Document:

cgnd_ex45.htm

EXHIBIT 4.5
  
 WARRANT
  
 THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A “NO-ACTION” LETTER FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION” OR THE “SEC”) WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
  
 Jacksam, Inc. (DBA Convectium)
  
 WARRANT NO. December # 1 Dated:
  
 December 1 2017
  
 Jacksam Inc., a corporation organized under the laws of the State of Delaware (the “Company”), hereby certifies that, for value received from Altar Rock Capital, a Delaware LLC (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of Five Million 5,000,000 shares of the common stock equal par value $0.001 par value per share (the “Common Stock”), of the Company (the “Warrant Shares”), at an exercise price equal to One one-hundredth ($0.001) per share (the “Exercise Price”). This Warrant may be exercised on a cashless basis any time after issuance through and including the third (3rd) anniversary of its original issuance as noted above (the “Expiration Date”), subject to the following terms and conditions:
  
 1.Registration of Warrant. The Company shall, from time to time and whenever requested by the Holder, register this Warrant in conformity with records to be maintained by the Company for such purpose (the “Warrant Register”) in the name of the Holder. The Company shall treat the registered Holder of this Warrant as the absolute owner hereof for any and all purposes, including the exercise hereof or any distribution to the Holder, and the Company shall not be affected by notice to the contrary.
  
 2. Registration of Transfers and Exchanges.
  
 (a) The Company or the transfer agent shall enter or record the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant to the Company at the office specified herein or pursuant to Section 11 hereof. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant hereinafter referred to as a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant.
   	 
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 (b) This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company specified herein or pursuant to Section 3(b) hereof for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder. Any such New Warrant shall be dated as of the date of such exchange.
  
 3. Duration and Exercise of Warrants.
  
 (a) This Warrant shall be exercisable by the registered Holder on any business day before 5:00 P.M., Boston time, at any time and from time to time on or after the date hereof to and including the Expiration Date. At 5:00 P.M., Boston time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. Prior to the Expiration Date, the Company may not call or otherwise redeem this Warrant without the prior written consent of the Holder, which consent shall be given or withheld at the sole and absolute discretion of the Holder.
  
 (b) Subject to Section 2(b), Section 6 and Section 10 hereof, upon: (x) surrender of this Warrant, together with the Form of Election to Purchase attached hereto duly completed and signed, to the Company at its address for notice set forth in Section 11 hereof; and (y) payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, in the manner provided hereunder, all as specified by the Holder in the Form of Election to Purchase, the Company shall promptly (but in no event later than five (5) business days after the Date of Exercise (as defined below)) issue or cause to be issued and cause to be delivered to the Holder in such name(s) as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise and free of restrictive legends unless (i) a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act then the Warrant Shares will bear a Securities Act restrictive legend, or (ii) this Warrant shall have been issued pursuant to a written agreement between the original Holder and the Company, as required by such agreement. Any person so designated by the Holder to receive Warrant Shares shall be deemed to have become holder of record of such Warrant Shares as of the Date of Exercise of this Warrant. A “Date of Exercise” means the date on which the Company shall have received (I) this Warrant (or any New Warrant, as applicable), together with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed; and (II) payment of the Exercise Price for the number of Warrant Shares so indicated by the holder hereof to be purchased.
  
  	 
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 (c) This Warrant shall be exercisable in its entirety or, from time to time, for a portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be purchased under this Warrant are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant. In the event the Common Stock representing the Warrant Shares is not delivered per the written instructions of the Holder within five (5) business days after the Notice of Election and Warrant is received by the Company (the “Delivery Date”), then the Company shall pay to Holder in cash two percent (2.0%) of the dollar value of the Warrant Shares to be issued per each day after the Delivery Date that the Warrant Shares are not delivered. The Company acknowledges that its failure to deliver the Warrant Shares by the Delivery Date will cause the Holder to suffer damages in an amount that will be difficult to ascertain. Accordingly, the parties hereto agree that it is appropriate to include in this Warrant this provision for liquidated damages. The parties hereto acknowledge and agree that the liquidated damages provision set forth in this section represents the parties’ good faith effort to quantify such damages and therefore agree that the form and amount of such liquidated damages are reasonable and will not constitute a penalty. Notwithstanding the foregoing, the payment of liquidated damages shall not relieve the Company from its obligations to deliver the Common Stock pursuant to the terms of this Warrant. The Company shall make any payments incurred under this Section 3 in immediately available funds within five (5) business days from the date of issuance of the applicable Warrant Shares. Nothing herein shall limit Holder’s right to pursue actual damages or cancel the Notice of Election for the Company’s failure to issue and deliver Common Stock to the Holder within seven (7) business days following the Delivery Date.
  
 4. Registration Rights. The Company agrees to file a registration statement with the SEC covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder within forty five (45) days of the completion of the merger with a public company (unless the Warrant Shares are otherwise freely transferable without volume restrictions pursuant to Rule 144(k) or Rule 144A promulgated under the Securities Act). The registration rights granted to the Holder pursuant to this Section shall continue until all of the Holder’s Warrant Shares have been sold in accordance with an effective registration statement or upon the Expiration Date, or as otherwise provided in the Debenture Registration Rights Agreement entered into between the Company and the original Holder as of the original issuance date hereof. The Company will pay all registration expenses in connection therewith.
  
 5. Payment of Taxes. Upon the exercise of this Warrant, the Company will pay all documentary stamp taxes attributable to the issuance of Warrant Shares; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
   	 
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 6. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe.
  
 7. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 8 hereof). The Company covenants that all Warrant Shares that shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If the Company does not have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares, it shall, as soon as reasonably practicable, use its best efforts to increase the number of its authorized shares such that the Company will have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares.
  
 8. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8. Upon each such adjustment of the Exercise Price pursuant to this Section 8, the Holder shall thereafter but prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.
  
 (a) An adjustment shall be made, if the Company, at any time while this Warrant is outstanding (i) pays a stock dividend (except scheduled dividends paid on outstanding preferred stock as of the date hereof which contain a stated dividend rate) or otherwise make distribution(s) on shares of its Common Stock or on any other class of capital stock and not the Common Stock payable in shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines outstanding shares of Common Stock into a smaller number of shares. If either (i), (ii) or (iii) above occurs, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations.
   	 
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 (b) In case of any reclassification of the Common Stock, any consolidation or merger of the Company with or into another entity, the sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification, consolidation, merger, sale, transfer or share exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 8(b) upon any exercise following any such reclassification, consolidation, merger, sale, transfer or share exchange.
  
 (c) At any time while this Warrant is outstanding, if the Company distributes to all holders of Common Stock (and not to holders of this Warrant) evidence of its indebtedness or assets or rights or warrants to subscribe for or purchase any security (excluding those referred to in Section 8(a), Section 8(b) and Section 8(d) hereof), then in each such case the Exercise Price shall be determined by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the Exercise Price determined as of the record date mentioned above, and of which the numerator shall be such Exercise Price on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of Common Stock as determined by the Company’s independent certified public accountants that regularly examines the financial statements of the Company (the “Appraiser”).
  
 (d) If, at any time while this Warrant is outstanding, the Company shall issue or cause to be issued rights or warrants to acquire or otherwise sell or distribute shares of Common Stock for a consideration per share less than the lower of the Exercise Price then in effect and the then fair market value of the Common Stock, then, forthwith upon such issue or sale, the Exercise Price shall be reduced to the price (calculated to the nearest one hundredth of a cent) determined by multiplying the Exercise Price in effect immediately prior thereto by a fraction, the numerator of which shall be the sum of (i) the number of shares of Common Stock outstanding immediately prior to such issuance, and (ii) the number of shares of Common Stock which the aggregate consideration received (or to be received, assuming exercise or conversion in full of such rights, warrants and convertible securities) for the issuance of such additional shares of Common Stock would purchase at the Exercise Price, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately after the issuance of such additional shares. Such adjustment shall be made successively whenever such an issuance is made.
   	 
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 (e) For the purposes of this Section 8, the following clauses shall also be applicable:
  
 (i) Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock or in securities convertible or exchangeable into shares of Common Stock, or (B) to subscribe for or purchase Common Stock or securities convertible or exchangeable into shares of Common Stock, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.
  
 (ii) Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
  
 (f) All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
  
 (g) Whenever the Exercise Price is adjusted pursuant to Section 8(c) hereof, the Holder, after receipt of the determination by the Appraiser, shall have the right to select an additional appraiser (which shall be a nationally recognized accounting firm), in which case the adjustment shall be equal to the average of the adjustments recommended by each of the Appraiser and such additional appraiser appointed under this Section 8(g). The Holder shall promptly mail or cause to be mailed to the Company, a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such adjustment shall become effective immediately after the record date mentioned above, if:
  
 (i) the Company shall declare a dividend (or any other distribution) on its Common Stock;
  
 (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock;
   	 
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 (iii) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights;
  
 (iv) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock of the Company, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or
  
 (v) the Company shall authorize the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall cause to be mailed to the Holder at their last addresses as they shall appear upon the Warrant Register, at least thirty (30) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up; provided, however, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.
  
 9. Payment of Exercise Price. The Holder, at its sole election, may pay the Exercise Price in one of the following manners:
  
 (a)Cash Exercise. The Holder shall deliver immediately available funds; or
  
 (b) Cashless Exercise. If at any time from the date of issuance of this Warrant there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder at such time, this Warrant may also be exercised at such time by means of a cashless exercise. In such event, the Holder shall surrender this Warrant to the Company, together with a notice of cashless exercise, and the Company shall issue to the Holder the number of Warrant Shares determined as follows:
  
 X = Y (A-B)/A
  
 where:
 X = the number of Warrant Shares to be issued to the Holder.
   	 
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 Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
  
 A = the average closing bid price of the Common Stock for the five (5) trading days immediately prior to the Date of Exercise.
  
 B = the Exercise Price.
  
 For purposes of Rule 144 of the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have been commenced, on the issue date.
  
 (c) Notwithstanding anything in this Warrant to the contrary, the Holder is limited in the amount of this Warrant it may exercise. In no event shall the Holder be entitled to exercise any amount of this Warrant in excess of that amount upon exercise of which the sum of (1) the number of shares of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by the Holder, and (2) the number of Warrant Shares issuable upon the exercise of any Warrants then owned by Holder, would result in beneficial ownership by the Holder of more than four and ninety- nine one hundredths percent (4.99%) of the outstanding shares of Common Stock of the Company, as determined in accordance with Rule13d-1(j) of the Exchange Act. Furthermore, the Company shall not process any exercise that would result in beneficial ownership by the Holder of more than four and ninety-nine one hundredths percent (4.99%) of the outstanding shares of Common Stock of the Company.
  
 10. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. The number of full Warrant Shares which shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of this Warrant so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 10, be issuable on the exercise of this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by such fraction.
  
 11. Notices. Any and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile( or email) at the facsimile telephone number specified in this Section prior to 5:00 p.m. Boston time on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:00 p.m. Boston time on any date and earlier than 11:59 p.m. Boston time on such date, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be:
  
 If to the Company:
  
 Jacksam Corp. (DBA Convectium)
  
 30191 Avenida de Las Banderas Suite B
 Rancho Santa Margarita, CA 90266
  
 12. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further action. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
  
 13. Miscellaneous.
  
 (a) This Warrant shall be binding on and inure to the benefit of the parties hereto. This Warrant may be amended only in writing signed by the Company and the Holder.
  
 (b) Nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the Company and the Holder.
  
 (c) This Warrant shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts without regard to the principles of conflicts of law thereof.
  
 (d) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.
   	 
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 (e) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
  
 (f) The Company hereby represent and warrants to the Holder that: (i) it is voluntarily issuing this Warrant of its own freewill, (ii) it is not issuing this Warrant under economic duress, (iii) the terms of this Warrant are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Warrant, advise the Company with respect to this Warrant, and represent the Company in connection with its issuance of this Warrant.
  
 (g) Any capitalized term used but not defined in this Warrant shall have the meaning ascribed to it in the Transaction Documents (as such term is defined in that certain Debenture Registration Rights Agreement, of even date herewith, by and between the Company and the Holder).
  
 (h) This Warrant may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Warrant. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.
  
 (i) This Warrant and the obligations of the Company hereunder shall not be assignable by the Company.
  
 (j) Notwithstanding anything in this Warrant to the contrary, the parties hereto hereby acknowledge and agree to the following: (i) the Holder makes no representations or covenants that it will not engage in trading in the securities of the Company; (ii) the Company shall, by 8:30 a.m. Boston Time on the trading day following the date hereof, file a current report on Form 8-K disclosing the material terms of the transactions contemplated hereby and in the other Transaction Documents; (iii) the Company has not and shall not provide material non-public information to the Holder unless prior thereto the Holder Party shall have executed a written agreement regarding the confidentiality and use of such information; and (iv) the Company understands and confirms that the Holder will be relying on the acknowledgements set forth in clauses (i) through (iii) above if the Holder effects any transactions in the securities of the Company.
  
 14. Disputes Under This Agreement.
  
 All disputes arising under this Warrant shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard to principles of conflict of laws. The parties hereto will submit all disputes arising under this Agreement to arbitration in Boston, Massachusetts before a single arbitrator of the American Arbitration Association (the “AAA”). The arbitrator shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall be an attorney admitted to practice law in the Commonwealth of Massachusetts. No party hereto will challenge the jurisdiction or venue provisions provided in this Section 14. Nothing in this Section 14 shall limit the Holder’s right to obtain an injunction for a breach of this Agreement from a court of law. Any injunction obtained shall remain in full force and effect until the arbitrator, as set forth in this Section 14 fully adjudicates the dispute.
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
  
 [Signature on Following Page]
  
  	 
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 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.
  
  	 	JACKSAM INC (DBA CONVECTIUM)	
	 	 	 	 
	Date: 11/13/2017	By:	/s/ Danny Davis	
	  
	 Name:
	Danny Davis 	 
	 	Title:	Chairman	 

  
  	 
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 EXHIBIT A
  
 FORM OF ELECTION TO PURCHASE
  
 Jacksam Inc.
  
 Re: Intention to Exercise Right to Purchase Shares of Common Stock Under the Warrant Gentlemen:
  
 In accordance with the Warrant enclosed with this Form of Election to Purchase __________, the undersigned hereby irrevocably elects to purchase shares of Common Stock, $0.001 par value per share, of Jacksam, Inc.. and, if such Holder is not utilizing the cashless exercise provisions set forth in the Warrant, encloses herewith $ ____________ in cash, certified or official bank check(s), which sum represents the aggregate Exercise Price for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. Any capitalized terms used but not defined in this Form of Election to Purchase shall have the meaning ascribed to them in the accompanying Warrant.
  
 The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:
  
  
  (Please insert SS# or FEIN #) 
  
  
 (Please print name and address)
  
 If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:
  
  
 (Please print name and address)
  
  
  
  
  
  	 	Name of Holder:	
	 	 	 	 
	Dated:                             ,                 	Signed:		
	  
	 Print Name:
		 
	 	Title: 		 

  
 (Signature must conform in all respects to name of Holder as specified on the face of the Warrant)
  
  
  	 11cgnd_ex101.htm

EXHIBIT 10.1
  
 EMPLOYMENT AGREEMENT
  
 THIS EMPLOYMENT AGREEMENT is made as of the 22 day of December, 2017 (the “Effective Date”) by and between, a [Jacksam Corporation] (the “Company”) and Daniel Davis (the “Executive”) (each a “Party” and together, the “Parties”).
  
 WHEREAS the Executive wishes to continue his employment with the Company, and the Company wishes to retain the Executive, in the position of chief executive officer;
  
 AND WHEREAS the Parties wish to set out the terms and conditions of their employment relationship;
  
 AND WHEREAS it is intended this Agreement will supersede any other employment agreements or arrangements between the Executive and the Company, if any;
  
 NOW THEREFORE in consideration of the mutual covenants and agreements hereinafter contained and for other good and valuable consideration (the sufficiency of which is hereby acknowledged) the Parties hereto have agreed to this Agreement as follows:
  
 ARTICLE 1 DEFINITIONS
 AND INTERPRETATION
  
  	1.1	Wherever in this Agreement, including the recitals and any Schedule attached hereto, the following terms appear, the following meanings shall be ascribed thereto:

  
  	  
	(a)	“Annual Salary” means the annual salary of the Executive as set forth in Section 4.1 and established from time to time by the Board;
	  
	  
	  

	  
	(b)	“Board” or “Board of Directors” means the board of directors of the Company;
	  
	  
	  

	  
	(c)	“Change of Control” means the occurrence of any of the following:

  
  	  
	(i)	the purchase or acquisition of any voting shares of the Company or Convertible Securities by a person which results in the person beneficially owning, or exercising control or direction over, voting shares of the Company or Convertible Securities such that, assuming only the conversion of Convertible Securities beneficially owned or over which control or direction is exercised by the person, the person would beneficially own, or exercise control or direction over, voting shares of the Company carrying the right to cast more than 50% of the votes attaching to all voting shares, but excluding any issue or sale of voting shares of the Company to an investment dealer or group of investment dealers as underwriters or agents for distribution to the public either by way of prospectus or private placement; or

  
  	 
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	(ii)	the approval by the shareholders of the Company of an amalgamation, arrangement, merger or other consolidation or combination of the Company with another entity which requires approval of the shareholders of the Company pursuant to its statute of incorporation and pursuant to which the shareholders of the Company immediately thereafter do not own shares of the successor or continuing entity, which would entitle them to cast more than 50% of the votes attaching to all shares in the capital of the successor or continuing corporation, which may be cast to elect directors of that corporation; or
	  
	  
	  

	  
	(iii)	the election at a meeting of the Company’s shareholders of that number of persons which would represent a majority of the Board, as directors of the Company who are not included in the slate for election as directors proposed to the Company’s shareholders by the Company; or
	  
	  
	  

	  
	(iv)	approval by the shareholders of the Company of the liquidation, dissolution or winding-up of the Company; or the sale, lease or other disposition of all or substantially all of the assets of the Company; or
	  
	  
	  

	  
	(v)	a determination by the Board that there has been a change, whether by way of a change in the holding of the voting shares of the Company, in the ownership of the Company’s assets or by any other means, as a result of which any person or group of persons acting jointly or in concert is in a position to exercise effective control of the Company;

  
  	  
	(d)	“Convertible Securities” means securities of the Company convertible into voting shares of the Company;
	  
	  
	  

	  
	(e)	“Exchange” means the OTC Pink Sheets, or such other stock exchange that the common shares in the capital of the Company may be listed on from time to time;
	  
	  
	  

	  
	(f)	“Notice” means a notice or other writing required to be given hereunder.

  
  	1.2	The division of this Agreement into Articles and Sections, or any other divisions, and the inclusion of headings is for convenience only and shall not affect the construction or interpretation of all or any part hereof.
	  
	  

	1.3	Time shall in all respects be of the essence in this Agreement. Unless otherwise specifically provided, any period of time required to be measured hereunder shall be exclusive of the date of the giving of Notice or the occurrence of the event from which the period is to be measured and inclusive of the last day of the period.

  
 ARTICLE 2
 TERM EMPLOYMENT
  
  	2.1	This Agreement shall be effective for a term commencing upon the Effective Date and ending five (5) years from the Effective Date (the “Initial Term”) unless earlier terminated as provided under Article 8 of this Agreement. Thereafter, this Agreement shall be automatically extended and renewed, upon the same terms and conditions contained herein, without further action by either party, for additional terms of one (1) year each, unless earlier terminated as provided under Article 8 (the Initial Term and an extension thereto collectively means the “Term”).

  
  	 
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 ARTICLE 3
 EMPLOYMENT SERVICES
  
  	3.1	The Executive shall have such responsibilities and powers as are usually associated with Executive’s position, and shall hold the offices of chief executive officer of the Company and perform such duties normally associated with such position and as such Officer and those which the Board may reasonably request from time to time. The Executive’s authority shall at all times remain subject to the authority of the Board. Executive will report directly to the Board of Directors.
	  
	  

	3.2	The Executive shall devote the whole of his business time and effort to the Executive’s duties and obligations hereunder, faithfully serve the Company during his employment hereunder, and shall use his best efforts to promote the interests of the Company. Nothing herein shall prohibit the Executive from engaging in enterprises and activities which do not conflict with his duties hereunder and which do not materially affect his performance hereunder, provided that the Executive shall neither consent to nor act as a director of another for-profit corporation.
	  
	  

	3.3	The Executive acknowledges that the Executive’s relationship to the Company and, if applicable, its parent and subsidiaries is that of a fiduciary, and the Executive agrees to act towards the Company and its parent and subsidiaries and otherwise behave as a fiduciary of the Company and such companies.

  
 ARTICLE 4
 COMPENSATION
  
  	4.1	As of the Effective Date, and for one year of the date therefrom, the Executive’s annual salary shall be equal to USD $180,000 per annum (the “Annual Salary”). The Annual Salary shall be paid to the Executive in equal installments in accordance with the Company’s usual payroll practices.

  
  	  
	(a)	Executive’s Annual Salary shall increase automatically at the rate of five percent (5%) per year, beginning on the anniversary date of the Effective Date. For instance, beginning on the one-year anniversary date of the Effective Date and continuing for one year thereafter, Executive’s Annual Salary shall be equal to USD $189,000 per annum. Beginning on the two-year anniversary date of the Effective Date and continuing for one year thereafter, Executive’s Annual Salary shall be equal to USD $198,450 per annum. Beginning on the three-year anniversary date of the Effective Date and continuing for one year thereafter, Executive’s Annual Salary shall be equal to USD $208,372.50 per annum. Beginning on the four-year anniversary date of the Effective Date and continuing for one year thereafter, Executive’s Annual Salary shall be equal to USD $218,791.12 per annum.

  
  	 
	3
	 
 
	 

  
  	  
	(b)	In addition to the automatic raises set forth above, the Annual Salary may also be increased from time to time by merit and general increases in amounts determined by the Board.

  
  	4.2	Performance Bonus. In addition to the Annual Salary, the Executive is eligible to earn an annual bonus of up to thirty percent (30%) of Executive’s Annual Salary (the “Performance Bonus”). The amount of the Performance Bonus will be determined in good faith by the Board, based upon the following factors:

  
  	  
	(a)	Fifty percent (50%) of the Performance Bonus shall be based upon the achievement of the Executive’s individual objectives, as defined in writing and presented to Executive annually by the Board.
	  
	  
	  

	  
	(b)	Fifty percent (50%) of the Performance Bonus shall be based upon the achievement of Company objectives – which shall include specifically, meeting or exceeding the revenue targets and other objectives as determined by the Board.
	  
	  
	  

	  
	 The initial set of performance objectives, both for Executive individually and for the Company, will be reasonably established by the Board within sixty (60) days of the Effective Date of this Agreement. Subsequent performance objectives, both for Executive individually and for the Company, will be reasonably established by the Board within sixty (60) days of the beginning of the calendar year to which the Performance Bonus relates. The Performance Bonus shall be paid to Executive in the first regular payroll period after the Board makes a good faith determination that such Performance Bonus has been earned, but in no event shall the Performance Bonus be paid later than March 1 of the calendar year immediately following the calendar year in which the bonus was earned.

  
 ARTICLE 5
 STOCK OPTIONS
  
  	5.1	The Board will arrange for a grant to the Executive an option to purchase [1,000,000] common shares of the Company (“Holdings Shares”), exercisable for a period of [3] years at an exercise price equal to USD $[] per share. The options shall vest at a rate of [28,000] shares for each full one-month period worked from the Effective Date. If this Agreement is terminated pursuant to Section 8.3 on or before the date that is one year after the Effective Date, all the options shall vest and the Executive shall retain the options subject to their terms and the terms hereof. The options may contain terms providing the issuer the right to accelerate vesting and/or require the exercise of options prior to the initial public offering and listing of the issuer. The Company may arrange for the grant of additional options to the Executive from time to time based on the Executive’s performance and other relevant factors as the Board may determine in its discretion.

  
  	 
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  	5.2	All options to purchase Holdings Shares granted to the Executive shall be subject to the terms of the stock option agreement pursuant to which they are granted and the terms of the stock option plan under which they are granted in effect from time to time. Shares issuable on exercise of the options shall be subject to any escrow, trading restriction, or other requirement imposed by any stock exchange or securities regulatory authority upon initial public offering or listing of the shares. The Executive shall take such steps and execute and deliver such documents as may be required to effect the foregoing.

  
 ARTICLE 6
 BENEFITS
  
  	6.1	Executive shall be entitled to four (4) weeks (equal to one hundred sixty [160] hours) of paid vacation in each calendar year, which shall be granted to Executive as a lump sum on the Effective Date (prorated for the number of months remaining in 2018), and at the beginning of every calendar year thereafter.
	  
	  

	6.2	The Executive shall receive full, comprehensive medical and dental insurance coverage, and shall receive full, comprehensive medical and dental insurance for his spouse and all dependents. The Company shall be responsible for payment of the full cost of all premiums and all other expenses necessary to maintain medical and dental insurance for Executive, his spouse, and his dependants.
	  
	  

	6.3	The Executive will be entitled to life and disability insurance coverage or other benefit commensurate to the role and responsibility of a senior executive officer of the Company and as is established by the Board and provided to other full time senior executive officers of the Company, if and when established. If applicable, the Company shall pay any professional expenses and industry specific membership fees required to be paid by the Executive to maintain his professional standing.
	  
	  

	6.4	The Company agrees to maintain commercially reasonable Director’s and Officer’s Insurance as well as commercially reasonable general liability insurance covering the customary potential liabilities of Executive in his role as an officer of the Company. The coverage shall be determined by the Company in its best business judgment. Subject to applicable law, the Company shall indemnify Executive from and against any liabilities, costs, claims, and expenses, including all costs and expenses incurred in defense of any proceeding (including attorneys’ fees) for all actions (including failures to act) taken by Executive in good faith in his capacity as Executive and in the course of the performance of his duties for the Company unless Executive is grossly negligent, commits willful misconduct, is convicted of, or plead guilty to, a felony or any crime involving, fraud, misappropriation, or misrepresentation.

  
 ARTICLE 7
 EXPENSES
  
  	7.1	The Company agrees that during employment, the Executive shall be reimbursed by the Company for all reasonable travelling and other costs actually and properly incurred by the Executive in connection with his duties hereunder, subject to the Executive furnishing to the Company expense reimbursement forms and receipts (or other substantiation) for all such expenses to the extent possible.

  
  	 
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 ARTICLE 8
 TERMINATION
  
  	8.1	This Agreement shall terminate automatically upon the death of the Executive.
	  
	  

	8.2	The Company may terminate Executive’s employment for Cause immediately upon Notice from the Company to Executive. For purposes of this Agreement, “Cause” shall mean the occurrence of any of the following: (i) Executive’s conviction of or plea of nolo contendere to any felony crime involving fraud, dishonesty, or moral turpitude; (ii) Executive’s commission of, or participation in, a fraud against the Company. In the event Executive’s employment is terminated for Cause, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination.
	  
	  

	8.3	The Company may terminate Executive’s employment without Cause upon written Notice from the Company to Executive, which Notice shall set forth the effective date of termination, such effective date to be no less than thirty (30) days from the date of the Notice of termination.
	  
	  

	8.4	Executive may terminate this Agreement by giving at least thirty (30) days’ prior written Notice of termination to the Company. Upon voluntary termination by the Executive pursuant to this Section 8.4, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to effective date of termination as determined by the Company.
	  
	  

	8.5	Executive may terminate this Agreement with Good Reason by sending written notice of the same to Company. “Good Reason” means any of the following: (i) a material and adverse change in Employee’s duties, authority or responsibilities with the Company relative to the duties, authority or responsibilities in effect immediately prior to such reduction; or (ii) the Company breaches a material term of this Agreement.
	  
	  

	8.6	In the event of any termination of employment pursuant to this Agreement, if Executive is a director or officer of the Company or any direct or indirect parent or subsidiary of the Company, Executive shall be deemed to have resigned voluntarily from the Board and any Committee of the Board, and of the board of directors (and any committee thereof) of all subsidiaries of the Company, and any position as officer, upon the effective date of termination or such earlier date as may be agreed in writing between the Company and Executive, and Executive’s signature on this Agreement shall, without the need to any further action, constitute Executive’s resignation from such boards of directors and as an officer in such circumstance.
	  
	  

	8.7	This Agreement shall continue in full force and effect during Executive’s employment, until terminated pursuant to the provisions of this Article 8.

  
  	 
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 ARTICLE 9
 TERMINATION PAYMENT
  
  	9.1	Upon termination of this Agreement pursuant to Section 8.1, the Company shall pay the Executive’s heirs:

  
  	  
	(a)	a payment equal to six (6) months’ Annual Salary; and
	  
	  
	  

	  
	(b)	any Performance Bonus payable pursuant to Section 4.2 that has been earned by Executive on or before the effective date of termination, but that has not yet been paid.
	  
	  
	  

	  
	(c)	all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination.

  
  	9.2	Upon termination of this Agreement pursuant to Section 8.2, Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination.
	  
	  

	9.3	Upon termination of this Agreement pursuant to Section 8.3, the Company shall provide to the Executive:

  
  	  
	(a)	A lump sum payment equal to the greater of (i) twelve (12) months’ Annual Salary at the Executive’s then-current rate, or (ii) Executive’s Annual Salary for the remainder of the Term;
	  
	  
	  

	  
	(b)	if applicable, to the extent permitted by the Company’s group insurance carrier and applicable law, continued group insurance benefits coverage, together with reimbursement of the individual life insurance premium for the period of time equal to the number of months in respect of which payment is due pursuant to Section 9.3(a); and
	  
	  
	  

	  
	(c)	any other amounts (including but not limited to any earned Performance Bonus during Executive’s active employment that may be payable pursuant to this Agreement) accrued and earned by Executive prior to the effective date of termination.

  
  	9.4	Upon termination of this Agreement pursuant to Section 8.4, the Company shall pay Executive all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination.

 	 
	7
	 
 
	 

  
 	9.5	Upon termination of this Agreement pursuant to Section 8.5, the Company shall provide to the Executive:

   	  
	(a)	A lump sum payment equal to the greater of (i) twelve (12) months’ Annual Salary at the Executive’s then-current rate, or (ii) Executive’s Annual Salary for the remainder of the Term;
	  
	  
	  

	  
	(b)	if applicable, to the extent permitted by the Company’s group insurance carrier and applicable law, continued group insurance benefits coverage, together with reimbursement of the individual life insurance premium for the period of time equal to the number of months in respect of which payment is due pursuant to Section 9.3(a); and
	  
	  
	  

	  
	(c)	any other amounts (including but not limited to any earned Performance Bonus during Executive’s active employment that may be payable pursuant to this Agreement) accrued and earned by Executive prior to the effective date of termination.

  
  	9.6	If a Change of Control occurs and the Executive is not offered continued employment on a comparable basis after the Change of Control, the Executive shall be entitled to receive, within thirty (30) days after the Change of Control, a sum equivalent to twelve (12) months’ Annual Salary, plus an additional 4% of Annual Salary in lieu of benefits, and any Performance Bonus that has been earned by Executive prior to the effective date of the Executive’s termination from the Company. Thereafter, the Company shall have no further obligations to the Executive under this Agreement other than payment of any other amounts accrued as owing to the Executive under this Agreement as of the date the Change of Control occurs.
	  
	  

	9.7	If a Change of Control occurs and the Executive is offered continued employment on a comparable basis after the Change of Control (which offer shall have been evidenced by a written offer from the person acquiring control through the Change of Control delivered to the Executive prior to the Change of Control), thereafter, the Company shall have no further obligations to the Executive under this Agreement other than payment of any other amounts accrued as owing to the Executive under this Agreement as at the date the Change of Control occurs.

  
 ARTICLE 10
 GENERAL
  
  	10.1	Except for the Executive’s rights to continued participation in employee benefit plans, if any, conditions of employment generally available to other employees of the Company, this Agreement contains the entire understanding of the Parties with respect to the matters contained herein and there are no statements, representations, warranties, understandings, promises, undertakings or agreements, written or oral, express or implied, by either Party hereto to the other, other than those expressly set forth herein. Except as otherwise expressly provided in this Agreement, this Agreement supersedes and replaces any earlier agreement(s), whether oral or in writing between the Parties hereto respecting the subject matter of this Agreement. This Agreement may be amended only by written instrument signed by each of the Parties hereto.

  
  	 
	8
	 
 
	 

  
  	10.2	No provision hereof shall be deemed waived and no breach excused, unless such waiver or consent excusing the breach shall be in writing and signed by the Party to be charged with such waiver or consent. A waiver by a Party of any provision of this Agreement shall not be deemed or construed as a waiver of a further breach of the same provision or of the provision itself.
	  
	  

	10.3	In any covenant or obligation of either Party contained herein or any provision of this Agreement or its application to any person or circumstance shall, to any extent, be invalid or unenforceable; the remainder of this Agreement or the application of such covenant or obligation to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected, and each provision and each covenant and obligation contained in this Agreement shall be separately valid and enforceable, to the fullest extent permitted by law or at equity.
	  
	  

	10.4	This Agreement is for the personal services and employment of the Executive and may not be assigned in whole or in part to any third party by the Executive. Subject thereto, this Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, legal representatives, successors and permitted assigns, if any.
	  
	  

	10.5	All Notices permitted or required to be given hereunder shall be in writing and shall be addressed as follows:

  
 To the Company:
 [Jacksam Corporation]
 [30191 Avenida de las Banderas]
 [Rancho Santa Margarita, CA 92688]
 Email (danny@convectium.com):
  
 To the Executive:
 Daniel Davis
 [47 Lazurite]
 [Rancho Santa Margarita, CA 92688]
 Email (for courtesy copy only): danny@convectium.com
  
  		Notices may be delivered by personal delivery, by overnight mail service, or by first class mail, postage prepaid. Notices which are personally delivered shall be deemed to be received upon actual receipt thereof. Notices which are mailed shall be deemed to have been received seven (7) business days after the posting of such Notices (exclusive of the date of posting). Either Party may change its address or particulars respecting its address for receipt of Notices by giving Notice as aforesaid.
	  
	  

	10.6	This Agreement shall be governed exclusively by the laws of the State of California, without regard to conflict of law principles. The Parties also agree that that sole and exclusive jurisdiction and venue for any action arising from this Agreement or Executive’s employment with the Company shall be in the Superior Court of the State of California, for the County of Los Angeles – Central District.
	  
	  

	10.7	This Agreement may be executed in separate counterparts and all such executed counterparts, when taken together shall constitute one agreement. The Parties hereto shall be entitled to rely on delivery of an electronically sent copy of the executed Agreement and such copy shall be legally effective to create a binding and valid Agreement.

  
  	 
	9
	 
 
	 

  
 IN WITNESS WHEREOF the Parties agree to the terms of this Agreement and have caused it to be executed as of the dates set forth below.
  
  
  	 COMPANY
	  
	 EXECUTIVE
	  

	  
	  
	  
	  

	 /s/ Mark Adams
	  
	 /s/ Daniel Davis
	  

	 By: Mark Adams
	  
	 By: Daniel Davis
	  

	 Its:
	  
	  
	  

	  
	  
	  
	  

	 Date: 12/22/17
	  
	 Date: 12/22/17
	  

  
  
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