Document:

Exhibit 10.2

 

EXECUTION VERSION

 

DIRECTOR NOMINATION AGREEMENT
 February 5, 2016

 

This Director Nomination Agreement, dated as of February 5, 2016 (this “Agreement”), is by and between Forestar Group Inc., a Delaware corporation (the “Company”) and Cove Street Capital, LLC (together with its Affiliates, the “Investor”).  The Investor and the Company shall collectively be referred to herein as the “Parties.”  In consideration of, and reliance upon, the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.                                      Board Representation and Board Matters.  Each Party agrees that:

 

(a)                                 As promptly as practicable after the execution and delivery of this Agreement, the Board of Directors of the Company (the “Board”) will appoint Mr. Ashton Hudson to the Board as a director of the class of directors whose terms expire in 2017 (the “2017 Class”) and include Mr. Hudson as a nominee to the 2017 Class on the slate of directors to be elected at the annual meeting of stockholders of the Company to be held in 2016 (the “2016 Annual Meeting”).  Mr. Hudson shall be referred to herein as the “New Nominee”.  The Investor acknowledges that within ten calendar days of the date of execution of this Agreement, a Form 3 is required to be filed with the U.S. Securities and Exchange Commission (the “SEC”) via EDGAR for the New Nominee in connection with the appointment of the New Nominee to the Board.  With respect to Form 4 filings, the Company will make such filings for the New Nominee consistent with its practice with respect to the other directors.

 

(b)                                 Mr. Hudson will be offered the opportunity to become a member of the Board’s Nominating and Governance Committee; provided, that the New Nominee, subject to satisfying the Company’s governance policies in effect as of the date hereof and as in effect from time to time (to the extent any changes in the Company’s governance policies are not, and could not reasonably be construed to have been, implemented for the purpose of removing the New Nominee from a committee) and applicable law and the rules and regulations of the New York Stock Exchange (or any other securities exchange on which the Company’s securities are then traded) as in effect from time to time, shall continue to have the right to serve on such committee for so long as he serves on the Board.  The Investor acknowledges that if the Board determines in its good faith judgment that the New Nominee no longer satisfies the Company’s governance policies, applicable law or the rules and regulations of the New York Stock Exchange (or any other securities exchange on which the Company’s securities are then traded), as in effect from time to time, the Board shall have the discretion to remove the New Nominee from any committee of the Board on which the New Nominee is then serving, so long as (i) the treatment of the New Nominee is not inconsistent with the treatment of the other directors and (ii) any changes in the Company’s

 

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governance policies are not, and could not reasonably be construed to have been, implemented for the purpose of removing the New Nominee from a committee.

 

(c)                                  The Investor shall, and shall cause its Affiliates to, immediately cease all communication efforts, direct or indirect, in furtherance of any potential efforts to influence the management and policies of the Company.

 

(d)                                 Prior to the execution of this Agreement, Ms. Kathleen Brown shall have delivered her unconditional resignation from her current position as a director of the Company to the Company, which resignation shall be effective immediately upon the execution of this Agreement.  Prior to or concurrently with the execution of this Agreement, the Company has accepted the resignation of Ms. Brown from such position as director on the Board.  During the Standstill Period, the Board will not increase the size of the Board and will not permit Section IV.E of the Company’s Corporate Governance Guidelines to be amended.

 

(e)                                  The Board will exercise its reasonable best efforts, including the solicitation of proxies, to elect Mr. Hudson at the 2016 Annual Meeting (it being understood that such efforts shall not be less than the efforts used by the Company to obtain the election of any other director nominee nominated to serve as director on the Board of the 2016 Annual Meeting).

 

(f)                                   If the New Nominee resigns or is otherwise unable to serve as director (other than as a result of removal, or the failure to be elected at the 2016 Annual Meeting by the stockholders of the Company), the Company and the Investor shall select a replacement director, mutually acceptable to the Company and the Investor, which acceptance shall not be unreasonably withheld.

 

(g)                                  If the Investor materially breaches its commitments or obligations under this Agreement, upon written notice from the Company (specifying the relevant facts), the Investor agrees to cause Mr. Hudson (or his replacement director selected pursuant to Section 1(f)) to resign promptly from the Board and the provisions of Sections 1(a), 1(b) and 1(e) – 1(f) shall terminate with respect to Mr. Hudson, except that if such material breach can be cured and is cured within the time period set forth in the immediately following sentence.  The Investor shall have fifteen business days after the date of such written notice within which to cure its material breach and this Section 1(g) shall not apply in the event of such cure.

 

2.                                      Proxy Solicitation Materials.  The Company agrees that the Company’s “proxy statement” (as defined in Rule 14a-1 promulgated under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with respect to the 2016 Annual Meeting (such proxy statement, the “2016 Proxy Statement”) and all other solicitation materials to be delivered to stockholders in connection with the 2016 Annual Meeting will be prepared in accordance with, and in a manner consistent with the intent and purpose of, this Agreement.  The Company will provide the Investor with a true and complete copy of any portion of the 2016 Proxy Statement or other “soliciting materials” (as used in Rule 14a-6 promulgated under the Exchange Act) with respect to the 2016

 

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Annual Meeting, in each case that refer to the Investor, the New Nominee or this Agreement, at least two business days before filing such materials with the SEC in order to permit the Investor a reasonable opportunity to review and comment on such portions, and will consider in good faith any comment received from the Investor and its counsel relating to such portions.

 

Except as required by applicable law, the Company will use the same or substantially similar language, or any summary thereof that is agreed upon for the foregoing filings, in all other filings with the SEC that disclose, discuss, refer to or are being filed in response to or as a result of this Agreement.  The Investor will promptly provide all information relating to the New Nominee and other information to the extent required under applicable law to be included in the Company’s 2016 Proxy Statement and any other soliciting materials (as such term is used in Rule 14a-6 promulgated under the Exchange Act) to be filed with the SEC or delivered to stockholders of the Company in connection with the 2016 Annual Meeting.  The 2016 Proxy Statement and other soliciting materials will contain the same type of information and manner of presentation concerning the New Nominee as provided for the Company’s other independent director nominees.

 

3.                                      Standstill.  Except with the prior written consent of the Company, at all times during the Standstill Period (as defined below in Section 19), the Investor agrees not to, directly or indirectly, and will cause each of its Affiliates (as defined in Section 19) not to, directly or indirectly:

 

(a)                                 effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist, facilitate or encourage any other individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group, association or other entity of any kind or structure (collectively, a “Person”) to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, any “solicitation” of “proxies” (as such terms are used in the proxy rules of SEC) to vote any Voting Securities of the Company or consent to any action from any holder of any Voting Securities of the Company or conduct or suggest any binding or nonbinding referendum or resolution or seek to advise, encourage or influence any Person with respect to the voting of or the granting of any consent with respect to any Voting Securities of the Company;

 

(b)                                 propose or nominate, or cause or encourage any Person to propose or nominate, any candidates to stand for election to the Board, or seek the removal of any member of the Board;

 

(c)                                  form, join or otherwise participate in any “partnership, limited partnership, syndicate or other group” (other than any group among some or all of the Affiliates of the Investor) within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock, or deposit any shares of Common Stock in a voting trust or similar arrangement, or subject any shares of Common Stock to any voting agreement or pooling arrangement, or grant any proxy with respect to any shares of Common Stock (other than to a designated representative of the

 

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Company pursuant to a proxy statement of the Company) or otherwise act in concert with any Person with respect to the Common Stock (other than Affiliates of the Investor);

 

(d)                                 seek to call, or to request the call of, or call a special meeting of the stockholders of the Company, or make a request for a list of the Company’s stockholders or other Company records;

 

(e)                                  otherwise act, alone or in concert with others, to control or seek to control, to seek representation on, or to influence or seek to influence, whether through litigation or otherwise, the management, the Board or the policies of the Company; provided, however, that nothing herein shall prohibit the Investor from complying with legal or regulatory requirements, including, without limitation, the filing of any report or schedule required to be filed with the SEC, and provided, further that the Investor and its Affiliates may privately communicate their views to the management or the Board;

 

(f)                                   effect, seek to effect or in any way assist or facilitate any other Person in effecting or seeking to effect any: (i) tender offer or exchange offer to acquire securities of the Company; (ii) acquisition of any interest in any material asset or business of the Company or any of its subsidiaries; (iii) merger, acquisition, share exchange or other business combination involving the Company or any of its subsidiaries; or (iv) recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries or material portion of its or their businesses;

 

(g)                                  other than through open market broker sale transactions where the identity of the purchaser is unknown, sell, offer or agree to sell directly or indirectly, through any swap or hedging transaction or otherwise, any security of the Company or any right decoupled from such underlying security held by the Investor to any Person that would knowingly result in such Person, together with its Affiliates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of 10% or more of the shares of Common Stock  outstanding at such time or would increase the beneficial or other ownership interest of any Person who, together with its Affiliates, has a beneficial or other ownership interest in the aggregate of 10% or more of the shares of the Common Stock outstanding at such time, except in each case in a transaction approved by the Board;

 

(h)                                 request that the Company or any of its Representatives amend or waive any provision of this Section 3; or

 

(i)                                     otherwise take, or solicit, cause or encourage others to take, any action inconsistent with any of the foregoing.

 

Notwithstanding anything to the contrary, nothing in this Agreement shall prohibit or restrict any director of the Company, including the New Nominee, from exercising his or her rights and fiduciary duties as a director of the Company.

 

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4.                                      Non-Disparagement.  During the Standstill Period, the Investor agrees that neither it nor any of its partners, officers, directors, managers or employees shall, and the Investor shall cause each of its Affiliates not to, make, or cause to be made, any comments or statements by press release or similar public statement to the press or media, or in any SEC filing, any statement or announcement that disparages, the Company, its partners, officers, directors or employees.  During the Standstill Period, neither the Company nor any of its officers or directors shall make, or cause to be made, by press release or similar public statement, including to the press or media or in an SEC filing, any statement or announcement that disparages, the Investor, its Affiliates, officers, directors or employees; provided that nothing herein shall be deemed to prevent either the Investor or the Company from complying with its respective disclosure obligations under applicable law or the rules and regulations of the New York Stock Exchange (or any other securities exchange on which the Company’s securities are traded).

 

5.                                      Voting.  Notwithstanding anything in this Agreement to the contrary, until the end of the Standstill Period, the Investor agrees to cause all Voting Securities with respect to which it has any voting authority, whether owned of record or beneficially owned, as of the record date for any annual or special meeting of stockholders or in connection with any solicitation of stockholder action by written consent (each a “Stockholders Meeting”) within the Standstill Period, in each case that are entitled to vote at any such Stockholders Meeting to be present for quorum purposes and to be voted at all such Stockholders Meetings or at any adjournment or postponement thereof:

 

(i)            for all existing directors nominated by the Board for election at such Stockholders Meeting, as well as the New Nominee; and

 

(ii)           in accordance with any recommendation of the Board on any proposal or other business set forth on Schedule 1 hereto.

 

6.                                      Public Announcement.  As soon as practicable on or after the date hereof, the Company shall issue a joint press release, a copy of which is attached hereto as Exhibit A (the “Press Release”).

 

7.                                      Representations and Warranties of each Party.  The Company represents and warrants to the Investor and the Investor represents and warrants to the Company that:

 

(a)                                 Such Party has all requisite company and other power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

 

(b)                                 This Agreement has been duly and validly authorized, executed and delivered by it and is a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

 

(c)                                  This Agreement will not result in a violation of any term or condition of any agreement to which such Party is party or by which such Party may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting such Party.

 

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8.                                      Representations and Warranties of the Investor.  The Investor represents and warrants that, as of the date hereof:

 

(a)                                 It beneficially owns 3,165,917 shares of Common Stock.

 

(b)                                 It has an economic exposure to, including without limitation, through derivative transactions, an aggregate of 3,165,917 shares of Common Stock.

 

(c)                                  Except for such ownership or exposure, neither the Investor nor any of its Affiliates has any other direct or indirect beneficial ownership (as defined in Section 19) of, and/or economic exposure to, any Voting Securities or rights or options to own or acquire any Voting Securities, including through any derivative transaction.

 

(d)                                 It acknowledges that the New Nominee may not share confidential information relating to the Company with the Investor, any of its directors, officers, other employees or attorneys.

 

9.                                      Miscellaneous.  Each Party recognizes and agrees that if for any reason any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy.  Accordingly, each Party agrees that, in addition to any other remedy the other Party may be entitled to at law or equity, the other Party is entitled to an injunction or injunctions to prevent any breach of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in the Chancery Court of the State of Delaware or, if that court lacks subject matter jurisdiction, the United States District Court for the District of Delaware (collectively, the “Chosen Courts”).  THIS AGREEMENT IS GOVERNED IN ALL RESPECTS, INCLUDING WITHOUT LIMITATION VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

 

If any action is brought in equity to enforce any provision of this Agreement, no Party will allege, and each party hereby waives the defense, that there is an adequate remedy at law.  Furthermore, each Party:

 

(a)                                 Consents to submit itself to the personal jurisdiction of the Chosen Courts if any dispute arises out of this Agreement or the transactions contemplated hereby.

 

(b)                                 Agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any Chosen Court.

 

(c)                                  Agrees that it will not bring any action relating to this Agreement or the transactions contemplated thereby in any court other than the Chosen Courts and each Party irrevocably waives any right to trial by jury.

 

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(d)                                 Agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief.

 

(e)                                  Irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such parties’ principal place of business or as otherwise provided by applicable law.

 

(f)                                   WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CONTROVERSY OR CLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE MAKING, PERFORMANCE OR INTERPRETATION THEREOF, INCLUDING FRAUDULENT INDUCEMENT THEREOF.

 

10.                               No Waiver.  Any waiver by any Party of a breach of any provision of this Agreement does not operate as, nor is construed to be, a waiver of any other breach of such provision or of any breach of any other provision of this Agreement.  The failure of any Party to insist upon strict adherence to any term of this Agreement on one or more occasions is not a waiver and does not deprive that Party of the right thereafter to insist upon strict adherence to that or any other term of this Agreement.

 

11.                               Entire Agreement.  This Agreement and the exhibits hereto contain the entire understanding of the Parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the Parties.

 

12.                               Notice.  All notices, consents, requests, instructions, approvals or other communications provided for herein and all legal process with regard hereto will be in writing and will be deemed validly given, made or served, if:

 

(a)                                 Given by facsimile or email, when such facsimile or email is transmitted to the facsimile number or email address below.

 

(b)                                 Or if given by any other means, when actually received during normal business hours at the applicable address specified as follows:

 

(i)                                     if to the Company:

 

Forestar Group Inc.
 6300 Bee Cave Road, Building 2, Suite 500
 Austin, TX 78746
 Attn:  David M. Grimm, Esq.,

Executive Vice President, General Counsel and Secretary

Facsimile:  (512) 433-5203
 Email:  david.grimm@forestargroup.com

 

(ii)                                  with a copy, which will not constitute notice, to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
 1440 New York Avenue, NW
 Washington, DC 20005

 

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Attn:  Jeremy D. London 
 Facsimile:  (202) 661-8299
 Email:  jeremy.london@skadden.com

Attn:  Richard J. Grossman
 Facsimile:  (917) 777-2116

Email:  richard.grossman@skadden.com

 

(iii)                               or if to the Investor:

 

Cove Street Capital, LLC
 2101 East El Segundo Boulevard, Suite 302
 New York, NY 10019
 Attn:                    Daniele Beasley

Chief Compliance Officer; Member
 Facsimile:  (424) 221-5888
 Email:  dbeasley@covestreetcapital.com

 

(iv)                              with a copy, which will not constitute notice, to:

 

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Attn:       Andrew Freedman

Facsimile: (212) 451-2222

Email: afreedman@olshanlaw.com

 

13.                               Severability.  If at any time after the date hereof, any provision of this Agreement is held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision has no force or effect, but the illegality or unenforceability of such provision has no effect on the legality or enforceability of any other provision of this Agreement.

 

14.                               Counterparts.  This Agreement may be executed in counterparts, which together will constitute a single agreement.

 

15.                               Successors and Assigns.  This Agreement is not assignable by any Party but is binding on any successor of such Party.

 

16.                               No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the Parties and is not enforceable by any other Person.

 

17.                               Expiration of Standstill Period.  Upon the expiration of the Standstill Period in accordance with Sections 3 and 19, this Agreement immediately and automatically terminates in its entirety and no Party has any further right or obligation under this Agreement; provided, that:

 

(a)                                 Section 1(b) survives in accordance with its terms; and

 

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(b)                                 no Party is released from any breach of this Agreement that occurred prior to its termination.

 

18.                               Interpretation and Construction.  Each Party acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that each Party has executed the same with the advice of said counsel.  Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and any and all drafts relating thereto exchanged among the Parties is deemed the work product of all Parties and may not be construed against any Party by reason of its drafting or preparation.  Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each Party and any controversy over any interpretation of this Agreement will be decided without regard to events of drafting or preparation.  The section headings contained in this Agreement are for reference only and do not affect in any way the meaning or interpretation of this Agreement.

 

19.                               Other Definitions.  As used in this Agreement:

 

(a)                                 “Affiliate” has the meaning in Rule 12b-2, promulgated by the SEC under the Exchange Act.

 

(b)                                 “Beneficial owner” and “beneficially own” have their respective meanings in Rule 13d-3 promulgated by the SEC under the Exchange Act.

 

(c)                                  “Person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.

 

(d)                                 “Standstill Period” means the period from the date hereof until the earlier of (x) February 1, 2017, (y) 25 days before the nomination deadline for the 2017 annual meeting of the stockholders of the Company and (z) ten business days after such date, if any, that the Investor provides written notice to the Company (specifying the relevant facts) that the Company has materially breached any of its commitments or obligations under this Agreement, except that if such material breach can be cured, the Company shall have fifteen business days after the date of such written notice within which to cure its material breach and this clause (z) shall not apply in the event of such cure.

 

(e)                                  “Voting Securities” means:

 

(i)            the common stock, par value $0.01 per share, of the Company (the “Common Stock”).

 

(ii)           all other securities of the Company entitled to vote in the election of directors.

 

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(iii)          all securities convertible into, or exercisable or exchangeable for Common Stock or other securities, whether or not subject to the passage of time or any other contingency.

 

***

 

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IN WITNESS WHEREOF, each Party has executed this Agreement or caused the same to be executed by its duly authorized representative as of the date first above written.

 

 

	
 
    	
FORESTAR GROUP INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Phillip J. Weber
    
	
 
    	
 
    	
Name:
    	
Phillip J. Weber
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    

 

Signature Page to Director Nomination Agreement

 

 

	
 
    	
COVE STREET CAPITAL, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ D. Beasley
    
	
 
    	
 
    	
Name: Daniele Beasley
    
	
 
    	
 
    	
Title: President & COO
    

 

Signature Page to Director Nomination Agreement

 

 

Schedule I

 

1.              Advisory approval of the Company’s executive compensation.

 

2.              To ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the year 2016.

 

3.              To re-approve the material terms of the Company’s 2007 Stock Incentive Plan for purposes of complying with the requirements of Section 162(m) of the Internal Revenue Code.

 

Schedule I to the Director Nomination Agreement

 

 

Exhibit ABOARD
OF DIRECTORS RETENTION AGREEMENT

 

This
Board of Directors Retention Agreement (this “Agreement”), which is made and entered into as of February 1, 2016 by
and between Ubiquity Corporation., a Nevada corporation with its principal place of business at 9801 Research Drive, Irvine CA
92618 (“THE COMPANY”) and Greg Jones, an individual, sets forth the principal terms upon which Director will serve
as a member of the Board of Directors of the Company THE COMPANY (the “Board of Directors”).

 

Whereas,
Greg Jones desires to serve as an active member of the Board of Directors of the Company THE COMPANY and provide the services
and standard and customarily associated with same, and;

 

Whereas,
THE COMPANY desires to have Greg Jones serve as an active member of the Board of Directors of THE COMPANY and to provide services
to COMPANY relating to the aforementioned.

 

NOW,
THEREFORE, for good and valuable consideration, including the following, the parties hereto covenant and agree as follows:

 

1.
Services Provided:

 

The
Company THE COMPANY agrees to engage Greg Jones to serve as a member of the Board of Directors and to provide those services required
of a director under The Company’s THE COMPANY Articles of Incorporation and Bylaws (as such may be amended from time to
time, the “Articles and Bylaws”), the Nevada General Corporation Law, and other state and federal laws and regulations,
as applicable. Notwithstanding the terms of this Agreement, Director’s engagement hereunder is at all times subject to the
Articles and Bylaws, the Nevada General Corporation Law, and any other applicable state and federal laws and regulations.

 

In
addition to the services required of Director as set forth in the preceding paragraph, THE COMPANY wishes to engage Director to
provide the services set forth below, and Director wishes to provide such services on the terms and conditions set forth in this
Agreement. The compensation to be paid to Director in consideration of the provision of such services is set forth herein.

 

Nothing
in this Agreement shall be construed so as to mitigate or circumvent Director’s fiduciary duties to THE COMPANY. In the
event of a conflict as between this Agreement and any law applicable to Director’s duties or obligations to THE COMPANY
by virtue of his status as a member of the Board of Directors, the applicable law shall control to the extent of such conflict.
Director shall notify THE COMPANY of any conflicts that may exist in writing in advance.

 

2.
Nature of Relationship

 

Director
is an independent contractor and will not be deemed an employee of THE COMPANY for purposes of employee benefits, income tax withholding,
F.I.C.A. taxes, unemployment benefits or otherwise. The Director shall not enter into any agreement or incur any obligations on
THE COMPANY’s behalf extent in connection with his role as a member of the Board of Directors.

 

    	 

    	 	 	 

    

 

THE
COMPANY will supply, at no cost to the Director: (I) periodic briefings regarding THE COMPANY’s business, (ii) director
packages for each meeting of the Board of Directors and each meeting of any committee of the Board of Directors on which Director
then serves, (iii) copies of minutes of meetings and any other materials that are required under the Articles and Bylaws or the
charter documents of any committee of the Board of Directors on which Director then serves, and (iv) any other materials which
may be necessary for Director to perform the services required by this Agreement.

 

3.
Director’s Warranties

 

Director
warrants that he had fully disclosed his professional background and in reliance of his resume of experience THE COMPANY has offered
this Directorship, that he delivered to THE COMPANY a completed and signed Director Questionnaire, that no other party has exclusive
rights to his services in the specific areas described and that Director is in no way compromising any rights or trust between
any other party and Director or creating a conflict of interest. Director also warrants that no other agreement will be entered
into that will create a conflict of interest with this Agreement. Director further warrants that, in connection with his role
as a member of the Board of Directors and the performance of his obligations under this Agreement, he will comply with all applicable
state and federal laws and regulations. Director acknowledges it understanding of THE COMPANY and reliance on the services to
be provided by Director described in this agreement and attachments to this agreement.

 

Throughout
the term of this Agreement and for a period of twelve months thereafter, Director agrees that he will not, without obtaining THE
COMPANY’s prior written consent, directly or indirectly engage or prepare to engage in any activity in competition with
THE COMPANY business or product, including products in the development stage, accept employment with, provide services to, (including
services as a member of a board of directors), or establish a business in competition with THE COMPANY.

 

4.
Director’s Duties

 

In
consideration for the compensation set forth in herein, and in addition to Director’s duties and obligations to THE COMPANY
as a member of the Board of Directors, Director shall perform the additional duties set forth on Exhibit A attached hereto.

 

5.
Compensation

 

5.1
Common Stock

 

Subject
to approval by the Board of Directors (with Director abstaining from such approval), THE COMPANY shall grant Director 150,000
(ONE HUNDERED FIFTY THOUSAND) shares of THE COMPANY’s restricted common stock at the current stock price in connection with
the first year of service, which shares shall be awarded upon execution of this Agreement. Thereafter, THE COMPANY shall grant
Director 250,000 (TWO HUNDRED FIFTY THOUSAND) common shares options of THE COMPANY’s common stock at the then current common
stock price, for each full year of service to THE COMPANY as a member of the Board of Directors. At the end of each year of service
as a Member of the Board of Directors, Director shall receive cash compensation in the amount of $25,000.00 (TWENTY FIVE THOUSAND
DOLLARS AND NO CENTS) or common stock equivalent at the sole option of THE COMPANY In the event that this Agreement is terminated
for any reason before the completion of Director’s then relevant year of service as a member of the Board of Directors,
then Director shall not be entitled to receive any shares of THE COMPANY’s common stock with respect to such partial year
of service.

 

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5.2
Expenses

 

THE
COMPANY will reimburse Director for reasonable expenses incurred by Director in the performance of his duties as a member of the
Board of Directors, provided such expenses are approved in writing in advance by a duly authorized officer of THE COMPANY.

 

6.
Term of Agreement

 

The
term of this Agreement shall commence upon execution of this Agreement and shall continue in full force and effect until its termination
as set forth in this agreement.

 

7.
Termination

 

This
Agreement shall automatically terminate upon the death of Director or upon his resignation or removal from, or failure to win
election or reelection to, the Board of Directors. This Agreement may also be terminated by THE COMPANY upon a breach by Director
of his duties or obligations hereunder, which breach goes uncured for 15 days or more following written notice to Director by
THE COMPANY of such breach.

 

In
the event of any termination of this Agreement, Director agrees to promptly return any materials provided to Director under this
Agreement. Director agrees that THE COMPANY has the right of injunctive relief to enforce this provision. Director further agrees
not to make any statements or undertake any actions that would disparage THE COMPANY, its officers, directors, shareholders, products
or services.

 

Termination
shall not relieve either party of its continuing obligation under this Agreement with respect to confidentiality of proprietary
information as set forth on Exhibit B attached hereto.

 

8.
Limitation of Liability

 

Under
no circumstances shall THE COMPANY be liable to Director for any consequential damages claimed by any other party as a result
of representations made by Director with respect to THE COMPANY which are different from representations made by THE COMPANY to
Director.

 

Furthermore,
except with respect to the maintenance of confidentiality, neither party shall be liable to the other for delay in any performance,
or for failure to render any performance under this Agreement when such delay or failure is caused by government regulations,
fire, strike, differences with workmen, illness of employees, flood, accident, or any other cause or causes beyond the reasonable
control of such delinquent party.

 

9.
Confidentiality

 

Director
agrees to sign and abide by THE COMPANY’s Director Proprietary Information and Inventions Agreement, a copy of which is
attached hereto as Exhibit B.

 

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10.
Governing Law; Venue

 

This
Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to its
conflict of law principles. Any judicial proceeding brought against any of the parties to this Agreement on any dispute arising
out of this Agreement or any matter related hereto may be brought only in the courts of the County of Orange, State of California,
and by execution and delivery of this Agreement, each of the parties to this Agreement accepts the exclusive jurisdiction of such
courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Nothing in this
section shall be construed so as to limit the right of either party to seek injunctive or other legal relief to which such party
is entitled.

 

11.
Entire Agreement

 

This
agreement (including agreements executed substantially in the form of the exhibits attached hereto) supersedes all prior or contemporaneous
written or oral understandings or agreements, and may not be added to, modified, or waived, in whole or in part, except by a writing
signed by the party against whom such addition, modification or waiver is sought to be asserted.

 

12.
Assignment

 

Director
may not assign his rights, obligations or duties under this Agreement without the express written consent of THE COMPANY, which
consent may be withheld in THE COMPANY’s sole discretion, and any attempted or purported assignment or any delegation of
Director’s duties or obligations arising under this Agreement to any third party or entity shall be deemed to be null and
void, and shall constitute a material breach by Director of his duties and obligations under this Agreement. This Agreement shall
inure to the benefit of and be binding upon any successors of THE COMPANY by way of merger, consolidation or transfer of all or
substantially all of the assets of THE COMPANY, and any parent or subsidiary of THE COMPANY to which THE COMPANY may transfer
its rights under and pursuant to this Agreement.

 

13.
Notices

 

Any
notice required to be given hereunder shall be made to the address for each party set forth above. All notices shall be deemed
effectively given upon personal delivery, (i) five business days after deposit in the United States mail by certified or registered
mail (return receipt requested), (ii) two business days after its deposit with any express courier or overnight delivery service
(prepaid), or (iii) one business day after transmission by facsimile with evidence of successful transmission.

 

14.
Survival of Obligations

 

Notwithstanding
the termination of this Agreement, neither party hereto shall be released hereunder from any liability or obligation to the other
which has already accrued as of the time of such termination (including, without limitation, THE COMPANY’s obligation to
make any fees and expense payments required pursuant to Section E) or which thereafter might accrue in respect of any act or omission
of such party prior to such termination.

 

    	4

    	 	 	 

    

 

15.
Severability

 

Any
provision of this Agreement which is determined to be invalid or unenforceable shall not affect the remainder of this Agreement,
which shall remain in effect as though the invalid or unenforceable provision had not been included herein, unless the removal
of the invalid or unenforceable provision would substantially defeat the intent, purpose or spirit of this Agreement.

 

16.
Further Assurances

 

Whether
or not specifically required under the terms of this Agreement, each party hereto shall execute and deliver such documents and
take such further actions as shall be necessary in order for such party to perform all of his or its obligations specified herein
or reasonably implied from the terms hereof.

 

17.
Amendment

 

No
modification or amendment hereof shall be valid and binding, unless it be in writing and signed by the parties hereto.

 

18.
No Waiver

 

No
waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.

 

19.
Headings

 

Section
headings are inserted herein for convenience only and shall not control or affect the meaning or construction of any of the provisions
hereof.

 

20.
Counterparts

 

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

 

21.
Director’s Acknowledgment

 

Director
acknowledges that (a) he has consulted with or has had the opportunity to consult with legal counsel of Director’s choice
concerning this Agreement and has been advised to do so by THE COMPANY and (b) that he has read and understands this Agreement,
is fully aware of its legal effect, and has entered into it freely and voluntarily.

 

[Signature
Page Follows]

 

    	5

    	 	 	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Board of Directors Retention Agreement to be executed by their duly authorized
officers, as of the date first written above.

 

	Director	 	 	 
	 	 	 	 	 
	Signature:	/s/
    Greg Jones	 	Date:
    	 
	By:
    	Greg
    Jones	 	 	 
	 	 	 	 	 
	Ubiquity,
    Inc.	 	 	 
	 	 	 	 	 
	Signature:	/s/
    Chris Carmichael  	 	Date:
    	 
	By:	Chris
    Carmichael 	 	 	 
	Title:	CEO	 	 	 

 

    	6

    	 	 	 

    

 

EXHIBIT
A

 

BOARD
OF DIRECTOR’S DUTIES

 

In
addition to Director’s common law and statutory duties as a member of the Board of Directors, Director agrees to perform
the following additional duties on behalf of THE COMPANY and THE COMPANY relies on the performance of the BOARD OF DIRECTOR’S
DUTIES:

 

	 	1.
    	Director
    shall respond to all written, e-mail or verbal requests for information in a timely manner, such as but not limited to measures
    taken in lieu of a meeting of the board etc. 
	 	 	 
	 	2.
    	Upon
    reasonable and timely notice, Director shall attend all Board meetings (whether regularly scheduled or special) either personally
    or telephonically.
	 	 	 
	 	3.
    	Director
    shall serve on committees as appointed by the Board and shall provide timely reports on committee activities, actions, and
    recommendations for the Board of Directors.
	 	 	 
	 	4.
    	Upon
    reasonable and timely notice, Director shall be required to travel on behalf of THE COMPANY, in order to attend meetings,
    presentations, events, etc. 
	 	 	 
	 	5.
    	Director
    shall promptly respond to all reasonable requests from the Board of Directors and/or THE COMPANY management. In the event
    of a written request to Director from the Board of Directors and/or THE COMPANY management, Director shall promptly respond
    in writing.
	 	 	 
	 	6.
    	Director
    shall use his best efforts on a continual basis to promote the business of the Company and acquire best of breed partners
    and investors on behalf of THE COMPANY.
	 	 	 
	 	7.
    	Director
    shall use his best efforts to assist THE COMPANY in Growing the revenue of the business of THE COMPANY and such other endeavors
    as may be necessary, from time to time, to promote the success of THE COMPANY.

 

Agreed
and Accepted this 1st day of February, 2016

 

 

Greg
Jones

 

    	7

    	 	 	 

    

 

EXHIBIT
B

 

BOARD
OF DIRECTORS PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

This
Board of Directors Proprietary Information and Inventions Agreement (this “Agreement”), is made and entered into as
of date set forth on the signature page below by and between Ubiquity Inc. (“THE COMPANY”) and ____________________,
an individual (“Director”). Capitalized terms used herein and not defined herein shall have the meanings ascribed
to them in the Retention Agreement (defined below).

 

RECITALS

 

WHEREAS,
THE COMPANY and Director are parties to that certain Board of Directors Retention Agreement (the “Retention Agreement”),
dated as of even date herewith, pursuant to which THE COMPANY agreed to retain director to serve as a member of the Board of Directors,
and to perform certain other duties on behalf of THE COMPANY.

 

WHEREAS,
the parties desire to assure the confidential status of the information which may be disclosed by THE COMPANY to Director in connection
with the Retention Agreement or otherwise;

 

AGREEMENT

 

NOW
THEREFORE, in reliance upon and in consideration of the following undertakings, the parties agree as follows:

 

1.
Subject to the limitations set forth in Paragraph 2, all information disclosed by THE COMPANY to Director shall be deemed to be
“Proprietary Information”. In particular, Proprietary Information shall be deemed to include any information, process,
technique, algorithm, program, design, drawing, formula or test data relating to any research project, work in process, future
development, engineering, manufacturing, marketing, servicing, financing or personnel matter relating to THE COMPANY, its present
or future products, sales, suppliers, customers, employees, investors, or business, whether or oral, written, graphic or electronic
form.

 

2.
The term “Proprietary Information” shall not be deemed to include information which Director can demonstrate by competent
written proof. (i) is now, or hereafter becomes, through no act or failure to act on the part of Director, generally known or
available; (ii) is known by the Director at the time of receiving such information as evidenced by its records; (iii) is hereafter
furnished to Director by a third party, as a matter of right and without restriction on disclosure; or (iv) is the subject of
written permission to disclose provided by THE COMPANY.

 

3.
The Director shall maintain in trust and confidence and not disclose to any third party or use for any unauthorized purpose any
Proprietary Information received from THE COMPANY. The Director may use such Proprietary Information only to the extent required
to accomplish the purposes of this Agreement. The Director shall not use Proprietary Information for any purpose or in any manner
which would constitute a violation of any laws or regulations. No other rights of licenses to trademarks, inventions, copyrights,
or patents are implied or granted under this Agreement.

 

    	8

    	 	 	 

    

 

4.
Proprietary Information supplied shall not be reproduced in any form except as required for Director to serve as a member of the
Board of Directors.

 

5.
The Director represents and warrants that he shall protect the Proprietary Information received with at least the same degree
of care used to protect his own Proprietary Information from unauthorized use or disclosure. The Director shall advise his agent’s
representatives who might have access to the Proprietary Information of the confidential nature thereof and shall obtain from
each such person an agreement to abide by the terms of this Agreement. The Director shall not disclose any Proprietary Information
to any person who does not have a need for such information.

 

6.
All Proprietary Information (including all copies thereof) shall remain the exclusive property of THE COMPANY, and shall be returned
to THE COMPANY after Director’s need for it has expired, or upon request of THE COMPANY, and in any event, upon termination
of the Board of Directors Retention Agreement to which this Agreement is attached.

 

7.
For valuable consideration, Director, , for himself/herself, agents, successors, and assigns, agrees that collectively, they shall
not circumvent the relationships gained while serving as a Board of Director :

 

 

7.1
Use or disclose any information gained through the relationship with the Company concerning the Company’s customers, vendors,
investors, partners CONTRACTORs, or CONTRACTORs for Directors personal gain;

 

7.
Notwithstanding any other provision of this Agreement, disclosure of Proprietary Information shall not be precluded if such disclosure:

 

	 	(a)
    	is
    in response to a valid order of a court or other governmental body of the United States or any political subdivision thereof;
    provided, however, that the responding party shall first have given notice to the other party hereto and shall have made a
    reasonable effort to obtain a protective order requiring that the Proprietary Information so disclosed be used only for the
    purpose for which the order was issued;
	 	 	 
	 	(b)
    	is
    otherwise required by law; or
	 	 	 
	 	(c)
    	is
    otherwise necessary to establish rights or enforced obligations under this Agreement, but only to the extent that any such
    disclosure is necessary.

 

8.
This Agreement shall continue in full force and effect for so long as Director continues to serve as a member of the Board of
Directors. The termination of the Agreement shall not relieve the Director of the obligations imposed by Paragraphs 3, 4, 5 and
12 of this Agreement with respect to Proprietary Information disclosed prior to the effective date of such termination and the
provisions of these Paragraphs shall survive the termination of this Agreement for a period of five (5) years from the date of
such termination.

 

    	9

    	 	 	 

    

 

9.
The Director agrees to indemnify THE COMPANY for any loss or damage suffered as a result of any breach by the Director of the
terms of this Agreement, including any reasonable fees incurred by THE COMPANY in the collection of such indemnity.

 

10.
This Agreement shall be governed by the laws of the State of California as those laws are applied to contracts entered into and
to be performed entirely in California by California residents.

 

11.
This Agreement contains the final, complete and exclusive agreement of the parties relative to the subject matter hereof and may
not be changed, modified, amended or supplemented except by a written instrument signed by both parties.

 

12.
Each party hereby acknowledges and agrees that in the event of any breach of this Agreement by the Director, including, without
limitation, an actual or threatened disclosure of Proprietary Information without the prior express written consent of THE COMPANY,
THE COMPANY will suffer an irreparable injury, such that no remedy at law will afford it adequate protection against, or appropriate
compensation for, such injury. Accordingly, each party hereby agrees that THE COMPANY shall be entitled to specific performance
of the Director’s obligations under this Agreement, as well as such further injunctive relief as may be granted by a court
of competent jurisdiction.

 

[Signature
Page Follows]

 

    	10

    	 	 	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Board of Directors Proprietary Information and Inventions Agreement
as of the 23 day of December, 2015.

 

	THE
    COMPANY 	 	DIRECTOR
	 	 	 
	Ubiquity,
    Inc. 	 	Mr.
    	 
	9801
    Research Drive	 	[Address]
	Irvine,
    CA 92618 	 	City,
    State ZIP

 

	By:
    	/s/
    Chris Carmichael	 	By:
    	/s/
    Greg Jones
	Name:
    	Chris
    Carmichael 	 	Name:
    	Greg
    Jones 
	Title:
    	President
    & CEO 	 	Title:	 Director

 

    	11

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