Exhibit 10.1

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this " Agreement "), dated as of October 26, 2016 (the " Effective Date "), is made by and between Blackboxstocks Inc., a Nevada corporation (the " Company "), and Stephen Chiang, a citizen of Singapore   (the " Purchaser ").

WHEREAS, the Company proposes to issue 3,000,000 shares (the " Shares ") of its common stock, par value $0.001 per share (the " Common Stock "), at a price of $0.50 per Share;

WHEREAS, the Purchaser desires to purchase the Shares for cash consideration in the total aggregate amount of $1,500,000.00;

WHEREAS, in connection with the purchase of the Shares, the parties hereto and certain other shareholders of the Company (as applicable) have agreed to execute that certain Investor Rights Agreement (the " Investor Rights Agreement ") and that certain Right of First Refusal and Co‑Sale Agreement (the " Right of First Refusal Agreement " and, together with the Investor Rights Agreement, the " Transaction Documents "), each dated as of the Effective Date, copies of which have been reviewed by the Company and the Purchaser; and

WHEREAS, the Company, upon the terms and conditions and in reliance upon the representations of the Purchaser contained herein, has agreed to issue the Shares to the Purchaser for such cash consideration.

NOW, THEREFORE, in consideration of the premises, representations, warranties, covenants, and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

1.   Purchase of Shares .

(a)     Subject to the terms and conditions of this Agreement, the Purchaser hereby irrevocably agrees to purchase, and the Company hereby agrees to sell and issue to the Purchaser, the Shares at a price per Share of $0.50, for an aggregate purchase price of $1,500,000.00 (the " Purchase Price ").

(b)     The Purchase Price will be paid in cash by the Purchaser by wire transfer to the Company made in accordance with the following wire instructions:

Receiver - Bank of America

SWIFT Code – BOFAUS3N

Beneficiary Bank - Bank of America

Beneficiary Account Number – XXXXXXXXXXX

Beneficiary Account Name – Blackboxstocks, Inc.

Beneficiary Bank Info.

Bank of America

Preston Beltline Branch

14999 Preston Road

Building E

Dallas, Texas 75254

Phone 972-419-6100

 

 

2.   Closing; Deliveries; and Conditions to Closing .

(a)    Closing .  The purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures at 9:00 a.m. CDT on October 27, 2016, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place are designated as the " Closing ").

(b)    Deliveries .  At the Closing, the Company shall deliver to the Purchaser a certificate representing the Shares against payment of the Purchase Price payable as set forth in Section 1(b) above.  Each of the Company and the Purchaser shall deliver to the other its respective executed copy of this Agreement and each of the Transaction Documents, each dated as of the Effective Date.

(c)    Additional Conditions to Close .  The Company's obligation to issue the Shares and deliver its executed copies of the Transaction Documents to the Purchaser, each at Closing, shall be conditioned upon the Purchaser's representations and warranties set forth in Section 3 below being true and correct in all material respects as of the Effective Date.  The Purchaser's obligation to pay the Company the Purchase Price and to deliver its executed Transaction Documents to the Company, each at Closing, shall be conditioned upon each of Gust Kepler and Jeff Sharrock having executed an employee non-compete agreement substantially in the form or forms delivered to the Purchaser's counsel and the Purchaser's receipt of such executed employee non-compete agreements.

3.   Representations and Warranties of the Purchaser .  The Purchaser hereby represents, warrants, and acknowledges to the Company as follows:

(a)    The Purchaser has full power and authority to execute and deliver this Agreement and to undertake and perform his obligations hereunder.

(b)    All action on the part of the Purchaser necessary for the authorization, execution and delivery of this Agreement by the Purchaser, for the performance of the Purchaser's obligations hereunder, and for the payment of the Purchase Price, has been taken.  Each of this Agreement and the Transaction Documents, when executed and delivered by the Purchaser, will constitute the legal and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights and general principles of equity.

(c)    The Purchaser is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the " Securities Act ").

(d)    If the Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Code), the Purchaser hereby represents that the Purchaser is satisfied as to the full observance of the laws of his country of residence in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements of the Purchaser's country of residence for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares.  The Purchaser's subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Purchaser's country of residence.

(e)    The Purchaser is purchasing the Shares for the Purchaser's own account, for investment purposes only, and not for the account of any other person or entity, and not with a view to distribution, assignment or resale of the Shares to others or to fractionalization of the Shares in whole or in part.

 

 

(f)    The Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser's representations as expressed herein.  The Purchaser understands that the Shares are "restricted securities" under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the   Shares indefinitely unless they are registered with the Securities and Exchange Commission (the " SEC ") and qualified by state authorities, or an exemption from such registration and qualification requirements is available.  The Purchaser acknowledges that the Company has no obligation to register or qualify the Shares for resale except as set forth in the Investor Rights Agreement.  The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of the Purchaser's control, and which the Company is under no obligation   and may not be able to satisfy.

(g)    The Purchaser has conducted the Purchaser's own due diligence in making a decision to purchase Common Stock of the Company.  In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representations or other information (whether oral or written) from the Company or any other person or entity acting as an agent for the Company, other than the representations of the Company provided in Section 4 below.  The Purchaser has discussed with the Purchaser's professional legal, tax and financial advisers the suitability of an investment in the Company for the Purchaser's particular tax and financial situation and has determined that the Common Stock will be a suitable investment for the Purchaser.

(h)    The Purchaser has no need for liquidity with respect to the Purchaser's investment in the Shares to satisfy any existing or contemplated need, undertaking or indebtedness.  The Purchaser is able to bear the economic risk of the Purchaser's investment in the Shares for an indefinite period, including the risk of losing all of the Purchaser's investment.

(i)    The Company has made available to the Purchaser all documents and information relating to an investment in the Company as the Purchaser has requested, and the Purchaser has had the opportunity to ask questions of, and receive answers from, the Company relating to the Purchaser's investment in the Shares.

(j)    The Purchaser acknowledges that an investment in the Company involves substantial risks and recognizes that any historical financial and operating history relating to the Company and its affiliates that may have been provided to the Purchaser, if any, was for purposes of illustration only, and no assurance is or can be given that actual results will correspond with the historical results.  The Purchaser is fully aware of and understands all of the risk factors related to the purchase of the Shares.

(k)    The Purchaser is aware that the Company is issuing the Shares pursuant to exemptions and exceptions from applicable securities laws, and in doing so, is relying upon, among other things, the representations and warranties of the Purchaser contained herein.

(l)    The Purchaser understands that the Purchaser may not distribute or transfer the Shares unless the Common Stock is registered under applicable securities laws or an exemption from registration is available.

 

 

(m)    The Shares were not offered to the Purchaser by means of: (i) any advertisement, article, notice or other communication published in any newspaper, magazine, Internet website or similar medium, or broadcast over television or radio, (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising, or (iii) any other form of general solicitation or advertising.

(n)    The Purchaser understands and acknowledges that the certificate issued in connection with the purchase of the Shares shall be endorsed with the legend set forth below:

THE COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " SECURITIES ACT "), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL THIS COMMON STOCK IS REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

4.   Representations and Warranties of the Company .  The Company hereby represents and warrants to the Purchaser as follows:

(a)    The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the Company, its assets and/or operations.

(b)    The Company has the requisite power and authority to (i) carry on its business as presently conducted and as proposed to be conducted, and (ii) execute and deliver this Agreement and issue the Shares.

(c)    All action on the part of the Company and its officers necessary for the authorization, execution and delivery of this Agreement by the Company, for the performance of the Company's obligations hereunder and for the issuance of the Shares, has been taken or will be taken prior to issuance thereof.  This Agreement, when executed and delivered by the Company, will constitute the legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights and general principles of equity.

(d)    The execution, delivery and performance by the Company of each of this Agreement and the Transaction Documents, the issuance and delivery of the Shares, and the performance of the transactions contemplated by this Agreement and the Transaction Documents: (i) have been duly authorized by all necessary corporate action of the Company; (ii) do not and will not violate or result in a violation of, conflict with or constitute or result in a default (whether after the giving of notice, lapse of time or both) or loss of benefit under any provision of the certificate of incorporation or bylaws of the Company; (iii) do not and will not violate or result in a violation of, conflict with or constitute or result in any breach, default or contravention of (or with due notice or lapse of time or both would result in any breach, default or contravention of), or loss of benefit under, any contract or obligation to which the Company or any of its subsidiaries is a party or by which its or any of its subsidiaries' assets are bound, or cause the creation of any claim upon any of the assets of the Company, and do not and will not violate, conflict with or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, any judgment, injunction, writ, award, decree or order of any nature of, or any restriction imposed by, any court or governmental authority against, binding upon or otherwise applicable to the Company, or, to the Company's knowledge, any provision of United States law, regulation or rule; (iv) do not and will not require from the Company any notice to, declaration or filing with, or consent or approval of any United States federal or state governmental authority (other than such filings as may be required with the SEC, any U.S. state securities authorities or the OTC Markets Group, Inc.); and (v) do not and will not violate or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, accelerate any obligation under, or give rise to a right of termination of, any permit, license or authorization to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound.

 

 

(e)    The Shares, when issued in accordance with the terms of this Agreement, will be duly and validly authorized, validly issued and fully paid and nonassessable, and will be free and clear of any liens or encumbrances, except as created pursuant to this Agreement; provided, however, that the Shares will be subject to certain restrictions on transfer under state and federal securities laws.

(f)    The authorized capital of the Company consists, immediately prior to the Closing, of:

(i) 100,000,000 shares of Common Stock, $0.001 par value per share, 20,220,000 of which are issued and outstanding.  All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws.  The Company holds no Common Stock in its treasury.

(ii)  10,000,000 shares of Preferred Stock, $0.001 par value per share, of which 5,000,000 have been designated as Series A Convertible Preferred Stock, all of which are issued and outstanding.  The rights, privileges and preferences of the Preferred Stock are as stated in the Certificate of Designation filed by the Company with the Secretary of State of Nevada on December 3, 2015 and as provided by Nevada Revised Statutes.  The Company holds no Preferred Stock in its treasury.

(g)    There is no litigation or governmental or administrative proceeding or investigation pending or, to the knowledge of the Company, threatened in writing against the Company or affecting the properties or assets of the Company, or against any of the Company's officers, directors or key employees, nor, to the knowledge of the Company, has there occurred any event or does there exist any condition on the basis of which any such claim may be asserted, that has had or could reasonably be expected to have a material adverse effect on the Company, its assets, properties and/or operations.  

(i)    The Common Stock is registered pursuant to Section 12 of the U.S. Securities Exchange Act of 1934, as amended (the " Exchange Act "), and is quoted on the OTC Pink tier of the OTC Market Groups, Inc.  The Company's Annual Report on Form 10-K for the year ended December 31, 2015 (and any amendments thereto filed prior to the date hereof) (the " Form 10-K ") and the Current Reports on Form 8-K and other reports filed by the Company with the SEC between January 1, 2016 and the Effective Date (collectively, the " SEC Reports "), constitute all reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act, including pursuant to Sections 13, 14 or 15(d) thereof, since December 31, 2015. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Nothing has come to the attention of the Company since such respective dates that would indicate that the SEC Reports are not true and correct in all material respects as of the applicable dates thereof.

(j)    The audited consolidated financial statements of the Company and its subsidiaries (balance sheet and statements of operations, cash flow and shareholders' equity, together with the notes thereto) for the fiscal year ended December 31, 2015 set forth in the Form 10-K contain the unqualified report of the Company's independent certified public accountants (the " Company Financial Statements "), are true, complete and correct in all material respects, consistent in all material respects with the books and records of the Company and its subsidiaries, and have been prepared in accordance with United States Generally Accepted Accounting Principles (" GAAP ") applied on a consistent basis throughout the periods indicated. Except as may be otherwise specified in the Company Financial Statements or the notes thereto, the Company Financial Statements fairly present in all material respects the financial condition, operating results and cash flows of the Company and its subsidiaries as of the dates and for the periods indicated in accordance with GAAP. Nothing has come to the attention of the Company since such respective dates that would indicate that any such financial statements are not true and correct in all material respects as of the applicable dates thereof.

 

 

(k)    Except as set forth in the SEC Reports filed prior to the date hereof, as contemplated by the Transaction Documents or as set forth in the Company Financial Statements, (a) since January 1, 2016, neither the Company nor any of its subsidiaries has participated in any transaction (including, without limitation, amendments to or changes in its Certificate of Incorporation or Bylaws; incurrences, assumptions or guarantees of any debt for borrowed money; issuances or sales of securities, other than pursuant to compensatory plans; discharges or satisfactions of material liens; declarations or payments of dividends or distributions to stockholders; sales, assignments or transfers of material assets; waivers of any rights of substantial value; and material changes in officer compensation) material to the financial condition of the Company and its subsidiaries taken as a whole which is outside the ordinary course of business, (b) since January 1, 2016, neither the Company nor any of its subsidiaries has created or assumed any lien, mortgage or similar claim on an asset of the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, and is outside of the ordinary course of business, (c) since January 1, 2016, there has not been any event, action, omission or other development or change that, individually or in the aggregate, has had a material adverse effect on the Company, its assets and/or operations, (d) since January 1, 2016, there has not occurred a material change in the Company's or any of its subsidiaries' accounting principles or practice except as required by reason of a change in GAAP, (e) since January 1, 2016, there has not occurred any resignation, termination or removal of any officer or director of the Company or any of its subsidiaries or loss of personnel of the Company or any of its subsidiaries or change in the terms and conditions of the employment of the Company's or any of its subsidiaries' officers or key personnel that has had or could reasonably be expected to have a material adverse effect on the Company, its assets and/or operations, and (f) since January 1, 2016, there has been no damage, destruction or loss, whether or not covered by insurance, that would, individually or in the aggregate, have or would be reasonably likely to have, a material adverse effect on the Company, its subsidiaries, and their respective assets and/or operations.

(l)    The Company and its subsidiaries, (a) except where any failure has not had and could not reasonably be expected to have a material adverse effect on the Company, its assets and/or operations, have timely and properly filed all federal, state, local and foreign tax returns required to be filed by any of them through the date hereof and as of the Closing, and all such tax returns filed by the Company or any of its subsidiaries are true, correct and complete in all material respects; (b) have paid or caused to be paid all federal, state, local, foreign and other taxes, including without limitation, income taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes, franchise taxes, employment and payroll related taxes, withholding taxes, transfer taxes, and all deficiencies, or other additions to tax, interest, fines and penalties owed by any of them (collectively, " Taxes "), required to be paid by any of them through the date hereof and as of the Closing whether disputed or not, except Taxes that have not yet accrued or otherwise become due; and (c) and have not received notice of any audit or of any proposed deficiencies from the Internal Revenue Service or any other taxing authority (other than routine audits undertaken in the ordinary course and that have been finally resolved on or prior to the date hereof).

(m)    Except as disclosed in the SEC Reports, the Company holds all material authorizations, consents, approvals, franchises, licenses and permits required under applicable law or regulation for the operation of the business of the Company and its subsidiaries as presently operated.

5.   Further Assurances .  Each party hereto agrees to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement.

6.   Miscellaneous .

(a)    This Agreement may be amended, modified or supplemented only by a signed written agreement (referring specifically to this Agreement) between the Company and the Purchaser.

 

 

(b)    No failure on the part of either party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of either party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver thereof; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.  Any provision of this Agreement may be waived if, and only if, such waiver is in writing and signed by each of the Company and the Purchaser.

(c)    This Agreement constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to its subject matter.

(d)    In the event that any provision of this Agreement is determined to be invalid, unlawful, void or unenforceable to any extent, such provision or any portion thereof shall be interpreted to best reflect the parties' intent, and the remainder of this Agreement shall not be affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

(e)    This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without giving effect to its conflicts of law principles that could cause the law of another state to apply. THE PARTIES IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN DALLAS COUNTY, TEXAS, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(f)    The Agreement shall be binding upon the Purchaser, and the Purchaser's heirs, estate, legal representatives, successors, and permitted assigns and shall inure to the benefit of the Company and its successors and assigns.

(g)    This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one and the same agreement.  Facsimile or .pdf signatures have the same force and effect as an original.

(h)    The headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, each of the Company and the Purchaser has caused this Agreement to be executed on its or his behalf on the date(s) set forth below to be effective as of the Effective Date.

COMPANY:   Blackboxstocks Inc. By: __________________________ Gust Kepler President PURCHASER: _____________________________ Stephen Chiang

 

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COMPANY:   Blackboxstocks Inc. By: __________________________        Gust Kepler, President PURCHASER: _____________________________ Stephen Chiang

 

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RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT

This Right of First Refusal and Co-Sale Agreement (this " Agreement "), is made as of the 26 ^th day of October, 2016 by and among Blackboxstocks Inc., a Nevada corporation (the " Company "), the Investor listed on Schedule A and the Key Holders listed on Schedule B .

WHEREAS, each Key Holder is the beneficial owner of the number of shares of Capital Stock set forth opposite the name of such Key Holder on Schedule B ;

WHEREAS, the Company and the Investor are parties to that certain Stock Purchase Agreement, of even date herewith (the " Purchase Agreement "), pursuant to which the Investor has agreed to purchase shares of Common Stock of the Company, par value $0.001 per share (" Common Stock "); and

WHEREAS, the Key Holders and the Company desire to further induce the Investor to purchase the Common Stock;

NOW, THEREFORE, the Company, the Key Holders and the Investor agree as follows:

1.             Definitions .

1.1   " Affiliate " means, with respect to Investor, any other person or entity that directly or indirectly, controls, is controlled by or is under common control with such Investor, including, without limitation, any general partner, managing member, officer or director of such Investor, or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members of, or shares the same management company with, such Investor.

1.2   " Capital Stock " means (a) shares of Common Stock and Preferred Stock (whether now outstanding or hereafter issued in any context), (b) shares of Common Stock issued or issuable upon conversion of Preferred Stock, and (c) shares of Common Stock issued or issuable upon exercise or conversion, as applicable, of stock options, warrants or other convertible securities of the Company, in each case now owned or subsequently acquired by any Key Holder, Investor, or their respective successors or permitted transferees or assigns. For purposes of the number of shares of Capital Stock held by Investor or any Key Holder (or any other calculation based thereon), all shares of Preferred Stock shall be deemed to have been converted into Common Stock at the then‑applicable conversion ratio.

1.3   " Change of Control " means a transac-tion or series of related transactions in which a person, or a group of related persons, acquires from stockholders of the Company shares representing more than fifty percent (50%) of the out-standing voting power of the Company.

1.4   " Common Stock " means shares of Common Stock of the Company, $0.001 par value per share.

1.5   " Investor Notice " means written notice from an Investor notifying the Company and the selling Key Holder that such Investor intends to exercise Investor's Right of First Refusal as to a portion of the Transfer Stock with respect to any Proposed Key Holder Transfer.

1.6   " Investor(s) " means the person(s) named on Schedule A hereto, each person to whom the rights of an Investor are assigned pursuant to Subsection 5.9 ; provided , however , that any such person shall cease to be considered an Investor for purposes of this Agreement at any time such person and his, her or its Affiliates collectively hold fewer than 5% of the shares of Common Stock issued and outstanding at any time, calculated on a non-diluted basis.

 

 

1.7   " Key Holders " means the persons named on Schedule B hereto, each person to whom the rights of a Key Holder are assigned pursuant to Subsection 3.1 , each person who hereafter becomes a signatory to this Agreement pursuant to Subsection 5.9   or 5.15   and any one of them, as the context may require.

1.8   " Preferred Stock " means collectively, all shares of Preferred Stock, par value $0.001, of the Company.

1.9   " Proposed Key Holder Transfer " means any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer or encumbering of any Transfer Stock (or any interest therein) proposed by any of the Key Holders.

1.10   " Proposed Transfer Notice " means written notice from a Key Holder setting forth the terms and conditions of a Proposed Key Holder Transfer.

1.11   " Prospective Transferee " means any person to whom a Key Holder proposes to make a Proposed Key Holder Transfer.

1.12   " Right of Co-Sale " means the right, but not an obligation, of an Investor to participate in a Proposed Key Holder Transfer on the terms and conditions specified in the Proposed Transfer Notice.

1.13   " Right of First Refusal " means the right, but not an obligation, of Investor to purchase up to Investor's pro rata portion (based upon the total number of shares of Capital Stock then held by Investor) of any Transfer Stock, on the terms and conditions specified in the Proposed Transfer Notice.

1.14   " Transfer Stock " means shares of Capital Stock owned by a Key Holder, or issued to a Key Holder after the date hereof (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), but does not include any shares of Preferred Stock.

2.             Agreement Among the Company, the Investors and the Key Holders .

2.1     Right of First Refusal .

(a)   Grant of Right of First Refusal to Investor .  Subject to the terms of Section 3 below, each Key Holder hereby unconditionally and irrevocably grants to the Investor a Right of First Refusal to purchase all or any portion of the Transfer Stock that such Key Holder may propose to transfer in a Proposed Key Holder Transfer, at the same price and on the same terms and conditions as those offered to the Prospective Transferee.  Each Key Holder that intends to enter into a Proposed Key Holder Transfer must deliver a Proposed Transfer Notice to the Investor no later than thirty (30) days prior to the consummation of such Proposed K ey Holder Transfer.  Such Proposed Transfer Notice shall contain the material terms and conditions (including price and form of consideration) of the Proposed Key Holder Transfer, the identity of the Prospective Transferee and the intended date of the Proposed Key Holder Transfer.  To exercise Investor's Right of First Refusal, Investor must deliver an Investor Notice to the selling Key Holder and the Company within fifteen (15) days after the delivery of the Proposed Transfer Notice as provided in the preceding sentence.

 

 

(b)   Forfeiture of Rights .  Notwithstanding the foregoing, if the total number of shares of Transfer Stock that the Investor has agreed to purchase in the Investor Notice is less than the total number of shares of Transfer Stock, then the Investor shall be deemed to have forfeited any right to purchase such Transfer Stock, and the selling Key Holder shall be free to sell all, but not less than all, of the Transfer Stock to the Prospective Transferee on terms and conditions substantially similar to (and in no event more favorable than) the terms and conditions set forth in the Proposed Transfer Notice, it being understood and agreed that (i) any such sale or transfer shall be subject to the other terms and restrictions of this Agreement, including, without limitation, the terms and restrictions set forth in Subsections 2.2 and 5.9(b) ; (ii) any future Proposed Key Holder Transfer shall remain subject to the terms and conditions of this Agreement, including this Section 2 ; and (iii) such sale shall be consummated within forty-five (45) days after receipt of the Proposed Transfer Notice by the Investor and, if such sale is not consummated within such forty-five (45) day period, such sale shall again become subject to the Right of First Refusal on the terms set forth herein.

(c)   Consideration; Closing .  If the consideration proposed to be paid for the Transfer Stock is in property, services or other non-cash consideration, the fair market value of the consideration shall be as determined in good faith by the Company's Board of Directors.   If the Investor cannot for any reason pay for the Transfer Stock in the same form of non-cash consideration, the Investor may pay the cash value equivalent thereof, as determined in good faith by the Board of  Directors.  The closing of the purchase of Transfer Stock by the Investor shall take place, and all payments from the Investor shall have been delivered to the selling Key Holder, by the later of (i) the date specified in the Proposed Transfer Notice as the intended date of the Proposed Key Holder Transfer; and (ii) forty-five (45) days after delivery of the Proposed Transfer Notice.

2.2      Right of Co-Sale .

(a)   Exercise of Right .  If any Transfer Stock subject to a Proposed Key Holder Transfer is not purchased pursuant to Subsection 2.1 above and thereafter is to be sold to a Prospective Transferee, the Investor may elect to exercise Investor's Right of Co-Sale and participate on a pro rata basis in the Proposed Key Holder Transfer as set forth in Subsection 2.2 (b) below and otherwise on the same terms and conditions specified in the Proposed Transfer Notice. An Investor who desires to exercise such Investor's Right of Co-Sale (a " Participating Investor ") must give the selling Key Holder written notice to that effect in lieu of, and within the deadline for delivery of the Investor Notice described above, and upon giving such notice such Participating Investor shall be deemed to have effectively exercised the Right of Co-Sale.

(b)   Shares Includable .  The Participating Investor may include in the Proposed Key Holder Transfer all or any part of such Participating Investor's Capital Stock equal to the product obtained by multiplying (i) the aggregate number of shares of Transfer Stock subject to the Proposed Key Holder Transfer by (ii) a fraction, the numerator of which is the number of shares of Capital Stock owned by such Participating Investor immediately before consummation of the Proposed Key Holder Transfer (including any shares that the Investor has agreed to purchase pursuant to the Right of First Refusal) and the denominator of which is the total number of shares of Capital Stock owned by the Participating Investor plus the number of shares of Transfer Stock held by the selling Key Holder.

(c)   Purchase and Sale Agreement .  The Participating Investor and the selling Key Holder agree that the terms and conditions of any Proposed Key Holder Transfer in accordance with Subsection 2.2 will be memorialized in, and governed by, a written purchase and sale agreement with the Prospective Transferee (the " Purchase and Sale Agreement ") with customary terms and provisions for such a transaction, and the Participating Investor and the selling Key Holder further covenant and agree to enter into such Purchase and Sale Agreement as a condition precedent to any sale or other transfer in accordance with this Subsection 2.2 .

 

 

 

(d)   Allocation of Consideration . The aggregate consideration payable to the Participating Investors and the selling Key Holder shall be allocated based on the number of shares of Capital Stock sold to the Prospective Transferee by each Participating Investor and the selling Key Holder as provided in Subsection 2.2(b) .

(e)   Purchase by Selling Key Holder; Deliveries .  Notwithstanding Subsection 2.2(c) above, if any Prospective Transferee or Transferees refuse(s) to purchase securities subject to the Right of Co-Sale from any Participating Investor or upon the failure to negotiate in good faith a Purchase and Sale Agreement reasonably satisfactory to the Participating Investors, no Key Holder may sell any Transfer Stock to such Prospective Transferee(s) unless and until, simultaneously with such sale, such Key Holder purchases all securities subject to the Right of Co-Sale from such Participating Investor on the same terms and conditions (including the proposed purchase price) as set forth in the Proposed Transfer Notice.  In connection with such purchase by the selling Key Holder, such Participating Investor shall deliver to the selling Key Holder any stock certificate or certificates, properly endorsed for transfer, representing the Capital Stock being purchased by the selling Key Holder (or request that the Company effect such transfer in the name of the selling Key Holder).  Any such shares transferred to the selling Key Holder will be transferred to the Prospective Transferee against payment therefor in consummation of the sale of the Transfer Stock pursuant to the terms and conditions specified in the Proposed Transfer Notice, and the selling Key Holder shall concurrently therewith remit or direct payment to each such Participating Investor the portion of the aggregate consideration to which each such Participating Investor is entitled by reason of his, her or its participation in such sale as provided in this Subsection 2.2(e) .

(f)   Additional Compliance .  If any Proposed Key Holder Transfer is not consummated within seventy-five (75) days after receipt of the Proposed Transfer Notice by the Company, the Key Holders proposing the Proposed Key Holder Transfer may not sell any Transfer Stock unless they first comply in full with each provision of this Section 2 .  The exercise or election not to exercise any right by any Investor hereunder shall not adversely affect its right to participate in any other sales of Transfer Stock subject to this Subsection   2.2 .

2.3     Effect of Failure to Comply .

(a)   Transfer Void; Equitable Relief .  Any Proposed Key Holder Transfer not made in compliance with the requirements of this Agreement shall be null and void ab initio, shall not be recorded on the books of the Company or its transfer agent and shall not be recognized by the Company.  Each party hereto acknowledges and agrees that any breach of this Agreement would result in substantial harm to the other parties hereto for which monetary damages alone could not adequately compensate.  Therefore, the parties hereto unconditionally and irrevocably agree that any non-breaching party hereto shall be entitled to seek protective orders, injunctive relief and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Transfer Stock not made in strict compliance with this Agreement).

(b)   Violation of First Refusal Right .  If any Key Holder becomes obligated to sell any Transfer Stock to the Investor under this Agreement and fails to deliver such Transfer Stock in accordance with the terms of this Agreement, such Investor may, at such Investor's option, in addition to all other remedies it may have, send to such Key Holder the purchase price for such Transfer Stock as is herein specified and transfer to the name of such Investor (or request that the Company effect such transfer in the name of an Investor) on the Company's books any certificates, instruments, or book entry representing the Transfer Stock to be sold.

 

 

(c)   Violation of Co-Sale Right .  If any Key Holder purports to sell any Transfer Stock in contravention of the Right of Co-Sale (a " Prohibited Transfer "), an Investor who desires to exercise such Investor's Right of Co-Sale under Subsection 2.2 may, in addition to such remedies as may be available by law, in equity or hereunder, require such Key Holder to purchase from such Investor the number of shares of Capital Stock that such Investor would have been entitled to sell to the Prospective Transferee had the Prohibited Transfer been effected in compliance with the terms of Subsection 2.2 .  The sale will be made on the same terms, and subject to the same conditions as would have applied had the Key Holder not made the Prohibited Transfer, except that the sale (including, without limitation, the delivery of the purchase price) must be made within ninety (90) days after the Investor learns of the Prohibited Transfer, as opposed to the timeframe proscribed in Subsection   2.2 .  Such Key Holder shall also reimburse each Investor for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of the Investor's rights under Subsection 2.2 .

3.              Exempt Transfers .

3.1     Exempted Transfers .  Notwithstanding the foregoing or anything to the contrary herein, the provisions of Subsections 2.1 and 2.2 shall not apply (a) in the case of a Key Holder that is an entity, upon a transfer by such Key Holder to its stockholders, members, partners or other equity holders; (b) to a repurchase of Transfer Stock from a Key Holder by the Company at a price no greater than that originally paid by such Key Holder for such Transfer Stock and pursuant to an agreement containing vesting and/or repurchase provisions approved by a majority of the Board of Directors; (c) to a pledge of Transfer Stock that creates a mere security interest in the pledged Transfer Stock, provided that the pledgee thereof agrees in writing in advance to be bound by and comply with all applicable provisions of this Agreement to the same extent as if it were the Key Holder making such pledge; (d) in the case of a Key Holder that is a natural person, upon a transfer of Transfer Stock by such Key Holder made for bona fide estate planning purposes, either during his or her lifetime or on death by will or intestacy to his or her spouse, child (natural or adopted), or any other direct lineal descendant of such Key Holder (or his or her spouse) (all of the foregoing collectively referred to as " family members "), or any other relative/person approved by unanimous consent of the Board of Directors of the Company, or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by such Key Holder or any such family members; or (e) to the transfer by the Key Holder of an amount of Common Stock representing 5% or less of the issued and outstanding Common Stock of the Company at the time of the transfer during any 6 month period; provided however, that if a transfer is exempt under Subsection 3.1(e) , the transferee must agree in writing at the time of and in connection with the transfer to refrain from selling any of the Common Stock acquired in the Exempt Transfer for a period of 6 months from the date of the transfer, and shall limit sales of the Common Stock acquired in the transfer thereafter to a maximum of 20% of the total number of shares of Common Stock acquired in the transfer during each succeeding 6 month period; and provided further, that in the case of clause(s) (a), (c), or (d), the Key Holder shall deliver prior written notice to the Investors of such pledge, gift or transfer and such shares of Transfer Stock shall at all times remain subject to the terms and restrictions set forth in this Agreement and such transferee shall, as a condition to such issuance, deliver a counterpart signature page to this Agreement as confirmation that such transferee shall be bound by all the terms and conditions of this Agreement as a Key Holder (but only with respect to the securities so transferred to the transferee), including the obligations of a Key Holder with respect to Proposed Key Holder Transfers of such Transfer Stock pursuant to Section 2 .

 

 

3.2     Exempted Offerings .  Notwithstanding the foregoing or anything to the contrary herein, the provisions of Section 2 shall not apply to the sale of any Transfer Stock to the public in an offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (a " Public Offering ").

4.              Legend . Each certificate, instrument, or book entry representing shares of Transfer Stock held by the Key Holders or issued to any permitted transferee in connection with a transfer permitted by Subsection  3.1 hereof shall be notated with the following legend:

THE SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT BY AND AMONG THE STOCKHOLDER, THE CORPORATION AND CERTAIN OTHER HOLDERS OF STOCK OF THE CORPORATION.  COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

Each Key Holder agrees that the Company may instruct its transfer agent to impose transfer restrictions on the shares notated with the legend referred to in this Section 4 above to enforce the provisions of this Agreement, and the Company agrees to promptly do so.  The legend shall be removed upon termination of this Agreement at the request of the holder.

5.             Miscellaneous .

5.1   Term .  This Agreement and the rights and obligations described herein will terminate and be of no further force or effect upon the earliest to occur of: (a) such date upon which Investor holds less than 5% of the Company's issued and outstanding Common Stock, calculated on a non-diluted basis; (b) the consummation of a sale of the Company's securities pursuant to a registration statement filed by the Company under the Securities Act of 1933, as amended, in connection with an offering of its securities to the general public; or (c) the consummation of a merger or consolidation of the Company that is effected for independent business reasons unrelated to extinguishing such rights and that results in fifty percent or more of the Company being owned by shareholders other than those listed on Schedule B as of the date of this Agreement.

5.2   Stock Split .  All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect any stock dividend, split, combination or other recapitalization affecting the Capital Stock occurring after the date of this Agreement.

5.3   Ownership .  Each Key Holder represents and warrants that such Key Holder is the sole legal and beneficial owner of the shares of Transfer Stock subject to this Agreement and that no other person or entity has any interest in such shares (other than a community property interest as to which the holder thereof has acknowledged and agreed in writing to the restrictions and obligations hereunder).

5.4   Dispute Resolution .  The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Texas and to the jurisdiction of the United States District Court for the Northern District of Texas for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Texas or the United States District Court for the Northern District of Texas, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

 

5.5   Notices .  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient's next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with an internationally nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt.  All communications shall be sent to the respective parties at their address as set forth on Schedule A or Schedule B hereof, as the case may be, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 5.5 .  If notice is given to the Company, it shall be sent to Blackboxstocks Inc., 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240,   Attention: Gust Kepler, President; and a copy (which shall not constitute notice) shall also be sent to Munck Wilson Mandala, LLP, 12770 Coit Road, Suite 600, Dallas, Texas 75252, Attention: Jeffrey M. McPhaul.  Notwithstanding the foregoing or any provision herein to the contrary, any notice to be delivered to the Investor hereunder shall, in addition to any other method of delivery, be e-mailed to the Investor at his e-mail address set forth on Schedule A attached hereto (or to such other e-mail address provided to the Company by the Investor in writing after the date hereof).

5.6   Entire Agreement .  This Agreement (including, the Exhibits and Schedules hereto) constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

5.7   Delays or Omissions .  No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

5.8   Amendment; Waiver and Termination .  This Agreement may be amended, modified or terminated and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by (a) the Company, (b) the Key Holders holding a majority of the shares of Transfer Stock then held by all of the Key Holders, and (c) the holders of a majority of the shares of Common Stock held by the Investor(s) (voting as a single class).  Any amendment, modification, termination or waiver so effected shall be binding upon the Company, the Investors, the Key Holders and all of their respective successors and permitted assigns whether or not such party, assignee or other shareholder entered into or approved such amendment, modification, termination or waiver.  The Company shall give prompt written notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination or waiver.  No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

5.9   Assignment of Rights .

(a)   The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(b)   Any successor or permitted assignee of any Key Holder, including any Prospective Transferee who purchases shares of Transfer Stock in accordance with the terms hereof, shall deliver to the Company and the Investor(s), as a condition to any transfer or assignment,  a counterpart signature page hereto pursuant to which such successor or permitted assignee shall confirm their agreement to be subject to and bound by all of the provisions set forth in this Agreement that were applicable to the predecessor or assignor of such successor or permitted assignee.

(c)   Except as set forth in the second sentence of this paragraph, the rights of the Investor(s) hereunder are not assignable without the Company's written consent, in its discretion, it being acknowledged and agreed that any such assignment shall be subject to and conditioned upon any such assignee's delivery to the Company, the Key Holders and the Investor of a counterpart signature page hereto pursuant to which such assignee shall confirm their agreement to be subject to and  bound by all of the provisions set forth in this Agreement that were applicable to the  assignor of such assignee.  Notwithstanding the foregoing or any provision herein to the contrary, the Investor may assign his rights hereunder without the Company's written consent to any Affiliate of the Investor.

(d)   Except in connection with an assignment by the Company by operation of law to the acquirer of the Company, the rights and obligations of the Company hereunder may not be assigned under any circumstances.

5.10   Severability .  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

5.11   Governing Law . This Agreement shall be governed by the internal law of the State of Texas.

5.12   Titles and Subtitles .  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

5.13   Counterparts .  This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g. , www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

5.14   Specific Performance .  In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Investor shall be entitled to specific performance of the agreements and obligations of the Company and the Key Holders hereunder and to such other injunction or other equitable relief as may be granted by a court of competent jurisdiction.

 

 

5.15   Additional Key Holders .  In the event that after the date of this Agreement, the Company issues shares of Common Stock, or options to purchase Common Stock, to any employee or consultant, which shares or options would collectively constitute with respect to such employee or consultant (taking into account all shares of Common Stock, options and other purchase rights held by such employee or consultant) one percent (10%) or more of the Company's then outstanding Common Stock (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding options, warrants or convertible securities, as if exercised or converted), the Company shall, as a condition to such issuance, cause such employee or consultant to execute a counterpart signature page hereto as a Key Holder, and such person shall thereby be bound by, and subject to, all the terms and provisions of this Agreement applicable to a Key Holder.

 [Remainder of Page Intentionally Left Blank]

 

 

 

 

SCHEDULE A
INVESTORS

Mailing Address:	8 Kitchener Link,
	City Square Residences #21-14 Singapore 207226
E-mail address:	mansapost@gmail.com

SCHEDULE B
KEY HOLDERS

 

 

 

Gust Kepler	8,800,000 Common Stock
5430 LBJ Freeway, Suite 1485	5,000,000 Preferred Stock
Dallas, Texas 75240
Karma BlackBox, LLC	5,000,000 Common Stock
2 Lake Forest Court
Trophy Club, Texas 76262

 

 

 

EMPLOYEE NON-COMPETE AGREEMENT

This Employee Non-Compete Agreement (" Agreement ") is entered into by and between Blackboxstocks, Inc., a Nevada corporation, with its principal place of business located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240, (the " Employer ") and Gust Kepler (the " Employee ") (the Employer and the Employee are collectively referred to herein as the " Parties ") as of October 21, 2016 (the " Effective Date ").

In consideration of the Employee's employment by the Employer as President, which the Employee acknowledges to be good and valuable consideration for the Employee's obligations hereunder, the Parties hereby agree as follows:

1.   Confidential Information . The Employee understands and acknowledges that during the course of employment by the Employer, the Employee will have access to and learn about the Employer's confidential, proprietary, and trade secret information (Confidential Information), as defined below.

(a)  Confidential Information Defined.

For purposes of this Agreement, " Confidential Information " includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic, or any other form or medium, relating directly or indirectly to: business processes, practices, methods, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts, terms of agreements, transactions, potential transactions, negotiations, pending negotiations, know-how, trade secrets, computer programs, computer software, applications, operating systems,  software design, web design, work-in-process, databases, manuals, records, articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting information, accounting records, legal information, marketing information, advertising information, pricing information, credit information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, security procedures, graphics, drawings, sketches, market studies, sales information, revenue, costs, formulae, notes, communications, algorithms, product plans, designs, styles, models, ideas, audiovisual programs, inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer lists, client information, and client lists of the Employer or its businesses or any existing or prospective customer, supplier, investor, or other associated third party, or of any other person or entity that has entrusted information to the Employer in confidence.

The Employee understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified or treated as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used.

The Employee understands and agrees that Confidential Information includes information developed by the Employee in the course of the Employee's employment by the Employer as if the Employer furnished the same Confidential Information to the Employee in the first instance. Confidential Information shall not include information that is generally available to and known by the public at the time of disclosure to the Employee, provided that such disclosure is through no direct or indirect fault of the Employee or person(s) acting on the Employee's behalf.

 

 

(b)   Employer Creation and Use of Confidential Information.

 

The Employee understands and acknowledges that the Employer has invested, and continues to invest, substantial time, money, and specialized knowledge into developing its resources, creating a customer base, generating customer and potential customer lists, training its employees, and improving its offerings in the design, development, marketing and exploitation of software applications and solutions to be used in conjunction with stock trading platforms. The Employee understands and acknowledges that as a result of these efforts, Employer has created, and continues to use and create, Confidential Information. The Employee further understands and acknowledges that this Confidential Information provides Employer with a competitive advantage over others in the marketplace and that Employer would suffer irreparable harm if Confidential Information is disclosed to its competitors.

(c)    Disclosure and Use Restrictions.

 

The Employee agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate, or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or part, to any entity or person whatsoever (including other employees of the Employer) not having a need to know and authority to know and use the Confidential Information in connection with the business of the Employer; and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of the Employer, except as required in the performance of the Employee's authorized employment duties to the Employer. Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. The Employee shall promptly provide written notice of any such order to the President of the Company.

The Employee understands and acknowledges that the Employee's obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon the Employee first having access to such Confidential Information (whether before or after beginning employment with the Employer) and shall continue during and after the Employee's employment by the Employer until such time as such Confidential Information has become public knowledge other than as a result of the Employee's breach of this Agreement or breach by those acting in concert with the Employee or on the Employee's behalf.

(d)   Notice of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016 ("DTSA").

 

Notwithstanding any other provision of this Agreement:

 

 

(i)	The Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that:

(A)	is made: (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or

(B)	is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

(ii)	if the Employee files a lawsuit for retaliation by the Employer for reporting a suspected violation of law, the Employee may disclose the Employer's trade secrets to the Employee's attorney and use the trade secret information in the court proceeding if the Employee:

(A)	files any document containing the trade secret under seal; and

(B)	does not disclose the trade secret, except pursuant to court order.

2.             Restrictive Covenants .

(a)   Acknowledgment.

 

The Employee understands that the nature of the Employee's position gives the Employee access to and knowledge of Confidential Information and places the Employee in a position of trust and confidence with the Employer and that the Employee will benefit from the Employer's goodwill. The Employee understands and acknowledges that the Employer invested significant time and expense in developing the Confidential Information and goodwill.

The Employee further understands and acknowledges that the restrictive covenants below are necessary to protect the Employer's legitimate business interests in its Confidential Information and goodwill. The Employee further understands and acknowledges that the Employer's ability to reserve these for the exclusive knowledge and use of the Employer is of great competitive importance and commercial value to the Employer and that the Employer would be irreparably harmed if the Employee violates the restrictive covenants below.

(b) Non-Competition.

 

Because of Employer's legitimate business interest as described herein and the good and valuable consideration offered to the Employee, the receipt and sufficiency of which is acknowledged, during the term of Employee's employment and for the twelve (12) months, to run consecutively, beginning on the last day of the Employee's employment with the Employer, for any reason or no reason and whether employment is terminated at the option of the Employee or the Employer, the Employee agrees and covenants not to engage in any Prohibited Activity.

 

 

For purposes of this non-compete clause, " Prohibited Activity " is activity in which the Employee contributes his knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, partner, director, stockholder, officer, volunteer, intern, or any other similar capacity to an entity engaged in the same or similar business as the Employer, including those engaged in the business of in the design, development, marketing and exploitation of software applications and solutions to be used in conjunction with stock trading platforms. Prohibited Activity also includes activity that may require or inevitably require disclosure of trade secrets, proprietary information, or Confidential Information.

Nothing herein shall prohibit Employee from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that the Employee is not a controlling person of, or a member of a group that controls, such corporation.

This Section does not, in any way, restrict or impede the Employee from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Employee shall promptly provide written notice of any such order to the President of the Company.

(c)    Non-Solicitation of Employees.

 

Employee understands and acknowledges that the Employer has expended and continues to expend significant time and expense in recruiting and training its employees and that the loss of employees would cause significant and irreparable harm to the Employer. The Employee agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, any employee of the Employer in the six (6) months preceding the last day of Employee's employment (collectively, " Covered Employee "), or induce the termination of employment of any employee of the Employer during twelve (12) months, to run consecutively, beginning on the last day of the Employee's employment with the Employer.

(d)   Non-Solicitation of Customers.

 

The Employee understands and acknowledges that the Employer has expended and continues to expend significant time and expense in developing customer relationships, customer information and goodwill, and that because of the Employee's experience with and relationship to the Employer, he will have access to and learn about much or all of the Employer's customer information. " Customer Information " includes, but is not limited to, names, phone numbers, addresses, email addresses, order history, order preferences, chain of command, pricing information, and other information identifying facts and circumstances specific to the customer and relevant to services.

The Employee understands and acknowledges that loss of this customer relationship and/or goodwill will cause significant and irreparable harm to the Employer.

The Employee agrees and covenants, for a period of twelve (12) months, to run consecutively, beginning on the last day of the Employee's employment with the Employer, not to directly or indirectly solicit, contact, or attempt to solicit or contact, using any other form of oral, written, or electronic communication, attempt to contact or meet with the Employer's current customers for purposes of offering or accepting goods or services similar to or competitive with those offered by the Employer.

 

 

This restriction shall only apply to each of the following:

·	Customers or prospective customers the Employee contacted in any way during the six (6) months before the last day of the Employee's employment with the Employer.

·	Customers about whom the Employee has trade secret or Confidential Information.

·	Customers who became customers during the Employee's employment with the Employer.

·	Customers about whom the Employee has information that is not available publicly.

3.   Acknowledgment: "At-Will" Employment Status . The Employee acknowledges and agrees that the Employee's services to be rendered to the Employer are of a special and unique character; that the Employee will obtain knowledge and skill relevant to the Employer's industry, methods of doing business, and marketing strategies by virtue of the Employee's employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interests of the Employer.

                   The Employee further understands and acknowledges that the amount of the Employee's compensation reflects, in part, the Employee's obligations and the Employer's rights under this Agreement; that the Employee has no expectation of any additional compensation, royalties, or other payment of any kind not otherwise referenced herein in connection herewith; that the Employee will not be subject to undue hardship by reason of the Employee's full compliance with the terms and conditions of this Agreement or the Employer's enforcement thereof; and that this Agreement is not a contract of employment and shall not be construed as a commitment by either of the Parties to continue an employment relationship for any certain period of time.

4.   Remedies . In the event of a breach or threatened breach by the Employee of any of the provisions of this Agreement, the Employee hereby agrees and acknowledges that the Employer will suffer immediate and irreparable injury, for which monetary damages will not be an adequate remedy. The Employee further acknowledges and agrees that the Employer shall be entitled to immediate injunctive relief, including a temporary restraining order, a temporary injunction, a permanent injunction, or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy. The Employee further agrees and acknowledges that the aforementioned equitable relief shall be in addition to, not in lieu of, and without prejudice to, any legal remedies, monetary damages, or other available forms of relief.

5.   Successors and Assigns .

(a) Assignment by the Employer.

 

To the extent permitted by state law, the Employer may assign this Agreement to any subsidiary or corporate affiliate, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Employer. This Agreement shall inure to the benefit of the Employer and its successors and assigns.

 

 

(b) No Assignment by the Employee.

 

The Employee may not assign this Agreement or any part hereof. Any purported assignment by the Employee shall be null and void from the initial date of purported assignment.

6.   Warranty . Employee represents and warrants that the Employee is not a party to any non-compete restrictive covenant or related contractual limitation that would interfere with or hinder the Employee's ability to undertake the obligations and expectations of employment with the Employer.

7.   Governing Law: Jurisdiction and Venue . This Agreement, for all purposes, shall be construed in accordance with the laws of Texas without regard to conflicts-of-law principles. Any action or proceeding by either of the Parties to enforce this Agreement shall be brought only in any state or federal court located in the state of Texas, county of Dallas. The Parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

8.   Entire Agreement . Unless specifically provided herein, this Agreement contains all the understandings and representations between the Employee and the Employer pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter.

9.   Modification and Waiver . No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Employee and by the President of the Employer. No waiver by either of the Parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the Parties in exercising any right, power, or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power, or privilege.

10.              Severability . Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding on the Parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement.

   The Parties further agree that any such court is expressly authorized to modify any unenforceable provision of this Agreement in lieu of severing the unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement, or by making any other modifications as it deems warranted to carry out the intent and agreement of the Parties as embodied herein to the maximum extent permitted by law.

   The Parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had not been set forth herein.

 

 

11.   Captions . Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

12.   Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart's signature page of this Agreement, by facsimile, electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, has the same effect as delivery of an executed original of this Agreement.

 [SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date above.