Document:

ex10-2.htm

Exhibit 10.2

 

BRIDGELINE DIGITAL, INC.

 

Warrant No. 2/2015

 

WARRANT TO PURCHASE COMMON STOCK

 

VOID AFTER 5:00 P.M., EASTERN TIME, 
ON THE EXPIRATION DATE

 

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR WITHOUT DELIVERING AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

FOR VALUE RECEIVED, Bridgeline Digital, Inc., a Delaware corporation (the “Company”), hereby agrees to sell upon the terms and on the conditions hereinafter set forth, at any time commencing on August 12, 2015 (the “Initial Exercise Date”) but no later than 5:00 p.m., Eastern Time, on February 12, 2020 (the “Expiration Date”), to Michael N. Taglich, or his registered assigns (the “Holder”), under the terms as hereinafter set forth, Three Hundred Thousand (300,000) fully paid and non-assessable shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), at a purchase price per share of $0.80 (the “Warrant Price”), pursuant to the terms and conditions set forth in this warrant (this “Warrant”). The number of shares of Common Stock issued upon exercise of this Warrant (“Warrant Shares”) and the Warrant Price are subject to adjustment in certain events as hereinafter set forth. 

 

This Warrant is issued to the Holder in return for financing provided to the Company by the Holder.

 

1.             Exercise of Warrant.

 

(a)     The Holder may exercise this Warrant according to the terms and conditions set forth herein by delivering to the Company (whether via facsimile or otherwise) at any time on or after the Initial Exercise Date and prior to the Expiration Date (such date of exercise, the “Exercise Date”) (i) the Exercise Notice attached hereto as Exhibit A (the “Exercise Notice”) (having then been duly executed by the Holder), and (ii) unless the Warrant is being exercised pursuant to a Cashless Exercise (as defined below), cash, a certified check, a bank draft or wire transfer in payment of the purchase price, in lawful money of the United States of America, for the number of Warrant Shares specified in the Exercise Form. The Holder shall not be required to deliver the original of this Warrant in order to affect an exercise hereunder. Execution and delivery of an Exercise Form with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Form for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof.

 

 

 

 

 

(b)     On or before the third (3rd) Trading Day following the later of (i) the date on which the Company has received an Exercise Notice or (ii) the date on which the Company receives payment of the exercise price (which shall not apply for cashless exercises), the Company shall transmit an acknowledgment of confirmation of receipt of such Exercise Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the fifth (5th) Trading Day following the later of (i) the date on which the Company has received such Exercise Notice or (ii) the date on which the Company receives the exercise price (such later date, the “Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon the later of (i) the date on which the Company has received the Exercise Notice or (ii) the date on which the Company receives the exercise price, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). Notwithstanding the foregoing, if a Holder has not received certificates for all Warrant Shares prior to the tenth (10th) business day after the Delivery Date with respect to an exercise of any portion of this Warrant for any reason, then Holder shall have the right, but not the obligation, at any time thereafter until receipt of all the Warrant Shares relating to the Exercise Notice, to rescind the Exercise Notice by providing notice to the Company (the “Rescission Notice”). Upon delivery of a Rescission Notice to the Company, the Holder shall regain the rights of a Holder of this Warrant with respect to such unexercised portions of this Warrant and the Company shall, as soon as practicable, return such unexercised Warrant to the Holder or, if the Warrant has not been surrendered, adjust its records to reflect that such portion of this Warrant has not been exercised. 

 

(c)     This Warrant may be exercised in whole or in part so long as any exercise in part hereof would not involve the issuance of fractional Warrant Shares. If exercised in part, at the request of the Holder and upon delivery of the original Warrant, the Company shall deliver to the Holder a new Warrant, identical in form to this Warrant, in the name of the Holder, evidencing the right to purchase the number of Warrant Shares as to which this Warrant has not been exercised, which new Warrant shall be signed by the President or Chief Executive Officer of the Company. The term Warrant as used herein shall include any subsequent Warrant issued as provided herein. 

 

(d)     Notwithstanding any provisions herein to the contrary, in lieu of exercising this Warrant by cash payment in the manner set forth in Section 1(a), the Holder may, in its sole discretion, elect to exercise this Warrant, or a portion hereof, and to pay for the Warrant Stock by way of cashless exercise (a “Cashless Exercise”). If the Holder wishes to effect a cashless exercise, the Holder shall deliver the Exercise Notice duly executed by such Holder or by such Holder’s duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of such exercise, in which event the Company shall issue to the Registered Holder the number of Warrant Shares computed according to the following equation:

 

	

 

 

; where

 

X = the number of Warrant Shares to be issued to the Registered Holder.

 

Y = the Warrant Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant Shares being exercised.

 

A = the Fair Market Value (defined below) of one share of Common Stock on the Exercise Date. 

 

B = the Exercise Price (as adjusted pursuant to the provisions of this Warrant).

 

For purposes of this Section 1(d), the “Fair Market Value” of one share of Common Stock on the Exercise Date shall have one of the following meanings:

 

(1)     if the Common Stock is traded on a national securities exchange registered with the Securities Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, the Fair Market Value shall be deemed to be the average of the Closing Prices over a five trading day period ending on the Exercise Date. For the purposes of this Warrant, “Closing Price” means the closing sale price of one share of Common Stock, as reported by Bloomberg; or

 

 

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(2)     if the Common Stock is not traded on a national securities exchange, the Fair Market Value shall be deemed to be the average of the closing bid prices price over the ten (10) trading day period ending on the Exercise Date; or

 

(3)     if neither (1) nor (2) is applicable, the Fair Market Value shall be at the commercially reasonable price per share which the Company could obtain on the Exercise Date from a willing buyer (not a current employee or director) for shares of Common Stock sold by the Company, from authorized but unissued shares, as determined in good faith by the Company’s Board of Directors.

 

For illustration purposes only, if this Warrant entitles the Holder the right to purchase 100,000 Warrant Shares and the Holder were to exercise this Warrant for 50,000 Warrant Shares at a time when the Exercise Price per share was $1.00 and the Fair Market Value of each share of Common Stock was $2.00 on the Exercise Date, as applicable, the cashless exercise calculation would be as follows:

 

X = 50,000 ($2.00-$1.00)

2.00

 

X = 25,000

 

Therefore, the number of Warrant Shares to be issued to the Holder after giving effect to the cashless exercise would be 25,000 Warrant Shares and the Company would issue the Holder a new Warrant to purchase 50,000 Warrant Shares, reflecting the portion of this Warrant not exercised by the Holder. For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), it is intended, understood and acknowledged that the Warrant Shares issued in the cashless exercise transaction described pursuant to Section 1(c) shall be deemed to have been acquired by the Holder, and the holding period for the shares of Warrant Shares shall be deemed to have commenced, on the date of the Holder’s acquisition of the Warrant.

 

(e)     No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the exercise of this Warrant. The Company shall pay cash in lieu of such fractional Warrant Shares. The price of a fractional Warrant Share shall equal the product of (i) the closing price of the Common Stock on the exchange or market on which the Common Stock is then traded (if the Common Stock is not then publicly traded, then upon the Fair Market Value per share of the Common Stock (as determined by the Company’s Board of Directors)), and (ii) the applicable fraction.

 

(f)     Except as provided in Section 4 hereof, the Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of Warrant Shares on exercise of this Warrant.

 

(g)     The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

2.             Disposition of Warrant Shares and Warrant.

 

(a)     The Holder hereby acknowledges that: (i) this Warrant and any Warrant Shares purchased pursuant hereto are not being registered (A) under the Securities Act of 1933 (the “Act”) on the ground that the issuance of this Warrant is exempt from registration under Section 4(2) of the Act as not involving any public offering, or (B) under any applicable state securities law because the issuance of this Warrant does not involve any public offering; and (ii) that the Company’s reliance on the registration exemption under Section 4(2) of the Act and under applicable state securities laws is predicated in part on the representations hereby made to the Company by the Holder. The Holder represents and warrants that he, she or it is acquiring this Warrant and will acquire Warrant Shares for investment for his, her or its own account, with no present intention of dividing his, her or its participation with others or reselling or otherwise distributing this Warrant or Warrant Shares.

 

 

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(b)     The Holder hereby agrees that he, she or it will not sell, transfer, pledge or otherwise dispose of (collectively, “Transfer”) all or any part of this Warrant and/or Warrant Shares unless and until he, she or it shall have first obtained an opinion, reasonably satisfactory to counsel for the Company, of counsel (competent in securities matters, selected by the Holder and reasonably satisfactory to the Company) to the effect that the proposed Transfer may be made without registration under the Act and without registration or qualification under any state law. 

 

(c)     If, at the time of issuance of Warrant Shares, no registration statement is in effect with respect to such shares under applicable provisions of the Act and the Warrant Shares may not be sold pursuant to Rule 144 of the Act, the Company may, at its election, require that any stock certificate evidencing Warrant Shares shall bear legends reading substantially as follows:

 

“THE SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT PURSUANT TO WHICH THESE SHARES WERE PURCHASED FROM THE COMPANY. COPIES OF SUCH RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. NO TRANSFER OF SUCH SHARES OR OF THIS CERTIFICATE (OR OF ANY SHARES OR OTHER SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR OR IN RESPECT OF SUCH SHARES) SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS SET FORTH IN THE WARRANT HAVE BEEN COMPLIED WITH.”

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.”

 

In addition, so long as the foregoing legend may remain on any stock certificate evidencing Warrant Shares, the Company may maintain appropriate “stop transfer” orders with respect to such certificates and the shares represented thereby on its books and records and with those to whom it may delegate registrar and transfer functions.

 

3.             Reservation of Shares. The Company hereby agrees that at all times there shall be reserved for issuance upon the exercise of this Warrant such number of shares of the Common Stock as shall be required for issuance upon exercise of this Warrant. The Company further agrees that all Warrant Shares will be duly authorized and will, upon issuance and payment of the exercise price therefor, be validly issued, fully paid and non-assessable, free from all taxes, liens, charges and encumbrances with respect to the issuance thereof, other than taxes, if any, in respect of any transfer occurring contemporaneously with such issuance and other than transfer restrictions imposed by federal and state securities laws.

 

Except and to the extent as waived or consented to in writing by the Holder, the Company shall not by any action, including, without limitation, amending its certificate or articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

 

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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

4.             Exchange, Transfer or Assignment of Warrant. Subject to Section 2, this Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of the Company (“Warrants”) of different denominations, entitling the Holder or Holders thereof to purchase in the aggregate the same number of Warrant Shares purchasable hereunder. Subject to Section 2, upon surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form attached hereto as Exhibit B (the “Assignment Form”) duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in the Assignment Form and this Warrant shall promptly be canceled. Subject to Section 2, this Warrant may be divided or combined with other Warrants that carry the same rights upon presentation hereof at the office of the Company or at the office of its stock transfer agent, if any, together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof.

 

5.             Capital Adjustments. This Warrant is subject to the following further provisions:

 

(a)     Recapitalization, Reclassification and Succession. If any recapitalization of the Company or reclassification of its Common Stock or any merger or consolidation of the Company into or with a corporation or other business entity, or the sale or transfer of all or substantially all of the Company’s assets or of any successor corporation’s assets to any other corporation or business entity (any such corporation or other business entity being included within the meaning of the term “successor corporation”) shall be effected, at any time while this Warrant remains outstanding and unexpired, then, as a condition of such recapitalization, reclassification, merger, consolidation, sale or transfer, lawful and adequate provision shall be made whereby the Holder of this Warrant thereafter shall have the right to receive upon the exercise hereof as provided in Section 1 and in lieu of the Warrant Shares immediately theretofore issuable upon the exercise of this Warrant, such shares of capital stock, securities or other property as may be issued or payable with respect to or in exchange for the number of outstanding shares of Common Stock equal to the number of Warrant Shares immediately theretofore issuable upon the exercise of this Warrant had such recapitalization, reclassification, merger, consolidation, sale or transfer not taken place, and in each such case, the terms of this Warrant shall be applicable to the shares of stock or other securities or property receivable upon the exercise of this Warrant after such consummation.

 

(b)     Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, the number of Warrant Shares purchasable upon exercise of this Warrant shall be proportionately adjusted.

 

(c)     Stock Dividends and Distributions. If the Company at any time while this Warrant is outstanding and unexpired shall issue or pay the holders of its Common Stock, or take a record of the holders of its Common Stock for the purpose of entitling them to receive, a dividend payable in, or other distribution of, Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock that Holder would have owned immediately following such action had this Warrant been exercised immediately prior thereto.

 

(d)     Price Adjustments. Whenever the number of Warrant Shares purchasable upon exercise of this Warrant is adjusted pursuant to Sections 5(a), 5(b) or 5(c), the then applicable Warrant Price shall be proportionately adjusted.

 

(e)     Certain Shares Excluded. The number of shares of Common Stock outstanding at any given time for purposes of the adjustments set forth in this Section 5 shall exclude any shares then directly or indirectly held in the treasury of the Company.

 

 

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(f)     Deferral and Cumulation of De Minimis Adjustments. The Company shall not be required to make any adjustment pursuant to this Section 5 if the amount of such adjustment would be less than one percent (1%) of the Warrant Price in effect immediately before the event that would otherwise have given rise to such adjustment. In such case, however, any adjustment that would otherwise have been required to be made shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than one percent (1%) of the Warrant Price in effect immediately before the event giving rise to such next subsequent adjustment. All calculations under this Section 5 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall the Company be obligated to issue fractional Warrant Shares or fractional portions of any securities upon the exercise of the Warrant.

 

(g)     Duration of Adjustment. Following each computation or readjustment as provided in this Section 5, the new adjusted Warrant Price and number of Warrant Shares purchasable upon exercise of this Warrant shall remain in effect until a further computation or readjustment thereof is required.

 

6.             Notice to Holders.

 

(a)     Notice of Record Date. In case:

 

(i)     the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend (other than a cash dividend payable out of earned surplus of the Company) or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right;

 

(ii)     of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation with or merger of the Company into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation; or

 

(iii)     of any voluntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such case, the Company will mail or cause to be mailed to the Holder hereof at the time outstanding a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any, is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution or winding-up. Such notice shall be mailed at least ten (10) calendar days prior to the record date therein specified, or if no record date shall have been specified therein, at least ten (10) days prior to such specified date.

 

(b)     Certificate of Adjustment. Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company shall promptly provide the Holder with prompt written notice, signed and certified by its Chairman, Chief Executive Officer, President or a Vice President, setting forth in reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated and the Warrant Price and number of Warrant Shares purchasable upon exercise of this Warrant after giving effect to such adjustment.

 

7.            Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of evidence satisfactory to it, in the exercise of its reasonable discretion, of the ownership and the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company and, in the case of mutilation, upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof, without expense to the Holder, a new Warrant of like tenor dated the date hereof.

 

8.             Warrant Holder Not a Stockholder. The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to any rights whatsoever as a stockholder of the Company, including but not limited to voting rights. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

 

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9.             Registration Rights. The Holder shall have the registration rights with respect to its Warrant Shares as set forth on Exhibit C attached hereto.

 

10.           Notices.   Any notice provided for in this Warrant must be in writing and must be either personally delivered, mailed by first class mail (postage prepaid and return receipt requested), or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated:

 

If to the Company:

 

Bridgeline Digital, Inc.
80 Blanchard Road
Burlington, Massachusetts 01803
Attention: Mr. Thomas L. Massie,
                  President and Chief Executive Officer

 

If to the Holder:

 

To the address of such Holder set forth on the books and records of the Company.

 

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Warrant will be deemed to have been given (a) if personally delivered, upon such delivery, (b) if mailed, five days after deposit in the U.S. mail, or (c) if sent by reputable overnight courier service, one business day after such services acknowledges receipt of the notice.

 

11.          Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.

 

12.          Submission to Jurisdiction. EACH OF THE HOLDER AND THE COMPANY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT AND AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH OF THE HOLDER AND THE COMPANY ALSO AGREE NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT IN ANY OTHER COURT. EACH OF THE PARTIES WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY, OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO.

 

13.           Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

14.           Miscellaneous.

 

(a)     Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

(b)     Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.

 

 

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(c)     Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

(d)     Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

 

 

[Remainder of page intentionally left blank]

 

 

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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its behalf, in its corporate name and by a duly authorized officer, as of this 12th day of February 2015.

 

	
BRIDGELINE DIGITAL, INC.

	 
	 
	
By: /s/Michael D. Prinn                                           

       Michael D. Prinn

       Executive Vice President and Chief Financial Officer

 

 

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EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

 

Bridgeline Digital, Inc.

 

The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of Bridgeline Digital, Inc., a Delaware corporation (the “Company”), evidenced by Warrant to Purchase Common Stock No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.              Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

 

	 	
  ____________
	
a “Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

	 	
  ____________
	
a “Cashless Exercise” with respect to _______________ Warrant Shares.

 

2.              Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the exercise price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

 

3.             Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, to the following address:

 

_______________________

_______________________

_______________________

_______________________

 

4.              Fractional Shares. In lieu of receipt of a fractional share of Common Stock, the undersigned will receive a check representing payment therefor.

 

Date: _______________ __, ______

 

                                                                      

   Name of Registered Holder

 

By:                                                               

Name:

Title:

 

 

A-1 

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

Bridgeline Digital, Inc.
80 Blanchard Road
Burlington, Massachusetts 01803
Attention: Mr. Thomas L. Massie,
                  President and Chief Executive Officer

 

 

 

FOR VALUE RECEIVED,                                hereby sells, assigns and transfers unto

 

(Please print assignee’s name, address and Social Security/Tax Identification Number)

 

________________________________________________

 

________________________________________________

 

________________________________________________

 

the right to purchase shares of common stock, par value $0.001 per share, of Bridgeline Digital, Inc., a Delaware corporation (the “Company”), represented by this Warrant to the extent of shares as to which such right is exercisable and does hereby irrevocably constitute and appoint ____________________________, Attorney, to transfer the same on the books of the Company with full power of substitution in the premises.

 

	
Dated:                                                                                              
	
 

	  	PRINT WARRANT HOLDER NAME
	 	 
	 	 
	 	 
	  	
Name: 
Title: 

	  	  
	
Witness:

 

                                                                                                         
	  

 

 

B-1 

 

 

Exhibit C

Registration Rights

 

1.1.         Participation in Registrations. Whenever the Company proposes to register any of its securities under the Securities Act, whether for its own account or for the account of another stockholder (except for the registration of securities (A) to be offered pursuant to an employee benefit plan on Form S-8 or (B) pursuant to a registration made on Form S-4, or any successor forms then in effect) at any time and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), it will so notify in writing the Holder no later than the earlier to occur of (i) the tenth (10th) day following the Company’s receipt of notice of exercise of other demand registration rights, or (ii) thirty (30) days prior to the anticipated filing date. Subject to the provisions of this Agreement, the Company will include in the Piggyback Registration all Registrable Securities, on a pro rata basis based upon the total number of Registrable Securities with respect to which the Company has received written requests for inclusion within ten (10) business days after the applicable holder’s receipt of the Company’s notice.

 

1.2.         Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company, whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the trading market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws, (ii) processing expenses of a placement agent, not to exceed $20,000 without the Company’s approval, including, but not limited to, printing expenses, messenger, telephone and delivery expenses and customary marketing expenses, (iii) fees and disbursements of counsel and independent public accountants for the Company, (iv) fees and disbursements of one counsel to the placement agent not to exceed $30,000, and (v) filing fees and counsel fees of the placement agent if a determination is made that a FINRA Rule 5110 filing is required to be made with respect to the Registration Statement.

 

1.3.         Indemnification.

 

(a)     Indemnification by the Company. The Company will indemnify and hold harmless each Holder and its officers, directors, members, shareholders, partners, representatives, employees and agents, successors and assigns, and each other person, if any, who controls such Holder within the meaning of the Securities Act, against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto, to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Holder’s behalf and will reimburse such Holder, and each such officer, director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Holder or any such controlling person in writing specifically for use in such Registration Statement or Prospectus.

 

 

C-2 

 

 

(b)     Indemnification by the Holders. Each Holder agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders, partner, representatives and each person who controls the Company (within the meaning of the Securities Act) against any Claims resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability of an Holder be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Holder in connection with any claim relating to this Section 1.3 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

 

(c)     Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim or employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

 

 

C-3 

 

 

(d)     Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Claim in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 1.3 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

 

1.4.  Cooperation by Holder. Each Holder shall furnish to the Company or the Underwriter, as applicable, such information regarding the Holder and the distribution proposed by it as the Company may reasonably request in connection with any registration or offering referred to in this Section 1. Each Holder shall cooperate as reasonably requested by the Company in connection with the preparation of the registration statement with respect to such registration, and for so long as the Company is obligated to file and keep effective such registration statement, shall provide to the Company, in writing, for use in the registration statement, all such information regarding the Holder and its plan of distribution of the Shares included in such registration as may be reasonably necessary to enable the Company to prepare such registration statement, to maintain the currency and effectiveness thereof and otherwise to comply with all applicable requirements of law in connection therewith.

 

1.5  Definitions. 

 

“Registrable Securities” shall mean the Warrant Shares; provided, that a security shall cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the Securities Act, or (B) such security becoming eligible for sale by the Holder without any restriction pursuant to Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).

 

“Registration Statement” shall mean any registration statement of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

“Underwriter” shall mean any entity engaged by the Company to serve as an underwriter in connection with a registration or offering of securities referred to in Section 1.

 

 

 C-4EMPLOYMENT AGREEMENT

CONSULTING AGREEMENT 

THIS AGREEMENT effective as of the 1st day of October 2014 (the “Effective Date”): 

BETWEEN: 

Microelectronics Technology Company, a Nevada corporation with mailing address of 15707 Rockfield Blvd, Irvine California 92618 (the “Company”) 

AND: 

Zoom Companies, Inc., a Nevada Corporation with mailing address of 3525 Del Mar Heights Road, San Diego, California 92130 (the “Consultant”) 

WHEREAS: 

A. The Company is a public company called Microelectronics Technology Company; 

B. The Company is engaged in, among other the Internet incubator space in order to capitalize upon the technology opportunities available today and in the immediate future within the cloud computing market place for on-line advertising, marketing and web application firms. The Company has developed proprietary technologies that will enable the company to capitalize on the third party data management and utilization space through the implementation of a cost effective development and delivery system allowing for economies of scale to be applied to custom applications. Most recently the Company has expanded into Bitcoin Mining and has developed a mining pool, BTC Pool Party.  The BTC Pool Party is a new standard for the Bitcoin mining industry providing transparency with openly disclosed rates and fees;

C. The Company owns and utilizes various trade secrets and proprietary information in connection with its business and is constantly developing and striving to develop new trade secrets and proprietary information to allow it to maintain and enhance its competitive position in its industry; 

D. The Consultant has certain skills and expertise, as represented to the Company by the Consultant, which will benefit the Company.  Consultant will create, develop, and implement a comprehensive strategy for the Company’s Social Media campaigns, PR campaigns, new Web Site development, launches and integration campaigns, development of a new comprehensive Customer Relationship Management system including internal/external touch points, ongoing loyalty assessments, creation of actionable knowledge based on quantitative and qualitative metrics; 

E. The Company wishes to obtain and the Consultant wishes to provide certain services to the Company on the terms and conditions contained in this Agreement; 

F. The Consultant will be placed in a position of authority and trust and will come into contact with, or have access to certain trade secrets and/or confidential information of and relating to the Company. All information disclosed to the Consultant by the Company is done so in the context of a confidential relationship between the Consultant and the Company; and

G. The Consultant would not be retained by the Company or be given access to work, or contact with any such trade secrets and/or confidential information unless the Consultant maintains any and all such trade secrets and/or confidential information in the strictest of confidence. 

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THEREFORE THIS AGREEMENT WITNESSES that the parties AGREE AS FOLLOWS: 

1.  SERVICES, TERM, ETC. 

1.1 Services. The Consultant will perform those services customarily performed by the Manager of Social Media of the Company and as directed by board of directors. 

1.2 Equipment. The Consultant will provide its own equipment to perform the Services except as otherwise set out in this Agreement. 

1.3 Facilities. The Consultant will be responsible for all necessary office premises and basic office equipment including space, desk, telephone, signs, and business cards.

1.4 Reporting. The Consultant will keep the Company informed of all matters concerning the Consultant’s Services at such time and in such manner as the board of directors of the Company may determine. 

1.5 Term and Termination. This Agreement will commence on the Effective Date and will continue for a period of one year (the “Term”). Either party will have the right to terminate this Agreement before the end of the Term without cause. During the term of this agreement termination can be done by giving one month’s written notice of termination or at the discretion of the Company, payment in lieu of notice (based on the Contract Rate, as defined below, for one month), or some combination thereof.

1.6 No Employment, No Authority to Bind, Etc. The Consultant and the Company acknowledge and agree that nothing contained in this agreement will be interpreted to constitute the Consultant as an Consultant or agent of the Company. Neither the Consultant nor the Company have the authority, express or implied, to bind the other in any respect and will not represent themselves as having such authority, it being intended that the Consultant will be responsible for its own actions. The Consultant is retained only for the purposes and to the extent set out in this Agreement. 

1.7 Devotion of Time. The Consultant need only devote such portion of the Consultant’s time as is necessary to complete the Services required. The Consultant is not precluded from acting in any other capacity for any other person, firm or Company provided that it does not conflict with the Consultant’s duties to the Company.

2.                         REMUNERATION 

2.1 Compensation. The Company will pay to the Consultant $10,000 (U.S.) per month (the “Consulting Rate”), due and payable at the end of each month, payable in duly authorized, validly issued, fully paid and non assessable common shares of the company.  The calculation of the number of shares issued will be based on a thirty-day average of the highs of the stocks value on the exchange.

2.2 The Contract Rate is inclusive of any tax. To the extent that the Consultant is required to collect and remit any tax.

2.3 Bonuses. The Company in its sole discretion may choose to pay the Consultant bonuses or other discretionary payments. 

2.4 Incentive Plans. The Company in its sole discretion may choose to provide the Consultant with short or long term incentive plans or other discretionary investment opportunities, such as 

2

stock options. Any such remuneration will be provided in accordance with the plan documents (i.e. share purchase agreement). 

2.5 No Deductions. The Company will not make any statutory source deductions from the compensation payable to the Consultant under this Agreement, such as, but not limited to federal income tax, provincial income tax, Canada Pension Plan and Employment Insurance. The Consultant is solely responsible for withholding and remitting any local, provincial, or federal payroll-related taxes or assessments related to performance of the Services.

2.6 No Benefits. The Consultant is not entitled to any benefits or privileges that may be provided by the Company to its Consultants.

2.7 Expenses. The Company will pay the Consultant for all reasonable out of pocket expenses incurred by the Consultant in carrying out the Services provided they are pre-approved by the Company and individually listed as a separate line item on the Consultant’s invoice for Services. 

3. GENERAL OBLIGATIONS 

3.1 The Consultant is solely responsible for the Consultant’s registration and payment of assessments for coverage with the Workers Compensation Board. If requested by the Company, proof of coverage must be provided immediately. 

3.2 Indemnity of the Company. The Consultant agrees to indemnify the Company from all losses, claims, actions, damages, charges, taxes, penalties, assessments or demands (including reasonable legal fees and expenses) which may be made by the Canada Revenue Agency, Employment Insurance Plan, the Canada Pension Plan, the Workers Compensation Plan, or related plans or organizations requiring the Company to pay an amount under the applicable statutes and regulations in relation to any Services provided to the Company pursuant to this Agreement.

3.3 Indemnity of the Consultant. The Company agrees to indemnify the Consultant from all losses, claims, actions, damages, assessments or demands (including reasonable legal fees and expenses) made against the Consultant which result from the Consultant’s actions, omission or negligence in the performance of the Services. The Company will not indemnify the Consultant where the Consultant’s actions or omissions are fraudulent. 

3.4 Company’s Policies. The Consultant is bound by the various policies of the Company and notwithstanding that those policies may be varied from time to time. If there is an express conflict between any such policies and this Agreement, then this Agreement governs. 

3.5 Use of the Company’s Property. The Consultant must not save, retain or store copies of any communications, documentation, records or files being the rightful property of the Company in any form outside the office or on any personal electronic device (i.e. ipod, PDA, cell phone, black berry, personal computer, mass storage device, cd, etc.) for any reason unless expressly permitted by the Company. 

3.6 Return of Company’s Property. Whenever requested by the Company and immediately upon termination of this Agreement for any reason, the Consultant will deliver to the Company all property belonging to the Company, including without limitation any keys, security cards, passwords, devices, documents, papers, plans, materials or other property, and any copies or reproductions thereof, which may have come into the Consultant’s possession during the course of the Consultant’s engagement by the Company. For greater certainty, any communications or documentation transmitted by, received from, or stored in the Company’s computer, email or voicemail systems, regardless of any personal content, are the property of the Company.

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3.7 Non-Solicitation. During the Term of this Agreement, the Consultant will not: 

			
	 

	(a) 

	solicit or entice, or attempt to solicit or entice, either directly or indirectly, any supplier, Consultant, Consultant, customer or prospective customer of the Company as at the date of termination of this Agreement, to become a supplier, Consultant, Consultant, or customer of any business or enterprise that competes with the Company;

	 

	 

	 

	 

	(b) 

	Solicit or entice, or attempt to solicit or entice, either directly or indirectly, any Consultant or Consultant of the Company as at the date of termination of this Agreement, to become an Consultant or Consultant of any business or enterprise that competes with the Company.

3.8 Not in Breach of Prior Agreements. The Consultant represents that his performance of all the terms of this Agreement do not and will not breach any fiduciary or other duty or any covenant, agreement or understanding (including any agreement relating to any proprietary information, knowledge or data acquired by the Consultant in confidence, trust or otherwise prior to the Effective Date) to which the Consultant is a party or by the terms of which the Consultant may be bound. The Consultant agrees that he will not disclose to the Company, or induce the Company to use any proprietary information, knowledge or data belonging to any previous Company or others. The Consultant further agrees not to enter into any agreement or understanding, either written or oral, in conflict with the provisions of this Agreement. 

4. CONFIDENTIAL INFORMATION & INTELLECTUAL PROPERTY 

4.1 Confidential Information. For purposes of this agreement, the term “Confidential Information” means all of the following materials and information (whether or not reduced to writing and whether or not patentable or protectible by copyright) which the Consultant receives, received access to, conceived or developed, in whole or part, directly or indirectly, in connection with its relationship with the Company or in the course of providing the Services to the Company (in any capacity, whether executive, managerial, planning, technical, sales, research, development, manufacturing, engineering or otherwise) or through the use of any of the Company’s facilities or resources: 

			
	 

	(a) 

	business plans, strategies, tactics, policies, resolutions, patent applications, trademark applications, trade name applications and industrial design applications, intellectual property, software, hardware use;

	 

	 

	 

	 

	(b) 

	litigation, negotiations or contractual arrangements;

	 

	 

	 

	 

	(c) 

	financial information, including but not limited to, cost, pricing, performance data, debt arrangements, equity structure, interests and holdings;

	 

	 

	 

	 

	(d) 

	operational and scientific information, including but not limited to, marketing, research techniques, exploration techniques, trade secrets, product specifications, data, data base information, know-how, methodologies, formula, models, compositions, processes, improvements, devices, inventions, discoveries, concepts, ideas, designs, sketches, photographs, graphs, drawings, notes, samples, past, current and planned research and development, systems, structures and architectures and related processes (collectively, the “Works”);

	 

	 

	 

	 

	(e) 

	marketing information, including but not limited to, current and planned marketing activities, methods and processes, marketing strategies, advertising strategies, customer or client lists, current and anticipated customer or client requirements, price lists and methodologies, marketing research methodologies, market studies, sales and marketing plans and information concerning customers, clients or suppliers, and strategies for attracting and dealing with customers or clients, including information relevant to the design and implementation of marketing plans and advertising campaigns;

	 

	 

	 

	 

	(f) 

	personnel information, including but not limited to, the names and backgrounds of key personnel, personnel lists, résumés, personnel data, including information about compensation and benefits, organization structure, performance evaluations of personnel of the Company and personnel training techniques and materials;

	 

	 

	 

	 

	(g) 

	any and all information concerning the business and affairs of the Company which the Company treats as proprietary and confidential and which is not in the public domain;

	 

	 

	 

	 

	(h) 

	any other information, however documented, of the Company that is a trade secret under any applicable legislation or at common law; and

			
	 
	(i) 

	all ideas, which are derived from or related to the Consultant’s access to or knowledge of any of the above, enumerated materials and information.

4.2 Failure to mark any of the Confidential Information as confidential, proprietary or protected information does not affect its status as part of the Confidential Information under the terms of this Agreement. 

4.3 For purposes of this Agreement, the information that would otherwise be Confidential Information, which is or becomes publicly available without breach of: 

			
	 

	(a) 

	this Agreement;

	 

	 

	 

	 

	(b) 

	any other agreement or instrument to which the Company is a party or a beneficiary; or

	 

	 

	 

	 

	(c) 

	any duty owed to the Company by the Consultant or any third party;

(“Available Information”) 

is not Confidential Information, provided, however, that the Consultant acknowledges and agrees that if the Consultant seeks to disclose, divulge, reveal, report, publish, transfer or use, for any purpose, any Available Information, the Consultant bears the burden of proving that such information is Available Information. 

4.4 Definition of Intellectual Property. For purposes of this Agreement, the term “Intellectual Property” means all Works, trademarks, trademark applications, patents, patent applications, copyright materials, trade names, trade name applications, industrial designs, and applications to register designs. 

4.5 Treatment of Information. The Consultant acknowledges that as a result of his relationship with the Company, the Consultant may use, acquire or add to Confidential Information or Intellectual Property. 

4.6 The Consultant will not at any time during or following the term of this Agreement, directly or indirectly, disclose, divulge, reveal, report, publish, transfer or use for any purpose any of the 

5

Confidential Information, except with the prior written consent of the Company, or except if the Consultant is acting as a Consultant of the Company solely for the benefit of the Company in connection with the Company’s business and in accordance with the Company’s business practices and policies. 

4.7 Disclosure of any Confidential Information is not prohibited if the disclosure is directly pursuant to a valid and existing order of a court or other governmental body or agency within Canada or the United States of America; provided, however, that: 

			
	 

	(a) 

	the Consultant will first have given prompt notice to the Company of any possible or prospective order (or proceeding pursuant to which any order may result); and

	 

	 

	 

	 

	(b) 

	the Company will have been afforded a reasonable opportunity to prevent or limit any disclosure.

4.8 Ownership of Information and Intellectual Property. Subject to Section 4.11, the Consultant acknowledges and agrees that all rights, title and interest in any Confidential Information or Intellectual Property remains the exclusive property of the Company. Accordingly, the Consultant specifically agrees and acknowledges that it has no interest in the Confidential Information or Intellectual Property, notwithstanding the fact that the Consultant may have created or contributed to the creation of or its name or Consultant’s name is used in association with such Confidential Information or Intellectual Property. 

4.9 Waiver of Moral Rights. The Consultant waives all moral rights to any such Intellectual Property, including, but not limited to, the right to the integrity of the Intellectual Property, the right to be associated with the Intellectual Property as its author by name or under a pseudonym and the right to remain anonymous. 

4.10 Disclosure of Intellectual Property. The Consultant will immediately disclose to the Company all Intellectual Property developed in whole or in part by the Consultant during the term of this Agreement and to assign to the Company any right, title or interest the Consultant may have in the Intellectual Property. The Consultant will execute any instruments and to do all other things reasonably requested by the Company (both during and after termination of this Agreement) in order to vest more fully in the Company all ownership rights in those items transferred by it to the Company. 

4.11 Sections 4.5 to 4.10 do not apply in respect of any invention, copyrighted material, trademarks, patents or other intellectual property, including applications therefore, where: 

				
	 

	(a) 

	no equipment, supplies, facility, Confidential Information or Intellectual Property of the Company was used, which was developed entirely on the Consultant’s own time, and which does not:

	 

	 

	 

	 

	 

	 
	(i) 

	relate to the business of the Company;

	 

	 

	 

	 

	 

	 
	(ii) 

	relate to the Company’s actual or demonstrably anticipated processes, research or development; or

	 

	 

	 

	 

	 

	 
	(iii) 

	result from any work performed by the Consultant for the Company; or

	 

	 

	 

	 

	 

	(b) 

	The Consultant owned or had an interest in, or were conceived of, created, or first reduced to practice, prior to his or her employment with the Company, provided they are listed by the Consultant and attached as a Schedule to this Agreement. The Company agrees to keep the Schedule in confidence.

4.12 Use of Consultant’s Name, Image, etc. The Company may use the Consultant’s name, image, appearance, likeness and form, without limitation, in connection with the Company, including but not limited to the creation, development, production, manufacture, distribution, promotion and use of its products and services, during the term of this Agreement and for a period of one (1) years from the date of termination of this Agreement, regardless of whether the termination is voluntary or involuntary.

5. MISCELLANEOUS 

5.1 Severability. If any provision of this Agreement is determined by a court or tribunal of competent jurisdiction to be invalid, illegal or otherwise void or unenforceable for any reason whatsoever, then such provision will be severed from this Agreement and will not affect the validity of the remainder of this Agreement and this Agreement will be construed as if such provision had never been contained in this Agreement. All other provisions of this Agreement will, nevertheless, remain in full force and effect and no provision will be deemed dependent upon any other provision unless so expressed in this Agreement. 

5.2 Non-Waiver. The failure of either party to insist upon strict performance of any of the terms and conditions of this Agreement will not be deemed a waiver of any rights or remedies that either party has and will not be deemed a waiver of any subsequent default of the terms and conditions of this Agreement. 

5.3 No Assignment by Consultant. The Consultant must not assign either this Agreement or any benefit or interest granted by it without the prior written consent of the Company. 

5.4 No Subcontracting by Consultant. The Consultant will not subcontract all or any portion of the Services required to be performed under this Agreement without prior written consent of the Company. 

5.5 Successors. This Agreement will operate to the benefit of and is binding upon the Company and the Consultant and their respective heirs, executors, administrators, successors and permitted assigns. 

5.6 Notices. Any notice required or permitted to be given to either party must be delivered by hand or personally to the party’s address last known to the other party and will be deemed to be received on the date of hand delivery or personal delivery to such address. Personal delivery will include delivery by a commercial courier. 

5.7 Survival. The Consultant’s obligations contained in Sections 1.5, 1.6, 2.6, 3.3, 3.4, 3.6 to 3.9 and 4 will survive termination of this Agreement. 

5.8 Governing Law. This Agreement will be governed by and interpreted in accordance with laws of The State of Nevada that may be applicable.. 

5.9 Independent Legal Advice. The Consultant acknowledges that it has read and understands this Agreement, and acknowledges that it has had the opportunity to obtain independent legal advice with respect to it.

5.10 Headings. The headings utilized in this Agreement have been inserted for convenience of reference only and in no way define, limit, or enlarge the scope or meaning of the provisions of this Agreement. 

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5.11 Execution in Counterparts. This Agreement may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument. 

5.12 Entire Agreement. This Agreement and any documents and instruments referred to in this Agreement contain the whole agreement between the Consultant and the Company with respect to the Consultant’s engagement by the Company and there are no representations, warranties, collateral terms or conditions, express or implied, other than as set forth in this Agreement. This Agreement supersedes any written or oral agreement or understanding between the Consultant and the Company.

5.13 Amendments. No amendment, change, modification or addition to this Agreement will be valid unless made in writing and executed by the Company and the Consultant.

IN WITNESS WHEREOF, the Company and the Consultant have executed this Agreement as of the 1st day of October, 2014.

Brett Everett____________________________

Microelectronics Technology Company

Diane Camet______________________________

Zoom 

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