the form attached hereto as Exhibit A (the “Release”) within the sixty (60) day period following the date of the termination of Executive’s employment (such 60-day period, the “Release Period”): (A) severance pay in an aggregate amount equal to seventy-five percent (75%) of Executive’s then current Base Salary; (B) to the extent any Annual Bonus could be earned in the current fiscal year under the terms of the Company’s bonus program but is not yet earned or paid, a prorated bonus (based on the Board’s determination of Company performance through the date of termination), prorated through the date of termination; and (C) payment or reimbursement of health benefit continuation coverage under COBRA or otherwise from the termination date through the earlier of (x) nine (9) months following the termination date or (y) the date Executive becomes eligible for health benefits with another employer, which shall be paid no later than the due date of payments for such coverage; provided that if Executive is no longer eligible for COBRA continuation coverage, the Company may provide a lump sum payment calculated based on the monthly premiums immediately prior to the expiration of COBRA coverage.  The severance amounts provided hereunder will be paid in accordance with the Company’s regular payroll practices in equal or substantially equal payments over the twelve (12) month period following the date of termination, with the first installment being paid on the first payroll date following the date on which the Release has become effective and irrevocable.  Notwithstanding the foregoing, if the Release Period spans two (2) calendar years, then the first installment of the severance pay will commence on the first payroll date that occurs in the second 

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calendar year, with any amounts otherwise payable prior to such payroll date being paid instead on such payroll date.  All other benefits, if any, due Executive following a termination pursuant to this Section 6(d) shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group.  Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.  The termination of Executive’s employment upon the expiration of the Term as a result of the Company’s delivery of a notice of nonrenewal pursuant to Section 1 shall be treated as a termination by the Company without Cause pursuant to this Section 6(d) (unless Executive’s employment is earlier terminated pursuant to Sections 6(a), (b) or (c) hereof).

If a termination of Executive’s employment occurs without Cause or if Executive resigns for Good Reason under this Section 6(d) and such termination or resignation occurs outside of the “Change in Control Protection Period” (as defined below) but within one (1) year after the date when Iain MacKenzie is no longer the chief executive officer or co-chief executive officer of SGH, and subject to Executive’s execution, delivery and non-revocation of a Release within the Release Period then, the health benefit continuation provided in sub-part (C) in the immediately preceding paragraph shall be increased from nine (9) months to twelve (12) months and all unvested equity awards held by Executive that would, but for the termination, vest within one (1) year of the effective date of such termination, (i) shall not expire or terminate until after the expiration of the Release Period and (ii) shall accelerate and vest if and when the Release has become effective and irrevocable; provided, that if the Release has not become effective prior to the expiration of the Release Period or the Release is revoked such unvested equity awards shall expire and be immediately terminated.  

Termination for Good Reason or Without Cause during the Change in Control Protection Period.

  If, during the Change in Control Protection Period (defined below), Executive is terminated by the Company without Cause or Executive resigns for Good Reason, Executive shall be entitled to (i) the Accrued Amounts and (ii) subject to Executive’s execution, delivery and non-revocation of a Release within the Release Period, the following payments and benefits in lieu of any severance benefits under Section 6(d) above: (A) 1.5 times Executive’s then existing Base Salary; (B) 1.5 times the Annual Bonus paid or payable for the most recently completed fiscal year (in addition to the Annual Bonus paid or payable with respect to the most recently completed fiscal year); (C) to the extent any Annual Bonus could be earned in the current fiscal year under the terms of the Company’s bonus program but is not yet earned or paid, a prorated bonus (based on the Board’s determination of Company performance through the date of termination), prorated through the date of termination; (D) payment or reimbursement of health benefit continuation coverage under COBRA or otherwise from the termination date through the earlier of (x) eighteen (18) months following the termination date or (y) the date Executive becomes eligible for health benefits with another employer, which shall be paid no later than the due date of payments for such coverage; provided that if Executive is no longer eligible for COBRA continuation coverage, the Company may provide a lump sum payment calculated based on the monthly premiums immediately prior to the expiration of COBRA coverage; and (E) 100% vesting of all of the Executive’s unvested and outstanding equity awards. The amounts payable under this Section 6(e) shall be paid, at the Company’s sole discretion, in accordance with the Company’s regular payroll practices in equal or substantially 

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equal payments over a period of no longer than twelve (12) months following the date of termination, with the first installment being paid on the first payroll date following the date on which the Release has become effective and irrevocable.  Notwithstanding the foregoing, if the Release Period spans two (2) calendar years, then the first installment will commence on the first payroll date that occurs in the second calendar year, with any amounts otherwise payable prior to such payroll date being paid instead on such payroll date.  All other benefits, if any, due Executive following a termination pursuant to this Section 6(e) shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group.  Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.  For purposes of this Section 6, the “Change in Control Protection Period” means the twelve (12) month period following a “Change in Control” (“Change in Control” as used in this Agreement shall have the meaning as such term is defined in the Saleen Holdings, Inc. 2011 Share Incentive Plan). 

Notice of Termination.

 Any purported termination of the Executive’s employment by the Company or by Executive shall be communicated by written Notice of Termination to the other Party in accordance with Section 10(e) hereof.  For purposes of this Agreement, “Notice of Termination” shall mean a notice that shall indicate the specific termination provision in this Agreement relied upon and shall, to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

Board/Committee Resignation.

  Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and, as applicable, the board of directors (and any committees thereof) of each of the other members of the Company Group. 

Non-Solicitation of Clients; No Hire.

  Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company Group and accordingly agrees as follows:

(a)During the Term and the “Restricted Period” (as defined below), Executive shall not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly, solicit or service, or assist in soliciting or servicing the business of any then current customer or client or “prospective customer or client” (as such term is defined herein), or any supplier, licensee, licensor or other business relation of any member of the Company Group in order to induce such Person to cease doing business with, or reduce the amount of business conducted with, the member of the Company Group, or in any way interfere with the relationship between any then current or prospective customer or client, or any supplier, licensee or business relation of any member of the Company Group:

(i)with whom Executive had personal contact or dealings on behalf of any member of the Company Group during the one-year period preceding Executive’s termination of employment;

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(ii)with whom Executive had knowledge of any member of the Company Group’s plans with respect to such current or prospective customer or client, or supplier, licensee, business or Person;

(iii)with whom any employees reporting to Executive have had personal contact or dealings on behalf of any member of the Company Group during the one-year period immediately preceding Executive’s termination of employment; or

(iv)for whom Executive had direct or indirect responsibility during the one-year immediately preceding Executive’s termination of employment. 

(b)During the Term, Executive shall not directly or indirectly in any place in the world, own any interest in, manage, control, participate in (whether as an officer, director, manager, employee, partner, equity holder, member, agent, representative or otherwise), consult with, render services for, or in any other manner engage in any business engaged in anywhere in the world, by the Company or as conducted by any member of the Company Group as of the date of Executive’s termination, other than any business that is not directly related to the business conducted by any member of the Company Group as of the date hereof, as such business may be extended or expanded, or proposed to be extended or expanded, prior to the date of Executive’s termination; provided, that nothing herein shall prohibit Executive from investing in stocks, bonds, or other securities in any business if: (x) such stocks, bonds, or other securities are listed on any United States securities exchange or are publicly traded in an over the counter market, and such investment does not exceed, in the case of any capital stock of any one issuer, two percent (2%) of the issued and outstanding capital stock or in the case of bonds or other securities, two percent (2%) of the aggregate principal amount thereof issued and outstanding, or (y) such investment is completely passive and no control or influence over the management or policies of such business is exercised by Executive.

(c)During the Restricted Period, Executive shall not, directly or indirectly, solicit, induce or encourage to cease to work with the Company or any member of the Company Group, any independent contractor, consultant or partner then under exclusive contract with any member of the Company Group.

(d)For purposes of this Agreement, the “Restricted Period” means the twelve (12) month period following the date of the termination of Executive’s employment. Termination of Executive’s employment by the Company without Cause or by Executive for Good Reason at any time during the Term is each a “Qualifying Termination”.

(e)In consideration for the covenants contained in Sections 7(a), (b) and (c) and provided that Executive is not otherwise in breach of Sections 7 and 8 hereof or the Release, in the event Executive experiences a Qualifying Termination, the Company shall, during the Restricted Period, pay to Executive payments in the amount of fifty percent (50%) per month of Executive’s monthly Base Salary (the “Restrictive Covenant Payments”), which Restrictive Covenant Payments shall be payable in accordance with the Company’s normal payroll practices. Payments made pursuant to the terms of Section 6 shall count toward any Restrictive Covenant Payments due under this Subsection (e).

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8.Non-Solicitation of Employees/Contractors; Confidentiality; Intellectual Property.

Non-Solicitation of Employees/Contractors.

 During the twelve (12) month period following the termination of Executive’s employment for any reason, Executive shall not, without the prior written consent of the Company, whether on Executive’s own behalf or on behalf of or in conjunction with any Person:

(i)directly or indirectly solicit, induce or encourage any employee of any member of the Company Group to leave the employment of the Company Group; or

(ii)directly hire any employee who was a direct report of Executive and was employed by the Company Group as of the date of Executive’s termination of employment with the Company or who left the employment of the Company Group coincident with, or within one year after, the termination of Executive’s employment with the Company.

Confidentiality.

  

(i)Executive shall not at any time (whether during or after Executive’s employment with the Company or any of its affiliates) (x) retain or use for the benefit, purposes or account of Executive or any other Person (other than the Company or any member of the Company Group) or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information – including, without limitation, trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals – concerning the past, current or future business, activities and operations of the Company or any member of the Company Group and/or any third party that has disclosed or provided any of same to the Company or any member of the Company Group on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

(ii)“Confidential Information” shall not include any information that is (x) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties (y) made legitimately available to Executive by a third party without breach of any confidentiality obligation or (z) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(iii)Except as required by law, Executive shall not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement, provided they agree to maintain the confidentiality of such terms.

(iv)Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information (including without limitation, any patent, invention, copyright, trade secret, 

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trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, or any member of the Company Group (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, any member of the Company Group or their affiliates, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.   

(v)Executive and the Company acknowledge and agree that nothing in this Agreement or otherwise limits Executive’s ability to communicate directly with and provide information, including documents, not otherwise protected from disclosure by any applicable law or privilege to the U.S. Securities and Exchange Commission (the “SEC”), any other federal, state or local governmental agency or commission (“Government Agency”) or self-regulatory organization regarding possible legal violations, without disclosure to the Company. The Company may not retaliate against Executive for any of these activities, and nothing in this Agreement requires Executive to waive any monetary award or other payment that Executive might become entitled to from the SEC or any other Government Agency or self-regulatory organization. 

(vi)Further, nothing in this Agreement precludes Executive from filing a charge of discrimination, unfair labor practice or inappropriate working conditions with the Equal Employment Opportunity Commission or a like charge or complaint with a state or local fair employment or labor Government Agency.  However, once this Agreement becomes effective, Executive may not receive a monetary award or any other form of personal relief from the Company in connection with any such charge or complaint that Executive has filed or is filed on Executive’s behalf. 

Intellectual Property.

    

(i)If Executive creates, invents, designs, develops, contributes to or improves any works of authorship, inventions, intellectual property, materials, documents or other work product (including, without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content or audiovisual materials) (“Works”), either alone or with third parties, at any time during Executive’s employment by the Company or any member of the Company Group and within the scope of such employment and/or with the use of any of the Company Group resources (“Company Works”), Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.  

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(ii)Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media requested by the Company) of all Company Works.  The records will be available to and remain the sole property and intellectual property of the Company at all times.

(iii)Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Company Works.  If the Company is unable for any other reason to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and in Executive’s behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

(iv)Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company or any of its subsidiaries or affiliates any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party.  Executive shall comply with all relevant policies and guidelines of the Company, including, without limitation, policies and guidelines regarding the protection of confidential information and intellectual property and potential conflicts of interest.  Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version.  

(v)Notwithstanding the foregoing, this Section 8(c) is subject to the provisions of California Labor Code Sections 2870, 2871 and 2872.  In accordance with Section 2870 of the California Labor Code, Executive’s obligation to assign Executive’s right, title and interest throughout the world in and to all Company Works does not apply to any Works that Executive developed entirely on Executive’s own time without using the Company’s equipment, supplies, facilities, or Confidential Information except for those Works that relate to either (A) the business of the Company at the time of conception or reduction to practice of the Work, or actual or demonstrably anticipated research or development of the Company or (B) result from any work performed by Executive for the Company.  A copy of California Labor Code Sections 2870, 2871 and 2872 is attached to this Agreement as Exhibit B.  Executive shall disclose all Works to the Company, even if Executive does not believe that Executive is required under this Agreement, or pursuant to California Labor Code Section 2870, to assign Executive’s interest in such Works to the Company.  

(vi)Pursuant to the Defend Trade Secrets Act of 2016, Executive and the Company acknowledge and agree that Executive shall not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition and without limiting the preceding sentence, if Executive 

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files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and may use the trade secret information in the court proceeding, if Executive (X) files any document containing the trade secret under seal and (Y) does not disclose the trade secret, except pursuant to court order.

General

.  It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable (the “Covenants”) if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

Specific Performance

.  Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the Covenants would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach.  In recognition of this fact, Executive agrees that, in the event of such a breach or anticipated or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

10.Miscellaneous.

Executive’s Representations.

  Executive hereby represents and warrants to the Company that (i) Executive has read this Agreement in its entirety, fully understands the terms of this Agreement, has had the opportunity to consult with counsel prior to executing this Agreement and is signing the Agreement voluntarily and with full knowledge of its significance, (ii) the execution, delivery and performance of this Agreement by Executive does not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound, (iii) Executive is not a party to or bound by an employment agreement, non-compete agreement or confidentiality agreement with any other person or entity which would interfere in any material respect with the performance of Executive’s duties hereunder and (iv) Executive shall not use any Confidential Information or trade secrets of any person or party other than a member of the Company Group in connection with the performance of Executive’s duties hereunder.

Mitigation.

  Executive shall have no duty to mitigate Executive’s damages by seeking other employment and, should Executive actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any other compensation except as specifically provided herein.

12

 

Waiver.

  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and an officer of the Company (other than Executive) duly authorized by the Board to execute such amendment, waiver or discharge.  No waiver by either Party of any breach of the other Party of, or compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(d)Successors and Assigns.

(i)This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive other than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(ii)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and, other than as set forth in Section 10(d)(iii), shall not be assignable by the Company without the prior written consent of the Executive (which shall not be unreasonably withheld).

(iii)This Agreement shall be assignable by the Company to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company; provided that, the Company shall require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

Notice.

  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if delivered by overnight courier service, or if mailed by registered mail, return receipt requested, postage prepaid, addressed to the respective addresses or sent via facsimile to the respective facsimile numbers, as the case may be, as set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt; provided, however, that (i) notices sent by personal delivery or overnight courier shall be deemed given when delivered, (ii) notices sent by facsimile transmission shall be deemed given upon the sender’s receipt of confirmation of complete transmission, and (iii) notices sent by registered mail shall be deemed given two days after the date of deposit in the mail.

If to Executive, to such address as shall most currently appear on the records of the Company.

If to the Company, to:

SMART Modular Technologies, Inc.

39870 Eureka Drive

Newark, California 94560-4809

13

 

Attention: Legal Department

 

With a copy, which shall not constitute notice, to:

Silver Lake Partners and
Silver Lake Sumeru
2775 Sand Hill Road, Suite 100
Menlo Park, California  94025 
Fax No.: (650) 233-8125
Attention:  Karen King

 

GOVERNING LAW; CONSENT TO JURISDICTION.

  THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA TO BE APPLIED.  IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF CALIFORNIA WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.  ANY ACTION TO ENFORCE THIS AGREEMENT MUST BE BROUGHT IN, AND THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF, A COURT SITUATED IN ALAMEDA COUNTY, CALIFORNIA.  EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

Set Off.

 The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of any amounts owed by Executive to the Company or any of its affiliates except to the extent any such set-off, counterclaim or recoupment would violate, or result in the imposition of tax under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in which case such right shall be null and void.

Compliance with IRC Section 409A.

  Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) to the extent necessary to comply with the requirements of Section 409A of the Code until the first business day that is more than six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral 

14

 

will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax.  In the event that payments under this Agreement are deferred pursuant to this Section 10(h) in order to prevent any accelerated tax or additional tax under Section 409A of the Code, then such payments shall be paid at the time specified under this Section 10(h) without any interest thereon.  The Company shall consult with Executive in good faith regarding the implementation of this Section 10(h); provided that neither the Company nor any member of the Company Group, employees or representatives shall have any liability to Executive with respect to the imposition of any early or additional tax under Section 409A of the Code, including, without limitation, under Section 10(i).  Notwithstanding anything to the contrary herein, to the extent required by Section 409A of the Code, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean “Separation from Service.”  For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code.  Notwithstanding anything to the contrary herein, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A of the Code, (x) the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year, (y) the reimbursements for expenses for which Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (z) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

280G Cutback.  

Notwithstanding any other provision of this Agreement to the contrary, if payments made or benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made.  “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999.  The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the 

15

 

Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company and reasonably acceptable to Executive prior to a Change in Control (the “Accounting Firm”).  In the event of any mistaken underpayment or overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2).  Any reduction in payments required by this Section 10(i) shall, to the extent possible, be made in a manner does not violate the provisions of Section 409A of the Code and shall occur in the following order: (1) any cash severance, (2) any other cash amount payable to Executive, (3) any benefit valued as a “parachute payment,” and (4) the acceleration of vesting of any equity-based awards.  

Severability of Invalid or Unenforceable Provisions.

  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

Advice of Counsel and Construction.

  Each Party acknowledges that such Party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement.  Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each Party.

Entire Agreement.

  This Agreement constitutes the entire agreement between the parties as of the Effective Date and supersedes all previous agreements and understandings between the Parties with respect to the subject matter hereof. 

Withholding Taxes.

  The Company shall be entitled to withhold from any payment due to Executive hereunder any amounts required to be withheld by applicable tax laws or regulations.

Section Headings.

  The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part of this Agreement.

Cooperation.

  During the Term and at any time thereafter, Executive agrees to cooperate (i) with the Company in the defense of any legal matter involving any matter that arose during Executive’s employment with the Company or any other member of the Company Group and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the Company or any other member of the Company Group.  The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation. 

Survival.

  Sections 5, 7, 8 and 9 shall survive and continue in full force in accordance with their terms notwithstanding any termination for any reason of this Agreement or 

16

 

of the Term or of Executive’s employment with the Company or any other member of the Company Group.

Continuation of Employment; Termination On or After Expiration of the Term.

 Unless the Parties otherwise agree in writing, continuation of Executive’s employment with the Company or any other member of the Company Group beyond the expiration of the Term shall be deemed an employment “at-will” and shall not be deemed to extend any of the provisions of this Agreement, and Executive’s employment may thereafter be terminated “at-will” by Executive or the Company.

Counterparts.

  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

[Signature page follows.]

 

17

 

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

 

 

SMART Modular Technologies, Inc.

 

By:/s/ IAIN MACKENZIE      

Name: Iain MacKenzie

Title: President & CEO

EXECUTIVE

 

/s/ JACK PACHECO

Jack Pacheco

 

 

 

 

 

[Signature Page to Employment Agreement]

 

 

18

 

 

EXHIBIT A

GENERAL RELEASE

THIS AGREEMENT AND RELEASE, dated as of _______, 20__ (this “Agreement”), is entered into by and between ____________________ (“Executive”) and ____________ (the “Company”).

WHEREAS, Executive is currently employed with the Company; and

WHEREAS, Executive’s employment with the Company will terminate effective as of ____, 20__;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and other good and valuable consideration, Executive and the Company hereby agree as follows:

1.Executive shall be provided severance pay and other benefits (the “Severance Benefits”) in accordance with the terms and conditions of Section 6 of the amended and restated employment agreement by and between Executive and the Company, dated as of December 19, 2017 (the “Employment Agreement”); provided, that no such Severance Benefits shall be paid or provided if Executive revokes this Agreement pursuant to Section 5 below.

2.Executive, for and on behalf of himself and Executive’s heirs, successors, agents, representatives, executors and assigns, hereby waives and releases any common law, statutory or other complaints, claims, demands, expenses, damages, liabilities, charges or causes of action (each, a “Claim”) arising out of or in any way relating to Executive’s employment or termination of employment with, Executive’s serving in any capacity in respect of, or Executive’s status at any time as a holder of any securities of, any of the Company and any of its affiliates (collectively, the “Company Group”), both known and unknown, in law or in equity, which Executive  may now have or ever had against any current or former member of the Company Group or any current or former equityholder, investor, agent, representative, administrator, trustee, attorney, insurer, fiduciary, employee, director or officer of any member of the Company Group, including their successors and assigns (collectively, the “Company Releasees”), including, without limitation, any Claim for any severance benefit which might have been due Executive under any previous agreement executed by and between any member of the Company Group and Executive; any Claim related to compensation or benefits from any of the Company Releasees, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in any member of the Company Group; any Claim for breach of contract, wrongful termination or breach of the implied covenant of good faith and fair dealing; any tort Claim, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended); and any complaint, charge or cause of action arising out of Executive’s employment with any member of the Company Group under the Age Discrimination in Employment Act of 1967 (“ADEA,” a law which prohibits discrimination on the basis of age 

1

against individuals who are age 40 or older), the National Labor Relations Act, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, the Family Medical Leave Act, the Equal Pay Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code,  California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Employee Retirement Income Security Act of 1974 (except for any vested benefits under any tax qualified benefit plan), the Immigration Reform and Control Act, the Workers Adjustment and Retraining Notification Act, the Fair Credit Reporting Act; any public policy, contract, tort, or common law; all other federal, state and local statutes, ordinances and regulations and any basis for recovering costs, fees, or other expenses including attorneys' fees incurred in these matters..  By signing this Agreement, Executive acknowledges that Executive intends to waive and release any rights known or unknown Executive may have against any and all of the Company Releasees under these and any other laws; provided that, Executive does not waive or release Claims (i) with respect to the right to enforce this Agreement or those provisions of the Employment Agreement that expressly survive the termination of Executive’s employment with the Company, (ii) with respect to any vested right Executive may have under any employee pension or welfare benefit plan of any member of the Company Group or (iii) any rights to indemnification preserved by Section 5 of the Employment Agreement.

3.Executive has read Section 1542 of the California Civil Code, which states in full: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” Executive expressly waives any rights that Executive may have under Section 1542 of the California Civil Code to the full extent that Executive may lawfully waive such rights pertaining to a general release of claims, and Executive affirms that Executive is releasing all known or unknown claims that Executive has or may have against the Company or any of the Company Releasees as stated in this Release.

THIS MEANS THAT, BY SIGNING THIS RELEASE, EXECUTIVE WILL HAVE WAIVED ANY RIGHT EXECUTIVE MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST ANY OF THE COMPANY RELEASEES BASED ON ANY ACTS OR OMISSIONS OF ANY OF THE COMPANY RELEASEES UP TO THE DATE OF THE SIGNING OF THIS RELEASE.  Notwithstanding the above, nothing in this AGREEMENT shall prevent the Executive from (i) initiating or causing to be initiated on EXECUTIVE’S behalf any complaint, charge, claim or proceeding against the Company before any local, state or federal agency, court or other body challenging the validity of the waiver of EXECUTIVE’S claims under ADEA contained in this AGREEMENT (but no other portion of such waiver); or (ii) initiating or participating in (but not benefiting from) 

2

an investigation or proceeding conducted by the Equal Employment Opportunity Commission with respect to ADEA.

4.Executive acknowledges that Executive has been given [twenty-one (21)]1 days from the date of receipt of this Agreement to consider all of the provisions of the Agreement and, to the extent Executive has not used the entire [21-day] period prior to executing this Agreement, Executive does hereby knowingly and voluntarily waive the remainder of said [21-day period].  EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY AND FULLY UNDERSTANDS THAT BY SIGNING BELOW EXECUTIVE IS GIVING UP CERTAIN RIGHTS WHICH EXECUTIVE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE COMPANY RELEASEES, AS DESCRIBED HEREIN AND THE OTHER PROVISIONS HEREOF.  EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT AND EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.

5.Executive shall have seven (7) days from the date of Executive’s execution of this Agreement to revoke the release, including with respect to all claims referred to herein (including, without limitation, any and all claims arising under ADEA).  If Executive revokes this Agreement, Executive will be deemed not to have accepted the terms of this Agreement.

6.Executive hereby agrees not to defame or disparage any member of the Company Group or any executive, manager, employee, director, or officer of any member of the Company Group in any medium to any person without limitation in time.  Notwithstanding this provision, Executive may confer in confidence with Executive’s legal representatives and make truthful statements as required by law.

7.Each party and its counsel have reviewed this Agreement and have been provided the opportunity to review this Agreement and accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.  Instead, the language of all parts of this Agreement shall be construed as a whole, and according to their fair meaning, and not strictly for or against either party.

[Signature Page Follows]

	
	 

	
1
	
 Note to Draft: If Executive’s termination of employment is in conjunction with the termination of other Company employees, period to be forty-five (45) days.

3

 

 

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

 

SMART Modular Technologies, Inc.

	
 
	

	
By:  
Name:

Its:  

EXECUTIVE

_________________________
Jack Pacheco

 

4

 

 

EXHIBIT B

 

California Labor Code Sections 2870, 2871 and 2872

SECTION 2870

(a)Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

	
 
	
(1)
	
Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

	
 
	
(2)
	
Result from any work performed by the employee for the employer.

(b)To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

SECTION 2871

No employer shall require a provision made void and unenforceable by Section 2870 as a condition of employment or continued employment.  Nothing in this article shall be construed to forbid or restrict the right of an employer to provide in contracts of employment for disclosure, provided that any such disclosures be received in confidence, of all of the employee's inventions made solely or jointly with others during the term of his or her employment, a review process by the employer to determine such issues as may arise, and for full title to certain patents and inventions to be in the United States, as required by contracts between the employer and the United States or any of its agencies.

SECTION 2872

If an employment agreement entered into after January 1, 1980 contains a provision requiring the employee to assign or offer to assign any of his or her rights in any invention to his or her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the provisions of Section 2870.  In any suit or action arising thereunder, the burden of proof shall be on the employee claiming the benefits of its provisions.

 

 

1Exhibit 10.41

 

TECHNOLOGY
SERVICES AGREEMENT

 

This
Technology Services Agreement (this “Agreement”) is made as of March 21, 2018 (the “Effective Date”),
by and between ProximaX Limited, a Gibraltar private company limited by shares, with a place of business at E-6-3, BLOCK E PLAZA
GLOMAC, NO. 6 JALAN SS 7/19, KELANA JAYA, 47301 PETALING JAYA, SELANGOR DARUL EHSAN, MALAYSIA. (“Customer”),
and PeerStream, Inc., a Delaware corporation, with a principal place of business at 122 East 42nd Street, Suite 2600,
New York, NY 10168 (“Provider”).

 

RECITALS

 

WHEREAS,
Provider is engaged in the design and development of a media streaming and secure messaging protocol known as the “PeerStream
Protocol” (the “Provider Protocol”);

 

WHEREAS,
Customer is developing a protocol to enhance existing blockchain technology by integrating storage, streaming, consensus algorithms,
and other features, known as “ProximaX” (the “Customer Protocol”); and

 

WHEREAS,
the parties wish for Provider to provide certain development and related services to Customer to facilitate the implementation
of the Provider Protocol into the Customer Protocol, according to the terms set forth herein.

 

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

 

		1.	DEFINITIONS.
                                         The following terms will have the following meanings:

 

		1.1.	“Affiliate”
                                         means, with respect to either party, any entity that controls, is controlled by, or is
                                         under common control with such party.

 

		1.2.	“Background
                                         IP” means any IP Rights owned by a party prior to the Effective Date or acquired
                                         or developed by such party outside of the scope of this Agreement. For avoidance of doubt,
                                         Provider’s Background IP includes the Provider Protocol and its components.

 

		1.3.	“Compensation”
                                         means cash, equity, cash equivalent, or equity equivalent compensation, as further specified
                                         in the applicable SOW.

 

		1.4.	“Confidential
                                         Information” means any technical, financial, business or other information,
                                         whether in tangible or intangible form, that is either marked or designated as confidential
                                         or proprietary or that, due to the nature of the information or the circumstances of
                                         its disclosure, should be reasonably understood to be confidential. Confidential Information
                                         does not include any information that the receiving party can establish: (i) is or becomes
                                         generally known or available to the public through no fault of the receiving party; (ii)
                                         was known to the receiving party, without obligations of confidentiality, prior to receipt
                                         from the other party; (iv) was subsequently provided to the receiving party by a third
                                         party, without obligations of confidentiality; or (iii) was independently developed by
                                         the receiving party without reference to any Confidential Information of the other party.

 

		1.5.	“Custom
                                         Development” means a custom Development created by Provider specifically to
                                         facilitate the implementation of the Provider Protocol with and into the Customer Protocol
                                         and which does not have general applicability for solutions other than the Provider Protocol.

 

     

    

    

 

		1.6.	“Deliverables”
                                         means the deliverables set forth in each SOW.

 

		1.7.	“Development”
                                         means any and all inventions, works of authorship, and other developments created by
                                         Provider in connection with the Services.

 

		1.8.	“IP
                                         Rights” means any rights under copyright, patent, trade secret, or other intellectual
                                         property laws.

 

		1.9.	“Retained
                                         Development” means any Development made by Provider that is either a derivative
                                         work of, or an improvement to, any of Provider’s Background IP, or that has general
                                         applicability for solutions other than the Provider Protocol.

 

		1.10.	“Services”
                                         means the development, integration, or other services provided by Provider hereunder,
                                         as may be further described in the applicable SOW.

 

		1.11.	“Specifications”
                                         means the technical specifications set forth in the applicable SOW.

 

		1.12.	“SOW”
                                         means one or more statements of work executed by Customer and Provider, specifying in
                                         detail the Services to be provided by Provider and any applicable fees, timelines, and
                                         Deliverables. An initial SOW agreed to by the parties is attached hereto as Exhibit A.

 

		2.	SCOPE
                                         OF SERVICES.

 

		2.1.	Generally.
                                         Provider will provide the Services to Customer, and Customer will compensate Provider
                                         for such Services, on the terms and conditions set forth in this Agreement and the applicable
                                         SOW. Each party will provide all reasonable strategic, technical, and other cooperation
                                         to facilitate the timely completion of the Services. For the avoidance of doubt, it is
                                         hereby understood and agreed by the parties hereto that the Services to be provided by
                                         Provider to Customer under this Agreement (or any SOW attached hereto) shall not involve
                                         the assistance by Provider with the marketing and sale of the tokens in the ICO (as defined
                                         on Exhibit A), and that any and all such activities shall be conducted solely by Customer
                                         and the ICO Affiliates (as defined on Exhibit A).

 

		2.2.	Project
                                         Manager. The parties shall each appoint a project manager to serve as the primary
                                         point of contact on each SOW and who has authorization to make any operational decisions
                                         required in connection with Provider’s provision of the Services.

 

		2.3.	Changes.
                                         If Customer wishes to change the scope of any SOW, it will make a written request to
                                         Provider’s project manager. The parties will review the proposed change and determine
                                         the effect that the implementation of the change will have on price, schedule, and Deliverables.
                                         Upon completion of the review, any changes in price, schedule or other terms will be
                                         documented. No requested changes will be binding until agreed to in writing by both parties.

 

		2.4.	Personnel.
                                         Provider will have the right to determine which of its employees, agents, representatives,
                                         or subcontractors will be assigned to perform Services under this Agreement.

 

		3.	COMPENSATION.

 

		3.1.	Compensation.
                                         Customer will pay Provider the applicable Compensation in accordance with the terms and
                                         conditions of the SOW.

 

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		3.2.	Invoices;
                                         Payment. For any cash consideration, Provider will invoice Customer as set forth
                                         in the SOW. Customer will pay any invoiced amounts within 30 days from receipt of invoice.
                                         Any undisputed amount payable to Provider under this Agreement that is not paid within
                                         30 days after receipt of invoice will bear interest at a rate equal to the lower of 1%
                                         per month, or the highest rate permitted by law.

 

		3.3.	Taxes.
                                         All taxes will be separately itemized on each invoice, indicating the tax and the charges
                                         against which such tax was calculated. At Customer’s request, Provider will provide
                                         documentation supporting the collection of any expense, tax or duty, Provider’s
                                         right to collect it and proof that appropriate taxes were paid. In no event will Customer
                                         pay any taxes in respect of Provider’s net income or property.

 

		4.	TERM;
                                         TERMINATION.

 

		4.1.	Term.
                                         This Agreement commences on the Effective Date and, unless terminated by the parties
                                         in accordance with this Section 4, continues for the longer of one year or so long as
                                         an SOW remains in effect (the “Term”).

 

		4.2.	Termination
                                         for Cause. Either party may, by delivery of written notice to the other party, terminate
                                         a particular SOW if: (a) the other party materially breaches its obligations under the
                                         SOW and fails to cure such breach within 30 days after receipt of written notice of same
                                         from the non-breaching party; or (b) the other party is adjudicated insolvent, admits
                                         in writing its inability to pay its debts as they mature, makes an assignment for the
                                         benefit of its creditors, is adjudged bankrupt or becomes the subject of execution, dissolution,
                                         liquidation or bankruptcy proceedings, whether voluntarily or involuntarily. The termination
                                         of a single SOW will have no effect upon the parties’ respective obligations under
                                         any other SOW in effect under this Agreement.

 

		4.3.	Effect.
                                         Termination or expiration of this Agreement will not affect any liabilities of the parties
                                         accruing during the Term. Sections 5 through 10 of this Agreement will survive any termination
                                         or expiration thereof.

 

		4.4.	Retroactivity.
                                         The parties acknowledge that Provider began providing Services hereunder as of November
                                         27, 2017 based on a mutual understanding with Customer, that this Agreement confirms
                                         and memorializes the understanding pursuant to which Provider has been providing services
                                         to Customer, and that any Services, Developments, Deliverables, and IP Rights provided
                                         or developed by Provider in connection with such prior Services will be equally governed
                                         by this Agreement as though provided or developed during the Term.

 

		5.	INTELLECTUAL
                                         PROPERTY

 

		5.1.	Background
                                         IP. Each party will retain ownership of its Background IP, and nothing in this Agreement
                                         will be deemed to grant any such ownership to the other party.

 

		5.2.	Custom
                                         Developments. Subject to Customer’s payment of the Compensation: (i) Customer
                                         will own all right, title, and interest in and to the Custom Developments, including
                                         any IP Rights therein; and (ii) Provider hereby assigns, and will automatically assign,
                                         to Customer any right, title, or interest Provider may have in any Custom Developments,
                                         including any IP Rights therein.

 

		5.3.	Retained
                                         Developments. Provider will retain all right, title, and interest in and to any Retained
                                         Developments, including any IP Rights therein. Customer hereby assigns, and will automatically
                                         assign, to Provider any right, title, or interest Customer may have in any Retained Developments,
                                         including any IP Rights therein.

 

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		5.4.	Deliverables.
                                         Subject to Customer’s payment of the Compensation: (i) all Deliverables will be
                                         owned by Customer, subject to Provider’s retention of rights in any Provider Background
                                         IP and Retained Developments (collectively, “Provider IP”); and (ii)
                                         to the extent the Deliverables incorporate any Provider IP, Provider grants to Customer
                                         a non-exclusive, worldwide, perpetual, irrevocable, sub-licensable, transferable, royalty-free,
                                         fully-paid license to use, reproduce, create derivative works, perform and display the
                                         Provider IP as incorporated in the Deliverables. For avoidance of doubt, this license
                                         does not give Customer the right to reverse-engineer or otherwise separate any Provider
                                         IP from the Deliverables in which such Provider IP is incorporated.

 

		5.5.	Further
                                         Assurances. Each party will perform all lawful acts reasonably requested by the other
                                         party in order to perfect, maintain, or evidence the rights and licenses set forth in
                                         this Section 5.

 

		6.	CONFIDENTIALITY

 

		6.1.	Protection.
                                         Each party shall protect the other’s Confidential Information from unauthorized
                                         use or disclosure using the same degree of care that it uses to protect its own confidential
                                         information, but in no event less than reasonable care. Neither party will use the other’s
                                         Confidential Information other than as necessary to fulfill its obligations or exercise
                                         its rights under this Agreement. Neither party shall disclose the other’s Confidential
                                         Information to third parties (except as required by law or to that party’s attorneys,
                                         accountants and other advisors as reasonably necessary). The receiving party may disclose
                                         Confidential Information of the disclosing party if required to be disclosed by law,
                                         provided the receiving party has promptly notified the disclosing party of such requirement
                                         and allowed the disclosing party a reasonable time to oppose such requirement.

 

		6.2.	Survival;
                                         Return. The obligations of confidentiality hereunder with regards to any particular
                                         Confidential Information will survive for the greater of five years, or so long as such
                                         Confidential Information remains protected as a trade secret under applicable law. Each
                                         party will return all copies of the other party’s Confidential Information in its
                                         possession or control upon the reasonable request of the other party, except for (a)
                                         copies contained in backup media created in the ordinary course of business or (b) copies
                                         retained by legal counsel or as required by law. Any such retained copies will remain
                                         subject to the obligations of confidentiality set forth herein.

 

		7.	WARRANTIES;
                                         DISCLAIMER

 

		7.1.	Mutual
                                         Warranties. Each party represents and warrants that: (i) it is duly organized, validly
                                         existing and in good standing under the laws of the jurisdiction of its formation or
                                         organization and has full power and authority to enter into and perform its obligations
                                         and engage in the activities contemplated under this Agreement; (ii) its entry into this
                                         Agreement and performance hereunder does not and will not conflict with or violate any
                                         agreement or obligation it has to any third party; and (iii) it is and shall remain fully
                                         in compliance with all applicable laws, rules, and regulations.

 

		7.2.	Customer
                                         Warranties and Covenants. Customer hereby represents and warrants to, and covenants
                                         with, Provider that:

 

		(i)	either
                                         Customer or one or more of the ICO Affiliates (as defined on Exhibit A attached
                                         hereto) shall control, and shall be responsible for the content of, any and all statements
                                         made in any and all materials (including, without limitation, slide decks, power point
                                         presentations, “sizzle reels”, business plans and web site descriptions)
                                         that are prepared or provided to potential investors in connection with the ICO (as defined
                                         on Exhibit A attached hereto), including, without limitation, the white paper
                                         (the “White Paper”) with respect to the new “XPX” cryptocurrency
                                         (such cryptocurrency, the “Token”, and all of the aforementioned materials,
                                         the “Marketing Materials”);

 

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		(ii)	to
                                         the extent that Provider makes any suggestions (or provides any advice) with respect
                                         to the content of the Marketing Materials, or provides any content to be inserted into
                                         the Marketing Materials, the decision as to whether or not (and to what extent) such
                                         suggestions, advice or content shall be incorporated into the Marketing Materials shall
                                         be made by Customer or the applicable ICO Affiliate, and not by Provider;

 

		(iii)	neither
                                         Customer nor any of the ICO Affiliates is an “affiliate” of Provider (as
                                         such term is defined in Rule 405 promulgated under the Securities Act of 1933, as amended);

 

		(iv)	Provider
                                         does not have any ability, whether by agreement, ownership of securities or otherwise,
                                         to control the business, properties or affairs of either Customer or any of the ICO Affiliates;

 

		(v)	no
                                         executive officer of Provider or member of Provider’s Board of Directors currently
                                         serves, or has served within the past six (6) months, as an executive officer or member
                                         of the Board of Directors (or similar governing body) of Customer or any of the ICO Affiliates;

 

		(vi)	Customer
                                         and the ICO Affiliates shall use their best efforts to ensure that residents of the United
                                         States do not purchase or otherwise acquire Tokens in the ICO, or that the marketing
                                         activities relating to the ICO do not target residents of the United States, which efforts
                                         shall include, without limitation, the engagement of reasonably appropriate third party
                                         verification services, and the verification of the physical and IP addresses of all of
                                         the participants in the ICO;

 

		(vii)	neither
                                         Customer nor any of the ICO Affiliates, nor any affiliates of any of the foregoing, has
                                         taken any actions to solicit the purchase of the Tokens in the ICO by residents of the
                                         United States; and

 

		(viii)	the
                                         statements to be set forth in the Marketing Materials, when used in connection with the
                                         marketing of the ICO, will be true, correct and complete in all material respects, including,
                                         without limitation, Sections 5.1, 5.2 and 5.3 of the White Paper (relating to the anticipated
                                         development roadmap for the Token for 2018, 2019 and subsequent periods), Section 5.5
                                         of the White Paper (relating to ongoing projects), Section 6.1 of the White Paper (relating
                                         to the distribution of the Token) and Section 7 of the White Paper (relating to the use
                                         of funds to be received from the ICO), and will not contain any material misstatements
                                         or omissions.

 

		7.3.	Provider
                                         Warranties. For a period of 90 days from performance or delivery, as applicable (the
                                         “Warranty Period”), Provider represents and warrants that the Services
                                         will be performed in a professional and workmanlike manner, and that the Deliverables
                                         will materially conform to the Specifications. Customer’s exclusive remedy, and
                                         Provider’s sole obligation, in the event of a breach of warranty during the Warranty
                                         Period, will be for Provider to promptly re-perform, repair, or replace the affected
                                         Service or Deliverable at no additional charge.

 

		7.4.	DISCLAIMER.
                                         EXCEPT AS EXPRESSLY SET FORTH ABOVE, THE SERVICES AND DELIVERABLES ARE PROVIDED AS IS
                                         AND AS AVAILABLE AND PROVIDER MAKES NO WARRANTIES, WHETHER EXPRESS, STATUTORY, OR IMPLIED,
                                         INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
                                         TITLE, OR NON-INFRINGEMENT.

 

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		8.	LIMITATION
                                         OF LIABILITY

 

TO
THE MAXIMUM EXTENT PERMITTED BY LAW, AND REGARDLESS OF WHETHER A CLAIM ARISES OUT OF CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY,
OR ANY OTHER LEGAL OR EQUITABLE THEORY, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR: (A) SPECIAL, INCIDENTAL,
INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST DATA, OR LOST BUSINESS,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER ARISING OUT OF CONTRACT, TORT, NEGLIGENCE, STRICT
LIABILITY, OR ANY OTHER LEGAL OR EQUITABLE THEORY; OR (B) DAMAGES IN EXCESS OF THE AMOUNT OF COMPENSATION PAID BY CUSTOMER TO
PROVIDER IN THE 12 MONTHS PRECEDING THE CLAIM. THIS SECTION WILL NOT LIMIT A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION
9.

 

		9.	INDEMNITY

 

		9.1.	Indemnity.
                                         Each party will indemnify, defend, and hold harmless the other party against any liabilities,
                                         costs, and expenses (including without limitation reasonable attorney’s fees) incurred
                                         in connection with any third party claims to the extent based on (i) a breach of the
                                         representations, warranties and covenants of such party contained in Section 7 of this
                                         Agreement; or (ii) an allegation that any products or materials provided by the indemnifying
                                         party infringe or misappropriate any third party IP Rights.

 

		9.2.	Procedure.
                                         In the event of an Indemnified Claim, the party seeking indemnity will: (i) provide the
                                         other party prompt written notice of such claim, provided that no delay will affect the
                                         indemnifying party’s obligations except to the extent such delay was materially
                                         prejudicial to it); (ii) grant the indemnifying party the right to defend any such claim
                                         with its counsel of choice, provided that the indemnifying party will not settle such
                                         claim in any way that imposes any financial or other liabilities or obligations on the
                                         indemnified party, except with prior written consent of the indemnified party; and (iii)
                                         provide such assistance and information as the indemnifying party may reasonably require
                                         to settle or oppose such claims, at the indemnifying party’s expense. The indemnified
                                         party may participate in the defense or settlement of such claim at its own expense and
                                         with its own choice of counsel.

 

		9.3.	Mitigation.
                                         In addition to Provider’s obligations under Section 9.1, if any Deliverable is
                                         held, or in Provider’s opinion is likely to be held, to infringe or misappropriate
                                         any third party’s IP Rights, Provider may, at its expense and option: (a) procure
                                         the right for Customer to continue using the Deliverable; or (b) replace the Deliverable
                                         with a non-infringing product materially conforming to the Specifications; or (c) modify
                                         the Deliverable to make it non-infringing while materially conforming to the Specifications.
                                         If none of the foregoing options are commercially feasible, Provider may terminate this
                                         Agreement and refund Customer any prepaid fees for such infringing Deliverable.

 

		10.	GENERAL.

 

		10.1.	Force
                                         Majeure. Neither party will be liable for any failure or delay in its performance
                                         hereunder to the extent due to any cause beyond its reasonable control, which may include
                                         natural disasters, acts of war, acts of God, earthquake, flood, fire, freezing or other
                                         casualty, embargo, riot, sabotage, governmental act, pervasive failure of the Internet,
                                         failure by telecommunications providers, terrorism and civil commotion. The non-affected
                                         party may terminate this Agreement if such cause prevents the other party’s performance
                                         for a period exceeding 60 days.

 

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		10.2.	Independent
                                         Parties. The parties are independent contractors, and nothing in this Agreement will
                                         be deemed to create any partnership, joint venture, principal-agent or employer-employee
                                         relationship between the parties.

 

		10.3.	Severability.
                                         If any provision in this Agreement is invalid or unenforceable, that provision will be
                                         construed, limited, modified or, if necessary, severed, to the extent necessary, to eliminate
                                         its invalidity or unenforceability, and the other provisions of this Agreement will remain
                                         in full force and effect.

 

		10.4.	Assignment.
                                         Neither party may assign this Agreement, except to an Affiliate, without the other party’s
                                         prior written consent (which will not be unreasonably withheld). Any attempt to assign
                                         this Agreement in violation of this section, will be null and void. This Agreement will
                                         be binding upon the parties hereto and their heirs, successors, and assigns.

 

		10.5.	Waiver.
                                         No waiver of any right under this Agreement shall be deemed effective unless contained
                                         in writing signed by a duly authorized representative of the waiving party, and no waiver
                                         of any past or present right arising from any breach or failure to perform shall be deemed
                                         to be a waiver of any future right arising under this Agreement.

 

		10.6.	Governing
                                         Law. This Agreement is entered into and governed by the laws of the State of New
                                         York, without reference to conflict of laws principles. The parties hereby consent and
                                         submit to the exclusive jurisdiction of the federal and state courts in New York, New
                                         York to resolve any disputes arising in connection with this Agreement.

 

		10.7.	Notices.
                                         Except as otherwise provided in this Agreement, any notice required or permitted to be
                                         sent by one of the parties shall be delivered by hand, by overnight courier, by facsimile,
                                         or by registered mail, return receipt requested, to the address of the parties first
                                         set forth in this Agreement or to such other address of the parties designated in writing
                                         in accordance with this subparagraph. Notice will be deemed given when delivered by hand,
                                         the following day after being sent by overnight courier, when electronically confirmed
                                         after being sent by facsimile and three (3) business days after being sent by registered
                                         mail.

 

		10.8.	Entire
                                         Agreement. This Agreement, together with all Exhibits hereto and any SOWs incorporated
                                         hereunder, constitutes the entire agreement between the parties concerning the subject
                                         matter hereof and supersedes and replaces any prior or contemporaneous agreements or
                                         understandings regarding such subject matter. The terms of this Agreement may be modified
                                         only by a writing that expressly references this Agreement and is executed by the parties.

 

		10.9.	Execution;
                                         Counterparts. This Agreement may be executed in one or more counterparts (including
                                         electronic .pdf counterparts), each of which shall be deemed an original and all of which
                                         together shall constitute but one instrument.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized representatives as of the Effective
Date.

 

	PEERSTREAM, INC.	 	PROXIMAX LIMITED 
	 	 	 
	By: /s/ Alexander Harrington	 	By: /s/ Kian Lon WONG
	 	 	 
	Name: Alexander Harrington	 	Name: Kian Lon WONG
	 	 	 
	Title: CEO	 	Title: Director

 

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Exhibit
A

 

Statement
of Work No. 1

 

	Request #	 	Request
 Date	 	Target
 Delivery
 Date	 	 	Deliverable	 	Supporting Tasks
	1	 	11/27/2017	 	12/04/2017	 	 	Establish initial Dev Team	 	 

                                                                                                                ●     Introduction
to client/establish Telegram group (Lon)

	 	 	 	 	 	 	 	 	 	 
	2	 	11/27/2017	 	12/11/2017	 	 	Architecture draft for Smartproof streaming and messaging layer	 	●     Present first draft architecture to Lon and Alvin (Team lead)

                                                                                ●     Approval to proceed with R&D with weekly updates

	 	 	 	 	 	 	 	 	 	 
	3	 	01/24/2018	 	03/31/2018	 	 	R&D and Code Development - Milestone #1 - Q2’18	 	●     Defining
dynamic data store structure and event bus.

                                                                                ●     Architecting node ecosystem and routing layer.

                                                                                ●     Implementing blockchain communication layer.

	 	 	 	 	 	 	 	 	 	 
	4	 	01/24/2018	 	06/31/2018		 	R&D and Code Development - Milestone #2 - Q3’18	 	●     Developing
node ecosystem and routing layer.

                                                                                                    ●     Developing discovery ecosystem.

                                                                                                    ●     Ensuring signal protocol compatibility to support Dapp requirements.

	 	 	 	 	 	 	 	 	 	 
	5	 	01/24/2018	 	09/31/2018		 	R&D and Code Development - Milestone #3 - Q4’18	 	●     Establishing
client side SDK/APIs.

                                                                                                    ●     Developing commercial centralized nodes.

                                                                                                    ●     Working on media delivery quality.

                                                                                                    ●     Getting
the first beta platform out publicly with bootstrapped set of nodes.

 

Target
dates above are targets and estimates only. Customer acknowledges that any delays in providing necessary information or cooperation
to Provider, or any changes in the scope or assumptions of the project, may result in unanticipated delays.

 

Compensation:

 

It
is anticipated that Customer or its affiliates (the “ICO Affiliate”) will launch an initial coin offering of
the new “XPX” cryptocurrency (the “ICO”), of which Customer or one of the ICO Affiliates will be
the issuer. The ICO will either be consummated (a “Consummation”) or cancelled (a “Cancellation”),
at the discretion of Customer or one or more of the ICO Affiliates, provided that the ICO will not be Cancelled if it is able
to raise at least $30,000,000 USD.

 

All
amounts listed herein are in USD, and may be measured in cash or in an equivalent value of cryptocurrencies (provided such cryptocurrencies
are of a type that was accepted from subscribers in the ICO) based on the then-current exchange rate listed on coinmarketcap.com.

 

Provided
the ICO is Consummated and raises at least $30,000,000, then:

 

		1.	Customer
                                         will transfer, or ensure that the ICO Affiliate transfers, to Provider 2.4% of all initial
                                         XPX stakes on the date of the ICO Consummation, and will hold, or ensure that the ICO
                                         Affiliate holds, an additional 2% of all initial XPX stakes in reserve for payment for
                                         future services to be provided by Provider, as agreed upon by the parties from time to
                                         time; and

 

		2.	Customer
                                         will also pay, or ensure that the ICO Affiliate pays, Provider:

 

		●	$5,000,000
                                         upon Consummation of the ICO;

 

		●	$2,500,000
                                         upon delivery of item 4 in the table above (R&D and Code Development - Milestone
                                         #2 - Q3’18); and

 

		●	$2,500,000
                                         upon delivery of item 5 in the table above (R&D and Code Development - Milestone
                                         #3 - Q4’18).

 

If
either: (i) the ICO does not raise at least $30,000,000 USD, or (ii) the $5,000,000 payment listed above has not been made by
June 1, 2018, then the parties will negotiate in good faith to agree on appropriate alternative compensation. If the parties are
unable to agree on reasonable alternative compensation, Provider may terminate the Agreement and revoke the assignments and licenses
made and granted to Customer under Sections 5.2 and 5.4 of the Agreement, in which case Customer will retain no ownership of or
license to any Custom Developments, Deliverables, or Provider IP.

 

 

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