Exhibit 10.1


 





EXECUTIVE
EMPLOYMENT AGREEMENT MARK SCIALDONE


 


THIS
EMPLOYMENT AGREEMENT, dated May 1, 2015 (the "Agreement"), is between VAPE HOLDINGS, INC., a Delaware corporation
(the "Company"), and Dr. Mark Scialdone ("Executive"), an individual. Company and Executive may be referred
to herein individually as a "Party" or collectively as the "Parties."


 


RECITALS


 


WHEREAS,
Executive is currently the chief executive officer of BetterChem Consulting, L.L.C., a Pennsylvania limited liability company
("BetterChem"); and


 


WHEREAS,
Company and Executive mutually desire to enter into an employment relationship whereby Executive shall provide services to the
Company in the position of Chief Science Officer;


 


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


 


AGREEMENT


 


1.         POSITION
AND RESPONSIBILITIES


 


a.                 
Position. Pursuant to this
Agreement, Executive shall render services to the Company as its Chief Science Officer. Executive shall report to the Chief Executive
Officer ("CEO") and will have such duties, powers, and responsibilities customary for the chief science officer of a
corporation of the size, type, and nature of the Company. Executive shall apply his best efforts, skill, knowledge, and attention
to the business of the Company in the performance of his duties to the Company. Unless otherwise agreed, Executive shall be offered
the position of a Director on the Board of Directors of the Company, which position shall require the formal approval of the Board
of the Company. Executive shall in addition be appointed to the position of Co-Chairman of the Advisory Board of the Company.


 


b.                 
Other Activities. Except upon
the prior written consent of the Company, which may be granted or withheld in the Company's sole discretion, Executive will not,
while employed by the Company, (i) engage, directly or indirectly, in any other business activity (whether or not pursued for
pecuniary advantage) that might create a conflict of interest with the Company; (ii) engage, directly or indirectly, in any other
business activity or revenue stream (whether or not pursued for pecuniary advantage) presented to or identified by Executive in
the same or similar businesses to those of the Company or related to or arising from the operations of the Company. The Company
and Executive agree that services rendered by Executive by and through BetterChem, and that are approved by Company in writing,
are exempt from the requirements of this paragraph.


 



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c.                  
No Conflict. Executive represents
and warrants that Executive's execution of this Agreement, Executive's employment with the Company, and the performance of Executive's
proposed duties under this Agreement, does not and will not violate any obligations the Executive may have to any other employer,
person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.


 


d.                 
Location of Services. Company
acknowledges that Executive maintains a primary residence in Pennsylvania. Nothing in this Agreement shall be construed as requiring
Executive to relocate his primary residence as a condition of commencing or continuing employment under this Agreement. Company
acknowledges and agrees that Executive may perform some of Executive's duties hereunder remotely, so long as it does not interfere
materially with the performance of Executive's duties. Notwithstanding the foregoing, Employee acknowledges and agrees that Employee
frequently will be required to travel to the Company's offices and to other locations as requested by the Company's Chief Executive
Officer from time to time, at the Company's sole expense. The Parties agree to revisit the amount of time Executive works remotely
and adjust it as necessary in accordance with the needs of the Company.


 


2.         COMPENSATION
AND BENEFITS


 


a.                 
Base Salary.In consideration
of the services to be rendered under this Agreement, the Company shall pay Executive an annual salary at the rate of $102,000
per annum, less all applicable wage deductions ("Base Salary"). The Base Salary shall be paid in accordance with the
Company's regularly established payroll practice. To the extent Executive and the Company agree by mutual written agreement which
specifically refers to this Section 2(a) to defer any Base Salary earned within a taxable year, this deferred compensation shall
paid to Executive within two and a half months of the end of the Company's tax year in which the compensation is earned. The Base
Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries
for similarly situated Executives and may be adjusted in the sole discretion of the Company.


 


b.                 
Bonus. Executive shall receive
bonus compensation associated with revenue generated from consulting services revenues generated by BetterChem over the term of
this Agreement such bonus compensation to be calculated in accordance with Schedule A hereto. Executive may be eligible to receive
a discretionary annual bonus compensation based upon the Board's evaluation of the performance of Executive, the Company's operating
results and such other criteria as may be determined by the Board to be relevant. Executive must be employed on the date such
discretionary bonus, if any, is paid in order to be eligible for same.


 


c.                  
Stock Options. Subject to the
approval of the Company's Board of Directors, the Company may grant options to purchase shares of common stock of the Company
to Executive (OTCQB:VAPE) pursuant to an approved stock option plan (the "Stock Options"). The Stock Options will vest
as determined by the Board of Directors in its sole discretion. The exercise price per share will be equal to the fair market
value per share on the date the Stock Option is granted.





 






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d.               
Royalty Sharing. Company agrees
that in the event that revenue is realized by the Company or one of the Company's wholly owned or partially owned subsidiaries
("VAPE Affiliates"), as applicable, from the exploitation of intellectual property that is developed with Executive
as the inventor or co-inventor, then the Company will pay Executive as follows:


 


i.         For
licenses to parties other than the Company or VAPE Affiliates, fifteen percent (15%) of Net Royalties received by the Company
and/or applicable VAPE Affiliate on all such licenses and extensions thereof in perpetuity;


 


ii.        For
licenses to or other exploitation by the Company or a VAPE Affiliate, 5% of Net Profit received by the Company or applicable VAPE
Affiliate from the sales of products incorporating the intellectual property in perpetuity.


 


iii.        For
purposes this of Subsection 2(d):


 


(1)              
"Net Royalties" shall be calculated by determining gross royalties received and subtracting any unrecouped out-of-pocket
costs incurred by the Company and/or applicable VAPE Affiliate for filing, prosecution, licensing and patent defense directly
related to the specific rights that are licensed.


 


(2)              
"Net Profit" shall be calculated by determining the net profit received by the Company or applicable VAPE Affiliate
from the sales of the product incorporating the invention starting with the gross revenue from sales and subtracting the costs
incurred by the Company, and any returns, sales allowances and sales discounts.


 


iv.       With
respect to intellectual property in which Executive is a co-inventor but not the sole inventor, Executive's share of Net Royalties
or Net Profit, as applicable, will be will be prorated in accordance with Executive's percentage contribution to the subject invention
("Co-Inventor Percentage"). Company and Executive agree to negotiate Executive's Co-Inventor Percentage for each such
invention, on a case-by-ease basis, upon first issuance of a patent covering the invention.


 


e.                  
Benefits. Executive shall be
eligible to participate in the benefits made generally available by the Company to similarly situated employees, if any, in accordance
with the benefit plans established by the Company and subject to the terms, conditions, limitations and exclusions of the applicable
plans, and as may be amended from time to time in the Company's sole discretion. The foregoing shall not, in any way, require
the Company to establish any such benefits or continue to maintain any such benefits.


 


f.                   
Expenses. Upon presentation
of verifiable invoices and other documentation as may be requested by the Company, the Company shall reimburse Executive for reasonable
business expenses incurred in the performance of Executive's duties hereunder in accordance with the Company's expense reimbursement
guidelines. The Parties have expressly agreed that necessary and reasonable legal fees and costs incurred by Executive in connection
with this Agreement not to exceed $3,000.00.


 



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3.         TERM
OF EMPLOYMENT


 


a.         Employment
Term. The employment of Executive shall be for a period of two (2) years and may be terminated at any time for any reason
or no reason by the Company or Executive upon thirty (30) days' written notice. Either Party hereto shall have the right to terminate
this Agreement without notice in the event of the death, bankruptcy, insolvency, or assignment for the benefit of creditors of
the other Party.


 


b.         Severance.
Except in situations where the employment of Executive is terminated For Cause, By Death or By Disability (as defined in Section
4 below), in the event that the Company terminates the employment of Executive at any time, Executive will be eligible to receive
an amount equal to the then-current Base Salary of the Executive payable in the form of salary continuation for a six month period
following termination. Executive shall not be entitled to any severance payments if Executive's employment is terminated For Cause,
By Death or By Disability (as defined in Section 4 below) or if Executive's employment is terminated by Executive (in accordance
with Section 5 below).


 


4.         TERMINATION


 


a.         Termination
Without Cause. Either Party may terminate this Agreement at any time for any reason or no reason, upon thirty (30) days
advance written notice. During such notice period Executive shall continue to diligently perform all of Executive's duties hereunder.
The Company shall have the option, in its sole discretion, to make Executive's termination effective at any time prior to the
end of such notice period as long as the Company pays Executive all compensation to which Executive is entitled up through the
last day of the thirty-day notice period. Thereafter all obligations of the Company to the Executive shall cease.


 


b.         Termination
by Company on Account of Cause. Notwithstanding anything in this Agreement to contrary, if Executive's employment is terminated
by the Company on account of Cause (as defined below), Executive shall not receive any benefits or compensation following the
date of termination except for accrued but unpaid salary, which shall be paid to Executive. "Cause" means (i) an intentional
tort (excluding any tort relating to a motor vehicle) which causes substantial loss, damage, or injury to the property or reputation
of the Company or its subsidiaries; (ii) any serious crime or intentional, material act of fraud or dishonesty against the Company,
(iii) the commission of a felony that results in other than immaterial harm to the Company's business or the reputation of the
Company or Executive, (iv) habitual neglect of Executive's reasonable duties (for reason other than illness or incapacity) which
is not cured within thirty (30) days after written notice thereof by the CEO to Executive, (v) the disregard of written, material
policies of the Company which causes other than immaterial loss, damage, or injury to the property or reputation of the Company
which is not cured within ten days after written notice thereof by the Board to Executive, and (vi) any material breach of Executive's
ongoing obligation not to disclose confidential information.


 


c.         Termination
By Death. Executive's employment shall terminate automatically upon the Executive's death. The Company shall pay to Executive's
beneficiaries or estate, as appropriate, any compensation then due and owing up through the date of Executive's death. Thereafter
all obligations of the Company under this Agreement shall cease. Nothing in this Section 4(c) shall affect any entitlement of
Executive's heirs or devisees to the benefits of any life insurance plan or other applicable benefits.


 






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d.               
Termination By Disability. If
Executive becomes eligible for the Company's long term disability benefits or if, in the sole opinion of the Company, Executive
is unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental
impairment for more than ninety consecutive days or more than one hundred and twenty days in any twelve-month period, then, to
the extent permitted by law, the Company may terminate Executive's employment. The Company shall pay to Executive all compensation
to which Executive is entitled up through the date of termination, and thereafter all obligations of the Company under this Agreement
shall cease. Nothing in this Section 4(d) shall affect Executive's rights under any disability plan in which Executive is a participant.


 


5.         TERMINATION
OBLIGATIONS


 


a.                 
Return of Property. Executive
agrees that all property (including without limitation all electronic devices, equipment, tangible proprietary information, documents,
records, notes, contracts and computer-generated materials) which was furnished, created, or prepared incidentally to Executive's
employment belongs to the Company and shall be promptly returned to the Company upon termination of Executive's employment.


 


b.                 
Resignation and Cooperation.
Upon termination of Executive's employment, Executive shall be deemed to have resigned from all officer and management positions
then held with the Company. Following any termination of employment and prior to the last day of Executive's employment, Executive
shall reasonably cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer
of work to other employees. Executive shall also cooperate with the Company in the defense of any action brought by any third
party against the Company that relates to Executive's employment by the Company at the Company's sole cost and expense. Finally,
because Executive is expressly expected during the scope of employment to contribute to and develop intellectual property that
is owned and/or managed by the Company, Executive warrants and agrees that he will provide prompt and reasonable cooperation to
Company during and following his employment with Company on the administrative and legal prosecution and defense of intellectual
property of Company in which Executive has participated directly or indirectly during his employment with Company.


 



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6.         CONFIDENTIAL
INFORMATION


 


a.         Obligation
to Maintain Confidentiality. Executive acknowledges that the continued success of the Company depends upon the use and
protection of a large body of confidential and proprietary information. All of such confidential and proprietary information now
existing or to be developed in the future will be referred to in this Agreement as "Confidential Information".
Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merely remembered
or embodied in a tangible or intangible form) that is (i) related to the Company's prior, current or potential business and (ii)
is not generally or publicly known. Confidential Information includes, without specific limitation, the information, observations
and data obtained by Executive during the course of the Employment Term and his performance under this Agreement concerning the
business and affairs of the Company, information concerning acquisition opportunities in or reasonably related to the Company's
business or industry of which Executive is aware or becomes aware during the Employment Term, the persons or entities that are
current, former or prospective suppliers or customers of any one or more of them during the course of Executive's performance
under this Agreement, as well as development, transition and transformation plans, methodologies and methods of doing business,
strategic, marketing and expansion plans, including plans regarding planned and potential sales, financial and business plans,
Executive lists and telephone numbers, new and existing programs and services, prices and terms, customer service, integration
processes, requirements and costs of providing service, support and equipment. Therefore, Executive agrees that he shall not disclose
to any unauthorized person or use for his own account any of such Confidential Information without the Company's prior written
consent, unless and to the extent that any Confidential Information: (i) becomes generally known to and available for use by the
public other than as a result of Executive's acts or omissions to act or (ii) is required to be disclosed pursuant to any applicable
law or court order. Executive agrees to deliver to the Company at the end of the Employment Term, or at any other time the Company
may request in writing, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the
business of the Company (including, without limitation, all Confidential Information) that he may then possess or have under his
control.


 


b.         Ownership
of Intellectual Property. Executive agrees to make prompt and full disclosure to the Company of all ideas, discoveries,
trade secrets, inventions, innovations, improvements, developments, methods of doing business, processes, programs, designs, analyses,
drawings, reports, data, software, firmware, logos and all similar or related information (whether or not patentable and whether
or not reduced to practice) that relate to the Company's actual or anticipated business, research and development, or existing
or future products or services and that are conceived, developed, acquired, contributed to, made, or reduced to practice by Executive
(either solely or jointly with others) while employed by the Company (collectively, "Work Product"). Any copyrightable
work falling within the definition of Work Product shall be deemed a "work made for hire" under the copyright laws of
the United States, and ownership of all rights therein shall vest in the Company. To the extent that any Work Product is not deemed
to be a "work made for hire", Executive hereby assigns and agrees to assign to the Company all right, title and interest,
including without limitation, the intellectual property rights that Executive may have in and to such Work Product. Executive
shall promptly perform all actions reasonably requested by the CEO or his designee (whether during or after the Employment Term)
to establish and confirm the Company's ownership (including, without limitation, providing testimony and executing assignments,
consents, powers of attorney, and other instruments).


 


c.         Third
Party Information. Executive understands that the Company will receive from third parties confidential or proprietary
information ("Third Party Information") subject to a duty on the Company's part to maintain the confidentiality
of such information and to use it only for certain limited purposes. During the Employment Term and thereafter, and without in
any way limiting the provisions of Section 6, Executive will hold Third Party Information in the strictest confidence and will
not disclose to anyone (other than personnel of the Company who need to know such information in connection with their work for
the Company) or use, except in connection with his work for the Company, Third Party Information unless expressly authorized in
writing by the Manager.


 



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d.         Use
of Information of Prior Employers. Executive represents and warrants and covenants that Executive shall not disclose to
the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others at any time, including
but not limited to any proprietary information or trade secrets of any former employer, if any; and Executive acknowledges and
agrees that any violation of this provision shall be grounds for Executive's immediate termination and could subject Executive
to substantial civil liabilities and criminal penalties. Executive further specifically and expressly acknowledges that no officer
or other Executive or representative of the Company has requested or instructed Executive to disclose or use any such third party
proprietary information or trade secrets.


 


7.         AMENDMENTS;
WAIVERS; REMEDIES


 


This
Agreement may not be amended or waived except by a writing signed by Executive and by a duly authorized representative of the
Company other than Executive. Failure to exercise any right under this Agreement shall not constitute a waiver of such right.
Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified
for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable
law.


 


8.         ASSIGNMENT;
BINDING EFFECT


 


a.                 
Assignment. The performance
of Executive is personal hereunder, and Executive agrees that Executive shall have no right to assign and shall not assign or
purport to assign any rights or obligations under this Agreement. This Agreement may be assigned or transferred by the Company;
and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially
all of its assets.


 


b.                 
Binding Effect. Subject to
the foregoing restriction on assignment by Executive, this Agreement shall inure to the benefit of and be binding upon each of
the parties; the affiliates, officers, managers, agents, successors and assigns of the Company; and the heirs, devisees, spouses,
legal representatives and successors of Executive.


 


9.         NOTICES


 


All
notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly
given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class
registered or certified mail, return receipt requested, to the principal address of the other party. The date of notice shall
be deemed to be the earlier of: (i) actual receipt of notice by any permitted means, or (ii) five business days following dispatch
by overnight delivery service or the United States Mail. Executive shall be obligated to notify the Company in writing of any
change in Executive's address.


 



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10.       SEVERABILITY


 


If
any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall
be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect.
In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce
the time period or scope to the maximum time period or scope permitted by law.


 


11.     TAXES


 


All
amounts paid under this Agreement (including without limitation Base Salary) shall be paid less all applicable state and federal
tax withholdings and any other withholdings required by any applicable jurisdiction.


 


12.        
GOVERNING LAW; DISPUTE RESOLUTION


 


The
parties agree that any dispute, controversy or claim between Executive and the Company based on, arising out of or relating to
Executive's employment under this Agreement or the termination of same, including, without limitation, any and all claims under
Title VII of the Civil Rights Acts of 1964 as amended, the Civil Rights Act of 1870, the Americans with Disabilities Act of 1990
as amended, the Americans with Disabilities Act Amendments Act of 2008, the Age Discrimination in Employment Act as amended, the
Older Workers Benefit Protection Act, the Fair Labor Standards Act of 1938 as amended by the Equal Pay Act of 1963, the Lilly
Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, the Executive Retirement Income Security Act of 1974, the Civil
Rights Act of 1991, the Genetic Information Nondiscrimination Act of 2008, the Consolidated Omnibus Budget Reconciliation Act,
the U.S. Patriot Act, the Sarbanes-Oxley Act of 2002, the Dodd—Frank Wall Street Reform and Consumer Protection Act, and
any other federal, state or local civil rights, disability, discrimination, retaliation or labor law, or any theory of contract,
criminal, arbitral or tort law, shall be settled by final and binding arbitration in Los Angeles County, California, administered
by the American Arbitration Association ("AAA") pursuant to the National Rules for the Resolution of Employment Disputes
of the AAA ("Rules of the AAA"). This Agreement shall be construed in accordance with the laws of the State of California
without reference to the conflict of laws provisions thereof, and judgment upon any resulting arbitration award may be entered
in any court of competent jurisdiction.


 


13.        
INTERPRETATION


 


This
Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Sections and
section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or
interpretation of this Agreement. Whenever the context requires, references to the singular shall include the plural and the plural
the singular and references to the masculine pronoun shall include the feminine and the neuter, and the singular shall include
the plural. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party
hereto because that party drafted or caused that party's legal representative to draft any of its proVisions.


 



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14.        
OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT


 


Executive
agrees that any and all of Executive's obligations under this Agreement (other than Section 1) shall survive the termination of
employment and the termination of this Agreement in accordance with their terms. Company agrees that all of Company's obligations
under Paragraph 2(d) shall survive the termination of employment and the termination of this Agreement in accordance with their
terms.


 


15.        
COUNTERPARTS


 


This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all
of which together shall constitute one and the same instrument.


 


16.        
AUTHORITY


 


Each
party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and
to perform and discharge all of its obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement
and obligation of such party and is enforceable in accordance with its terms.


 


17.        
ENTIRE AGREEMENT


 


This
Agreement constitutes the entire agreement of the Company and Executive relating to the subject matter hereof and supersedes all
prior oral and written understandings and agreements relating to such subject matter. To the extent that the practices, policies
or procedures of the Company, now or in the future, apply to Executive and are inconsistent with the terms of this Agreement,
the provisions of this Agreement shall control.


 


18.        
PRESS RELEASES


 


The
Parties shall jointly agree on the language of any press releases or other public announcements concerning Company's employment
of Executive and/or the Proposed Transaction.





 






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19.        EXECUTIVE
ACKNOWLEDGEMENT


 


EXECUTIVE
ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND
UNDERSTANDS THE AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED
ON EXECUTIVE'S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.


 


IN
WITNESS WHEREOF, the parties have duly executed this Agreement s of the date first written above.





 


	VAPE HOLDINGS, INC.:	 	EXECUTIVE:
	 	 	 
	By:	/s/ Kyle Tracey	 	/s/ Mark Scialdone
	 	Kyle Tracey	 	Mark Scialdone, an individual
	 	its Chief Executive Officer	 	 






 






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SCHEDULE
A: Performance Based Non Discretionary Bonus Compensation


 


Gross
Consulting Revenue* Earned:         Industry Related


 


Year
1 (from May 1, 2015 through April 30, 2016)


 


	Up to $200,000 gross revenue	2,5%
	From $200,000—$400,000 gross revenue	5.0%
	From $400,000—$600,000 gross revenue	7.5%
	Above $600,000 gross revenue	10.0%
	 	 
	Year 2 (from May 1, 2016 through April 30, 2017)	 
	 	 
	Up to $200,000 gross revenue	2.5%
	From $200,000—$400,000 gross revenue	5.0%
	From $400,000—$600,000 gross revenue	7.5%
	Above $600,000 gross revenue	10.0%
	 	 
	Gross Revenue Earned Non Industry
    Related (including Legacy Business Relationships)
	 	 
	50/50 share (payable monthly
    based on actual net revenue collections.


 


 


 


*Gross
Consulting Revenue is defined herein to exclude specific reimbursable vendor costs, travel expenses including airfare.


 


 


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