Exhibit 10.4

 

EMPLOYMENT AGREEMENT 

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into this 12th day of
May 2017, by and between Caleminder, Inc., (the “Company”), and David Lamadrid
(“Executive”).

 

The Company wishes to employ Executive as President and Chief Executive Officer
upon the terms and conditions set forth in this Agreement and Executive is
willing to accept employment subject to the terms and conditions set forth
below. Accordingly, the parties, intending to be legally bound, agree as
follows: 

 

1.Employment and Term

  

1.1           Employment. Subject to the terms and conditions hereof, the
Company hereby employs Executive during the term of employment set forth in
Section 1.2 to serve as President and Chief Executive Officer of the Company and
perform such services and duties as are normally and customarily associated with
such position as well as such other associated duties as the Board of Directors
(the “BOD”) shall determine. Executive hereby accepts such employment and agrees
to devote sufficient time, attention and energies during regular business hours
to effectively perform his duties and obligations hereunder. Executive will work
from offices in New York and travel as needed to perform his duties and
obligations hereunder.

 

1.2           Term. The term of employment of Executive under this Agreement
shall be one (1) year commencing May 1, 2017 and expiring on April 30, 2018 (the
“Term”) and automatically renewed thereafter from year to year unless within 60
days prior to end of initial term or the end of any renewal year, either party
gives the other written notice of its intention not to renew in which event this
Agreement shall terminate at the end of the initial Term or the end of that
renewal year term, subject to the provisions for early termination set forth
herein.

 

2.            Compensation. In consideration of the services to be rendered
hereunder, the Company hereby agrees to (a) pay Executive an annual base
compensation of $180,000 payable in equal semimonthly installments in accordance
with the usual practice of the Company which base compensation shall be subject
to annual review (but his compensation may not be reduced from then current
level) by the BOD or Compensation Committee, and (b) grant 10 year stock options
to purchase 857,143 share of Common Stock of the Company on the date hereof
pursuant to the Company’s 2017 Stock Incentive Plan (the “Plan”) at an exercise
price of $0.35 per option (the “Options”), said number of Options to vest as
follows: 34% on the date hereof, 33% on October 31, 2017, and 33% on April 30,
2018, subject to the terms hereof. Notwithstanding anything set forth herein to
the contrary, in the event that during the Term (including any renewal thereof),
but prior to such time as the Company raises additional equity (including any
form of financing that converts to equity) financing of $40 million following
the date hereof, the Company issues additional shares of common stock, grants
options to third parties or issues securities convertible or exercisable into
common stock of the Company, then the Company agrees to immediately issue the
Executive such additional number of options (if any) so that the Executive has
been issued options under this Section 2 to purchase no less than 4% of the
Company’s outstanding shares of common stock on a fully-diluted basis. Any such
additional options would vest on the same schedule as the Options (and be
immediately exercisable to the extent issued after April 30, 2018), and have an
exercise price equal to the fair market value of the Common Stock on the date of
grant, as determined by the BOD.

 

 

 

 

3.Benefits.

  

3.1           Participation in Plans. During the term hereof, Executive shall be
entitled to participate on the same terms as afforded other executive officers
in any group insurance, hospitalization, medical, dental, health and accident,
disability or similar plan or program of the Company now existing or established
hereafter to the extent that he is eligible under the general provisions
thereof; provided that in no case shall the benefits be reduced or less than
that granted, awarded or provided to Executive on the date hereof. 

 

3.2           Reasonable Business Expenses. Executive shall be allowed
reimbursement for reasonable business expenses in connection with the
performance of his duties hereunder upon presentation by Executive of the
details of, vouchers for, such expenses, including tourist class commercial air
travel, and Executive shall be furnished reasonable office space, computing and
telecommunications resources, assistance and facilities.

 

3.3           Vacation. Executive shall be entitled to a vacation (without
deduction of salary or other compensation) for the period as is in conformity
with the Company’s policy regarding vacations for management employees (but in
no event less than four weeks per year). 

 

3.4           Bonuses. Executive may receive such discretionary bonuses as the
Board of Directors, in its sole discretion and from time to time, deem
appropriate. 

 

3.5           Liability Insurance. With respect to the Executive’s acts or
failures to act while employed by the Company in the Executive’s capacity as a
director, officer, employee or agent of the Company, the Executive shall be
entitled to: (i) indemnification from the Company; and (ii) liability insurance
coverage, in each case on the same basis as other directors and officers of the
Company.

 

4.Early Termination of Employment

  

4.1           Termination for Justifiable Cause. In addition to termination
pursuant to Section 1.2, the Company, by written notice to Executive authorized
by the BOD may terminate Executive’s employment for “justifiable cause”, which
shall mean any of the following events: (a) adjudication by a court of competent
jurisdiction that Executive has committed an act of fraud or dishonesty
resulting or intended to result, directly or indirectly, in personal enrichment
at the expense of the Company; (b) an indictment of a felony (other than a motor
vehicle related matter or as a result of pursuing the Company’s cannabis
business in the ordinary course) involving moral turpitude; (c) repeated failure
or refusal by Executive to follow written policies and directions reasonably
established by the BOD that go uncorrected for a period of thirty (30)
consecutive days after written notice has been provided to Executive; or (d)
persistent willful failure by Executive to fulfill his duties hereunder that
goes uncorrected for a period of thirty (30) consecutive days after written
notice has been provided Executive.

 

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4.2           Permanent Disability of Executive. The Company shall have the
right to terminate Executive’s employment hereunder if the BOD shall in good
faith and on the basis of reasonable medical evidence determine that Executive,
by reason of physical or mental disability, has been unable to perform the
services required of him hereunder for more than 120 consecutive days or an
aggregate of 180 calendar days, during any 12-month period. Such termination
shall be effective as of the last day of the month following the month in which
the Company shall have given notice to Executive of its intention to terminate
pursuant to this paragraph.

 

4.3           Compensation Upon Early Termination. 

 

(a)       In the event of termination of this Agreement for “justifiable cause”
as described in Section 4.1, or pursuant to Section 1.2 hereof, Executive shall
be entitled to the compensation earned by him before the effective date of
termination, as provided for in this Agreement, computed pro rata up to and
including that date, in lieu of salary and other benefits under this Agreement. 

 

(b)       If prior to the expiration of the term of this Agreement Executive
dies, the Company shall continue Executive’s compensation and coverage of
Executive’s direct dependents (if any and if they are eligible) under all plans
or programs of the types listed in Section 3.1 for a period of 120 days,
provided that no benefits will continue past the end of the term of this
Agreement. 

 

(c)       Upon a Change of Control (as defined in the Plan) or upon Executive’s
termination for “Good Reason” as defined below, Executive shall then be entitled
to receive, in lieu of salary and other benefits under this Agreement, (i) an
amount equal to his then-current base salary, payable monthly in arrears without
interest for a period of one year, (ii) continued coverage under all plans or
programs of the types listed in Section 3.1 until the sooner of 1.5 years or one
(1) month after Executive becomes otherwise employed and eligible for other
comparable coverage, and (iii) all other benefits provided to Executive under
this Agreement for a period of thirty (30) days.

 

4.4           Vesting Upon Early Termination. In the event Executive is
terminated for any reason other than for “justifiable cause” as defined in
Section 4.1 hereof, death, disability or voluntary termination (unless the
Company and Executive mutually agree to such voluntary termination), or if
Executive terminates for Good Reason, then any and all unexercised options
and/or restricted stock granted to Executive under a Company option plan
(including without limitation the Options granted pursuant to Section 2(b)
hereof) shall be deemed fully vested and exercisable immediately upon
Executive’s termination, as provided in the applicable option plan or agreement,
and the initial Option granted under Section 2 shall continue to be exercisable
for the full 10-year term thereof. For purposes of this Agreement, the term
“Good Reason” shall mean the material breach of this Agreement by the Company
(including the Company requiring the Executive to relocate outside of New York
or assigning Executive duties inconsistent with his position under Section 1),
which is not cured after 30-days’ notice from Executive.

 

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5.Confidentiality and Non-Competition.

 

5.1           (i) Confidentiality. During the term of employment under this
Agreement, Executive will have access to and become acquainted with various
confidential information including without limitation, trade secrets, customer
relationships, formulas, devices, inventions, processes, know-how, financial
information and other compilations of information, records, and specifications,
which are owned by the Company. Executive shall not disclose any of the
Company’s confidential information, directly or indirectly, or use them in any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of his employment for the Company. All files, records,
documents, drawings, specifications, equipment and similar items relating to the
business of the Company, whether prepared by Executive or otherwise coming into
his possession, shall remain the exclusive property of the Company and shall not
be removed from the premises of the Company under any circumstances whatsoever
without the prior written consent of the Company, and if removed shall be
immediately returned to the Company upon any termination of his employment and
no copies thereof shall be kept by Executive, provided, however, that Executive
shall be entitled to retain documents reasonably related to his interest as a
shareholder. 

 

(ii) Inventions and Shop Right. Every invention, discovery or improvement made
or conceived by Executive related to the business of the Company during his
employment by the Company whenever and wherever made or conceived, and whether
or not during business hours, of any product, article, appliance, tool, device,
formula, process, machinery or pattern similar to, or which constitutes an
improvement, on those heretofore, now or at any time during this employment,
manufactured or used by the Company in connection with the manufacture or
process of any product heretofore or now or hereafter manufactured by the
Company, or of any product which shall or could reasonably be manufactured in
the reasonable expansion of the Company’s business, shall be and continue remain
the Company’s exclusive property, without any added compensation or any
reimbursement for expenses to Executive, and upon the conception of any and
every such invention, discovery or improvement and without waiting to perfect or
complete it, Executive promises and agrees that he will immediately disclose it
to the Company and to no one else and thenceforth will treat it as the property
and secret of the Company. Executive will also execute any instruments requested
from time to time by the Company to vest in it complete title and ownership to
such invention, discovery or improvement and will, at the request of the
Company, do such acts and execute such instruments as the Company may require
but at the Company’s expense to obtain Letters Patent in the United States and
foreign countries, for such invention, discovery or improvement and for the
purpose of vesting title thereto in the Company, all without any reimbursement
for expenses or otherwise and without any additional compensation of any kind to
Executive. 

 

5.2           Non-Competition. In the event of a termination of this Agreement
for any reason, Executive shall be prohibited for a period of one (1) year from
the effective date of this separation from engaging in any business in
competition with that of the Company in those states within the United States
and those countries outside the United States in which the Company at the time
of Executive’s separation has conducted business, however, nothing herein
contained shall be construed as (a) preventing Executive from investing his
personal assets in any businesses which do not compete directly or indirectly
with the Company, (b) preventing Executive from purchasing securities in any
corporation whose securities in any corporation whose securities are regularly
traded, if such purchases shall not result in his owning beneficially at any
time 5% or more of equity securities of any corporation engaged in a business
which is competitive, directly or indirectly, to that of the Company, (c)
preventing Executive from engaging in any activities, if he receives the prior
authorization of the BOD. Notwithstanding anything herein to the contrary this
Section 5.2 shall not be effective in the event Executive has been discharged
for any reason other than “justifiable cause” or voluntarily leaves the
employment of the Company with the mutual agreement of the Company or for Good
Reason.

 

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5.3           Subsequent to the termination of this Agreement, Executive will
not for a period of one (1) year materially interfere with or disrupt the
Company’s business relationship with its customers or suppliers or employ any
person who was employed with the Company at any time during the 6 months prior
to Executive’s termination.

 

6.            Notices. All notices under this Agreement shall be in writing and
shall be deemed effective when delivered in person (in the Company’s case, to
the BOD or Secretary) or forty eight (48) hours after deposit thereof in the
U.S. mail, postage prepaid, addressed to Executive, at last known address as
carried in the records of the Company, or to the Company, at the corporate
headquarters, to the attention of the Secretary, or to such other address as the
party to be notified may specify by notice to the other party.

 

7.            Assigns and Successors. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company and the rights and obligations of
Executive shall move to the benefit of and shall be binding on Executive and his
legal representatives or heirs. This agreement constitutes a personal service
agreement and Executive’s obligations hereunder may not be transferred or
assigned by Executive. 

 

8.            Amendment Waiver. This Agreement may be amended, and any right or
claim hereunder waived, only by a written instrument signed by both Executive
and the Company, following authorization by the BOD. Nothing in this Agreement,
express or implied, is intended to confer upon any third person any rights or
remedies under or by reason of this Agreement. No amendment or waiver of this
Agreement requires the consent of any individual, partnership, corporation or
other entity not a party of this Agreement.

 

9.            Injunction.

 

(a) Should Executive at any time violate or threaten to violate any of the
provisions of this Agreement, the Company shall be entitled to an injunction
restraining Executive from doing or continuing to do or performing any such
acts, and Executive hereby consents to the issuance of such an injunction.

 

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(b) In the event that a proceeding is bought in equity to enforce the provisions
of this paragraph, Executive shall not urge as a defense that there is an
adequate remedy at law, nor shall the Company be prevented from seeking any
other remedies which may be available.

 

(c) The existence of a claim or cause of action by the Company against
Executive, or by Executive against the Company, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the endorsement by the
Company of the foregoing restrictive covenants but shall be litigated
separately.

 

(d) The provisions of this Section 9 shall survive termination of this
Agreement.

 

10.          Code Section 409A.

 

(a)           This Agreement is intended to comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
Payments of “Non-Qualified Deferred Compensation” (as such term is defined under
Code Section 409A and the regulations promulgated thereunder) may only be made
under this Agreement upon an event and in a manner permitted by Code Section
409A. For purposes of Code Section 409A, the right to a series of installment
payments under this Agreement shall be treated as a right to a series of
separate payments. All reimbursements and in-kind benefits provided under this
Agreement shall be made or provided in accordance with Code Section 409A
including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during the period of time specified in this Agreement, (ii)
the amount of expenses available for reimbursement, or the in-kind benefits
provided, during a calendar year may not affect the expenses eligible for
reimbursement, or in-kind benefits provided, in any other calendar year, (iii)
the reimbursement of an eligible expense will be made no later than the last day
of the calendar year following the year in which the expense in incurred, and
(iv) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.

 

(b)           To the extent required by Code Section 409A, and notwithstanding
any other provision of this Agreement to the contrary, no payment of
Non-Qualified Deferred Compensation will be provided to, or with respect to, you
on account of your separation from service until the first to occur of (i) the
date of your death or (ii) the date which is one day after the six month
anniversary of your separation from service, and in either case only if you are
a “specified employee” (as defined under Code Section 409A(a)(2)(B)(i) and the
regulations promulgated thereunder) in the year of your separation from service.
Any payment that is delayed pursuant to the provisions of the immediately
preceding sentence shall instead be paid in a lump sum (subject to all
applicable withholding) promptly following the first to occur of the two dates
specified in such immediately preceding sentence.

 

(c)           Any payment of Non-Qualified Deferred Compensation made under this
Agreement pursuant to a voluntary or involuntary termination of your employment
with the Company shall be withheld until you incur both (i) a termination of
your employment relationship with the Company and (ii) the first instance of a
“separation from service” with the Company, as such term is defined in Treas.
Reg. Section 1.409A-1(h).

 

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(d)           The preceding provisions of this Section 10 shall not be construed
as a guarantee by the Company of any particular tax effect to you under this
Agreement, under any plan or program sponsored or maintained by the Company or
under any other agreement by and between you and the Company. The Company shall
not be liable to you for any additional tax, penalty or interest imposed under
Code Section 409A nor for reporting in good faith any payment made under this
Agreement or under any such other plan, program or agreement as an amount
includible in gross income under Code Section 409A.

 

11.          Governing Law and Jurisdiction. This Agreement in its
interpretation and application and enforcement shall be governed by the law of
the State of New York without application of its conflict of laws provisions,
and any legal action commenced by either party seeking interpretation,
application and/or enforcement of this Agreement shall be brought only in the
State of New York.

 

12.          Prior Agreements. This Agreement supercedes and replaces any and
all prior agreements between the parties as to its subject matter.

 

13.          Construction. Paragraph headings are for convenience only and shall
not be considered a part of the terms and provisions of this Agreement. 

 

14.          Effective Date. The effective date of this Agreement shall be May
12, 2017. 

 

IN WITNESS WHEREOF, the parties have executed this Agreement.

 

Caleminder, Inc.     EXECUTIVE               By:  /s/ David Lamadrid     /s/
David Lamadrid     David Lamadrid     David Lamadrid  

 

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