Document:

Unassociated Document

EXHIBIT 10.8

 

LOCK-UP AGREEMENT 

THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of this 19th day of November, 2010 (the “Effective Date”) by and among LC Luxuries Limited, a Nevada corporation (“LCLX” or the “Company”), on the one hand, and Justin Hartfield, an individual (“Hartfield”) and Keith Hoerling, an individual (“Hoerling” and, together with Hartfield, each a “Shareholder” and collectively the “Shareholders”), on the one hand.  The Company and the Shareholders shall be referred to as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, the Shareholders, and each of them, own the number of shares of Company common stock set forth next to his or her signature on the signature page of this Agreement (the shares subject to this Agreement are referred to as the “Shares”);

 

WHEREAS, the Shareholders acquired the Shares as a result of the transactions contemplated by that certain Agreement and Plan of Reorganization and Merger by and among Weedmaps, LLC, a Nevada limited liability company, and the Shareholders, on the one hand, and the Company and LC Merger Corp., a Nevada corporation and a wholly owned subsidiary of the Company (“LC Merger Sub”), on the other hand, dated November 17, 2010 (the “Merger Agreement”);

WHEREAS, the Company is in the process of becoming a reporting issuer under the Securities Exchange Act of 1934 (the “Exchange Act”), and the Company and the Shareholders believe it is in the best interests of the Company to impose limitations on the resale and/or transfer of the Shares, and the execution of this Agreement is a condition to the closing of the transactions contemplated by the Merger Agreement (the “Closing”);

NOW, THEREFORE, in reliance on the foregoing recitals and in consideration of and for the mutual covenants contained herein, the Parties hereto agree as follows:

AGREEMENT

1.           Lock-Up by the Shareholders.  The Shareholders, and each of them, hereby agree that (a) from the date hereof until June 30, 2011 (the “Initial Lock-Up Period”) with respect to all of the Shares, (b) from the end of the Initial Lock-Up Period until November 30, 2011 (the “Complete Lock-Up Period”) with respect to seventy five percent (75%) of the Shares, they will not make, offer to make, agree to make, or suffer any Disposition (as defined below) of any of his or her Shares or any interest therein, unless agreed to in writing by all Parties.  The restrictions contained in this Section 1 shall not apply to (a) a Disposition under a Shareholder’s will or pursuant to the laws of descent and distribution, or (b) a gift by a Shareholder to an immediate family member (i.e. a spouse, child, parent, grandparent or sibling) or a family trust for the benefit of immediate family member(s), so long as, in each case, the transferee(s) deliver to the other Parties an executed written instrument agreeing to be bound by the terms of this Agreement as if such transferee(s) were the Shareholder.  For the purposes of this Agreement, “Disposition” shall mean any sale, exchange, assignment, gift, pledge, mortgage, hypothecation, transfer or other disposition or encumbrance of all or any part of the rights and incidents of ownership of the Shares, including the right to vote, and the right to possession of the Shares as collateral for indebtedness, whether such transfer is outright or conditional, or for or without consideration.  Notwithstanding the foregoing, in the event the Company enters into a commercial lending relationship and the lender requires that any of the Shareholders pledge any of the Shares as collateral, any Shareholder may do so with the consent of the Company, but without the consent of the other Shareholders.

 

  

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2.           Restriction On Proxies and Non-Interference.  The Shareholders hereby agree that, during the Lock-Up Period, such Shareholders will not (i) grant any proxies or powers of attorney that would permit any such proxy or attorney-in-fact to take any action inconsistent herewith, (ii) deposit his or her Shares into a voting trust or enter into a voting agreement with respect to such Shares; or (iii) take any action that would make any representation or warranty of such Shareholder untrue or incorrect or would result in a breach by that Shareholder of his/her obligations under this Agreement.  Each Shareholder further agrees not to enter into any agreement or understanding with any other person or entity, the effect of which would be inconsistent with or violative of any provision contained in this Agreement.

3.           Representations and Warranties of the Shareholders.  Each Shareholder (severally, and not jointly and severally) hereby represents and warrants to the other Parties the following:

a.           Ownership of Shares.  Subject to community property laws of the state of California, each Shareholder is the sole record and beneficial owner of that number of shares of the Company’s common as set forth next to such Shareholder’s name on the signature page of this Agreement.  On the date hereof, such shares constitute all the shares of Company common stock owned of record or beneficially owned by such Shareholder or any of Shareholder’s affiliates or related parties, determined in accordance with the rules of the Securities and Exchange Commission, and includes voting and investment power with respect to the Shares.  Subject to community property laws of the state of California, such Shareholder has sole voting power and sole power to issue instructions with respect to the matter set forth in this Agreement, sole power of disposition, and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Company stock, with no limitations, qualifications or restrictions on such rights, subject to applicable securities laws and the terms of this Agreement.

 

  

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b.           Authorization.  Each Shareholder has the requisite legal capacity and competency, and the full legal right to execute and deliver this Agreement and perform his or her obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Shareholder and constitutes a valid and binding agreement enforceable against such Shareholder in accordance with its terms except (i) as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights, and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.

 

c.           No Conflicts. Except for filings, authorizations, consents and approvals as may be required under the Securities Act of 1933 (the “Securities Act”) and the Exchange Act, (i) no filing with, and no permit, authorization, consent or approval of, any state or federal governmental authority, or any other person or entity, is necessary for the execution of this Agreement by such Shareholder and the consummation by such Shareholder of the transactions contemplated hereby, and (ii) neither the execution and delivery of this Agreement by such Shareholder, the consummation by such Shareholder of the transactions contemplated hereby, or compliance by such Shareholder with any of the provisions hereof will (A) result in a violation or breach of, or constitute a default (or give rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any note, loan agreement, bond, mortgage, indenture, license, contract, commitment, arrangement, understanding, agreement or other instrument or obligation of any kind to which such Shareholder is a party or by which such Shareholder or any of its properties or assets may be bound, or (B) violate any order, writ, injunction, decree, judgment, statute, role or regulation applicable to such Shareholder or any of his or her properties or assets.

d.           No Encumbrances. Each Shareholder owns his or her Company stock free and clear of all liens, claims, security interests, proxies, voting trusts or agreements, or any other encumbrances whatsoever, except for (i) any such matters arising hereunder and (ii) bona fide pledges of such Shares as security for obligations owed to the Company; provided, however, in the event that the Company acquires any interest in all or any of such Shares, including, without limitation, legal or beneficial ownership thereof or any voting rights with respect thereto, whether through foreclosure or otherwise, the Company hereby agrees to be bound by the terms of this Agreement with respect to such Shares as if it were the Shareholder.

e.            Shareholder Capacity.  Each Shareholder who is, or becomes during the Lock-Up Period, a director of the Company, agrees that the terms of this Agreement are agreed to in his or her capacity as a stockholder of the Company and not as a director.

4.           Representations and Warranties of the Company.  The Company has full legal right, power and authority to enter into and perform all of its obligations under this Agreement.  The execution and delivery of this Agreement by the Company has been authorized by all necessary corporate action on the part of the Company and will not violate any other agreement to which the Company is a party.  This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company, enforceable in accordance with its terms, except as the enforcement thereof may be limited in bankruptcy, insolvency, reorganization, moratorium or similar laws.

 

  

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5.           Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the Parties.

 

6.           Certain Events.  Each Shareholder agrees that this Agreement and the obligations hereunder shall attach to his or her Company stock and shall be binding upon any other person or entity to which legal or beneficial ownership of such Company stock shall pass, whether by operation of law or otherwise, including, without limitation, such Shareholder’s heirs, guardians, administrators or successors.  Notwithstanding any such transfer of Company stock, the transferor shall remain liable for the performance of all obligations under this Agreement of the transferor.

 

7.           Acquisition of Additional Company Stock. Each Shareholder agrees to promptly notify the Company of the number of shares of Company stock acquired by any Shareholder, if any, after the date of this Agreement.

 

8.           Assignments; Rights of Assignees; Third Party Beneficiaries. This Agreement shall not be assignable by any Shareholder without the prior written consent of the other Parties.  This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns.  Nothing expressed in this Agreement is intended or shall be construed to give any person or entity other than the Parties or their respective heirs, executors, administrators, legal representatives, successors or permitted assigns, any legal or equitable right, remedy or claim under this Agreement or any provision contained herein.

 

9.           Specific Performance.  The Parties acknowledge that money damages are an inadequate remedy for breach of this Agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the non-breaching Party or Parties in the event this Agreement is breached.  Therefore, each Party agrees that the non-breaching Party or Parties may obtain specific performance of this Agreement without the necessity of establishing irreparable harm or posting any bond, and will be in addition to any other remedy to which such Party may be entitled at law or in equity.

 

10.        Amendment and Waivers.  Any term or provision of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the Party to be bound thereby.  The waiver by a Party of any breach hereof for default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default.

 

  

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11.         Attorneys’ Fees.  Should suit be brought to enforce or interpret any part of this Agreement, the prevailing party shall be entitled to recover, as an element of the costs of suit and not as damages, reasonable attorneys’ fees to be fixed by the court (including without limitation, costs, expenses and fees on any appeal).  The prevailing party shall be the party entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgment.  A party not entitled to recover its costs shall not be entitled to recover attorneys’ fees.  No sum for attorneys’ fees shall be counted in calculating the amount of a judgment for purposes of determining if a party is entitled to recover costs or attorneys’ fees.

 

12.         Section Headings.  Headings contained in this Agreement are inserted only as a matter of convenience and in no way define, limit, or extend the scope or intent of this Agreement or any provisions hereof.

 

13.         Governing Law and Venue.  This Agreement will be governed by and construed and enforced in accordance with the laws of the State of California, without regard to its choice of law principles, applicable to a contract executed and to be performed in the State of California.  Each Party hereto (i) agrees to submit to personal jurisdiction and to waive any objection as to venue in the state or federal courts located in Orange County, California, (ii) agrees that any action or proceeding shall be brought exclusively in such courts, unless subject matter jurisdiction or personal jurisdiction cannot be obtained, and (iii) agrees that service of process on any party in any such action shall be effective if made by registered or certified mail addressed to such Party at the address specified herein, or to any other addresses as he, she or it may from time to time specify to the other Parties in writing for such purpose.  The exclusive choice of forum set forth in this paragraph shall not be deemed to preclude the enforcement of any judgment obtained in such forum or the taking of any action under this Agreement to enforce such judgment in any appropriate jurisdiction.

 

14.         Independent Counsel and Rules of Construction. All Parties to this Agreement acknowledge and agree that they have been advised to, and have had the opportunity to, seek independent counsel and advice with respect to the terms of this Agreement.  As such, this Agreement has been negotiated at arms length between persons sophisticated and knowledgeable in these types of matters. Additionally, any normal rules of construction that would require a court to resolve matters of ambiguities against the drafting party are hereby waived and shall not apply in interpreting this Agreement.

 

15.         Notices.  All notices, requests and other communications to any party hereunder shall be in writing and will be deemed to have been duly given only if delivered personally or by overnight mail (charges pre-paid or billed to account of the sender) to the Parties at their addresses listed on the signature page of this Agreement.

 

16.         Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original as against any party whose signature appears thereon and all of which together shall constitute one and the same instrument.

 

[remainder of page intentionally left blank; signature page to follow]

 

  

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the date first set forth above.

	
“LCLX”

	  	  
	  	  	  
	
LC Luxuries Limited,

	  	  
	
a Nevada corporation

	  	  
	  	  	  
	
/s/ James Pakulis

	  	  
	
By:    James Pakulis

	  	  
	
Its:    Chief Executive Officer

	  	  
	  	  	  
	
“Shareholders”

	  	  
	  	  	  
	
/s/ Justin Hartfield

	  	
/s/ Keith Hoerling

	
Justin Hartfield, an individual

	  	
Keith Hoerling, an individual

	
8,200,000 shares

	  	
8,200,000 shares

 

  

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EXHIBIT 10.9

 

EMPLOYMENT AGREEMENT 

This Employment Agreement is entered this 19th day of November, 2010, by and between LC Luxuries Ltd., a Nevada corporation (the “Employer”), and Justin Hartfield, hereinafter referred to as “Employee,” in consideration of the mutual promises made herein, agree as follows:

ARTICLE 1.  AT-WILL EMPLOYMENT

Section 1.1.         At-Will Employment.  Employer hereby employs Employee and Employee hereby accepts employment with Employer on an at-will basis, with both Employer and Employee able to terminate the employment relationship at any time, with or without cause.  This at-will status can only be changed by a writing signed by Employer’s President.

Section 1.2.         Annual Review.  Employer will grant Employee an annual review.  This annual review may result in a corresponding increase in salary to Employee, but any increase in salary is in the sole discretion of Employer.

ARTICLE 2.  DUTIES AND OBLIGATIONS OF EMPLOYEE

Section 2.1.         General Job Responsibilities.  Employee is being hired for the position of Chief Web Officer (“CWO”) for the Employer.  Employee shall report directly to Employer’s President.  In that capacity, Employee shall do and perform the following services:

	
  

	
·

	
Manage Employer’s technical operations, including all activities as they relate to Weedmaps.com and any or all affiliate web sites.

	
  

	
·

	
Employment duties within the CWO jurisdiction include online strategy,  budgeting, systems & software administration, hosting, online marketing  & communications, e-commerce, customer service, business development,  online community & social media, web content development & workflows, website graphic design,  information/data architecture, website analytics, security, archiving, accessibility, legal issues (for example, copyright, DRM, trademark, and privacy), and training, among others.

	
  

	
·

	
Additional responsibilities as required by the Employer.

Section 2.2.         Matters Requiring Consent of Employer’s President.  Employee shall not, without specific written approval of the Employer’s President, do or contract to do any of the following:

	
  

	
(1)

	
Bind the Employer to any contract or agreement outside the Employer’s ordinary course of business (meaning – e-commerce and marketing as it relates to the cannabis industry and any other industry in which Employer is either operating in or is in the pre-operation development stage at the time of Employee’s departure (the “Business”) that could cause the Employer to expend in excess of $1,000.00 (One Thousand Dollars); or

	
  

	
(2)

	
Bind the Employer to a liquidation event, such as liquidation, dissolution or winding up of the Employer, whether voluntary or involuntary;

	
  

	
(3)

	
Bind the Employer to a sale of all or substantially all of the assets of the Employer;

 

  

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(4)

	
Bind the Employer to a transaction that would result in a change of the control of the Employer;

	
  

	
(5)

	
Bind the Employer to any transaction that would result in the issuance of any shares of any class of stock of the Employer after the date of this Agreement, or any security convertible into or exchangeable for any shares of any class of the Employer’s stock;

	
  

	
(6)

	
Guaranty any debt or obligation in the name of the Employer; or

	
  

	
(7)

	
Any other matter prohibited by the Employer’s written practices and policies that have been, or will be, distributed to Employer’s employees.

Section 2.3.         Devotion to Employer’s Business.

(a)           Subject to the exceptions set forth herein, Employee shall devote his full professional time, attention, best efforts, energy and skill to the business of Employer during the term of his employment necessary to effectively and efficiently execute all job responsibilities set forth in Section 2.1.  Employee may devote time and attention to other activities that do not compete with Employer or interfere with Employee’s obligations, duties and responsibilities to Employer hereunder.

(b)           During Employee’s employment with Employer, Employee shall not engage in any other business duties or pursuits whatsoever, or directly or indirectly render any services of a business, commercial, or professional nature to any other person or organization, whether for compensation or otherwise, that competes with Employer or interferes with Employee’s obligations, duties and responsibilities to Employer hereunder, without the prior written consent of Employer’s CEO.  However, the expenditure of reasonable amounts of time for educational, charitable, or professional activities shall not be deemed a breach of this agreement if those activities do not materially interfere with the services required under this agreement and such activities shall not require the prior written consent of Employer’s CEO.

(c)           This agreement shall not be interpreted to prohibit Employee from making passive personal investments or conducting private business affairs if those activities do not interfere or conflict with the services required under this agreement.  However, during the term of Employee’s employment, Employee shall not directly or indirectly acquire, hold, or retain any material interest in any business competing with or similar in nature to the Business.

Section 2.4.         Competitive Activities.  While Employee is an employee of Employer, and for a period of one (1) year after termination, Employee shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any business that competes with the Business.  Employee acknowledges that this non-compete provision itself survives the termination of this employment agreement.

Section 2.5.         Uniqueness of Employee’s Services.  Employee hereby represents and agrees that the services to be performed by Employee under this agreement are of a special, unique, unusual, extraordinary and intellectual character that gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law.  Employee therefore expressly agrees that Employer, in addition to any other rights or remedies that the Employer may posses, shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of this contract by Employee.  The parties are aware that under California law specific performance may not be available to enforce all breaches of this agreement but acknowledge that for all such material breaches of this agreement the non-breaching party would be harmed and both parties agree that this harm will be recoverable through monetary damages.

 

  

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Section 2.6.         Trade Secrets.

(a)           The parties acknowledge and agree that during Employee’s employment and in the course of the discharge of his duties hereunder, Employee shall have access to and become acquainted with confidential information concerning the operation and processes of Employer, including without limitation, confidential financial, personnel, sales, and other information that is owned by Employer’s business, and that such information constitutes Employer’s trade secrets (“Trade Secrets”).

(b)           Employee specifically agrees that he shall not misuse, misappropriate, or disclose any such Trade Secrets, directly or indirectly to any other person or use them in any way, either during the term of this Agreement or at any other time thereafter, except as is required in the course of his employment hereunder.

(c)           Employee acknowledges and agrees that the sale or unauthorized use or disclosure of any of Employer’s Trade Secrets obtained by Employee during the course of his employment with Employer, including confidential information concerning Employer’s current or any future and proposed work, services, or products, the facts as well as any descriptions thereof, would constitute unfair trade practices and unauthorized use of the Employer’s Trade Secrets, whether such information is used during the term of Employee’s employment or at any other time thereafter.

(d)           Employee further agrees that all files, records, documents, drawings, specifications, equipment, and similar items relating to Employer’s business, whether prepared by Employee or others, are and shall remain exclusively the property of Employer and that they shall be removed from the premises of Employer only with the express prior written consent of Employer.  Employee shall not solicit or hire any client(s) or employee(s) of Employer for one (1) year following termination of employment.  Trade Secrets do not include: (1) information that was in the public domain at the time of disclosure; or (2) information that subsequently becomes part of public knowledge or literature through a deliberate act of Employer or Employee as of the date of its becoming public.

Section 2.7          Discoveries.  All inventions, discoveries, ideas, and other intellectual property rights (“Intellectual Property”) made or conceived by Employee during the term hereof, either solely or jointly with others, whether they can be patented or not, to the extent related to and arising out of Employee’s performance under this Agreement shall be promptly and fully disclosed to the Employer, considered work for hire and all right, title and interest thereto anywhere in the world shall be the Employer’s property.  In the event that such inventions, discoveries and ideas are not considered work for hire for any reason, Employee hereby unconditionally assigns to the Employer all of his right, title and interest therein.  Employee agrees to execute any and all documents deemed necessary by the Employer to effectuate the foregoing at any time, whether before or after the expiration or earlier termination of this Agreement.  Compensation for any such inventions, discoveries or ideas shall be deemed to be included in the compensation paid to Employee hereunder.

 

  

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ARTICLE 3.  OBLIGATIONS OF EMPLOYER

Section 3.1.        General Description.  Employer shall provide Employee with the compensation, incentives, benefits, and business expense reimbursement specified elsewhere in this agreement.

Section 3.2.        Office and Staff.  Employer shall provide Employee with an office, office equipment, supplies, and other facilities and services, suitable to Employee’s position and adequate for the performance of his duties.  Employee shall work from the Employer’s corporate headquarters, which is currently located in Costa Mesa, California.  Employee is required to spend time at the Employer’s corporate headquarters and in the field as necessary to effectively carry out his job duties and responsibilities, maintain team continuity and direction, grow and maximize sales, and to achieve his established goals.  Employee understands and agrees that frequent travel may be necessary to accomplish his job responsibilities outlined herein.

ARTICLE 4.  COMPENSATION OF EMPLOYEE

Section 4.1.         Annual Salary.

(a)           As compensation for the services to be rendered hereunder, Employee shall receive an annual salary at the rate of $30,000 per month, payable twice a month.

(b)           Employee may receive such annual increases in salary as may be determined by Employer in its sole discretion on the anniversary of this Agreement.  Nothing herein requires Employer to increase Employee’s salary at any time.

Section 4.2.         Tax Withholding.  Employer shall have the right to deduct or withhold from the compensation due to Employee hereunder any and all sums required for federal income and Social Security taxes and all state or local taxes now applicable or that may be enacted and become applicable in the future.

ARTICLE 5.  EMPLOYEE BENEFITS

Section 5.1.         Eligibility.  Employee will be entitled to begin accruing the benefits listed in this Section immediately after Employee’s start date.

Section 5.2.         Annual Vacation.  Employer does not currently offer vacation leave.   However, to the extent that the Employer offers vacation leave to its employees in the future, Employee will be eligible to participate in such a plan, in accordance with what the Employer offers to other comparable employees.

Section 5.3.         Sick Leave.  Employer does not currently offer sick leave.   However, to the extent that the Employer offers sick leave to its employees in the future, Employee will be eligible to participate in such a plan, in accordance with what the Employer offers to other comparable employees.

Section 5.4.         Medical Coverage.  Employer does not currently offer medical coverage.  However, to the extent that the Employer offers coverage to its employees in the future, Employee will be eligible to participate in such coverage, in accordance with what the Employer offers to other comparable employees.

 

  

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Section 5.5.         Retirement Plan.  Employer does not currently offer retirement benefits.   However, to the extent that the Employer offers retirement benefits to its employees, Employee will be eligible to participate in such benefits, in accordance with what the Employer offers to other comparable employees.

 

ARTICLE 6.  BUSINESS EXPENSES

Section 6.1.         Reimbursement of Business Expenses.

(a)           Employer shall reimburse Employee for all reasonable business expenses incurred by Employee in connection with the business of Employer, conditional on Employee receiving written authorization from the President or CEO, prior to incurring such expense.

(b)           Each such expenditure shall be reimbursable only if it is of a nature qualifying it as a proper deduction on the federal and state income tax return of Employer.

(c)           Each such expenditure shall be reimbursable only if Employee furnishes to Employer adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authorities for the substantiation of each such expenditure as an income tax deduction.

ARTICLE 7.  TERMINATION OF EMPLOYMENT

Section 7.1.         Termination At Will.  Employee’s employment hereunder is at will and may be terminated by either Employer or Employee at any time for any reason, with or without cause.

Section 7.2.         Termination Upon Death.  Employee’s employment hereunder shall terminate upon his death, in which event the Employer shall pay to such person as the Employee shall have designated in a written notice filed with the Employer, or if no such person shall have been designated to his estate, all salary, amounts due under benefit plans and profit sharing plans, and reimbursement of business expenses through the date of termination.

Section 7.3.        Termination Upon Disability.  If, as a result of a permanent mental or physical disability, Employee shall have been absent from his duties hereunder on a full-time basis for six (6) consecutive months, (“Disability”) and, within thirty (30) days after the Employer notifies Employee in writing that it intends to replace him, (which notice can be given at the end of the fifth month during such six-month period), Employee shall not have returned to the complete performance of his duties on a full-time basis, the Employer shall be entitled to terminate Employee’s employment.  In addition, Employee shall, upon his Disability, have the right to terminate his employment with Employer.  If such employment is terminated (whether by the Employer or Employee) as a result of Employee’s Disability, then Employer shall pay, if applicable, to Employee all salary, amounts due under benefit plans and profit sharing plans, and reimbursement of business expenses, through the date of termination.

 

  

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Section 7.4.         Termination for Cause.  Employer shall be entitled to terminate Employee’s employment for Cause, in which event Employee shall be entitled, if applicable, to all salary, amounts due under benefit plans and profit sharing plans, and reimbursement of business expenses, through the date of termination.  For purposes of this agreement, “Cause” shall mean (i) the conviction of Employee of a felony, (ii) the commission by Employee of an act of fraud or embezzlement involving assets of the Employer or its customers, suppliers or affiliates, (iii) a willful breach or habitual neglect of Employee’s duties which he is required to perform under the terms of his employment (See Section 2.1, above) and which causes material harm to the Business, (iv) refusal to timely produce any and all documentation related to the Employer’s business to the President upon request therefore, which refusal causes material harm to the Business; or (v) gross misconduct or gross negligence in connection with the business of the Employer or an affiliate which has a material adverse effect on the Employer and any of its subsidiaries.  Notwithstanding the foregoing, Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Employee a notice of termination which specifies the grounds for termination and a statement of supporting facts.

Section 7.5          Termination without Cause. Subject to the provisions of Section 7.7 of this Agreement, Employee’s employment hereunder may be terminated by Employer without Cause at any time and without prior notice to Employee.

Section 7.6          Termination with Good Reason.  Employee may resign at any time with Good Reason.  For purposes of this Agreement, Employee shall be deemed to have terminated his service to Employer for “Good Reason” if he terminates his service because:  (i) he experiences a material reduction in salary, benefits or role without his prior written consent unless (A) within the prior six (6) months, Employee committed one or more of the acts defined as Cause in Section 7.4, above or (B) all of Employer’s employees are subject to a similar reduction; or (ii) Employer relocates Employee’s office or reporting location more than 40 miles away from Employer’s current corporate offices in Costa Mesa, California.

 

Section 7.7          Payments upon Termination without Cause or With Good Reason.  In the event that Employee’s employment with Employer is terminated by Employer without Cause pursuant to Section 7.5 or by Employee with Good Reason pursuant to Section 7.6 above, then Employee shall be entitled to receive payment of eighteen (18) weeks (four and a half (4.5) months) of Employee’s base salary in effect as of the date of such termination.   The severance payments will be made in accordance with the normal payroll cycle of Employer and subject to any required tax withholdings and deductions.  In the event that Employee breaches any of the covenants set forth in Article 2, above, Employer shall have no further obligation to provide, and Employee shall have no further right to receive, any payments or benefits pursuant to this Section 7.7.

Section 7.8          Return of Documents.  Upon the termination of Employee's employment with Employer for any reason, including without limitation termination by the Employer for Cause, Employee shall promptly deliver to Employer all correspondence, manuals, orders, letters, notes, notebooks, reports, programs, proposals, appraisal documents, agreements, and any documents and copies concerning Employer’s customers or concerning products or processes used by Employer and, without limiting the foregoing, will promptly deliver to the Employer any and all other documents or material containing or constituting Trade Secrets.

ARTICLE 8.  GENERAL PROVISIONS

Section 8.1.         Notices.  Any notices to be given hereunder by either party to the other shall be in writing and may be transmitted by personal delivery or facsimile or overnight mail.  Notices shall be addressed to the parties at the addresses below.  Such notice or communication shall be deemed to have been given or made, as of the date of delivery, as evidenced by a signed declaration under penalty of perjury in the event of personal delivery, as evidenced by a facsimile confirmation sheet in the event of facsimile delivery, or as evidenced by prove of overnight delivery in the event of delivery by overnight courier.

 

  

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If to Employer:

	
LC Luxuries Ltd.

	  	
2183 Fairview Road, Suite 101

	  	
Costa Mesa, CA  92627

	  	
Attn.  James Pakulis, President

	  	
Facsimile (949) 515-1625

	  	  
	
with a copy to:

	
The Lebrecht Group, APLC

	  	
9900 Research Drive

	  	
Irvine, CA  92618

	  	
Attn:  Craig V. Butler, Esq.

	  	
Facsimile:  (949) 635-1244

	  	  
	
If to Employee:

	
Justin Hartfield

	  	
  

	  
	  	
  

	  
	  	
Facsimile: 

	
  

	  

Section 8.2.         Arbitration.

(a)           Any controversy between Employer and Employee involving the construction or application of any of the terms, provisions, or conditions of this agreement shall on written request of either party served on the other be submitted to arbitration.

(b)           Employer and Employee shall each appoint one person to hear and determine the dispute.  If the two (2) persons so appointed are unable to agree, then those persons shall select a third impartial arbitrator whose decision shall be final and conclusive upon both parties.

(c)           The cost of arbitration shall be borne by the losing party or in such proportions as the arbitrators decide.

Section 8.3.         Attorney’s Fees and Costs.  If any action at law or in equity is necessary to enforce or interpret the terms of this agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which that party may be entitled.  This provision shall be construed as applicable to the entire contract.

Section 8.4.         Entire Agreement.  This agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Employee by Employer and contains all of the covenants and agreements between the parties with respect to that employment in any manner whatsoever.  Each party to this agreement acknowledges that no representation, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this agreement shall be valid or binding on either party.

Section 8.5.         Modifications.  Any modification of this agreement will be effective only if it is in writing and signed by the party to be charged.

 

  

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Section 8.6.         Effect of Waiver.  The failure of either party to insist on strict compliance with any of the terms, covenants, or conditions of this agreement by the other party shall not be deemed a waiver or relinquishment of any right or power at any one time or times be deemed a waiver or relinquishment of that right or power for all or any other times.

Section 8.7.         Partial Invalidity.  If any provision in this agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

Section 8.8.         Law Governing Agreement/Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of California.  Any legal action, suit, arbitration, or proceeding arising from or relating to this Agreement shall be brought and maintained in the appropriate court or arbitrator located in and with jurisdiction over Orange County, California and the parties hereby submit to the jurisdiction thereof.

Section 8.9.         Understanding Agreement. Employee has read and fully understands the points listed above and has agreed to adhere to all sections as presented.  Employee has had an opportunity to seek the advice of legal counsel regarding the terms of this agreement.

Section 8.10.       Assignment.  This Agreement, and the Employee’s rights and obligations hereunder, may not be assigned by the Employee.

Section 8.11.       Amendment.  This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both parties as hereto, as in the case of a waiver, by the party waiving compliance.

IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers or other authorized signatory, have executed this Amendment as of the date first above written.  This agreement may be signed in counterparts and facsimile signatures are treated as original signatures.

	
“Employer”

	  	
“Employee”

	  	  	  
	
LC Luxuries Ltd.

a Nevada corporation

	  	
Justin Hartfield,

an individual

	  	  	  
	
/s/ James Pakulis

	  	
/s/ Justin Hartfield

	
By:  James Pakulis

	  	
By:  Justin Hartfield

	
Its:  President

	
  

	  

 

  

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