Document:

Blueprint

 

 

 

 EXHIBIT 10.2

 

FIRST AMENDMENT TO CONVERTIBLE SUBORDINATED NOTE PURCHASE AGREEMENT AND FIRST AMENDMENT TO CONVERTIBLE
SUBORDINATED PROMISSORY NOTE

 

 

 

THIS FIRST AMENDMENT TO CONVERTIBLE SUBORDINATED NOTE PURCHASE AGREEMENT AND FIRST AMENDMENT TO CONVERTIBLE SUBORDINATED PROMISSORY NOTE (this “Amendment”), effective as of May 17, 2016, is made and entered into by and among Mobilesmith, Inc., a Delaware corporation (the “Company”),
the holder (the “Holder”) of the Convertible Subordinated Promissory Note (the “Note”) issued by the Company on December 11, 2014 pursuant to that certain Convertible Subordinated Note Purchase Agreement, dated December 11, 2014 (as amended through the date hereof, the “Note Purchase Agreement”), between the Company and the Holder. Capitalized terms used but not defined herein have
the meanings assigned to them in the Note Purchase Agreement.

 

 

WITNESSETH:

 

 

WHEREAS, The Company and the Holder desires to amend the Note previously issued pursuant to the Note Purchase Agreement to provide that the Maturity Date of the Note be extended from November 14, 2016 to November 14, 2018, and to provide that the definition of “Maturity Date” contained in any Additional Note issued on or after the date hereof shall be conformed
to the definition thereof contained in the Note, as hereby amended;

 

 

WHEREAS, Section 9(a) of the Note Purchase Agreement provides that any provision of the Note Purchase Agreement may be amended with the written consent of the Company and the Holders of at least a Requisite Percentage;

 

 

WHEREAS, Section 8 of the Note provides that any provision of the Notes may be amended with the written consent of the Company and the Holders of at least a Requisite Percentage;

 

 

WHEREAS, the Holder listed on the signature page to this Amendment holds a Requisite Percentage necessary to amend the provisions of each of the Note and the Note Purchase Agreement;

 

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

Section 1.                              Amendment to Note Purchase Agreement. All references in the Note Purchase Agreement to “Note” or “Notes”
shall mean the form of Convertible Subordinated Promissory Note attached hereto as Exhibit 1.

 

 

Section 2.                              Amendment to Note.

 

 

 

(a) The last sentence of the first paragraph of the Note shall be deleted and the following shall be inserted in lieu thereof:

 

 

“All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) November 14, 2018, (ii) a Change of Control or (iii) when, upon or after the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by Investor or made
automatically due and payable in accordance with the terms hereof (such date upon which all amounts payable hereunder are due is referred to herein as the “Maturity Date”).”

 

 

(b) The Maturity Date as defined in any Additional Note issued on the date hereof or hereafter shall be the same as provided in the Note, as hereby amended.

 

 

 

Section 3.                              Ratification. Except as specifically amended above, each of the Note and the Note Purchase Agreement shall continue in full force and
effect in accordance with its terms, and is hereby in all respects ratified and confirmed.

 

 

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

 

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first above written.

 

 

 

MOBILESMITH, INC.

 

By: /s/  Gleb Mikhailov

Name: Gleb Mikhailov

Title: Chief Financial Officer

 

 

UBP, UNION BANCAIRE PRIVEE

 

By: /s/ Leonardo Tagliaferri

Name: Leonardo Tagliaferri

Title: Director

 

 

 

 

 

 

 

 

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

 

 

 

 

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EXHIBIT 1

 

 

 

THE NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF (THE “SECURITIES”) HAVE BEEN ISSUED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND APPROPRIATE EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES LAWS OF OTHER APPLICABLE JURISDICTIONS.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE ISSUER SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE OF THE PROPOSED SALE OR TRANSFER WITH THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR EXEMPTION THEREFROM.

 

 

 

CONVERTIBLE SUBORDINATED PROMISSORY NOTE

 

 

$500,000                                                                                                              
                                                                                                               
                                                                                                               
                                                                                            December, 11 2014

 

 

 

 

FOR VALUE RECEIVED, MobileSmith, Inc., a Delaware corporation (the “Company”) promises to pay to Union Bancaire Privée, UBP SA (“Investor”), or its registered assigns, in lawful money of the United States of America the principal sum of Five Hundred Thousand Dollars ($500,000), or such lesser amount as shall equal the outstanding principal amount
hereof, together with interest from the date of this Note on the unpaid principal balance at a rate equal to 8.00% per annum, computed on the basis of the actual number of days elapsed and a year of 360 days. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) November 14, 2018, (ii) a Change of Control or

(iii) when, upon or after the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by Investor or made automatically due and payable in accordance with the terms hereof (such date upon which all amounts payable hereunder are due is referred to herein as the “Maturity Date”).

 

 

 

This Note is one of a series of “Notes” issued pursuant to the Convertible Subordinated Note Purchase Agreement, dated December 11, 2014 (as amended, modified or supplemented, the “Note Purchase Agreement”), between the Company and the Investors (as defined in the Note Purchase Agreement). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Note Purchase Agreement. This Note and the Investor are subject to certain restrictions, and are entitled to certain rights and privileges, set forth in the Note Purchase Agreement. This Note is expressly subject to Section 8, Subordination, of the Note Purchase Agreement.

 

 

The following is a statement of the rights of Investor and the conditions to which this Note is subject, and to which Investor, by the acceptance of this Note, agrees:

 

 

 

1. Definitions. As used in this Note, the following capitalized terms have the following meanings:

 

 

(a) “Business Day” means any day other than a Saturday or Sunday or other day on which the New York Stock Exchange is permitted or required by law to close.

 

 

(b) the “Company” includes the corporation initially executing this Note and any Person which shall succeed to or assume the obligations of the Company under this Note.

 

       (c)      “Conversion Price” means One Dollar and Forty Three Cents ($1.43).

 

(d) “Change of Control” means (i) any consolidation or merger or other transaction or series of transactions to which the Company is a party following which the “persons” that “beneficially owned” (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, the voting securities of the Company immediately prior to such transaction “beneficially own”, directly or indirectly, less than fifty percent (50%) of the voting securities of the surviving entity (other than a financing transaction) or (ii) the sale of all or substantially all of the assets of the Company.

 

       (e)        "Event of Default" has the meaning given in Section 4 hereof

 

  

 

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

 

(g) “Obligations” means and includes all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Company to Investor of every kind and description (whether or not evidenced by any note or instrument and whether or not for the
payment of money), now existing or hereafter arising under or pursuant to the terms of this Note, the Note Purchase Agreement and the Security Agreement, including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by the Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the
United States Code (11 U. S. C. Section 101 et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding.

 

(h) “Person” means and includes an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental
authority.

 

 

(i) “Requisite Percentage” means at least two-thirds of the aggregate outstanding principal amount of the Notes issued pursuant to the Note Purchase Agreement

 

 

(j) “Transaction Documents” means this Note, each of the other Notes issued under the Note Purchase Agreement, and the Note Purchase Agreement.

 

 

2. Interest. Accrued interest on this Note shall be payable in cash in quarterly installments commencing on the third month anniversary of the date of issuance of this Note with the final installment payable on the Maturity Date.

 

       3.    Prepayment. This Note may not be prepaid without the consent of the holders of a Requisite Percentage.

4. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note and the other Transaction Documents:

 

 

(a) Failure to Pay. The Company shall fail to pay (i) when due any principal, or interest payment or other sum on the due date hereunder or (ii) any other payment required under the terms of this Note or any other Transaction Document on the date
due and such failure continues for a period of five (5) business days after the due date;

 

 

(b) Non-Performance of Affirmative Covenants. The Company shall default in the due observance or performance of any material covenant set forth in the Note, the Note Purchase Agreement or the Security Agreement, which default shall continue uncured for fifteen (15)
days after receipt of written notice to the Company thereof;

 

 

 

(c) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property,

(ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vii) take any action for the purpose of effecting any of the foregoing;

 

 

(d) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty

(60) days of commencement;

 

 

(e) Judgments. One or more judgments, decrees or orders (excluding settlement orders) for the payment of money shall be entered against the Company or any of its subsidiaries involving in the aggregate a liability of

$1,000,000 or more, and any such judgment, decree or order shall continue without discharge or stay for a period of sixty (60) days; or

 

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(f) Cross-Defaults. The Company or any of its subsidiaries shall default in the performance or observance of any agreement or instrument relating to any indebtedness, or any other event shall occur or condition exist, and the effect of such default,
event or condition is to cause or permit the holder or holders of any such indebtedness to cause indebtedness, in excess of $500,000 individually or in the aggregate, to become due prior to its stated maturity.

 

 

 

5. Rights of Investor upon Default. Upon the occurrence or existence of any Event of Default (other than an Event of Default described in Sections 4(c) or 4(d)) and at any time thereafter during the continuance of such Event of Default, a default
interest rate of fifteen percent (15%) will accrue on any overdue Obligations. The holders of a Requisite Percentage may, by written notice to the Company, declare all outstanding Obligations payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence or existence of any Event of Default described in Sections 4(c) and 4(d), immediately and without notice, all outstanding Obligations
payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default and subject to the consent of the Agent, Investor may exercise any other right power or remedy granted to it by the Transaction Documents or otherwise permitted to it by law, either by suit in equity or by action at law,
or both.

 

        6.    Conversion 

 

(a) Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s
request; provided, however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such conversion, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors, under the Note Purchase Agreement, the 2007 Note Purchase Agreement (as defined in the Note Purchase Agreement), or both, request conversion
of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after
the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock
that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion, by submission of the notice of conversion attached as Exhibit A hereto. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to
the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written
notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

 

 

(b) Mechanics of Optional Conversion. As soon as practicable following surrender by the Investor of the original of this Note, the Company shall issue and deliver to Investor a certificate or certificates for the shares of Common Stock into which
the Note has been converted (bearing such legends as may be required or advisable in the opinion of counsel to the Company). Such conversion shall be deemed to have been made immediately prior to the close of business on the date selected for the conversion and the Investor shall be treated for all purposes as the record holder or holders of such Common Stock on such date.

 

 

(c) Fractional Shares; Interest; Effect of Conversion. No fractional shares shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to Investor upon the conversion of this Note, the Company shall pay to
Investor an amount equal to the product obtained by multiplying the Conversion Price by the fraction of a share not issued pursuant to the previous sentence. Upon conversion of this Note in full and the

 

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payment of any amounts specified in this Section 6(c), the Company shall be released from all its obligations and liabilities under this Note.

 

 

7. Successors and Assigns. Subject to the restrictions on transfer described in Sections 9 and 10 below, the rights and obligations of the Company and Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

 

8. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the holders of a Requisite Percentage.

 

 

9. Transfer of this Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, Investor will give written notice to the Company prior
thereto, describing briefly the manner thereof, together with (unless waived by the Company) a written opinion of Investor’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company, as promptly as practicable, shall
notify Investor that Investor may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 9 that the opinion of counsel for Investor, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify Investor promptly after such determination has been made. Each Note thus transferred and each certificate representing the securities thus transferred shall
bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Subject to the foregoing, transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of the Company.
Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice to the contrary. Notwithstanding anything in this Section 9 to the contrary, no opinion of counsel shall be required with respect to any transfer by an Investor
to its officers, directors, partners, members or other affiliates.

 

 

10. Assignment by the Company. Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of the holders of
a Requisite Percentage.

 

        11.     Notices. All notices, requests, demands, consents, instructions or other communications required or permitted
hereunder shall be in writing and faxed, mailed or delivered to each party at the respective addresses of the parties as set forth in the Note Purchase Agreement, or at such other address or facsimile number as the Company shall have         furnished to Investor in writing. All such
notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service of recognized standing or (v) two days after being deposited in the U.S. mail, first class with postage prepaid.

 

12. Pari Passu Notes. Investor acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other
Notes issued pursuant to the Note Purchase Agreement or pursuant to the terms of such Notes.

 

 

13. Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal
and applied against the principal of this Note.

 

 

14. Remedies Cumulative. The remedies of Investor as provided herein and in the Note Purchase Agreement and in any other documents governing or securing repayment hereof shall be cumulative and concurrent and may be pursued singly, successively,
or together, at the sole discretion of Investor to the extent provided herein and in the Note Purchase Agreement and may be exercised as often as occasion therefore shall arise. No act or omission of the Investor, including specifically, but without limitation, any failure to exercise any right, remedy or recourse, shall be effective as a waiver of any right of the Investor hereunder, unless set forth in a written document executed by the Investor, and then only to the extent specifically recited therein. A waiver
or release with reference to one event shall not be construed as continuing, as a bar to, or as a waiver or release of any

 

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subsequent right, remedy or recourse as to any subsequent event. All notices, waivers, releases and/or consents by an Investor shall be directed to the Company only through the Agent.

 

 

15. No Rights of a Stockholder. Nothing contained in this Note shall be construed as conferring upon the Investor or any other Person the right to vote or consent or to receive notice as an stockholder in respect of meetings of stockholders for the election of directors
of the Company or any other matters or any rights whatsoever as a stockholder of the Company prior to the time that this Note is converted pursuant to Section 6.

 

 

16. Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State
of Delaware, or of any other state.

 

 

 

 

(Signature Page Follows)

 

 

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The Company has caused this Note to be issued as of the date first written above.

 

 

MOBILESMITH, INC.

a Delaware corporation

 

 

 

By:                                        

Name: 

Title:

 

8

 

 

 

EXHIBIT A

 

 

FORM OF NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to Convert the Note)

 

 

 

The undersigned hereby irrevocably elects to convert $                                   of the principal amount of the above Note No. into shares of Common Stock of MobileSmith, Inc., (the “Company”)
according to the conditions hereof, as of the date written below.

Date of Conversion                                                                                                               

 Applicable Conversion Price 

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

Signature                                                                                                                
[Name]

Address:                                                                                                              

 

 

 

9INTERNATIONAL
TRADE CENTER SERVICE PROVIDER AGREEMENT

 

This
International Service Provider Agreement (this “Agreement”) is made and effective as of

May 12, 2016 (the “Effective Date”), by and between AmericaTowne, Inc., a Delaware corporation and reporting
company under the rules promulgated by the United States Securities and Exchange Commission, with a mailing address for notice
purposes of 4700 Homewood Court, Suite 100 in Raleigh, North Carolina 27609 (“AmericaTowne”) and Ms. Anita
Afua Gyasiwah Arthur with an address for notice purposes of Apt 19B, Blvd de Marseille, Abidjan 01, Côte d’Ivoire,
(the Ivory Coast) (the “Service Provider”). AmericaTowne and the Service Provider may be defined singularly
as a “Party” or collectively as the “Parties.”

 

WITNESSETH

 

WHEREAS,
the Parties have determined that the transaction contemplated by this Agreement would be advantageous and beneficial to them.

 

WHEREAS,
the Service Provider and its management have distinct experience working with potential
individuals and businesses who may be candidates for AmericaTowne’s operations and business, including but not limited to,
experience assisting businesses and entrepreneurs who may be candidates for occupancy, or facilitating the acquisition of goods
and performing services to AmericaTowne, securing funding (credit lines, loans and loan guarantees), insurance, supplier and export
contracts and other related services that could assist candidates in conducting business with AmericaTowne. These services are
collectively referred to herein as “Support Services”

 

WHEREAS,
in consideration for the Service Provider having an agreement with AmericaTowne in providing Support Services, and the Service
Provider in agreeing not to provide similar services to other parties similarly situated as AmericaTowne, the Parties agree to
the terms and conditions of this Agreement.

 

WHEREAS,
the Parties agree that the parties shall form a Limited Liability Company (LLC) whose name will include the word AmericaTowne.
AmericaTowne, Inc. shall determine the LLC’s composition and ownership. The Service Provider shall own no less than 25%
of the LLC. 

 

WHEREAS,
the Parties agree that the location of the Service Provider’s business operations will be in the Country of the Ivory Coast,
and located in the city of Abidjan or another location as designated by AmericaTowne.

 

WHEREAS,
the Parties agree that the LLC will operate from a designated location approved by AmericaTowne and that is commensurate with
AmericaTowne’s office in Raleigh, North Carolina, USA. The Service Provider will manage this office. It is agreed that the
Service Provider’s initial office and physical location will be 01 BP 12959 Abidjan 01, 2 Plateaux, 4ème Tranche,
Rue Saint Antoine, Abidjan, Côte d’Ivoire (Ivory Coast). 

 

WHEREAS,
the Parties agree that the LLC’s ownership may change as directed by AmericaTowne to accommodate other investors, and at
all times the Service Provider’s ownership shall remain at a minimum of 25%.

 

WHEREAS,
the Recitals stated herein are not mere statements, but representations and warranties of the parties, and material terms in which
each party has relied upon in executing this Agreement.

 

NOW,
THEREFORE, in consideration the representations, warranties and agreements herein contained, the Parties agree as follows:

 

    -1- 

     

    

1.Term
of Agreement. This Agreement shall become effective upon the Effective Date and, absent gross negligence, or willful and material
breach of this Agreement or intentional violation of any law by the Service Provider that cannot be reasonably cured by the Service
Provider within thirty (30) days of receipt of written notice by AmericaTowne of the alleged action or omission, this Agreement
shall not be terminated absent mutual written agreement between the Parties prior to December 31, 2021 (the “Term”).
The Parties agree that in the event of termination under this Section 1, any and all corresponding rights, duties and obligations
intended to survive post-termination shall remain in full force and effect. Upon termination under this Section 1, AmericaTowne
shall reimburse the Service Provider for any approved compensation and expenses incurred related to fulfilling its duties under
this Agreement. In the event the Parties do not organize the LLC as contemplated herein, within 45 days of the effective date
this Agreement is null and void.

 

2.Option
and Conditions to Extension of Term. AmericaTowne retains the option to extend the Term under its sole discretion until December
7, 2025 subject to the terms of this Section 2 (the “Option Term”). The Option Term shall become effective
provided AmericaTowne provides written notice to the Service Provider by 10/31/2021 of its intent to exercise the option right
herein. AmericaTowne may terminate this Agreement at any time during the Option Term subject to AmericaTowne providing written
notice to the Service Provider fifteen (15) days prior to the termination. The Parties agree that in the event of termination
under this Section 2, any and all corresponding rights, duties and obligations intended to survive post-termination shall remain
in full force and effect. Upon termination under this Section 2, AmericaTowne shall reimburse the Service Provider for any approved
compensation and expenses incurred related to fulfilling its duties under this Agreement.

 

3.Scope
of Services. The Service Provider shall provide Support Services for the benefit of
AmericaTowne in a manner deemed commercially acceptable by AmericaTowne. The Service Provider’s role is to support AmericaTowne’s
export activities. 

 

4.Compensation.
In consideration of the Service Provider providing the Support Services to
AmericaTowne, the Parties have agreed to the “Compensation Schedule” attached hereto as Exhibit A. 

 

5.Exclusive
Independent Contractor. The Service Provider
is an independent contractor, and for the consideration agreed upon herein, agrees to provide the services identified in Section
3, above, on an exclusive basis to AmericaTowne. AmericaTowne shall cooperate with the Service Provider in providing the Service
Provider with sufficient and confidential information and knowledge of AmericaTowne’s business in order for the Service
Provider to perform under this Agreement. AmericaTowne agrees to be responsible for all costs necessary in providing this information
and knowledge to the Service Provider. The Service Provider has the sole right to control and direct the means, manner, and method
by which the services required by this Agreement will be performed. The Service Provider has the right to perform the services
required by this Agreement at any place or location and at such times as the Service Provider may determine. The Service Provider
has the right to hire assistants as subcontractors or to use employees to provide the services required by this Agreement provided
that such individuals have no less than six months of experience in providing services contemplated under this Agreement.

 

The
Service Provider represents that those subcontractors or employees performing services under this Agreement on behalf of the Service
Provider meet The Service Provider’s conditions of employment. The Service Provider, or the Service Provider’s employees
or contract personnel shall perform the services required by this Agreement, and AmericaTowne shall not hire, supervise, or pay
any assistants to help the Service Provider. Neither the Service Provider nor the Service Provider’s employees or contract
personnel shall receive any training from the AmericaTowne in the professional skills necessary to perform the services required
by this Agreement, unless otherwise agreed upon by the Parties.

 

6.Waiver
and Assumption of Liability. The Service Provider assumes all liability for personal injuries of any kind or death directly
related the recklessness or willful misconduct of its performance under this Agreement. The Service Provider assumes all liability
and responsibility for its personal property while acting under this Agreement.

 

    -2- 

     

    

7.Confidential
Information.  The Service Provider will not disclose or use, either during or after the term of this Agreement, any
proprietary or confidential information of AmericaTowne without AmericaTowne’s prior written consent except to the extent
necessary to perform services on AmericaTowne’s behalf. Proprietary or confidential information includes the written, printed,
graphic, or electronically recorded materials furnished by the AmericaTowne for the Service Provider to use; information belonging
to AmericaTowne about whom the Service Provider gained knowledge as a result of the Service Provider’s services to AmericaTowne.
AmericaTowne agrees it will not provide the Service Provider with false written or verbal information. The Service Provider shall
not be restricted in using any material that is publicly available, already in the Service Provider’s possession, or known
to the Service Provider without restriction, or the Service Provider from sources other than AmericaTowne rightfully obtains that.
On termination of this Agreement, the Service Provider shall deliver to AmericaTowne all materials in the Service Provider’s
possession relating to AmericaTowne’s business.

 

8.Agreement
Not To Circumvent. The Parties agree that the AmericaTowne has a legitimate business purpose in seeking a restrictive covenant
from the Service Provider not to directly or indirectly circumvent confidential information in order to either benefit directly
or indirectly from the opportunities presented by and paid for by AmericaTowne. The Parties agree that the restrictions in this
section are fair and reasonable in all respects. If any provision of this section are ever held by a court to be unreasonable,
the Parties agree that this section shall be enforced to the extent it is deemed to be reasonable. This section survives any termination
of this Agreement.

 

9.Covenant
Not To Compete. The Service Provider agrees that in consideration of the compensation set forth herein and in consideration
of the AmericaTowne sharing confidential and proprietary information with the Service Provider, the Service Provider agrees that
during the Term herein and for six (6) months after termination of this Agreement, the Service Provider shall not actively compete
against AmericaTowne in the United States of America or in any other country in which the AmericaTowne now or during the Term
or, if applicable, the Option Term of this Agreement does business. By executing this Agreement, the Service Provider agrees that
the AmericaTowne has a legitimate business interest in seeking the restrictive covenant herein.

 

10.Intellectual
Property. All materials developed by the Service Provider for AmericaTowne, if any, will belong exclusively to AmericaTowne,
and will be deemed to have been developed and created by the Service Provider for AmericaTowne as “work for hire.”

 

11.Mutual
Indemnification/Hold Harmless. The Service Provider, as an independent contractor, agrees to indemnify, defend, and hold harmless
AmericaTowne from any and all liability resulting from intentional or reckless acts or the acts of the employees or agents of
the Service Provider. Likewise, AmericaTowne agrees to indemnify, defend, and hold harmless the Service Provider from any and
all liability resulting from intentional or reckless acts or the acts of the employees, agents, franchisees, licensees, directors
or officers of AmericaTowne.

 

The
party entitled to indemnification is defined in this Section 10 as the “Indemnified Party,” and the party providing
the indemnity is the “Indemnifying Party.” In the event of a lawsuit, investigation, or claim, the Indemnifying
Party will, at its sole discretion, cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Party
from losses arising out of or resulting from any inaccuracy, misrepresentation or breach or non-fulfillment of any covenant or
agreement by the Indemnifying Party in connection with: (i) any and all claims, liabilities, losses or damages related solely
and exclusively to statements prepared by, or made by, the Indemnified Party that were either approved in advance by the Indemnifying
Party or entirely based on information provided by the Indemnifying Party to the Indemnified Party expressly for use in connection
with the services under this Agreement, and (ii) all claims, actions, Suits, proceedings, demands, assessments, judgments, costs
and expenses, including, without limitation, any legal fees and expenses, incident to any of the foregoing, except in case of
the   Indemnified Party’s gross negligence, bad faith or willful misconduct with respect thereto.

 

    -3- 

     

    

12.Permits
and Licenses. The Service Provider declares that it has complied with all federal, state, and local laws requiring business
permits, certificates, and licenses required to carry out the services to be performed under this Agreement.

 

13.Assignment.
Neither party shall assign its rights or duties under this Agreement unless it receives the prior written approval of the
other party, which approval may be withheld in such party’s sole discretion.

 

14.Amendment.
This Agreement may be amended by a writing signed by the Parties.

 

15.Severability.
If any term, provision, covenant or restriction contained in this Agreement is held by any court of competent jurisdiction
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants or restrictions contained in this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and if a covenant or provision
is determined to be unenforceable by reason of its extent, duration, scope or otherwise, then the Parties intend and hereby request
that the court or other authority making that determination shall only modify such extent, duration, scope or other provision
to the extent necessary to make it enforceable and enforce it in its modified form for all purposes of this Agreement.

 

16.Complete
Agreement. This Agreement, and the Compensation Schedule, contains the entire agreement between the Parties with respect to
the matters covered herein. The Service Provider acknowledges that this Agreement is entered into solely on the basis of the written
representations contained herein.

 

17.Applicable
Law. The laws of North Carolina shall govern this Agreement. The Parties agree that, should any dispute arise out of, in connection
with, or relating to this Agreement, that they shall cooperate in good faith to resolve any such disputes, and if unsuccessful,
the Parties agree to binding arbitration under the procedural rules of the American Arbitration Association. The Parties agree
that such arbitration shall be final and binding, and that by agreeing to arbitration, are waiving their right to seek legal remedies
in Court and agree to waive the right to a trial by jury; however, the Parties agree that they have the right to seek equitable
relief from a Court of competent jurisdiction for any alleged breach of Sections 7 through 10 of this Agreement.

 

    	-4- 

    	 

    

 

 

18.Counterparts;
Electronic or Facsimile Signature. This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same instrument. Signatures on this Agreement may be communicated
by facsimile and or other electronic transmission and shall be binding upon the parties hereto so transmitting their signatures.
Counterparts with original signatures shall be provided to the other parties hereto following the applicable transmission; provided
that the failure to provide the original counterpart shall have no effect on the validity or the binding nature of this Agreement.

 

19.Joint
Drafting, Negotiation and Conflict Waiver. Each Party agrees that they have had an opportunity to participate in the drafting,
preparation and negotiation of this Agreement. Each of the Parties expressly acknowledges such participation and negotiation in
order to avoid the application of any rule construing contractual language against the drafter thereof and agrees that the provisions
of this Agreement shall be construed without prejudice to the Party who actually memorialized this Agreement in final form.

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date set forth above.

 

AMERICATOWNE,
INC.

 

By:/s/Alton PerkinsDate
5/12/2016

Alton
Perkins

Chairman
of the Board

Authorized
by Board of Directors

 

THE SERVICE
PROVIDER

 

 

By:/s/ Anita Afua Gyasiwah
ArthurDate 5/16/2016

Anita Afua Gyasiwah
Arthur

    -5- 

     

    
 

Exhibit
A

MUTUAL
COMPENSATION SCHEDULE

 

This
Compensation Schedule (this “Schedule”) is made and effective as of May
12, 2016, (the “Effective Date”), by and between AmericaTowne,
Inc., a Delaware corporation and reporting company under the rules promulgated by the United States Securities and Exchange Commission,
with a mailing address for notice purposes of 4700 Homewood Court, Suite 100 in Raleigh, North Carolina 27609 (“AmericaTowne”)
and Ms. Anita Afua Gyasiwah Arthur with an address for notice purposes of Apt 19B, Blvd de Marseille, Abidjan 01, Côte
d’Ivoire, (the Ivory Coast) (the “Service Provider”),
and is incorporated into and merged with the International Trade Center Service Provider Agreement between the Service Provider
and AmericaTowne (the “Agreement”.) AmericaTowne and the Service Provider may be defined singularly as a “Party”
or collectively as the “Parties.”

 

WHEREAS,
until further written amendment hereto signed by the Parties, the Parties agree that this Schedule shall govern compensation from
AmericaTowne to the Service Provider for providing those services set forth in the Agreement.

 

NOW,
THEREFORE, in consideration the representations, warranties and agreements herein contained, the Parties agree as follows:

 

1.Support
Services. Subject to the disclosures set forth in Section 3 and Section 4 of this Schedule, during the Term and, if applicable,
the Option Term, as these terms are defined in the Agreement, AmericaTowne shall pay the Service Provider:

a)
Solely at AmericaTowne’s discretion a fee equal to 1.0% to 13% of the gross

value of all funds, insurance, loans and or guarantees charged and collected from those businesses and individuals participating
or contracting with AmericaTowne export program;

b)
A stock award of 25,000 shares of AmericaTowne’s commons stock one year after this agreement is signed and it is still in
force and affect;

c)
Starting at the end of the third month, provided that the Service provider has met the production schedule, a monthly stipend
$1,600.00 paid solely at the discretion of AmericaTowne; and

d)
A stock option of 25,000 shares of commons stock of AmericaTowne for each year the

agreement is in force for up to five years. Starting in the year 2016 and each year thereafter, the option can be exercised annually
in the month of December on or before the 31st of December at the option price of $1.50 per common share.

2.In
addition, the Service Provider agrees to pay AmericaTowne a nonrefundable service fee of $35,000.00 USD on the Effective Date
(the "Service Fee"). The Service Fee is recognized when deliverables are provided. The Service Fee is paid for deliverables
including the formation and registration of the LLC, recording the Service Provider’s ownership interest in the newly formed
entity, and the delivery of marketing materials to be used by the Service Provider. The Service Fee is to be paid as follows:
$5,000 upon signing this agreement; and monthly payments of $1,000 a month for thirty months. The first monthly payment will start
on 30 September 2016, and run for 20 consecutive months. At the discretion of AmericaTowne Inc. the Service Provider may be required
to sign a note for outstanding service fees. In addition AmericaTowne Inc. at its sole discretion may exchange other assets or
items of value for payments due. The Service Provider shall be given credit for any and all funds paid pursuant to this agreement.

 

    -6- 

     

    

3.The
Service Provider Is Not A Real Estate Broker. AmericaTowne agrees that the Service Provider is not being compensated as a
real estate broker or salesperson as the Service Provider is not licensed as such a broker or salesperson, and the Service Provider
shall not sell or offer for sale, buy or offer to buy, provide or offer to provide market analyses, list or offer or attempt to
list, or negotiate the purchase or sale or exchange or mortgage of real estate, and AmericaTowne acknowledges and agrees that
it will retain its own attorneys, accountants and real estate brokers and/or salespeople, as needed, for any transactions contemplated
under the Agreement and this Schedule.

 

4.The
Service Provider Is Not A Securities Broker or Dealer. AmericaTowne agrees that the Service Provider is not being compensated
as a broker/dealer or registered FINRA representative in the business of selling securities. AmericaTowne acknowledges that the
Agreement and this Schedule is limited solely to consulting and advisory services, and AmericaTowne agrees that the compensation
set forth herein shall be categorized as valuable consideration in the context of facilitating the services under the Agreement,
and payment of any consideration under this Schedule constitutes a waiver and release of any claims by AmericaTowne that the payment
is related in any manner to the sale of securities.

 

5.Merger
and Integration. This Schedule, along with the Agreement, contain the entire agreements of the Parties, and any and all prior
schedules, agreements, representations, promises or, to the extent recognized by a court of competent jurisdiction to constitute
binding duties and obligations under North Carolina law, are superseded by and/or merged into the aforementioned agreements.

 

6.Miscellaneous.
The Parties agree that all other remaining provisions set forth in the Agreement are incorporated by reference as if fully
stated herein.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed and delivered as of the date set forth above.

 

AMERICATOWNE,
INC.

 

By:/s/Alton PerkinsDate
5/12/2016

Alton
Perkins

Chairman
of the Board

Authorized
by Board of Directors

 

THE SERVICE
PROVIDER

 

 

By:/s/
Anita Afua Gyasiwah ArthurDate 5/16/2016

Anita
Afua Gyasiwah Arthur

    -7-

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