Form of Agreement for Distribution Agreement

[vc_row][vc_column][vc_column_text]THIS AGREEMENT (as defined below) is dated as of this day (“Effective Date”) by and between Paracanna Foods Inc., a British Columbia corporation with its mailing address at 910 Grilse Lane Brentwood Bay, British Columbia V8M 1B5, (“Paracanna”), and the wholesale customer whose data has been entered into this application process, (“Reseller”). The parties are also referred to in this Agreement individually as a “Party” and collectively as the “Parties”.

WHEREAS, Paracanna is a manufacturer of non-cannabis candies and candy making kits of various flavours (“Products”);

WHEREAS, Reseller desires to purchase such Products from Paracanna for non-exclusive distribution to legal cannabis dispensaries and retail stores located within Canada, and Paracanna desires to sell such Products to Reseller;

WHEREAS, Paracanna and Reseller desire to enter into this Agreement to set forth the terms and conditions which will govern the purchase and sale of such Products and the business relationship between the Parties with respect to the same.

NOW THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

  1. The documents listed below in order of precedence, shall form the “Agreement” and shall be taken as mutually explanatory. Anything contained in one but not in the other shall be equally binding as if contained in all.
  2. this Form of Agreement;
  3. the Distribution Agreement Terms and Conditions (“Terms and Conditions”); and
  4. Attachment A to this Agreement
  5. The initial term of this Agreement shall be one (1) year (“Initial Term”). After the Initial Term and subject to the Terms and Conditions, this Agreement shall automatically renew for subsequent one (1) year terms (“Renewal Term”) unless terminated in accordance with Section 26 therein.
  6. All notices permitted or required under this Agreement will be in writing and shall be delivered to the mailing address specified in the first paragraph of this Agreement and deemed received three (3) Business Days after mailing by registered mail. For expediency of communications, notices shall be sufficient if delivered by email; however if the receiving party does not confirm receipt, the sending party must either confirm receipt by telephone or utilize registered postal mail or courier. Such confirmed email notices shall be effective upon receipt by the Party to whom notice is given and directed as follows: If to Paracanna: and (250) 213-2543; and if to Reseller the information they have recorded in their reseller account. Rejection, refusal to accept or the inability to deliver because of changed mailing address of which no notice was given shall be deemed to constitute receipt of notice
  7. Non-Exclusive Product Lines: Cherry Bomb, Mega Mango, Punchy Pink Grapefruit, and Righteous Raspberry kits and refills
  8. Pricing and Currency: Reseller shall pay Paracanna the prices outlined in their wholesale account for each candy kit and refill, exclusive of shipping costs.
  9. Reseller’s Non-Exclusive Territory: Legal cannabis dispensaries and retail stores located within Canada.


1. APPOINTMENT. Subject to the terms and conditions of this Agreement, Paracanna appoints Reseller as its non-exclusive Reseller for the Product Lines (“Products”) to be sold within the Territory (“Territory”) as such capitalized terms are defined in the Form of Agreement and Reseller accepts such appointment to act as a non-exclusive distributor of the Products during the Term in accordance with this Agreement.

2. OBLIGATIONS. Reseller agrees to exercise commercially reasonable efforts to: (a) order and maintain sufficient inventory of the Products during the term of this Agreement; (b) promote the sale of the Products in the Territory; (c) abide by Paracanna’s policies with regard to the retail price of the Products as specified in Section 7 of this Agreement; and (d) conduct its business in a manner that reflects favorably at all times on the Products and the good name, goodwill and reputation of Paracanna and its affiliates.

3. PRODUCTS AND COSTS. The Products consist of the items or classifications of items listed in Attachment A herein. Paracanna reserves the right to unilaterally modify the pricing of the Products and any Products specifications, including but not limited to design, labeling, minimum order quantities, and sizing if its production costs increase, and in such case, Paracanna will provide Reseller with all updated Product information and pricing.

4. PAYMENT TERMS, DISCOUNTS AND DELIVERY. Upon receipt of Reseller’s written order, Paracanna will invoice Reseller and Reseller must pay fifty percent (50%) of the total amount due prior to shipment. Reseller must make payment for the remaining fifty percent (50%) of the total amount due within twenty (20) days after the date of such invoice. Notwithstanding the foregoing, if Reseller instead chooses to pay the full amount due prior to shipment then Paracanna will provide Reseller with a one and a half percent (1.5%) discount on the total amount due. The amount due shall be payable to Paracanna in the currency noted in the Form of Agreement. Unless otherwise agreed by the parties in writing, payment shall be made by Reseller by wire transfer (or other payment method acceptable to and confirmed by Paracanna). The Products will be delivered to Reseller’s mailing address specified on the purchase in the Form of Agreement. Risk of loss for the Products will pass from Paracanna to Reseller upon delivery of the Products to Paracanna’s shipping company of choice.

5. SALES OUTSIDE OF THE TERRITORY. Reseller will promote the Products in the Territory on its website, social media websites, and its physical store(s). Notwithstanding the foregoing sentence, Reseller shall not actively advertise or actively solicit orders for Products outside of the Territory unless permitted to do so in the Form A of Agreement. In the event Reseller receives an order inquiry from outside its Territory, Reseller will forward such order or inquiry to Paracanna. Reseller agrees that it shall not and is not authorized to promote, resell, deliver or otherwise distribute the Products outside of the Territory

6. ORDERS. All orders will be transmitted by Reseller to Paracanna by way of purchase order. Each order submitted by Reseller shall constitute an offer from Reseller to purchase the Products described in such order and, upon acceptance by Paracanna, shall give rise to a contractual obligation of Reseller to purchase the specified quantity of and flavour varieties of Products in accordance with the terms and conditions set forth in this Agreement. Each purchase order between the Parties is deemed to be governed by this Agreement. Accordingly, both Parties hereby give notice to the other Party that it objects to and rejects any addition terms or conditions contained in any purchase order which may in the future be supplied to it which attempt to amend or vary the terms of this Agreement, whether such terms or conditions are set forth in an order acknowledgement, purchase order, invoice or any other document, even if such document requires a signature of the Party who is fulfilling such order. Once Paracanna has begun incurring costs for the processing of the order placed by Reseller, the order may not be cancelled or modified unless all expenses arising out of such modification or cancellation of the order, including but not limited to, the cost of diversion, cancellation, re-consignment of shipments, or reasonable restocking fees, are paid by Reseller to Paracanna. Paracanna may, in its sole discretion, reject any purchase order. If Paracanna does not accept the order under the terms of this Section within ten (10) days of Paracanna’s receipt of the order, the order will lapse. No order is binding on Paracanna unless accepted by Paracanna as provided in this Agreement. Paracanna may without liability or penalty, cancel any order placed by Reseller and accepted by Paracanna, in whole or in part if: (a) Paracanna discontinues its sale of the Products; (b) reduces or allocates its inventory of the Products; (c) Paracanna determines that Reseller is in violation of its payment obligations under this Agreement; or (d) Reseller has breached or is in material breach of this Agreement.

7. RETAIL PRICE AND EXPENSES. Reseller will unilaterally establish its own resale prices for the Products. The manufacturer’s suggested retail price (“MSRP”) is $19.99 Canadian Dollars (CAD) for each candy making kit and $12.99 Canadian Dollars (CAD) for each candy refill. The MSRP is not mandatory pricing and no penalties or repercussions will be imposed by Paracanna to Reseller or its retail partners for selling the Products at a price that differs from the MSRP. For greater certainty, the sole intent of this Section is to ensure Reseller’s retail partners do not engage in anti-competitive below cost predatory pricing pursuant to Section 79 of the Competition Act, RSC 1985, c C-34. Reseller shall be solely responsible for its expenses incurred in the distribution of the Products to its retail partners.

8. LATE FEE. Paracanna will add a late payment charge of twenty four percent per annum (24%) or the maximum allowable interest rate allowable at law, whichever is greater, to all outstanding amounts that are not paid within twenty (20) days from the due date specified in such invoice. In the event that Reseller’s account with Paracanna becomes delinquent, Paracanna may, at its option, cancel any of Reseller’s orders and cease future Products to Reseller.

9. APPROVALS. Reseller shall obtain, at its own expense, such approvals, consents, certifications, permits and other authorizations, including all approvals as are required to qualify the Products for sale and use in the Territory for all purposes, including but not limited to, business permits, business licensing, and, if the Territory includes countries outside of Canada, compliance with foreign regulations and local laws related to the sale or importation of the Products (collectively, the “Approvals”).

10. SECURITY INTEREST. Paracanna will retain a security interest in all Products shipped to Reseller until all amounts for which Reseller is responsible under this Agreement have been received in full by Paracanna. Paracanna shall have all rights of a secured party, including the right to file a financing statement with the Personal Property Registry or a comparable secured party registry within the Territory to protect Paracanna’s security interest. In the event Reseller defaults in its payment obligations.

11. PROMOTIONAL LITERATURE. Paracanna agrees to furnish, in English, to Reseller (via email in electronic file formats) such descriptive literature, advertising materials, and sales promotional materials concerning the Products as Paracanna may, from time to time, have available for such purposes. Reseller shall have the right to translate such materials into the languages of the Territory at its own expense. Paracanna shall retain ownership of all proprietary rights, including, intellectual property rights to the translated versions of the materials. Reseller will be solely responsible for the accuracy of any translations and will provide Paracanna with a mock-up copy of each translated work prior to Reseller’s use of such translated marketing materials. If necessary, Reseller shall promptly revise (at Reseller’s costs) the materials upon notice from Paracanna. If Reseller wishes to create its own promotional and marketing materials utilizing Paracanna’s intellectual property, including but not limited to Paracanna’s registered and unregistered copyright and trademarks, then Reseller must first provide Paracanna with a mock-up of such promotional and marketing materials prior to use.

12. LINKING AGREEMENT. Paracanna may, at its sole discretion during the term of this Agreement, add a page on its website for consumers to indicate where consumers may find and purchase the Products in person at retail locations. Such webpage will include the addresses of Reseller’s retail store locations with hyperlinks to Reseller’s website.

13. USE OF TRADEMARKS AND COPYRIGHT. Paracanna grants Reseller a limited, revocable, non-transferrable, non-exclusive and non-sublicensable license to use Paracanna’s copyrights and trademarks in the non-exclusive Territory during the Term solely on or in connection with the promotion, marketing, advertising, and resale of the Products in accordance with the terms and conditions of this Agreement. Paracanns’a intellectual property is set forth on Attachment B, as may be updated from time to time, whether registered or unregistered, including the listed registrations and applications and any registrations, which may be granted pursuant to such applications. On expiration or earlier termination of this Agreement or upon Paracanna’s request, Reseller shall promptly discontinue the display or use of any of Paracanna’s intellectual property or change the manner in which it is displayed or used with regard to the Products. Upon expiration or earlier termination of this Agreement, Reseller’s rights under this Section will cease immediately. Other than the express licenses granted by this Section, Paracanna grants no right or license to Reseller, by implication, estoppels, or otherwise, to the Products or any intellectual property rights of Paracanna or its officers or affiliates.

14. NO TRANSFER OF RIGHTS, TITLE OR LICENSE. Reseller acknowledges and agrees that it has no title, rights or claims of any kind to the Products, or any aspect thereof, except such rights as are created by this Agreement. Reseller expressly agrees that Paracanna and its affiliates’ trademarks, trade names, service marks copyrights, or logos (collectively, the “Paracanna IP”) remain the property of Paracanna or its affiliates. Reseller may indicate in its advertising and marketing materials that it is a Reseller for Paracanna’s Products and may as necessary, incidentally use Paracanna’s IP in its sales and marketing efforts so long as any marketing materials which utilize Paracanna’s IP are preapproved by Paracanna. Paracanna reserves the right to review Reseller’s marketing and sales materials prior to their publication or use. No rights shall inure to Reseller as a result of any such use or reference, and all such rights, including goodwill shall inure to the benefit of and be vested in Paracanna. Upon termination of this Agreement for any reason, Reseller will immediately cease using Paracanna’s IP as allowed in this Section and shall immediately take all appropriate and necessary steps to remove any marketing materials in Reseller’s retail partner locations, the Internet and elsewhere that would indicate or would lead the public to believe that Reseller is still a distributor of Paracanna’s Products.

15. INFRINGEMENT BY THIRD PARTIES. Reseller will cooperate fully with and assist Paracanna in its efforts to protect Paracanna’s intellectual property rights within the Territory and agrees to immediately inform Paracanna if Reseller has knowledge of any infringement of any trademarks, copyrights or other intellectual property rights owned or used by Paracanna.

16. CONFIDENTIAL INFORMATION. Paracanna will provide Reseller with certain confidential or proprietary information (“Confidential Information”). Confidential Information includes information, whether written, electronic or oral, which Reseller knows or reasonably should know is proprietary, confidential or a trade secret of Paracanna, including, but not limited to, any and all technical or business information, pricing information, intellectual property, marketing information, and policies regarding Paracanna’s Resellers or distribution channels, research and development and other proprietary matter relating to the Products or business of Paracanna. Reseller will refrain from using the Confidential Information except to the extent necessary to exercise its rights or perform its obligations under this Agreement. Reseller will likewise restrict its disclosure of the Confidential Information to those who have a need to know such Confidential Information in order for Reseller to perform its obligations and who are bound by a written obligation of confidentiality and non-disclosure no less restrictive than contained in this Agreement. Reseller will remain responsible for any unauthorized use or disclosure of the Confidential Information by any of such third parties. Upon termination of this Agreement (or earlier, upon request by Paracanna), Reseller shall cease to use all Confidential Information and promptly return to Paracanna (or destroy, upon request by Paracanna) any documents (whether written or electronic) in its possession or under its control that constitutes Confidential Information. During the term of this Agreement and thereafter, neither Reseller, nor Reseller’s employees, independent contractors nor other agents will reverse engineer the Products. Any breach by Reseller involving the misuse of Confidential Information may result in irreparable damage to Paracanna for which Paracanna will not have an adequate remedy at law. Accordingly, in addition to any other remedies and damages available, Reseller acknowledges and agrees that Paracanna may immediately seek enforcement of this Agreement by means of specific performance or injunction, without any requirement to post a bond or other security. The restrictions in this section on the use and disclosure of Confidential Information will not apply to: (a) Information that is or becomes publicly known without the breach of this Agreement; (b) Information that at the time of disclosure under this Agreement is already known by Reseller without any restriction on its disclosure; (c) Information that is or subsequently comes into the possession of Reseller from a third Party without violation of any contractual or legal obligation; (d) Information that is independently developed by Reseller without the use of Confidential Information, Trade Secrets or breach of this Agreement; and (e) Information that is approved for disclosure in writing by Paracanna. Reseller will have the burden of proof regarding the applicability of any exception. Notwithstanding the foregoing, if the Confidential Information is combined with information that is within the public domain or information already in the possession of Reseller but the combination of information is not in the public domain, then the Parties agree that such combined information shall constitute Confidential Information. Reseller hereby acknowledges and agrees that the Paracanna’s Trade Secrets are of a highly confidential nature and Reseller will ensure that, in addition to taking all reasonably necessary steps to protect the confidentiality of Trade Secrets as required in this Section, Reseller will also implement reasonably sufficient physical, technological and other security measures to maintain the secrecy of the Trade Secrets. “Trade Secret” means information possessed by or developed for Paracanna, including, without limitation, any compilation of ingredients, recipes, formulae, know-how, method, technique or process, where the information: (a) derives independent economic value, whether actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use, (b) is the subject of efforts to maintain its secrecy that are reasonable under the circumstances; or (c) that constitutes a “trade secret” under the laws (including the common laws) of the country, province or state where the Parties to this Agreement conduct business.

17. COMPLIANCE WITH LAWS. In connection with its obligations under this Agreement, each Party agrees to comply with all federal, provincial, local and foreign laws, statutes, regulations and ordinances of any governmental authority that may be applicable to such Party and its activities under this Agreement, including all applicable export control laws and regulations applicable to Reseller if the Territory includes countries outside of Canada including, but not limited to, the Corruption of Foreign Public Officials Act the U.K. Export Control Act 2002 and Export Control Order 2008, and the U.S. Foreign Corrupt Practices Act. Without limiting the generality of the foregoing, Reseller shall at all times, at its own expense, obtain and maintain all certifications, credentials, authorizations, licenses, and permits necessary to conduct its business relating to the exercise of its rights and the performance of its obligations under this Agreement.

18. LIMITED MANUFACTURING WARRANTY. Paracanna warrants for a period of thirty (30) days following delivery of the Products (the “Warranty Period”) that the Products shall be free from defects in materials and workmanship. Paracanna’s sole obligation under this warranty shall be to provide, at no charge to Reseller, replacement Products. Any Defective Products must be returned to Paracanna (at Reseller’s cost) in order to receive warranty replacement (unless Paracanna determines such return is not necessary) and shall become Paracanna’s property.

19. WARRANTY OF GOOD TITLE. Paracanna agrees to indemnify Reseller from any liability to any third party for infringement of Canadian patents, copyrights, trademarks or trade secrets with respect to Products sold by Reseller pursuant to this Agreement. This obligation does not extend to any foreign patents, copyrights, trademarks, or trade secrets or to any Products manufactured or modified by Paracanna to meet Reseller’s or a customer’s specifications. Paracanna shall, at its option, be allowed sole and exclusive control over the defense and settlement of any claims of infringement. Paracanna must be notified in writing by Reseller within five (5) days of any third party claim which, if upheld, might result in a liability subject to indemnification under this Subsection. If the distribution of the Products is threatened by a claim of infringement, or is likely to be enjoined or liability for infringement is found, Paracanna may, in its discretion and at its sole option: procure for Reseller the right to continue distributing the Products; or (a) modify the Products so as to make the Products non-infringing; or (b) substitute non-infringing products; or (c) refund the price paid by Reseller for the Products in its possession subject to their return by Reseller and terminate this Agreement with respect to the allegedly infringing products. THIS SUBSECTION STATES THE ENTIRE LIABILITY OF PARACANNA WITH RESPECT TO INFRINGEMENT OF ANY CANADIAN PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT BY ANY PARACANNA PRODUCT.


21. QUALITY ASSURANCE. Paracanna’s Products are manufactured in a Safe Quality Food Program, kosher and organic certified facility that operates in accordance with Health Canada’s Health Protection Branch Food Program. All manufacturing procedures and Product ingredients comply with Good Manufacturing Practices and the Food and Drugs Act R.S.C., F-27. All Products must pass quality control checks (including being passed through metal detectors over magnets) to ensure there are no potential physical hazards present in the finished product. In the event of the need for the recovery of the Products from the market or consumers after public announcement of such need due to defect(s) in the Product causing personal injury or property damage to third parties or a reasonable determination that there is a high probability that such injury or damage will be caused (“Recall”), Paracanna may require Reseller to take all necessary action to immediately Recall any such Products. Paracanna will notify Reseller by telephone, email, or any other form of immediate communication with written confirmed receipt of Paracanna’s need to have Reseller Recall such Products. Upon receipt of notice, Reseller shall immediately cease distribution of such Products and take all other actions as may be required by Paracanna in connection with the Recall. In the event it is Reseller who becomes aware of factors relating to the Products that may necessitate a Recall, then Reseller shall immediately notify Paracanna by telephone, e-mail or any other form of immediate communication with written confirmed receipt. Such notification by Reseller must include: (a) the identity and quantities of the Products involved; (b) lot numbers; and (c) all other relevant data that will assist in tracing such Products. To the extent such Recall results from any breach by Paracanna of this Agreement, in addition to any other rights or remedies available under this Agreement, Paracanna shall reimburse Reseller for Reseller’s direct costs and expenses associated with such Recall, including Reseller’s return shipping costs (if return of Product is required by Paracanna), administrative costs associated with arranging and coordinating the Recall, and all costs associated with the distribution of replacement Product; provided that Reseller shall be solely responsible for all, and shall reimburse Paracanna for Paracanna’s, costs and expenses associated with any Recall to the extent such Recall is the result of a breach by Reseller of this Agreement, in addition to any other rights or remedies available under this Agreement.

22. INDEMNIFICATION FOR PRODUCT LIABILITY. Subject to Section 24, Paracanna agrees to indemnify, hold harmless, and defend Reseller, its directors and officers, from any loss, damage, claim, cost or expense incurred or suffered by Reseller by reason of any claim by any third party alleging a defect in the Products, provided that the condition or circumstance affecting such Products were present prior to Reseller accepting delivery of the Products.

23. MANUFACTURING INDEMNIFICATION. Subject to Section 24, Paracanna agrees to indemnify, hold harmless, and defend Reseller, its directors and officers, from all claims, suits and litigation resulting from the manufacturing of the Products.

24. HANDLING OF CLAIMS FOR INDEMNIFICATION. As a condition precedent to Reseller’s right to be indemnified under this Agreement, Reseller must give Paracanna written notice as soon as practicable, but not more than three (3) calendar days, of any suits, actions, demands, or other proceedings brought by a third party (“Claim”) made against Reseller for which indemnification will or could be sought under this Agreement; provided however that the failure of Reseller to provide such notice to Paracanna shall not relieve Paracanna from any liability that it may have to Reseller under this Agreement unless Paracanna’s ability to participate in the defense of such claim was materially and adversely affected by such failure. Notice to Paracanna shall be directed to the Chief Executive Officer of Paracanna at the mailing address shown on the Form of Agreement with a scanned PDF electronic copy sent in accordance with Section 3 of the Form of Agreement. In addition, Reseller will provide Paracanna with any information that is necessary for Paracanna to effectively defend such Claim. If the Claim falls within the scope of the indemnification obligations of this Section 24, then Paracanna will assume the full defense and management of such Claim with counsel reasonably satisfactory to Reseller. Notwithstanding the foregoing, Reseller may, at its option and sole expense, be represented by counsel of its own choosing in any action or proceeding with respect to such Claim. Paracanna will not settle any Claim if such settlement (a) does not fully and unconditionally release Reseller from all liability relating thereto; or (b) adversely impacts the exercise of the rights granted to Reseller under this Agreement, unless Reseller otherwise agrees in writing. If Paracanna has liability insurance in effect that may cover its indemnification obligations at the time Paracanna receives the notice of Claim from Reseller, then Paracanna will give prompt notice of the Claim to its insurers in accordance with the procedures set forth in its respective insurance policies. In such event, Paracanna will take all necessary actions to cause its insurers to pay, on behalf of Reseller, all amounts payable as a result of such Claim in accordance with the terms of its insurance policy. Paracanna agrees to keep Reseller reasonably informed as to the status of all relevant insurance matters

25. INSURANCE. Paracanna shall at all times maintain commercial general liability insurance (including product liability coverage and recall coverage), necessary to cover Paracanna’s obligations under this Agreement. Reseller shall maintain, for the duration of this Agreement, the minimum commercial general liability insurance necessary to cover Reseller’s obligations under this Agreement. Upon request by either Party, the other Party shall provide the requesting Party with a certificate of insurance or other acceptable proof of Reseller’s insurance

26. TERMINATION. The term of this Agreement shall commence as of the Effective Date Either party may terminate this Agreement as follows: (a) upon thirty (30) days prior written notice to the non-terminating Party with or without cause; (b) upon any non-material breach of this Agreement by the other Party which has not been cured within five (5) days after the delivery of notice to the Party alleged to be in breach, specifying with particularity the act or omission asserted to constitute such breach; (c) Immediately, upon the dissolution, insolvency or any adjudication in bankruptcy of, or any assignment for the benefit of creditors by, the other Party or if the other Party ceases to conduct business in the ordinary or normal course; or (d) immediately, if required by law or by any regulation, order, decree, judgment or other governmental act of any governmental authority. Notwithstanding the foregoing, Paracanna may immedciately terminate this Agreement if: (a) Paracanna reasonably suspects that Reseller has breached any of its obligations of confidentiality or infringed upon Paracanna’s intellectual proprietary rights; (b) Reseller has failed to pay any amount due under this Agreement for twenty (20) days; or (c) Reseller is in material breach of this Agreement.

27. EFFECT OF TERMINATION. Upon termination of this Agreement for any reason, Reseller shall cease to use all Confidential Information and promptly return to Paracanna (or certify by way of statutory declaration it has been destroyed, upon request from Paracanna) any Confidential Information in its possession or under its control. All obligations regarding the restrictions on use of Confidential Information will survive any termination or expiration of this Agreement and with respect to Trade Secrets, the obligation of confidentiality will continue for so long as such Trade Secrets are subject to protection by Paracanna. The additional following provisions shall apply upon termination: (a) all purchase orders will be terminated if the termination is due to a breach of this Agreement; (b) Paracanna may continue to fill any existing purchase orders from Reseller that have been accepted by Paracanna prior to the termination of this Agreement under the terms and conditions provided there was no breach of this Agreement; (c) all outstanding balances owed by Reseller to Paracanna shall become immediately due and payable to Paracanna; (d) both parties shall at all times thereafter refrain from any conduct that would be inconsistent with or likely to cause confusion with respect to the nature of their business relationship; (e) all intellectual property rights granted to Reseller under this Agreement shall cease; and (f) Reseller shall return any and all Confidential Information in accordance with Section 16 herein. Notwithstanding the foregoing, this Agreement shall continue to govern the relationship of the Parties for so long as Reseller possesses the Products and no termination of this Agreement will be effective until all such Products have been depleted from Reseller’s inventory.

28. INDEMNIFICATION. Subject to the terms and conditions of this Agreement, Reseller hereby agrees it will indemnify, hold harmless, and defend Paracanna and its officers, directors, partners, members, shareholders, employees, agents, affiliates, successors, and permitted assigns (collectively, the “Indemnified Party”) against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including legal fees, fees, and the costs of enforcing any right to indemnification under this Agreement and the cost of pursuing any insurance providers, relating to any claim of a third party arising out of or occurring in connection with: (a) Reseller’s breach of this Agreement; (b) any acts or omissions of Reseller, its employees, officers, agents, subcontractors, dealers or representatives that are negligent, grossly negligent, willful or unlawful acts or omissions; (c) Reseller’s advertising or representations that warrant performance of the Products beyond that provided by Paracanna’s written warranty; (d) Reseller’s business or trade practices; (e) any failure by Reseller or its personnel to comply with any applicable Laws; or (f) allegations that Reseller breached its agreement with a third party as a result of or in connection with entering into, performing under or terminating this Agreement.

29. RELATIONSHIP OF THE PARTIES. The Parties to this Agreement are independent contractors and nothing in this Agreement shall be deemed or construed as creating a joint venture, partnership, agency relationship, franchise, or business opportunity between Paracanna and Reseller. Neither Party, by virtue of this Agreement, will have any right, power, or authority to act or create an obligation, express or implied, on behalf of the other Party. Each Party assumes responsibility for the actions of their personnel under this Agreement and will be solely responsible for their supervision, daily direction and control. The relationship created hereby between the parties is solely that of Paracanna acting as a supplier and Reseller acting as a distributor. If any provision of this Agreement is deemed to create a franchise relationship between the parties, then Paracanna may immediately terminate this Agreement.

30. FORCE MAJEURE. Except for the obligation to make payment, neither party shall be liable in the event that its performance of this Agreement is prevented by reason of an Act of God, labor dispute, unavailability of transportation, goods, changes in laws, governmental restrictions or actions, war (declared or undeclared) or other hostilities, or by any other event, condition or cause which is not foreseeable and is beyond the reasonable control of the party. If Reseller’s Territory includes countries outside of Canada, then it is expressly agreed that any failure of any applicable government to issue a required license for the export of any Paracanna Product ordered by Reseller shall constitute an event of force majeure. In the event of non-performance or delay in performance attributable to any such causes, the period allowed for performance of the applicable obligation under this Agreement will be extended for a period equal to the period of the delay. However, the Party so delayed shall use its best efforts, without obligation to expend substantial amounts not otherwise required under this Agreement, to remove or overcome the cause of delay. In the event that the performance of a Party is delayed for more than two (2) months, the other Party shall have the right, which shall be exercisable for so long as the cause of such delay shall continue to exist, to terminate this Agreement without liability for such termination.



33. GOVERNING LAW AND VENUE. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to any purchases or transactions entered into pursuant to this Agreement. This Agreement shall be governed in all respects exclusively by the laws of the province of British Columbia and the applicable federal laws of Canada without regard to conflict of law rules. Venue for any lawsuit brought by the Parties to this Agreement against each other regarding or as a result of this Agreement shall be proper only in an appropriate court located within the province of British Columbia and each Party hereby submits itself to the exclusive jurisdiction of said courts.

34. CONSTRUCTION. The headings or titles preceding the text of the Sections and Subsections are inserted solely for convenience of reference, and shall not affect the interpretation, construction or effect of this Agreement. It is the express wish of the Parties that this Agreement and all related documents, including notices and other communications, be written and signed in English only. Il est la volonté expresse des Parties que cette convention et tous les documents s’y rattachant, y compris les avis et les autres communications, soient rédigés et signés en anglais seulement. This Agreement may be translated into another language for informational purposes only. In the event an ambiguity or question of intent or interpretation arises, the English version of this Agreement shall prevail. There shall be no presumption favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

35. ADVICE OF COUNSEL. Reseller acknowledges that it has had a reasonable period of time sufficient to understand and consider this Agreement. Reseller agrees it has had an opportunity to consult with independent legal counsel of Reseller’s own choosing.

36. ENTIRETY. This Agreement constitutes the entire agreement between the Parties related to its subject matter and supersedes all prior understandings and representations, whether written or oral.

37. AMENDMENT. This Agreement may only be amended in writing signed by the Parties. Notwithstanding the foregoing, Paracanna may amend this Agreement unilaterally in accordance with the Sections herein permitting unilateral amendment.

38. SURVIVAL. The provisions of this Agreement concerning Confidentiality, Trade Secrets, Intellectual Property, Governing Law and any provisions of this Agreement that, by express terms of this Agreement will not be fully performed during the term of this Agreement, shall survive the termination of this Agreement.

39. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same agreement.

40. ASSIGNMENT. Neither Party may assign this Agreement, in whole or in part, without the written consent of the other Party, except that Paracanna may assign this Agreement to an affiliate or any entity acquiring all or substantially all of the assets of Paracanna. This Agreement shall be binding upon the parties’ respective successors and permitted assigns.

41. WAIVER. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege by either Party.

42. SEVERABILITY. In the event a court of law finds any provision of this Agreement void and unenforceable, the remaining provisions shall remain in full force and effect. In any such event, the Parties agree to use good faith efforts to reform this Agreement in order to give effect to the original intent of the Parties.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][/vc_column][/vc_row]

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