Document:

sajan100561_ex10-6.htm - Generated by SEC Publisher for SEC Filing

 

Exhibit 10.6

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 

WARRANT NO.: MS- 

MATHSTAR, INC.

COMMON STOCK PURCHASE WARRANT

          MathStar, Inc., a Delaware corporation (the “Company”), hereby agrees that, for value received, _________, or its assigns (collectively, the “holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time before 5:00 P.M., Minneapolis, Minnesota time, on September 28, 2016, ________________(_______) Shares of the Company’s common stock (the “Common Stock”) at an exercise price of $0.61 per Share, subject to adjustment as provided herein (the “Exercise Price”). 

          1.          Exercise. The purchase rights granted by this Warrant shall be exercised by the holder surrendering this Warrant with the form of exercise attached hereto duly executed by such holder, to the Company at its principal office, accompanied by payment, in cash or by cashier’s check payable to the order of the Company, of the purchase price payable in respect of the number of Shares being purchased (unless exercised pursuant to Section 5 hereof). If fewer than all of the Shares purchasable hereunder are purchased upon exercise, the Company will execute and deliver to the holder hereof a new Warrant (dated the date hereof) evidencing the number of Shares not so purchased. As soon as practicable after the exercise of this Warrant and payment of the purchase price, the Company will cause to be issued in the name of and delivered to the holder hereof, or as such holder may direct, one or more certificates representing the Shares purchased upon such exercise. The Company may require that any certificates representing the shares contain a legend substantially as follows: 

	
 

	
 

	
 

	
 

	
The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws. No transfer of such securities or any interest therein may be made except pursuant to registration under said laws unless the Company has received an opinion of counsel acceptable to the Company stating either that the securities have been registered or such transfer does not require registration under said laws. 

	
 

          2.          Transfer. This Warrant is issued upon the following terms, to which the holder hereof consents and agrees: (a) until this Warrant is duly transferred on the Company’s books, the Company may treat the registered holder of this Warrant as absolute owner hereof for all purposes without being affected by any notice to the contrary; (b) each successive holder of this Warrant, or of any portion of the rights represented thereby, shall be bound by the terms and 

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conditions set forth herein; (c) subject to compliance with applicable securities laws, this Warrant is immediately assignable by Feltl and Company, Inc., notwithstanding anything herein to the contrary, to officers, directors, employees and registered representatives of Feltl and Company, Inc. and its affiliates and subagent(s), and the officers, directors, employees and registered representatives of such sub-agent(s); provided, any determination as to the assignability of the Warrant shall promptly be made by the Company at its expense; and (d) no assignment or transfer of any portion of this Warrant or any warrant shares may be made by those individuals or entities who become holders pursuant to Section 2(c) above, without the prior written approval of Feltl and Company, Inc. Section 2(d) shall remain in full force and effect as long as the holder is an officer, director, employee or registered representative of Feltl and Company, Inc. and its affiliates and subagent(s), and an officer, director, employee or registered representative of such subagent(s), as set forth in Section 2(c) above. 

          3.          Antidilution Adjustments to Exercise Price. The provisions of this Warrant are subject to adjustment as provided in this Section 3. 

          (a)          The Exercise Price shall be adjusted from time to time if the Company shall hereafter: (i) pay any dividends on the Common Stock payable in Common Stock or securities convertible into Common Stock; (ii) subdivide its then-outstanding shares of Common Stock into a greater number of shares; or (iii) combine its then-outstanding shares of Common Stock, by reclassification or otherwise. In any such event, the Exercise Price in effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to the nearest full cent) determined by dividing (A) the number of shares of Common Stock outstanding immediately prior to such event, multiplied by the then- existing Exercise Price, by (B) the total number of shares of Common Stock outstanding immediately after such event (including in each case the maximum number of shares of Common Stock issuable in respect of any securities convertible into Common Stock), and the resulting quotient shall be the adjusted Exercise Price. 

          Adjustments made pursuant to this subsection shall become effective immediately after the record date in the case of a dividend or distribution; or immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this subsection, the holder of the Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors shall reasonably and not arbitrarily determine the allocation of the adjusted Exercise Price between or among shares of such classes of capital stock or shares of Common Stock and other capital stock. All calculations under this subsection shall be made to the nearest cent or to the nearest 1/100 of a share, as the case may be. In the event that, as a result of an adjustment made pursuant to this subsection, the holder of the Warrant thereafter surrendered for exercise shall become entitled to receive any securities of the Company other than shares of Common Stock, thereafter the exercise price of such other securities so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions contained herein with respect to the shares of Common Stock and such other securities. 

          (b)          Upon each adjustment of the Exercise Price pursuant to Section 3(a), the holder of this Warrant shall thereafter (until another such adjustment) be entitled to purchase at the 

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adjusted Exercise Price the number of shares of Common Stock, calculated to the nearest full share, obtained by multiplying the number of shares of Common Stock specified in the Warrant (as then in effect, after all adjustments in the Exercise Price prior thereto) by the Exercise Price in effect prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price. 

          (c)          In case of (i) any reorganization of the Company’s capital stock (other than splits or combinations of Common Stock contemplated by and provided for in Section 3(a)), (ii) any consolidation or merger of the Company with another company, limited liability company, partnership or other business entity, or any sale, conveyance, lease or other transfer by the Company of all or substantially all of its property to any other company, limited liability company, partnership or other business entity, which is effected in such a manner that the holders of Common Stock shall be entitled to receive cash, stock, securities or assets with respect to or in exchange for Common Stock, or (iii) any dividend or any other distribution upon any class of the Company’s capital stock payable in capital stock of a different class, other securities of the Company, or other Company property (other than cash), then, as a part of such transaction, lawful provision shall be made so that the holder of the Warrant then outstanding shall have the right thereafter to convert such Warrant into the kind and amount of shares of stock and other securities and property which the holder would have owned or have been entitled to receive immediately after such consolidation, reorganization, merger, statutory exchange, sale or conveyance had such Warrant been exercised immediately before the effective date of such consolidation, merger, statutory exchange, sale or conveyance and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section with respect to the rights and interests thereafter of the holder of the Warrant, to the end that the provisions set forth in this Section shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any other shares of stock and other securities and property thereafter deliverable upon the exercise of the Warrant. The provisions of this paragraph shall similarly apply to successive consolidations, reorganizations, mergers, statutory exchanges, sales or conveyances. 

          (d)          Upon any adjustment of the Exercise Price, then and in each such case the Company shall give written notice thereof, by first-class mail, postage prepaid, addressed to the holder as shown on the Company’s books, which notice shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 

          (e)          (e) If at any time: (i) the Company shall pay any dividend upon its Common Stock payable in stock or make any distribution (other than cash dividends) to the holders of its Common Stock; (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights; (iii) there shall be any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with, or sale, conveyance, lease or other transfer of all or substantially all of its assets to, another company; or (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more such cases, the Company shall give prior written notice, by first-class mail, postage prepaid, addressed to the holder of the Warrant as shown on the books of the Company, of the date on 

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which (1) the books of the Company shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (2) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in such dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up, as the case may be. Such written notice shall be given at least 15 business days prior to the action in question and at least 15 business days prior to the record date or the date on which the Company’s transfer books are closed in respect thereto. 

          (f)          If the Company or an affiliate of the Company shall at any time after the date hereof and prior to the exercise of this Warrant issue any rights, warrants or options to subscribe for shares of Common Stock or any other securities of the Company or of such affiliate to all the shareholders of the Company, then the holder of the Warrant on the record date set by the Company or such affiliate in connection with such issuance of rights, warrants or options shall be entitled, in addition to the shares of Common Stock or other securities receivable upon the exercise of the Warrant, to receive such rights, warrants or options that such holder would have been entitled to receive had the holder been, on such record date, a holder of record of the number of whole shares of Common Stock then issuable upon exercise of the holder’s outstanding Warrant (assuming for purposes of this Section 3(f) that the exercise of the Warrant is permissible immediately upon issuance). 

          (g)          [Intentionally Omitted.] 

          4.           Transferability Registration Rights. 

          (a)          Prior to making any disposition of the Warrant or of any Common Stock purchased upon exercise of the Warrant, the holder will give written notice to the Company describing briefly the manner of any such proposed disposition. The holder will not make any such disposition until (i) the Company has notified the holder that, in the opinion of its counsel, registration under the Act is not required with respect to such disposition, or (ii) a registration statement covering the proposed distribution has been filed by the Company and has become effective. The holder then will make any disposition only pursuant to the conditions of such opinion or registration. The Company agrees that, upon receipt of written notice from the holder hereof with respect to such proposed distribution, it will use its reasonable best efforts, in consultation with the holder’s counsel, to ascertain as promptly as possible whether or not registration is required, and will advise the holder promptly with respect thereto, and the holder will cooperate in providing the Company with information necessary to make such determination. If an exemption from state and federal registration of the exercising of the Warrant is not available during the term of this Warrant when the holder of the Warrant seeks to exercise the Warrant, the exercise period of the Warrant will automatically be extended until such time as a state and federal exemption for the exercise of the Warrant by the holder becomes applicable to the holder of the Warrant. In the absence of such an exemption from such registration, and if, as a result, the term of the Warrant is so extended beyond the original term hereof, the Warrant shall then remain exercisable for a period of at least thirty (30) business days from the date the Company delivers to the holder of the Warrant written notice of the availability 

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of such state and federal registration or exemption from such registration. In no event will the exercise period of the Warrant expire before September 28, 2016. 

          (b)          If, at any time prior to the expiration of twelve years from September 28, 2007, the Company shall propose to file any registration statement under the Securities Act covering a public offering of the Common Stock (other than a registration on Form S-4 or Form S-8 (or their successor forms) or any registration form that does not permit secondary sales), it will notify the holder hereof at least 30 business days prior to each such filing and will include in the registration statement (to the extent permitted by applicable regulation) the Common Stock purchased by the holder or purchasable by the holder hereunder to the extent requested by the holder hereof; provided that, notwithstanding the foregoing, the rights provided in this paragraph (b) shall not apply to a registration related to the Company’s initial public offering of common stock. Notwithstanding the foregoing, the number of shares of Common Stock proposed to be registered thereby shall be reduced pro rata with any other selling shareholder (other than the Company) upon the reasonable request of the managing underwriter of such offering, if any. If the registration statement or offering statement filed pursuant to such notice has not become effective within six months following the date such notice is given to the holder hereof the Company must again notify such holder in the manner provided above. 

          (c)          At any time prior to the expiration of this Warrant, and provided that a registration statement on Form S-3 (or its equivalent) is then available to the Company, and on a one-time basis only, if the then holders of a majority of the shares of Common Stock underlying the Warrant and those purchased by a holder upon exercise of the Warrant request the registration of such shares on Form S-3 (or its equivalent), the Company shall promptly thereafter effect the registration under the Securities Act of all such shares of Common Stock which such holders request in writing to be so registered, and in a manner as nearly as commercially possible corresponding to the methods of distribution described in such holders’ request. This Section 4(c) shall not apply to any shares of Common Stock held by the holder pursuant to an exercise of the Warrant and which shares of Common Stock are then freely transferable by the holder pursuant to Rule 144(k). 

          (d)          Notwithstanding the foregoing, if the Company shall furnish to holders of the Warrant or Common Stock requesting a registration statement pursuant to Section 4(c) a certificate signed by the Company’s Chief Executive Officer stating that in the good faith judgment of the Company’s Board of Directors, it would be seriously detrimental to the Company and its shareholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the one time right to defer such filing for a period of not more than 180 days after receipt of the request of such holders of Common Stock. 

          (e)          The Company shall bear all costs, fees and expenses of any such registrations referred to in this Section 4, including, without limitation, the Company’s legal and accounting fees, printing expenses and blue sky fees and expenses, except the fees and expenses of counsel or other special advisors to such holders and any of their underwriting commissions or discounts. The Company will take all necessary action which may be required in qualifying or registering the Common Stock included in the registration statement for offering and sale under the securities or blue sky laws of such states as are requested by the holders of such securities and in 

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obtaining approval by the Financial Industry Regulatory Authority for the resale of the Common Stock. 

          (f)          The Company will mail to each record holder of the Warrant and Common Stock, at the last known post office address, written notice of any exercise of the rights granted under this Section 4, by certified or registered mail, return-receipt requested, and each holder shall have 30 business days from the date of deposit of such notice in the U.S. mail to notify the Company in writing whether such holder wishes to join in such exercise of rights. 

          (g)          The Company will furnish the holder hereof with a reasonable number of copies of any prospectus included in such filings and will amend or supplement the same as required during the period of required use thereof. The Company will maintain the effectiveness of any registration statement or the offering statement filed by the Company under this Section 4, whether or not at the request of the holder hereof for at least one year following the effective date thereof. 

          (h)          The holder of the Warrant agrees to cooperate in a commercially reasonable manner with the Company in the preparation and filing of any such registration statement or offering statement, and in the furnishing of information concerning the holder for inclusion therein, or in any efforts by the Company to establish that the proposed sale is exempt under the Securities Act as to any proposed disposition by the holder. 

          (i)          Indemnification. 

	
 

	
 

	
 

	
              (i)          Company Indemnification. The Company will indemnify each holder, and each holder’s officers, directors, members, governors, employees, partners, legal counsel, and accountants, and each person controlling such holder within the meaning of Section 15 of the Securities Act with respect to any registration, qualification, or compliance effected pursuant to this Section 4, and each underwriter, if any, and each person who controls, within the meaning of Section 15 of the Securities Act, any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect of such expenses, claims, losses, damages, and liabilities) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular, or other document (including any related registration statement, notification, or similar document) incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission) to state in such document a material fact required to be stated in such document or necessary to make the statements in such document not misleading, or any violation by the Company of the Securities Act and any applicable state securities laws or any rule or regulation under the Securities Act or state securities laws applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification, or compliance, and will reimburse each such holder, and each of such holder’s officers, directors, partners, legal counsel, and accountants, and each person controlling such holder, and each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided that the Company will not be liable in any such case to the extent that 

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any such claim, loss, damage, liability, or expense arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such holder or underwriter and stated to be specifically for use in such document, or any violation by the holder of the Securities Act and any applicable state securities laws or any rule or regulation under the Securities Act or state securities laws applicable to the holder and relating to action or inaction required of the holder in connection with any such registration, qualification, or compliance; provided that the Company’s obligations under this Section 4(i)(i) will not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect of such claims, losses, damages, or liabilities) if such settlement is effected without the Company’s consent (which consent will not be unreasonably withheld, delayed or conditioned). 

	
 

	
 

	
 

	
              (ii)          Holder Indemnification. Each holder will, if Common Stock held by such holder or purchasable by the holder upon exercise of the Warrant is included in the securities as to which such registration, qualification, or compliance is being effected, indemnify the Company, and each of the Company’s directors, officers, legal counsel, and accountants, and each underwriter, if any, of the Company’s securities covered by such a registration statement, and each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other such holder, and each of their respective officers, directors, and partners, and each person controlling such holder or other Company stockholder, against all claims, expenses, losses, damages, and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular, or other document, or any omission (or alleged omission) to state in such document a material fact required to be stated in such document or necessary to make the statements in such document not misleading, or any violation by the holder of the Securities Act and any applicable state securities laws or any rule or regulation under the Securities Act or state securities laws applicable to the holder and relating to action or inaction required of the holder in connection with any such registration, qualification, or compliance, and will reimburse the Company, and each of the Company’s directors, officers, employees, partners, legal counsel, and accountants, and each person who controls the Company within the meaning of Section 15 of the Securities Act, for any legal or any other expenses reasonably incurred in connection with investigating or defending or settling any such claim, loss, damage, liability, or action, in each case related to any misstatement or omission to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Company by such holder and stated to be specifically for use in such document; provided that such holder’s obligations under this Section 4(i)(ii) will not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect of such claims, losses, damages, or liabilities) if such settlement is effected without such holder’s consent (which consent will not be unreasonably withheld, delayed or conditioned); and provided further that in no event will any indemnity under this Section 4(i)(ii) exceed the net proceeds. For purposes of this Section 4(i)(ii), the term “net proceeds,” with respect to any particular holder, means the proceeds from the offering received by such holder after deducting 

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underwriters’ commissions, discounts, and expenses attributable the securities sold by such holder. 

	
 

	
 

	
 

	
              (iii)          Indemnification Procedures. Each person entitled to indemnification under this Section 4(i) (the “Indemnified Party”) will give notice to the person required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and will permit the Indemnifying Party to assume the defense of such claim or any litigation resulting from such claim; provided that counsel for the Indemnifying Party who will conduct the defense of such claim or any litigation resulting from such claim, will be approved by the Indemnified Party (whose approval will not be unreasonably withheld), and the Indemnified Party may participate in such defense at such Indemnified Party’s expense. Notwithstanding the foregoing, any Indemnified Party’s failure to give notice as provided in this Section 4(i) will not relieve the Indemnifying Party of the Indemnifying Party’s obligations under this Section 4(i) to the extent such failure is not materially prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, will, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term of such judgment or such settlement the claimant’s or plaintiffs release of such Indemnified Party from all liability in respect to such claim or litigation. Each Indemnified Party will furnish such information regarding such Indemnified Party or the claim in question as an Indemnifying Party may reasonably request in writing and as will be reasonably required in connection with defense of such claim and litigation resulting from such claim. 

	
 

	
 

	
 

	
            (iv)          Indemnification Unavailability. If the indemnification provided for in this Section 4(i) is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to in this Section 4(i), then the Indemnifying Party, instead of indemnifying such Indemnified Party under Section 4(i) or Section 4(i), will contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and of the Indemnified Party, on the other hand, in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations; provided, however, that in no event will any contribution by a holder under this Section 4(i) exceed the net proceeds (as defined in Section 4(i). The relative fault of the Indemnifying Party and of the Indemnified Party will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the Parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

          (j)          Nothing contained herein shall be construed as requiring the holder to exercise this Warrant prior to the initial filing of any registration statement or the effectiveness thereof. 

          (k)          [Reserved.] 

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          (l)          The Company shall not permit the inclusion of any securities other than the shares of Common Stock to be included in any registration statement filed pursuant to Section 4(c) hereof, without the prior written consent of the holders of a majority of the Common Stock purchased by or purchasable by the holder of this Warrant and any of the Warrants issued pursuant to Section 2(c), which consent shall not be unreasonably withheld. 

          5.          Cashless Exercise Option. 

          (a)          The holder of this Warrant shall have the right to require the Company to convert this Warrant (the “Conversion Right”), at any time after it is exercisable, but prior to its expiration, into shares of Common Stock as provided for in this Section 5. Upon exercise of the Conversion Right, the Company shall deliver to the holder (without payment by the holder of any Exercise Price) that number of shares of Common Stock purchasable hereunder equal to (i) the number of shares of Common Stock which would, but for such conversion, be then issuable pursuant to the provisions of Section 1 above upon the exercise of this Warrant, as specified by the holder in its Conversion Notice (defined below) (the “Total Common Stock Number”) less (ii) the number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the Total Common Stock Number and the then-applicable Exercise Price per share, by (y) the Fair Market Value (as defined below) of one share of Common Stock immediately prior to the exercise of the Conversion Right. No fractional shares shall be issuable upon exercise of the Conversion Right, and if the number of shares to be issued in accordance with the foregoing formula is other than a whole number, such fractional share shall be cancelled. 

          (b)          The Conversion Right may be exercised by the holder, at any time or from time to time after this Warrant is exercisable, prior to its expiration, on any business day, by delivering a written notice in the form attached hereto (the “Conversion Notice”) to the Company and specifying (i) the total number of shares of Common Stock the holder of this Warrant is purchasing pursuant to such conversion, and (ii) a place and a date not less than one nor more than 20 business days from the date of the Conversion Notice for the closing of such conversion. 

          (c)          At any closing under Section 5(b), (i) the holder will surrender the Warrant, (ii) the Company will deliver to the holder one or more certificates for the number of shares of Common Stock issuable upon such conversion, and (iii) the Company will deliver to the holder a new Warrant representing the number of shares, if any, with respect to which the Warrant shall not have been converted. 

          (d)          “Fair Market Value” of a share of Common Stock as of the date the holder mails the Conversion notice (the “Determination Date”) shall mean, as applicable: 

	
 

	
 

	
 

	
               (i)          If the Company’s Common Stock is traded on an exchange or is quoted on the NASDAQ Global Market or the NASDAQ Capital Market, then the average closing or last sale prices, respectively, reported for the ten consecutive trading days immediately preceding the Determination Date. 

	
 

	
 

	
 

	
               (ii)          If the Company’s Common Stock is not traded on an exchange or quoted on the NASDAQ Global Market or the NASDAQ Capital Market but is traded in the 

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over-the-counter market, then the average of the closing bid and asked prices reported for the ten consecutive trading days immediately preceding the Determination Date. 

	
 

	
 

	
 

	
               (iii)          If the Company’s Common Stock is not publicly traded and there has been a bona fide sale for cash on an arm’s-length basis within 45 days prior to the Determination Date of such Common Stock by the Company privately to one or more investors unaffiliated with the Company (a “Qualifying Sale”), then such most recent sales price. 

	
 

	
 

	
 

	
               (iv)          If the Company’s Common Stock is not publicly traded and there has been no Qualifying Sale, then Fair Market Value of such stock will be determined by the Board of Directors of the Company, acting in good faith and in a commercially reasonable manner utilizing customary business valuation criteria and methodologies (without discount for lack of marketability or minority interest). 

          6.          [Reserved] 

          7.          Reservation of Common Stock. A number of shares of Common Stock sufficient to provide for the exercise of this Warrant, upon the basis herein set forth, shall at all times be reserved for the exercise thereof. 

          8.          Miscellaneous. Whenever reference is made herein to the issue or sale of shares of Common Stock, the term “Common Stock” shall include any stock of any class of the Company other than preferred stock with a fixed limit on dividends and a fixed amount payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company. 

          The Company will not, by amendment of its Articles of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act or deed, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company, but will at all times in good faith assist, insofar as it is able, in the carrying out of all provisions hereof and in the taking of all other action which may be necessary in order to protect the rights of the holder hereof. 

          The representations, warranties and agreements contained herein shall survive the exercise of this Warrant. References to the “holder of’ include the immediate holder of shares purchased on the exercise of this Warrant, and the word “holder” shall include the plural thereof. This Warrant shall be interpreted under the laws of the State of Minnesota without regard to its conflicts-of-law principles. 

          All shares of Common Stock issued upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, and the Company will pay all stock-transfer taxes in respect of the issuance thereof if any. 

          Notwithstanding anything contained herein to the contrary, the holder of this Warrant shall not be deemed a shareholder of the Company for any purpose whatsoever (including voting rights) until and unless this Warrant is duly exercised. 

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          Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated orally but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. 

          IN WITNESS WHEREOF, this Common Stock Purchase Warrant has been duly executed by MathStar, Inc., as of February 23, 2010. 

	
 

	
 

	
 

	
 

	
MATHSTAR, INC.

	
 

	
 

	
 

	
 

	
By

	
 

	
 

	
 

	
 

	
 

	
Its

	
 

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WARRANT EXERCISE FORM

(To be signed only upon exercise of Warrant)

          The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, __________________ of the shares of Common Stock of MathStar, Inc. to which such Warrant relates, and herewith makes payment of $____________ therefor in cash or by certified check, and requests that such shares be issued and be delivered to, __________________________________ the address for which is set forth below the signature of the undersigned. 

	
 

	
 

	
 

	
 

	
Dated: __________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Signature)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Taxpayer’s I.D. Number)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Address)

	
 

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ASSIGNMENT FORM

(To be signed only upon authorized transfer of Warrant

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _________________________ the right to purchase shares of Common Stock of MathStar, Inc. to which the within Warrant relates and appoints MathStar, Inc., attorney, to transfer said right on the books of MathStar, Inc. with full power of substitution in the premises.

	
 

	
 

	
 

	
 

	
Dated: __________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Signature)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Address)

	
 

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CASHLESS EXERCISE FORM

(To be executed upon exercise of Warrant pursuant to Section 5

TO: MATHSTAR, INC. 

          The undersigned hereby irrevocably elects a cashless exercise of the right of purchase represented by the within Warrant for, and to purchase thereunder, ________________________ shares of Common Stock as provided for in Section 5 therein.

          If said number of shares shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder rounded up to the next higher number of shares. 

Please issue a certificate or certificates for the number of whole shares Common Stock in the name of: 

	
 

	
 

	
 

	
NAME

	
 

	
 

	
 

	
 

	
(Please print name)

	
 

	
 

	
 

	
 

	
 

	
 

	
ADDRESS

	
 

	
  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  

	
 

	
 

	
 

	
 

	
 

	
 

	
SOCIAL SECURITY NO.

	
 

	
  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Signature)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
NOTE: The above signature should correspond exactly with the name on the first page of this Common Stock Purchase Warrant or with the name of the assignee appearing in the assignment form on the preceding page.

14sajan100561_ex10-8.htm - Generated by SEC Publisher for SEC Filing

 

Exhibit 10.8

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made this 19th day of May 2006 by and between SAJAN, INC., a Minnesota corporation having its principal executive offices in the State of Wisconsin (the “Company”) and ANGELA ZIMMERMAN, an individual resident of the State of Wisconsin (the “Employee”).  

RECITALS

WHEREAS, the Employee has been an “at-will” employee of the Company prior to the date hereof, serving as the Company’s Chief Operating Officer for an annual salary of $50,000, and without benefit of a written employment agreement; and 

WHEREAS, the Company and the Employee desire to enter into this Agreement to set forth all terms and conditions of the Employee’s employment by the Company.  

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Employee and the Company desire to enter into this Agreement, upon the terms and conditions hereinafter set forth.  

AGREEMENT

1.                   Employment; Duties.

1.1                The Company hereby agrees to employ the Employee on a full-time basis, and the Employee hereby accepts such employment.  The Employee shall serve as the President and Chief Operating Officer of the Company.  The Employee will render such business and professional services in the performance of Employee’s duties, consistent with Employee’s position within the Company, as shall reasonably be assigned to Employee by the Company’s Board of Directors (the “Board”).  The period of the Employee’s employment under this Agreement is referred to herein as the “Employment Term.”

1.2                During the Employment Term, the Employee will perform Employee’s duties faithfully and to the best of Employee’s ability and will devote Employee’s full business efforts and time to the Company.  For the duration of the Employment Term, Employee agrees not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration without the prior approval of the Board.  

2.                   At-Will Employment.  The parties agree that Employee’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause upon written notice.  Employee understands and agrees that neither Employee’s job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of Employee’s employment with the Company.

 

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3.                   Term.  The term of this Agreement is one (1) year beginning on the date hereof.  This Agreement will automatically renew for additional successive one (1) year terms unless (i) at least thirty (30) days before the end of the then-current term, the Company provides written notice to the Employee that it does not want to renew, or (ii) otherwise terminated pursuant to the terms of this Agreement.

4.                   Compensation and Related Matters.

4.1                Salary.  During the Employment Term, the Company will pay to the Employee a base salary of $110,000 per annum; provided that such amount may be increased from time to time as determined by the Board at its discretion (the “Base Salary”).  The Base Salary shall be paid in monthly or other installments in accordance with the general practice of the Company from time to time.  

4.2                Bonus.  The Employee shall be eligible to receive bonus payments from time to time in an amount as determined in the sole discretion of the Board.    

4.3                Fringe Benefits.  The Employee shall be entitled to participate in and to receive benefits, without duplication, under such profit sharing, pension, life insurance, accident insurance, health insurance, hospitalization and all other “Employee Benefit Plans,” as said term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, as the Company may establish and maintain from time to time during the term hereof and for which the Employee qualifies.

4.4                Vacation.  The Employee shall be entitled to vacation in each fiscal year, determined in accordance with Company’s vacation policy in effect on the date hereof and from to time during the term hereof.  The Employee shall also be entitled to all paid holidays and personal days given by Company to its employees generally.  

4.5                Expenses.  The Company will reimburse the Employee for all reasonable business expenses incurred in performing services hereunder, upon the Employee’s presentation to the Company from time to time of itemized accounts describing such expenditures, all in accordance with the Company’s policy in effect from time to time with respect to the reimbursements of business expenses.

4.6                Withholding.  All payments to the Employee under this Section 4 shall be subject to required withholding for federal and state income taxes, FICA contributions and other required deductions.

 

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5.                   Termination.

5.1                By the Company for Death or Disability or For Cause.  The Company may terminate the Employee’s employment hereunder for any reason or for no reason, including but not limited to for death or disability or for Cause.  For purposes of this Agreement, “Cause” is defined as (i) a material act of dishonesty made by Employee in connection with Employee’s responsibilities as an employee, (ii) Employee’s commission of a felony, (iii) Employee’s gross misconduct, (iv) Employee’s continued substantial violations of Employee’s employment duties after Employee has received a written demand for performance from the Company that specifically sets forth the factual basis for the Company’s belief that Employee has not substantially performed Employee’s duties or (v) Employee’s continued material breach of this Agreement or any confidentiality or proprietary information agreement between Employee and the Company after Employee has received a written notice that specifically sets forth the factual basis for the Company’s belief that Employee has breached this Agreement or any confidentiality or proprietary information agreement between Employee; provided, that any breach of Sections 7.1 or 7.3 of this Agreement shall constitute a continuing material breach which is not subject to cure by Employee.  

5.2                By the Employee for the Company’s Breach.  The Employee may terminate Employee’s employment hereunder for a failure by the Company to comply with any material provision of this Agreement that has not been cured within thirty (30) days after written notice of such noncompliance has been given by the Employee to the Company.  

5.3                Notice of Termination.  Any termination of the Employee’s employment by the Company or by the Employee shall be communicated by written notice of termination to the other party hereto, which shall describe whether such termination was for Cause.  The parties acknowledge that any written notice of noncompliance delivered under Section 5.2 does not constitute the notice of termination of this Agreement required by this Section 5.3.  

5.4                Date of Termination.  The “Date of Termination” shall mean:  (a) if the Employee’s employment is terminated by Employee’s death, the date of Employee’s death; and (b) if the Employee’s employment is terminated for any other reason, the date on which a notice of termination is given or, in the event of termination by the Employee, the date on which the Employee stops providing services to the Company.  

6.                   Compensation Upon Termination or During Disability.

6.1                During Disability.  Upon Employee’s termination for disability, the Employee shall be entitled to all amounts to which the Employee is entitled pursuant to Company disability plans, programs and policies all in accordance with the terms thereof.

 

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6.2                Death.  If the Employee’s employment is terminated by Employee’s death, the Company shall, within ten (10) days following the date of the Employee’s death, pay to the Employee’s estate or the Employee’s designated beneficiary any unpaid portion of the Base Salary through the Date of Termination, and, thereafter, payment of any other amounts to which the Employee is entitled pursuant to Company death benefit plans, programs and policies in accordance with the terms thereof.  

6.3                By the Company For Cause or By the Employee without Cause.  If the Employee’s employment is terminated by the Company for Cause or by the Employee for any reason other than Company’s uncured breach of the terms hereof, the Company shall pay the Employee any unpaid portion of the Base Salary and any accrued vacation time through the Date of Termination at the rate in effect at the time notice of termination is given and the Company shall have no further obligations to the Employee under this Agreement.  

6.4                By the Company Without Cause or by the Employee For the Company’s Breach.

(a)                Severance.  If (a) the Company terminates the Employee’s employment without Cause, or (b) the Employee properly terminates employment pursuant to Section 5.2, the Employee will be entitled to continuing payments of the Employee’s Base Salary for twelve (12) months following the Date of Termination (such payment, the “Severance Payment”) (to be paid in monthly or other installments in accordance with the general practice of the Company from time to time).   

(b)               In addition to the Severance Payment, the Employee shall be entitled to receive all other unpaid amounts, if any, to which Employee is entitled under this Agreement under any compensation plan or program of the Company, at the time such payments are due (such payments pursuant to Section 6.4(a) and this Section 6.4(b), the “Severance Payments”).  

6.5                Conditions to Receive Severance Payments.  Notwithstanding anything to the contrary in this Agreement, the Severance Payments will be provided to the Employee only to the extent the Employee satisfies and complies with the following conditions:  (i) the Employee complies with all surviving provisions of this Agreement, including without limitation Sections 7, 8, 9 and 10 and any additional non-competition agreement, non-solicitation agreement, confidentiality agreement or invention assignment agreement signed by Employee; and (ii) Employee executes and delivers to the Company, and does not revoke, a full general release, in a form reasonably acceptable to the Company, releasing all claims, known or unknown, that Employee may have against the Company, and any subsidiary, affiliate or related entity, their officers, directors, employees and agents, arising out of or any way related to Employee’s employment or termination of employment with the Company.

 

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7.                   Disclosure of Confidential Information.

7.1                Definition of Confidential Information.  For purposes of this Agreement, “Confidential Information” means any information that is not generally known to the public that relates to the existing or reasonably foreseeable business of the Company which has been expressly or implicitly protected by the Company or which, from all of the circumstances, the Employee knows or has reason to know that the Company intends or expects the secrecy of such information to be maintained.  Confidential Information includes, but is not limited to, information relating to the Technology (as defined below), information contained in or relating to the development plans or proposals, marketing plans or proposals, strategies, financial statements, budgets, pricing formulas, customer and vendor information, employee information, technical information, know-how, trade practices, trade secrets and other proprietary information of the Company, whether written, oral or communicated in another type of medium, whether disclosed directly or indirectly, whether disclosed prior to or after the date of this Agreement, whether originals or copies and whether or not legal protection has been obtained or sought under applicable law.  The Employee shall treat all such information as Confidential Information regardless of its source and whether or not marked as confidential.  For purposes of this Agreement, Confidential Information shall not include information that has become public through no fault of the Employee.  

7.2                Technology.  The Employee recognizes that the Company is engaged in the business of developing proprietary language translation and globalization solutions and other technologies (hereinafter the “Technology”), and that such Technology is kept in strict confidence by the Company.  The Employee is aware that the Technology is vital to the Company’s success.  The Employee further understands that the success of the Company depends, to a great extent, on its ability to protect Confidential Information, including that comprising the Technology, from unauthorized disclosure, use, or publication.  Inasmuch as the Employee will gain knowledge of or have access to the Confidential Information about the Technology, in whole or in part, in the course of employment, the Employee acknowledges that the Company is and will be entrusting the Employee with this valuable information.  The Employee understands that the Company is engaged in a continuous program of research, development, and marketing of its present and future solutions, services, and products, and the enhancement of its Technology.  

7.3                The Employee Shall Not Disclose Confidential Information.  The Employee will not, during the Employment Term or following the Employment Term, use, show, display, release, discuss, communicate, divulge or otherwise disclose Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, except in connection with and only to the extent required for the performance of the Employee’s obligations hereunder, without the prior written consent or authorization of a duly authorized officer of the Company. This covenant and restriction shall continue to be binding upon the Employee after termination of any employment or other relationship with the Company and is an independent covenant.

 

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7.4                Title.  All documents or other tangible or intangible property relating in any way to the business of the Company which are conceived or generated by the Employee in performing Employee’s duties for the Company or come into the Employee’s possession during the term of this Agreement shall be and remain the exclusive property of the Company.  At termination or whenever requested to do so by the Company, the Employee agrees to return all such documents, and tangible and intangible property, and all copies thereof, including, but not limited to, all records, manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, data, tables, magnetic tapes, computer files or disks, calculations or copies thereof, which are the property of the Company or which relate in any way to the business, customers, products, practices or techniques of the Company, and all other property of the Company, including, but not limited to, all documents.

7.5                Compelled Disclosure.  In the event a third party seeks to compel disclosure of Confidential Information by the Employee by judicial or administrative process, the Employee shall promptly notify the Board of such occurrence and furnish to the Board a copy of the demand, summons, subpoena or other process served upon the Employee to compel such disclosure, and will permit the Company to assume, at its expense, but with the Employee’s cooperation, defense of such disclosure demand.  In the event that the Company refuses to contest such third party disclosure demand under judicial or administrative process, or if a final judicial order is issued compelling disclosure of Confidential Information by the Employee, the Employee shall be entitled to disclose such information in compliance with the terms of such administrative or judicial process or order without violating Employee’s obligations under this Agreement.  

8.                   Inventions.

8.1                Employee Original Works.  The Employee has identified on Schedule A, attached hereto and incorporated herein by reference, a complete list of all inventions or improvements which have been made or conceived or first reduced to practice by the Employee alone or jointly with others prior to the date of this Agreement, which the Employee desires to exclude from the operation of this Agreement.  If there is no such list on Schedule A, the Employee represents that the Employee has made no such inventions or improvements at the time of signing this Agreement.

 

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8.2                Definition of Inventions.  The term “Inventions” for purposes of this Agreement shall mean developments, designs, creations, code, improvements, original works of authorship, formulas, processes, know-how, techniques, inventions, or other protectable proprietary information or developments, whether or not protection has been obtained or applied for under applicable laws.

8.3                Disclosure of Inventions.  The Employee hereby agrees to disclose promptly to the Company (or any persons designated by it) all Inventions:  (i) which are made or conceived or reduced to practice by the Employee, either alone or jointly with others, during the Employment Term, or which are reduced to practice during the period of twelve (12) months following the Employment Term that relate to or are useful in the present or future business of the Company; or (ii) which result from tasks assigned the Employee by the Company or the Board under this Agreement, or from the Employee’s use of premises or other resources owned, leased or contracted for by the Company.  

8.4                Ownership of Inventions.  The Employee agrees that all Inventions described in Section 8.3 which the Company, in its sole discretion, determines to be related to or useful in its business or its research or development, or which result from work performed by the Employee for the Company, shall be the sole and exclusive property of the Company and its assigns, and the Company and its assigns shall have the right to use or to apply for patents, copyrights or other statutory or common law protections for such Inventions in any and all countries.  The Employee further agrees to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights and other statutory or common law protections for such Inventions in any and all countries.  To that end, the Employee will execute all documents for use in applying for and obtaining such patents, copyrights and other statutory or common law protections therefor and enforcing the same, as the Company may desire, together with any assignments thereof to the Company or to persons or entities designated by the Company.  The Employee’s obligations under this Section 8.4 shall continue beyond the Employment Term, but the Company shall compensate the Employee at a reasonable rate after such termination for time actually spent by the Employee at the Company’s request in providing such assistance.  

8.5                Works for Hire.  The Employee hereby acknowledges that all original works of authorship which are made by the Employee (solely or jointly with others) within the scope of the Employee’s engagement by the Company under this Agreement, which are protectable by copyright are “works for hire”, as that term is defined in the United States Copyright Act (17 U.S.C., Section 101).

 

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8.6                Power of Attorney.  In the event the Company is unable, after reasonable effort, to secure the Employee’s signature on any document needed to apply for, obtain or enforce any intellectual property rights relating to any Invention with respect to which the Employee has made an inventive contribution, whether because of the Employee’s unavailability, or physical or mental incapacity, or for any other reason whatsoever, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Employee’s agents and attorneys-in-fact to act for and in the Employee’s behalf and stead solely for and in connection with the execution and filing of any such documents with the same legal force and effect as if such acts were performed by the Employee. 

9.                   Employee’s Representations and Warranties.

9.1                No Breach of Prior Agreements.  The Employee represents and warrants that performance of the terms of this Agreement as a employee of the Company does not and will not cause the Employee to breach any agreement, commitment or understanding the Employee has with any other party, whether formal or informal, to assign to such other party inventions the Employee may hereafter make, or to keep in confidence proprietary information of such other party which the Employee acquired or learned prior to the Employee’s engagement by the Company.  

9.2                Proprietary Information of Others.  The Employee represents and warrants that the Employee has not brought and will not bring to the Company or use for the benefit of the Company, any materials or documents of a former employer (which, for purposes of this paragraph, shall also include persons, firms, corporations and other entities for which the Employee has acted or is currently acting, as an independent contractor or employee) that are not generally available to the public or to the trade, unless the Employee has obtained written authorization from any such person or entity permitting the Employee to retain and use said materials or documents.  With respect to any materials or documents that the Employee may bring to the Company for use in the course of this Agreement, the Employee hereby further represents and warrants that the Employee’s use (or the Company’s use) of such materials or documents will not violate the intellectual property rights of any former employer of the Employee, or any other party.  

10.                Subsequent Competition.

10.1            Customers and Vendors.  During the Employment Term, and for a period of one (1) year following the termination of this Agreement, the Employee shall not, either directly or indirectly, either alone or in concert with others, solicit or entice or in any way divert any customer or vendor of the Company as of the date of any such termination, to do business with any business entity in competition with the Company, if the Employee’s knowledge of the identity of, and other pertinent information about, any such customer or vendor was learned by the Employee in the course and scope of this Agreement, and could not otherwise be obtained from public sources or records.

 

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10.2            Business.  During the Employment Term, the Employee agrees not to plan or otherwise take any preliminary steps, either alone or in concert with others, to set up or engage in any business enterprise, or become an employee, consultant or advisor to any business enterprise, that is a “Competitor” (as defined below) of the Company.  For a period of one (1) year after the Employment Term, the Employee will not accept any employment from, or engage in any activities with, any entity which the Company determines in good faith is a Competitor of the Company.  For the purposes of this Section 10.2, a “Competitor” is any business enterprise that is involved in the development and/or marketing of (a) services, products or technology utilized in language translation or globalization, or (b) any other services, products or technology that the Company has developed or sold in the past two years immediately prior to such date, is currently developing or selling, or which the Company could reasonably be expected to develop or sell in the future.  For the purpose of clarity, nothing in this section 10.2 shall constitute a waiver or termination of the provisions of this Agreement regarding the non-disclosure of Confidential Information or the non-solicitation of the Company’s customers, vendors, or employees.  

10.3            Solicitation of Company Employees.  During the Employment Term, and for a period of one (1) year following the Employment Term, the Employee will not, directly or indirectly, alone or in concert with others, induce or attempt to induce for Employee’s benefit or that of any third party or solicit any of the Company’s employees, officers, suppliers, consultants, independent contractors or vendors who have held any such position or provided any goods or services to the Company at any time during twelve (12) months preceding the date of termination of the Employee’s employment for employment or other engagement by any other company which is, by any reasonable standard, in competition with the Company.  The Employee understands that the above restraint is necessary in order to reduce the risk that the Company’s Confidential Information will be disclosed to and used by its competitors to its detriment.  

10.4            Subsequent Notification.  Upon the termination of this Agreement, the Employee hereby authorizes the Company to notify any other party, including without limitation, the Employee’s future employers, future partners, and customers of the Company, as to the existence of this Agreement, and the existence of the Employee’s covenants and responsibilities with respect to the Confidential Information entrusted to the Employee hereunder.  

10.5            Nature of Restrictions.  Nothing contained in this Agreement shall be construed to prevent the Employee from engaging in a lawful profession, trade, or business after the termination of this Agreement.  This Agreement shall be construed only as one which prohibits the Employee from engaging in acts which are unfair to the Company, and which are in violation of the confidence and trust reposed in the Employee by the Company with respect to their Confidential Information and intellectual property.

 

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10.6            Claim Not a Defense.  The existence of any claim or cause of action by Employee against the Company shall not constitute a defense to the enforcement of Employee’s obligations herein.

11.                Survival of Restrictive Covenants.  The provisions of Sections 7, 8, 9 and 10 of this Agreement shall survive the termination of this Agreement, and shall be binding upon the Employee following the termination of the Employee under this Agreement.  Such covenants shall be deemed and construed as separate agreements independent of any other provisions of this Agreement; and the existence of any claim or cause of action by the Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any or all such Sections.  

12.                Remedies.  The Employee acknowledges that irreparable injury will result to the Company if the Employee violates any of the covenants in Sections 7 (Disclosure of Confidential Information), 8 (Inventions), 9 (Employee’s Representations and Warranties) and 10 (Subsequent Competition) of this Agreement, and that the Company cannot adequately ascertain or quantify its damages or be compensated therefor by money damages.  The Employee hereby expressly agrees that the Company shall be entitled, in addition to damages and any other remedies provided by law, to reimbursement from the Employee of the Company’s reasonable attorneys’ fees and costs incurred in successfully enforcing its rights under this Agreement; and further agrees to the entry by a court of an injunction or other equitable remedy enjoining the Employee’s breach without the necessity of proof of actual damages respecting any such violation by the Employee.  

13.                Arbitration.  Any claim, dispute or controversy arising out of this Agreement, the interpretation, validity or enforceability of this Agreement or the alleged breach thereof shall be submitted upon the request of either party to binding arbitration in Minneapolis, Minnesota; provided, however, that this arbitration provision shall not preclude the Company from seeking injunctive relief as provided in Section 12. Such arbitration shall proceed in accordance with the then-governing rules of the American Arbitration Association (“AAA”) for Employment Dispute Resolutions or Commercial Arbitration, at the option of the petitioner.  Judgment upon the award rendered may be entered and enforced in any court of competent jurisdiction.  It is agreed that the parties shall choose a single, neutral arbitration from among a panel of not less then seven (7) proposed arbitrators and that the parties may have no more than two (2) panels of arbitrators presented to them by the AAA.  The parties agree that they will share equally the fees of the arbitrator, and they shall each be responsible for their own attorneys’ fees and costs and any filing fee paid by them unless the arbitrator determines that one party shall pay a greater portion of such costs and fees and states the justification therefor.  THE EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION WHICH DISCUSSES ARBITRATION.  EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION CLAIMS. 

 

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14.                Miscellaneous.

14.1            Recitals.  The recitals to this Agreement are true and correct and constitute a part of this Agreement.  

14.2            Assignment.  The rights and benefits of the Company and its permitted assigns under this Agreement shall be fully assignable and transferable to any other entity (subject to that entity’s assumption of the obligations hereunder):  (i) which is an affiliate of the Company, as that term is defined under federal securities law; or (ii) which is not an affiliate and with which the Company has merged or consolidated, or to which it may have sold substantially all its assets in a transaction in which it has assumed the liabilities of the Company under this Agreement.  In the event of any such assignment or transfer, all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by or against the successors and assigns of the Company.  This Agreement shall not be assignable by the Employee without the prior written consent of the Company, but all obligations and agreements of the Employee hereunder shall be binding upon and enforceable against the Employee and Employee’s successors.

14.3            Notices.  All notice, requests, and other communications from any of the parties hereto to another shall be in writing and shall be considered to have been fully given or served if personally delivered, telecopied, sent by national overnight delivery service, or sent by first class, certified or registered mail, return receipt requested, postage prepaid, to the party at the party’s or its address as provided below, or to such other addresses such party may hereinafter designate by written notice to the other parties: (a) if to the Company, to Sajan, Inc., 625 Whitetail Blvd., River Falls, WI 54022, Attention: Board of Directors, or (b) if to the Employee, to the address last shown for Employee in the records of the Company.  Such notice shall be deemed to be received when delivered if delivered personally, upon receipt of electronic sent confirmation (or other confirmation of receipt) if telecopied, the next business day if sent by a national overnight delivery service, or three (3) business days after the date mailed if sent by certified or registered mail.  Any notice of any change in such address shall also be given in the manner set forth above.  Whenever the giving of notice is required, the giving of such notice may be waived in writing by the party entitled to receive such notice.

 

 

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14.4            Governing Law; Jurisdiction.  This Agreement, and the legal relations between the parties, shall be governed by, and construed in accordance with, the laws of the State of Minnesota without regard to such state’s conflicts or choice of law provisions.  The parties consent to jurisdiction of the courts of such state and/or its Federal District Courts, and agree that venue is proper in Hennepin County, for those matters not subject to arbitration.  

14.5            Entire Agreement; Amendment.  This Agreement constitutes the entire agreement, and supersedes all other prior and contemporaneous agreements and undertaking, both written and oral, between the parties hereto relating to the subject matter hereof.  There are no representations, warranties, covenants, statements, conditions, terms of obligations other than those contained herein or relating to the subject matter hereof.  No amendments or modifications to or variations of this Agreement shall be deemed valid unless in writing and executed by the Employee and the Company.  

14.6            Meanings of Pronouns; Singular and Plural Words.  All pronouns used in this Agreement shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person to which or to whom reference is made may require.  Unless the context in which any word is used shall clearly indicate to the contrary, words used in the singular shall include the plural, and words used in the plural shall include the singular.

14.7            Interpretation.  When a reference is made in this Agreement to Sections or Subsections such reference shall be to a Section or Subsection of this Agreement unless otherwise indicated.  Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

14.8            Benefit.  This Agreement shall inure to the benefit of and be enforceable by the Employee or by the Employee’s personal and legal representatives, executors, administrators, heirs, devisees and legatees.

14.9            No Waiver.  No delay on the part of either party in exercising any right hereunder shall operate as a waiver of such right, nor shall any waiver, express or implied, by either party of any right hereunder, or of any failure to perform hereunder or breach hereof by either party, constitute or be deemed to constitute a waiver of any other failure to perform hereunder or breach hereof by either party, whether of a similar or dissimilar nature thereto.

 

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14.10         Attorneys’ Fees.  If any litigation shall ensue between the parties concerning the interpretation of or performance under this Agreement, the prevailing party shall recover from the nonprevailing party its reasonable attorneys’ and other fees and expenses, if and to the extent fixed by the court.

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

14.12         Headings.  The headings used in this Agreement are for the convenience of the parties and shall not be deemed to be a part of this Agreement.

14.13         ADVICE OF COUNSEL.  EMPLOYEE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, EMPLOYEE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND EMPLOYEE HAS READ AND UNDERSTANDS ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

(Remainder of Page Intentionally Left Blank)

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement on the day and year first written above.

	
 

	
 

	
 

	
COMPANY:  SAJAN, INC.

	
 

	
 

	
 

	
/s/ Shannon Zimmerman

	
 

	
  Shannon Zimmerman, CEO

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
EMPLOYEE:

	
 

	
 

	
 

	
/s/ Angela Zimmerman

	
 

	
  Angela Zimmerman, An Individual

 

 

EXHIBIT A

to Sajan, Inc./Angela Zimmerman

Employment Agreement

 

List of Prior Inventions 

 

 

	
Title

	
Date

	
Identifying Number or Brief Description

 

NONE.  

 

 

 

 

 

 

	
Signature of Employee:

	
/s/ Angela Zimmerman

	
 

	
 

	
 

	
Date:

	
May 19, 2006

	
 

 

 

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AMENDMENT NO. 1

TO

EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 (“Amendment No. 1”) is made effective this 1st day of February, 2010 by and between SAJAN, INC. (the “Company”) and ANGEL ZIMMERMAN (the “Employee”) (collectively the “Parties”).  

RECITALS

A.            The Employee and the Company are parties to an employment agreement dated May 19, 2006 (the “Employment Agreement”).

B.            The Company and the Employee desire to and have agreed to amend and restate certain terms of the Employee’s employment as set forth in the Employment Agreement. 

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties desire to enter into this Amendment No. 1, upon the terms and conditions hereinafter set forth.  

AGREEMENT

1.                  Ratification of Employment Agreement.  The Company and Employee hereby ratify the Employment Agreement and their respective obligations under such agreement, except as provided herein.

2.                  Amendment of Employment Agreement.  The Company and the Employee hereby amend the Employment Agreement as follows:

2.1          The text of Section 2 of the Employment Agreement, entitled “At-Will Employment” is hereby deleted in its entirety, and Section 2 is hereby amended to read in its entirety as follows to preserve the numbering of the remaining Sections in the Employment Agreement: 

2.  [Reserved.]

 

2.2         The text of Section 3 of the Employment Agreement is hereby amended and restated as follows:

 

               3.             Term.  The term of this Agreement is one (1) year beginning on the date hereof.  This Agreement will automatically renew for additional successive one (1) year terms unless (i) at least 30 days before the end of the then-current term, the Company provides written notice to the Employee that it does not intend to renew; or (ii) Employee’s employment is otherwise terminated as set forth in Section 5 of this Agreement.

 

 

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3.                  Continuation of Employment Agreement.  Except as herein expressly amended, the Employment Agreement shall continue in full force and effect. 

4.                  Further Assurances.  The parties hereto agree to take any and all action reasonably requested by the Company to authorize and give effect to this Amendment No. 1.

5.                  Counterparts.  This Amendment No. 1 may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which counterparts shall together constitute one and the same instrument. 

 

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment No. 1 to the Employment Agreement on the day and year first written above.

 

	
 

	
SAJAN, INC.

	
 

	
 

	
 

	
 

	
 

	
/s/ Shannon Zimmerman

	
 

	
By: Shannon Zimmerman

	
 

	
Its: CEO

	
 

	
 

	
 

	
 

	
 

	
/s/ Angel Zimmerman

	
 

	
Angel Zimmerman, An Individual

 

 

 

 

 

 

 

 

(Signature Page to Amendment No. 1 to Employment Agreement)

 

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