Fresh Coast Extracts

1. Applicability. These terms and conditions of sale (these “Terms”) are the only terms that govern the sale of product (“Product”) by 42 Degrees Processing, LLC (d/b/a Fresh Coast Extracts) (which, together with its successors or any entity resulting from a name change, merger, or reorganization, shall be referred to herein as “Fresh Coast”) to any (“Customer”). The accompanying Sales Confirmation, if applicable, in addition to any future Sales Confirmations and these Terms (collectively, this “Agreement”) comprise the entire agreement between the parties, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral. These Terms prevail over any of Customer’s general terms and conditions of purchase regardless of whether or when Customer has submitted its purchase order or such terms. Fulfillment of Customer’s order does not constitute acceptance of any of Customer’s terms and conditions and does not serve to modify or amend these Terms. These Terms may only be amended or modified in a writing which specifically states that it amends these Terms and is signed by an authorized representative of each party. 

2. Regulatory Compliance. This Agreement is subject to strict requirements for ongoing regulatory compliance by the parties hereto, including, without limitation, requirements that the parties take no action in violation of either the Michigan Medical Marihuana Facilities Licensing Act or Regulation and Taxation of Marihuana Act (together with all related rules and regulations thereunder and any successor or replacement thereto, the “Marihuana Act”) or the guidance or instruction of the Michigan Marijuana Regulatory Agency (including any successor governmental authority, the “Regulator”). The parties acknowledge and understand that the Marihuana Act and/or the requirements of the Regulator are subject to change and are evolving as the marketplace for state-compliant cannabis businesses continues to evolve. If necessary or desirable to comply with the requirements of the Marihuana Act and/or the Regulator, the parties hereby agree to (and to cause their respective affiliates and related parties and representatives to) use their respective commercially reasonable efforts to take all actions reasonably requested to ensure compliance with the Marihuana Act and/or the Regulator, including, without limitation, negotiating in good faith to amend and restate, supplement, or otherwise modify this agreement to reflect terms that most closely approximate the parties’ original intentions but are responsive to and compliant with the requirements of the Marihuana Act and/or the Regulator. In furtherance, not in limitation of the foregoing, the parties further agree to cooperate with the Regulator to promptly respond to any informational requests, supplemental disclosure requirements, or other correspondence from the Regulator and, to the extent permitted by the Regulator, keep all other parties hereto fully and promptly informed as to any such requests, requirements, or correspondence.

3. Delivery. Unless otherwise agreed in writing on the associated Sales Confirmation, Fresh Coast shall facilitate the delivery of the Product by a Marihuana Transporter (as defined under the Marihuana Act) of its choosing, licensed pursuant to same, within a reasonable time after the execution of the Sales Confirmation, subject to availability. The Product will be delivered using Fresh Coast’s standard methods for packaging and delivery unless otherwise agreed on the Sales Confirmation. Fresh Coast will remain liable for loss or damage in transit unless Customer facilitates the use of its own, chosen, Marihuana Transporter, in which case any such liability is expressly disclaimed by Fresh Coast. Upon delivery to Customer’s indicated facility/establishment, risk of loss of the Product shall pass to Customer. Under no circumstances shall Fresh Coast be liable for any delays in transit. For orders delivered to the Lower Peninsula exceeding $3,000 (excluding taxes), or orders delivered to the Upper Peninsula exceeding $5,000 (excluding taxes), Fresh Coast shall be responsible for associated Marihuana Transporter fees. In all other cases, Customer agrees to pay a minimum delivery fee of $150 for Lower Peninsula deliveries or $275 for Upper Peninsula deliveries, which will be included in the associated final invoice amount. If, for any reason, Customer fails to accept delivery of any Product or if Fresh Coast is unable to deliver Product because Customer has not provided appropriate instructions, documents, licenses or authorizations: (i) risk of loss of the Product shall pass to Customer; (ii) the Product shall be deemed to have been delivered; and (iii) Fresh Coast, at its option, may store the Product until Customer picks it up, whereupon Customer shall be liable for all related costs and expenses (including, without limitation, shipping, storage and insurance).

4. Inspection, Rejection of Nonconforming Product and Restocking Fee. Customer shall inspect the Product upon receipt. Customer will be deemed to have accepted the Product unless it notifies Fresh Coast in writing of any Nonconforming Product within three (3) days of receipt and furnishes such written evidence or other documentation as required by Fresh Coast. “Nonconforming Product” means only the following: (i) Product shipped is different than identified in the Sales Confirmation or (ii) Product’s label or packaging incorrectly identifies its contents. If Customer timely notifies Fresh Coast of any Nonconforming Product, Fresh Coast shall, in its sole discretion, (i) replace such Nonconforming Product with conforming Product or (ii) credit or refund the Price for such Nonconforming Product. Customer acknowledges and agrees that the remedies set forth in this Section are Customer’s exclusive remedies for the delivery of Nonconforming Product. Except as provided under this Section and with regard to any express warranty provided in Section 8 below, all sales of Product to Customer are made as-is and on a one-way basis, meaning Customer has no right to return Product purchased under this Agreement to Fresh Coast.  In the event Customer refuses to accept Product (i) for its convenience or (ii) based upon a false assertion that it is Nonconforming Product, Customer agrees to reimburse Fresh Coast for the cost of any associated Marihuana Transporter fees and shall be charged a re-stocking fee equal to 5% of the Prices (defined below) of the Product wrongfully rejected (collectively “Rejection Charges”).  Customer shall satisfy any outstanding Rejection Charges as a precondition of Fresh Coast’s acceptance of any future orders of or requests for Product.  

5. Price; Payment Terms. Customer shall purchase the Product from Fresh Coast at the prices (the “Prices”) set forth in the Sales Confirmation. All Prices are exclusive of applicable sales, use and/or excise taxes. Customer is responsible for all such charges, costs and taxes and such amounts shall be included in Customer’s final invoice unless necessary and applicable exemption documentation is provided by Customer, and accepted by Fresh Coast, in advance of invoicing. Customer shall pay all amounts due to Fresh Coast in accordance with the payment terms set forth in the Sales Confirmation. Unless otherwise specified and agreed to in writing in the associated Sales Confirmation, all payments shall be due via Cash on Delivery (COD) in immediately available funds at the time the Product is delivered to the Customer’s designated location. Customer shall make all payments hereunder in US dollars. Customer shall be charged interest on all late payments at the lesser of the rate of 1.5% per month or the highest rate permissible under applicable law, calculated daily and compounded monthly. Open balances must be satisfied by Customer as a precondition of Fresh Coast’s acceptance of any future order of or requests for Product. Customer shall reimburse Fresh Coast for all costs incurred in collecting any late payments, including, without limitation, attorneys’ fees. In addition to all other remedies available under these Terms or at law (which Fresh Coast does not waive by the exercise of any rights hereunder), Fresh Coast shall be entitled to suspend the delivery of any Product if Customer fails to pay any amounts when due hereunder and such failure continues for ten (10) days following written notice thereof. Customer shall not withhold payment of any amounts due and payable by reason of any set-off of any claim or dispute with Fresh Coast.

6. Marketing Obligations and Restrictions; Equitable Relief and Liquidated Damages. The following apply to Customer’s use, advertisement and/or resale of the Product: 

   1. Customer shall: (i) observe all directions and instructions given to it by Fresh Coast in relation to the marketing, advertisement, and promotion of the Product; and (ii) market, advertise, promote, and resell Product and conduct business in a manner that reflects favorably at all times on the Product and the good name, goodwill, and reputation of Fresh Coast.

   2. Customer shall not, directly or indirectly: (i) engage in any unfair, competitive, misleading, or deceptive practices respecting the Product or Fresh Coast’s name, trademarks, brands, product names or logos (the “Fresh Coast Marks”), including any product disparagement, mislabeling or “bait-and-switch” practices; (ii) take any action that may interfere with any of Fresh Coast’s rights in or to the Fresh Coast Marks, including Fresh Coast’s ownership or exercise thereof; (iii) engage in any action that tends to disparage, dilute the value of, or reflect negatively on Fresh Coast, the Product, or any of the Fresh Coast Marks; (iv) alter, obscure, or remove any of the Fresh Coast Marks or any other proprietary rights notices placed on the Product, marketing materials, or other materials that Fresh Coast may provide; (v) place any written label on or in connection with, or otherwise use any of the Fresh Coast Marks in writing in relation to the Product other than those that are placed on or in connection with, or otherwise used in relation to, such Product by Fresh Coast and then only in such form and to the extent placed or used by Fresh Coast; or (vi) use any of the Fresh Coast Marks in any written advertisement of the Product without obtaining Fresh Coast’s prior written approval of such advertisement and the extent and nature of its anticipated use (“Advertisement Preapproval”).  

   3. In the event Customer purchases prepackaged Product, Fresh Coast may, but need not, provide Customer with associated advertisement content (a “Media Package”) and in such instances, Customer’s reasonable use of the Media Package for the express purpose of advertising the specific Product associated therewith shall be deemed to have received Advertisement Preapproval from Fresh Coast. Without limiting the foregoing, Customer shall promptly discontinue or change the display or use of any Fresh Coast Marks immediately upon Fresh Coast’s request. Nothing in this Agreement grants Customer, by implication, estoppel, or otherwise, any rights or license to any intellectual property rights of Fresh Coast.

   4. Customer acknowledges that a breach or threatened breach by Customer of any of its obligations or restrictions under this Section would give rise to irreparable harm to Fresh Coast for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by Customer of any such obligations, Fresh Coast shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

   5. In addition to the foregoing, if Customer breaches its obligations or restrictions under this Section, Customer shall pay to Fresh Coast an amount equal to $1,000.00 for each day such breach continues (the “Liquidated Damages”). The parties intend that the Liquidated Damages constitute compensation, and not a penalty. The parties acknowledge and agree that Fresh Coast’s harm caused by any such breach would be impossible or very difficult to accurately estimate at the time of contract and that the Liquidated Damages are a reasonable estimate of the anticipated or actual harm that might arise from such a breach.

7. Intellectual Property Rights. All intellectual property rights, including copyrights, patents, patent disclosures and inventions (whether patentable or not), trademarks, service marks, trade secrets, know-how and other confidential information, trade names, logos, corporate names, and domain names, together with all of the goodwill associated therewith, derivative works and all other rights in and to all documents, work product, materials, and other items prepared by or on behalf of Fresh Coast in the course of performing hereunder or otherwise shall be owned exclusively by Fresh Coast. 

8. Limited Warranty. Fresh Coast warrants to Customer that upon delivery the Product will be free from material defects. EXCEPT FOR THE WARRANTY SET FORTH IN THIS SECTION, Fresh Coast MAKES NO WARRANTY WHATSOEVER WITH RESPECT TO THE PRODUCT, INCLUDING ANY (a) WARRANTY OF MERCHANTABILITY; OR (b) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE. Fresh Coast shall not be liable for a breach of the warranty set forth in this Section unless: (i) Customer gives written notice of the defect, reasonably described, to Fresh Coast within ten (10) days of the time when Customer discovers or ought to have discovered the defect; (ii) Fresh Coast is given a reasonable opportunity after receiving the notice to examine such Product and Customer (if requested to do so by Fresh Coast) returns such Product to Fresh Coast’s place of business at Fresh Coast’s cost for the examination to take place there; and (iii) Fresh Coast reasonably verifies Customer’s claim that the Product is defective. Fresh Coast shall not be liable for a breach of the warranty set forth in this Section if: (iv) Customer makes any further use of such Product after giving such notice; (v) the defect arises because Customer failed to follow Fresh Coast’s oral or written instructions as to the storage, use or maintenance of the Product; or (vi) Customer alters such Product without the prior written consent of Fresh Coast. Subject to the remainder of this Section, with respect to any Product that breaches the warranty set forth herein, Fresh Coast shall, in its sole discretion, either: (i) replace such Product or (ii) credit or refund the price of such Product. THE REMEDIES SET FORTH IN THIS SECTION SHALL BE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY AND Fresh Coast’s ENTIRE LIABILITY FOR ANY BREACH OF THE LIMITED WARRANTY SET FORTH IN THIS SECTION.

9. Indemnification. Customer shall defend, indemnify, and hold harmless Fresh Coast and its Affiliates and their related persons and entities from and against all losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs, and expenses of whatever kind, including reasonable attorney fees and the cost of enforcing any right to indemnification hereunder, arising out of or resulting from Customer’s negligence, willful misconduct, or breach of this Agreement. 

10. Limitation of Liability. IN NO EVENT SHALL Fresh Coast BE LIABLE TO CUSTOMER OR ANY THIRD PARTY FOR ANY LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES WHETHER  ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND WHETHER OR NOT Fresh Coast HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE. IN NO EVENT SHALL Fresh Coast’s AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL OF THE AMOUNTS PAID TO Fresh Coast FOR THE PRODUCT SOLD HEREUNDER.

11. Compliance with Laws. Customer shall comply with all applicable laws, regulations and ordinances. Customer shall maintain in effect all the licenses, permissions, authorizations, consents, and permits that it needs to operate its business, purchase and store Product and to carry out its obligations under this Agreement, including, without limitation, those required under the Marihuana Act or otherwise by the Regulator. For clarity, Customer represents and warrants to Fresh Coast that it has in effect all such licenses, permissions, authorizations, consents and permits. If Customer is an entity other than a licensed marijuana Retailer, Customer hereby affirms that its wholesale purchasing and distribution structure relative to the Products seeks to achieve a legitimate commercial purpose and is not effectuated solely to limit or avoid the extent of taxes that may be due under the Comprehensive Road Funding Tax Act (MCL 205.901 et seq.).

12. Termination. In addition to any remedies that may be provided under these Terms, Fresh Coast may terminate this Agreement with immediate effect upon written notice to Customer, if Customer: (i) fails to pay any amount when due under this Agreement and such failure continues for ten (10) days after Customer’s receipt of written notice of nonpayment; (ii) has not otherwise performed or complied with any of these Terms, in whole or in part; or (iii) becomes insolvent, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization or assignment for the benefit of creditors.

13. Waiver. No waiver by Fresh Coast of any of the provisions of this Agreement is effective unless explicitly set forth in writing and signed by an authorized representative of Fresh Coast. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement operates, or may be construed, as a waiver thereof. No single or partial exercise of any right, remedy, power or privilege hereunder precludes any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

14. Confidential Information. All non-public, confidential or proprietary information of Fresh Coast, including but not limited to specifications, samples, designs, plans, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Fresh Coast to Customer, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential” in connection with this Agreement is confidential, solely for the use of performing this Agreement and may not be disclosed or copied unless authorized in advance by Fresh Coast in writing. Upon Fresh Coast’s request, Customer shall promptly return all documents and other materials received from Fresh Coast. Fresh Coast shall be entitled to injunctive relief for any violation of this Section.

15. Force Majeure. Fresh Coast shall not be liable or responsible to Customer, nor be deemed to have defaulted or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement when and to the extent such failure or delay is caused by or results from acts or circumstances beyond the reasonable control of Fresh Coast including, without limitation, acts of God, pandemic, flood, fire, earthquake, explosion, governmental actions, war, invasion or hostilities (whether war is declared or not), terrorist threats or acts, riot, or other civil unrest, national emergency, revolution, insurrection, epidemic, lockouts, strikes or other labor disputes (whether or not relating to either party’s workforce), restraints or delays affecting carriers, inability or delay in obtaining supplies of adequate or suitable materials, materials or telecommunication breakdown, or power outage.

16. Governing Law; Option to Arbitrate. This Agreement and all matters relating thereto are governed by, and construed in accordance with, the laws of the State of Michigan without regard to the conflict of laws provisions. Subject to Fresh Coast’s right to elect arbitration as set forth below, any legal suit, action, or proceeding arising out of or relating to this Agreement shall be instituted in the Grand Traverse County Circuit Court, and each party irrevocably submits to the exclusive jurisdiction of such court in any such suit, action, or proceeding. Notwithstanding the foregoing, at Fresh Coast’s sole discretion, Fresh Coast may require any dispute arising from this Agreement, including a dispute arising from or concerning interpretation, violation, invalidity, non-performance, or termination of this Agreement, to be submitted to final and binding arbitration under the Rules of Arbitration of the American Arbitration Association applying Michigan law. Such arbitration, if any, will be held in the State of Michigan at a location reasonably acceptable to Fresh Coast, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  

17. Legal Disclaimer. By entering into this Agreement, Customer agrees and acknowledges that Fresh Coast has not made, and is not making, or shall be deemed to have made, any representation or warranty of any kind regarding the compliance of this Agreement with any “Federal Cannabis Laws” as defined herein. Neither Fresh Coast nor any Customer shall have any right of rescission or amendment arising out of or relating to any non- compliance with Federal Cannabis Laws unless such non-compliance also constitutes a violation of Marihuana Act. As used herein, “Federal Cannabis Laws” means any U.S. federal laws, civil, criminal or otherwise, as such relate, either directly or indirectly, to the cultivation, harvesting, production, distribution, sale and possession of cannabis, marijuana or related substances or products containing or relating to the same, including, without limitation, the prohibition on drug trafficking under 21 U.S.C. § 841(a), et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision of a felony (concealing another’s felonious conduct) under 18 U.S.C. § 4, the bar against being an accessory after the fact to criminal conduct under 18 U.S.C. § 3, federal money laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960, and the regulations and rules promulgated under any of the foregoing. 

18. Miscellaneous. Customer shall not assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of Fresh Coast. Any purported assignment or delegation in violation of this Section is null and void. No assignment or delegation relieves Customer of any of its obligations under this Agreement. At any time, upon reasonable advance notice and during regular business hours, Fresh Coast may inspect Customer’s facilities and books, records, and other documents to verify compliance with the terms and conditions of this Agreement, including, without limitation, Section 6. The relationship between the parties is that of independent contractors. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of these Terms. 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. Provisions of these Terms which by their nature should apply beyond their terms will remain in force after and survive any termination or expiration of this Agreement including, but not limited to, the following provisions: Marketing Obligations and Restrictions; Equitable Relief and Liquidated Damages (Section 6); Indemnification (Section 9); Limitation of Liability (Section 10); Compliance with Laws (Section 11); Confidential Information (Section 14); Governing Law; Option to Arbitrate; Disclaimers (Section 16); and Miscellaneous (Section 17).

Customer, by placing an order, accepting delivery of Product, and/or tendering payment for same, understands and agrees to the Terms and this Agreement in their entirety with regard to any sale of Product by Fresh Coast, unless otherwise amended or modified in a writing signed by an authorized representative of Fresh Coast and Customer.