This document outlines a memorandum of understanding between SMRC and a potential partner. Key points include:
- SMRC proposes a joint venture where the partner can purchase 18-45% of SMRC's executive shares for $1.2-3 million.
- The funds would be used to complete SMRC's development and marketing for launch, and provide operating expenses.
- SMRC's social media model has been in development since 2009 through various companies. It aims to facilitate donations and social benefits for online activities.
- The MOU covers non-binding terms like the parties' proposed responsibilities, SMRC's stock structure and ownership, and next steps for launch. It establishes a framework for negotiating a
Social Market Research for Charity consulting (Phil Nakata & Associates
1. …a passive social benefits and 501(c)3 social impact rating service
…creating donations + social benefits for content, networking, purchases and awards
(resulting in massive feedback & 100%++ increase in funding for all worthy 501(c)3s)
Funding Causes from Technology that makes every Tweet & Post in life Count,
To End Fraud, Protect Privacy & Change the World for Good!
The ultimate market for cause marketing and social medium
Changing the Social Web… FOR GOOD
Bringing together charities, celebrities, personal and corporate social
responsibility, social organizations (media, networks & ‘societies’),
multi-player online gaming, social media analytics, social process
reengineering services, the dynamics of the social web and the most
popular forms of supporting charity, to finance the spectrum of
humanitarian causes as a by-invitation-only passive social credit
awards & 501(c)3 social impact rating service.
Phillip R. Nakata
Aaron S. Nakata
Scott Bruce
JP D. Zahr
Prepared for XXXXX YYYYYY.
A Joint Venture Agreement of True Partners – To Change the World for
Good by optimizing mankind’s most abundant & sustainable asset.
2. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 2
Table of Contents
Binding Terms of a Joint Venture
1. ObligationstoNegotiateinGoodFaithtowardsDefinitiveAgreements.................................................................................... 5
2. Confidentiality:PublicAnnouncements.................................................................................................................................... 5
3. SMRC ScopeofExclusivity........................................................................................................................................................ 6
4. Deposit w/Loan backup........................................................................................................................................................ 6
5. Retainer: NOTE: This term is no longer available as the first $600K contribution has been allocated ......................... 6
6. ImplicitNDA: ........................................................................................................................................................................... 6
7. DurationoftheLetterofIntent................................................................................................................................................. 6
Non-Binding Terms - binding upon acceptance of the JV/MOU agreement
8. ProposedTransactionsandResponsibilities.............................................................................................................................. 7
a. SMRCwilldoeachofthefollowing........................................................................................................................................ 7
b. (YourOrganization)willeachdothefollowing....................................................................................................................... 7
9. SMRC Stock.............................................................................................................................................................................. 7
a. ExecutiveStock..................................................................................................................................................................... 8
b. PreferredStock..................................................................................................................................................................... 8
10. Finder’sFee.............................................................................................................................................................................. 8
11. History ..................................................................................................................................................................................... 9
12. SMRC Inc.(reborn): modusoperandi.................................................................................................................................... 9
13. Hosting..................................................................................................................................................................................... 9
14. MembershipProfile ............................................................................................................................................................... 10
15. The ObjectivesofSMRC.......................................................................................................................................................... 10
16. CharitiesSupported................................................................................................................................................................ 11
17. SMRC’sBusinessRevenues..................................................................................................................................................... 11
CoreServices.............................................................................................................................................................................. 11
ViaPartnerships......................................................................................................................................................................... 11
18. SMRC BusinessMarket........................................................................................................................................................... 12
19. SMRC –CurrentSoftwareAssetValue(Whatisusableandreadytogonow?)......................................................................... 12
20. Web3.0 Technologies............................................................................................................................................................ 14
21. Web4.0 Technologies............................................................................................................................................................. 14
22. SMRC’sNextSteps(Whatto donext?).................................................................................................................................... 15
a. MarketingtoCharities......................................................................................................................................................... 15
b. SMRC,Beta(enhancementsto workingmodel)andSMRC,GA (generalavailability).............................................................. 15
i. Launch(coordinatedwith simultaneouscharityendorsements)........................................................................................ 16
3. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 3
ii. SMRCDevelopment: 3-4Months Post-Launch............................................................................................................... 16
23. SMRC Status/ Legal............................................................................................................................................................... 16
24. SMRC Status/Financials......................................................................................................................................................... 17
25. SMRC Status/SocialMediaNetwork Security&MemberPrivacy:......................................................................................... 18
· BestPracticePolicies .......................................................................................................................................................... 18
· WorkstationProtection...................................................................................................................................................... 18
· MessageEncryption........................................................................................................................................................... 18
· ServerProtection................................................................................................................................................................ 18
26. Employee Stock Options..................................................................................................................................................... 19
27. Repayment of Contribution ............................................................................................................................................... 19
28. Partner's Monetary Contribution...................................................................................................................................... 20
29. Partner Approval Rights.................................................................................................................................................. 21
30. Representations and Warranties........................................................................................................................21
31. Indemnification by SMRC ...................................................................................................................................22
32 Accounting and Reports by SMRC.......................................................................................................................22
33. Funds Held in Trust..............................................................................................................................................23
34. Relationship of Parties ........................................................................................................................................23
35. Business Opportunities ........................................................................................................................................23
36. Additional Documents..........................................................................................................................................23
37. Notices.................................................................................................................................................................23
38. Assignment ..........................................................................................................................................................24
39. Miscellaneous.......................................................................................................................................................25
40. Attorneys' Fees .....................................................................................................................................................25
41. Effect of this Letter of Intent.................................................................................................................................25
42. SpecialReferences and Provisions– EffectiveJuly4th
,2014 -AssociationwithConscienceLLC(IPHolding)...............25
43. Specialprovisions-‘Spokesperson’(endorsing/promoting)role(requirements/liabilityexclusion)...........................26
44. Disclaimer - Pubiisher's Revenues Analytics …………………………………………………………………………………………………….26
45. Termination ..........................................................................................................................................................26
Signatures - Understood, Agreed & Accepted …………………………………………………………………………………………………………..27
Exhibit A: Sample Loan Terms .......................................................................................................................................30
Exhibit B: Bi-Lateral Non-Disclosure Agreement............................................................................................................31
Selective SMRC References ............................................................................................................................................36
SMRC Graphics..........................................................................................................................................................37-43
4. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 4
March 20th
, 2015
To: XXXXX YYYYY
c/o ZZZZ Spruce Street, Suite XXX
Boulder, CO 80302
abc@abcorp.com; 303.XXX.YYYYY
www.linkedin.com/in/XXXXXX
Re:LetterofIntent/DocumentedStartingPoint: MemorandumofUnderstanding–Objectives,Resources,Roles,Terms
Dear XXXXX,
This Memorandum of Understanding (MOU) articulates our mutual intention to actively support SMRC in securing a
Joint Venture of Development, Employment, Resource Pooling, Governance & Industry Trading Strategy that includes
equity and Executive Board voting power. As an internal (not Public), private equity purchase agreement (“Purchase
Agreement”) by which the undersigned party’s (each of member, employee & owner status under this joint venture –
e.g. Consultant) professional or personal relationships And/or other qualified strategic candidates or “accredited”
(qualified) partners (“Working Partner”) and/or their undersigned shareholders (under similar agreements collectively)
could together purchase/ contribute a capital contribution of 18%, but no more than 45% or more of the Executive
Shares of a set of companies we are co-founding together, dba SMRC, for a contemplated purchase / contribution price/
budget of $1,200,000.00 (USD) for 18% to as much as $3,000,000.00 (USD) for the 45%. The “Use of Funds” for the
$1.2M will be for completing the marketing, development of SMRC for market launch, while the additional funding (to
$1.8M) would be for marketing to secure double the number of sponsors and members, provide for 1-3 months of
operation expenses, along with establishing the infrastructure to go Public in as early as 6 months from our market
launch. With over 2+ years of historical social data, launching with an absolute minimum of 7 million members at the
time of this notice, SMRC does not anticipate needing further funds.
Subsequent to this formation of a “C” Corp (for the media schedules and the foundation of this Agreement), a
Charitable Trust (where every 501-c3 supported has a sub-account), a pending 501-c3 (for SMRC’s exit plan), and an “S”
Corp (for SMRC IP/Intellectual Capital, Consulting & insurance of Business Continuity for SMRC’s “C” Corp), we wish to
open the door to some of the preferred stock for ‘friends and family’ working contributions, pursuant to complying with
SEC Regulation D (Rules 504-505).
In co-founding this venture,we will be establishing the Executive (performing roles w/board voting rights)as 30% of the total
shares, the balance will be represented by 30% Preferred shares and 40% Common shares; Phil Nakata & Associates, as
original founders of this social-business-technical model will granted at no-cost, 15% of the Executive shares (with Phillip,
Aaron Nakata, Aimee Nakata to receive only 2.5% each – see details at item 9 disclosure); 9% of the remaining Executive
Shares are being reserved for ‘friends and family’ offering; 26% of the remaining Executive Shares are reserved for our
funding partners and 2-3 Future Executives. The difference between securing 40% to 49% of the Executive shares will be
dependentonwhatneeded resourceswemutuallydeemofvalueinsupportofourdynamic growth.
SMRC’s IP/IC models, implemented through Open Sourcearchitecture & ‘best practice’ designs/patterns have been evolving
since 1.2009, though multiple corporate business identities, always under a ‘shared rights’ and disclosure agreement for the
application component configurations, with virtually everything of IC/IP value documented by the primary founder, Phillip R.
Nakataandhisson,Aaron,theCTOofSMRC’sbusinesspractice.
5. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 5
Underthebusinessidentitiesof‘StrategicRatingInc’(SRI,anOregon “C”Corporation),‘Xenia’(aWashington“C”Corporation),
and ‘Phil Nakata & Associates’ (a private home consultancy, with only contractors), the SMRC model has been through,
sometimes multiple times, the myriad of legal, financial/tax, securities and business assessments & reviews, by authorized
subjectand industrymatter experts– includingthe vested value todate, ofdesign,anycodeand/orlicensesacquired,POC’s/
pilots using the same framework as the current design, and the comparative benchmarked behavior studies, needed to
substantiate the businessprojections and the filing of a PPM (private placement memorandum). 95%+ of typical risk factors
associatedwithacontemporarysocialmodelforcharitywereremovedbydesign.
The unusually large offer of 45% of the Executive shares of the ‘to be’ companies, is only possible as we have not
formalized for this Agreement, the start-up or previous contribution value to date, although this will be assigned as
appropriate upon execution of this Agreement in lieu of a formal purchase agreement.
This contribution in SMRC’s Executive Shares (provided only to SMRC Founders) carries an advisory position on SMRC’s board, full
votingprivilegesand specialdiscretionaryprivilegestodirectthedistributionof fundsgenerated bySMRCmembershipbase toSMRC’s
charity (501(c)(3)) members (weighted according to SMRC membership’s identified cause-profile) based on apperceived merit. SMRC
selectsitsFoundingPartnersbasedontheirstrongphilanthropiccredentialsandsocialprofile.
The MOU sets forth the general terms and conditions (costs, descriptions, limitations, conditions of acceptance, etc) of
the Parties’ agreement to pursue and promote SMRC. This MOU in its entirety supersedes any and all communications
which previously occurred between the parties.
While we anticipate that all of the terms and conditions will be fully set forth in a later Purchase Agreement, we confirm
our current mutual understanding to be as follows:
Binding Provisions
1. Obligations toNegotiate inGoodFaith towardsDefinitiveAgreements:
Both parties agree to engage in good faith negotiations toward mutually approved terms for the execution of the
PurchaseAgreementatthePurchase Price.
2. Confidentiality:PublicAnnouncements
Each of Purchaser and shall maintain the confidentiality of and shall not disclose any of the terms of this MOU
(including its existence or the fact that the parties are in negotiations) and any other information related to the
other party or its representatives or affiliates except to the extent required by law (provided that any party so
required shall provide the otherparty with the contents of such disclosure as soon as reasonably practicable prior
to making such disclosure). It is understood that all press releases or other public communications of any sort
relating to this Memorandum or the transactions contemplated herein, including the method of release for
publication thereof, shall be subject to the approval of each of the parties hereto; provided, however, that the
parties shall be entitled to make such disclosures as may be required pursuant to applicable law or the lawful
requirementsofanygovernmentalagencyorbyorderofacourtofcompetentjurisdiction.
6. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 6
3. SMRC ScopeofExclusivity
· SMRC’sproposalto you isalimited exclusiveofFoundersStock
· Foundercandidatesarequalified based onlong termpersonalassociationswith existingfounders,as well
as byyour visiblydemonstrated philanthropicprofiletowardscharity
· OnlySMRCfounders can acquireCommonStock,whichcarriesboardvoting privileges
· 30%ofSMRCwillbebased on PreferredStock
4. [ ] __NA__ (SMRC initials) - Financial Contribution DEPOSIT w/Loan backup (Insures your spot).
Concurrently with the execution therewith, in lieu of a financial contribution DEPOSIT (PER One Percent of
Founder’s shares @ $75,000), the Joint Venture Partner may elect to issue a loan of$7,500 (“Loan”), 10% of the
JointDevelopmentAgreementbudgetassigned to that One Percentshare,to bemadeto SMRC,on theterms and
conditions set forth on Exhibit A to this Memorandum. This would insure that pending a contribution from
another major partner,SMRC would acceptyour contribution for the remaining balanceofexecutive shares along
with preferred or common shares at the same rate OR repay your loan with interest. SMRC agrees promptly to
execute and deliver such documentation as Purchasermay in its discretion deem prudent to evidence and secure
theLoan—including,withoutlimitation,a PromissoryNoteandSecurityAgreement.
5. [ ] __NA___ (SMRC initials) – Retainer Alternative: In lieu of a $75,000 retainer (per one percent share*), SMRC
will grant you one-and one-half percent of the SMRC *Founder shares – as compared to the one-percent of such
shares, that we offer to working partners (As $3MM / 40%) . These shares are exclusive of additional Founder
shares to be issued to you under Item 10. Conservative projections based on our start-up assets (biometric
signatures and 2+ years of in-depth profiling on 10+ million people) will deliver a minimum 10:1 net return from
profit sharing 1st
year (As 50% of Net). This provision was only valid through July 15, 2014 (p.r.n.), respective to
contributionsforthefirst$600,000.000 oftheSMRCLaunchBudget.
While a contribution is not required for the Executive board role, voting power & profit sharing
(exclusively for Co-founders of SMRC’s launch), are based on a board member’s total contribution of
resources.
6. Implicit NDA: In lieu of an existing signed, Bi-Lateral Non-Disclosure Agreement, a copy of which is supplied as
ExhibitB, thisLetterof Intentwillserveasthesame
7. Duration of the Letter of Intent: the present agreement is enforced as from the date of its ratification. This
Agreement can be modified at any time upon consent of all parties who signed the Agreement. It will last for a
period of _4 months_, ending _____MST 07.04.2015. It is NOT automatically renewed. It can be cancelled by
eitherparty through a formal requestsubmitted in writing, with at least two (2) weeks notice. The cancellation of
thisAgreementdoesnotaffecttheactionsofcollaborations in progress.
7. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 7
Non-Binding Provisions (binding upon signing)
8. ProposedTransactions andResponsibilities:
a. SMRCwilldoeach ofthe following:
- PromoteSMRC’sexchange ofsocialcredit(anddonations)forsocialcontent,networking,purchases
and awardsofrecognition forcontribution to the‘public good’
- Secure sustain & supportworking relationships with charities (501(c)(3)s), celebrities and businesses
with established Corporate SocialResponsibility (CSR)initiatives.
- Operate,manageandcontinuetodevelopSMRC’stechnicalinfrastructure
- Develop ‘webservice’offerings vis-à-visstrands in theWeb 3.0 and Web4.0 fabric
- Create value analyzing social activities & content to personal lifestyle, personality, philanthropic and
charitableconsumer profiles=>activities, interests&concerns=>on-goingsurvey
- Promote an economy of charity: promoting a charitable donation for all monitored feedback and a
donationwitheverypurchase(foreverySMRCBusinessSponsor’sexternalco-promotionofSMRC)
- Co-Manage disbursement of SMRC revenues to charities (where the contribution goes the farthest
to dogood in theworld)
b. _Signing Parties&Associates___(YourOrganization)willeach do thefollowing:
- MakecontributionstosecureExecutiveSharesin SMRC(asprovided in thisdocument).
- AttendandparticipateinSMRC’s regularlyscheduled board meetings
- DirectdisbursementsofSMRCrevenuesto charities(501(c)(3)s)
- Contributeideas,skillsand/orotherintellectualcapitalincludingcontactsthatcould furtherenhance
and elevateSMRCofferingsbeneficialto charities.
- Collectregular dividendsbased on themarketvalueofthestock
- Executesupportforone,ifnotmore,forms ofSponsorship:
__ BusinessSponsor
__ CharitySponsor(servingas aCharity)
__ CelebritySponsor
__ SocialOrganization (network,media,gaming,society)
9. SMRCStock: SMRC’sinitialissuancestockschedule will divideitstotalshares(CCorp,CharitableTrust,and
pending501(c)(3)Foundation)into 30% executive(performing)shares,30%preferred shares and40%common
shares. 15% ofSMRC’sexecutive shareswillbeassigned amongstSMRC’s Founders:2.5% each to Phillip,Aaron
and AimeeNakata,2%toPeterBerg,1%each toScottBruce,ChrisShea,LanceWoody,and 2.5%atthediscretion
of thecurrentfounders(issued in 0.50 –1.0%unitsto otherswhohavesupportedus). Allothersharesremain
unassigned.Yourcontribution for40%of theexecutiveshares would leaveexecutiveshares reserved for2-3
futureexecutivestobe nominated and approvedbytheboard.
8. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 8
a. Executive Stock is only madeavailable to foundingpartner(s) and carries executive performanceprivileges
in addition to opportunitiesfor profitsharingand larger annualperformance-based dividends(common).
b. Preferred Stock, which is more stable, and paid out prior to Common Stock dividends, does not carry
SMRCboard votingprivileges. Itwillrepresent0%ofSMRC’sissued stock.
Dividend Provisions: (Starting on January 1, 2016.) The holders of the Preferred will be entitled
to receive dividends [at the rate of _35_% of the Original Purchase Price] whenever funds are
legally available and when and as declared by the Board. No dividend shall be paid on the
Common at a rate greater than the rate at which dividends are paid on Preferred (based on the
number of shares of Common into which the Preferred is convertible on the date the dividend
is declared). Dividends on Preferred will be in preference to dividends paid on the Common.
c. The complete disclosure of current equity assignments, as it pertains to the SMRC Founders’
shares (as 30% of the total shares, where none of the remaining 40% common shares or the
30% Preferred shares has been allocated), is referenced in Term 42, page 24 of this Agreement.
That Term references Addendum M which list the registration of SMRC Inc. and Conscious LLC
including the existing shareholders of the Founders shares.
10. [X]_PRN___ (SMRC initials) Finder’s Fee: Whereasthemain purposeofaLOI/MOUis to establishthe‘intended’
termsandjustifyingdetailofaNON-EXCLUSIVEofferingto a singleprinciplepartywith secondaryassociates,
should asignificant(overhalf)ofthefundingcomes fromthe‘SecondaryAssociates’(making you respectivelya
minorprinciple),this LOI/MOUincludesthe followingspecialprovisions:
a. SMRCwillgrantanbonusequityfee,asone(1)percentoftheExecutive (performing)sharesofthe“tobe”SMRCbusiness
(oranotherTrademarkscreatedin lieu thereof)–forsecuringforSMRC–peronehundredfiftythousanddollars
($150,000.00)–cappedat2.5%perparty(totalof6%allocation) –tobefurtherdedicated totheSMRClaunchbudget
b. Forsecuringfundingthateither(1) falls shortof$600Kpriorto SMRCachievingthefundingfromothersources,
and/or(2) forfundingin excessof$600K,provided SMRCcouldutilize thefunds &has filed its’PPM,a finder’sfee
of 2-10%(notavailable to professionalbrokersor contributionbankers)willbepaidbySMRCbasedon thesizeof
thefundingand thedegreeofservicesyouprovidebeyondjusttheintroduction. These terms may be overridden
as per the terms referenced in an associated Agreement titled “SMRC Finder’s Fee Agreement”.
c. Forsecuringfundingthateither(1)falls shortof$600Kpriorto SMRC achieving the fundingfrom other
sources,and/or(2)forfundinginexcess of$600K,provided SMRC couldutilizethefunds &has filed its’
PPM,a finder’s feewillbepaidby SMRC basedonthesize ofthefundingbasedonthefollowingschedule:
6% onthefirst$1,000,000,5%on the 2nd
$1,000,000,3%onthe3rd
$1,000,000 and2%oneverything
above$3,000,000.The foundermaygrantupto7%onthefirst$3MM offunds,otherterms apply.
· Securing funding over$3,000,000,whichrepresents SMRC’s 2nd
($3MM -$25MM)and3rd
funding
rounds($25MM -$100MM)willautomaticallyextendthisJV/MOUagreementuntilsuchtimeas the
finalfundingroundis achieved. Any partymayterminatetheagreementafterthefirst$3,000,000has
9. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 9
beenachieved,withtheprovision thatanyon-going proposals willbehonoredforcompensation. The
finder’sfeerateis 2%for thesefunds,unlessreassignedby thefounder.
11. History: SMRCisbasedon aworking applicationmodelsupportingapurelyGreen socialnetworkandcharity
model,self-financedbytax write-offs and a2-tier distribution model(similarto NationalGeographicMagazine).
UsingSocialMedia and Celebrities,thiswouldallow10million nativeIndonesiansto easilyfund5 million acresof
IndonesianRainForestpropertyannually,while providing areasonableincomein an areawhere$10 represents
theaverageweeklyincome.
12. SMRCInc.(reborn): modus operandi
a. Supportingallworthycharities(501(c)(3))
b. Providing an increasingly large stream of revenue (>100%), never from directadvertising,nor any practice
that jeopardizes the privacy or security of any of its members, but from the monetization of user
generated content in the form of social media analytics, the brokerage of behavioral content to market
researchers,and corporate CSR-related businessservices, allinsupportofcharitablecauses.
c. Integrating web 3.0 (Semantic/XML/multi-modal) and Web 4.0 (AI supported humanity) technologies
today,provided freeofchargetoSMRC memberbase,andasservices formemberbusinesses:
· SMRC's Founders have broad expertise in business and social analytics, artificial intelligence and
object programming that we apply to our unique member profiles. That member data includes in-
depthdemographic,lifestyle, personalityand socio-technicalprofiles,represented in theinitialsetup
of each member’sVirtuALLYavatars.
13. Hosting:
SMRCisDRUPAL application thatrunsonLAMP-based (Linux,Apache,MySQL,PHP)infrastructure,where
PostgreSQL hasbeen substituted forMySQL astheprimarysystem database. Itisoffered freeto any other
DRUPAL developerorregistered501(c)(3)charity. Itiscurrently hostedatCanvasdreams.com,an ISPoutof
Portland Oregon:
· Configuration: 2Fullrack-mounted VSPservers –4 VPSaccounts:
o Each VPSsupports to 250 fullISPaccounts:each rackisai7 (Quad Core) with unlimited bandwidth
(2.4TB/mo.base); 6 dedicated IP’s;200 GBRAID;FullRootAccess;CPanelVPS (Pro);CentOS;
PHP5;automatedbackup;Cost:$320/mo.(Phil’scompanyStrategic RatingInc.also host~1/2
dozen other customerdomainsthere)
o Onerackserverisdedicated toSMRC;theothersupportsthedevelopmentserverasonedomain
as wellasan alternate2nd
(currentlyun-used)serverdomain (reservedfor oneofmany2nd
active
domains supported)
· Canvasdreams: (a)Excellentsupport24 X7 with2nd
facility in theUK;(b)Ranked asoneofthegreenest
ISPnationally;NOTE: Weare consideringLevel3 inBoulder(theDNSofVerizon?)–1.1.2012.
10. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 10
14. MembershipProfile: TheSMRCnetwork is acollaborationof sociallyactiveparticipantsallinterested in
supportingcharityand includesbutis notlimited to:
a. Thetop150+501(c)(3)Charitiesspread acrossthe~30 sub-classesof501(c)(3)charities(averageof 3top
charities per charityclass… eachpromotingSMRC asthenewsupplementalcharitychannelofchoice
b. Thefans oftopcelebritiesthatarepromotingSMRCtosupporttheirfavorite charity.
c. TheCSR employeesfrombusinessesthatareprovidingcharitablefunding (receivingvaluable taxbenefits
personallyorfor theircompanywhileveryvisiblypromotingtheircompany’scorporatesocial
responsibility
d. Membersoffor-profitSocialorganizations(media,networks&‘societies’)promotingcharitablefunding
e. Whilethenumber ofmembers sponsored by wayofcelebrities,thecharities,sociallyconscious/charitable
companiesandsocialorganizations is large,thenumberofsocialmembersprospects,respondingto the
moreinfluentialnatureofapassive referral,where‘remarkable’content(hottestmedia)sellsitself… is
much larger
15. TheObjectivesofSMRC:
a. PromoteSMRC’ssimplemodelcreating socialcredit(anddonations to each person’sfavoritecharity)for
(1)theirsocialcontentand feedback,(2)networking(@5%),(3)sponsorparticipation &(4)SMRCawards
forrecognition ofservicein the ‘public good’
b. To allowmemberstheopportunityto engagein themostpopularsocialmedia/events(thatmostare
alreadydoingtoday),for entertainment,or in thecreationof,orinteractionwith,importantsocialissues
and dialog… underalow costprogramwhere:
· Everyformofparticipation(as wellas points awardedto write-inentries orexternalsales
promotions)andresponses toparticipationat SMRC generates redeemable SMRC points
· Everypointgeneratesmore monies(as adonation)tothemember’s profiledcharity.
c. To provide Super-Fundingforallworthy501(c)(3)Charitiesatunprecedentednewlevels–based on
establishingeasy entry toa regular,lowcostthemeofparticipation –creatingasmallbutsteadyrecurring
streamofrevenue(ataminimumof$0.60perdaypermember–uplifting thelargerand more irregular
balanceofcontributorsincharitymemberships. Alternately,SMRCprovides members withthebest
selection ofcharitiesto choosefromon an ad-hoc(asneededbasis). Themajorityofnewsupporters for
each501(c)3 comefrom SMRC members hostedbycelebrities,business and socialorganizations.
d. To allowSMRCmembers(andtheworld)theopportunity to takethenextstep in man’ssocial
evolution…….becomingan interactivepartof thegreater“socialcollectiveintelligence” (the‘wisdom of
thecrowd’)… madepossibleby acombination ofWeb 3.0 and4.0 technologies
e. To createSMRCrevenues,themajority (90%)ofprofitsofwhich willgo to charity(in themember’scredit
relatedto theirSMRCpoints),basedon non-direct-advertising revenues.
11. Social Market Research for Charity consulting (Phil Nakata & Associates)
355 S. 38th Street, Boulder, CO 80305 - (720) 590.7430
SMRC Memorandum of Understanding Page 11
16. Charities Supported: SMRCsupportsallprivate,registered 501(c)(3)charitiesthatarerequired to solicit
donations,(with a‘GateKeeper’review processto makesurenonon-humanitarian organizations likeAl-Quedaare
accepted)under thefollowingcategories:
* Animal * Arts &Culture * Children * CommunityService
* Disabilities * Disaster Relief * Educational * Elderly
* Environmental * Ethnic * Historical * Human Rights
* Hunger/Poverty * Medical * OverseasAid * Religious
* Research
17. SMRC’s BusinessRevenues:
SMRCgeneratesveryprofitableconsultingrevenuesbyprovidingtheseprofessionalservices to business:
(I) Corporate SocialConsulting(content/marketintelligence[analytics&AI]servicefor web channels)
(II) Analytics&Monitoring Programs (activity/contentvs.lifestyle,personality,philanthropic and purchase)
(III) Support&MarketingPrograms(allpurchasedonateto member’s individualcharityasatax-deduction)
Theseservices aredelivered usingthemostproven,bestpracticeconsultingmethodologies,as sixdistincttypesof
services,threeascoreservicesand theotherthreeusingfuturepartnerrelations:
CoreServices
a. Promoting theirCSRas aprofitcenter(multiplyingtheeffectofgoodwillvisibility with donation bonuses,
increased sales,and advancementtoward strategic initiatives). Morespecifically,thisisaboutsponsors
acquiring501(c)3socialmediaschedulesto beused inmemberprogramswhereparticipation includesa
donationto themembers’favoritecharity+socialcreditrewards(prizes,events,awardsof taxcredits)
b. Developingdeepersocial,demographic,technologyandpsychographicprofilingand analysis reportingof
statusand trending(foranyproductor servicereferenced insocialconversation,these reference the
deeperlifestyleand personalityprofilingatSMRC,thatisnon-privatized to exposeaggregatedetail)
c. ProvidingSMRC 1st
and 2nd
levelremotesupportservices: SMRCoffersits softwareframeworkbasedon
customizationsto OpenSourcesystemsforfreeto any501(c)(3)charityorDrupalcontentdevelopers. 2nd
levelsupport(or remotecontractedsupport) oftheDrupalframeworkcustomized forSMRC’s
functionality is offered atacostof~10% oftheremotesite’s revenues ORataratecontractedto support
SMRC’suseoftheremotesitedata forsalesanalysis
ViaPartnerships:
d. DevelopingWeb 3.0 Industry businessconsultingservices (Expert3rd
partymoderators insurefulltopic
and competitivecoverage;un-moderated publicfeedbackforums insuresalltheprosandcons getaired.
e. Providemonitoringservicesforabusinessclient’s supportservices(and/ormonitoringforproblems,
complaints,etc,in acompetitor’s productsorservices)
f. CustomWeb/ Internetmarketingbusiness developmentprograms
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18. SMRCBusiness Market: SMRCoffersitsservicesto those businessindustriesmosteffected by Web2.0–4.0
technology. These include:
* Media &Entertainment * Consumer Products * ConsumerServices
* Retailer * Marketing Agencies * Travel
* FinancialServices *Food&Beverage * Auto
19. SMRC–CurrentSoftware AssetValue (Whatis usableandreadyto go now?):
SMRCisaworkingnextgenerationdesign thatisoperationaland90%complete;thissection describesthevalueof
thedevelopmentthatrepresentassets wewould otherwisehaveto investin to getto wherewearestartingtoday.
Thetransferableworkingmodelrepresents ~3000 man-hours (worth$100-150K,based on anetcostof~$75k)
includingbutnotlimitedto:
a. Manykeysystemupgradesto theinfrastructure:
· PostgreSQL asafasterandscalableobjectorienteddatabasevs.MySQL
· The development of a social media monetization framework with psychometrically-verified
elementsofgamemechanicsand a testedcompetitionmodel.
b. A customsubscription and donation systemextendingDRUPAL'sauthenticatedaccountswith
memberships. Thissystemwasextendedto provideaccountingfor anyand allcharitabledonations
applied toeach membership. Thecontributioncostwas~$1000 and itcarriesa~$100 licensecostper
installationswhich supportto5 installs(e.g.forsupport, alternatesite,etc.)
NOTE: Thissystem is availablebutwas originally developedto supporta subscription modelwith
consultingservices creatingthe fundingtosupporteveryone’s socialcreditgenerated from theirsocial
content–as compared tothecurrentmodelwhicheasily justifies the value everypieceofsocialcontent
andfeedbackasinputs to501(c)3social-mediaschedules–where60-80%ofthesupportingSMRC
members foranyonecharity arenotoriginalsupportingmembers ofthat501(c)3
c. A WidevarietyofContentObjectsincludingmixedvideoplaylists(featuring10:1 dynamiccompression
and localized storage),slideshow/storybooksupportincludingparent/child relationship to (9)levelsof
depthand web
d. Application of bestpractices in design though synchronizingresourcesandselecting from multiple
patterns toinitiatenewdesign.Such action mitigatesfutureupgradedifficulty,optimizesnewmarkets
opportunities(e.g.I-POD:HTML5/MP4)and structuredmaintenance/troubleshooting.Mostimportant,
thismeansthecodeprogrammingprinciplesareeasyfornewand experienced objectprogrammersto
assimilate.
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e. A Socialmedia referenceand dynamic industry monitoring workstation:SMRCs socialmediaand
networkingresourcesincludelinksandsupportboth tofreeand topre-paid monitoringsearches,the
results fromwhich areaggregated andprovideddailytoallsitevisitors. Itincludes:
· LinkstoThemostradicalalternativesocialmedia
· Linksto themostrelevantsocialtagsearches(~350,20-50perresult)intheHottestSocialMedia
(Video,Blogs,News,People,Photo,Rating/ReviewURLortopic)
· Linksto thehottestsyndicated/breakingnews(~250 searches,20-50perresult)by socialkeyword
· Linksto58 GreenSocialWidgetsalongwith those to 22stand-aloneeducational,socialand
amusementgames.
· An extensive reference to alltheSMRCcontentobjectsas wellaslistsofotherveryhelpfultools
and applications
f. Theoverallsetofsupportivecontentassociated with theunderlyingSMRCoffering-(1)social
participation in the socialmediaforcharity-(2) promotedbycelebritiesandcharitiesto...(3)theirfansand
supporters...who sharetheirthebestmaterialpassiveshared with (4)thosesociallynetworkedparties
thatfollowthem in theirsocialnetworks....to share/playin thecommon,taxdeductiblecauseofcharity: ...
includingbutnotlimitedto:
· About,andthedozen multi-pagepromotionalattachments
· MemberWelcome(with aprintablecodeattached)
· TheNetwork(whatyou get,along with atechnologylookatthebusinessarchitecture,howgroup
portalsprovidea newclass ofcontent,associatedbyacommon group,andhowdifferentsocial
media applications scale
· SMRCFAQs,Termsand Conditions,DataPrivacyPolicy,and instructionson getting started
· TheCompleteregistrationprocessincludingforms(PDF'sandonlineSAFE forms),FAQsand
instructionsforregistration for:
1. Charities,
2. Celebrities
3. SocialExecutives (representingtheCSR armofsociallyconsciouscorporations
4. Partners
5. GeneralMembers
g. A completed pilotlaunchofSMRCpredecessor (SGS360.comakaplanetsaviors.com)waslaunched in late
May 2010to testthe marketresponseto asocialmediaforcharityprogram. Within afewdaysoflaunch
and forseveralweeksafterward (aslongasnew socialmaterialwasactivelycreated)thepilotattracted
4000-6000 visitorsperday(with onlytheminimalexternalpromotion ofaperiodic press release).
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NOTE: Thiswassimilarto,andexpressed much ofthesame strategythatPhilNakataapplied toasocial
advocacypromotionalprogram(overthe Oregon auto insurancepoliciesconcerning 'steering'or
preferentialguidingtoutilizepre-negotiated serviceswhichoftencarrydifferentstaterequirements)he
initiated in early3Q2007.Within3 monthsoflaunchingaportal,drawing aconcentratednewpublic
response(alongwith reposting oldercomplaints),thesecondaryfeedback to thosepostings (and
commentsto thecommentsasexpressedacrossthesocialmedia)provoked sufficientattention,asto
influencethequickclosureon thisbill,whichhadbeenan ongoing issueforover6yearsprior.
20. Web3.0 Technologies: TheSemantic,multi-modalweb wherebusinessandpoliticsbecomea partofthesocial
fabric….Web3.0 technologiesinvolvethreedescriptions(thatSMRCwillbesupportfeatures setfromeach)
supporting:
· Thesemantic web (wheremostwebcontent/documentsbecomesusablebyprogramsvs.requiringbeing
interpreted fromtheHTML ‘blob’
· Themulti-modalWebOS (it’s morethan Google’s OS andincludetheiPod markets also)
· Wherebusinessand politicsbecomeapartofthesocialfabric (aslisteners,participantsand industry
support,promotedbyexpert,un-biasreview and usertestimony)
21. Web4.0 Technologies: ThisisaboutAIcomplimentingthehuman bybeingcreated to simulateasmuch as
possibleabouttheindividuality in eachperson,reinforcingvs.competingtheireffortsin an attempttooptimize
theunified output. Theinitialimplementation integratesthreepopular(and free)existingAIformats (Verbots
onlineand Lifenaut)as animateddigitalavatars(oneoptionallyasan animatedphoto)into themember's profile
page(andcanbeviewedonPhil'spageatplanetsaviors.com).
· Priorto capturingcustominteractivedialogs(instructingthe entity),a simple setupcreates avery life-like
simulation,closelymatching75 personalitytraitsof themember,aswellasbeing ableto sharethedetail
fromdozens ofcategoriesof themember's interestwith membersoftheirtrusted socialcircles.
Memberscan easilytrain localintelligentagents(verbotworkstationversionswhose knowledgebasesare
stored on thelocalpc)usingNLP(naturallanguageprocessing)toconstructinteractivedialogs(supporting
variablestocreatetemplates)allowingretained sharableknowledge,thatmay beoptionallyshared with
theSMRC'sVerbotOnline. Verbotworkstation isAIMLcompatible, allowing integration with theworld's
largestsources/supplyofAItechnology in use today(A.L.I.C.E as in thecollegestart-upcourse).
Togetherthesevirtualpersonascanserveasthemember'sPersonalAssistant,Intelligentagent(who
knows you andwhat'simportantwith themember'strusted networkers),gatekeeper/dispatchertoyour
profile atSMRC,guideonyourpersonalorbusiness website,advisor,student,teacherorjustpersonal
companion (whoshouldknowyoubetter)? Perhapsjustas importantisthefactthatwithoutbuilding
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such a systemwhere such aprofilewouldhavesuch use,itwould notbepossibleto sharewith othersin
closesocialcircles(trustedcolleagues)thelevelof thesedetailsexceptbyrandomchance.
Whilehavingadeep profilereflecting boththelifestyleinterests andpersonalitythatanyoneis morethan
willing to sharewith theirtrustedcolleagues(theonestheyrespectand trustnotto takeadvantageof
them),is what friendsdon'tmind sharing...italso opensup thepotential(and socialresponsibility) to
leverage thisdatain amostproductiveway. ThusSMRCprovidesthistobusinesses,asaggregatedetail
spreads,with no privateinformationandno abilityto associatecontentto any individualorgroup identity.
WhileSMRCwilllaunch,highlightingthoseAItechnologiesthathavesignificantestablished momentum
and/orassociated long termsgoals and support,wewill beadding/extendingthefeaturesto support
perspectives/approaches found in otherapplications like"Virsona", orintegratorslike Guile3Dor UltraHAL.
Furthermore,alargefocusofSMRCdevelopmentin thenext3-6 monthswillbein threeareas:
1. GamesDevelopment(similar to 'broughtto youbytheSyFychannel-sponsored bySMRC)
2. Integrationofbiometrics asinputto AI,highlightingvocalemotionalrecognition butincluding
facialrecognition for emotionalbio-feedback(in addition to itbeingastandard 2ndbiometric
alternative to retinaor fingerprintscanningorvoiceprintmatches.)
3. Programminglogic tocreate'Creativity': creatinglogic to thinkofmorethan whatthecollective
knows aretheknow solutionsand failures. Re-engineering,Deductive/Reverse-Logic,and Out-of-
box/Paradigm-Shiftapproachesareallgood examplesthatwork.
22. SMRC’s NextSteps (Whatto donext?):
a. Marketing toCharities
· Gain endorsementfrom100+ofleadingUS-based 501(c)(3),2-3percharitycategory/typein 2
months(60 days)
· Nocontribution offerrequired
· Targetinglower40-60%of mostcharity’smembership–typified byirregularsmallcontributions
to convertat3-4 Xtheoverallannualpledgetotal–accountingforthe easierdaily/weekly
contribution,wheretheorganizingbodyrepresents multiplecharitableofferings ANDthe
organizinggroupsmaintainsrecordsforthe members deductions…
· RewardingtheSMRCmemberformorethan theirdonation (intheirnameversus a‘matching’
fund wherethefinancialrewardof beinggenerousstillgoes to someoneelse)
b. SMRC,Beta(enhancementsto working model) andSMRC,GA(generalavailability):
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i. Launch(coordinatedwithsimultaneous charityendorsements):
1. Configurebackend DRUPALdesign tohandlethedirectinputofallformsofsocialmedias.
Foreach pieceofcontentscanned,in addition tothetimestamp,addsystemindexes(tags)
to supplementuser’stags,as wellasrun socialanalyticson each pieceofcontentto
determine theemotionalcharactersof thesubmitted content.
2. BuildCharity databasetableto supportmultiplecharitiesin themembersprofile,each
with acharityid,charityclasscode,contribution/charity,andcalculatedpercentage
supportingfrom 1-5charities;
3. CompletedevelopmentofSMRCMember’sTaskbar. Thisincludes:
i. Themembers’socialcreditpoints(todatetotalascompared to thepoints
availableafterredemptions)
ii. Themember’s followers’socialcreditpointsgenerated
iii. Themember’s hostand theirsponsor(ex: Bill(PEPSI) )
iv. Linkto theSMRCregistration (tochangemediaorcharitypreferences)
v. Linkto theSMRCredemption/exchangecenter
4. DevelopSMRCPointsRedemptionCenter
a. Developprizeacceptancepolicy
b. Developprizeallocation/accountingapplication
c. Developdynamic factoring application managingtheprofits fromSMRCbusiness
serviceswith the allocation ofadditionalSMRCcharitablereceipts in thepoint
system:
ii. SMRCDevelopment: 3 -4 MonthsPost-Launch:
ü Multi-server synchronization
ü Integrationofsocialmediaanalytics,NLPandDatamining analysis
ü Advancementsin extendingAIinputandCreativeprocesses
ü SMRCbusinessservicestotallystandardized toconsultingframeworks –producing a
highlyleverageablemodelforbusinessconsulting
23. SMRCStatus / Legal:
Themajority ofconcerns regardingLegalissuesforSMRCInc areaddressed via:
a. SMRC’sfilingto beacombinationofaCCorporation,anon-profitTrust,and apending501(c)(3)charity
b. SMRCisaprivate,by invitation onlypassive socialcreditaward service and 501(c)3 ratingservice
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c. Inorderto securethecharitablecredits fortheircharitabledonation and theSMRCcharitablecredits
applied in themember’sname–theirsocialsecurityID willberequired forfilingpurposes
d. SMRCisnotmakinganyincomeon advertisingortheselling ofindividually identifyingdatathatcould
violate anyindividualmember’sprivacy.
e. Bycontrast,SMRC’srevenuescomefromservicesto businesses enablingtheirCSR,helpingthem
implementweb3.0 and4.0 technologies,providing them deepinsightinto the profilesofthe member’s
mostpersonalinterests(withoutviolatingtheirpersonalprivacy –orspecific identity),as wellashowand
where toadvertise (solongasitisnotwithin theSMRCnetwork itself)–and providingadonation +social
creditwith participation (theworld’smostpopularformofsupportingcharity).
24. SMRCStatus / Financials:
SMRCpromotes an environmentfreefrom directadvertisements asitis apassiveservicewith virtuallyno
interfaceexceptforthetaskbar.Bysignificantcontrast,thefinancialinstrumentofvirtuallyeveryotherfor-profit
socialnetwork promotingcharity is advertisingon theirsite. Thedifferenceis thatwith SMRCprofessional
services,(a)employing many ofthe same newtechnologies wesupportforthemembers,alongwith (b)the
deeperinsightsthatourmemberssupply abouttheirmotivations,whatinterests and influencesthem,wefound
thatwewerein averyuniqueposition to offerveryvaluableservicestobusiness,mostnotablyhighlighting:
a. Socialmedia analytics–mappedto on-goingpersonaprofiling (lifestyle,personality,philanthropicand
charitablepurchases,creatingthevalueofaon-goingsurveyon everythingpersonaland social–
expressing everyone’sactivities,interests and concerns: competitivemarketreports. Therevenuesthat
fundsocialcreditfor contentarejustified fromthesaleoftheresulting501(c)3 socialmediaschedules.
b. SalesofSMRC(sponsor)bonuscreditsthatSMRCbusinesssponsors issue(asSMRCredemptioncodes) to
theircustomers,aspartofusingtheirability to ‘invitein’ newmembers,to useSMRCtofulfilltheir
charitablesalesprogramsthatdonateto theconsumer’scharity ofchoice. SMRCtransparentlymanages
theconsumer’sdonation,thetax credits,assignmentofbonuspointsand themanagementofconsumer’s
data thatcontinuestodrivemoredonationsto theircharity.
c. 2nd
or1st
leveltechnicalsupportforSMRC Clones(supportingcopiesofSMRC’s infrastructure code
(DRUPALobjects and customphp/objectprogramming): SMRCoffers aremoteservicesupportservice at
8-10%ofthe netrevenuesofsuchSMRCclones forSMRCclonemembers –theexceptionbeingifSMRCis
engaged in developingbusinessservicesforabusinesssponsorto theSMRCclonenetwork.
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25. SMRCStatus /SocialMediaNetworkSecurity & MemberPrivacy:
SMRC’s technical resources have over 25 years of in-depth experience in all avenues addressing User Privacy, IT
programming security, and Internet collaboration …. from policy development (IBM’s Security & Privacy
architecture boards), to network routing/firewalls/submasks, to maintaining compliance with all Internet best
practice Security Standards, to developing counter-measures to workstation malware and viruses [based on root
kits], to programming search worms.
Security at SMRC is about all the measures that SMRC provides to insure the privacy and security of the
individual member regarding (1) highly private, sensitive and potentially damaging data including contact details
(address, phone) and financial information, (2) semi-private information that the individual is more than willing
to share with trusted contacts, (3) group level information that is offered to be shared with a group, or the
public.
Inside/on-line social media threats (like a hacker gaining inside direct database access or an application like
Farmville selling subscriber’s contact data) constitute as much concern as a malware getting access to one’s
personal computer for the private, financial or contact information or to just be malicious. 95% of all Internet
‘break-ins’ occur as a result of getting direct web access to a URL and taking advantage of an
insecure/vulnerable web page enhanced FORM control. SMRC protects its members thoroughly:
· BestPracticePolicies:
o Properobservationofsecure passwords(semi-complex),easy-fast-and-secure ability to changeor
havetemporarysecurepassword
o 100%observationandcompliancewith allWC3Securityadvisories
o Isolation ofthemostprivatememberdata(backup usingendlesskeyencryptionand alongpass
phrase)
· Workstation Protection: SMRCprovidessupportfor(a)optionalbiometric securitytokeep othersfrom
gainingaccessto yourworkstation;(b)optionalanti-virus,malwareandspyware toolstoprotectagainst,
or isolateand removemaliciouscode
· MessageEncryption: SMRCsupports128 bitPKI-based security certificatesto insureanyinformation
submitted between theworkstation andSMRCis encrypted.Thisprotects themessagewhileit travels
overtheInternet;alternately asneeded,wecancreate/offersecure‘tunnels’.
· ServerProtection:
o Biometric 2nd
back-up accessto serverworkstations (optional);
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o Host/Serveranti-virus;closedsmtp access;128bitsecuritycertificate
o DRUPAL granularly controlsofUserauthentication,Roleswith differentlevelsof permissionsper
contenttype:supporting accesscontrolto DRUPALsystem,moduleand specificcontenttype
o FormsSecurity: SMRCprovidesautomaticcode-cleansingroutines,priorto submitting any
updateto thecontentby any member(orotherparties).NOTE: ThisistheBIGGESTSINGLE
sourceofInternetbreak-in (theaccessgranted fromoneofthesesecurity‘loophole’).Itcan allow
aroguecodeto do somethingimmediately whileitmasqueradesas asystemand databaseadmin,
or to leave aroutineto watchforcreditcardoremaildata.
o SMRC’suseofmemberdata: SMRCdoesnotsellcustomer information,noroffersadvertising
services,butratheronlyuses thedatato supportits businessservicesin thewaysofmarket
research,aggregatebuthighlydetailed andnon-privatized marketanalysisand monitoringfor
supportservices
26. Employee Stock Options: It is SMRC’s intention to retain 5% of the Common Stock for Employee Stock Options.
This is in spirit with the 10% of the revenues generated for everyone’s social credit from content and feedback
that will be allocated to SMRC system ‘awarded’ (stimulus) social credit (off the top of the budget from the
beginning).
27. Repayment of Contribution: In consideration of the Partner making that financial contribution called for in
paragraph 6 (of the SMRC MOU) hereof, SMRC shall pay or cause to be paid to the Partner the following:
(a) Repayment of Contribution: Shall in any case the partner want to reimburse the contribution amount or
terminate the contract, SMRC will pay back the invested amount only.
(b) Net Profit Participation: Paid as Dividends on SMRC Common and Preferred Stock it is based on the
percentage of a partner/partner’s shares to the total SMRC outstanding (common) shares PLUS the total
number of Issued Preferred Shares. Net profits participation of the Partner as described in this sub-
paragraph 23(b) shall continue so long as SMRC is generating net profits and duration of the agreement
except that the Partner shall have no interest in the SMRC anymore.
(c) Profit Sharing Exclusive for Co-Founding Partners of the SMRC launch: Co-Founding partners will
participate in profit sharing – To 50% of the annual for-profit research (representing before expenses,
8% of the flow), based on Founder’s equity; 25% is reserved annually for dividends and support
contracts and 25% is re-invested internally.
EXCLUSIVE / AND / OR (USING EQUITY AS COLLATERAL – one only at most – strikeout others):
[X ] __PRN__ (SMRC initials) Dividends :
Beginning in the third year following contribution, the enterprise will pay to the partner
a dividend. Dividends will be shared among partners on a pro rata basis. The amount of
the dividend will be determined by the board of directors, but in no event will total
dividends issued reduce the fiscal year end cash ratio to less than .75.
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[ ] _______ (SMRC initials) - Partner redemption based on a pre-defined schedule –
Beginning in the third year after contribution the partner will have the right to redeem
their equity to the extent that the enterprise's cash ratio can be maintained at or
above .6. If more than one partner wishes to redeem their equity it will be done so on a
pro rata basis. Redemption will be based on the following schedule.
Year three - 250% of original contribution, this is equivalent to 20% internal rate of
return.
Year four - 380% of original contribution, this is equivalent to 36% internal rate of
return.
Year five - 500% of original contribution, this is equivalent to 42% internal rate of return.
[ ] _______ (SMRC initials) - Enterprise buyout of partners based on a pre-defined schedule
- Beginning in the third year after contribution the enterprise will have the right to buy
back the partner's equity at a pre-determined price. Buy back will be based on the
following schedule. Note: Not applicable for Co-Founding Partners, except by request.
Year three - 800% of original contribution, this is equivalent to 120% internal rate of
return.
Year four - 1200% of original contribution, this is equivalent to 114% internal rate of
return.
Year five - 1600% of original contribution, this is equivalent to 104% internal rate of
return.
[ ] _______ (SMRC initials) – Merger, Acquisition, IPO
In any of these circumstances it is not possible to predict what the return will be for
the partner. It is assumed that any such action would be done in the best interest of
the stockholders.
[ ] _______ (SMRC initials) – Convertible Note
An alternative to a direct contribution is a loan from an partner. A specified interest
rate would be defined with payments due at regular intervals over the term of the
loan. The partner would have the option to convert the loan to a percentage interest
in the enterprise for some pre-defined period of time (usually considerably less time
than the term of the loan). The monthly rate is shown below.
________ % _______ (SMRC initials) _______ (Partner initials)
28. Partner's Monetary Contribution: The Partner shall deliver a ______________ (Check/Cash/Other) in the
amount of ________________to the SMRC payable to the Company's designated <SMRC > Account.
OR
A Total Equity Contribution of $ __________________, in ______ Phases:
$_________________ at the start of this Agreement;
$_________________ after ____________________;
$_________________ at _______________________
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29. Partner Approval Rights: The Partner shall be _(X for yes)_ actively involved on a regular basis and in a material
manner in significant decisions relating to the expansion, selling of the SMRC, production, post-production, and
other exploitation of the SMRC.
30. Representations and Warranties: SMRC hereby represents and warrants to the Partner that:
(a) Powers and Authority: It is duly incorporated, validly existing and in good standing. It has the corporate
power and all necessary rights and title to enter into and perform this Agreement and the transactions
contemplated hereby or referred to herein and have taken all necessary action to authorize the entry into
and performance of this Agreement and such transactions.
(b) Legal Validity: This Agreement constitutes a legal, valid and binding obligation of SMRC and is in proper form
for enforcement against it.
(c) Non-Conflict With Laws: The entry into and performance of this Agreement and the transactions
contemplated hereby do not and will not conflict with: (i) any existing law or regulation or any official or
judicial order, or (ii) its articles of incorporation, or (iii) any agreement or document to which it is a party or
which is binding upon it or any of its assets.
Without limiting the generality of the foregoing, SMRC represents and warrants that there are not now any
liens, claims, encumbrances, legal proceedings, restrictions, agreements or understandings which might
conflict or interfere with, limit, derogate from, or be inconsistent with or otherwise affect any of the
provisions of this Agreement or any of the representations or warranties of SMRC.
(d) Consents: All authorizations, approvals, consents, licenses, exemptions, filings, registrations, notarizations
and other matters, official or otherwise, required by SMRC or advisable in connection with the entry into,
performance, validity and enforceability of this Agreement and the transactions contemplated hereby SMRC
have been obtained or effected and are in full force and effect (other than the registration of security
interests to be created pursuant hereto).
(e) Litigation: No litigation, arbitration or administrative proceedings are threatened or, to its knowledge,
pending which call into questions the validity or performance of its obligations hereunder.
(f) Copy Documents: Each copy document delivered to the Partner by or on behalf of SMRC under or in
connection with this Agreement and/or any prior negotiation between SMRC and the Partner constitutes a
true and complete copy of the document of which it purports to be a copy and all facts, circumstances and
other documents which might materially affect their interpretation have been disclosed in writing to the
Partner.
(g) Material Information: All information which might be material to a person assuming the obligations and
acquiring the rights assumed and acquired by the Partner pursuant to this Agreement has been disclosed in
writing to the Partner and there are no facts or circumstances which might make such information
misleading or inaccurate.
(h) Survival: SMRC's warranties, representations and agreements are of the essence of this Agreement and shall
survive the early termination hereof. None of SMRC's warranties, representations or agreements shall in any
way be limited by reason of any investigation made by the Partner or on behalf of the Partner regarding said
warranties, representations or agreements.
31. Indemnification by SMRC: SMRC shall, at its own expense, indemnify, save and hold harmless the Partner and
its successors, licensees, assigns, agents, representatives and affiliates from and against any and all claims,
demands, causes of action, obligations, liability, loss, damage, cost and expenses (including reasonable
attorneys' fees), incurred or sustained by reason of or arising out of any breach or alleged breach of any of the
warranties, representations or agreements herein made by SMRC, or from any reliance upon any such
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warranties, representations or agreements. If any person or entity shall make any claim or institute any suit or
proceeding alleging any facts, which, if true, would constitute a breach by SMRC, of any warranty,
representation or agreement herein made, SMRC shall give prompt written notice of same to the Partner and
SMRC shall undertake at its own cost and expense the defense thereof and shall supply competent and
experienced counsel to defend any such suit or proceeding. The Partner may also engage his own counsel in
connection with any such suit or proceeding.
32. Accounting and Reports by SMRC:
(a) SMRC shall maintain complete books and records with respect to the operation of SMRC. SMRC shall render
to the Partner, on a semi-annual basis for the first two years after initial operation of SMRC, a written
statement of monies due the Partner hereunder, if any ("Partner Statement"), and such Partner Statement
shall be accompanied by remittance of any amount shown to be due to the Partner thereon. Thereafter,
Partner Statements and payments shall be provided annually for as long as SMRC generates net profits or
based on duration of the agreement which ever first. If any error is made by SMRC in any Partner Statement,
it may be corrected by SMRC within two (2) years thereafter by making any necessary deductions or
additions on subsequent Partner Statements, or at SMRC 's option by rendering an Amended Partner
Statement. Each Partner Statement shall be rendered within forty-five (45) days following the end of each
accounting period. Any Partner Statement rendered by SMRC hereunder shall be deemed conclusively true
and correct and binding upon the Partner, shall constitute an account stated and be incontestable unless the
Partner delivers to SMRC in writing specific objections, setting forth specific transactions or items objected
to and the basis of such objections, within one (1) year from the date of such Partner Statement. Any
recovery by the Partner shall be limited to those items specifically objected to in writing by the Partner
within said one (1) year period.
(b) The Partner shall have the right to examine the books and records of SMRC to the extent they pertain to the
operation of SMRC. Such examination shall be made during reasonable business hours, upon reasonable
advance written notice, at the regular place of business of SMRC where such books and records are
maintained, and shall be conducted on the Partner's behalf and at the Partner's expense by the Partner's
designee. Such examination shall not be made more frequently than annually and no more than once with
respect to any accounting period or Partner Statement rendered hereunder. With respect to any accounting
period for which an Partner Statement has been rendered by SMRC, such examination shall be permitted
only for a period of one year from the date such Partner Statement was received by the Partner. Partner's
examination shall be limited to those records relating to the SMRC and under no circumstances shall the
Partner have the right to examine records relating to SMRC business generally or relating to other motion
pictures for purposes of comparison or otherwise.
(c) No action, suit or proceeding arising out of this Agreement or concerning the Partner Statement or other
accounting rendered by SMRC hereunder or to the period of time to which such Partner Statement or
accounting relates may be maintained against SMRC unless commenced within one (1) year after the date
such Partner Statement or accounting is received by the Partner.
(d) SMRC shall, upon the Partner's request, avail itself of any audit right SMRC might have under any
distribution agreement SMRC might enter into relating to the SMRC. The expenses of such an audit, if not
reimbursable by such distributor shall be a deductible expense under paragraph 2 hereof.
33. Funds Held in Trust: All monies received by SMRC which are payable to the Partner in accordance with the
provisions of this Agreement shall be held by SMRC, in trust, for the sole use and benefit of the Partner and shall
be immediately deposited upon receipt in a separate interest-bearing bank account naming the Partner as the
beneficiary thereof. SMRC shall not commingle the monies payable to the Partner hereunder with other monies
of SMRC.
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34. Relationship of Parties: The Partner and SMRC each acknowledge that they are independent contractors and
that a partnership, joint venture, agency or employment relationship will be created by this Agreement. Nothing
herein shall thus prevent SMRC from subsequently initiating arm's length negotiations with and engaging the
Partner and/or the Partner's company, in which case the Partner and/or his company shall be paid budgeted
costs out of the SMRC's budget.
35. Business Opportunities: Each of the parties acknowledges that this Agreement relates only to the SMRC and
than none of the parties will in any way be restricted from any other business activity, whether or not
competitive to the SMRC, it being agreed that so-called "corporate and/or joint venture opportunities" or
fiduciary opportunities in relation to any such other activities are hereby waived by each of the parties.
36. Additional Documents: Each of the parties agree to execute any additional documents which may be required
or be desirable to fully effectuate the purposes and intent of this Agreement or to carry out the obligations of
the parties hereunder, provided that they are not inconsistent with the provisions of this Agreement.
37. Notices: All notices hereunder shall be in writing and shall be served by personal delivery to the Partner or SMRC,
as the case may be, or by registered or certified mail, return receipt requested, or by telegram or FAX, addressed
as follows:
Partner:
Phillip R. Nakata
Aaron S. Nakata
Aimee K. Nakata Chris Shea
Phillip Berg
Jesse & Julie Saldana
Alex Berryhill
Lance Reed Woody
Ramiro Saldana
Jean-Pierre D’Zahr
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Notices (Con’t):
Scott Bruce
Marc Sinkinson
Marieta Darrah
William Luke Stewart & Michelle St. Pierre
_________________________________
_________________________________
XXXXX YYYYY
Reserved slot for Pre-Launch Partner
For a board role & Spokesperson/HOST
Bryan Graves
Leonard Marshall (Spokesperson)
Andrew Rigby
Rolland Gregg/ QuantumPower.cc
William Murphy / Boomeon.com
Chad Soltis
38. Assignment: No party hereto shall have the right to assign all or any part of its right or obligations hereunder
without the prior consent of the other party, except that nothing contained in this sentence shall prevent any
party from assigning its right to receive monies hereunder.
39. Miscellaneous:
a) This Agreement may not be modified except by written agreement signed by each of the parties hereto.
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b) This Agreement shall in no event be construed as a third party beneficiary contract and is not intended for
the benefit of any person or company whomsoever except the parties hereto.
c) No waiver by one party of a breach or default by the other party shall be deemed to be a waiver of any
preceding, continuing or succeeding breach of the same or any other provision of this Agreement.
d) Each party acknowledges that no representation or warranty not expressly set forth in this Agreement has
been made or relied upon by the other party, it being agreed that this Agreement constitutes the entire
Agreement of the parties regarding the subject matter hereof and supersedes all prior Agreements with
respect thereto.
e) This Agreement has been entered into in the United States and shall be construed and enforced under and
subject to the laws of said country.
40. Attorneys' Fees: In any action or proceeding between or among the parties hereto to interpret or enforce any of
the provisions hereof, the prevailing party shall, in addition to any other award of damages or other remedy, be
entitled to reasonable attorneys' fees and costs.
41. EffectofthisLetterofIntent:
This Letter of Intent (as a Joint Venture Agreement) is intended merely as a guide in the negotiations and
preparation of a Partnership Purchase/ Contributions Agreement on terms and conditions satisfactory to the
parties hereto, and nothing contained herein shall be construed to preclude other provisions from being
included in the Partnership Purchase/ Contributions Agreement, provided that such other provisions are
consistent with the content of this Letter of Intent and otherwise satisfactory to the parties hereto. While the
parties intend to proceed promptly to complete and execute the Partnership Purchase / Contributions
Agreement, it is expressly understood that this is a Letter of Intent only, and no liability or obligation of any
nature whatsoever is intended to be created between either of the parties hereto except as set forth in
Paragraphs 2 (confidentiality) and 3 (exclusivity) hereof, together with the obligation to repay the Loan DEPOSIT
(Paragraph 4) in accordance with its terms.
42. SpecialReferencesandProvisions–EffectiveJuly4th
, 2014:
The details of corporate filing for Social Market Research for Charity Inc. (respective to this Joint Venture
Agreement), and the associated IC/IP Holding company, Conscience LLC (external to this Agreement) are available
in Addendum M of the associated Addendums that supplement this agreement. This includes the declared Stock
Issuance made at the time of the filing of Social Market Research for Charity Inc. as a Delaware C Corporation –
And isprovided asamatteroffulldisclosure.
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43. [ ]__PRN___ (SMRC Initials) Specialprovisions - ‘Spokesperson’ (endorsing/promoting)role: for .0.50 percent
of the Founder’s shares: (Note: The standard for this provision is 0.50 percent (1/2 of one percent) of the
Founder’sshares).
a. Promoting/ endorsing SMRC to (i) Partners for a portion of the $3MM launch budget – For a Finder’s Fee
(no brokers) plus Founder’s equity (capped at 2%) as provided and limited as in Term 10, page 8 of this
Agreement, to (ii) prospective SMRC Hosts and Sponsors – promoting solutions to the biggest market
problems (including protecting people’s identity) through Persona development and replacing all
interactive media with ‘incentivised personal advertising fulfillment’ (personal portals filtered to be non-
competitiveunless they wish to be an authority site)– (a) ForSponsors, it’s perfectqualified matches, and
ad attention games, co-branded with personal charity – and now served everywhere – (b) For Hosts, it’s
about personalization on steroids and a pay-per-custom impression market, and to (iii) your followers (if
you haveany)–offeringsecurity,contentmonetization and incentivizedpersonalfulfillment(plusso much
more).
b. This role requires a letter endorsing yoursupport for the SMRC program – from one of multiple positions
– for what it wil do for charity – to how Persona(s) are used to keep everyone’s identity safe, to how this
allows fans,hostsand sponsorsto supporttheircelebrities.
c. You are (as a non-salaried partner), able to serve as a SMRC Host (promoting social intelligence to your
followers) and/or as a SMRC Sponsor (cause marketing/every-cause for yourself or others). Salaried
SMRC promoters receive a lifetime commission often percent(10%)of the valueof thestandard “House”
Fourpercent(4%)totalvalue foranaccount–Thismaybeincreasedbyannualperformance.
__________: Startingcommission _________: Capped -Aspercentof4%hostingcommission.
d. No Liability: Participation as a SMRCSpokesperson,while being aSMRC Joint Venture Partner,does not
carry any SMRC liabilities/responsibilities, with the exception that such liabilities should affect the
profitability/performanceofthecompany.
44. Disclaimer - Pubiisher's Revenues Analytics: Host publisher revenues as reflected in the three year projections is
not expressed in this document. This includes income line 15, COG (cost of goods) line 32 of the cash flow
statementaswellaslines104-105 (period &cumulativerevenues)and lines107-111 (totalHostrevenues).
45. Termination:
This Letter of Intent may be terminated at any time, by mutual consent of the parties, and (if) by Purchaser on
notice to SMRC Inc. Upon such termination, this Letter of Intent shall have no force and effect other than under
Paragraph 2.
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Please acknowledgethatthis Memorandumof Understandingcorrectlysets forth acceptablebindingaswellas non-
bindingintentionsatthis pointbycountersigningtheenclosed duplicateoriginalofthis MemorandumofUnderstandingin
thespaceprovided belowand returningonefullyexecutedoriginaltoSMRC Inc.
Understood,Agreed &Accepted:
ForSMRCInc.:
Chief Business Officer & Director 04.25.2014___
_______________________________ _________________________ _____________
[Owner/Founder/Director/Officer] [Date]
JointVenturePartner(s):MarketDevelopment,Collaboration,Governance,Ownership/Contribution
ThetotalnumberofthisJointVenture’sworkingpartnersshallnotexceed 35,each holdinganExecutiveBoard
rolewith votingpowerrelatedto eachmember’stotalresourcecontribution and finder’sfee agreement(s). Every
week,untilthe funding budgetiscomplete,thelistof JointVenturePartners willbeaggregated into therelease
documentforthenextweek(Bringingallthesignerstogetherononeextendeddocument). JointVenture
Agreements issuedw/pre-defined amountsmustbeauthorizedbyaSMRCOfficerorAssignedRep.
____On-File____________________ Phillip Berg 07.27.2012__ _$XXK/ 2 %__
[Owner/Founder/Director/Officer] [Date] F.Equity% (XX.XXX)
____On-File____________________ _JesseR &JulieAnneSaldana _05.01.2014_ _$XX K/_1%_____
____On-File____________________ [Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
____On-File____________________ RamiroSaldana____________ _05.19.2014_ _$XX K/0.50 %_-prn_
[Owner/Founder/Director/Officer] [Date] F. Equity% (XX.XXX)
____On-File____________________ _ScottGeremia____________ _05.27.14____ _$XXK/ 0.50 %_____
[Owner/Founder/Director/Officer] [Date] F. Equity% (XX.XXX)
____On-File____________________ _LanceReed Woody________ _04.15.2011__ _$XXK/ 1 %__
[Owner/Founder/Director/Officer] [Date] F. Equity% (XX.XXX)
____On-File____________________ Phillip/Aaron/AimeeNakata _-------- _$XXXK /7.5 %TBD
[Owner/Founder/Director/Officer] [Date] Equity%(XX.XXXX)
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____On-File____________________ Marc Sinkinson__ ____ 12/5/2014____ Endrsmt
1
/0.50
2
++
3
%
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
A=______%( )
____On-File____________________ ChrisShea/Director_________ __2010_____ _$XXK/1 %_____
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
____On-File____________________ ScottBruce_______________ __2012______ $XXK/1%________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
____On-File____________________ Jean-PierreD’Zahr_________ __2012______ _$XXK/ 1%_______
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
____On-File____________________ _BryanGraves_____________ __2012_______ _$XX K/0.50 %___
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
____On-File____________________ Alex Berryhill_______________ __2011______ _$XXK/ 1%_______
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
____On-File____________________ Marieta Darrah ________ _2013_______ _$XXK/ 0.50 %___
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
_____On-File____________________ _Leonard Marshall_________ _2015______ _$XX K/1 %__
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
_____On-File____________________ _AndrewRigby_____________ _2010____ $XXK/ 0.50 %__
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
_____On-File____________________ _RollandGregg_/QuantumPower.cc ____2015_____ _$XX4
K / 1%_______
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
$3.5 MPledgeon File/AwaitUpd.__ _LukeStewart&MichellSt.Pierre(Ross) _20150120__ $10MM/40%(T)as45%(F)
[Owner/Founder/Director/Officer] [Date] +44.15%(P)+33.125%(C)_
__--Pending$10 MPledge_______
1
Endorsement/Spokesperson/Advisorprovision,Term43,page25–Asperapprovedrate,cappedatonepercent(founders).
2
Equitybefore potentialfinders’ feeequity, as applicable,Term10,page8.
3
Equitybasedonperformance,as applicable,Term 10,page 8.
4
StockTrade
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_____On-File___________________ __BillMurphy/Boomeon___ ____________ _$XX4
K/ 1%_______
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ XXXXXXYYYYYYY . _________ _$150k/2%Founders
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________
_____On-File____________________ _ChadSoltis_______________ ___2015____ $75k/10%Dep/1%Founder
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
______________________________ _________________________ ____________ _______________
[Owner/Founder/Director/Officer] [Date] F. Equity%(XX.XXX)
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EXHIBIT B:
PNA/SMRC BI-LATERAL CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is made and entered into this _Xth day of
________________, 2015, by and between _XXXXX YYYYY_, a __ZZ_____ private citizen / corporation (circle
one) (“ ”) and Phillip R. & Aaron S. Nakata (of Phil Nakata & Associates, Social Market Research for Charity
Inc. [a Delaware Corp] & Conscience LLC [a Wyoming LLC]), Colorado private consultants.
The resource (you) and SMRC agree that the following terms and conditions apply when one of the parties
(Discloser) discloses Confidential Information (information) to the other (Recipient) under this Agreement.
You and SMRC agree that our mutual objective under this Agreement is to provide appropriate protection for
Information while maintaining our ability to conduct our respective business activities.
WITNESSETH:
WHEREAS, the parties are considering a potential business transaction (the “Proposed Transaction”); and
WHEREAS, as a condition to each party furnishing the other party with information in connection with its
evaluation of the Proposed Transaction, each party is requiring the other party to treat confidentially any
Confidential Information (as defined below) that it or its directors, officers, employees, agents or advisors
(collectively, a “Disclosing Party”) furnishes to the other party or its directors, officers, employees, agents or
advisors (collectively, the “Receiving Party”); and
WHEREAS, each party desires to ensure that the Confidential Information (as defined below) so disclosed will
not be used for any purpose other than an evaluation of the Proposed Transaction and, if appropriate, the
negotiation of mutually acceptable definitive agreements.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Confidential Information. For purposes of this Agreement, the term “Confidential Information” shall
mean, with respect to the Disclosing Party, any “Trade Secret” (as defined under applicable law) or any
information which:
(a) Is not generally available to the public; and
(b) Pertains or relates in any way to the Disclosing Party or its businesses, activities, products
or services including, without limitation, exhibitor and attendee lists, vendor lists, customer lists,
marketing plans and materials, price lists and related analyses, strategic partner activities, market
analyses, financial information, business plans, employee compensation information, organizational
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structure, reports, strategic plans, e-commerce activities, intellectual property rights, systems,
programs, techniques, know-how, software, works of authorship, contracts and licenses, pricing
methods or other similar information, as well as any copies, reproductions, summaries, extracts,
analyses, studies or other derivative works prepared by the Receiving Party or
(c) Its representatives incorporating or developed from the Confidential Information so
disclosed.
Notwithstanding the foregoing, if any Confidential Information pertaining to a Disclosing Party shall
become generally available to the public other than as a result of a breach by the Receiving Party of its
covenants hereunder, the same shall no longer be considered Confidential Information for purposes of
this Agreement. In addition, the term Confidential Information shall not include information, technical
data or know-how which (i) is in the public domain at the time of receipt, (ii) is in the possession of the
Receiving Party at the time of disclosure, (iii) is expressly approved by the Disclosing Party, in writing,
for release, (iv) comes into the possession of the Receiving Party from a third party that was not, to the
Receiving Party’s knowledge, subject to any confidentiality restriction, or (v) is independently
developed by the Receiving Party without reference to the Confidential Information.
Written materials that are intended to fall under the protection of this Agreement will be clearly
marked “Confidential,” “Proprietary” or similar marking. When verbal discussions between the Parties
include Confidential Information, that fact shall be announced in the discussion, and then within ten
days summarized in writing by the Disclosing Party, marked appropriately as above, and presented to
the Receiving Party. During that delay, Confidential Information disclosed verbally will be treated
exactly as if it had been disclosed in writing.
Each Disclosing Party owns all rights with respect to its Confidential Information disclosed to the
Receiving Party, and no right, express or implied, is conveyed to the receiving Party by the disclosure of
the Confidential Information that is made by the Disclosing Party to the Receiving Party
2. Prohibition Against Disclosure or Use. The parties shall use the Confidential Information only for the
purpose of evaluating the Proposed Transaction and, if appropriate, the negotiation of mutually
acceptable definitive agreement and the performance of work under those agreements. Except as
otherwise provided herein, neither party shall disclose to any third party any Confidential Information
concerning a Disclosing Party or appropriate any such Confidential Information for its use or benefit or
for the use or benefit of any third party. Each Receiving Party agrees that it shall not disclose to any
person or entity, other than the Receiving Party’s agents, representatives or corporate officers that
have a need to know, any such Confidential Information without the prior written consent of the
Disclosing Party.
3. Associated Contract Documents: Each time one of the parties wishes to disclose specific information
to the other, the Discloser will issue a Supplement to this Agreement (Supplement) before disclosure.
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The Supplement will identify the Recipient’s person designated to be the Point of Contact for the
disclosure and will contain the initial and Final Disclosure Dates. If either of these dates is omitted
from the Supplement, such date will be deemed to be the actual date of disclosure. Information
becomes subject to this Agreement o the Initial Disclosure date. The Supplement will also contain a
nondisclosure description of the specific Information to be disclosed and any additional terms and
conditions for that information.
The only time you and SMRC are required to sign the Supplement is when it contains additional terms
and conditions. When signatures are not required, the Recipient indicates acceptance of the
Information under the terms and conditions of this Agreement by participating in the disclosure, after
receipt of the Supplement.
4. Method(s) of Disclosure: The Discloser and the Recipient’s Point of Contact will coordinate and control
the disclosure. Information will be disclosed either:
a. In writing;
b. By delivery of items;
c. By initiation of access to information, such as may be contained in a data base or
d. By oral and/or visual presentation
Information should be marked a restrictive legend of the Discloser. If information is not marked with
legend or is disclosed orally, 1) the information will be identified as confidential at the time of
disclosure and 2) the Discloser will promptly provide the Recipient with written confirmation.
5. Exceptions: No obligation of confidentiality applies to any ideas, concepts, know-how, or techniques
contained in information that is related to the Recipient’s business activities (Knowledge). However,
this does not give the Recipient the right to disclose, except as set forth elsewhere in this Agreement,
1) the source of Knowledge, 2) any financial, statistical or personnel data or 3) the business plans of
the Discloser
Neither this Agreement no any disclosure of information grants the Recipient any license under
patents or copyrights.
6. Return of Confidential Information. Immediately upon demand by the Disclosing Party, the Receiving
Party shall deliver to the Disclosing Party all of its Confidential Information and copies thereof which is
then in the possession of the Receiving Party. At the request of the Disclosing Party, the Receiving
Party shall certify in writing that it has destroyed or turned over to the Disclosing Party all documents
containing such Confidential Information.
7. Required Disclosure. If the Receiving Party becomes legally compelled to disclose any Confidential
Information, it shall immediately notify the Disclosing Party so that the Disclosing Party may, at its
option, seek a protective order or other appropriate remedy or waive compliance with the provisions
of this Agreement. Notwithstanding any other term or provision of this Agreement, the parties hereto
agree that it shall be permissible for either party to make disclosures regarding this Agreement or the
Proposed Transaction that are necessary or appropriate to fulfill its obligations under any applicable
federal or state securities law.
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8. Disclaimers: THE DISCLOSER PROVIDES INFORMATION ON AN “AS-IS” BASIS. The Discloser will not be
liable for any damages arising out of the use of information.
Disclosure of information containing business plans is for planning purposes only. The Discloser may
change or cancel its plans at any time. Therefore, the use of information is at the Recipient’s own risk.
9. Governing Law. This Agreement shall be interpreted, construed, and governed according to the laws of
the State of Colorado. The Recipient will comply with all applicable United States and foreign export
laws and regulations
10. Term of Agreement. This Agreement may not be changed except by in writing signed jointly by the
parties. This Agreement shall be effective as of the date set forth above and the obligations of
confidentiality and nonuse shall continue for a period of three (3) years thereafter such date, except
with respect to Trade Secrets, if any, as to which the obligations shall continue perpetually.
11. General:
Neither party may assign its rights or delegate its duties or obligations under this Agreement without
prior written consent. Any attempt to do so is void.
SMRC may modify the terms and conditions of this notice. Any such modification will apply only to
information for which the Initial Disclosure Date is on or after the effective date specified in the notice.
Otherwise, only a written agreement signed by you and SMRC can modify this agreement.
Either party may terminate this Agreement by providing one month’s written notice to the other. Any
provisions of this Agreement which by their nature extend beyond its termination will remain in effect
beyond such termination until fulfilled and will apply to either party’s successors and assigns.
If there is conflict between the terms and conditions of this Agreement and a Supplement, those of
the Supplement will prevail. Except as modified by a Supplement the terms and conditions of this
Agreement remain in full force and effect.
12. Noncircumvent: Neither Party shall circumvent the other Party in the implementation of the other Party’s
Confidential Information. It is the intent of the Parties that they seek ways of expanding beyond this Evaluation
to establish written contractual business arrangements of mutual commercial benefit. Such subsequent
business relationships, will be in the form of a joint-venture, or a written co-venture that shall not constitute a
circumvention of the other Party. Neither Party shall contract directly with any actual or potential customer,
employee or supplier of the other Party who is actually identified in the disclosure of confidential information to
the extent that such contract would be in direct competition with the other Party .
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IN WITNESS WHEREOF the parties hereto have executed this Agreement:
Page 5 of 5
Agreement #: _____________
XXXXXX XXXX XXX CONSULTANT
___________________________ _____________________________
Name: Phillip R. Nakata
Title Consultant, PN&A (Phil Nakata & Assoc.)
___________________________ _____________________________
Name: Aaron S. Nakata
Title Consultant, PN&A (Phil Nakata & Assoc.)
________________________________ ________________________________
Name: Name:
Title: Title:
Co: Co: