Document:

Exhibit 10.1

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Right to Purchase __________ shares of Common Stock of  BlackRidge Technology International, Inc. at $.25 (subject to adjustment as provided herein)

 

COMMON STOCK PURCHASE WARRANT

	
No.

	
 Issue Date: ________, 2018

Blackridge Technology International, Inc, a corporation organized under the laws of the State of Nevada (the "Company"), hereby certifies that, for value received, or it's __________ (the "Holder"), or his/her assigns, are entitled, subject to the terms set forth below, to purchase from the Company at any time commencing two (2) months after the Original Issue Date until 5:00 p.m., M.S.T and ending on the date Five (5) years after the Original Issue Date (the "Expiration Date"), up to __________ fully paid and non-assessable shares of Common Stock at a per share purchase price of $.25. The afore described purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the "Purchase Price." The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein. This Warrant is part of an offering (the "Warrant Offering") by the Company of certain warrants in connection with the issuance of certain promissory notes (the "Notes"). The Company may reduce the Purchase Price for some or all of the Warrants issued in the Warrant Offering, temporarily or permanently, provided such reduction is made as to all outstanding Warrants for all Holders of such Warrants that were issued in the same offering as this Warrant.

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(A) The term "Company" shall mean BlackRidge Technology International, Inc., a Nevada corporation ("BlackRidge"), and any corporation which shall succeed or assume the obligations of BlackRidge hereunder.

(B) The term "Common Stock" includes (i) the Company's Common Stock, $0.001 par value per share, as authorized on the date of the Subscription Agreement, and (ii) any other securities into which or for which any of the securities described in (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

(C) For purposes of this Warrant, the "Fair Market Value" of a share of Common Stock as of a particular date (the "Determination Date") shall mean:

(a) If the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, or the American Stock Exchange, LLC, then the average of the closing sale prices of the Common Stock for the five (5) Trading Days immediately prior to (but not including) the Determination Date;

(b) If the Company's Common Stock is not traded on an exchange or on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, or the American Stock Exchange, Inc., but is traded on the OTC Bulletin Board or in the over-the-counter market or Pink Sheets, then the average of the closing bid and ask prices reported for the five (5) Trading Days immediately prior to (but not including) the Determination Date;

(c) Except as provided in clause (d) below and Section 3.1, if the Company's Common Stock is not publicly traded, then as the Holder and the Company agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided; or

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(d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.

(D) The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

(E) The term "Warrant Shares" shall mean the Common Stock issuable upon exercise of

this Warrant.

1. Exercise of Warrant.

1.1. Number of Shares Issuable upon Exercise.  From and after the Original Issue Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of Section 1.2 or upon exercise of this Warrant in part in accordance with Section 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4 below.

1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery to the Company of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the "Subscription Form") duly executed by such Holder and delivery within two days thereafter of payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect. The original Warrant is not required to be surrendered to the Company until it has been fully exercised.

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1.3. Partial Exercise. This Warrant may be exercised in part (but not for a fractional share) by delivery of a Subscription Form in the manner and at the place provided in Section 1.2, except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect. On any such partial exercise, provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.

1.4. Automatic Exercise. In the event this Warrant is exercisable pursuant to the provisions of Section 2 hereof on a cashless basis as of the close of the last trading day on or before the Expiration Date, then this Warrant, to the extent not previously unexercised and subject to the limitation in Section 11 of this Warrant shall be deemed to have been automatically exercised without the requirement of any notice or delivery of the Subscription Form, pursuant to the terms of Section 2. Such Expiration Date will be deemed the exercise date for purposes of determining the Warrant Share Delivery Date and similar terms hereof.

1.5. Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

1.6. Delivery of Stock Certificates on Exercise. The Company agrees that, provided the full purchase price listed in the Subscription Form is received as specified in Section 1.2, the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which delivery of a Subscription Form shall have occurred and payment made for such shares as aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within five (5) business days thereafter ("Warrant Share Delivery Date"), the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise. In addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant. Upon a failure by the Company to issue the Warrant Shares by the Warrant Share Delivery Date, unless the Holder revokes such exercise, in addition to any other remedies, the Holder shall be deemed to be the record owner of all Warrant Shares to be issued for purposes of receiving distributions, dividends and other financial incidents of ownership from and after the Warrant Share Delivery Date.

1.7. Buy-In.  In addition to any other rights available to the Holder, if the Company fails to deliver to a Holder the Warrant Shares as required pursuant to this Warrant after the Warrant Share Delivery Date and the Holder or a broker on the Holder's behalf, purchases (in an open market transaction or otherwise) shares of common stock to deliver in satisfaction of a sale by such Holder of the Warrant Shares which the Holder was entitled to receive from the Company (a "Buy-In"), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder's total purchase price (including brokerage commissions, if any) for the shares of common stock so purchased exceeds (B) the aggregate Purchase Price of the Warrant Shares required to have been delivered together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price of Warrant Shares to have been received upon exercise of this Warrant, the Company shall be required to pay the Holder $1,000, plus interest. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

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2. Cashless Exercise.

(a) Payment upon exercise may be made at the option of the Holder either in (i) cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants in accordance with Section (b) below or (iii) by a combination of any of the foregoing methods, for the number of Common Stock specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms of this Warrant) and the holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein. Notwithstanding the immediately preceding sentence, payment upon exercise may be made in the manner described in Section 2(b) below only with respect to Warrant Shares not included for unrestricted public resale in an effective Registration Statement on the date notice of exercise is given by the Holder.

(b) Subject to the provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by delivery of a properly endorsed Subscription Form delivered to the Company by any means described in Section 12, in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula:

 

	
X=

	
Y (A-B) A

	 	 
	
Where X=

	
the number of shares of Common Stock to be issued to the Holder

	 	 
	
Y=

	
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation) which shall be the date notice of exercise is given by the Holder

	 	 
	
A=

	
Fair Market Value

	 	 
	
B=

	
Purchase Price (as adjusted to the date of such calculation) which shall be the date notice of exercise is given by the Holder

 

 

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For purposes of Rule 144  promulgated under the 1933  Act,  it is intended, understood  and acknowledged that the Warrant Shares issued in a cashless exercise transaction in the manner described above shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Subscription Agreement.

3. Adjustment for Reorganization, Consolidation, Merger, Breach of Promissory Note.

3.1. Fundamental Transaction. If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another entity, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions and distributes proceeds from such  sale to its shareholders,  (C) any tender offer or  exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, or spin-off) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party  to, such stock purchase agreement or other business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification of the Common  Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into  or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event.  For purposes of any such exercise, the determination of the Purchase Price shall be appropriately adjusted  to  apply  to  such  Alternate   Consideration based  on  the  amount  of Alternate Consideration issuableinrespectofoneshareofCommonStockinsuch Fundamental Transaction, and the Company shall apportion the Purchase Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder's right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3.1 and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. "Black-Scholes Value" shall be determined in accordance with the Black-Scholes Option Pricing Model obtained from the "OV" function on Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP of the Common Stock for  the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of such request and (iii) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg L.P. determined as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction.

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3.2. Continuation of Terms.  Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4 and the Company shall include in agreements governing such transaction terms that recognize and require fulfillment of such rights and obligations.

3.3 Share  Issuance.  Until the Expiration  Date, if the Company shall issue any Common Stock, except for the issuance of Common Stock (or Other Securities) or the issuance or grant of options to purchase Common Stock pursuant to the Company's existing stock incentive plan for employees, prior to the complete exercise of this Warrant for a consideration less than the Purchase Price then in effect at the time of such issuance then, and thereafter successively upon each such issuance, the Purchase Price shall be reduced to such other lower price for then outstanding Warrants. For purposes of this adjustment, the issuance of any security or debt instrument of the Company carrying the right to convert such security or debt instrument into Common Stock or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Purchase Price upon the issuance of the above-described security, debt instrument, warrant, right, or option if such issuance is at a price lower than the Purchase Price in effect upon such issuance and again at any time upon any actual, permitted, optional, or allowed issuances of shares of Common Stock upon any actual, permitted, optional, or allowed exercise of such conversion or purchase rights if such issuance is at a price lower than the Purchase Price in effect upon any actual, permitted, optional, or allowed issuance. 

                                 3.4                 Breach of Note. This warrant will reprice to $.35 in the event the Company does  not convert the Note into equity with Holder as named in this Warrant.

4. Extraordinary Events Regarding Common Stock.  In the event that the Company shall (a) issue additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase Price shall, simultaneously  with the happening  of such event, be adjusted by multiplying  the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect on the date of such exercise.

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5. Piggy-Back Registrations.  Commencing six months after the Original Issue Date of this Warrant, if there is not an effective registration statement covering all of the Warrant Shares and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each holder of any of the Securities entitled to registration rights under this Section 5 written notice of such determination and, if within fifteen calendar days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of the Warrant Shares such holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights.  To the extent not all of the Warrant Shares may be included for registration in the registration statement, as a result of the Commission's application of Rule 415 under the 1933 Act, priority in such registration statement will be given to the other Common Stock included therein in preference to the Warrant Shares except no preference shall be given to shares held by affiliates. The obligations of the Company under this Section may be waived by any holder of any of the Securities entitled to registration rights under this Section 5. The holders whose shares are included or required to be included in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted to other holders of Securities included in such registration statement. Notwithstanding anything to the contrary herein, the registration rights granted to the holders of Securities shall not be applicable for such times as such Warrant Shares may be sold by the Holder thereof without restriction pursuant to Section 144(b)(1) of the 1933 Act. In no event shall the liability of any holder of Securities or permitted successor in connection with any Warrant Shares included in any such registration statement be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of the Warrant Shares sold pursuant to such registration or such lesser amount applicable to other holders of Securities included in such registration statement.

6. Demand Registration Rights. During the two (2) year period commencing six (6) months after the Original Issue Date of this Warrant, upon the written request of the holders of those securities representing at least 50% of the shares underlying the Warrants issued in the Warrant Offering (including shares previously received upon exercise of the Warrants), the Company agrees to prepare and file with the Securities and Exchange Commission no more than once, a registration statement on Form S-1 under the Securities Act of 1933, as amended, registering the Warrant Shares. The Company agrees to use its best efforts to cause the above filing to become effective and to pay all costs in connection with the registration statement.

7. Certificate as to Adjustments.  In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 12 hereof).

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8. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant or take such actions to increase the shares of Common Stock authorized for issuance to fulfill its obligations under this Section 8. This Warrant entitles the Holder hereof, upon written request, to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company's Common Stock.

9. Assignment; Exchange of Warrant.   Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a "Transferor"). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the "Transferor Endorsement Form") and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

10. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

11. Maximum Exercise.  The Holder shall not be entitled to exercise this Warrant on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock on such date.   For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Rule 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the issuance of more than 4.99%. The Holder shall have the authority to determine whether the restriction contained in this Section 11 will limit any conversion hereunder and the extent such limitation applies and to which convertible or exercisable instrument or part thereof such limitation applies. The restriction described in this paragraph may be waived, in whole or in part, upon sixty-one (61) days prior notice from the Holder to the Company to increase such percentage to up to 9.99%, but not in excess of 9.99%.

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12. Warrant Agent.  The Company may, by written notice to the Holder of the Warrant, appoint an agent (a "Warrant Agent") for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 9, and replacing this Warrant pursuant to Section 10 or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such Warrant Agent.

13. Transfer on the Company's Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

14. Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: if to the Company, to: 10615 Professional Circle, Reno NV, 89521, and (ii) if to the Holder, to the address and facsimile number listed on the first paragraph of this Warrant.

15. Law Governing This Warrant.  This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of Delaware or in the federal courts located in the state and county of Delaware. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	 	
BLACKRIDGE TECHNOLOGY INTERNATIONAL, INC.

	 	 
	 	 
	 	
By: /s/ John H. Bluher

	 	Name: John H. Bluher
		Title:  Chief Financial Officer

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Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

 

TO:   BlackRidge Technology International, Inc.

 

The undersigned,  pursuant  to  the  provisions  set  forth  in  the  attached  Warrant  (No.      ), hereby irrevocably elects to purchase (check applicable box):

 shares of the Common Stock covered by such Warrant; or the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2 of the Warrant.

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $ . Such payment takes the form of (check applicable box or boxes):

 $  in lawful money of the United States; and/or  the cancellation of such portion of the attached Warrant as is exercisable for a total of shares of Common Stock (using a Fair Market Value of $per share for purposes of this calculation); and/or

the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2 of the Warrant, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

 

The undersigned requests that the certificates for such shares be issued in the name of, and delivered pursuant to the DTC instructions below or to  whose address is  

 .

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an exemption from registration under the Securities Act.

DTC Instructions:  

Dated:

(Signature must conform to name of holder as specified on the face of the Warrant)

(Address)

11

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT (To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading "Transferees" the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of BlackRidge to which the within Warrant relates specified under the headings "Percentage Transferred" and "Number Transferred," respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of BlackRidge with full power of substitution in the premises.

	
Transferees

	
Percentage Transferred

	
Number Transferred

	 	 	 
	 	 	 
	 	 	 

Dated:  ,  

(Signature must conform to name of holder as specified on the face of the warrant)

Signed in the presence of:

(Name)

ACCEPTED AND AGREED: [TRANSFEREE]

(address)

(address)

(Name)

12Exhibit

EXHIBIT 10.1

Research and Development Services Agreement

This Agreement is made and entered into as of this 8th day of August, 2018 by and between Vicon Industries, Inc., having a principal place of business at 135 Fell Court, Hauppauge, New York (hereinafter referred to as “Vicon” or “Parent”) and Cemtrex, Inc., having a principal place of business at 19 Engineers Lane, Farmingdale, New York 11735, and its subsidiaries. (hereinafter referred to as “Cemtrex”).

WHEREAS:  (i) Cemtrex is the principal shareholder of Vicon, (ii) the Chief Executive Officer of Cemtrex serves as the Chief Executive Officer of Vicon, and (iii) the principal shareholder of Cemtrex, who serves as a director of Cemtrex, also serves as a director of Vicon.

WHEREAS: Vicon, through its Israeli based Vicon Systems Limited subsidiary, has been engaged in the development of the Valerus and ViconNet branded Video Management Systems (VMS), among other things, pursuant to an R&D Services Agreement between Vicon and its subsidiaries.   

WHEREAS: Vicon has determined to transition the development services for Valerus and the VMS to  Cemtrex , as a lower cost alternative.  

WHEREAS: Cemtrex has been engaged to provide Vicon with contract software development services and herein the parties desire to formalize their arrangement in this Agreement.

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

Article 1 - Definitions 

“Consideration” shall mean Development Costs. 

“Development Costs” in this Agreement shall mean standard monthly resources rates of Cemtrex reasonably required to perform Services contained in this Agreement. Such expenses may include, but not be limited to, payroll, payroll related benefits, supplies, capital assets in the form of depreciation, facilities, utilities, administrative costs and all other expenses of Cemtrex. Cemtrex will provide certain staff resources on a full-time basis for Vicon and others on an hourly basis as required to perform Services. 

“Parties” shall mean Vicon and Cemtrex and their respective subsidiaries and affiliates.

“Proprietary Information” shall mean all information disclosed to, created by, or known by the Parties as a consequence of this Agreement, whether before, on, or after the date of this Agreement, or through the performance of services by Cemtrex and/or  its subsidiaries on behalf of Vicon prior to or under this Agreement, including any and all confidential or proprietary knowledge, data or information related to the Technology. By way of illustration but not limitation, Proprietary Information includes the Technology and information regarding plans for research, development, new products, marketing and selling, business plans, budgets and work plans. Proprietary Information shall not include any information Cemtrex obtains from third parties that is already in the public domain.

“Proprietary Rights” shall mean all Technology rights throughout the world.

“Services” shall mean all research and development activities conducted by Cemtrex and/or its subsidiaries in accordance with the terms contained herein.

“Technology” shall mean all trade secrets, patents, patent applications, copyrights, inventions, ideas, processes, formulas, source and object codes, prototypes, data, programs, algorithms, know-how, improvements, discoveries, development, designs, techniques and any other intellectual property which have been assigned to or may hereafter be developed by Cemtrex and/or its subsidiaries under this Agreement, including any and all existing and future products developed based upon said Technology. 

Article 2 - Research and Development Services

2.1 Research and Development Services - Vicon and Cemtrex hereby formalize Vicon’s engagement of Cemtrex and its subsidiaries to assume substantial development of Vicon’s VMS products and associated physical products such as cameras, NVRs, etc. Cemtrex has assigned and will assign such resources as may be necessary in order to develop, maintain, enhance and expand such product lines. All Technology developed, or which may be developed by Cemtrex and/or its subsidiaries, whether or not specifically requested by Vicon, shall be regarded as developed at the request and on behalf of Vicon.  

2.2 The Services shall be performed by Cemtrex and/or its subsidiaries in accordance with the highest professional standard and procedures applicable to the Services, and in accordance with instructions received from time to time from Vicon. Cemtrex warrants that it has or will have the requisite technical and professional knowledge, know-how, expertise, skills, talents and experience required in order to perform the Services in a professional and efficient manner and that such Services will be performed in accordance with acceptable industry standards.

2.3 The precise scope of Services and time for performance of such Services by Cemtrex and/or its subsidiaries shall be determined by Vicon after consultation with Cemtrex. A “Work Plan” and financial operating “Budget” will be formulated by which Cemtrex will conduct its Services. From time to time, but not less often than annually at September 30th of each year, Vicon and Cemtrex shall review the Work Plan and Budget then in effect to determine whether any changes in the objectives and projected costs of Services to be performed are required. Vicon recognizes that Cemtrex develops software under an agile development framework and as a requirement of the agile nature of the development authorizes Cemtrex to make reasonable immaterial adjustments to the “Budget” in order to deliver Services in a timely manner without prior notice. 

2.4 Within 60 days after the end of each six months period ending March 31 and September 30th during the term of this Agreement, Cemtrex shall provide Vicon with a detailed report of Services performed in such preceding six months period, the results of such Services and the status of Development Costs incurred compared with the Budget. Within 30 days after the termination of this Agreement, Cemtrex shall provide Vicon with, among its other obligations herein, a detailed report of Services performed from the last period reported through the date of termination and a final status of Development Costs incurred for the period. In addition, upon termination of this Agreement for any reason, Cemtrex shall provide reasonable assistance to Vicon in the transition of the development and support services to be provided hereunder to Vicon or an entity designated by Vicon.  

Article 3 - Consideration

3.1 In consideration of Cemtrex’s Services and obligations covered by this Agreement, Vicon undertakes to pay Cemtrex its Development Costs

3.2 The Consideration will be payable net due after the receipt by Vicon of any invoice from Cemtrex detailing the Development Costs incurred by Cemtrex during the preceding calendar month. Payments will be made in U.S. Dollars by bank transfer of immediately available funds to Cemtrex’s specified local bank account. Cemtrex shall be responsible for all tax, sales tax and other taxes and duties imposed on Cemtrex and its subsidiaries in performance of the Services hereunder.  

Article 4 - Ownership of the Technology 

4.1 Cemtrex hereby assigns to Vicon all its rights, title and interest in and to any and all Technology and any Proprietary Rights created, developed, conceived, reduced to practice, authored or delivered by Cemtrex or its subsidiaries in connection with the performance of the Services hereunder, whether developed or delivered prior to or following the date of this Agreement. Such assignment shall be regarded as having been made by force of this Agreement immediately upon the creation of the Technology or Proprietary Rights without any necessity for further action by Cemtrex or Vicon. 

4.2 Cemtrex acknowledges that all original works of authorship which are part of the Technology and which are protectable by copyright and which could qualify as “works made for hire” are “works made for hire” pursuant to United States Copyright Act (17 U.S.C., Section 101), and the applicable laws of India or other relevant jurisdictions. If any work does not qualify as a work for hire it will be immediately assigned to Vicon pursuant to this Agreement without need for additional consideration or documentation.  

4.3 Cemtrex will assist Vicon in every proper way to obtain, and from time to time enforce, United States, Indian, and other Proprietary Rights relating to the Technology in any and all countries. To that end, Cemtrex will (and, if necessary, will cause its employees and contractors to) execute, verify and deliver such documents and perform such other acts as Vicon may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, Cemtrex will (and will cause its employees and contractors if necessary to) execute, verify and deliver assignments of such Proprietary Rights to Vicon or its designee. 

4.4 Cemtrex undertakes that, in the creation of the Technology, it will not improperly use or disclose any confidential information or trade secrets, if any, of any third party to whom it has an obligation of confidentiality unless such third party consents to such use in a way which does not encumber the Technology or create any possibility of future encumbrance and further undertakes that it will not knowingly use in the creation of the Technology any trade secret, patent, copyright, or other intellectual property right of any third party unless such third party consents to such use in a way which does not encumber the Technology or create any possibility of future encumbrance.  Cemtrex represents that the Services hereunder and the Technology, to the best of its knowledge, shall not infringe or be subject to the intellectual property rights of any third party or require a license from any third party. 

4.5 Cemtrex herein represents and warrants that no other third party or entity other than Vicon has any right, title or interest in the Technology or Proprietary Information.  

4.6 The Technology is the exclusive property of Vicon. Only with Vicon’s written consent, Cemtrex will have the right to market and sell under license from Vicon, all or certain of the products developed based upon the Technology solely within agreed upon worldwide territories in consideration for a royalty payment to be negotiated by the parties.  

4.7 Cemtrex warrants that it will not use Open Source Software in its development without the express written consent of Vicon and that it will adhere to now and in the future all official terms and conditions of such usage. Open Source Software shall mean:

 (a) any software that requires as a condition of use, modification and/or distribution of such software, that such software: (i) be disclosed or distributed in source code form; (ii) be licensed for the purpose of making derivative works; (iii) may only be redistributed free from enforceable intellectual property rights; and/or (b) any software that contains, is derived from, or statically or dynamically links to, any software specified under (a).

Article 5 - Non-disclosure and Safeguard of Software Code

5.1 At all times during the period when this Agreement is in force and thereafter, Cemtrex and its employees and contractors will hold in strictest confidence and will not disclose, use, lecture upon, publish or otherwise share with third parties, any of the Proprietary Information except as may be required by law or court order.

5.2 Cemtrex and its subsidiaries shall not make use of the Proprietary Information other than as necessary to perform the Services and shall not disclose any of the Proprietary Information or part thereof to any third party except employees, agents or sub-contractors who have a need to know such information for the purpose of performing the Services.

5.3 Cemtrex shall upon termination of this Agreement, or upon request of Vicon, promptly deliver all tangible copies of any Proprietary Information or any other documentation relating to the Technology and Services therewith to Vicon.

5.4 Cemtrex shall provide Vicon “confidentiality agreements”, in form satisfactory to Vicon, from Cemtrex’s and its subsidiaries’ employees and contractors that restrict their use and dissemination of Proprietary Information during and after their employment or consultancy and, which agreements are expressly enforceable by Vicon. Prior to disclosing any Proprietary Information to a third party, Cemtrex shall first obtain Vicon’s consent and deliver to Vicon an executed confidentiality agreement from such third party.

5.5 Cemtrex shall perform Technology backup procedures according to customary industry practices to safeguard Vicon’s Technology. Such procedures shall include, but not be limited to, providing Vicon with a copy of source code for all VMS software revisions and in process works in executable form along with development management information.   

Article 6 - Term and Termination

6.1 This Agreement will remain in full force and effect for a period of ten (10) years from the date of this Agreement unless terminated by (a) either Party for any reason upon six (6) months written notice (b) mutual consent of the Parties or (c) a material breach of any of the terms or conditions herein by either of the Parties, which have not been remedied within ninety (90) days after written notice thereof from the other party. The provisions of Articles 4, 5 and 7 shall survive any termination or expiration of this Agreement.

Article 7 - General Provisions

7.1 To the extent any product is made, in whole or in part, to Vicon’s design specifications or instructions, Vicon shall indemnify and hold harmless Cemtrex from all third party claims brought against Cemtrex arising out of the development of such products by Cemtrex as long as such products were made in strict conformance with the design specification or instructions from Vicon, and such damages did not result from the breach of this Agreement by Cemtrex.    

7.2 Vicon agrees that, during the term of this Agreement and for a period of one (1) year thereafter, that it will not, without the express written approval of Cemtrex, offer employment or engagement (whether as an employee, independent contractor or consultant) to any of Cemtrex’s employees or independent contractors that became known to Vicon as a result of this Agreement; provided, however, that the foregoing provision will not prevent Vicon from (a) conducting general recruitment solicitations not specifically directed at the Cemtrex’s employees or contractors, or (b) employing any person responding to such solicitation. 
 
7.3 This Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained therein and supersedes and replaces all prior agreements, understandings, writings and discussions between the Parties as to the subject matter hereof.

7.4 This Agreement may not be amended, altered or modified except by a written instrument signed and duly executed by both Parties.

7.5 This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of laws rules and the State and Federal courts located in the State of New York shall have sole and exclusive jurisdiction over any and all disputes which shall arise under or in any way be connected with this Agreement. Cemtrex consents to the jurisdiction of such courts in any proceeding by Vicon or its assignee as to any dispute relating to this Agreement.

7.6 Should any part of this Agreement be held unenforceable or in conflict with the applicable laws, rules, regulations or orders of any applicable jurisdiction, the invalid or unenforceable part or provision shall be replaced with a provision which accomplishes, to the fullest extent possible, the original purpose of such part or provision in a valid and enforceable manner, and the balance of this Agreement shall remain in full force and effect.

7.7 Neither this Agreement nor any right or obligation arising herein may be assigned by Cemtrex in whole or in part, without the prior written consent of Vicon, which consent may be withheld in the absolute discretion of Vicon.

7.8 All notices and other communications required or desired to be given or sent under this Agreement by either of the Parties shall be in writing, in the English Language, and shall be deemed to have been given on the date of delivery as confirmed by third party delivery confirmation receipt. Notice to either Party should be addressed to its then acting Chief Executive Officer in the case of Cemtrex and the Chief Operating Officer in the case of Vicon, at the addresses designated above.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Agreement hereunder as of the date set forth above.

On behalf of:

Vicon Industries, Inc. (“Vicon”)

Signature:  /s/ John M. Badke
By:            John M. Badke
Title:         Chief Operating Officer

Cemtrex, Inc. (“Cemtrex”)

Signature:  /s/ Saagar Govil
By:            Saagar Govil 
Title:         Chief Executive Officer

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