Jeffrey G. McGonegal Executive Employment Agreement dated as of February 6, 2019

i.        “Affiliate” shall mean any entity in which the Company owns, directly or indirectly, more than a twenty-five percent (25%) interest, or any entity that owns, directly or indirectly, more than a twenty-five percent (25%) interest in the Company, either as a partner, member, shareholder, joint venturer, limited liability company or other equity position or interest.

 

ii.       “Confidential Information” shall mean all confidential, proprietary, sensitive or trade secret information relating in any way to the Company’s business, Inventions (as defined below), Works (as defined below), the present or prospective Field of Business (as defined below) or interests of the Company, the Company’s products or services, or Employee’s employment with the Company, whether in oral, written, magnetic, electronic, or visual form, including without limitation, all information, data, and materials relating to business policies, procedures, models, and methods; customers, customer accounts and customer relationships; referral sources and referral relationships; business targets and prospects; inventions, patents, trademarks, and copyrights, and respective applications therefor; Property (as defined below); improvements, procedures, and know-how; trade secrets; specifications and drawings; computer software, web and software designs, graphics, content, programming, and source code and/or object code; business, product, and consumer information; data, research, and development; reports, forecasting, modeling, planning, and databases; cost and pricing data; collected information and data; process flow diagrams; bills and invoices; vendor and supplier information; products, processes, and ideas; sales, financial, business plans, and marketing information; financial statements; balance sheets; and all other information that an organization such as the Company reasonably would consider proprietary and/or confidential.

iii.      “Field of Business” shall mean the business of (1) cyptocurrency operations; (2) data center operations; and (3) any other field of business that represents a material portion of the business conducted by the Company (including its subsidiaries and Affiliates) during the Term.

 

iv.      “Property” shall mean any and all: (1) inventions, ideas, articles of manufacture, machines, compositions of matter, methods, processes, improvements, any new or useful arts, discoveries, contributions, findings or other tangible or intangible concepts, trade secrets, designs, formulae, software programming, and manufacturing techniques, whether patentable, copyrightable, or otherwise, and all related know-how, which arises out of or relates in any way to the present or prospective Field of Business or interests of the Company, the Company’s products or services or Employee’s employment with the Company whether created, conceived, reduced to practice, or contributed to, in whole or in part, by Employee at any time during Employee’s employment with the Company or at any time within one (1) year following Employee’s separation of employment with the Company for any reason whatsoever (collectively, “Inventions”); (2) all works of authorship created by Employee, in whole or in part, at any time during the period of Employee’s employment including, without limitation, written materials, computer programs, software, screen displays, advertising and marketing materials, and business materials (collectively, the “Works”); and (3) all Confidential Information.

 

v.       “Restricted Area” shall mean and include any geographic area in which (1) the Company (including its Affiliates) does business, and (2) Employee performs services for the Company or has supervisory authority.

 

vi.      “Trade Secret” means any Confidential Information described above, without regard to form, which: (1) is not commonly known by or available to the public; (2) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means to other persons who can obtain economic value from its disclosure or use; and (3) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

i.    Employee agrees that, during the course of Employee’s employment with the Company, Employee shall not accept alternative employment or engage in any independent and/or separate business activity in the Field of Business in the Restricted Area.

 

ii.    Employee agrees that, during the course of Employee’s employment with the Company, Employee shall not without prior Board approval, which will not be unreasonably withheld, serve on a corporate board as a board member, not to exceed a total of one board at any one time, nor serve on a civic or non-profit board as a board member, not to exceed a total of one such board at any one time.

 

iii.    Employee further agrees that during the term of Employee’s employment with the Company and for a period of three (3) months after Employee’s employment terminates pursuant to paragraph 6 hereof for any reason, Employee shall not:

 

iv.    Employee further agrees that during the course of Employee’s employment with the Company and for a period of three (3) months after the termination of Employee’s employment with the Company for any reason whatsoever, Employee shall not, directly or indirectly do the following:

 

i.     Employee acknowledges that Employee will use and/or have access to Confidential Information, including Trade Secrets, and that such information constitutes valuable, special and unique property of the Company.

 

ii.    Employee agrees that, during the term of Employee’s employment with the Company, and following the termination of Employee’s employment with the Company for any reason whatsoever, Employee shall: (1) maintain the Confidential Information in strict confidence; (2) not use any of the Confidential Information for any purpose whatsoever except for uses expressly authorized by the Company that are in connection with Employee’s employment with the Company; and (3) not disclose or divulge any Confidential Information, including Trade Secrets, to any person, corporation, or other entity for any reason or purpose whatsoever, except upon the direct written authorization of the Board of Directors of the Company, and that the Company shall be entitled to seek an injunction from a court restraining and enjoining Employee from the unauthorized disclosure of any such information.

 

i.    All Works shall be considered a “Work Made for Hire,” as that term is defined in the United States Copyright laws and shall be owned by and for the express benefit of the Company and the Company shall be the author of all Works.  To the extent any Works do not qualify as a “Work Made for Hire,” Employee hereby forever, irrevocably and unconditionally, assigns, transfers, and conveys to the Company all rights, title, and interest in and to all such Works.  Inventions, Trade Secrets, and trademarks, including all patent and all other intellectual property rights therein, world-wide and without exception shall be the property of Company and Employee will assign and does hereby assign all rights therein to Company.

 

ii.    Employee acknowledges and agrees that the Company is the lawful and sole and exclusive owner of all Property and that the Company owns all rights, title, and other interests thereto.  Employee hereby forever, irrevocably and unconditionally assigns, transfers and conveys to the Company all rights, title, and interest in and to all of the Property including, but not limited to, all Inventions and all copyrights, patents, trademarks, trade secrets, and all other intellectual property rights therein, world-wide and without exception.

 

iii.    No license or other rights, whether express or implied, are granted to Employee in any of the Property and Employee hereby disclaims the same.  Both during Employee’s employment with the Company and at any time thereafter, Employee shall, at no cost, fully cooperate with and assist the Company in the procurement, protection, maintenance, and enforcement of any and all rights, registrations, and perfections of all Property, including but not limited to, the filing and prosecution of all applications for registration of patents, copyrights, trademarks, and any other intellectual property rights therein.  This shall include executing, acknowledging, and delivering to the Company all documents, declarations, applications, affidavits, and papers necessary to enable the Company to procure and protect such rights.

iv.     Employee shall be required to promptly disclose all Property to the Company.  Employee shall keep accurate records relating to the conception and reduction to practice of all Inventions and records concerning the creation of all Works and other Property.  Such records shall be the sole and exclusive property of the Company and included within the definition of “Works” and “Confidential Information,” and Employee shall surrender possession of such records to the Company at any time upon the Company’s request.

 

i.   induce or attempt to induce any employee of the Company (including its subsidiaries and Affiliates) to terminate his or her employment with the Company;

 

ii.   interfere with or attempt to disrupt the relationship existing between the Company (including its subsidiaries and Affiliates) and its respective employees; or

 

iii.  solicit, hire or assist in the solicitation or hiring away of any employee of the Company (including its subsidiaries and Affiliates) to become an employee of any other business entity with which Employee is associated.

i.   Employee represents and warrants that he is under no agreements, limitations, or restrictions of any kind whatsoever that would interfere with him providing services in connection with his employment with the Company, including without limitation, non-compete agreements, non-solicitation agreements, invention agreements, work-for-hire agreements, or any similar agreements or arrangements with third parties.

 

ii.   Employee shall immediately notify the Company of any issues that arise that could conflict with the representations, warranties, and obligations set forth herein, including without limitation, any demands, claims, notices, or requests made by third parties that could adversely impact Employee’s ability to perform for the Company

 

iii.   Employee agrees to indemnify, defend, and hold the Company harmless against any claims by third parties alleging that Employee’s employment with the Company hereunder constitutes unlawful activity, breaches an obligation of Employee, or otherwise subjects the Company to potential liability as a result of such employment.  The provisions in this paragraph shall survive termination of Employee’s employment and/or this Agreement for any reason.

 

i.            Right to Injunction.  Employee acknowledges that a breach of any of the Covenants will cause irreparable damage to the Company with respect to which the Company's remedy at law for damages will be inadequate.  Therefore, in the event of breach or anticipatory breach of the Covenants, in addition to remedies otherwise available to it at law or equity, Employee and the Company agree that the Company shall be entitled to injunctions, both preliminary and permanent, enjoining or restraining such breach or anticipatory breach.  Employee acknowledges and agrees that an injunction may be issued by any court of competent jurisdiction without requiring the Company to post any bond, in addition to remedies otherwise available to the Company at law or in equity.  No remedy herein conferred upon any party is intended to be exclusive of any other remedy, and each and every such remedy shall be in addition to any other remedy existing at law or in equity.

 

ii.           Reimbursement following Breach.  In the event that any court enters a final, non-appealable judgment that Employee has breached any of the Covenants, Employee shall reimburse the Company for any payments it makes pursuant to this Agreement subsequent to such breach.  Any such reimbursements shall be in addition to any damages in the Company’s favor that the court may impose upon Employee.

 

iii.          Recovery of Costs.  In the event that the Company commences an action in any court to enforce any of the Covenants, the party against whom the court finds shall pay all expenses associated with such enforcement, including reasonable attorneys’ fees.

 

i.     Employee fails to comply with the policies, standards, and regulations that the Company, in its sole discretion, establishes and/or implements during Employee’s employment;

 

ii.    Employee commits any act of fraud, dishonesty or other acts of misconduct in the rendering of services on behalf of the Company;

 

iii.   Employee fails to faithfully, diligently or properly comply with the provisions of this Agreement and the reasonable requests of the person(s) to whom Employee reports;

 

iv.   Employee fails to adequately perform to Company’s reasonable satisfaction the usual and customary duties of Employee’s employment, those duties typically associated with Employee’s position, and/or those duties or expectations assigned by Company;

 

v.    Employee breaches any term of this Agreement; and/or

 

vi.   Employee is convicted of a felony or commits any act which damages the reputation or causes public embarrassment to the Company, as determined in the sole discretion of the Board of Directors of the Company.

 

i. A material diminution in Employee’s base salary or employment benefits;

 

ii. A material breach of this Agreement by the Company;

 

iii. A material diminution in Employee’s title, authorities, responsibilities, or duties;

 

iv. A relocation of Employee’s primary work location by more than 50 miles from its then current location;

 

v. Company ceases its business operations; and/or

vi.   A Change of Control (as defined below) of the Company.

 

i.    If the Company terminates this Agreement and Employee’s employment hereunder for Cause, Employee terminates this Agreement and Employee’s employment hereunder without Good Reason, or this Agreement terminates by expiration because Employee or Company elect not to renew it in accordance with paragraph 2, then, within thirty (30) days of termination or expiration, the Company shall pay Employee (1) all base salary through the date of termination or expiration; and (2) any outstanding expense reimbursement payments then due to Employee as of the date of termination or expiration.

 

ii.    If the Company terminates this Agreement and Employee’s employment hereunder without Cause, Employee terminates this Agreement and Employee’s employment hereunder for Good Reason (except for a Change of Control), or this Agreement terminates due to Employee’s death or disability, then, within thirty (30) days of termination or expiration, the Company shall pay Employee (1) all base salary through the date of termination or expiration; (2) any outstanding expense reimbursement payments then due to Employee as of the date of termination or expiration; and (3) separation pay, which shall vary depending on the length of the Term: if the Term of this Agreement is between three (3) and six (6) months, Company will pay employee eighteen thousand seven hundred and fifty dollars and zero cents ($18,750.00) in additional cash compensation, plus forty three thousand seven hundred fifty dollars and zero cents ($43,750.00) of value in restricted stock under the Company’s 2017 Equity Incentive Plan or a successor plan (the “Plan”) ; if the Term of this Agreement is between six and (6) and nine (9) months, Company will pay employee thirty seven thousand five hundred dollars and zero cents ($37,500.00) in additional cash compensation, plus eighty seven thousand five hundred dollars and zero cents ($87,500.00) of value in restricted stock under the Plan; if the Term of this Agreement is between nine and (9) and twelve (12) months, Company will pay employee fifty six thousand two hundred fifty dollars and zero cents ($56,250.00) in additional cash compensation, plus one hundred and thirty one thousand two hundred fifty dollars and zero cents ($131,250.00) of value in restricted stock under the Plan; if the Term of this Agreement reaches twelve (12) months, Company will pay employee seventy five thousand dollars and zero cents ($75,000.00) in additional cash compensation, plus one hundred seventy five thousand dollars and zero cents ($175,000.00) of value in restricted stock under the Plan.

iii.    If Employee terminates this Agreement and Employee’s employment hereunder for a Change of Control, then, within thirty (30) days of termination, the Company shall pay Employee (1) all base salary through the Term of this Agreement; (2) any outstanding expense reimbursement payments then due to Employee as of the date of termination; and (3) separation pay in the amount of seventy five thousand dollars and zero cents ($75,000.00) in additional cash compensation, plus one hundred seventy five thousand dollars and zero cents ($175,000.00) of value in restricted stock under the Plan.