TESTING SERVICES AGREEMENT This Testing Services Agreement (the “ Agreement ”) is entered into as (this “Effective Date”) by and between (“Kaycha Labs”) with its principal place of business at 10 Post Lane, Riverdale, NJ 07457, and Acreage CCF New Jersey, LLC (“Customer”) with its principal place of business at 100 Century Drive, Egg Harbor Township, NJ 08234. Each of Kaycha Labs and Customer may be referred to individually as a “ party ” and collectively they may be referred to as the “ parties ”. Background Kaycha operates a testing laboratory that is licensed and certified under applicable federal, state and local laws to perform testing services relating to cannabis products.
Customer desires for Kaycha Labs to provide, and Kaycha Labs desires to provide to Customer, testing services relating to cannabis products provided by Customer, including without limitation cannabis flower, cannabis concentrates, and cannabis-infused products (“ Samples ”) in accordance with the terms and conditions herein.
In consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties agree as follows: Agreement
- Performance of Services.
Customer may, from time to time, submit orders (“ Orders ”) to Kaycha Labs to test Samples. No terms provided in an Order by Customer, whether boilerplate or otherwise, shall be binding on the parties, except for any information necessary for fulfillment of the applicable Order. Any other terms included as part of an Order shall form no part of this Agreement and are hereby rejected. In the event that Customer submits a Sample incorrectly such that Kaycha Labs cannot accurately report results in relation thereto and Kaycha Labs has provided notice to Customer of such incorrect Sample, Kaycha Labs shall not be responsible therefor. Kaycha Labs shall not be responsible for fulfilling any Order for any address that is located outside of the State of New Jersey. Kaycha Labs shall perform the testing services on each Sample in accordance with the specifications set forth in Schedule A (“ Testing Services ”), and Kaycha Labs shall provide Customer with a testing report (the “ Testing Report ”) for each such Sample. Kaycha Labs shall assign personnel who are licensed, certified, and/or qualified in accordance with applicable law to perform the Testing Services. Kaycha Labs may replace or change employees performing the Testing Services from time to time.
2. Fees and Payment Terms.
Customer shall pay Kaycha Labs the fees for the Testing Services set forth in Schedule A (the “ Fees ”). Payment of all Fees for the Testing Services are due within thirty (30) days of Customer’s receipt of an invoice. All Fees are payable in U.S. Dollars. Kaycha Labs shall only incur expenses that may be charged to Customer if pre-approved in writing by Customer. Fees exclude any taxes, including any applicable sales, use, gross receipts, excise, value-added, withholding, personal property or other taxes. Any such taxes, other than taxes on the income or assets of Kaycha Labs or employment taxes in respect of Kaycha Labs personnel, shall be paid by Customer.
- Term and Termination.
3.1 Term. The term of this Agreement shall commence on the Effective Date and unless earlier terminated in accordance herewith, shall continue in force and effect for one (1) year (the “ Initial Term ”). Following the initial term, the Agreement may be renewed by the written agreement of the parties (each such period being a “ Renewal Term ”, the Initial Term and Renewal Term(s), if any, collectively, the “ Term ”).
3.2 Termination for Convenience or Legal Compliance. Either party may terminate this Agreement for any reason upon thirty (30) days’ prior written notice to the other party of its intent to terminate. Notwithstanding anything herein, in the event there is a new law or change of applicable law or regulation and either party in good faith determines this Agreement conflicts with or otherwise does not comply with such law or regulation, Customer and Kaycha Labs shall in good faith seek to amend this Agreement to comply with such law or regulation; provided, however, if the parties are unable to agree to such amendment within five (5) business days of notice of non-compliance from a party, such party shall have the right to terminate this Agreement effective immediately upon written notice to the other party.
3.3 Termination for Cause. If a party materially breaches one of its obligations under this Agreement, the other party may terminate this Agreement and all pending Testing Services if the breaching party fails to cure such breach within thirty (30) days after receipt of a written notice from the non-breaching party specifying the nature of the breach.
3.4 Effect of Termination. Customer shall pay Kaycha Labs for all Testing Services performed through the termination or expiration date. The obligations in this Agreement which are intended by their terms to survive the expiration or termination of this Agreement shall so survive. In addition, and without limiting the generality of the preceding sentence, the provisions of this Section 3.4, and Sections 4, 6, 7 and 8.1 through 8.10, shall survive any termination or expiration of this Agreement.
- Intellectual Property Rights.
4.1 Ownership and License. Each party possesses certain intellectual property, including but not limited to trademarks, copyrights, patents, trade names, inventions, know-how, trade secrets, Confidential Information (as defined below), analytical methods, standard operating procedures, technical expertise, and statistical methodologies developed or acquired by such party prior to or during the term of this Agreement without benefit of the information or data provided by the other party (the “ Kaycha Labs Intellectual Property ” or “ Customer Intellectual Property ” respectively). Kaycha Labs Intellectual Property includes all enhancements, improvements and updates made by Kaycha Labs to its intellectual property while performing the Testing Services pursuant to this Agreement (except that it shall not include any Customer Intellectual Property, even if incorporated or referenced in Kaycha Labs Intellectual Property). Nothing herein shall transfer any right, title or interest in or to any Customer Intellectual Property, which shall remain the sole and exclusive property of Customer at all times, to Kaycha Labs. During the Term of this Agreement Customer grants to Kaycha Labs a limited, royalty free, revocable, and non-exclusive license to use the Samples for the purpose of providing the Testing Services. Kaycha Labs shall not materially alter the appearance of Customr’s Intellectual Property in connection providing the Testing Services. Nothing herein shall transfer any right, title or interest in or to any Kaycha Labs Intellectual Property, which shall remain the sole and exclusive property of Kaycha Labs at all times, to Customer. During the Term of this Agreement Kaycha Labs grants to Customer a limited, royalty-free, revocable, non-exclusive license to use the Kaycha Labs name, service marks, trademarks and logos (the “ Kaycha Labs Marks ”) in connection with the Testing Reports to the extent such Kaycha Labs Marks are included in such Testing Reports. Customer shall not materially alter the appearance of such Kaycha Labs Marks in connection therewith. Upon completion of the performance of Testing Services on any Sample, Kaycha Labs shall destroy the remainder of such Sample.
4.2 Results. All data, test results, and other information generated by Kaycha Labs in performing the Testing Services, including without limitation all Testing Reports (collectively, the “ Results ”) shall be the shared property of Kaycha Labs and Customer; provided, that, Customer shall have the right to use the Results for internal purposes and as required by applicable law.
4.3 Feedback. Customer agrees that all right, title and interest in all feedback, comments, remarks and other input that Customer provides to Kaycha Labs with respect to the Testing Services and/or this Agreement (collectively, “ Feedback ”) shall be the sole and exclusive property of Kaycha Labs. Kaycha Labs may use or disclose the Feedback or any portion thereof, and/or incorporate the Feedback or any portion thereof into products or services; provided, however, Kaycha Labs may only use any Feedback identifying Customer or which otherwise includes Confidential Information of Customer for Kaycha Labs’ internal business and analytics purposes, and may only disclose such Feedback in accordance with Section 6 of this Agreement. Notwithstanding the above, Customer shall continue to own the Customer Intellectual Property even if reference or incorporated into the Feedback.
4.4 No Implied Rights. Except as otherwise expressly provided herein, nothing in this Agreement shall be deemed to grant, directly or by implication, estoppel or otherwise, any right or license with respect to any intellectual property rights, and each party retains all right, title and interest in and to their respective technologies and other intellectual property rights.
5. Representations and Warranties.
5.1 Mutual Representations and Warranties. Each party represents and warrants that: (a) it is a duly organized entity in good standing under the laws of the jurisdiction in which it was formed; (b) the execution, adoption and delivery of this Agreement has been duly and validly authorized by all necessary action on its part; (c) it has all state and local authorizations, permits, registrations, consents and licenses necessary for it to perform its obligations under this Agreement; (d) its execution, delivery and performance of this Agreement does not, and will not, violate any provision of any applicable state or local law, rule, regulation, ordinance, order, writ, judgment, injunction, decree, determination or award; and (e) its execution, delivery and performance of this Agreement does not, and will not, result in a breach of, or constitute a default under, any agreement to which it is a party or by which it may be bound.
5.2 Kaycha Labs Representations and Warranties. Kaycha Labs represents and warrants to Customer that (a) it is duly licensed and certified under all applicable federal, state and local statutes and regulations to perform the Testing Services, and (b) the Testing Services will be performed in a professional and workmanlike manner and in accordance with applicable federal, state and local statutes and regulations. In the event of a breach of this representation and warranty, Kaycha Labs agrees to use commercially reasonable efforts to re-perform the Testing Services so that they comply with this Agreement, at the cost of Kaycha Labs and not the Customer.
5.3 Customer Representations and Warranties. Customer represents and warrants to Kaycha Labs that the Samples shall be prepared and delivered in accordance with applicable law. 6. Confidentiality.
6.1 Confidential Information. Each party (the “ Disclosing Party ”) may provide or make available non-public information that is confidential to such party (“ Confidential Information ”) to the other party (the “ Receiving Party ”) in connection with this Agreement. For purposes of this Agreement, “Confidential Information” of a party means information, intellectual property, ideas, materials or other subject matter of such party, whether disclosed orally, in writing or otherwise, which would reasonably be considered confidential or proprietary. Confidential Information includes, without limitation, the terms and conditions of this Agreement, including all schedules, pricing and payment terms (which are the Confidential Information of both parties); all business plans, technical information or data, product ideas, methodologies, algorithms and analytical routines; and all personnel, customer, contracts and financial information or materials disclosed or otherwise provided by a party. Confidential Information does not include information which (a) is already in the Receiving Party’s possession without restriction at the time of disclosure to the Receiving Party, (b) is or becomes publicly available other than as a result of any action or inaction of the Receiving Party, (c) is obtained by the Receiving Party from an unrelated third party without a duty of confidentiality to the Disclosing Party, or (d) is independently developed by the Receiving Party without use or reference to the Disclosing Party’s Confidential Information. Without limiting the generality of, and notwithstanding the exclusions described in, the foregoing, Confidential Information of Kaycha Labs includes, without limitation: (a) the Kaycha Labs Intellectual Property and (b) the terms and pricing under this Agreement. Confidential Information of Customer includes without limitation the Customer Intellectual Property, including the Samples.
6.2 Confidentiality Obligations. The Receiving Party shall not use Confidential Information of the Disclosing Party for any purpose other than to perform its obligations and/or exercise its rights under this Agreement. The Receiving Party shall not disclose Confidential Information of the Disclosing Party to any third parties except as otherwise permitted hereunder. The Receiving Party may disclose Confidential Information of the Disclosing Party only to those employees, advisors (legal and financial), or consultants who have a need to know such Confidential Information and who are bound to retain the confidentiality thereof under provisions (including, without limitation, provisions relating to nonuse and nondisclosure) no less restrictive than those required by the Receiving Party for its own Confidential Information. The Receiving Party shall maintain Confidential Information of the Disclosing Party with at least the same degree of care it uses to protect its own confidential information of a similar nature or sensitivity, but no less than reasonable care under the circumstances. Each party shall advise the other party in writing of any misappropriation or misuse of Confidential Information of the other party of which the notifying party becomes aware. Kaycha Labs shall not publish the Results of Testing Services performed under this Agreement without Customer’s written permission.
6.3 Exclusions. Notwithstanding the foregoing, this Agreement shall not prevent the Receiving Party from disclosing Confidential Information of the Disclosing Party to the extent required by law, regulation, judicial order or other legal obligation, provided that, in such event, the Receiving Party shall promptly notify the Disclosing Party to allow intervention (and shall cooperate with the Disclosing Party) to contest or minimize the scope of the disclosure (including application for a protective order). Further, each party may disclose the terms and conditions of this Agreement: (a) as required by the applicable securities laws, including, without limitation, requirements to file a copy of this Agreement (redacted to the extent reasonably permitted by applicable law) or to disclose information regarding the provisions hereof or performance hereunder to applicable regulatory authorities; (b) in confidence, to legal counsel; (c) in confidence, to accountants, banks, and financing sources and their advisors; and (d) in connection with the enforcement of this Agreement or any rights hereunder.
6.4 Return of Confidential Information. Upon termination or expiration of this Agreement, or upon the written request of the Disclosing Party, the Receiving Party will immediately return to the Disclosing Party or destroy (at its election) all Confidential Information of the Disclosing Party embodied in tangible (including electronic) form; provided, however, that the Receiving Party shall be permitted to retain a copy of the Disclosing Party’s Confidential Information to the extent required by applicable law or subject to customary document retention and archival policies and such Confidential Information shall remain subject to the confidentiality obligations herein.
- Indemnification; Liability; Disclaimers.
7.1 Mutual Indemnification. Each party (the “ Indemnifying Party ”) agrees to, and shall, indemnify, defend and hold harmless the other party and its affiliates, and its and their respective officers, directors, shareholders, employees, agents, contractors, successors and assigns (individually and collectively, the “ Indemnitees ”) from and against any and all third-party losses, damages, liabilities, costs and expenses (including reasonable attorney’s fees and expenses) (collectively, “ Losses ”) arising from: (a) any breach by the Indemnifying Party of this Agreement; or (b) the gross negligence, recklessness and/or willful misconduct of the Indemnifying Party in performing its obligations under this Agreement. The Indemnitee shall give the Indemnifying Party prompt written notice of any claim for indemnification, provided failure to do so shall not limit the Indemnifying Party’s indemnification obligations herein, except to the extent such failure materially prejudices the Indemnitee with respect thereto.
7.2 Limitation and Exclusion of Liabilities. UNLESS CAUSED BY A PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR INDIRECT DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO LOSS OF GOODWILL AND DAMAGES RESULTING FROM LOSS OF USE, LOSS OF BUSINESS OR LOST PROFITS OR LOST SALES ARISING FROM THIS AGREEMENT, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. UNLESS CAUSED BY A PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, AND EXCLUDING A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT, IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER PARTY FOR ANY AMOUNT IN EXCESS OF THE AMOUNT PAID BY CUSTOMER TO Kaycha LABS PURSUANT TO THIS AGREEMENT.
7.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 5, THE PARTIES MAKE NO REPRESENTATIONS OR WARRANTIES, AND HEREBY EXCLUDE ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, NON-INFRINGEMENT, OR RESULTS TO BE DERIVED FROM THE TESTING SERVICES PROVIDED UNDER THIS AGREEMENT. 8. Miscellaneous.
8.1 Entire Agreement; Severability. This Agreement, including all schedules, is the final, complete and exclusive agreement between the parties relating to the subject matter hereof, and supersedes all prior or contemporaneous proposals, understandings, representations, warranties, promises and other communications, whether oral or written, relating to such subject matter. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable for any reason, the remaining provisions hereof and thereof shall be unaffected and remain in full force and effect.
8.2 Governing Law and Dispute Resolution. This Agreement is to be construed in accordance with and governed by the internal laws of the State of New Jersey without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New Jersey to the rights and duties of the parties. Any legal suit, action or proceeding arising out of or relating to this Agreement shall be commenced in the State of New Jersey, and each party hereto irrevocably submits to the exclusive jurisdiction and venue of any such court in any such suit, action or proceeding. If any legal action is brought to enforce any obligations hereunder, the prevailing party shall be entitled to receive its reasonable attorneys’ fees and court costs, in addition to any other relief it may receive.
8.3 Modification and Waiver. No amendment or modification to this Agreement or any schedule shall be valid or binding upon the parties unless in writing and signed by an authorized representative of each party. No failure or delay on the part of either party in the exercise of any right or privilege hereunder shall operate as a waiver thereof or of the exercise of any other right or privilege hereunder, nor shall any single or partial exercise of any such right or privilege preclude other or further exercise thereof or of any other right or privilege.
8.4 Injunctive Relief. Each party considers its Confidential Information and Intellectual Property to contain trade secrets and that any unauthorized use or disclosure of such Confidential Information, or any use of its Intellectual Property not in accordance with this Agreement, may cause such party irreparable harm for which remedies at law may be inadequate. Accordingly, each party acknowledges and agrees that the other party will be entitled, in addition to any other remedies available to it at law or in equity, to seek the issuance of injunctive relief, enjoining any breach or threatened breach of such party’s obligations hereunder with respect the Confidential Information and Intellectual Property of the first party.
8.5 Notices. All notices required or permitted hereunder must be in writing and delivered by electronic transmission or by recognized overnight courier service with tracking capabilities to the applicable party at address set forth at the set forth below: If to Kaycha Labs: Kaycha Holdings, LLC 10 Post Lane Riverdale, NJ 07457 Email: lab-nj@Kaychalabs.com If to Customer: Acreage CCF New Jersey, LLC 100 Century Drive Egg Harbor Township, NJ 08234 Email: legal@canopy-usa.com8.6 Headings; Counterparts. The captions and section and paragraph headings used in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement. This Agreement may be executed in several counterparts, all of which shall constitute one agreement.
8.7 No Third-Party Beneficiaries. Nothing in this Agreement is intended or shall be construed to give any person, other than the parties hereto, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.
8.8 Independent Contractors. This Agreement shall not be construed as creating an agency, partnership, joint venture or any other form of association, for tax purposes or otherwise, between the parties, and the parties shall at all times be and remain independent contractors. Except as expressly agreed by the parties in writing, neither party shall have any right or authority, express or implied, to assume or create any obligation of any kind, or to make any representation or warranty, on behalf of the other party or to bind the other party in any respect whatsoever.
8.9 Assignment. Neither party may assign, delegate or otherwise transfer, whether by agreement, operation of law or otherwise, this Agreement without the express prior written consent of the other party, and any attempt to assign, delegate or otherwise transfer this Agreement without such consent shall be void. Notwithstanding the foregoing, each party may assign this Agreement without consent to an affiliate or to any successor of all or substantially all of its business, assets or stock. This Agreement shall bind each party and its permitted successors and assigns.
8.10 Non-Exclusivity. This Agreement is non-exclusive. Customer may seek other contractors to perform similar services to the Testing Services, and Kaycha Labs may provide services that are similar to the Testing Services to any third party.
8.11 Publicity. Subject to Customer’s prior written approval, Kaycha Labs may disclose on its website or marketing materials that it has a relationship with Customer.
8.12 Force Majeure. Each party shall be excused from performance under this Agreement for any period to the extent that a party is prevented from performing any obligation, in whole or in part, as a result of causes beyond its reasonable control and without its negligent or willful misconduct, including without limitation, acts of God, natural disasters, war or other hostilities, epidemics, pandemics, disease outbreak, or stay-at-home or similar governmental orders, labor disputes, civil disturbances, governmental acts, orders or regulations, or failures or fluctuations in electrical power, heat, light, air conditioning or telecommunications equipment.