UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K

   

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 12, 2018

 

 

KUSH BOTTLES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 000-55418 46-5268202
(State or other jurisdiction
of incorporation) 
(Commission File Number)  (IRS Employer Identification No.) 

 

1800 Newport Circle, Santa Ana, CA 92705
(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code:   (714) 243-4311

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

 

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On January 12, 2018 (the “Separation Date”), Ben Wu, the President and Chief Operating Officer of Kush Bottles, Inc. (the “Company”), entered into a Separation Agreement with the Company pursuant to which Mr. Wu will resign as President and Chief Operating Officer of the Company, effective as of the Separation Date. Mr. Wu’s resignation did not result from any disagreement regarding the Company’s financial reporting or accounting policies, procedures, estimates or judgments. As described below, Mr. Wu will continue to serve as a consultant to the Company for an initial term of six months.

 

In connection with Mr. Wu’s resignation, Jim McCormick, the Company’s Chief Financial Officer, assumed the role of Chief Operating Officer as of the Separation Date.

 

Separation Agreement

 

The Separation Agreement provides that, among other things, (a) Mr. Wu will receive a severance payment of $30,000, which will be payable in three monthly installments following the Separation Date, (b) the Company will amend the terms of fully vested options currently held by Mr. Wu to purchase 1,000,000 shares of the Company’s common stock to (i) extend the exercise period with respect to such options until the one-year anniversary of the Separation Date (the “Year Anniversary”), subject to certain monthly limitations and (ii) provide that upon a change of control of the Company, all such options shall become immediately vested and exercisable, and (c) Mr. Wu will receive 100,000 restricted shares of the Company’s common stock, which will vest fully on the earlier to occur of (i) the one-year anniversary of the Year Anniversary or (ii) a change of control of the Company. The Separation Agreement also contains a general release in favor of the Company.

 

The foregoing is a summary only and does not purport to be a complete description of all of the terms, provisions, covenants and agreements contained in the Separation Agreement, and is subject to and qualified in its entirety by reference to the complete text of the Separation Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

 

Consulting Agreement

 

In connection with his resignation, on January 19, 2018 (the “Consulting Start Date”), Mr. Wu and the Company entered into a consulting agreement (the “Consulting Agreement”), effective as of the Consulting Start Date. Pursuant to the Consulting Agreement, Mr. Wu will provide certain consulting services to the Company for an initial term of six months, which term will automatically renew for successive one-month periods unless either party provides 30 days’ prior written notice. Mr. Wu will be entitled to fees of $12,500 per month for the consulting services he will provide to the Company. The Consulting Agreement prohibits Mr. Wu from soliciting the Company’s employees during the term of the Consulting Agreement and for twelve months after its termination or expiration.

 

The foregoing is a summary only and does not purport to be a complete description of all of the terms, provisions, covenants and agreements contained in the Consulting Agreement, and is subject to and qualified in its entirety by reference to the complete text of the Consulting Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

 

 

 

 

Item 8.01. Other Events.

 

On January 12, 2018, the Company issued a press release announcing the resignation of Mr. Wu and the appointment of Mr. McCormick to the role of Chief Operating Officer in addition to his existing role as Chief Financial Officer. The full text of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this Item 8.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the United States Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
Number
 

Description of

Exhibit

10.1   Separation Agreement dated as of January 12, 2018 by and between Kush Bottles, Inc. and Ben Wu
10.2   Consulting Agreement dated as of January 19, 2018 by and between Kush Bottles, Inc. and Ben Wu
99.1   Press Release issued by Kush Bottles, Inc. on January 12, 2018

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    KUSH BOTTLES, INC.
    (Registrant)
     
January 19, 2018   /s/   Nicholas Kovacevich
(Date)   Nicholas Kovacevich
Chairman and Chief Executive Officer

 

 

 

 

INDEX TO EXHIBITS

 

Exhibit

Number

 

Description of

Exhibit

10.1   Separation Agreement dated as of January 12, 2018 by and between Kush Bottles, Inc. and Ben Wu  
10.2   Consulting Agreement dated as of January 19, 2018 by and between Kush Bottles, Inc. and Ben Wu  
99.1   Press Release issued by Kush Bottles, Inc. on January 12, 2018  

 

 

 

 

Exhibit 10.1

 

 

 

 

January 12, 2018

 

Mr. Ben Wu

 

Dear Ben:

 

As we discussed, this letter agreement sets forth the terms of your separation from employment with Kush Bottles, Inc., a Nevada corporation (the “Company”). Your final date of employment with the Company is January 12, 2018 (the “Separation Date”). In connection with the termination of your employment, the Company is offering certain benefits to which you are not otherwise entitled, in exchange for certain obligations on your part. This letter is referred to as the “Agreement.”

 

1.        Earned Compensation; Business Expenses . As of January 12, 2018, you will receive a payment representing your final pay for all earned but unpaid wages, including accrued but unused vacation time, earned through and including the Separation Date. All payments are subject to applicable withholdings and deductions. You will also be reimbursed for any authorized reasonable business expenses that you may have incurred, provided that you submit an expense report and supporting documentation in accordance with the Company’s policies and practices on, or immediately after, the Separation Date. You receive the earned compensation, reimbursement of business expenses and notice described in this paragraph even if you do not sign this Agreement.

 

2.        Benefit Plans . Because you do not currently participate in the Company’s group health plan, you will not have the option of extending that coverage by electing continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). Your participation in all other Company benefit plans will end on the Separation Date unless they continue by the terms of their respective governing plan documents.

 

3.        Severance Benefits . If you: (a) sign this Agreement on or before January 12, 2018 and comply with all of the terms of this Agreement, then the Company will:

 

i. provide you with severance pay in an amount equal to Thirty Thousand Dollars ($30,000.00), subject to all applicable withholdings and deductions, payable in equal installments in accordance with the Company’s regular payroll schedule over a period of three (3) months and commencing on the next regularly scheduled payroll date after the Separation Date;

 

ii. amend the terms of your existing options to purchase 1,000,000 shares of the Company’s common stock that have an exercise price of $0.05 per share (the “Retained Options”) to (A) extend the exercise period and expiration date until the one-year anniversary of the Separation Date, provided that you hereby agree to not exercise more than 250,000 of the Retained Options in any consecutive thirty (30) calendar day period during such extended exercise period, and (ii) provide that upon the occurrence of a Change in Control, as such term is defined in the Company’s 2016 Stock Incentive Plan (a “Change in Control”), all such Retained Options shall immediately become fully vested and exercisable; and

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

iii. grant 100,000 shares of the Company’s restricted common stock to you, which will vest with respect to all 100,000 shares upon the earlier to occur of (i) the one-year anniversary of the Separation Date, or (ii) a Change in Control.

 

For the avoidance of doubt, your options to purchase 1,500,000 shares of the Company’s common stock at an exercise price of $2.64 shall, to the extent they are not exercised prior to the Separation Date, be forfeited on the Separation Date pursuant to their terms. The Company hereby covenants and agrees to use its reasonable best efforts to cause any restrictive legends on the certificates or book entry notations with respect to shares issued upon exercise of the Retained Options to be removed, to the extent permissible under applicable law, as promptly as practicable following written notice from you to the Company indicating your intention to sell such shares. These best efforts will apply to both the 1,000,000 options noted in point i. as well as the 100,000 shares of restricted stock noted in point iii. above.

 

The severance benefits set forth in paragraphs 3(i)-(iii) are collectively the “Severance Benefits.”

 

If you:

 

A. do not sign this Agreement on or before January 12, 2018; or

 

B. do not comply with the terms of this Agreement;

 

then you will not be entitled to, and the Company will not be obligated to provide you with, any Severance Benefits.

 

4.        General Release, Waiver and Covenant Not to Sue . Except as specifically set forth in this Agreement, and in consideration and exchange for the Severance Benefits set forth above, and for other good and valuable consideration described herein, you, Ben Wu, on behalf of yourself, your heirs, next of kin, executors, administrators, agents, representatives, attorneys and assigns, knowingly and voluntarily forever release and discharge Kush Bottles, Inc.; its past and present affiliates, subsidiaries, board of directors, parent companies, investors, predecessors, successors and assigns; and its and their respective current and former partners, members, owners, shareholders, trustees, officers, directors, employees, attorneys, fiduciaries, insurers, representatives and agents, both individually and in their business capacities (collectively, the “Releasees”) of and from, and waive any rights in and to, all claims, complaints, demands, contracts, grants, lawsuits, causes of action or expenses of any kind (including attorney’s fees and costs), (collectively, “Claims”), whether known or unknown, that you now have or ever had against the Releasees or any of them up to your signing this Agreement, including but not limited to Claims related to or arising from your employment with the Company and/or the termination thereof; Claims arising under common law; Claims for breach of contract and in tort; Claims for unpaid compensation, unpaid bonuses, equity or any employee benefits; Claims for attorney’s fees and costs; and Claims arising under federal, state or local labor law, employment laws and laws prohibiting employment discrimination (based on age, gender, pregnancy, race, religion, color, national origin, ancestry, ethnicity, sexual orientation, disability, genetic information, military or veteran status, gender identity and expression, and other protected classes), including but not limited to: Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Fair Labor Standards Act of 1938, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act of 1990, the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, each as amended, and all related regulations, rules or orders, and similar federal, state or local statutes, regulations, rules or ordinances, including but not limited to the California Labor Code (including without limitation §1194(a)), the California Wage Theft Prevention Act, the California Fair Pay Act, the “All Gender” Bathroom Bill, the California Fair Employment and Housing Act, each as amended. You further agree that you covenant not to sue the Releasees, or any of them, for any Claims described above. For avoidance of doubt, this means that you have released the Releasees from liability from any Claims, and, additionally, separately agree not to commence any legal action for any Claims. You acknowledge that if you bring any legal action against the Releasees or any of them for any Claims, then you will be in breach of this Agreement. You understand that the release contained herein is a GENERAL RELEASE and acknowledge that the Severance Benefits are sufficient consideration for your obligations and release in this Agreement.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

a.     Acknowledgements . You acknowledge that with your final paycheck, you have been paid any and all wages (including all base compensation and, if applicable, any and all overtime, commissions which are due and payable as of the Separation Date, and bonuses) to which you are or were entitled by virtue of your employment with the Company, and that you are unaware of any facts or circumstances indicating that you may have an outstanding claim for unpaid wages, improper deductions from pay, or any violation of the Fair Labor Standards Act, the California Labor Code, the California Fair Pay Act, or any other federal, state or local laws, regulations, rules, ordinances or orders that are related to payment of wages. You acknowledge that you have not suffered an injury in the workplace which has not been reported to the Company and are not aware of any facts or circumstances that would give rise to a claim that you suffered a workplace injury. You acknowledge that you have received any leaves of absence and any reasonable accommodations to which you were entitled under the Family and Medical Leave Act, the Americans with Disabilities Act, the California Family Rights Act, the California Paid Family Leave Act, the California Healthy Workplaces, Healthy Families Act, or any other laws, regulations, rules or ordinances relating to medical leaves and accommodations and are not aware of any facts or circumstances that would give rise to a claim that you were denied any rights under such laws, regulations, rules or ordinances.

 

b.     Protected Activity . This release does not apply to: (i) your entitlement under ERISA to vested retirement or pension benefits; (ii) enforcement of the terms of this Agreement; (iii) any claims to workers’ compensation benefits; (iv) any claims for unemployment benefits; and (v) any claims that may not be released by applicable law. Also, nothing in this Agreement shall prohibit you from filing a charge with the Equal Employment Opportunity Commission (“EEOC”) or with any other federal, state or local government agency, including the National Labor Relations Board (“NLRB”) or from participating in an investigation or proceeding of the EEOC or other federal, state or local government agency, including the NLRB. However, you waive the right to any personal monetary recovery or other personal relief should the EEOC or any other federal, state or local government agency pursue any class or individual charges in part or entirely on your behalf on the basis that any such claims have been fully and completely satisfied by the payments you are receiving under this Agreement.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

  

c.    Release of Unknown or Unsuspected Claims . You understand and agree that this is a full and final release covering all known, unknown, anticipated and unanticipated injuries, debts, claims or damages to you which may have arisen or may be connected with your work relationship with the Company, the termination of that relationship, or based on any other act or omission through the execution date of this Agreement. You hereby waive any and all rights or benefits which you may now have, or in the future may have, under the terms of Section 1542 of the California Civil Code, which provides as follows:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in her or her favor at the time of executing the release, which if known by him or her must have materially affected her or her settlement with the debtor.

 

 

5.        Nondisparagement; Relationship to the Company . You and the Company each hereby agree not to make or provide any derogatory, defamatory or negative statements or information to anyone about the other party (and, in the case of the Company, any of the Releasees or any of its or their respective services, products, directors, officers or employees), unless compelled to do so by law, or by an order of a court or other forum of competent jurisdiction, in which case the disclosing party will notify the other party promptly to allow the other party sufficient time to intervene to stop the disclosing party from being required to make such statements or information. After the Separation Date, you must refrain from representing to others or giving others the impression, whether directly or indirectly, that you are in any way an employee, agent or representative of the Company, except in your limited capacity as consultant during the term of the Consulting Agreement by and between you and Company, dated on or about the date hereof (the “Consulting Agreement”).

 

6.        Confidentiality Agreement . You will remain bound by all terms of confidentiality currently in place with the Company as well as any subsequent agreements that may be put in place.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

7.        Cooperation; Return of Property . You agree to cooperate fully in the defense or prosecution of any claims or actions now in existence or which may be brought or threatened in the future against or on behalf of the Company about which you have knowledge or were involved by virtue of your employment with the Company, and in any claim or action brought by the Company against any other entity about which you have knowledge or were involved by virtue of your employment with the Company. On or before the Separation Date, you agree to return all of the Company’s property, including your identification badge and any and all keys, passwords, external hard drives, phones, software, spreadsheets and any other property and/or information that you may have received, created, or accessed as an employee of the Company, including but not limited to any documents or data stored on any Company device or on any personal device, but excluding your laptop, which will become your property as of the Separation Date. You agree not to retain, and represent that you have returned, any copies of any property, documents, spreadsheets or information, including but not limited to paper documents or items stored in any electronic format, which was made or compiled by you, or made available to you, relating to the Company, its clients or any of them. Notwithstanding the foregoing, you may access and temporarily retain any paper or electronic documents solely for the purposes of providing consulting services to the Company pursuant to the Consulting Agreement, provided that you return such documents to the Company promptly following the termination or expiration of the Consulting Agreement.

 

8.        Nonadmission . This Agreement shall not be construed in any way to be an admission by the Company, and the Company specifically denies, that it has engaged in any wrongful or unlawful act with respect to you, your employment or the termination of your employment.

 

9.        Breach . You agree that if you breach or threaten to breach the provisions of sections 4, 5, or 7 of this Agreement, the Company will suffer irreparable harm for which money damages may not be adequate. Therefore, you agree that the Company shall be entitled to equitable relief, including a preliminary and permanent injunction, without the need to post a bond of greater than $100 or to provide any other security, to stop or prevent the harm to the Company, and to payment by you of all costs and attorneys’ fees incurred by the Company in enforcing the provisions of this Agreement. The Company will also be entitled to all other remedies available to it by law.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

 

10.        Miscellaneous . This Agreement constitutes the entire agreement between you and the Company and supersedes all other agreements, whether written or oral, with respect to your employment, its termination and all related matters, except as provided in section 6 of the Agreement. This Agreement may only be modified or amended by a written document signed by both parties. If any part, term or provision of this Agreement is determined to be illegal, invalid or unenforceable, that term or provision will be stricken and the remaining parts, terms or provisions will remain in full force and effect. This Agreement will be governed by the laws of the State of California without regard to conflict of law principles. This Agreement shall be binding upon and inure to the benefit of the Company and its respective successors and assigns. This Agreement may be executed in duplicate counterparts, each of which shall be treated as an original, and signatures submitted in electronic format shall be considered originals.

 

11.        Representations . You represent and agree that: (a) you have carefully read and understand this Agreement and, in particular, the General Release, Waiver and Covenant Not to Sue contained in paragraph 4 above, and fully understand the final and binding effect of same; (b) you were advised to consult legal counsel before signing this Agreement and have had the opportunity to do so; (c) you are not entitled to the consideration set forth in this Agreement, but for your signing this Agreement; (d) you are signing this Agreement knowingly and voluntarily and for reasons of your own; and (e) the Company has not made any representations inconsistent with the terms of this Agreement.

 

[ Remainder of page left blank intentionally ]

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

 

Please indicate your agreement to the terms of this Agreement by signing and returning to Jim McCormick a copy of this letter no later than 5:00PM on January 12, 2018.

 

 

Kush Bottles, Inc. Ben Wu  
         
/s/ Jim McCormick   /s/ Ben Wu  
By: Jim McCormick Date: 1/12/18  
Its: Chief Financial Officer      
         
January 12, 2018      

 

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

 

Exhibit 10.2

 

 

 

 

Mr. Ben Wu

 

January 19, 2018

 

Dear Ben,

 

This letter agreement (this " Agreement ") sets forth the terms and conditions whereby you agree to provide certain services (as described on Schedule 1) to Kush Bottles, Inc., a Nevada corporation, with offices located at 1800 Newport Circle, Santa Ana, CA 92705 (the " Company ").

 

1.              SERVICES .

 

1.1               The Company engages you, and you accept such engagement, as an independent contractor to provide certain services to the Company on the terms and conditions set forth in this Agreement.

 

1.2               You shall provide to the Company the services listed on Schedule 1 (the " Services ").

 

1.3               The Company shall not control the manner or means by which you perform the Services, including but not limited to the time and place you perform the Services.

 

1.4               Unless otherwise stated in Schedule 1, you shall furnish, at your own expense, the equipment, supplies, and other materials used to perform the Services. The Company shall provide you with access to its premises and equipment to the extent necessary for the performance of the Services.

 

2.              TERM . The term of this Agreement shall commence on January 19, 2018 and shall continue six (6) months, unless earlier terminated in accordance with Section 8 (the " Term "). Thereafter, the Term shall automatically renew for successive one (1) month periods unless either party provides the other party with thirty (30) days’ prior written notice of its election to terminate this Agreement.

 

3.              FEES AND EXPENSES .

 

3.1               As full compensation for the Services and the rights granted to the Company in this Agreement, the Company shall pay you a fee of $12,500 per month (the " Fees "), payable in arrears on a bi-monthly basis. You acknowledge that you will receive an IRS Form 1099-MISC from the Company, and that you shall be solely responsible for all federal, state, and local taxes, as set out in Section 4.2 .

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

4.              RELATIONSHIP OF THE PARTIES .

 

4.1               You are an independent contractor of the Company, and this Agreement shall not be construed to create any association, partnership, joint venture, employee, or agency relationship between you and the Company for any purpose. You have no authority (and shall not hold yourself out as having authority) to bind the Company and you shall not make any agreements or representations on the Company's behalf without the Company's prior written consent.

 

4.2               Without limiting Section 4.1 , you will not be eligible under this Agreement to participate in any vacation, group medical or life insurance, disability, profit sharing or retirement benefits, or any other fringe benefits or benefit plans offered by the Company to its employees, and the Company will not be responsible for withholding or paying any income, payroll, Social Security, or other federal, state, or local taxes, making any insurance contributions, including for unemployment or disability, or obtaining workers' compensation insurance on your behalf.

 

5.              INTELLECTUAL PROPERTY RIGHTS .

 

5.1               The Company is and shall be, the sole and exclusive owner of all right, title, and interest throughout the world in and to all the results and proceeds of the Services performed under this Agreement (collectively, the " Deliverables "), including all patents, copyrights, trademarks, trade secrets, and other intellectual property rights (collectively " Intellectual Property Rights "). You agree that the Deliverables are deemed a "work made for hire" as defined in 17 U.S.C. § 101 for the Company. If, for any reason, any of the Deliverables do not constitute a "work made for hire," you hereby irrevocably assign to the Company, in each case without additional consideration, all right, title, and interest throughout the world in and to the Deliverables, including all Intellectual Property Rights.

 

5.2               Any assignment of copyrights under this Agreement includes all rights of paternity, integrity, disclosure, and withdrawal and any other rights that may be known as "moral rights" (collectively, " Moral Rights "). You irrevocably waive, to the extent permitted by applicable law, any and all claims you may now or hereafter have in any jurisdiction to any Moral Rights with respect to the Deliverables.

 

5.3               You shall make full and prompt disclosure to the Company of any inventions or processes, as such terms are defined in 35 U.S.C. § 100 (the " Patent Act "), made or conceived by you alone or with others during the Term, related in any way to the Services described, whether or not such inventions or processes are patentable or protected as trade secrets and whether or not such inventions or processes are made or conceived during normal working hours or on the premises of the Company. You shall not disclose to any third party the nature or details of any such inventions or processes without the prior written consent of the Company. Any patent or copyright applications relating to the Services, related to trade secrets of the Company, or related to tasks assigned to you by the Company that you may file within one year after expiration or termination of this Agreement, shall belong to the Company, and you assign the same to the Company, as having been conceived or reduced to practice during the Term.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

5.4               Upon the request of the Company, you shall promptly take such further actions, including execution and delivery of all appropriate instruments of conveyance, as may be necessary to assist the Company to prosecute, register, perfect, record, or enforce its rights in any Deliverables. Any fees or expenses incurred for such actions shall be the responsibility of the Company.

 

5.5               You have no right or license to use, publish, reproduce, prepare derivative works based on, distribute, perform, or display any Deliverables. You have no right or license to use the Company's trademarks, service marks, trade names, trade names, logos, symbols, or brand names without the written consent of the Company.

 

6.              CONFIDENTIALITY .

 

6.1               You acknowledge that you will have access to information that is treated as confidential and proprietary by the Company including without limitation trade secrets, technology, and information pertaining to business operations and strategies, customers, pricing, marketing, finances, sourcing, personnel, or operations of the Company, its affiliates, or their suppliers or customers, in each case whether oral, written, printed, electronic, or in any other form or medium (collectively, the " Confidential Information "). Any Confidential Information that you develop in connection with the Services, including but not limited to any Deliverables, shall be subject to the terms and conditions of this Section. You agree to treat all Confidential Information as strictly confidential, not to disclose Confidential Information or permit it to be disclosed, in whole or part, to any third party without the prior written consent of the Company in each instance, and not to use any Confidential Information for any purpose except as required in the performance of the Services. You shall notify the Company immediately in the event you become aware of any loss or disclosure of any Confidential Information.

 

6.2               Confidential Information shall not include information that:

 

(a)                is or becomes generally available to the public other than through your breach of this Agreement; or

 

(b)                is communicated to you by a third party that had no confidentiality obligations with respect to such information.

 

6.3               Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or under the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. You agree to provide written notice of any such order to an authorized officer of the Company within one (5) calendar day of receiving such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in the Company's sole discretion.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

 

7.              REPRESENTATIONS AND WARRANTIES .

 

7.1               You represent and warrant to the Company that:

 

(a)                you have the right to enter into this Agreement, to grant all rights granted, and to perform fully all of your obligations in this Agreement;

 

(b)                your entering into this Agreement with the Company and your performance of the Services do not and will not conflict with or result in any breach or default under any other agreement to which you are subject;

 

(c)                the Company will receive good and valid title to all Deliverables, free and clear of all encumbrances and liens of any kind;

 

7.2               The Company hereby represents and warrants to you that:

 

(a)                it has the full right, power, and authority to enter into and perform its obligations under this Agreement; and

 

(b)                the execution of this Agreement by its representative has been duly authorized by all necessary corporate action.

 

8.              TERMINATION .

 

8.1               You or the Company may terminate this Agreement, effective immediately upon written notice to the other party to this Agreement, if the other party breaches this Agreement, and such breach is incapable of cure, or with respect to a breach capable of cure, the other party does not cure such breach within 10 calendar days after receipt of written notice of such breach.

 

8.2               Upon expiration or termination of this Agreement for any reason, or at any other time upon the Company's written request, you shall within 5 calendar days after such expiration or termination:

 

(a)                deliver to the Company all Deliverables (whether complete or incomplete) and all hardware, software, tools, equipment, or other materials provided for your use by the Company;

 

(b)                deliver to the Company all tangible documents and materials (and any copies) containing or based on the Confidential Information;

 

(c)                permanently erase all of the Confidential Information from your computer and phone systems; and

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

(d)                certify in writing to the Company that you have complied with the requirements of this clause.

 

8.3               The terms and conditions of this Section 8.3 and Section 4 , Section 5 , Section 6 , Section 7 , Section 9 , Section 11 , and Section 12 shall survive the expiration or termination of this Agreement.

 

9.              OTHER BUSINESS ACTIVITIES . You may be engaged or employed in any other business, trade, profession, or other activity while providing services to the Company, in which case you agree to abide by the terms of Section 6 and Section 7 .

 

10.          NON-SOLICITATION OF EMPLOYEES . You agree that during the Term and for a period of twelve months following the termination or expiration of this Agreement, you agree not to disrupt or interfere with the business of the Company by directly or indirectly soliciting, recruiting, attempting to recruit, or raiding the employees of the Company, or otherwise inducing the termination of employment of any employee of the Company. You also agree and covenant not to use any of the Company's trade secrets and/or confidential information to directly or indirectly solicit the employees of the Company. For the purposes of this clause, a general advertisement or notice of a job listing or opening or other similar general publication of a job search or availability to fill employment positions, including on the internet, shall not be construed as a solicitation or inducement, and the hiring of any such employee who freely responds shall not be a breach of this clause.

 

11.          ASSIGNMENT . You shall not assign any rights, or delegate or subcontract any obligations under this Agreement without the Company's prior written consent. Any assignment in violation of the foregoing shall be deemed null and void. The Company may freely assign its rights and obligations under this Agreement at any time. Subject to the limits on assignment stated above, this Agreement will inure to the benefit of, be binding on, and be enforceable against each of the Parties and their respective successors and assigns. This excludes ongoing relationships the Company may already have in place.

 

12.          MISCELLANEOUS .

 

12.1           You shall not export, directly or indirectly, any technical data acquired from the Company, or any products utilizing any such data, to any country in violation of any applicable export laws or regulations.

 

12.2           All notices, requests, consents, claims, demands, waivers, and other communications (each, a " Notice ") shall be in writing and addressed to the Parties at the addresses set forth on the first page of this Agreement (or to such other address that may be designated by the receiving party from time to time in accordance with this section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile or email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only if (a) the receiving party has received the Notice and (b) the party giving the Notice has complied with the requirements of this Section.

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

12.3           This Agreement, together with the Separation Agreement dated on or about the date hereof and any other documents incorporated by reference and related exhibits and schedules, constitutes the sole and entire agreement of the Parties, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter.

 

12.4           This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party, and any of its terms may be waived, only by a written document signed by each party or, in the case of waiver, by the party or parties waiving compliance.

 

12.5           This Agreement and all related documents , including all schedules attached, shall be governed by and construed in accordance with the laws of the State of California , without giving effect to the conflict of laws provisions.

 

12.6           If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

12.7           This Agreement may be executed in counterparts and by facsimile signature, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

[ Remainder of page left intentionally blank ]

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

If this letter accurately sets forth our understanding, kindly execute the enclosed copy of this letter and return it to the undersigned.

 

Very truly yours,  
   
     
KUSH BOTTLES, INC.  
     
     
By: /s/ Jim McCormick  
Name: Jim McCormick  
Title: Chief Financial Officer  

 

 

 

ACCEPTED AND AGREED:  
   
   
/s/ Ben Wu  
Name: Ben Wu  

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

   

 

SCHEDULE 1

 

 

SERVICES & PERFORMANCE STANDARDS:

 

The scope of services and performance of these services shall focus on advising the Company on cannabis regulations in the state of California, completion of ongoing product development initiatives and other projects agreed in writing.

 

 

1800 NEWPORT CIRCLE, SANTA ANA, CA 92705 l 888.920.5874 l WWW.KUSHBOTTLES.COM

 

Exhibit 99.1

 

HTTPS:||WWW.KUSHBOTTLES.COM|IMAGES|FOOTER-WIDGET-LOGO@2X.PNG  

 

Kush Bottles Announces Senior Leadership Changes

 

Ben Wu to step down as Chief Operating Officer; Jim McCormick to take on COO role in addition to CFO responsibilities


Santa Ana, California – January 12, 2017 – Kush Bottles   (OTCQB: KSHB), a leading provider of packaging, supplies, vaporizers, accessories and branding solutions for the regulated cannabis industry, announced today that Ben Wu, who has served as Chief Operating Officer since 2014, will step down effective today, January 12 th , 2018.  Mr. Wu will continue to support the Company as an independent consultant for a minimum of six months focusing his efforts towards ongoing projects. As a result, Mr. Jim McCormick will assume the role of Chief Operating Officer in addition to continuing to serve in his current capacity as Chief Financial Officer.

 

“I would like to thank Ben for all his contributions to Kush Bottles, which have helped to grow the Company into the cannabis industry’s leading supplier of packaging, supplies and other ancillary products, and I wish him all the best for the future,” commented Nicholas Kovacevich, Chief Executive Officer of Kush Bottles. “Jim is more than qualified to take over the COO responsibilities having previously been general manager leading multi-market operations in the tobacco industry.  He has made a significant positive impact on the organization during his short tenure with the Company leveraging his experience and business acumen.   As we enter 2018, we look forward to leveraging this platform and continuing to build shareholder value.”

 

Jim McCormick, Chief Financial Officer and Chief Operating Officer, commented, “Since joining Kush Bottles last year, I have been extremely impressed with the professionalism and efficiency with which the Company is run. Kush Bottles has invested significantly in facilities, technology, and systems to support its development, and is implementing a multi-faceted growth strategy to drive sales and build value for shareholders through a combination of organic growth and M&A activity. I remain excited about the significant growth opportunities ahead of us at this exciting stage of the Company’s development.”

 

To be added to the distribution list please email ir@kushbottles.com with “Kush” in the subject line.

 

About Kush Bottles, Inc.

Kush Bottles, Inc. is a dynamic sales platform that provides unique products and services for both businesses and consumers in the cannabis industry. Founded in 2010 as a packaging and supplies company for dispensaries and growers, Kush Bottles has sold more than 100 million units and now regularly services more than 4,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe. The company has facilities in the three largest U.S. cannabis markets and a local sales presence in every major U.S. cannabis market.


Kush Bottles aims to be the gold standard for responsible and compliant products and services in the cannabis industry. Kush Bottles has no direct involvement with the cannabis plant or any products that contain THC.

 

The company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, Entrepreneur, and business magazine Inc.

For more information, visit www.kushbottles.com or call (888)-920-5874.

 

 

 

 

Forward-Looking Statements

This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent our current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this release. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as: “potential,” “look forward,” “believe,” “dedicated,” “building,” or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are often discussed in filings we make with the United States Securities and Exchange Commission (SEC), available at: www.sec.gov, and on our website, at: www.kushbottles.com.

 

Investor Contact:
Elizabeth Barker / Phil Carlson
KCSA Strategic Communications
212-896-1203 / 212-896-1233
ir@kushbottles.com

 

PR Contact:
Anne Donohoe
KCSA Strategic Communications
212-896-1265
adonohoe@kcsa.com