EMPLOYMENT AGREEMENT
Exhibit 10.12
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
made and entered into effective as of June 16, 2017 (the
“Effective Date”), by and between Super League Gaming,
Inc., a Delaware corporation (“COMPANY”), and Xxx Xxxx,
an individual (“EXECUTIVE”). This Agreement shall amend
and supersede that certain Employment
WITNESSETH:
WHEREAS, COMPANY
and EXECUTIVE deem it to be in their respective best interests to
enter into an agreement providing for COMPANY’s employment of
EXECUTIVE pursuant to the terms herein stated.
NOW,
THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, it is hereby agreed as
follows:
1. Term. COMPANY
hereby employs and EXECUTIVE hereby accepts employment with COMPANY
for a period of three (3) years beginning on the Effective Date
(“Initial Term”). Unless COMPANY or EXECUTIVE provides
written notice that this Agreement shall be allowed to expire and
the employment relationship thereby terminated at least thirty (30)
days prior to the expiration of the Initial Term or any Renewal
Term (as defined herein), this Agreement shall continue in effect
for successive periods of one (1) year (each such one (1) year
period being a “Renewal Term”; collectively, the
Initial Term and all Renewal Terms under this Agreement being the
“Term”).
2. Duties of
EXECUTIVE; Chairman Role. EXECUTIVE’s position with COMPANY
shall be Chief Executive Officer, President and Chairman. EXECUTIVE
shall do and perform all services reasonably necessary or advisable
to accomplish the objectives of the COMPANY’s Board of
Directors. EXECUTIVE shall report to the Board. EXECUTIVE reserves
the right to resign for Good Reason (as defined
below).
3. Devotion of Time to
Company’s Business. EXECUTIVE shall be a full-time EXECUTIVE
of COMPANY and shall devote such substantial and sufficient amounts
of her productive time, ability, and attention to the business of
COMPANY during the Term of this Agreement as may be reasonable and
necessary to accomplish the objectives and complete the tasks
assigned to EXECUTIVE. EXECUTIVE may devote reasonable time to
activities other than those required under this Agreement,
including activities involving professional, charitable, community,
educational, religious and similar types of organizations, speaking
engagements, membership on the boards of directors of other
organizations and similar types of activities to the extent that
such activities do not inhibit or prohibit the performance of
services under this Agreement.
4. Uniqueness of
Services. EXECUTIVE hereby acknowledges that the services to be
performed by her under the terms of this Agreement are of a special
and unique value. Accordingly, the obligations of EXECUTIVE under
this Agreement are non-assignable.
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5. Compensation of
EXECUTIVE.
a. Base Annual Salary.
Subject to other specific provisions in this Agreement, as
compensation for services hereunder, EXECUTIVE shall receive a Base
Annual Salary of $400,000 USD payable in accordance with the
Company’s ordinary payroll practices. On each anniversary
date hereof, EXECUTIVE’s Base Annual Salary will be reviewed
and may be increased at the sole discretion of the COMPANY’S
Board of Directors.
b. Annual Cash Bonus.
EXECUTIVE shall be entitled to receive cash bonuses as may be
determined from time to time by the Company’s Board of
Directors and Compensation Committee.
c. Common Stock
Purchase Warrant. EXECUTIVE is hereby granted a common stock
purchase warrant (“Warrant”), in the form attached
hereto as Exhibit A, in the amount of Three Hundred Thousand
(300,000) shares, exercisable for a period of ten (10) years from
the Effective Date and bearing an exercise price of $3.60 per
share. The Warrant will be exercisable, to the extent vested, by
EXECUTIVE at any time during the ten (10) year Warrant term without
regard for any termination of EXECUTIVE’s employment. The
Warrant is expressly subject to the following vesting
schedule:
i.
Time-Based
Vesting.
(a) The Warrant will
vest at the rate of 1/48th on the 15th calendar day of each month
commencing July 15, 2017 and ending June 15, 2023 (i.e., 300,000/48
= 6,250 shares vest per month), except as provided in Section
5.c.ii immediately below.
ii.
Accelerated Vesting
on a Change in Control Transaction (defined below).
(a) The Warrant shall
vest in full (prior to the date otherwise becoming time-vested
above) immediately prior to the closing of a Change of Control
Transaction involving the COMPANY (i.e., a sale of all or
substantially all of the assets of the COMPANY or a merger, sale of
shares or other transaction whereby the voting shareholders of the
COMPANY, collectively, prior to the close of such transaction do
not hold a majority voting interest in the post-transaction in the
Company on a post-transaction basis.
d. Health Insurance.
EXECUTIVE and her dependents shall be entitled to participate in
the health insurance plan offered to COMPANY employees, and the
Company will pay 90% of the premium related thereto.
e. 401(k). EXECUTIVE
will be permitted to participate in the Company’s 401(k) Plan
upon the Board of Directors electing to institute it.
f. Business Expenses.
COMPANY will reimburse EXECUTIVE for all reasonable business
expenses directly incurred in performing EXECUTIVE’s duties
and promoting the business of COMPANY.
6.
Termination of
Employment.
a. In the event
COMPANY should terminate EXECUTIVE’s employment
other
than for “Cause” as defined in Section 6(b) below or
EXECUTIVE resigns for “Good Reason” as defined in
Section 6(c) below (either such termination a “Severance
Termination”), EXECUTIVE shall receive the
following:
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x. Xxxxxxxxx
Termination prior to six (6) month anniversary of Effective Date
shall result in the following:
(a)
Accrued
Obligations (defined in Section 6(d) below);
(b)
Cash
equal to the greater of (I) Annual Salary for one and one-half
(1.5) years, payable 50% upon termination date, 25% at 90-day
anniversary of termination date, and 25% at 180-day anniversary of
termination date; and (II) the remaining Term of the Agreement;
and
(c)
Additional eighteen
(18) months’ vesting of Warrant.
b. COMPANY shall have
the right to terminate EXECUTIVE’s employment at any time for
Cause by giving EXECUTIVE written notice of the effective date of
termination. For the purposes of this Agreement,
“Cause” shall mean:
i. Fraud,
misappropriation, embezzlement or any other action of material
misconduct against COMPANY or any of its affiliates or
subsidiaries;
ii.
Substantial willful
failure to render services in accordance with the provisions of
this Agreement (for which purpose, no act or omission to act will
be “willful” if conducted in good faith or with a
reasonable belief that such conduct was in the best interests of
COMPANY), provided that:
(a)
a
written demand for performance has been delivered to EXECUTIVE at
least ten (10) days prior to termination identifying the manner in
which COMPANY believes that EXECUTIVE has failed to perform;
and
(b)
EXECUTIVE has thereafter failed to remedy such failure to
perform;
iii.
Material violation
of any law, rule or regulation of any governmental or regulatory
body material to the business of COMPANY;
iv.
Conviction or a guilty
plea or nolo contendere plea to a felony;
v.
Repeated and
persistent material failure to abide by the policies established by
COMPANY after written warning from COMPANY;
vi.
Any acts of
violence or threats of violence made by EXECUTIVE against COMPANY
or anyone associated with COMPANY’s business;
vii.
The solicitation or
acceptance of payment or gratuity from any existing or potential
customer or supplier of COMPANY without the prior written
consent
of COMPANY’s Board of Director’s; or
viii.
Drug dependency or
habitual insobriety.
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c. EXECUTIVE shall
have the right to terminate employment at any time without Good
Reason by giving COMPANY written notice of the effective date of
termination. For the purposes of this Agreement, “Good
Reason” shall mean:
i. Any material
adverse change in EXECUTIVE’s title, duties or
responsibilities (including reporting
responsibilities);
ii. Any reduction of
EXECUTIVE’s Base Annual Salary;
iii. Any
relocation, without EXECUTIVE’s written consent, of
EXECUTIVE’s principal office of employment by more than 35
miles from the location applicable on the Effective Date;
or
iv. Any failure of
COMPANY to assign or of a successor of COMPANY to assume the
obligations of COMPANY under this Agreement.
d. In the event of
termination for Cause by COMPANY or termination without Good Reason
by EXECUTIVE, EXECUTIVE shall be paid EXECUTIVE’s Base Annual
Salary and accrued vacation through the effective date of
termination on the date of termination, EXECUTIVE’s business
expenses incurred through the date of termination in accordance
with Section 3(g), and EXECUTIVE’s accrued and vested
employee benefits pursuant to Section 3(e) and (f) in accordance
with the applicable benefit plan (collectively, all such amounts
under this sentence being the “Accrued Obligations”).
After the effective date of Termination, EXECUTIVE shall not be
entitled to accrue or vest in any further salary, severance pay,
stock options, benefits, fringe benefits or entitlements; provided
that EXECUTIVE shall retain the right to exercise the portion of
the Warrant that has vested as of the effective date of termination
as provided above.
e. COMPANY may
terminate EXECUTIVE’s employment in the event that: (i)
EXECUTIVE fails or is unable to perform EXECUTIVE’s duties
due to injury, illness or other incapacity for ninety (90) days in
any twelve (12) month period (except that EXECUTIVE may be entitled
to disability payments pursuant to COMPANY’s disability plan,
if any); or (ii) Death of EXECUTIVE .
7. Covenant of
Confidentiality. All documents, records, files, manuals, forms,
materials, supplies, computer programs, trade secrets and other
information which comes into EXECUTIVE’s possession from time
to time during EXECUTIVE’s employment by COMPANY and/or any
of COMPANY’s subsidiaries or affiliates, shall be deemed to
be confidential and proprietary to COMPANY and shall remain the
sole and exclusive property of COMPANY. EXECUTIVE acknowledges that
all such confidential and proprietary information is confidential
and proprietary and not readily available to COMPANY’s
business competitors. On the effective date of the termination of
the employment relationship or at such other date as specified by
COMPANY, EXECUTIVE agrees that she will return to COMPANY all such
confidential and proprietary items (including, but not limited to,
Company marketing material, business cards, keys, etc.) in her
control or possession, and all copies thereof, and that she will
not remove any such items from the offices of COMPANY.
8. Covenant of
Non-Disclosure. Without the prior written approval of COMPANY
EXECUTIVE except as required to discharge EXECUTIVE’s duties
under this Agreement, EXECUTIVE shall keep confidential and not
disclose or otherwise make use of any of the confidential or
proprietary information or trade secrets referred to in Section 7
nor reveal the same to any third party whomsoever, except as
required by law.
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9. Covenant of
Non-Solicitation. During the Term of this Agreement and for a
period of two (2) years following the effective date of
termination, EXECUTIVE, either on EXECUTIVE’s own account or
for any person, firm, Company or other entity, shall not solicit,
interfere with or induce, or attempt to induce, any EXECUTIVE of
COMPANY, or any of its subsidiaries or affiliates to leave their
employment or to breach their employment agreement, if any, with
COMPANY.
10. Covenant of
Cooperation. EXECUTIVE agrees to cooperate with COMPANY in any
litigation or administrative proceedings involving any matters with
which EXECUTIVE was involved during her employment by COMPANY.
COMPANY shall reimburse EXECUTIVE for reasonable expenses incurred
in providing such assistance.
11. Covenant Against
Competition.
a. Scope and Term.
During the Term of this Agreement and for an additional period
ending one (1) year after the effective date of termination or
expiration of this Agreement, whichever occurs first, EXECUTIVE
shall not directly or indirectly engage in or become a partner,
officer, principal, EXECUTIVE, consultant, investor, creditor or
stockholder of any business, proprietorship, association, firm,
corporation or any other business entity which is engaged or
proposes to engage or hereafter engages in any business which
competes with the business of COMPANY and/or any of COMPANY's
subsidiaries or affiliates in any geographic area in which COMPANY
conducts business at the time of the termination or expiration of
the employment relationship.
12. Rights to
Inventions.
a. Inventions Defined.
“Inventions” means discoveries, concepts, and ideas,
whether patentable or not, relating to any present or contemplated
activity of COMPANY, including without limitation devices,
processes, methods, formulae, techniques, and any improvements to
the foregoing.
b. Application. This
Section 11 shall apply to all Inventions made or conceived by
EXECUTIVE, whether or not during the hours of her employment or
with the use of COMPANY facilities, materials, or personnel, either
solely or jointly with others, during the Term of her employment by
COMPANY and for a period of one (1) year after any termination of
such employment. This Section 12 does not apply to any invention
disclosed in writing to COMPANY by EXECUTIVE prior to the execution
of this Agreement.
c. Assignment.
EXECUTIVE hereby assigns and agrees to assign to COMPANY all of her
rights to Inventions and to all proprietary rights therein, based
thereon or related thereto, including without limitation
applications for United States and foreign letters patent and
resulting letters patent.
d. Reports. EXECUTIVE
shall inform COMPANY promptly and
fully
of each Invention by a written report, setting forth in detail the
structures, procedures, and methodology employed and the results
achieved (“Notice of Invention”). A report shall also
be submitted by EXECUTIVE upon completion of any study or research
project undertaken on COMPANY’s behalf, whether or not in
EXECUTIVE’s opinion a given study or project has
resulted in an
Invention.
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e. Patents. At
COMPANY’s request and expense, EXECUTIVE shall execute such
documents and provide such assistance as may be deemed necessary
by
COMPANY
to apply for, defend or enforce any United States and foreign
letters patent based on or related to such Inventions.
13. Remedies.
Notwithstanding any other provision in this Agreement to the
contrary, EXECUTIVE acknowledges and agrees that if EXECUTIVE
commits a material breach of the Covenant of Confidentiality
(Section 7), Covenant of Non-Disclosure (Section 8), Covenant of
Non-Solicitation (Section 9), Covenant of Cooperation (Section 10),
Covenant Against Competition (Section 11) or Rights to Inventions
(Section 12), COMPANY shall have the right to have the obligations
of EXECUTIVE specifically enforced by any court having jurisdiction
on the grounds that any such breach will cause irreparable injury
to COMPANY and money damages will not provide an adequate remedy.
Such equitable remedies shall be in addition to any other remedies
at law or equity, all of which remedies shall be cumulative and not
exclusive. EXECUTIVE further acknowledges and agrees that the
obligations contained in Sections 7 through 12, of this Agreement
are fair, do not unreasonably restrict EXECUTIVE’s future
employment and business opportunities, and are commensurate with
the compensation arrangements set out in this
Agreement.
14. Survivability.
Sections 7 through 13, of this Agreement, and Section 6 to the
extent required to give effect thereto, shall survive termination
of the employment relationship and this Agreement.
15. General
Provisions.
a. Arbitration. Any
controversy involving the construction, application, enforceability
or breach of any of the terms, provisions, or conditions of this
Agreement, including without limitation, claims for breach of
contract, violation of public policy, breach of implied covenant,
intentional infliction of emotional distress or any other
alleged claims which are
not settled by mutual agreement of the parties, shall be submitted
to final and binding arbitration before a single arbitrator in
accordance with the rules of the American Arbitration Association
with respect to employment disputes in Los Angeles County,
California. The cost of the arbitrator shall be borne by COMPANY,
and each party shall be responsible for such party’s own
attorneys’ fees and litigation costs (other than costs of
arbitrator). In consideration of each party’s agreement to
submit to arbitration any and all disputes that arise under this
Agreement, each party agrees that the arbitration provisions of
this Agreement shall constitute her/its exclusive remedy and each
party expressly waives the right to pursue redress of any kind in
any other forum. The parties further agree that the arbitrator
acting hereunder shall not be empowered to add to, subtract from,
delete or in any other way modify the terms of this Agreement.
Notwithstanding the foregoing, any party shall have the limited
right to seek equitable relief in the form of a temporary
restraining order or preliminary injunction in a
court
of competent jurisdiction to protect itself from actual or
threatened irreparable injury resulting from an alleged breach of
this Agreement pending a final decision in
arbitration.
b. Authorization.
COMPANY and EXECUTIVE each represent and warrant to the other that
it has the authority, power and right to deliver, execute and fully
perform the terms of this Agreement.
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c. Entire Agreement.
EXECUTIVE understands and acknowledges that this document
constitutes the entire agreement between EXECUTIVE and COMPANY with
regard to EXECUTIVE’s employment by COMPANY and
EXECUTIVE’s post-employment activities concerning COMPANY.
This Agreement supersedes any and all other written and oral
agreements between the parties with respect to the subject matter
hereof. Any and all prior agreements, promises, negotiations, or
representations, either written or oral, relating to the subject
matter of this Agreement not expressly set forth in this Agreement
are of no force and effect. This Agreement may be altered, amended,
or modified only in writing signed by all of the parties hereto.
Any oral representations or modifications concerning this
instrument shall be of no force and effect.
d. Severability. If
any term, provision, covenant, or condition of this Agreement is
held by a court or other tribunal of competent jurisdiction to be
invalid, void, or unenforceable, the remainder of such provisions
and all of the remaining provisions hereof shall remain in full
force and effect to the fullest extent permitted by law and shall
in no way be affected, impaired, or invalidated as a result of such
decision.
e. Governing Law.
Except to the extent that federal law may preempt California law,
this Agreement and the rights and obligations hereunder shall be
governed, construed and enforced in accordance with the laws of the
State of California.
f. Taxes. All
compensation payable hereunder is gross and shall be subject to
such withholding taxes and other taxes as may be provided by law.
EXECUTIVE shall be responsible for the payment of all taxes
attributable to the compensation provided by this Agreement except
for those taxes required by law to be paid or withheld by
COMPANY.
g. Assignment. This
Agreement shall be binding upon and inure to the benefit of the
successors and assigns of COMPANY. EXECUTIVE may not sell,
transfer, assign, or pledge any of her rights or interests pursuant
to this Agreement. In the event of EXECUTIVE’s death,
EXECUTIVE’s estate shall succeed to all rights of EXECUTIVE
as effective at such time (including under Sections 5(d), 5(e) and
6).
h. Waiver. Either
party’s failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any
such provision or provisions, or prevent that party thereafter from
enforcing such provision or provisions and each and every other
provision of this Agreement.
i. Captions. Titles
and headings to sections in this Agreement are for the purpose of
reference only and shall in no way limit, define, or otherwise
affect any provisions contained therein.
j. Breach - Right to
Cure. A party shall be deemed in breach of this Agreement only upon
the failure to perform any obligation under this Agreement after
receipt of written notice of breach and failure to cure such breach
within ten (10) days thereafter; provided, however, such notice
shall not be required where a breach or threatened breach would
cause irreparable harm to the other party and such other party may
immediately seek equitable relief in a court of competent
jurisdiction to enjoin such breach.
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k. All notices,
demands and all other communications required or otherwise provided
for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered either personally, by reputable
overnight courier or three (3) business days after
deposit
via United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to
EXECUTIVE:
At
EXECUTIVE’s last known address shown on the Company’s
payroll records
If to
the Company:
Attn:
Xxxxxxx X. Xxxxxx; General Counsel Super League Gaming,
Inc.
0000
Xxxxxxxx Xxx.
Xxxxx
Xxxxxx, XX 00000
or to
such other address as any party may have furnished to the other in
writing in accordance with this Agreement, except that notices of
change of address shall be effective only upon
receipt.
16. Acknowledgement.
EXECUTIVE acknowledges that he has been given a reasonable period
of time to study this Agreement before signing it. EXECUTIVE
certifies that he has fully read, has received an explanation of,
and completely understands the terms, nature, and effect of this
Agreement. EXECUTIVE further acknowledges that he is executing this
Agreement freely, knowingly, and voluntarily and that
EXECUTIVE’s execution of this Agreement is not the result of
any fraud, duress, mistake, or undue influence whatsoever. In
executing this Agreement, EXECUTIVE does not rely on any
inducements, promises, or representations by COMPANY other than the
terms and conditions of this Agreement.
17. Section 409A. The
parties intend that all payments and benefits under this Agreement
comply with Section 409A of the Code and the regulations
promulgated thereunder (collectively “Section 409A”)
and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted in a manner in compliance therewith. To the
extent that any provision hereof is modified in order to comply
with Section 409A, such modification shall be made in good faith
and shall, to the maximum extent reasonably possible, maintain the
original intent and economic benefit to EXECUTIVE and COMPANY of
the applicable provision without violating the provisions of
Section 409A. No amount shall be payable pursuant to Section 6 or
otherwise upon a termination of EXECUTIVE’s employment unless
such termination constitutes a “separation from
service” with COMPANY under Section 409A. To the maximum
extent permitted by applicable law, amounts payable to EXECUTIVE
pursuant to such Sections herein shall be made in reliance upon the
exception for certain involuntary terminations under a separation
pay plan or as short-term deferral under Section 409A. To the
extent that reimbursements or other in-kind benefits under this
Agreement constitute nonqualified deferred compensation, (i) all
expenses or other reimbursements hereunder shall be made on or
prior to the last day of the taxable year following the taxable
year in which such expenses were incurred by EXECUTIVE, (ii) any
right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and (ii) no such
reimbursement, expenses eligible for reimbursement, or in-kind
benefits provided in any taxable year shall in any way affect the
expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year. For purposes of Section 409A,
EXECUTIVE’s right to receive installment payments pursuant to
this Agreement shall be treated as a right to receive a series of
separate and distinct payments. Any other provision of this
Agreement to the contrary notwithstanding, in no event shall any
payment or benefit under this Agreement that constitutes
nonqualified deferred compensation for purposes of Section 409A be
subject to offset by any other amount unless otherwise permitted by
Section 409A.
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18. Effective Only Upon
Execution by Authorized Officer of COMPANY; Counterparts. This
Agreement shall have no force or effect and shall be unenforceable
in its entirety until it is executed by a duly authorized officer
of COMPANY and such executed Agreement is delivered to EXECUTIVE.
This Agreement may be executed in counterparts, each being an
original and all such counterparts together constituting one and
the same instrument.
IN
WITNESS WHEREOF, the parties hereto have read, understood, and
voluntarily executed this Agreement as of the day and year first
above written.
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EXECUTIVE
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COMPANY
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/s/ Xxx
Xxxx
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By: /s/ Xxxxx
Xxxxxxxxxxx
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Xxx Xxxx
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Xxxxx
Xxxxxxxxxxx
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Co-Founder &
CTO
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Exhibit A
Common Stock Purchase Warrant
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THE
SECURITIES REPRESENTED BY THIS COMMON STOCK PURCHASE WARRANT HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SHARES UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE SECURITIES ACT. ANY
SUCH TRANSFER MAY ALSO BE SUBJECT TO COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS AND THE LAWS OF OTHER APPLICABLE
JURISDICTIONS.
COMMON
STOCK PURCHASE WARRANT
For the
Purchase of 300,000 Shares of Common Stock, $0.001 par value
of
SUPER LEAGUE GAMING, INC.
A
Delaware Corporation
For
value received, XXX XXXX
(the “Holder”), or its assigns, is entitled to, on or
before the date specified below on which this Common Stock Purchase
Warrant (the “Warrant”) expires, but not thereafter, to
subscribe for, purchase and receive the number of fully paid and
non-assessable shares of the common stock, $0.001 par value (the
“Common Stock”), of Super League Gaming, Inc., a
Delaware corporation (the “Company”) set forth above,
at a price of $3.60 per share (the “Exercise Price”),
upon presentation and surrender of this Warrant and upon payment by
wire transfer or bank check of the Exercise Price for such shares
of Common Stock to the Company at its principal office. The Warrant
will vest at the rate of 1/36th per month in arrears, subject to
acceleration of all unvested shares upon a change of control of the
Company consisting of a sale of all
or substantially all of the assets of the Company, or a merger,
sale of shares or other transaction whereby the voting shareholders
of the Company, collectively, prior to the close of such
transaction do not hold a majority voting interest in the Company
on a post-transaction basis.
1. Exercise of Warrant. This
Warrant may be exercised in whole or in part, from time to time and
expressly subject to satisfaction of vesting conditions, commencing
on the date hereof (the “Issue Date”) and expiring on
the tenth (10th) anniversary
date hereof, by presentation and surrender hereof to the Company,
with the Exercise Form annexed hereto duly executed and accompanied
by payment by wire transfer or bank check of the Exercise Price for
the number of shares specified in such form, together with all
federal and state taxes applicable upon such exercise, if any. If
this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the right of the Holder to
purchase the balance of the shares purchasable hereunder. Upon
receipt by the Company
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of this
Warrant and the Exercise Price at the office of the Company, in
proper form for exercise, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such
exercise, notwithstanding that certificates representing such
shares of Common Stock shall not then be actually delivered to the
Holder. If the subscription rights represented hereby shall not be
exercised at or before 5:00 P.M., Pacific Time, on the expiration
date specified above, this Warrant shall become void and without
further force or effect, and all rights represented hereby shall
cease and expire.
2. Rights of the Holder. Prior to
exercise of this Warrant, the Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either
at law or equity, and the rights of the Holder are limited to those
expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein.
3. Adjustment in Number of
Shares.
(A) Adjustment for
Reclassifications. In case at any time, or from time to
time, after the Issue Date the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received,
or, on or after the record date fixed for the determination of
eligible stockholders, shall have become entitled to receive,
without payment therefore, other or additional stock or other
securities or property (including cash) by way of stock-split,
spinoff, reclassification, combination of shares or similar
corporate rearrangement (exclusive of any stock dividend of its or
any subsidiary’s capital stock), then and in each such case
the Holder(s) of this Warrant, upon the exercise hereof as provided
in Section 1, shall be entitled to receive the amount of stock and
other securities and property which such Holder(s) would hold on
the date of such exercise if on the Issue Date they had been the
holder of record of the number of shares of Common Stock of the
Company called for on the face of this Warrant and had thereafter,
during the period from the Issue Date, to and including the date of
such exercise, retained such shares and/or all other or additional
stock and other securities and property receivable by them as
aforesaid during such period, giving effect to all adjustments
called for during such period. In the event of a declaration of a
dividend payable in shares of any equity security of a subsidiary
of the Company, then the Company may cause to be issued a warrant
to purchase shares of the subsidiary (“Springing
Warrant”) in an amount equal to such number of shares of the
subsidiary’s securities to which the Holders would have been
entitled, but conditioned upon the exercise of this Warrant as a
prerequisite to receiving the shares issuable pursuant to the
Springing Warrant.
(B) Adjustment for Reorganization,
Consolidation, Merger. In case of any reorganization of the
Company (or any other corporation the stock or other securities of
which are at the time receivable on the exercise of this Warrant)
after the Issue Date, or in case, after such date, the Company (or
any such other corporation) shall consolidate with or merge into
another corporation or convey all or substantially all of its
assets to another corporation, then and in each such case the
Holder(s) of this Warrant, upon the exercise hereof as provided in
Section 1, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive, in lieu of the stock or
other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities
or property to which such Holder(s) would be entitled had the
Holders exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided herein; 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.
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4. Officer’s Certificate.
Whenever the number of shares of Common Stock issuable upon
exercise of this Warrant or the Exercise Price shall be adjusted as
required by the provisions hereof, the Company shall forthwith file
in the custody of its Secretary at its principal office, an
officer’s certificate showing the adjusted number of shares
of Common Stock or Exercise Price determined as herein provided and
setting forth in reasonable detail the facts requiring such
adjustment. Each such officer’s certificate shall be made
available at all reasonable times for inspection by the Holder(s)
and the Company shall, forthwith after each such adjustment,
deliver a copy of such certificate to the Holder(s). Such
certificate shall be conclusive as to the correctness of such
adjustment.
5. Restrictions on Transfer.
Certificates for the shares of Common Stock to be issued upon
exercise of this Warrant shall bear the following
legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SHARES UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE SECURITIES ACT. ANY
SUCH TRANSFER MAY ALSO BE SUBJECT TO COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS AND THE LAWS OF OTHER APPLICABLE
JURISDICTIONS.
The
Holder, by acceptance hereof, agrees that, absent an effective
registration statement under the Securities Act of 1933, as amended
(the “Act”), covering the disposition of this Warrant
or the Common Stock issued or issuable upon exercise hereof, such
Holder(s) will not sell or transfer any or all of this Warrant or
such Common Stock without first providing the Company with an
opinion of counsel reasonably satisfactory to the Company to the
effect that such sale or transfer will be exempt from the
registration and prospectus delivery requirements of the Act. The
Holder agrees that the certificates evidencing the Warrant and
Common Stock which will be delivered to the Holder by the Company
shall bear substantially the following legend: The Holder of this
Warrant, at the time all or a portion of such Warrant is exercised,
agrees to make such written representations to the Company as
counsel for the Company may reasonably request, in order that the
Company may be reasonably satisfied that such exercise of
the Warrant and
consequent issuance of Common Shares will not violate the
registration and prospectus delivery requirements of the Act, or
other applicable state securities laws.
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6. Loss or Mutilation. Upon
receipt by the Company of evidence satisfactory to it (in the
exercise of reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and (in the
case of loss, theft or destruction) of indemnity satisfactory to it
(in the exercise of reasonable discretion), and (in the case of
mutilation) upon surrender and cancellation thereof, the Company
will execute and deliver in lieu thereof a new Warrant of like
tenor.
7. Reservation of Common Stock.
The Company shall at all times reserve and keep available for issue
upon the exercise of the Warrants such number of its authorized but
unissued shares of Common Stock as will be sufficient to permit the
exercise in full of all outstanding Warrants.
8. Notices. All notices and other
communications from the Company to the Holder of this Warrant shall
be mailed by first class registered or certified mail, postage
prepaid, to the address furnished to the Company in writing by the
Holder.
9. Change; Waiver. 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.
10. Law Governing. This Warrant
shall be construed and enforced in accordance with and governed by
the laws of Delaware.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer on June 16, 2017.
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By: /s/ Xxxxx
Xxxxxxxxxxx
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Xxxxx
Xxxxxxxxxxx
Co-Founder & CTO
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NOTICE
OF EXERCISE
The undersigned
hereby elects irrevocably to exercise the within Warrant and to
purchase ___________ shares of the Common Stock of the Company
called for thereby, and hereby makes payment by bank check or wire
transfer in the amount of $_____________ (at the rate of $3.60 per
share of the Common Stock) in payment of the Exercise Price
pursuant thereto. Please issue the shares of the Common Stock as to
which this Warrant is exercised to:
____________________________
____________________________
____________________________
and if
said number of Warrants shall not be all the Warrants evidenced by
the Common Stock Purchase Warrant surrendered in connection with
this exercise, then the Company shall issue a new Warrant
Certificate for the balance remaining of such Warrants to
______________________ at the
address stated above.
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By:
__________________________
Print Name:
___________________
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