1. The Program.

Under the Program, Vendors can sell goods (“Merchandise”) to Retailers and provide those Retailers with the ability to pay for that Merchandise on terms approved for the Program (the “Payment Terms”). For each such sale of Merchandise by you to a Retailer who you are connected to do business with on the Program’s Site (each, an “Approved Retailer”), you may have the ability to sell the related accounts receivable to the Originator pursuant to the terms herein or as otherwise agreed to in writing between you and the Originator.

2. Delivery and Invoices.

You, or a licensed transporter, are responsible at all times for the timely and accurate delivery of your Merchandise to any Approved Retailer. By indicating a Ship Date and/or Delivery Date on our Site or otherwise in writing, you represent and warrant that you will have completed shipment and/or delivery of the Merchandise on or by that respective date. The delivery to any Approved Retailer shall include an accurate invoice (each an “Invoice”), which will be a representation and warranty from you to the Approved Retailer that the Merchandise is in saleable form and adheres to all applicable local requirements. After receipt of your Merchandise, Retailers may be provided with two (2) Business Days or a greater amount of time as provided by the local requirements, if any, to review and confirm their acceptance (the “Merchandise Acceptance Period”), and shall do so using the tools provided for accepting Merchandise on the Program’s Site (each, an “Approved Transaction”).

3. Sale of Invoices

When you use the Program’s Site or otherwise participate in the Program, you will be able to review outstanding Invoices with Approved Retailers and select Invoices from Approved Transactions that you want to sell to the Originator. When you do so you will be provided, either on the Site or separately in writing, with the terms upon which the Originator will purchase the selected Invoices, along with all associated right and title, from you (the “Assigned Payment Documents”). Upon acceptance by you of the purchase terms and sale of Invoices to the Originator you are assigning to the Originator, who may subsequently assign to another entity (an “Assignee”), all of your right, title and interest in each Invoice including the right to collect all amounts owed with respect to the Invoices. Some Vendors may be offered the ability to automatically sell and assign all eligible Invoices (“Automatic Eligible Invoices”). By agreeing to automatically sell and assign all Automatic Eligible Invoices, you are approving the sale and assignment of all Automatic Eligible Invoices existing and which may arise in the future in the ordinary course of business, without further authorization or action by you. You may revoke this authorization for any individual Automatic Eligible Invoice or Approved Retailer at your sole discretion with sufficient written notice, including by electronic mail, to the Originator.

4. Accuracy of Invoices.

It is Vendor’s responsibility to maintain a complete and accurate listing of all Invoices for Merchandise sold to any Approved Retailer, and any payments received related to such Invoices. It is also Vendor’s responsibility to notify the Originator if any Invoice is inaccurate or needs to be updated for any reason. The books and records of the Originator or, upon assignment of its rights to an assignee (each, an “Assignee”) the Assignee, shall control in the event of any question or dispute as to whether a transaction is an Approved Transaction, whether an Invoice has been assigned, or whether amounts remain outstanding on any Invoice.

5. Payment.

For each Approved Transaction, the Originator will transfer the payment amount (at the Originator’s discretion, net of any other amounts owed by Vendor or any of its parent, affiliate or subsidiary entities) to Vendor by ACH to the bank account provided by Vendor. You agree that after the Originator purchases any Invoice from you that all amounts owed on that Invoice are due to the Originator (or its Assignee(s)) and will be collected by the Originator on their behalf. You further agree that any payment towards that Invoice received by Vendor after the sale of the related Invoice shall be held by Vendor in trust for the benefit of the Originator (and its Assignee(s)), and shall be delivered by Vendor to the Originator within 3 business days following receipt thereof. Each payment received by Vendor related to any Invoice sold to the Originator shall be applied to the specific Invoice or Invoices being paid as indicated by Approved Retailer. To the extent that a payment is made by an Approved Retailer directly to the Vendor and such payment does not indicate a specific Invoice for it to be applied to, Vendor shall consult with the Originator in good faith to determine accurate application of the payment. Vendor agrees that all unidentified funds received from Approved Retailers shall first be applied to any outstanding Invoices sold but not yet paid for by such Approved Retailer. You agree that at any time a payment is to be made by the Originator to you pursuant to this Agreement, that the Originator shall have the right to net against, or offset, any such payment amounts by any other amount that is then owed by you or any of your parent, affiliate or subsidiary entities to the Originator.

6. True Sale.

You agree that all Invoices sold to the Originator under the Program are intended to be sales and that the sale and conveyance of each Invoice and all right and title thereto shall be absolute and irrevocable true sales by Vendor to the Originator that provide the Originator with the full benefits and burdens of ownership of such Invoice. Neither you, nor the Originator intend the transactions contemplated by the Program or this Agreement to be, or for any purpose to be characterized as, loans. You and the Originator agree to treat the transactions hereunder as true sales for all purposes under Applicable Laws and accounting principles, including in the books, records, computer files, tax returns (federal, state and local) (except upon a final determination by a taxing authority), regulatory and governmental filings (and shall reflect such sale in their respective financial statements) of you and the Originator, respectively. You agree to advise all persons inquiring about the ownership of the Invoices sold by you to the Originator under this Agreement that all such Invoices and rights thereto have been sold to the Originator.

7. Security Grant; Authorization to File Financing Statements.

If, notwithstanding the intent expressed in Paragraph 6, the transfer and conveyance by Vendor to the Originator of any Invoices, or the subsequent assignment of such Invoices to an Assignee, shall be characterized by a court of competent jurisdiction as a secured loan and not a sale, then, in such event, this Agreement shall constitute a security agreement under the Uniform Commercial Code as in effect in the State of New York (the “UCC”) and other Applicable Laws. For this purpose, you hereby grant to the Originator a security interest in all of your right, title and interest in, to and under the Invoices and any related documents between you and any Approved Retailer related to any Invoices sold or purportedly sold by you and all proceeds of any thereof, to secure the timely payment and performance by you of all amounts owing to the Originator or its Assignee hereunder and any other obligations owing to the Originator or its Assignee hereunder. In the event this Agreement shall be characterized as a security agreement, the Originator and its Assignee shall have, in addition to the rights and remedies which it may have hereunder, all the rights and remedies provided to a secured party under the UCC and Applicable Laws, which rights and remedies shall be cumulative. You authorize the Originator and its Assignee (or their agent(s)) to file at any time and from time to time such financing statements with respect to all Assigned Payment Documents naming you as seller/debtor and the Originator as buyer/secured party, as the Originator may require. Vendor ratifies any such filling made before the date hereof.

8. Rights of Originator; Subcontractors.

You understand that the Originator has complete discretion as to whether a Retailer is approved for the Program and whether any offer is made to purchase any of your Invoices. The Originator may, at its option, establish a maximum credit limit applicable to any Approved Retailer. The Originator may adjust the applicable credit limit at any time, for any reason, at its sole discretion. Once approved for the Program, it will be the Vendor’s responsibility to designate and credential its employee(s) who will be users of the Program. All actions taken by a Vendor’s employees are the responsibility of the Vendor.

The Originator may perform any or all of its duties hereunder, and exercise any or all of its rights hereunder, through one or more subcontractors or third-party service providers. You acknowledge and agree that all references to the “Originator” herein shall include any subcontractor acting on behalf of the Originator in the performance of its duties or the exercise of its rights hereunder. Any such subcontractor or third-party service provider shall be a third-party beneficiary of Originator’s rights and remedies hereunder.

9. Additional Documents and Actions.

You agree, at your expense, to promptly execute and deliver any instruments and documents, and take all further action that the Originator may reasonably request in order to perfect, protect or more fully evidence the Originator’s ownership of any Invoices sold hereunder, or to enable the Originator to exercise or enforce any of their rights hereunder.

10. Compliance with Regulatory Requirements.

This Agreement is subject to the rules and regulations (including any such new, amended, or modified rules and regulations, the “Regulations”) promulgated by one or more cannabis regulatory agencies (the “Regulators”). Notwithstanding anything to the contrary in these Vendor Terms or the Terms and Conditions of Use or Master Subscription Agreement, as applicable, Vendor agrees that (a) this Agreement and the transactions contemplated hereby do not provide LeafLink, Inc., its affiliates, or the Originator with any right to receive an ownership interest, control of the business, or any share of revenue or profits of, and otherwise does not provide LeafLink, Inc., its affiliates, or  the Originator control and/or undue influence, over Vendor and (b) neither LeafLink, Inc., its affiliates, nor the Originator has a financial interest in, is a financier, passive investor, and/or a true party interest (or similar terms defined by the Regulations) of Vendor. In the event that this Agreement is found not to be compliant with any applicable Regulations, the parties hereto and their successors and assigns agree to reform this Agreement in order to obtain the approval of such Regulators or cause this Agreement to be compliant with such Regulations; provided, however, that relevant benefits to each of the parties be maintained to the extent permitted by such Regulations.

11. Representations and Warranties.

Vendor represents and warrants to the Originator  and its Assignees:

1. You shall notify LeafLink, Inc. and the Originator within 24 hours of receiving any material adverse communication from a Governmental Authority or from an Approved Retailer (as applicable), or of becoming aware of any fact or communication, that would have a material adverse effect on your or such Approved Retailer’s ability to conduct its business in compliance with all requirements of Applicable Laws or the Regulations.
2. You shall notify LeafLink, Inc. and the Originator within 24 hours of receiving notice or any communication or indication from a bank or other financial institution that informs Vendor that their account(s) is/are being shut down or suspended for any reason and/or that informs Vendor about the loss or suspension of the Automated Clearing House Network privileges for any reason.
3. You are in compliance with the priorities outlined in the Memorandum commonly referred to as the “Cole Memo”, dated August 29, 2013, as if such memorandum is in full force and effect as of the date of entering into this Agreement.
4. Vendor does not have any delinquent taxes or other outstanding charges due that could materially or adversely affect the Assigned Payment Documents or the Vendor.
5. The Assigned Payment Documents are genuine and the legal, valid, binding and enforceable obligation of the Vendor.
6. All parties to the Assigned Payment Documents had the legal capacity to enter into the Assigned Payment Documents and to execute and deliver the Assigned Payment Documents, and the Assigned Payment Documents have been duly and properly executed.
7. All parties to the Assigned Payment Documents are in compliance with any and all applicable “doing business” and licensing requirements under Applicable Laws, the Regulations and of any applicable Regulator or Governmental Authority.
8. All information provided by Vendor to Originator to qualify for the Program or used by Originator to make a decision regarding any Approved Transaction, are true, correct, complete and accurately reflect Vendor’s financial condition and results of operations at the time such information and materials were provided to Originator.

12. Definitions.

The following capitalized terms used in this Agreement shall have the following meanings:

1. “Applicable Laws” means, collectively, each international, foreign, federal, state, provincial, territorial, municipal and local statute, treaty, rule, regulation, ordinance, code and administrative or judicial precedent or authority, including, without limitation, to the extent applicable, usury, truth in lending, consumer credit protection, equal credit opportunity, disclosure laws or all predatory, fair and abusive lending laws and other laws applicable to the origination and servicing of Assigned Payment Documents of a type similar to the Assigned Payment Documents, and including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and each applicable administrative order, directive, decree, policies, directed duty, license, authorization and permit of, and agreement with, any Governmental Authority, as the same have been or may in the future be amended from time to time; provided that the Controlled Substances Act (21 U.S.C. § 801 et seq.), and any rules or regulations promulgated thereunder as in effect from time to time, as it may apply to the Assigned Payment Documents or the parties, is excluded.
2. “Governmental Authority” means any federal, state, municipal, national, local or other governmental department, court, commission, board, bureau, agency, intermediary, carrier or instrumentality or political subdivision thereof, or any entity or officer exercising executive, legislative or judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case, whether of the United States or a state, territory or possession thereof, a foreign sovereign entity or country or jurisdiction or the District of Columbia.

13. Governing Law.

This Agreement and all related documents and all matters arising out of or relating to this Agreement, whether sounding in contract, tort, or statute are governed by, and will be construed in accordance with, the laws of the State of New York, without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of New York. For the avoidance of doubt, the parties agree that federal laws and regulations relating to cannabis shall not apply.

14. Arbitration.

Any dispute, controversy, or claim arising out of or relating to this Agreement, including any determination of the scope or applicability of this Section, shall be finally settled by arbitration administered by the American Arbitration Association (“AAA”) in accordance with its Commercial Arbitration Rules and, if applicable, its Expedited Procedures, and judgment on the award rendered by the arbitral tribunal may be entered in any court having jurisdiction thereof. For the avoidance of doubt, the Parties agree that this agreement will be governed by the Federal Arbitration Act. The Parties shall share the costs of the arbitration equally; however, each Party shall be responsible for its own attorneys’ fees and other costs and expenses. The arbitration will be conducted in the English language, in the city of San Diego, California, by a single arbitrator jointly selected by the parties in accordance with the AAA Rules. The arbitrator shall have the power to grant legal and equitable remedies, including awarding the prevailing party its attorneys’ fees and other costs of the arbitration, but they shall not grant punitive damages. Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties. The award shall be final and binding upon all parties as from the date rendered and shall be the sole and exclusive remedy between the parties regarding any claims, counterclaims, issues, or accounting presented to the arbitral tribunal. THE PARTIES ACKNOWLEDGE THAT THEY ARE IRREVOCABLY WAIVING THE RIGHT TO A TRIAL IN COURT, INCLUDING A TRIAL BY JURY AND THAT ALL RIGHTS AND REMEDIES WILL BE DETERMINED BY AN ARBITRATOR AND NOT BY A JUDGE OR JURY. Nothing in this Section shall prevent any Party from (i) seeking and obtaining injunctive relief, a restraining order, specific performance, or any other equitable relief through an action in court; (ii) joining any party as a defendant in any action brought by or against a third party; (iii) bringing an action in court to effect any attachment or garnishment; or (iv) bringing an action in court to compel arbitration as required by this Section; provided that, in no event shall any claim for injunctive or equitable relief be adjudicated in any United States Federal Court.

15. Other Provisions.

These Vendor Terms and the Terms and Conditions of Use or Master Subscription Agreement, as applicable are a complete statement of the agreement between you, the Originator, and its Assignees regarding the Program and supersedes any and all prior contracts and understandings regarding the Program.