Terms of Service to the General Supply Agreement

Effective Date: November 22nd, 2022

Last Updated: November 22nd, 2022

Terms of Service to the General Supply Agreement

These Terms of Service (“Terms”) are entered into by and between True Terpenes, Inc. (“True Terpenes”) and you (“Client”) (each, a “Party,” and collectively, the “Parties”) and constitute a binding contract between the Parties. These Terms govern, and are incorporated by reference into, the Parties’ Manufacturing and Supply Agreement (“Supply Agreement”). True Terpenes may, in its sole discretion, update and modify these Terms upon written notice to you. Your continued use of True Terpenes’s services and/or your continued purchase of any True Terpenes Goods after the date upon which you have been notified of a change to these Terms constitutes your: (i) acceptance of the updated Terms; and (ii) and confirmation that you have read, understand and agree to be bound by them. Unless otherwise provided herein, all capitalized terms in these Terms shall have the meaning given to them in the Supply Agreement.

1. Certain Obligations of Client.
• Certain Prohibited Acts. Notwithstanding anything to the contrary in these Terms, neither Client nor any Client Personnel shall:
• make any representations, warranties, guarantees, indemnities, similar claims or other commitments: (i) actually, apparently or ostensibly on behalf of True Terpenes, or (ii) to any customer or other Person with respect to the Goods, which are additional to or inconsistent with any then-existing representations, warranties, guarantees, indemnities, similar claims or other commitments in these Terms or any written documentation provided by True Terpenes to Client; and/or (iii) engage in any unfair, competitive, misleading or deceptive practices respecting True Terpenes, True Terpenes’ Trademarks or the Goods, including any product disparagement.
• Credit Risk on Resale of the Goods to Customers. Client shall be responsible for all credit risks with respect to, and for collecting payment for, all products (including Goods) sold to its customers or other third parties, whether or not Client has made full payment to True Terpenes for such products. The inability of Client to collect the purchase price for any product shall not affect Client's obligation to pay True Terpenes for any Goods.

1. Limitation of Liability.
• IN NO EVENT SHALL TRUE TERPENES BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF, OR RELATING TO, OR IN CONNECTION WITH ANY BREACH OF THIS AGREEMENT, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT TRUE TERPENES WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND (D) THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE. IN NO EVENT SHALL TRUE TERPENES'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 TRUE TERPENES PURSUANT TO THIS AGREEMENT IN THE 12 MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
• WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, CLIENT ASSUMES ALL RISK AND LIABILITY FOR THE RESULTS OBTAINED BY THE USE OF ANY GOODS IN THE PRACTICE OF ANY PROCESS, WHETHER IN TERMS OF OPERATING COSTS, GENERAL EFFECTIVENESS, SUCCESS OR FAILURE, AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY TRUE TERPENES, BY WAY OF TECHNICAL ADVICE OR OTHERWISE, RELATED TO THE USE OF THE GOODS.

1. Compliance with Law.
• Client shall comply with all laws now in effect or which may hereafter be enacted or promulgated applicable to its operations within the Territory and/or the Goods or relating to the subject matter of these Terms. To the extent any jurisdiction within the Territories has enacted laws requiring Client to obtain regulatory approval with respect to the Goods or Client’s operations, respectively, including but not limited to, ingredients and composition, sourcing and handling of the ingredients, packaging, labeling, product safety, registration, or otherwise, Client shall be responsible to obtain such regulatory approval, and provide True Terpenes with evidence demonstrating such regulatory approval satisfactory to True Terpenes. Client shall promptly, but in no case later than three (3) days after Client learns thereof, notify True Terpenes of any new or proposed laws relating to the distribution of the Goods.
• Client shall notify True Terpenes of, and, to the extent permitted, provide True Terpenes with copies of (i) all documents relating to, any investigation, inquiry, fine, penalty, regulatory action, or other material notice or communication from any federal, state, or local authorities related to the Goods or their manufacture, distribution or sale; (ii) any license, permit or other registration related thereto; promptly, but in no case later than three (3) days, after Client becomes aware of such matter. Subject to Section 13 of the Supply Agreement, Client shall comply in a timely manner with any request for information received from such governmental authorities.

1. Indemnification. Subject to the terms and conditions of these Terms, Client, its affiliates, successors, and/or assigns (as "Indemnifying Party") shall indemnify, defend and hold harmless True Terpenes and its representatives/officers, directors, employees, agents, affiliates, successors and permitted assigns (collectively, "Indemnified Party/ies") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys' fees, fees, the costs of enforcing any right to indemnification under these Terms, and the cost of pursuing any investigatory services and/or insurance providers, (collectively, "Losses"), relating to or resulting from any third-party claim or any direct claim alleging: (a) a breach or non-fulfillment of any representation, warranty or covenant of these Terms by Indemnifying Party or Indemnifying Party's personnel; (b) any negligent or more culpable act or omission of Indemnifying Party or its personnel (including any recklessness or willful misconduct) in connection with the performance of these Terms; (c) any bodily injury, death of any Person or damage to real or tangible personal property caused by the acts or omissions of Indemnifying Party or its personnel; and/or (d) any failure by Indemnifying Party or its personnel to comply with any applicable laws.
• Exceptions and Limitations on Indemnification. Notwithstanding anything to the contrary in these Terms, an Indemnifying Party is not obligated to indemnify or defend (if applicable) an Indemnified Party against any claim if such claim or corresponding Losses arise out of or result from the Indemnified Party's or its personnel's: (a) gross negligence or more culpable act or omission (including recklessness or willful misconduct); or (b) bad faith failure to materially comply with any of its obligations set forth in these Terms arising out of or occurring in connection with the products purchased from True Terpenes or Client's negligence, willful misconduct or breach of these Terms. Client shall not enter into any settlement without True Terpenes' or Indemnified Party's prior written consent.

1. Representations and Warranties.
• Client's Representations and Warranties. Client represents and warrants to True Terpenes that:
• it is duly organized, validly existing and in good standing;
• it is duly qualified to do business and is in good standing in every jurisdiction in which such qualification is required for purposes of these Terms;
• it has the full right, power and authority to enter into these Terms and to perform its obligations hereunder;
• the execution of these Terms by its Representative whose signature is set forth at the end of these Terms, and the delivery of these Terms by Client, have been duly authorized by all necessary action on the part of Client;
• the execution, delivery and performance of these Terms by Client will not violate, conflict with, require consent under or result in any breach or default under any of Client's organizational documents or any applicable Law;
• these Terms has been executed and delivered by Client and (assuming due authorization, execution and delivery by True Terpenes) constitutes the legal, valid and binding obligation of Client, enforceable against Client in accordance with its terms;
• it is in compliance with all applicable Laws and Client Contracts relating to these Terms, the Goods, and the operation of its business;
• it has obtained all licenses, authorizations, approvals, consents or permits required by applicable Laws to conduct its business generally and to perform its obligations under these Terms;
• it is not insolvent and is paying all of its debts as they become due;
• all financial information that it may provide to True Terpenes is true and accurate and fairly represents Client's financial condition; and
• it has reviewed and acknowledges the handling and use information regarding the Goods, including safety information, that has been made available by True Terpenes either directly or through its Website, www.trueterpenes.com.
• True Terpenes’ Representations and Warranties. True Terpenes represents and warrants to Client that:
• it is a limited liability company, duly organized, validly existing and in good standing under the laws of the Oregon;
• it is duly qualified to do business and is in good standing in every jurisdiction in which such qualification is required for purposes of these Terms;
• it has the full right, power and authority to enter into these Terms and to perform its obligations hereunder;
• the execution of these Terms by its Representative whose signature is set forth at the end of these Terms, and the delivery of these Terms by True Terpenes, have been duly authorized by all necessary action on the part of True Terpenes; and
• the execution, delivery and performance of these Terms by True Terpenes will not violate, conflict with, require consent under or result in any breach or default under any of True Terpenes’ organizational documents or any applicable Law;
• these Terms has been executed and delivered by True Terpenes and (assuming due authorization, execution and delivery by Client) constitutes the legal, valid and binding obligation of True Terpenes, enforceable against True Terpenes in accordance with its terms, except as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws and equitable principles related to or affecting creditors’ rights generally or the effect of general principles of equity;
• it has obtained all licenses, authorizations, approvals, consents or permits required by applicable Laws to conduct its business generally and to perform its obligations under these Terms.
• Disclaimer of Third-Party Products. Client acknowledges that the Goods purchased by Client may contain, be contained in, incorporated into, attached to, or packaged together with products manufactured by a third party (“Third Party Products”). For the avoidance of doubt, True Terpenes makes no representations or warranties with respect to any Third-Party Products.
• DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES; NON-RELIANCE. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.2 HEREIN AND THE LIMITED PRODUCT WARRANTY SET FORTH IN SECTION 6 HEREIN, (A) NEITHER TRUE TERPENES NOR ANY PERSON ON TRUE TERPENES’ BEHALF HAS MADE OR MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER, EITHER ORAL OR WRITTEN, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT, OR PERFORMANCE OF GOODS TO STANDARDS SPECIFIC TO THE COUNTRY OF IMPORT, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED, AND (B) CLIENT ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY TRUE TERPENES, OR ANY OTHER PERSON ON TRUE TERPENES’ BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 3.2 HEREIN AND SECTION 7 OF THE SUPPLY AGREEMENT.

1. Limited Product Warranty.
• True Terpenes warrants to Client that for a period of three (3) months from the date of shipment of the Goods ("Warranty Period"), such Goods will materially conform to the specifications set forth in Exhibit A and will be free from material defects in material and workmanship (“Limited Product Warranty”). This Limited Product Warranty covers Nonconforming Goods and Goods otherwise materially defective in material or workmanship (“Defective Goods”), but it does not cover any Goods damaged due to:
• Transportation, storage, improper use, improper handling, unlawful use, unintended use, failure to follow the product instructions or to perform any preventative maintenance, modifications, combination or use with any products, materials, processes, hardware, products, systems, or other matter not expressly and unequivocally provided or authorized in writing by True Terpenes; unauthorized repair; normal wear and tear;’ or external causes such as accidents, abuse, or other actions or events beyond True Terpenes’ reasonable control; or
• Reconstructions, repairs or alterations performed by persons other than True Terpenes or its authorized representatives.
• Client's Exclusive Remedy. Subject to Section 5 of the Supply Agreement, and notwithstanding any other provision herein or in the Supply Agreement, this Section 6(b) contains Client's exclusive remedy for Defective Goods. Client's remedy herein is conditioned upon Client's compliance with its obligations under this Section 6. During the Warranty Period, with respect to any allegedly Defective Goods:
• Client shall notify True Terpenes, in writing, of any alleged claim or defect within 14 Business Days from the date Client discovers, or upon reasonable inspection should have discovered, such alleged claim or defect (but in any event before the expiration of the applicable Warranty Period);
• Client shall ship, at its expense and risk of loss, such allegedly Defective Goods to a location specified by True for inspection and testing by True Terpenes;
• if True Terpenes’ inspection and testing reveals, to True Terpenes’ reasonable satisfaction, that such Goods are Defective and any such defect has not been caused or contributed to by any of the factors described under Section 6(a) above, True Terpenes shall, in its sole discretion and at its expense, repair or replace such Defective Goods; and
• True Terpenes shall ship to Client, at True Terpenes’ expense, the repaired or replaced Goods to a location designated by Client.

Client has no right to return for repair, replacement, credit or refund any Good except as set forth in this Section 6 and Section 5 of the Supply Agreement. In no event shall Client reconstruct, repair, alter or replace any Good, in whole or in part, either itself or by or through any third party. THIS SECTION SETS FORTH CLIENT'S SOLE AND EXCLUSIVE REMEDIES AND TRUE TERPENES’ ENTIRE LIABILITY FOR ANY BREACH OF THE LIMITED PRODUCT WARRANTY SET FORTH IN THIS SECTION 6.

• Applicability of Warranty. This Limited Product Warranty extends only to the original purchaser of the Goods. It does not extend to any subsequent or other owner or transferee of the Goods or any transferee or other beneficiary of the warranty service.

1. Withdrawal of Goods. If True Terpenes determines that any Goods sold to Client may be Defective, at True Terpenes’ request, Client shall withdraw all similar Goods from sale and, at True Terpenes’ option, either return such Goods to True Terpenes (pursuant to the terms of Section 6 herein or 5 of the Supply Agreement) or destroy the Goods and provide True Terpenes with written certification of such destruction. Notwithstanding the limitations of Section 6 herein, if Client returns all withdrawn Goods or destroys all withdrawn Goods and provides True Terpenes with written certification of such destruction within 30 days following True Terpenes’ withdrawal request, in either case consistent with True Terpenes’ instructions, unless any such defect has not been caused or contributed to by any of the factors described under Section 6 herein, True Terpenes shall, in its sole and exclusive discretion, (a) repair or replace all such returned Goods (b) replace such destroyed Goods, in either case pursuant to the terms of Section 6 herein; or (c) refund the purchase price of the Goods. THIS SECTION 7 SETS FORTH CLIENT'S SOLE REMEDY AND TRUE TERPENES’ ENTIRE LIABILITY FOR ANY GOODS THAT ARE WITHDRAWN PURSUANT TO THIS SECTION 7.

1. No Set-off Right.. Client shall not, and acknowledges that it will have no right, under the Supply Agreement, any Purchase Order (as defined therein), any other agreement, document or Law to, withhold, offset, recoup or debit any amounts owed (or to become due and owing) to True Terpenes or any of its Affiliates, whether under the Supply Agreement or otherwise, against any other amount owed (or to become due and owing) to it by True Terpenes or True Terpenes’ Affiliates, whether relating to True Terpenes’ or its Affiliates' breach or non-performance of the Supply Agreement, any Purchase Order, any other agreement between (a) Client or any of its Affiliates and (b) True Terpenes or any of its Affiliates, or otherwise.

1. Intellectual Property Rights.
• Ownership. Client acknowledges and agrees that: (i) Intellectual Property Rights are the sole and exclusive property of True Terpenes or its licensors who shall retain all Intellectual Property Rights used to create, embodied in, used in and otherwise relating to the Goods and any of their component parts, as well as the benefit of any goodwill derived from the use by Client of such rights; and (ii) Client shall not acquire any ownership interest in any Intellectual Property Rights under the Supply Agreement and shall use True Terpenes’ Intellectual Property Rights only in accordance with such Agreement and any written instructions of True Terpenes. Under no circumstances shall Client allege or otherwise assert that True Terpenes was “hired to invent” or that the Supply Agreement constitutes a “work-for-hire.”
• Prohibited Acts. Client shall not:
• take any action that may interfere with any of True Terpenes’ rights in or to True Terpenes’ Intellectual Property Rights, including True Terpenes’ ownership or exercise thereof;
• challenge any right, title or interest of True Terpenes in or to True Terpenes’ Intellectual Property Rights;
• make any claim or take any action adverse to True Terpenes’ ownership of True Terpenes’ Intellectual Property Rights;
• register or apply for registrations, anywhere in the world, for True Terpenes’ Trademarks or any other Trademark that is similar to True Terpenes’ Trademarks or that incorporates True Terpenes’ Trademarks in whole or in confusingly similar part;
• use any mark, anywhere, that is confusingly similar to True Terpenes’ Trademarks;
• engage in any action that tends to disparage, dilute the value of, or reflect negatively on the products purchased under the Supply Agreement (including Goods) or any True Terpenes Trademark;
• misappropriate any of True Terpenes’ Trademarks for use as a domain name without prior written consent from True Terpenes; or
• alter, obscure or remove any of True Terpenes’ Trademarks or trademark or copyright notices or any other proprietary rights notices placed on the products purchased under the Supply Agreement (including Goods), marketing materials or other materials that True Terpenes may provide.

1. Miscellaneous.
• Survival. Sections 8, 10 and 12 to the Supply Agreement and Sections 2, 4, 6, 8-9, 10(a)-(c) and 10(j) herein shall survive termination of the Supply Agreement, together with any other provision that logically ought to so-survive.
• Cumulative Remedies. All rights and remedies provided in these Terms are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties or otherwise. Notwithstanding the previous sentence, the Parties intend that Client's rights under Section 5 of the Supply Agreement and Section 6 herein, and each of the Parties' rights under Section 4 herein are such Party's exclusive remedies for the events specified therein.
• Equitable Remedies. Client acknowledges and agrees that (a) a breach or threatened breach by Client of any of its obligations under Sections 10 and 17 of the Supply Agreement or its obligations under Section 9 herein would give rise to irreparable harm to True Terpenes for which monetary damages would not be an adequate remedy and (b) in the event of a breach or a threatened breach by Client of any such obligations, True Terpenes shall, in addition to any and all other rights and remedies that may be available to True Terpenes at law, at equity or otherwise 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 a bond or other security, and without any requirement to prove actual damages or that monetary damages will not afford an adequate remedy. Client agrees that Client will not oppose or otherwise challenge the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section 10(c).
• Severability. If any term or provision of the Supply Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability does not affect any other term or provision of the Supply Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify the Supply Agreement to effect the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
• Amendment and Modification. No amendment to or recession, termination or discharge of the Supply Agreement is effective unless it is in writing, identified as an amendment to or rescission, termination, or discharge of the Supply Agreement, and signed by an authorized Representative of each Party.
• Waiver.
• No waiver under the Supply Agreement is effective unless it is in writing and signed by an authorized representative of the Party waiving its right.
• Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated, and does not operate as a waiver on any future occasion.
• None of the following constitutes a waiver or estoppel of any right, remedy, power, privilege or condition arising from the Supply Agreement: (x) any failure or delay in exercising any right, remedy, power or privilege or in enforcing any condition under the Supply Agreement; or (y) any act, omission or course of dealing between the Parties.
• Assignment. Neither Party may assign any of its rights or delegate any of its obligations under the Supply Agreement without the prior written consent of the other Party, which such consent may be withheld in such Party’s sole and exclusive discretion. Either Party may assign any of its rights or delegate any of its obligations to any Affiliate, in the event of a change in Control, or to any Person acquiring all or substantially all of such Party’s assets. Any purported assignment or delegation in violation of this Section is null and void. No assignment or delegation relieves the assigning or delegating Party of any of its obligations under the Supply Agreement.
• No Third-Party Beneficiaries. Except as may be expressly set forth in the second sentence of this Section 10(h), the Supply Agreement benefits solely the parties to the Supply Agreement and their respective permitted successors and permitted assigns and nothing in these Terms or the Supply Agreement, express or implied, confers on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of the Supply Agreement. True Terpenes’ Affiliates are intended Third Party Beneficiaries of the Supply Agreement.
• Exclusion of Federal Law. Any and all references herein and within the Supply Agreement to “applicable law,” “Law,” “governing body,” “governmental authority,” “regulatory agency,” and/or “governmental agency” shall specifically and intentionally exclude any federal law, rule, or regulation of any governmental agency that identifies or classifies the growing, production, manufacture, sale, and/or possession of Cannabis as a crime or otherwise prohibits the growing, production, manufacture, sale, and/or possession of cannabis, including, without limitation, the United States Federal Controlled Substances Act (“Excluded Laws”). Neither Party shall interpose a defense of illegality under the Excluded Laws to the enforcement of the Supply Agreement.
• Dispute Resolution. Except as otherwise set forth herein or in the Supply Agreement, any dispute, controversy or claim arising out of or relating to the Supply Agreement, or the breach, termination or invalidity hereof (each, a "Dispute"), shall be submitted for negotiation and resolution to the management of True Terpenes (or to such other person of equivalent or superior position designated by True Terpenes in a written Notice to Client) and the management of Client (or to such other person of equivalent or superior position designated by Client in a written Notice to True Terpenes), by delivery of written Notice (each, a "Dispute Notice") from either of the Parties to the other Party. Such persons shall negotiate in good faith to resolve the Dispute. If the Parties are unable to resolve any Dispute within 60 days after delivery of the applicable Dispute Notice, either Party may institute arbitration as provided herein. Any controversy or claim arising out of or relating to the Supply Agreement, or breach thereof, shall be settled by arbitration administered by JAMS under the Comprehensive Arbitration Rules & Procedures, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Either party may make a demand for binding arbitration by filing with JAMS a demand in writing signed by an officer of the complaining party. The parties shall agree upon one arbitrator which will be selected and appointed in accordance with such rules. The arbitration shall take place in Portland, Oregon, Multnomah County.