Document:

EXHIBIT 4.6

 

THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO WINDSTREAM TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

WINDSTREAM
TECHNOLOGIES, INC.

 

WARRANT
TO PURCHASE SHARES OF COMMON STOCK

 

1.Issuance.
In consideration of good and valuable consideration as set forth in the Purchase Agreement (defined below), including without
limitation the Purchase Price (as defined in the Purchase Agreement), the receipt and sufficiency of which are hereby acknowledged
by WINDSTREAM TECHNOLOGIES, INC., a Wyoming corporation (the “Company”);
Vista Capital Investments, LLC, its successors and/or registered assigns (the
“Holder”), is hereby granted the right to purchase at any time on or after the Issue Date (as defined below)
until the date which is the last calendar day of the month in which the fifth anniversary of the Issue Date occurs (the “Expiration
Date”), 199,396 fully paid and nonassessable shares (the “Warrant Shares”) of the Company’s
common stock, par value $0.001 per share (the “Common Stock”), as such number of Warrant Shares may be adjusted
from time to time pursuant to the terms and conditions of this Warrant to Purchase Shares of Common Stock (this “Warrant”).
This Warrant is being issued pursuant to the terms of that certain Securities Purchase Agreement dated October 9, 2014, to
which the Company and the Holder are parties (as the same may be amended from time to time, the “Purchase Agreement”).

 

Unless
otherwise indicated herein, capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase
Agreement.

 

This
Warrant was originally issued to the Holder on October 9, 2014 (the “Issue Date”).

 

2.Exercise
of Warrant.

 

2.1.
General.

 

(a)
This Warrant is exercisable in whole or in part at any time and from time to time commencing on the Issue Date and ending on the
Expiration Date. Such exercise shall be effectuated by submitting to the Company (either by delivery to the Company or by email
or facsimile transmission) a completed and duly executed Notice of Exercise substantially in the form attached to this Warrant
as Exhibit A (the “Notice of Exercise”). The date such Notice of Exercise is either faxed, emailed or
delivered to the Company shall be the “Exercise Date,” provided that, if such exercise represents the full
exercise of the outstanding balance of the Warrant, the Holder shall tender this Warrant to the Company within five (5) Trading
Days thereafter, but only if the Warrant Shares to be delivered pursuant to the Notice of Exercise have been delivered to the
Holder as of such date. The Notice of Exercise shall be executed by the Holder and shall indicate (i) the number of Warrant Shares
(as defined below) to be issued pursuant to such exercise, and (ii) if applicable (as provided below), whether the exercise is
a cashless exercise.

 

    	1

    	 

    

  

For
purposes of this Warrant, the term “Trading Day” means any day during which the principal market on which the
Common Stock is traded (the “Principal Market”) shall be open for business.

 

(b)
To the extent this Warrant is not previously exercised, and if the Market Price of one Warrant Share is greater than the Exercise
Price, the Holder may elect to receive Warrant Shares, in lieu of a cash exercise, equal to the value of this Warrant determined
in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a Notice of Exercise,
in which event the Company shall issue to Holder a number of Shares computed using the following formula:

 

X
= Y (A-B) 

A

 

	 	Where	X	=	the
    number of Warrant Shares to be issued to Holder.
	 	 	 	 	 
	 	 	Y
    	=	the
    number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation).
	 	 	 	 	
	 	 	A
    	=	the
    Market Price (at the date of such calculation).
	 	 	 	 	 
	 	 	B
    	=	Exercise
    Price (as adjusted to the date of such calculation).

 

For
the purposes of this Warrant, the following terms shall have the following meanings:

 

“Affiliate”
shall mean an affiliate as such term is defined in Rule 144 under the Securities Act of 1933, as amended (or a successor rule).

 

“Aggregate
Exercise Price Payable” shall mean the product of multiplying the number of Warrant Shares exercisable by the Exercise
Price.

 

“Closing
Price” shall mean the 4:00 P.M. last sale price of the Common Stock on the Principal Market on the relevant Trading
Day(s), as reported by Bloomberg LP (or if that service is not then reporting the relevant information regarding the Common Stock,
a comparable reporting service of national reputation selected by the Holder and reasonably acceptable to the Company) (“Bloomberg”)
for the relevant date.

 

“Deemed
Issuance” means a requested conversion under the Note that is not honored by the Company.

 

“Exercise
Price” shall mean $0.80 per share of Common Stock, subject to adjustments herein.

 

“Market
Price” shall mean the Closing Price for the Common Stock on the Trading Day that is two Trading Days prior to the Exercise
Date.

 

“Note”
shall mean that certain Convertible Promissory Note issued by the Company to the Holder pursuant to the Purchase Agreement,
as the same may be amended from time to time, and including any promissory note(s) that replace or are exchanged for such referenced
promissory note.

 

    	2

    	 

    

 

(c)If
the Notice of Exercise form elects a “cash” exercise (or if the cashless exercise referred to in the immediately preceding
subsection (b) is not available in accordance with the terms hereof), the Exercise Price per share of Common Stock for the Warrant
Shares shall be payable, at the election of the Holder, in cash or by certified or official bank check or by wire transfer in
accordance with instructions provided by the Company at the request of the Holder.

 

(d)Upon
the appropriate payment to the Company, if any, of the Exercise Price for the Warrant Shares, together with the surrender of this
Warrant (if required), the Company shall promptly, but in no case later than the date that is three (3) Trading Days following
the date the Exercise Price is paid to the Company (or with respect to a “cashless exercise,” the date that is three
(3) Trading Days following the Exercise Date) (the “Delivery Date”), provided that all DWAC Eligible Conditions
(as defined in the Note) are then satisfied, deliver or cause the Company’s Transfer Agent to deliver the applicable Warrant
Shares electronically via the Deposit/Withdrawal at Custodian (“DWAC”) system to the account designated by
the Holder on the Notice of Exercise. If all DWAC Eligible Conditions are not then satisfied, the Company shall instead issue
and deliver or cause to be issued and delivered (via reputable overnight courier) to the address as specified in the Notice of
Exercise, a certificate, registered in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
shall be entitled. For the avoidance of doubt, the Company has not met its obligation to deliver Warrant Shares by the Delivery
Date unless the Transfer Agent has posted the shares for DWAC pickup and the Holder or its broker, as applicable, has been notified
of this availability, or if the DWAC Eligible Conditions are not then satisfied, has actually received the certificate representing
the applicable Warrant Shares no later than the close of business on the relevant Delivery Date pursuant to the terms set forth
above.

 

(e)If
Warrant Shares are delivered later than as required under subsection (d) immediately above, the Company agrees to pay, in addition
to all other remedies available to the Holder in the Transaction Documents, a late charge equal to the greater of (i) $2,000.00
and (ii) 2% of the product of (1) the sum of the number of shares of Common Stock not issued to the Holder on a timely basis and
to which the Holder is entitled multiplied by (2) the Closing Price of the Common Stock on the Trading Day immediately preceding
the last possible date which the Company could have issued such shares of Common Stock to the Holder without violating this Warrant,
per Trading Day until such Warrant Shares are delivered. The Company shall pay any late charges incurred under this subsection
in immediately available funds upon demand; provided, however, that, at the option of the Holder (without notice to the
Company), such amount owed may be added to the principal amount of the Note. Furthermore, in addition to any other remedies which
may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares as
required under subsection (d) immediately above, the Holder may revoke all or part of the relevant Warrant exercise by delivery
of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions
immediately prior to the exercise of the relevant portion of this Warrant, except that the late charge described above shall be
payable through the date notice of revocation or rescission is given to the Company.

 

(f)The
Holder shall be deemed to be the holder of the Warrant Shares issuable to it in accordance with the provisions of this Section
2.1 on the Exercise Date.

 

    	3

    	 

    

  

2.2.
Ownership Limitation. If at any time after the Closing, the Buyer shall or would receive shares of Common Stock in payment
of interest or principal under Note, upon conversion of Note, under the Warrant, or upon exercise of the Warrant, so that the
Buyer would, together with other shares of Common Stock held by it or its Affiliates, own or beneficially own by virtue of such
action or receipt of additional shares of Common Stock a number of shares exceeding 9.99% of the number of shares of Common Stock
outstanding on such date (the “Maximum Percentage”), the Company shall not be obligated and shall not issue
to the Buyer shares of Common Stock which would exceed the Maximum Percentage, but only until such time as the Maximum Percentage
would no longer be exceeded by any such receipt of shares of Common Stock by the Buyer. The foregoing limitations are enforceable,
unconditional and non-waivable and shall apply to all Affiliates and assigns of the Buyer. Additionally, for so long as the Buyer
or any of its Affiliate own Securities, upon written request from the Buyer, the Company shall post (or cause to be posted), the
then-current number of issued and outstanding shares of its capital stock to the Company’s web page located at OTCmarkets.com
(or such other web page approved by the Buyer).

 

3.Mutilation
or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the
case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver to the Holder a new
Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void.

 

4.Rights
of the Holder. The Holder shall not, by virtue of this Warrant alone, be entitled to any rights of a stockholder in the Company,
either at law or in equity, and the rights of the Holder with respect to or arising under this Warrant are limited to those expressed
in this Warrant and are not enforceable against the Company except to the extent set forth herein.

 

5.Certain
Adjustments.

 

5.1.Capital
Adjustments. If the Company shall at any time prior to the expiration of this Warrant subdivide the Common Stock, by split-up
or stock split, or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend, the number
of Warrant Shares issuable upon the exercise of this Warrant shall forthwith be automatically increased proportionately in the
case of a subdivision, split or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments
shall also be made to the Exercise Price, Market Price (in the event of a cashless exercise), and other applicable amounts, but
the aggregate purchase price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 5.1 shall become effective automatically at the close of business on the date
the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date
is fixed, upon the making of such dividend.

 

5.2.Reclassification,
Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the capital stock
of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 5.1 above), then
the Company shall make appropriate provision so that the Holder shall have the right at any time prior to the expiration of this
Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of
stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder
of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization,
or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that
the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made to the purchase price per Warrant Share payable hereunder, provided
the aggregate purchase price shall remain the same.

 

    	4

    	 

    

  

5.3.
Dilutive Issuances. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding,
shall sell or grant any option to purchase, or sell or grant any right to re-price, or otherwise dispose of or issue (or announce
any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock, at an effective price per share less than the then Exercise Price (such lower price,
the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder
of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share
which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share
which is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such
date of the Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to equal the Base Share Price and the
number of Warrant Shares issuable hereunder shall be increased such that the Aggregate Exercise Price Payable hereunder, after
taking into account the decrease in the Exercise Price, shall be equal to the Aggregate Exercise Price Prior to such adjustment.
Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing,
no adjustments shall be made, paid or issued under this Section 5.3 in respect of an Exempt Issuance. The Company shall notify
the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject
to this Section 5.3, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price
and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, whether
or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5.3, upon the occurrence of any Dilutive Issuance,
after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares based upon the Base Share
Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. Notice of Adjustment.
Without limiting any other provision contained herein, when any adjustment is required to be made in the number or kind of shares
purchasable upon exercise of this Warrant, or in the Exercise Price, pursuant to the terms hereof, the Company shall promptly
notify the Holder of such event and of the number of Warrant Shares or other securities or property thereafter purchasable upon
exercise of this Warrant.

 

6.Certificate
as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock issuable on the exercise of
this Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute
such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of
(a) the consideration received or receivable by the Company for any additional shares of Common Stock issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of
each such certificate to the Holder and any Warrant Agent (as defined below) appointed pursuant to Section 8 hereof. Nothing in
this Section 6 shall be deemed to limit any other provision contained herein.

 

7.Transfer
to Comply with the Securities Act. This Warrant, and the Warrant Shares, have not been registered under the 1933 Act. This
Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant may only be sold, transferred,
pledged or hypothecated (other than to an Affiliate) if (a) there exists an effective registration statement under the 1933 Act
relating to such security or (b) the Company has received an opinion of counsel reasonably satisfactory to the Company that registration
is not required under the 1933 Act. Until such time as registration has occurred under the 1933 Act, each certificate for this
Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend, in
form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section
7. Any such transfer shall be accompanied by a transferor assignment substantially in the form attached to this Warrant as Exhibit
B (the “Transferor Assignment”), executed by the transferor and the transferee and submitted to the Company.
Upon receipt of the duly executed Transferor Assignment, the Company shall register the transferee thereon as the new Holder on
the books and records of the Company and such transferee shall be deemed a “registered holder” or “registered
assign” for all purposes hereunder, and shall have all the rights of the Holder.

 

    	5

    	 

    

  

8.Warrant
Agent. The Company may, by written notice to the Holder, appoint an agent (a “Warrant Agent”) for the purpose
of issuing shares of Common Stock on the exercise of this Warrant pursuant hereto, exchanging this Warrant pursuant hereto, and
replacing this Warrant pursuant hereto, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as
the case may be, shall be made at such office by such Warrant Agent.

 

9.Transfer
on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may treat the Holder
as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

10.Notices.
Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled “Notices”
in the Purchase Agreement, the terms of which are incorporated herein by reference.

 

11.Supplements
and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the
parties hereto. This Warrant, together with the Purchase Agreement and all the other Transaction Documents, taken together, contain
the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations,
warranties, agreements or understandings with respect to the subject matter hereof and thereof other than as expressly contained
herein and therein.

 

12.Governing
Law. This Warrant shall be governed by and interpreted in accordance with the laws of the State of Nevada, without giving
effect to the principles thereof regarding the conflict of laws. The Company and, by accepting this Warrant, the Holder, each
irrevocably (a) consent to and expressly submit to the exclusive personal jurisdiction of any state or federal court sitting in
San Diego County, California in connection with any dispute or proceeding arising out of or relating to this Warrant, (b) agree
that all claims in respect of any such dispute or proceeding may only be heard and determined in any such court, (c) expressly
submit to the venue of any such court for the purposes hereof, and (d) waive any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdictions
or to any claim that such venue of the suit, action or proceeding is improper. The Company and, by accepting this Warrant, the
Holder, each hereby irrevocably consent to the service of process of any of the aforementioned courts in any such proceeding by
the mailing of copies thereof by reputable overnight courier (e.g., FedEx) or certified mail, postage prepaid, to such party’s
address as provided for herein, such service to become effective ten (10) calendar days after such mailing. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	6

    	 

    

  

13.Remedies.
The remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance
of or compliance with any of the terms of this Warrant are not and will not be adequate and, without limiting any other remedies
available to the Holder in the Transaction Documents, law or equity, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.

 

14.Counterparts.
This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the same instrument. Signature delivered via facsimile
or email shall be considered original signatures for purposes hereof.

 

15.Descriptive
Headings. Descriptive headings of the sections of this Warrant are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.

 

16.Attorney’s
Fees. In the event of any litigation or dispute arising from this Warrant, the parties agree that the party who is awarded
the most money shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of
the full amount of the attorneys’ fees and expenses paid by said prevailing party in connection with the litigation and/or
dispute without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses.
Nothing herein shall restrict or impair a court’s power to award fees and expenses for frivolous or bad faith pleading.

 

17.Severability.
Whenever possible, each provision of this Warrant shall be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be invalid or unenforceable in any jurisdiction, such provision shall be modified
to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Warrant or the validity or enforceability of this Warrant in any other
jurisdiction.

 

[Remainder
of page intentionally left blank]

 

    	7

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by an officer thereunto duly authorized.

 

Dated:
October 9, 2014

 

	 	THE
    COMPANY:
	 	 	 
	 	Windstream
    Technologies, Inc.
	 	 
	 	By:	/s/
    Daniel Bates
	 	Name:	Daniel
    Bates
	 	Title:	Chief
    Executive Officer

 

[Signature
Page to Warrant]

 

    	 

    	 

    

  

EXHIBIT
A

 

NOTICE
OF EXERCISE OF WARRANT

 

	TO:	WINDSTREAM
    TECHNOLOGIES, INC.	 
	 	ATTN:
                                	 
	 	VIA
    FAX TO: (  )                             	 
	 	VIA
    EMAIL TO: (  )                             	 

 

The
undersigned hereby irrevocably elects to exercise the right, represented by the Warrant to Purchase Shares of Common Stock dated
as of October 9, 2014 (the “Warrant”), to purchase shares of the common stock, $0.001 par value (“Common
Stock”), of WINDSTREAM TECHNOLOGIES, INC., and tenders herewith payment in accordance with Section 2 of the Warrant,
as follows:

 

		 	CASH:	$
                                 
     = (Exercise Price x Warrant Shares)

 

		 	Payment
    is being made by:	 

 

	 		 	enclosed
    check
	 		 	wire
    transfer
	 		 	other

 

		 	CASHLESS
    EXERCISE:
	 	 	 
		 	Net
    number of Warrant Shares to be issued to Holder:                       *

 

*
X = Y (A-B) 

A

 

	 	Where	X	=	the
    number of Warrant Shares to be issued to Holder.
	 	 	 	 	 
	 	 	Y
    	=	the
    number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation).
	 	 	 	 	
	 	 	A
    	=	the
    Market Price (at the date of such calculation).
	 	 	 	 	 
	 	 	B
    	=	Exercise
    Price (as adjusted to the date of such calculation).

 

Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to them in the Warrant.

 

It
is the intention of the Holder to comply with the provisions of Section 2.2 of the Warrant regarding certain limits on the Holder’s
right to exercise thereunder. The Holder believes this exercise complies with the provisions of such Section 2.2. Nonetheless,
to the extent that, pursuant to the exercise effected hereby, the Holder would have more shares of Common Stock than permitted
under Section 2.2, this notice should be amended and revised, ab initio, to refer to the exercise which would result in
the issuance of the maximum number of such shares permitted under such provision. Any exercise above such amount is hereby deemed
void and revoked.

 

    	 

    	 

    

  

As
contemplated by the Warrant, this Notice of Exercise is being sent by facsimile or email to the fax number and officer indicated
above.

 

If
this Notice of Exercise represents the full exercise of the outstanding balance of the Warrant, the Holder either (1) has previously
surrendered the Warrant to the Company or (2) will surrender (or cause to be surrendered) the Warrant to the Company at the address
indicated above by express courier within five (5) Trading Days after delivery or email or facsimile transmission of this Notice
of Exercise; provided that the Warrant Shares to be delivered pursuant to this Notice of Exercise have been delivered to the Holder
as of such date.

 

To
the extent the Warrant Shares are not able to be delivered to the Holder via the DWAC system, please deliver certificates representing
the Warrant Shares to the Holder via reputable overnight courier after receipt of this Notice of Exercise (by facsimile transmission
or otherwise) to:

 

	 		 
	 	 	 
	 	 	 

 

	 	 	 
	Dated:		 
	 	 	 
	 	 
	[Name of Holder]	 
	 	 	 
	By:		 

 

    	 

    	 

    

  

EXHIBIT
B

 

FORM
OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of the Warrant)

 

For
value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees”
the right represented by the Warrant to Purchase Shares of Common Stock dated as of October 9, 2014 (the “Warrant”)
to purchase the percentage and number of shares of common stock, $0.001 par value (“Common Stock”), of
WINDSTREAM TECHNOLOGIES, INC. specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s), and appoints each such person attorney to transfer the undersigned’s
respective right on the books of WINDSTREAM TECHNOLOGIES, INC. with full power of substitution in the premises.

 

	Transferees	 	Percentage
    Transferred	 	Number
    Transferred

 

 

 

 

 

	Dated:                   
     ,          	 	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	[Transferor
    Name must conform to the name of Holder
    as specified on the face of the Warrant]
	 	 	 	 	
	 	 	 	By:	
	 	 	 	Name:	
	 	 	 	 	 
	Signed in the presence of:	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	(Name)	 	 	 	 
	 	 	 	 	 
	ACCEPTED AND AGREED:	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	[TRANSFEREE]	 	 	 
	 	 	 	 	 
	By:	 		 	 
	Name:ex10-1.htm

Exhibit 10.1

 

 

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made effective as of October 16, 2014 (the “Effective Date”), by and between Medbox, Inc., a Nevada corporation (the “Company”) and C. Douglas Mitchell (the “Executive”), a California resident.  Company and Executive are referred to herein, from time to time, collectively, as the “parties.” In consideration of the mutual covenants contained in this Agreement, the Company and the Executive agree as follows:

 

1.           Engagement.  The Company agrees to engage the Executive to serve as the Company’s Chief Financial Officer reporting to the Chief Executive Officer “CEO” and to provide the services described in Section 2 (“Engagement”).    In addition to his Engagement, the Executive will also serve as an officer of the following wholly owned subsidiaries: Vaporfection International, Inc. (VII), Prescription Vending Machines, Inc. (PVMI), and Medbox Technologies, LTD, and any other wholly owned subsidiary of the Company unless such position(s) is delegated to another executive with the approval of the CEO of the Company. The Executive agrees to serve in such capacities and to provide services to the Company on the terms and conditions set forth in this Agreement.

2.           Services.   The Executive shall be responsible for the general supervision, management and control of the financial function and SEC compliance of the Company and its wholly owned subsidiaries, and shall perform such duties as are usual and customary for such position and such other duties as the CEO shall reasonably assign to him from time to time (“Services”).  The Executive shall report directly to the CEO.

3.           Term.  The term of Executive’s engagement with the Company under this Agreement shall commence on the Effective Date and shall continue for two (2) years, unless earlier terminated as herein provided (the “Initial Term”).  At the end of the Initial Term, the term of Executive’s engagement shall be automatically extended without further action of the parties for additional one year periods (each, an “Extended Term”) unless, ninety (90) days before the expiration of the Initial Term, or any Extended Term, a party provides notice in writing to the other party as provided for herein that the Executive’s engagement shall not be further extended.  As used herein, “Term” shall include the Initial Term and any Extended Term, but the Term shall end upon any termination of Executive’s engagement with the Company as herein provided.

4.           Compensation.  The compensation payable by the Company to the Executive under this Agreement shall be as follows:

(a)           Annual Salary.  For all Services rendered by the Executive under this Agreement, the Company shall pay the Executive an aggregate salary (the “Salary”) of one hundred and ninety thousand dollars ($190,000) per annum.  The Salary shall accrue from day to day and shall be payable commencing on the Effective Date in periodic installments in accordance with the Company’s usual practice for its employees, but in no event less than twice monthly over the year in which the applicable portion of the Salary is earned.  The Salary shall be reviewed annually for increases by the CEO.

(b)           Annual Bonus Eligibility.  As additional compensation for his Services, the Executive shall be entitled to earn an annual bonus of up to 35% of his Salary (“Annual Bonus”), payable (i) of up to 50% in cash and (ii) the balance payable in equity of the Company, subject to performance criteria and objectives established by the Board of Directors (“Bonus Objectives”). The Bonus Objectives shall be established by the mutual approval of the CEO and Executive within the first ninety (90) days following the Effective Date of this Agreement, which approval shall not unreasonably delayed or withheld.  The terms agreed shall be committed to writing. Thereafter, Bonus Objectives shall be established from time to time by the CEO, at reasonable intervals selected by the CEO in its reasonable discretion, and in consultation with Executive, but in any event, no less than annually.  The Annual Bonus shall be prorated on a monthly basis for any partial year during the Term.  The Annual Bonus shall be reviewed annually for increases by the CEO.

 

  

  

  

(c)           Regular Benefits.  The Executive shall also be entitled to participate in any qualified retirement plans, deferred compensation plans, stock option and incentive plans, stock purchase plans, group and executive medical insurance plans (i.e., coverage for the Executive and family), life insurance plans, disability income plans, retirement plans, vacation plans, expense reimbursement plans and other benefit plans which the Company may from time to time have in effect for any, all or most of its senior executives (collectively “Company Benefit Plans”).  Such participation shall be subject to the terms of applicable plan documents, generally applicable policies of the Company, applicable law and the discretion of the CEO and the Board of Directors, or any administrative or other committee provided for in or contemplated by any such plan.  Nothing contained in this Agreement shall be construed to create any obligation on the part of the Company to establish any such plans or to maintain the effectiveness of any such plans which may be in effect from time to time.  Executive shall be entitled to paid vacation for three weeks each year. Accrual of paid vacation time shall be subject to any vacation plan adopted by the Company; pending adoption of any such policy, vacation shall accrue pro rata over a full calendar year and any roll over vacation shall cease to accrue once six (6) weeks of vacation is accrued.

(d)           Reimbursement of Business Expenses.  The Company shall reimburse the Executive for all reasonable expenses incurred by the Executive in performing Services during the Term, in accordance with the Company’s policies and procedures for its senior executives, as in effect from time to time, including but not limited to, air travel, meals and entertainment, fuel costs for transportation, car rental or taxi when traveling, wireless mobile communications, and personal computer equipment. In addition, the Company shall pay, or reimburse Executive   $2,500 per month for living expenses in the West Hollywood, California area.  The Executive shall provide reasonable substantiation of his business expenses, consistent with Company policies and in a manner which allows the Company to maintain compliance with any applicable law or regulation.

(e)           Stock Award.  In addition to the foregoing, Executive shall be entitled to receive, as soon as reasonably practicable but in any event within ninety (90) days of the Effective Date, unless extended by Executive,  an award of restricted stock units to be issued under an equity incentive plan to be adopted by the Company, in the amount of  7,500 RSU’s each calendar quarter during the Executive’s service under this contract (as adjusted for any stock splits, recapitalizations, dividends, combinations, or reclassifications prior to the date of grant).  Each Stock Award shall be fully vested upon issuance.    

5.           Extent of Services.  During the Executive’s engagement under this Agreement, the Executive shall, subject to the direction and supervision of the CEO devote the Executive’s full business time, best efforts and business judgment, skill and knowledge to the advancement of the Company’s interests and to the discharge of the Executive’s duties and responsibilities and performance of Services under this Agreement.  Nothing in this Agreement shall be construed as preventing the Executive from:

 

  

  

  

 

(a)           investing the Executive’s personal assets in any non-competitive business enterprise, company or other entity in such form or manner as shall not require any material personal time commitment on the Executive’s part in connection with the operations or affairs of such other enterprise, company or other entity in which such investments are made including remaining a member of Hardesty, LLC an Executive Services and Consulting firm, provided however that Executive agrees that he will refrain from direct participation or assistance in any engagement Hardesty has for any company or person directly competitive with Medbox;

(b)            engaging in religious, charitable or other community or non-profit activities that do not impair the Executive’s ability to fulfill the Executive’s duties and responsibilities under this Agreement;

6.           Termination.  Notwithstanding the provisions of Section 3, the Executive’s engagement under this Agreement shall terminate under the following circumstances set forth in this Section 6. For purposes of this Agreement, the date of the Executive’s termination (the “Termination Date”) shall mean the date of the Executive’s “separation from service” as such term is defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).

(a)           Termination by the Company for Cause.  The Executive’s engagement under this Agreement may be terminated for Cause without further liability on the part of the Company effective immediately upon approval of the CEO and written notice to the Executive as provided for herein.  Only the following shall constitute “Cause” for such termination:

(i)           indictment for, formal admission to (including a plea of guilty or nolo contendere to), or conviction of, a felony, or any criminal offense involving Executive’s moral turpitude, or if the Executive is named as a defendant in any criminal complaint alleging a felony where the CEO determines, in good faith, that the Company or its business is reasonably likely to experience a material adverse impact; provided, however, that the Company may not terminate Executive for Cause if Executive is so named as a defendant solely as a result of the performance of his obligations under this Agreement in the ordinary course of business.

(ii)           gross negligence or willful misconduct by Executive in the performance of Executive’s material duties required by this Agreement, or other uncured material breach of this Agreement,, of which the Executive has been notified by the Company in writing and has failed to remedy within 30 days of such notification, except in any case where the nature of the negligent act or misconduct is not capable of being remedied.

 

  

  

  

 

(b)           Termination by the Company Without Cause.  Subject to the payment of Termination Benefits pursuant to Section 7(b), the Executive’s Engagement under this Agreement may be terminated by the Company without Cause upon written notice to the Executive.  Termination by the Company within three hundred and sixty-five (365) days of a Change of Control in the absence of Cause shall be conclusively deemed a Termination by the Company without Cause.

  

(c)           Termination by Executive with Good Reason.  Executive may terminate this Agreement with Good Reason after providing notice to the Company as set forth below.  For purposes of this Agreement, “Good Reason” shall mean the occurrence of one or more of the following events without the Executive’s consent:

(i)           a reduction in the Executive’s Salary or elimination of his entitlement to earn an Annual Bonus subject to Bonus Objectives established by the CEO;

(ii)           a material reduction in scope of Services to be provided by Executive under this Agreement, or the assignment to Executive of substantial duties inconsistent with Executive’s Engagement;

(iii)           a requirement by the Company, without Executive’s consent, that Executive relocate to a location greater than fifty (50) miles from Executive’s place of residence in Orange County as of the date hereof  or relocate to a location greater than fifty (50) miles from Executive’s domicile in West Hollywood contemplated by this Agreement;;

(iv)           a material breach by the Company of this Agreement; or

(v)           mutual agreement to terminate between the Company and the Executive;

provided, however, that the Executive cannot terminate his employment for Good Reason unless he has provided written notice to the Company of the existence of the circumstances providing grounds for termination for Good Reason within ninety (90) days of the initial existence of such grounds and the Company has had at least thirty (30) days from the date on which such notice is provided hereunder to cure such circumstances.

 

  

  

  

 

(d)           Death.  The Executive’s Engagement with the Company shall terminate automatically upon his death.

(e)           Disability.  If the Executive shall become Disabled so as to be unable to perform the essential functions of the Executive’s Services or then existing duties under this Agreement with reasonable accommodation, the CEO may terminate this Agreement upon written notice to the Executive.  For purposes hereof, the term “Disabled” or “Disability” shall mean a written determination that the Executive, as certified by at least two (2) California  licensed physicians, one (1) approved by the CEO of the Company and one (1)  approved by the Executive, or, in the event of the Executive’s total physical or mental disability, the Executive’s legal representative, that the Executive suffers from a physical or mental impairment that renders the Executive unable to perform the Executive’s services under this Agreement and that such impairment can reasonably be expected to continue for a period of six (6) consecutive months or for shorter periods aggregating one hundred and eighty (180) days in any twelve (12) month period; provided, however, that if the Company provides a policy of long term disability insurance to Executive issued by a reputable disability insurance carrier on commercially reasonable terms, the Executive shall be deemed Disabled hereunder on the first day he is eligible for benefits under any such policy of insurance, following any applicable elimination period provided for in the policy.  The Executive shall cooperate with any reasonable request of a physician, designated by the Company, to submit to a physical examination for purposes of such certification, and shall promptly designate his choice of physician when requested to do so by the Company  The Executive shall cooperate with efforts, if any, by the Company to insure him with a long term disability insurance policy. Nothing in this Section 7(e) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

(f)           Retirement. The Executive may voluntarily terminate his Engagement under this Agreement at any time by reason of Retirement, following the Initial Term of this Agreement, provided that, in the event of any such Retirement, post- Engagement benefits shall exclusively be subject to the Company’s then in-force retirement plan, if any, for senior executives. The parties agree that the Company’s retirement plan, if adopted, may specify a mandatory retirement age, if accompanied by a plan to provide post-Engagement benefits for senior executives.

 

  

  

  

 

7.           Compensation Upon Termination.

(a)           Termination Generally.  If the Executive’s Engagement by the Company is terminated for any reason,  the Company shall pay or provide to the Executive (or to his authorized representative or estate) (i) any earned but unpaid portion of the Salary payable on the Termination Date (ii) the Annual Bonus earned but not yet paid, payable at the same time such amounts would otherwise have been paid to the Executive, if any, and (iii) any unpaid expense reimbursements, payable in accordance with the Company’s reimbursement policies and this Agreement (collectively, the “Accrued Compensation”).

(b)           Termination by the Company Without Cause, Termination by Executive with Good Reason, Termination on mutually agreed terms between the Company and the Executive or Termination by Reason of Expiration of Term.  In the event of termination of the Executive (i) by the Company pursuant to Section 6(b); (ii) by Executive pursuant to Section 6(c);  (iii) on mutually agreed terms between the Company and the Executive, or (iv) on account of notice provided for under Section 3 of this Agreement to Executive that the Term will not be extended, and subject to the Executive’s execution and delivery of an executed original of a release of any and all legal claims in a form satisfactory to the Company (“Release Agreement”) within forty-five (45) days of the Termination Date (the “Release Period”), the Company shall provide to the Executive, in addition to the Accrued Compensation, the following termination benefits (“Termination Benefits”):  payment of a lump sum equivalent to 6 months of  the Executive’s annual Salary., The parties shall meet and confer to agree upon the form of the Release Agreement and amend this Agreement to append that form as an exhibit hereto, within thirty days of the Effective Date of this Agreement.

(c)           Termination by the Company Without Cause or Termination by Executive with Good Reason within 12 Months Following a Change in Control.  In the event of termination of the Executive by the Company pursuant to Section 6(b) or by Executive pursuant to Section 6(c), within 12 months following a Change in Control as defined herein, and subject to the Executive’s execution and delivery of an executed original of the Release Agreement referenced herein, the Company shall provide to the Executive, in addition to the Accrued Compensation, the following termination benefits: a lump-sum payment equal to 6 months of Executive’s annual Salary in effect as of the Change of Control date.; and immediate vesting of any equity compensation and/or long-term cash incentive awards held by Executive that are unvested as of the Change in Control date, subject to applicable law, regulation and any future contractual restrictions on such unvested awards.  For purposes of this Agreement, “Change in Control” shall mean (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the 1934 Securities Exchange Act) or group of persons acting in concert together becomes the “beneficial owner” (as defined in Rule 13d-3 of the 1934 Securities Exchange Act), or obtains the right to acquire beneficial ownership, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities, provided that such person  or group is not currently in such a position as of the Effective Date; (ii) the consummation of the sale, lease or other disposition by the Company of all or substantially all of the Company’s assets (including any equity interests in subsidiaries); or (iii) the consummation of a merger, consolidation, business combination, scheme of arrangement, share exchange or similar transaction involving the Company and any other corporation (“Business Combination”), other than a Business Combination which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such Business Combination or (v) any combination of the foregoing.

 

  

  

  

 

Any Section 409A payments which are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as termination of Engagement) occurs shall commence payment only in the calendar year in which the release revocation period ends as necessary to comply with Section 409A.

(d)           Termination by Reason of Cause, Executive’s Termination without Good Reason or Termination by Reason of Executive’s Death or Disability.  If the Executive’s Engagement is terminated for (i) Cause under Section 6(a), (ii) voluntarily by the Executive without Good Reason or (iii) by reason of Executive’s death or Disability, the Company shall have no further obligation to the Executive other than payment of his Accrued Compensation.

8.           Confidential Information, Non Solicitation and Cooperation.

(a)           Confidential Information.  As used in this Agreement, “Confidential Information” means proprietary information of the Company which is of value to the Company in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Company.  Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Company.  Confidential Information includes information developed by the Executive in the course of the Executive’s Engagement by the Company, as well as other information to which the Executive may have access in connection with the Executive’s provision of Services.  Confidential Information also includes the confidential information of others with which or whom the Company has a business relationship. Confidential Information shall also include that which is described in California Civil Code Section 3426.1.  Notwithstanding the foregoing, Confidential Information does not include (i) information in the public domain, unless due to breach of the Executive’s duties under Section 8(b), or (ii) information obtained in good faith by the Executive from a third party who was lawfully in possession of such information and not subject to an obligation of confidentiality owed to the Company.

 

  

  

  

 

(b)           Duty of Confidentiality.  The Executive understands and agrees that the Executive’s Engagement creates a relationship of confidence and trust between the Executive and the Company with respect to all Confidential Information.  At all times, both during the Executive’s Engagement by the Company and after termination, the Executive will keep in confidence and trust all such Confidential Information, and will not use or disclose any such Confidential Information without the written consent of the Company, except (i) as may be necessary in the ordinary course of performing the Executive’s Services to the Company or (ii) as may be required in response to a valid order by a court or other governmental body or as otherwise required by law (provided that if the Executive is so required to disclose the Confidential Information, the Executive shall (i) immediately notify the Company of such required disclosure sufficiently in advance of the intended disclosure to permit the Company to seek a protective order or take other appropriate action, (ii) cooperate in any effort by the Company to obtain a protective order or other reasonable assurance that confidential treatment will be afforded the Confidential Information).

(c)           Documents, Records, etc.  All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, which are furnished to the Executive by the Company or are produced by the Executive in connection with the Executive’s engagement will be and remain the sole property of the Company.  The Executive will return to the Company all such materials and property as and when requested by the Company.  In any event, the Executive will return all such materials and property immediately upon termination of the Executive’s Engagement for any reason.  The Executive will not retain with the Executive any such material or property or any copies thereof after such termination.

(d)           Non Solicitation.  During the Term and for six (6) months thereafter, the Executive (i) will refrain from directly or indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or influencing any person to leave employment with the Company (other than subordinate employees whose employment was terminated in the course of the Executive’s Engagement with the Company); and (ii) will refrain from soliciting or encouraging any customer, advisor, officer, director, contractor or supplier to terminate or otherwise modify adversely its business relationship with the Company.  The Executive understands that the restrictions set forth in this Section 8(d) are intended to protect the Company’s interest in its Confidential Information and established employee, customer and supplier and other relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose.

(e)           Third-Party Agreements and Rights.  The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information or the Executive’s Engagement in any business.  The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s Engagement with the Company and the performance of the Executive’s proposed services for the Company will not violate any obligations the Executive may have to any such previous employer or other party.  In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

 

  

  

  

 (f)           Litigation and Regulatory Cooperation.  During and after the Executive’s Engagement with the Company, the Executive shall cooperate reasonably with requests from the Company, or the Company’s legal counsel, in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired in whole or in part while the Executive was engaged by the Company.  The Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after the Executive’s engagement, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired in whole or in part while the Executive was engaged by the Company.  The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 8(f) in accord with its indemnification obligations to Executive provided for by Nevada law and any separate indemnification agreement between Executive and Company, and if the Executive spends more than five (5) hours in any calendar month after the Executive’s Engagement in performance of these obligations has terminated for any reason, the Company shall pay the Executive $500 per hour for each part of an hour over five (5) hours in such calendar month.

(g)            Intellectual Property.  Except as provided under Section 2870 of the California Labor Code, the Company shall be the sole owner of all the products and proceeds of Executive’s services hereunder including, without limitation, all materials, ideas, concepts, formats, suggestions, developments, and other intellectual properties that Executive may acquire, obtain, develop or create in whole or in part in connection with his Services hereunder and during the Term, free and clear of any claims by Executive (or anyone claiming under Executive) of any kind or character whatsoever (other than Executive’s rights and benefits hereunder).  Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company’s right, title and interest in and to any such products and proceeds of Executive’s Services, in whole or in part, hereunder.

 

  

  

  

 

(h)           Company Policies. The Executive acknowledges that the Company had adopted written policies, including an insider trading policy, confirmation of invention assignment policy, and may adopt further policies, or update its policies from time to time. Executive acknowledges that he will be obligated to comply with all such policies of which he is informed in writing by the Company from time to time.

(i)           Injunction.  The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in this Section 8, and that in any event money damages may be an inadequate remedy for any such breach.  Accordingly, subject to Section 9 of this Agreement, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company and without the need to post a bond or other security.

(j)            Survival. The confidentiality obligations set forth in this Agreement shall, where the context indicates, survive the termination of this Agreement for any reason.

9.           Arbitration of Disputes.  In the event of any dispute or controversy arising out of, or relating to, this Agreement, the parties hereto agree to submit such dispute or controversy to binding arbitration pursuant to either the JAMS Streamlined (for claims under $250,000.00) or the JAMS Comprehensive (for claims over $250,000.00) Arbitration Rules and Procedures, except as modified herein, including the Optional Appeal Procedure.  A sole neutral arbitrator shall be selected from the list (the “List”) of arbitrators supplied by J.A.M.S. (“JAMS”) Los Angeles County, California office, or any successor entity, or if it no longer exists, from a List supplied by the ADR Services, Inc., in Los Angeles, California (“ADR”) following written request by any party hereto.  If the parties hereto after notification of the other party(-ies) to such dispute cannot agree upon an arbitrator within thirty (30) days following receipt of the List by all parties to such arbitration, then either party may request, in writing, that JAMS or ADR, as appropriate, appoint an arbitrator within ten (10) days following receipt of such request (the “Arbitrator”).  The arbitration shall take place in Los Angeles County, California, at a place and time mutually agreeable to the parties or if no such agreement is reached within ten (10) days following notice from the Arbitrator, at a place and time determined by the Arbitrator.  Such arbitration shall be conducted in accordance with the Streamlined Arbitration Rules and Procedures of JAMS then in effect, and Section 1280 et seq. of the California Code of Civil Procedure, or if applicable, the Commercial Arbitration Rules of ADR then in effect.  The preceding choice of venue is intended by the parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the parties with respect to or arising out of this Agreement in any jurisdiction other than that specified in this Section.  Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this Section, and stipulates that the Arbitrator shall have in personam jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy, or proceeding arising out of or related to this Agreement.  Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in this Agreement.  The decision of the Arbitrator shall be final and binding on all the parties to the arbitration, shall be non-appealable and may be enforced by a court of competent jurisdiction.  The prevailing party shall be entitled to recover from the non-prevailing party reasonable attorney’s fees, as well as its costs and expenses.  The Arbitrator may grant any remedy appropriate including, without limitation, injunctive relief or specific performance.  Notwithstanding any of the foregoing, the Company may seek a temporary restraining order or a preliminary injunction as contemplated in Section 8(h) herein. 

 

  

  

  

 

10.           Integration.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties with respect to any related subject matter.

 

11.           Assignment; Successors and Assigns, etc.  Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party; but the Company may assign its rights under this Agreement without the consent of the Executive, in the event that the Company shall effect a reorganization, consolidate with or merge into any other corporation, partnership, organization or other entity, or transfer all or substantially all of its properties or assets to any other corporation, partnership, organization or other entity, in which event the Company will obtain a written confirmation of the assumption of the Company’s obligation hereunder for the benefit of the Executive.  This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns.

12.           Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

  

  

  

 

13.           Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.  

 

14.           Notices.  Any notices, requests, demands and other communications provided for  or allowed by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the Executive’s last residential address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, and shall be effective on the date of delivery in person or by courier or three (3) days after the date mailed. The parties may, utilizing this provision, change their addresses for purposes of this provision, but their initial addresses for purposes of this provision shall be:

If to the Company:

Chief Executive Officer

Medbox, Inc.

8439 West Sunset Blvd., Ste 102,

West Hollywood, CA  90069

  

  

  

 

If to the Executive:

19800 Mac Arthur Blvd. Suite 820

Irvine, CA 92612 

15.           Third Party Beneficiary; Amendment.  The Executive and the Company acknowledge and agree that no third party shall have any rights or benefits under this Agreement. The Company’s wholly-owned subsidiaries shall not be considered third parties for purposes of this provision of this Agreement. This Agreement may be amended or modified only by a written instrument signed by the Executive and the Company.

16.           Non-Disparagement. Neither party will, at any time during or after the Engagement disparage, defame or denigrate the reputation, character, image, products or services of the other party (which, in the case of the Company, includes any of its wholly owned subsidiaries or its executives or directors), subject to any obligation imposed by law on either party.

 

17.           Governing Law.  This contract has been entered into in the State of California and shall be construed under and be governed in all respects by the laws of the State of California, without giving effect to the conflict of laws principles of such state.

18.           Counterparts.  This Agreement may be executed in any number of original, facsimile or other electronic counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

19.           Withholding Obligations.  The Company, or any other entity making a payment, may withhold and make such deductions from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld or deducted from time to time pursuant to any applicable law, governmental regulation and/or order.

 

  

  

  

20.           Section 409A Compliance.  Unless otherwise expressly provided, any payment of compensation by the Company to the Executive, whether pursuant to this Agreement or otherwise, shall be made no later than the fifteenth (15th) day of the third (3rd) month (i.e., 21⁄2 months) after the later of the end of the calendar year or the Company’s fiscal year in which the Executive’s right to such payment vests (i.e., is not subject to a “substantial risk of forfeiture” for purposes of Section 409A).  Each payment and each installment of any bonus or severance payments provided for under this Agreement shall be treated as a separate payment for purposes of application of Section 409A.  To the extent any amounts payable by the Company to the Executive constitute “nonqualified deferred compensation” (within the meaning of Section 409A) such payments are intended to comply with the requirements of Section 409A, and shall be interpreted in accordance therewith.  Neither party individually or in combination may accelerate, offset or assign any such deferred payment, except in compliance with Section 409A. No amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A and the Executive shall have no discretion with respect to the timing of payments except as permitted under Section 409A.  In the event that the Executive is determined to be a “key employee” (as defined and determined under Section 409A) of the Company at a time when its stock is deemed to be publicly traded on an established securities market, payments determined to be “nonqualified deferred compensation” payable upon separation from service shall be made no earlier than (a) the first (1st) day of the seventh (7th) complete calendar month following such termination of employment, or (b) the Executive’s death, consistent with the provisions of Section 409A.  Any payment delayed by reason of the prior sentence shall be paid out in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule.  All expense reimbursement or in-kind benefits subject to Section 409A provided under this Agreement or, unless otherwise specified in writing, under any Company program or policy, shall be subject to the following rules: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided during one calendar year may not affect the benefits provided during any other year; (ii) reimbursements shall be paid no later than the end of the calendar year following the year in which the Executive incurs such expenses, and the Executive shall take all actions necessary to claim all such reimbursements on a timely basis to permit the Company to make all such reimbursement payments prior to the end of said period, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.  The Executive shall be responsible for the payment of all taxes applicable to payments or benefits received from the Company.  It is the intent of the Company that the provisions of this Agreement and all other plans and programs sponsored by the Company be interpreted to comply in all respects with Section 409A; however, the Company shall have no liability to the Executive, or any successor or beneficiary thereof, in the event taxes, penalties or excise taxes may ultimately be determined to be applicable to any payment or benefit received by the Executive or any successor or beneficiary thereof.

 

  

  

  

 

21.           Survival. The provisions of Sections 7, 8, 9, 10, 12, 14, 15 and 16 shall survive the termination of Executive’s Engagement hereunder.

22.           Director’s and Officers’ Insurance.  The Company shall use commercially reasonable efforts to maintain during the term of this Agreement directors’ and officers’ insurance from a reputable insurance company with such coverage amounts and policy terms as is customary for public companies operating in the Company’s industry with market valuations similar to the Company, as determined by  its Board of Directors in its reasonable discretion.  The Company will, promptly following execution of this Agreement, initiate a review to determine whether enhanced insurance coverage is available at reasonable cost, as determined in the reasonable discretion of the Board of Directors. During the Initial Term of this Agreement the maximum amount the Company will be required to spend on premiums is $250,000 per year.

 

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IN WITNESS WHEREOF, this Agreement has been executed by the Company and by the Executive as of the Effective Date.

	  	
COMPANY

	  
	  	  
	  	
MedBox, Inc., a Nevada corporation

 

 

	  	
 By:

	
/s/ Guy M. Marsala                     

 

Guy M. Marsala

Title: CEO

 

 

	  	
EXECUTIVE: 

	  
	  	  	

/s/ C. Douglas Mitchell                

C. Douglas Mitchell

 

Date: 10/16/2014

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