Document:

EX-10.16

 Exhibit 10.16 

SEPARATION AND GENERAL RELEASE AGREEMENT 

This Separation and General Release Agreement (“Agreement”) is made by and between Edward R. Dietz, Jr.
(“you”) and Marlin Business Services Corp. (the “Company”) (collectively, the “Parties”) and shall be effective as of the Effective Date as defined below. 

WHEREAS, the Parties have agreed that you will transition out of your duties as Senior Vice President & General Counsel effective
December 31, 2019; and 
 WHEREAS, the Parties have reached a full and final agreement between and among them relating to your
separation of employment from the Company; 
 NOW, THEREFORE, in consideration for the mutual promises set forth herein, and intending to be
legally bound, the Parties agree as follows: 
 1. Transition Period and Separation Date. 

(a) Your employment with the Company shall terminate effective December 31, 2019, or a sooner date if agreed upon by the Parties in
writing (the “Separation Date”). 
 (b) The time between the date you execute this Agreement and the Separation Date shall
be known as the “Transition Period.” Your duties during the Transition Period shall be as directed by the Chief Executive Officer of the Company or his designee. You are expected to perform your duties efficiently and
faithfully. The Company may, at its discretion, end the Transition Period before the Separation Date, if you knowingly and willfully fail to perform duties in accordance with this Agreement or if you otherwise knowingly and willfully act in a
manner that materially harms the Company or any of its affiliates (for “Cause”). If the Company terminates your employment prior to the Separation Date for Cause, except as provided in Paragraph 17(i) below, you shall not be
entitled to payments or benefits under this Agreement for periods after the end of the date of such termination for Cause (the “Termination Date”), which includes, for the avoidance of doubt, the separation benefits set forth in
Section 2 of this Agreement. 
 (c) You will be paid your full bi-weekly salary through the
Separation Date or the Termination Date (as applicable), less applicable deductions for state, federal, and local taxes and any other payroll deductions that are on record for you, on the same schedule as payroll for similarly-situated active
employees. Additionally, regardless of whether you sign this Agreement, the Company will pay you for (i) any reimbursements for business expenses incurred prior to the Separation Date or the Termination Date (as applicable), subject to the
Company’s reimbursement policy; and (ii) any other vested benefits to which you are entitled under the Company’s employee benefit plans. All such payments and benefits shall be made or provided in accordance with applicable law
and, if applicable, the terms of the employee benefit plans. 
 2. Separation Benefits. Upon the Effective Date of this Agreement,
your subsequent reaffirmation of this Agreement, your return of all Company property, and in consideration of the covenants and promises contained herein, including your release of all claims as set forth in Paragraph 5 below, the Company will
provide you with the following separation benefits (the “Separation Benefits”): 

 (a) A cash payment of $165,743.00, equal to your target annual incentive bonus for the
Company’s 2019 fiscal year. The annual incentive bonus payable under this Paragraph 2(a) shall be paid on the same date on which such bonus, if any, would have been paid you under the bonus plan if your employment had not terminated on the
Separation Date. 
 (b) You acknowledge and agree that unless you execute this Agreement, reaffirm this Agreement on or after the Separation
Date, and do not revoke this Agreement after signing or reaffirming this Agreement as set forth in Paragraph 17(c), you would not otherwise be entitled to receive the additional consideration set forth in this Paragraph 2; it being understood and
agreed by you that by paying you such consideration, the Company is not making any admission or acknowledgement whatsoever that it is in any way obligated to pay you such consideration. You further acknowledge and agree that the payments set forth
in Paragraph 1 constitute full satisfaction and accord for any and all obligations due and owing to you by the Company. You also acknowledge that the Company has paid you all wages, salaries, bonuses, benefits and other amounts earned and accrued,
less applicable deductions, and you have received all other entitlements due, including paid time off, for which you were eligible and entitled. You further acknowledge that the Company has no obligation to pay any additional amounts other than the
payment(s) described in Paragraph 2 of this Agreement and then only if you sign this Agreement, reaffirm the same on or after the Separation Date, and do not exercise your right to revoke this Agreement under Paragraph 17(c). 

4. Non-Admission. You acknowledge and agree that neither the execution of this Agreement nor the
terms of this Agreement constitute evidence of any wrongdoing on the part of the Company or the Releasees (as defined below), or as any admission of liability or of the validity of any claim released hereunder. 

5. General Release. In consideration of the Separation Benefits set forth in Paragraph 2, you, on behalf of yourself, your spouse,
domestic partner, children, agents, assignees, heirs, executors, administrators, beneficiaries, trustees, legal representatives, and assigns, hereby waive, discharge, and release the Company and its current and former parents, subsidiaries,
divisions, branches, assigns and affiliated and related companies, and their respective predecessors, successors, employee benefit plans, and present and former directors, officers, members, partners, shareholders, fiduciaries, employees,
representatives, agents and attorneys, insurers, in their individual and representative capacities (collectively, the “Releasees”), from any and all actions, causes of action, obligations, liabilities, claims and demands you may
have, known or unknown, contingent or otherwise, and whether specifically mentioned or not, from the beginning of time until the date you sign this Agreement. 

Without limiting the generality of the foregoing, this waiver, discharge, and release includes, but is not limited to: any claims based on
your employment with the Company or the termination of that employment, including the release of any claims for wrongful discharge or breach of contract (express, implied or otherwise); any claims for negligence, defamation or intentional tort; any
claims for employment discrimination, harassment, or retaliation on any basis, including age, race, color, ethnicity, national origin, gender, religion, pregnancy, disability (or perceived disability), sexual orientation, veteran’s status,
whistleblower status, marital status, or other protected classes as defined by applicable laws; to the extent legally capable of being waived, any claims based upon or arising under any federal, state, or local laws or regulations, including,

 
but not limited to, any claims under Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act; the Employee
Retirement Income Security Act, the Family and Medical Leave Act; the Fair Labor Standards Act, the Older Workers’ Benefits Protection Act, the Civil Rights Act of 1866, the Genetic Information
Non-Disclosure Act, the Uniformed Services Employment and Reemployment Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Fair Credit and Reporting Act; Fair Labor Standards Act; Occupational
Health & Safety Act; the New Jersey Law Against Discrimination (N.J. Stat. Ann. 10:5-1, et seq.), the New Jersey Conscientious Employee Protection Act (N.J. Stat. Ann.
34:19-3, et seq.), the New Jersey Family Leave Act, New Jersey wage and hour laws, and the United States and New Jersey Constitutions. 

Notwithstanding the generality of the foregoing, nothing herein constitutes a release or waiver by you of, or prevents you from making or
asserting: (i) any claim or right you may have under COBRA; (ii) any claim or right you may have to workers’ compensation or unemployment benefits; (iii) any claim to vested benefits under the written terms of the 401(k) Plan;
(iv) any claim incurred during your employment that is payable under any applicable welfare plan or any employer-insured liability plan; (v) any claim or right you may have to enforce the terms and provisions of this Agreement;
(vi) any claim or right that may arise after the execution of this Agreement; (vii) any claim or right to indemnification, advancement of legal expenses, or liability insurance coverage; or (viii) any claim that is not otherwise
waivable by applicable law. 
 In addition, nothing herein shall prevent you from filing a charge or complaint with the Equal Employment
Opportunity Commission (“EEOC”) or similar federal or state agency or your ability to participate in any investigation or proceeding conducted by such agency; provided, however, that you are waiving any right to recover monetary damages or
any other form of personal relief in connection with any such charge, complaint, investigation or proceeding. To the extent you receive any personal or monetary relief in connection with any such charge, complaint, investigation or proceeding, the
Company will be entitled to an offset for the payments made pursuant to Paragraph 2 of this Agreement. 
 6. Non-Disclosure. Except as provided in Paragraph 9, you agree not to discuss or disclose the existence and/or terms of this Agreement, including the amount or nature of the consideration provided to you under
this Agreement, to any person other than your immediate family members, potential employers, and your attorney and/or financial advisor, should one be consulted, provided that those to whom you may make such disclosure must first agree to keep said
information confidential and not disclose it to others. 
 7. No Future Employment. You agree that you will not at any time in the
future seek employment with the Company, and hereby waive any right that may accrue to you from any application for employment that you may make, or any employment that you may receive, notwithstanding this provision. By this Agreement, you agree
that execution of this Agreement shall constitute good and sufficient cause to reject any application you may make for employment, or to terminate any employment you may receive, notwithstanding this Agreement. You further acknowledge and agree that
the Company has no obligation to consider you for rehire or reinstatement with the Company or any other related companies or affiliates. 

 8. Restrictive Covenants. You agree that during your employment with the Company, and
for a period of twelve (12) months following the Separation Date (or Termination Date whichever occurs earlier), you will not, directly or indirectly, solicit any actual or prospective customers, vendors, partners or consultants of the Company
for purpose of selling or servicing any products or services that compete with the Company, or otherwise impair the relationship with the Company. You also further agree that during your employment with the Company, and for a period of twelve
(12) months following the Separation Date (or Termination Date whichever occurs earlier), you will not, directly or indirectly, solicit or attempt to solicit any employee or contractor of the Company to terminate or lessen such employment or
contract with the Company, or to perform services on behalf of any person or entity that competes with the Company. The Parties agree that as of the Separation Date (or Termination Date, whichever occurs earlier) you shall be released from any and
all non-competition obligations. 
 In addition, during your employment and at all times thereafter,
you shall not take any action to materially disparage or criticize the Company or its respective directors, officers, employees, partners, members, clients or customers or to engage in any other action that injures or hinders the business
relationships of such persons. The Company agrees to notify the following people of their obligation not to make any defamatory or disparaging statement, writing, or communication pertaining to your character, reputation, or business practices:
current members of the Strategic Leadership Team (SLT), current members of the Company’s Human Resources Department and the Company’s current Board of Directors. 

In addition to any obligations set forth herein, you understand and acknowledge that you are obligated to continue to comply with your
covenants and agreements set forth in your Employee Promises Agreement, and Confidentiality Agreement, dated June 11, 2010 (both attached as Exhibit A), and except as provided in Paragraph 9, including those covenants of yours contained therein
relating to confidentiality, non-solicitation of customers, non-recruitment of employees, vendors, partners or contractors and
non-disparagement, in accordance with the terms of those covenants and agreements. Notwithstanding anything set forth in this Paragraph 8 to the contrary, the Company may excuse you from the restrictive
covenants identified in this Paragraph 8, or any portion thereof, in its sole discretion, upon the written agreement of the Company’s CEO. 

9. Permitted Conduct. Nothing in this Agreement shall prohibit or restrict you from lawfully: (a) initiating communications
directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by any government or regulatory agency, entity, or official(s) (collectively, “Governmental
Authorities”) regarding a possible violation of any law; (b) responding to any inquiry or legal process directly to you individually (and not directed to the Company) from any such Governmental Authorities; (c) testifying,
participating or otherwise assisting in an action or proceeding by any such Governmental Authorities relating to a possible violation of law; or (d) making any other disclosures that are protected under the whistleblower provisions of any
applicable law. Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made
(i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made to your
attorney in relation to a lawsuit for retaliation against you for reporting a suspected violation of law; or (c) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Nor does this
Agreement require you to obtain prior authorization from the Company before engaging in any conduct described in this Paragraph, or to notify the Company that you have engaged in any such conduct. 

 10. Non-Removal/Return of Company Property.
You agree you will not remove or cause to be removed from the Company’s premises any confidential or proprietary information, including, but not limited to, Confidential Information as set forth in your Employee Promises and Confidentiality
Agreements, and specifically, but not limited to, documents, equipment or other property (or copies thereof) belonging to the Company, its employees, customers or others doing business with the Company, and that you will return all such confidential
or proprietary information, including, but not limited to Confidential Information, and specifically, but not limited to, documents, equipment or other property (or copies thereof), including, but not limited to, credit cards, identification and
access cards, keys, computers, passwords, usernames, access codes, cellular telephones, pagers and other office equipment and Company property, immediately and no later than the Separation Date or the Termination Date (as applicable). Further, to
the extent you made use of your own personal computing devices (e.g., PDA, laptop, tablet, phone, thumb drives, cloud storage, personal email, etc.) during your employment with the Company, subject to any applicable litigation hold directive that
you received and that remains in effect, you agree: (i) to return any Company property to the Company and permanently delete all Company property and information from such personal computing devices; or (ii) deliver such personal computing
devices to the Company for review and permit the Company to delete or preserve as necessary all Company property and information from such personal computing devices immediately and no later than the Separation Date or the Termination Date (as
applicable). By signing this Agreement, you also represent you have not provided any Company property, including any confidential or proprietary information or Confidential Information, to any third parties. Nothing in this Agreement or elsewhere
shall restrict you from retaining, and using appropriately, documents and information relating to your personal entitlements and obligations. 

11. Tax Withholdings. All amounts payable pursuant to this Agreement are subject to applicable tax withholdings. In addition, you are
solely responsible for all taxes that may result from your receipt of the amounts payable and benefits to be provided to you under this Agreement, and neither the Company nor any of its affiliates makes or has made any representation, warranty or
guarantee of any federal, state or local tax consequences to you of your receipt of any payment or benefit hereunder, including, but not limited to, under section 409A of the Internal Revenue Code of 1986, as amended. 

12. Cooperation. You agree that upon the Company’s reasonable request to you, you shall cooperate with the Company and its counsel
(including, if necessary, preparation for and appearance at depositions, hearings, trials or other proceedings) with regard to any past, present or future legal or regulatory matters that relate to or arise out of matters you have knowledge about or
have been involved with during your employment with the Company. In the event that such cooperation is required, you will be reimbursed for reasonable expenses incurred in connection therewith. 

 13. Choice of Law. This Agreement shall in all respects be interpreted, enforced and
governed in accordance with and pursuant to the laws of the State of New Jersey, without reference to the conflicts of law principles thereof. 

14. Mediation; Arbitration; Jury Trial Waiver. Any and all disputes between you and the Company arising out of, relating to or
concerning this Agreement, whether sounding in contract or tort or any other claim whatsoever, including disputes as to whether a dispute is subject to mediation and/or arbitration, shall be submitted exclusively to
non-binding confidential mediation before a third-party neutral and (if necessary) to final and binding confidential arbitration by a private and impartial arbitrator, to be jointly selected by youyou and the
Company. Mediators and, if necessary, arbitrators shall be selected from the roster of neutrals of the American Arbitration Association. Any such mediation and/or arbitration shall be conducted in Mount Laurel, New Jersey, and in accordance with the
American Arbitration Association’s Employment Arbitration Rules or their equivalent then in effect. The costs for any mediation and/or arbitration shall be split equally between the parties. Judgment upon the award rendered by the arbitrator,
if any, may be entered in any court having jurisdiction thereof. You and the Company specifically waive their respective rights to a trial by jury for any dispute or controversy arising under or in connection with this Agreement. YOU UNDERSTAND THAT
BY AGREEING TO THE TERMS OF THIS PARAGRAPH YOU ARE GIVING UP ANY CONSTITUTIONAL OR STATUTORY RIGHT YOU MAY POSSESS TO HAVE COVERED CLAIMS DECIDED IN A COURT OF LAW BEFORE A JUDGE OR A JURY. 

15. Entire Agreement. This Agreement constitutes the entire agreement between you and the Company regarding the subject matter of this
Agreement and, except for those agreements otherwise specifically referenced herein, supersedes all existing agreements between them concerning such subject matter. You acknowledge that this Agreement was reached with the Company separately by you,
and that you surrender any rights to receive any benefits, including but not limited to any, if eligible, under the Severance Pay Plan for Senior Management. You acknowledge that neither the Company nor any related entity has made any promises to
you other than those contained in this Agreement. This Agreement may not be changed unless the change is in writing and signed by you and the Company. 

16. General Provisions. The failure of any party to insist on strict adherence to any term hereof on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term hereof. This Agreement may be signed in counterparts. This Agreement is binding upon and will inure to the benefit of
the parties and each of their heirs, executors, administrators, trustees, representatives, successors or assigns. 
 17.
Acknowledgements. You hereby acknowledge that: 
 (a) Legal Counsel. The Company hereby informs you to consult with an attorney
before signing this Agreement, which includes a general release and a jury trial waiver. You understand that whether or not you do so is your decision. 

 (b) Review Period. The Company has given you a reasonable period of twenty-one (21) days to review and consider this Agreement before signing it (the “Review Period”). You acknowledge and agree that you must sign and return the original Agreement to the
Company, c/o Laura Anger, Marlin Capital Solutions, 300 Fellowship Road, Mount Laurel, N.J. 08054, no later than the end of the Review Period. If you fail to do so, this Agreement shall not be effective or enforceable, and you will not receive the
Severance Benefits described in Paragraph 2. 
 (c) Revocation Period. You may revoke this Agreement within seven (7) calendar
days after the date on which you sign it, by delivering a written notice of revocation to the Company, c/o Laura Anger, Marlin Capital Solutions, 300 Fellowship Road, Mount Laurel, N.J. 08054. 

(d) Effective Date. If you revoke this Agreement, it shall not be effective or enforceable, and you will not receive, the payment
described in Paragraph 2. This Agreement shall not become effective (“Effective Date”) until after: (i) the Company’s receipt of this Agreement, signed by you; (ii) the Company’s receipt of this Agreement re-signed by you on or after the Separation Date; and (iii) the expiration of the seven-day revocation period as set forth above in this Paragraph 17(c). 

(e) Changes to Agreement. The parties agree that any changes to this Agreement, whether material or immaterial, do not restart the
running of the Review Period. 
 (f) Knowing and Voluntary Agreement. By signing this Agreement, you acknowledge you have read this
Agreement, understand it, and agree to its terms and conditions voluntarily, knowingly, of your own free will, and without duress or coercion. 

(g) ADEA Waiver. In exchange for your waiver, releases, and commitments set forth herein, including your release of claims arising under
the Age Discrimination in Employment Act, the payments, benefits, and other considerations you are receiving pursuant to Paragraph 2 of this Agreement, exceed any payment, benefits or other thing of value to which you would otherwise be entitled,
and are just and sufficient consideration for the waivers, releases, and commitments set forth herein. 
 (h) Violation of Certain
Obligations. You acknowledge and agree that, in addition to any other remedies available to the Company at law or in equity, in the event you materially violate the obligations referenced in Paragraphs 6, 8, 10, or 12, and do not cure any such
violation within 10 days after receiving notice from the Company describing the violation in reasonable detail and requesting cure, you shall forfeit any entitlement or right to, and shall be obligated to return to the Company, the payments and
benefits described in Paragraph 2, except for One Thousand Dollars ($1,000), which you will retain as consideration of your release of claims pursuant to Paragraph 5 of this Agreement. 

(i) Failure to Reaffirm; Termination During Transition Period. You acknowledge and agree that in the event you fail to reaffirm this
Agreement on or after the Separation Date or you are terminated for Cause during the Transition Period, you shall forfeit any entitlement or right to, and shall be obligated to return to the Company, the payments and benefits described in Paragraph
2, except for One Thousand Dollars ($1,000), which you will retain as consideration for your release of claims through the initial execution date, pursuant to Paragraph 5 of this Agreement, which shall remain enforceable. 

 (i) You acknowledge and agree that you are not aware of any factual basis for a claim that
the Company has defrauded the United States government, violated any state or federal law, or otherwise acted contrary to public policy. 

PLEASE READ THIS AGREEMENT CAREFULLY AND IN ITS ENTIRETY BEFORE SIGNING. DO NOT SIGN THIS AGREEMENT UNLESS YOU UNDERSTAND AND AGREE WITH ALL
OF ITS TERMS AND CONDITIONS. 
 YOU MUST SIGN THIS AGREEMENT AND RETURN IT TO THE COMPANY NO LATER THAN THE END OF THE REVIEW PERIOD. 

IN WITNESS WHEREOF, you and an authorized signatory of the Company have executed this Agreement as of the date set forth below. 

 

							
	MARLIN BUSINESS SERVICES CORP.:	 		 	ACCEPTED AND AGREED:
				
	By:	 	 /s/ Laura Anger
	 		 	 /s/ Edward R. Dietz

	Name:	 	Laura Anger	 		 	Edward R. Dietz, Jr.
	Title:	 	SVP, Chief HR Officer	 		 	Date: 8/1/19
	Date:	 	8/1/2019	 		 	

 IN WITNESS WHEREOF, you and an authorized signatory of the Company have
re-affirmed this Agreement as of the date set forth below, which shall be on or after the Separation Date. 
  

							
	MARLIN BUSINESS SERVICES CORP.:	 		 	ACCEPTED AND AGREED:
				
	By:	 	 /s/ Laura Anger
	 		 	 /s/ Edward R. Dietz

	Name:	 	Laura Anger	 		 	Edward R. Dietz, Jr.
	Title:	 	SVP, Chief HR Officer	 		 	Date: 12/31/19
	Date:	 	12/31/2019ex_176660.htm

 

EXHIBIT 4.1

 

DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

 

As of March 13, 2020, BioSig Technologies, Inc., a Delaware corporation (“we,” “our” and the “Company”) has our common stock, par value $0.001 per share registered under Section 12 of the Securities Exchange Act of 1934, as amended. 

 

The foregoing description is intended as a summary and is qualified in its entirety by reference to our amended and restated certificate of incorporation, as amended (the “Amended and Restated Certificate of Incorporation”) and the by-laws, as amended (the “By-laws”) as currently in effect, copies of which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein. 

 

Authorized Capital Stock

 

We have authorized 201,000,000 shares of capital stock, par value $0.001 per share, of which 200,000,000 are shares of common stock and 1,000,000 are shares of “blank check” preferred stock, of which 200 are authorized as Series A Preferred Stock, 600 are authorized as Series B Preferred Stock, 4,200 are authorized as Series C Preferred Stock, 1,400 are authorized as Series D Preferred Stock and 1,000 are authorized as Series E Preferred Stock. As of March 13, 2020, there were 25,965,418 shares of common stock issued and outstanding, 210 shares of Series C Preferred Stock issued and outstanding and no shares of our Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Series D Convertible Preferred Stock or Series E Convertible Preferred Stock issued and outstanding. The authorized and unissued shares of common stock and the authorized and undesignated shares of preferred stock are available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange on which our securities may be listed. Unless approval of our stockholders is so required, our board of directors does not intend to seek stockholder approval for the issuance and sale of our common stock or preferred stock.

 

Common Stock

 

The holders of common stock are entitled to one vote per share on all matters to be voted upon by stockholders. Holders of our common stock are entitled to receive ratably dividends as may be declared by the board of directors out of funds legally available for that purpose. We have not paid any dividends since our inception, and we presently anticipate that all earnings, if any, will be retained for development of our business. Even if we are permitted to pay cash dividends in the future, any future disposition of dividends will be at the discretion of our board of directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.

Each share of common stock entitles the holder to one vote, either in person or by proxy, at meetings of stockholders. The holders are not permitted to vote their shares cumulatively. Accordingly, the stockholders of our common stock who hold, in the aggregate, more than fifty percent of the total voting rights can elect all of our directors and, in such event, the holders of the remaining minority shares will not be able to elect any of such directors. The vote of the holders of a majority of the issued and outstanding shares of common stock entitled to vote thereon is sufficient to authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law.

 

Holders of our common stock have no preemptive rights or other subscription rights, conversion rights, redemption or sinking fund provisions. Subject to the rights of the holders of our preferred stock, upon our liquidation, dissolution or winding up, the holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities. There are no provisions in our Amended and Restated Certificate of Incorporation or our By-laws that would prevent or delay a change in our control.

 

The transfer agent and registrar for our common stock is Action Stock Transfer Corporation. The transfer agent’s address is 2469 East Fort Union Blvd., Suite 214, Salt Lake City, UT 84121. Our common stock is listed on the Nasdaq Capital Market under the symbol “BSGM.”

 

 

 

 

Preferred Stock

 

The board of directors is authorized, subject to any limitations prescribed by law, without further vote or action by the stockholders, to issue from time to time shares of preferred stock in one or more series. Each such series of preferred stock shall have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be determined by the board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights. Issuance of preferred stock by our board of directors may result in such shares having dividend and/or liquidation preferences senior to the rights of the holders of our common stock and could dilute the voting rights of the holders of our common stock.

 

Series C Preferred Stock

 

Each share of the Series C Preferred Stock is entitled to a nine percent (9%) annual dividend on the $1,000 per share stated value. Unless the Series C Preferred Stock is converted into shares of common stock, the dividends shall accrue and be payable in cash or, subject to the satisfaction of certain conditions, in pay-in-kind shares. Such cumulative dividends are payable quarterly, commencing on September 30, 2013 and on each conversion date. The terms of the Series C Preferred Stock were amended on March 27, 2014 and August 15, 2014. The description herein reflects such amended terms.

 

In the event that:

 

	 	
			(i)

				
			we fail to, or announce our intention not to, deliver common stock share certificates upon conversion of our Series C Preferred Stock prior to the seventh trading day after such shares are required to be delivered,

			

 

	 	
			(ii)

				
			we fail for any reason to pay in full the amount of cash due pursuant to our failure to deliver common stock share certificates upon conversion of our Series C Preferred Stock within five calendar days after notice therefor is delivered,

			

 

	 	
			(iii)

				
			we fail to have available a sufficient number of authorized and unreserved shares of common stock to issue upon a conversion of our Series C Preferred Stock,

			

 

	 	
			(iv)

				
			we fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of our obligations under, the securities purchase agreement, the registration rights agreement, the certificate of designation or the warrants entered into pursuant to the private placement transaction for our Series C Preferred Stock, which failure or breach could have a material adverse effect, and such failure or breach is not cured within 30 calendar days after written notice was delivered,

			

 

	 	
			(v)

				
			we are party to a change of control transaction,

			

 

	 	
			(vi)

				
			we file for bankruptcy or a similar arrangement or are adjudicated insolvent, or

			

 

	 	
			(vii)

				
			we are subject to a judgment, including an arbitration award against us, of greater than $100,000, and such judgment remains unvacated, unbonded or unstayed for a period of 45 calendar days, the holders of the Series C Preferred Stock are entitled, among other rights, to redeem their shares of Series C Preferred Stock at any time for greater than their stated value or increase the dividend rate on their shares of Series C Preferred Stock to 18%.

			

 

In the event of our liquidation or winding up of affairs, the holders of the Series C Preferred Stock will be entitled to a liquidation preference of the stated value plus any accrued but unpaid dividends or any other fees due the holder. The shares of the Series C Preferred Stock rank senior to the rights of the common stock and all other securities exercisable or convertible into shares of common stock.

 

 

 

 

Any holder of Series C Preferred Stock is entitled at any time to convert any whole or partial number of shares of Series C Preferred Stock into shares of our common stock at a price of $3.75 per share, subject to the beneficial ownership limitation described below. The Series C Preferred Stock is subject to full ratchet anti-dilution price protection upon the issuance of equity or equity-linked securities at an effective common stock purchase price of less than $3.75 per share as well as other customary anti-dilution protection.

 

In the event we issue any equity or equity-linked securities with terms more favorable than those of the Series C Preferred Stock, any holder of the Series C Preferred Stock may request to amend the terms of such holder’s Series C Preferred Stock to be equivalent to the terms of such issued equity or equity-linked securities, subject to certain exempted issuances.

 

The holders of the Series C Preferred Stock vote together with the holders of our common stock on an as-converted basis but may not vote the Series C Preferred Stock in excess of the beneficial ownership limitation of the Series C Preferred Stock. The beneficial ownership limitation is 4.99% of our then outstanding shares of common stock following such conversion or exercise, which may be increased to up to 9.99% of our then outstanding shares of common stock following such conversion or exercise upon the request of an individual holder. The beneficial ownership limitation is determined on an individual holder basis, such that the as-converted number of shares of one holder is not included in the shares outstanding when calculating the limitation for a different holder. In addition, absent the approval of holders representing at least 67% of the outstanding shares of the Series C Preferred Stock, we may not (i) increase the number of authorized shares of preferred stock, (ii) amend our charter documents, including the terms of the Series C Preferred Stock, in any manner adverse to the holders of the Series C Preferred Stock, including authorizing or creating any class of stock ranking senior to, or otherwise pari passu with, the shares of Series C Preferred Stock as to dividends, redemption or distribution of assets upon a liquidation.

 

Delaware Anti-Takeover Law and Provisions of our Amended and Restated Certificate of Incorporation and By-laws

 

Section 203 of the Delaware General Corporation Law, in general, prohibits a business combination between a corporation and an interested stockholder within three years of the time such stockholder became an interested stockholder, unless:

 

	 	
			●

				
			prior to such time the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

			

 

	 	
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			upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, exclusive of shares owned by directors who are also officers and by certain employee stock plans; or

			

 

	 	
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			at or subsequent to such time, the business combination is approved by the board of directors and authorized by the affirmative vote at a stockholders’ meeting of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

			

 

The term “business combination” is defined to include, among other transactions between an interested stockholder and a corporation or any direct or indirect majority owned subsidiary thereof: a merger or consolidation; a sale, lease, exchange, mortgage, pledge, transfer or other disposition (including as part of a dissolution) of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation; certain transactions that would result in the issuance or transfer by the corporation of any of its stock to the interested stockholder; certain transactions that would increase the interested stockholder’s proportionate share ownership of the stock of any class or series of the corporation or such subsidiary; and any receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation or any such subsidiary.

 

 

 

 

In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with, or controlling, or controlled by, the entity or person. The term “owner” is broadly defined to include any person that individually, with or through that person’s affiliates or associates, among other things, beneficially owns the stock, or has the right to acquire the stock, whether or not the right is immediately exercisable, under any agreement or understanding or upon the exercise of warrants or options or otherwise or has the right to vote the stock under any agreement or understanding, or has an agreement or understanding with the beneficial owner of the stock for the purpose of acquiring, holding, voting or disposing of the stock.

 

The restrictions in Section 203 do not apply to corporations that have elected, in the manner provided in Section 203, not to be subject to Section 203 of the Delaware General Corporation Law or, with certain exceptions, which do not have a class of voting stock that is listed on a national securities exchange or held of record by more than 2,000 stockholders. Our Amended and Restated Certificate of Incorporation and By-laws do not opt out of Section 203.

 

Section 203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

 

Provisions of our Amended and Restated Certificate of Incorporation and By-laws may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our Amended and Restated Certificate of Incorporation and By-laws:

 

	 	
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			do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose);

			

 

	 	
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			provide that special meetings of our stockholders may be called only by our board of directors, chairman, chief executive officer, president or secretary; and

			

 

	 	
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			provide advance notice provisions with which a stockholder who wishes to nominate a director or propose other business to be considered at a stockholder meeting must comply.

			

 

Indemnification of Directors and Officers

 

Pursuant to Section 145 of the Delaware General Corporation Law, a corporation has the power to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a third-party action, other than a derivative action, and against expenses actually and reasonably incurred in the defense or settlement of a derivative action, provided that there is a determination that the individual acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the individual’s conduct was unlawful. Such determination will be made, in the case of an individual who is a director or officer at the time of such determination:

 

	 	
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			by a majority of the disinterested directors, even though less than a quorum;

			

 

	 	
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			by a committee of such directors designated by a majority vote of such directors, even though less than a quorum

			

 

	 	
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			if there are no disinterested directors, or if such directors so direct, by independent legal counsel; or

			

 

	 	
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			by a majority vote of the stockholders, at a meeting at which a quorum is present.

			

 

 

 

 

Without court approval, however, no indemnification may be made in respect of any derivative action in which such individual is adjudged liable to the corporation.

 

The Delaware General Corporation Law requires indemnification of directors and officers for expenses relating to a successful defense on the merits or otherwise of a derivative or third-party action.

 

The Delaware General Corporation Law permits a corporation to advance expenses relating to the defense of any proceeding to directors and officers contingent upon such individuals’ commitment to repay any advances unless it is determined ultimately that such individuals are entitled to be indemnified.

 

Under the Delaware General Corporation Law, the rights to indemnification and advancement of expenses provided in the law are non-exclusive, in that, subject to public policy issues, indemnification and advancement of expenses beyond that provided by statute may be provided by law, agreement, vote of stockholders, disinterested directors or otherwise.

 

Limitation of Personal Liability of Directors

 

The Delaware General Corporation Law provides that a corporation’s certificate of incorporation may include a provision limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. However, no such provision can eliminate or limit the liability of a director for:

Our Amended and Restated Certificate of Incorporation provides that our directors will not be personally liable to us or any of our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the Delaware General Corporation Law.

 

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to our directors, officers and persons controlling us, we have been advised that it is the Securities and Exchange Commission’s opinion that such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.

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