Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the "Agreement") is March 1, 2020 ("Effective Date")
by and between Nirup Krishnamurthy, an individual (hereinafter referred to as
the "Employee"), and MEDICINE MAN TECHNOLOGIES, INC.("MMT"), a corporation duly
organized under the laws of the state of Nevada and having its principal place
of business at 4880 Havana Street, Suite 201 South, Denver, Colorado 80239 and
its affiliates and subsidiaries (hereinafter referred to as the "Employer" or
the "Company"). The existence of this Agreement will be announced publicly by
MMT in MMT's sole discretion.

 

WITNESSETH:

 

WHEREAS, the Employer desires to employ the Employee as its Chief Information
and Integration Officer under the terms of this Agreement and the Employee
desires to become employed by the Employer pursuant to the same, and;

 

WHEREAS, the Employee and the Employer desire to have their rights, obligations
and duties specified herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

 

1.EMPLOYMENT. Upon execution of this Agreement Employee shall become a full-time
employee of Employer and shall devote a reasonable amount of his/her time
necessary to properly effectuate the duties and obligations included herein to
the benefit of the Employer. During the term of Employee's employment with the
Company, Employee shall report directly to the Company's CEO, Justin Dye and/or
the Chairman of the Board, Justin Dye.

 

2.TERM. The Employee's employment hereunder shall be effective as of the date of
this Agreement and shall continue unless terminated pursuant to Section 4 of
this Agreement.

 

3.COMPENSATION.

 

a.Employer agrees to pay to the Employee during the Term of this Agreement, a
base gross salary of $264,000.00 per annum ("Base Salary"), payable in equal
installments on a bi-weekly basis, due and payable on those days of the month
where Employer customarily makes salary payments to its other employees.
Employer shall be responsible for deduction from each salary payment tendered to
Employee herein all applicable withholding and other employment taxes imposed by
state and federal tax regulations. The Employer may periodically increase
Employee's annual Base Salary at its sole discretion.

 

b.The Company grants to Employee, effective as of the date of this Agreement
(the "Date of Grant"), the option to purchase all or any part of 600,000 of the
common stock of the Company (the "Common Stock") at a purchase price that shall
equal the closing price of the Company's Common Stock as reported on the trading
market in which the Common Stock trades on the Date of Grant (the "Option"). The
Option shall vest and become exercisable in accordance with the following
vesting schedule: (i) 150,000 shares of Common Stock subject to the Option will
vest and become exercisable on the first anniversary of the Effective Date of
this Agreement; (ii) an additional 150,000 shares of Common Stock subject to the
Option will vest and become exercisable on the second anniversary of the
Effective Date of this Agreement; (iii) an additional 150,000 shares of Common
Stock subject to the Option will vest and become exercisable on the third
anniversary of the Effective Date of this Agreement and (iv) the remaining
150,000 shares of Common Stock subject to the Option will vest and become
exercisable on the fourth anniversary of the Effective Date of this Agreement,
such that the Option shall be fully vested as of such date.

 

c.Notwithstanding the vesting schedule and conditions set forth above, 100% of
the 600,000 shares of Common Stock subject to the Option shall vest and become
exercisable in the event of a "Change in Control." For purposes of this
Agreement, "Change in Control" means (i) the purchase or other acquisition
(other than from the Company) by any person, entity or group of persons, within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Act") (excluding for this purpose, the Company or its subsidiaries
or any employee benefit plan of the Company or its Subsidiaries), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 50% or
more of either the then-outstanding shares of Common Stock of the Company or the
combined voting power of the Company's then-outstanding voting securities
entitled to vote generally in the election of directors; (ii) approval by the
stockholders of the company of a reorganization, merger or consolidation, in
each case with respect to which persons who were the stockholders of the Company
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of, respectively, the Common Stock and
the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated corporation's
then-outstanding voting securities, or of a liquidation or dissolution of the
Company's or of the sale of all or substantially all of the assets of the
Company; or (iii) the termination by the Board of Directors of the Company's
Chief Executive Officer for any reason other than for "Cause" (as such term is
defined in the Company's employment agreement with its current Chief Executive
Officer) provided that such Chief Executive Officer is also removed or no longer
serves as Chairman of the Board of Directors.

 

 

 

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d.All shares of Common Stock issued pursuant to the Option to the Employee under
this Agreement may be liquidated at a daily rate of no more than 5% of the
preceding five (5) day average volume of the Company's Common Stock on any given
trading day. Notwithstanding the foregoing, the limits under this leak-out
provision do not apply in the event of a Change in Control of the Company.

 

e.During the term of the Agreement, the Employee shall be eligible to
participate in Company-established incentive, stock purchase, savings,
retirement (401(k)), and welfare benefit plans, including, without limitation,
group health, medical, dental, vision, life and disability insurance plans, in
the same manner and at the same levels as the Company makes such opportunities
available to the Company's senior executive level employees.

 

f.Employee shall be entitled to three (3) weeks of vacation (in addition to
customary United Stated federal holidays) during each year in which he/she
serves hereunder. Such vacation shall be taken at such time or times as will be
mutually agreed-upon between the Employee and the Company.

 

g.Employee and Company understand that until Employee shall commute at certain
times to the Company's offices in Denver, Colorado. Employee and Company agree
that the Company shall reimburse Employee for expenses related such travel,
including flights and hotels or alternative housing arrangements (the "Travel
Expenses"). The reimbursement amounts related to any such Travel Expenses must
be agreed-upon in writing by the Company. Notwithstanding the foregoing,
Employee shall have a duty to mitigate the Travel Expenses by acquiring travel
and accommodations in accordance with any Company policies related to employee
travel.

 

During the Term, Employee acknowledges and agrees to comply with the terms and
conditions in the attached Exhibit B, Insider Trading Acknowledgement.

 

4. TERMINATION.

 

a.This Agreement may be terminated upon the happening of any of the following
events:

 

i.Whenever the Employer and the Employee shall mutually agree to termination in
writing;

 

ii.Employer may at any time during the term of employment, by written notice,
terminate this Agreement and discharge the Employee for Cause (as defined
below), whereupon Employer's obligation to pay all compensation and other
benefits (including Severance amounts, insurance coverage, medical and
hospitalization plan benefits and management incentive plan payments, if any,
under this Agreement) shall cease as of the date of termination, unless
determined otherwise by the Board of Directors.

 

As used herein, termination for Cause shall mean the Employee has committed an
act constituting dereliction of duties or gross negligence; (a) committed a
material breach of any provision of this Agreement or any obligation to the
Company that, if curable, has not been cured by Employee within thirty (30) days
of written notice from the Company describing such breach in reasonable detail;
(c) engaged in dishonest, illegal conduct or misconduct which in each case has a
material and adverse impact on the reputation, business, business relationships,
financial condition or economic prospects of the Company; (d) refused, after
notice thereof, to perform specific lawful directives of the Chief Executive
Officer; (e) failed to comply with the Company's written policies or rules
during the term of this Agreement; (1) misappropriation by the Employee of any
money or other assets or properties of the Company or its subsidiaries outside
of his/her specific purview; (g) the willful and unauthorized disclosure by the
Employee of any Company trade secrets or financial information or data which has
resulted, or is likely to result, in material and demonstrable damage to
Employer ; (h) breach of the terms of any NDA entered into as of the date of
this Agreement (i) the commission by the Employee of an act constituting a
conflict of interest; (j) in the event Employee becomes aware of any dishonest
activities of any other employee of the Employer and Employee fails to undertake
proper and sufficient actions to protect the Employer therefrom; (k) been
convicted of or entered a plea of guilty or nolo contendere to a crime that
constitutes a felony (or state law equivalent) or a crime that constitutes a
misdemeanor involving moral turpitude, if such felony or other crime is
work-related, materially impairs the Employee's ability to perform services for
the Company or results in material/reputational or financial harm to the Company
or its affiliates.

 

 

 

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iii.Upon termination without Cause, the Employee shall be entitled to the
following: (A) twelve (12) months of base gross salary payable in accordance
with the normal payroll practice of the Company as if such Employee was employed
by the Company during such twelve (12) months; (B) any earned but unpaid bonus;
(C) the number of shares of Common Stock subject to the Option that would have
vested, had the Employee maintained employment with the Company, through the
next anniversary date following the date on which the termination without Cause
occurred; and (D) provide or reimburse Employee during the 12-month period for
the same or substantially the same medical, dental, long-term disability and
life insurance pursuant to Section 3(e) to which Employee was entitled hereunder
as of the date of termination, provided, however, that in the case of such
medical and dental insurance, that Employee makes a timely election for
continuation coverage under COBRA. Together (A), (B), (C) and (D) are
"Severance".

 

b.Upon termination for Cause, the Employee shall not be entitled to receive any
benefits of Severance pay, unless determined otherwise by the Company.

 

c.In the event the Employee decides to leave the employ of the Employer; the
Employee agrees to give to the Employer at least thirty (30) days advance
written notice of the date of his/her last day of employment.

 

5. RECORDS.

 

Upon termination of this Agreement, Employee shall not be entitled to keep or
preserve records of the Employer. Employee hereby acknowledges a duty to
Employer to cause to be kept and maintained accurate records of the Employer's
business. The Employee shall at any time be entitled to receive copies of
his/her personnel files with ten (10) days' notice to the Employer, noting that
should this provision be utilized only the most recent files not provided in any
earlier request shall be provided. This prohibition does not include any
relevant employee files or records of the employee.

 

6. NON-SOLICITATION/NON-COMPETE.

 

In consideration of the numerous mutual promises contained herein between the
Company and Employee, Employee, for his/her or himself/herself and for or on
behalf of any person or business entity in the any state in which the Company
does business during Employee's employment (the "Non-Compete Jurisdiction")
engage in any of the following activities:

 

a.Upon the Employee's termination of employment with the Employer (voluntary or
involuntary) and for a period of 12 months thereafter, said Employee shall not
(i) solicit any business from any customers or accounts of the Employer. The
Employee shall not assist any third parties in soliciting the business of any
customers or accounts of the Employer; and, (ii) directly or indirectly, on
his/her own behalf or on behalf of any other person or entity, whether as an
owner, director, officer, partner, employee, agent or consultant, for pay or
otherwise, render services to or engage with any person or entity (or on
Employee's own behalf, if the Employee is self-employed) that is engaged in the
same business of the Company, nor shall Employee become interested in any such
business, directly or indirectly, as an individual, partner, shareholder,
member, manager, director, officer, principal, agent, employee, trustee,
consultant, contractor or in any other relationship or capacity; provided,
however, that nothing contained in this paragraph shall be deemed to prohibit
Employee from acquiring, solely as an investment, up to four percent (4%) of the
outstanding shares of capital stock of any corporation whose shares are publicly
traded; and, for a period of twelve (12) months following the date upon which
Employee ceases being an employee, solicit, induce, recruit, or participate in
soliciting any individual who is employed by the Company.

 

b.In the event the Employee fails to comply with any provisions herein, the
Employee hereby authorizes the Employer to obtain a Restraining Order which
would restrain and enjoin the Employee or any third party being assisted by said
Employee in soliciting business (other than employment) from any accounts or
customers of the Employer. Should Employee desire to pursue an employment
opportunity with any customer of the Employer, written consent of the Employer
must be obtained. Such consent shall not be unreasonably withheld.

 

c.Employee hereby acknowledges that the geographic boundaries, scope of
prohibited activities and the time duration of the provisions of this Section 6
are reasonable and are no broader than are necessary to protect the legitimate
business interests of the Company.

 

 

 

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7. PROPRIETARY AND CONFIDENTIAL INFORMATION.

 

a.For purposes herein, Employer's proprietary and confidential information and
trade secrets (hereinafter "Proprietary and Confidential Information") includes:

 

i.Information concerning Employer's business, product development, marketing
analysis, and related information including prices, terms and other trade
secrets related to Employer's customer lists and customers' business affairs,
and related information;

 

ii.Discoveries, concepts and ideas; techniques and processes, whether
copyrightable or not, including, but not limited to, techniques, data and
improvements thereof, concerning present or future activities of Employer; and
any products, potential products or prototype concepts of Employer;

 

iii.Information relating to research, development, invention, purchasing,
merchandising and marketing;

 

iv.Any proprietary and confidential information relating to research and
development undertaken by Employer, its successors and assigns;

 

v.Proprietary and confidential information shall not include information which
is: (a) of record in the files of Employee at time that Employer's Proprietary
and Confidential Information is disclosed to Employee and received from
Employer; or (b) either has become or becomes available to the public through no
fault of Employee; or (c) is received by Employee, from any third party which
has the right to disclose it.

 

b.With respect to its Proprietary and Confidential Information as defined in
(a), above, Employer retains all rights and interest, which rights include but
are not limited to: patent, process patent, copyright, trademark, trade secret
or any other form of proprietary right. Employee agrees that all Proprietary and
Confidential Information of Employer is protected by law and may not be used or
disclosed by Employee. Employee agrees to safeguard Employer's Proprietary and
Confidential Information with no less care than he/she would reasonably use in
safeguarding his/her own valuable proprietary information and trade secrets.
Employee agrees to take appropriate steps to preserve the complete
confidentiality of Employer's Proprietary and Confidential Information by all
appropriate measures.

 

c.Employee agrees that, except as required by Employer in performance of his/her
duties for Employer, he/she will:

 

i.not copy or duplicate Employer's Proprietary and Confidential Information, nor
allow anyone else to copy or duplicate the same, without the express written
permission of Employer;

 

ii.never directly or indirectly use, sell, disseminate, disclose, lecture upon,
publish articles concerning, or otherwise convey or communicate to any person
other than Employer's employees, any of Employer's Proprietary and Confidential
Information unless authorized by their supervisor;

 

iii.never create or attempt to create or permit others to create duplicate or
derivative works containing all or part of Employer's Proprietary and
Confidential Information;

 

iv.upon termination of this Agreement, Employee shall return all of Employer's
Proprietary and Confidential Information which is within Employee's possession
or control at that time to Employer and, upon request by Employer, certify in
writing to Employer that all information has been returned.

 

 

 

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v.Employee agrees to notify Employer immediately upon learning of any
unauthorized possession, use or knowledge of Employer's Proprietary and
Confidential Information to which Employee has had access under this Agreement.
Employee will promptly furnish Employer all known details of such unauthorized
possession, use or knowledge, which will assist in preventing the recurrence of
such unauthorized possession, use or knowledge, and will cooperate with Employer
in any litigation against any parties undertaken by Employer to protect its
rights to its Proprietary and Confidential Information. Employee's compliance
with this subparagraph shall not be construed as a waiver of any of Employer's
rights under this Agreement.

 

d.In the event of a breach or threatened breach by Employee of the provisions of
this Agreement, Employer shall be entitled to an injunction restraining Employee
from such breach, and Employer may also pursue any and all other remedies
available to it for threatened or actual breach, including recovery of damages
from Employee.

 

e.In addition to the other requirements of this Section 7, for the good and
valuable consideration in this Agreement, Employee has agreed to comply with the
attached Exhibit A, Employee Invention Assignment.

 

8.GOODWILL. Goodwill shall mean that goodwill associated with the Company during
the term of this Agreement, including, but not limited to, the benefits that
have been or will be purchased, developed, accrued, and maintained as a result
of the Company's expenditure of time, money and effort in developing and
maintaining, among other things ("Goodwill"): (i) the Company's reputation and
the reputation and the skill, training, and, expertise of the Company's
officers, employees, advisors, Directors and partners; (ii) the quality of the
products and services provided; (iii) personal contacts of the Company's
officers, employees, advisors, directors and partners within the state-regulated
cannabis industry and local, national and global business community in general,
which relationships are vital to the Company's business; (iv) the Company's
knowledge and expertise; (v) the Company's business acumen; (vi) the Company's
ability to attract other employees, investors, financing, and business partners
in order to grow its business; (vii) the Company's Confidential Information; and
(viii) other attributes and actions that result in the retention of existing and
the acquisition of new patronage. Employee understands that by being employed by
the Company, he/she shall have the opportunity to be associated with the
Company's Goodwill and receive its benefits of it. At the outset and during the
term of this Agreement, the Company promises to provide Employee access to the
benefits of its Goodwill, through various means. Employee agrees not to take any
action that is intended to degrade or lessen the Company's Goodwill.

  

9.NON-DISPARAGEMENT. After the Employee's termination date for cause, neither
the Company nor Employee shall make any statements that are professionally or
personally disparaging about or adverse to the interests of the other party,
including but not limited to any statements that disparage any person, service
or capability of the other party, and each such party agrees not to engage in
any conduct that is intended to harm professionally or personally the reputation
of any party to this Agreement.

 

10.NAME & LIKENESS RIGHTS. Employee hereby authorizes the Company to use, reuse,
and to grant others the right to use and reuse, Employee's name, photograph,
likeness (including caricature), voice, and biographical information, and any
reproduction or simulation thereof, in any form of media or technology now known
or hereafter developed (including, but not limited to, film, video and digital
or other electronic media), both during and after Employee's employment, for any
purposes related to the Company's business, such as marketing, advertising,
credits, and presentations.

 

11.SEVERABILITY. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the terms
of this Agreement, the legality, validity and enforceability of the remaining
provisions of this Agreement shall not be affected thereby, and in lieu of each
such illegal, invalid and unenforceable provisions there shall be added
automatically as part of this Agreement a provision similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.

 

12.MANDATORY ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Such Arbitration shall take
place in the City and County of Denver, Colorado.

 

 

 

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13.ATTORNEYS FEES AND COSTS. In the event of a dispute arising between the
parties hereto, and said dispute becomes subject to any arbitration and/or
litigation relating to the rights, duties and/or obligations arising out of this
Agreement, the prevailing party in such action shall be entitled to recover all
applicable costs of said action, including but not limited to, reasonable
attorney's fees.

 

14.AMENDMENTS. This Agreement may only be amended by the mutual consent of all
the parties hereto, which Amendment shall be in writing duly executed by the
parties.

 

15.ENTIRE AGREEMENT. This Agreement constitutes the entire understanding and
agreement between the parties hereto with regard to all matters herein. There
are no other agreements, conditions or representations, oral or written, express
or implied, with regard thereto.

 

16.JURISDICTION. This Agreement shall be construed in accordance with the laws
of the State of Colorado.

 

17.NON-WAIVER. A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right herein.

 

18.BINDING EFFECT. The provisions of this Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns.

 

19.PRIOR AGREEMENTS. This Agreement supersedes and replaces all prior agreements
and understandings, whether written or oral.

 

20.SECTION 409A. This Agreement and the various provisions within it are
intended to either be exempt from or to meet the requirements of Section 409A of
the Code, and shall be interpreted and construed consistent with that intent.

 

a.Payments with respect to reimbursements of expenses or benefits or provision
of fringe or other in-kind benefits shall be made on or before the last day of
the calendar year following the calendar year in which the relevant expense or
benefit is incurred. The amount of expenses or benefits eligible for
reimbursement, payment or provision during a calendar year shall not affect the
expenses or benefits eligible for reimbursement, payment or provision in any
other calendar year.

 

b.A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a "separation from service" within the meaning of Section 409A of the
Code and, for purposes of any such provision of this letter agreement,
references to a "termination," "termination of employment" or like terms shall
mean "separation from service."

 

c.Notwithstanding any other payment schedule provided herein to the contrary, if
the Employee is deemed on the date of termination to be a "specified employee"
within the meaning of that term under Section 409A(a)(2)(B) of the Code, then
with regard to any payment that is considered "nonqualified deferred
compensation" under Section 409A of the Code payable on account of a "separation
from service," such payment shall be made on the date which is the earlier of
(A) the expiration of the six-month period measured from the date of the
Employee's "separation from service", and (B) the date of the Employee's death
(the "Delay Period") to the extent required under Section 409A of the Code. Upon
the expiration of the Delay Period, all payments delayed pursuant to this
Section 20 (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid to the Employee in a
lump sum, and all remaining payments due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date set
forth above.

 

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