Portland, ME PretiFlaherty Augusta, ME Concord, NH Matthew S. Warner mwarner©preti.com 207.791.3067 Boston, MA Washington, DC September 3, 2019 Heidi Bauer, Clerk Superior Court 205 Newbury Street, Ground Floor Portland, ME 04101 RE: Northeast Patients Group,Inc. d/b/a Wellness Connection of Maine Docket No. Dear Ms. Bauer: Enclosed for filing in this matter please find the following: 1) Civil Summary Sheet; 2) Complaint; 3) Check in the amount of$175 representing the filing fee. Thank you for your attention to this filing. Sincerely, Matthew S. Warner MSW:smw Enclosures Preti Flaherty Beliveau & Pachios LLP Attorneys at Law One City Center, Portland, ME 04101 I PO Box 9546, Portland, ME 04112-9546 I Tel 207.791.3000 I www.preti.com 14696203.1 SUMMARY SHEET M.R. Civ. P. 5(h) This summary sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by the Maine Rules of Court or by law. This form is required for the use of the Clerk of Court for the purpose of initiating or updating the civil docket. (SEE ATTACHED INSTRUCTIONS) I. County of Filing .:A• District Court Jurisdiction: Cumberland County II. CAUSE OF ACTION (Cite the primary civil statutes under which you are filing, if any.) Breach of Contract and Declaratory Judgment(14 MRS 5951) III. NATURE OF FILING r Initial Complaint •Third-Party Complaint •Cross-Claim or Counterclaim ❑ If Reinstated or Reopened case, give original Docket Number (If filing a second or subsequent Money Judgment Disclosure, give docket number of first disclosure) IV. v. •TITLE TO REAL ESTATE IS INVOLVED MOST DEFINITIVE NATURE OF ACTION. (Place an X in one box only) Check the box that most closely describes your case. GENERAL CIVIL(CV) Personal Injury Tort • Property Negligence ❑ Auto Negligence • Medical Malpractice •Product Liability ❑ Assault/Battery Contract F Contract Declaratory/Equitable Relief • General Injunctive Relief • Declaratory Judgment • Domestic Torts • Other Equitable Relief Constitutional/Civil Rights • Other Negligence • Constitutional/Civil Rights • Other Personal Injury Tort Non-Personal Injury Tort • Libel/Defamation • Auto Negligence • Othei- Negligence • Other Non-Personal Injury Tort Statutory Actions • Unfair Trade Practices • Freedom of Access M Other Statutory Actions Miscellaneous Civil ❑ Drug Forfeitures ❑ Non-DHS Protective Custody ❑ Eminent Domain • Easements • Boundaries • Administrative Warrant • HIV Testing • Arbitration Awards ❑ Appointment of Receiver ❑ Shareholders' Derivative Actions • Foreign Deposition MI Pre-action Discovery ❑ Common Law Habeas Corpus • Prisoner Transfers • Foreign Judgments • Minor Settlements • Other Civil SPECIAL ACTIONS(SA) Money Judgment ❑ Money Judgment Request Disclosure CHILD PROTECTIVE CUSTODY(PC) Title Actions ❑ Quiet Title • Other Forfeitures/Property Libels El Land Use Enforcement(80K) REAL ESTATE(RE) Foreclosure • Foreclosure(ADR exempt) • Foreclosure (Diversion eligible) • Foreclosure -Other Misc. Real Estate • Equitable Remedies ❑ Nuisance • Mechanics Lien ❑ Abandoned Roads • Partition ❑ Trespass ❑ Other Real Estate ❑ Adverse Possession APPEALS(AP)(To be filed in Superior Court) (ADR exempt) • Other Appeals • Administrative Agency(80C) • Governmental Body(80B) VI. M.R. Civ. P. 16B Alternative Dispute Resolution (ADR): • I certify that pursuant to M.R. Civ. P. 16B(b), this case is exempt from a required ADR process because: ❑ It falls within an exemption listed above (i.e., an appeal or an action for non-payment of a note in a secured transaction). • The plaintiff or defendant is incarcerated in a local, state or federal facility. • The parties have participated in a statutory pre-litigation screening process with • The parties have participated in a formal ADR process with (date). • This is an action in which the plaintiffs likely damages will not exceed $50,000, and the plaintiff requests an exemption from ADR pursuant to M.R. Civ. P. 16C(g). CV-001, Rev. 07/15 Page 1 of 3 on VII. (a)MIPLAINTIFFS(Name & Address including county) or Third-Party, Counterclaim or Cross-Claim Plaintiffs The plaintiff is a prisoner in a local, state or federal facility. Northeast Patients Group, Inc. d/b/a Wellness Connection of Maine 685 Congress Street Cumberland County Portland, Maine 04102 ❑ ❑ ❑ (b) Attorneys(Name, Bar number, Firm name, Address, Telephone Number) If all counsel listed do NOT represent all plaintiffs, specify who the listed attorney(s) represent. Matthew Warner Bar No. 4823 Timothy Connolly Bar No. 5322 Preti Flaherty Beliveau & Pachios One City Center Portland, Maine 04101 (207) 791-3067 VIII.(a) IMIDEFENDANTS (Name & Address including county) Third-Party, Counterclaim or ❑ Cross-Claim Defendants and/or ❑ ❑ ❑ The defendant is a prisoner in a local, state or federal facility. Canwell, LLC do Kenneth A. Keene 128 State Street, #3 Augusta, Maine 04330 If all counsel listed do NOT represent all defendants, specify who the listed attorney(s) represents. (b) Attorneys(Name, Bar number, Finn name, Address, Telephone Number) If known) ( IX.(a) ❑ PARTIES OF INTEREST (Name & Address including county) If all counsel listed do NOT represent all parties, specify who the listed attorney(s) represents. (b) Attorneys(Name,Bar number,Finn name, Address, Telephone Number) (If known) X. RELATED CASE(S)IF ANY Assigned Judge/Justice Docket Number Matthew Warner Date: Name ofPlaintiff or Lead Attorney of Record Signature of Plaintiff or Attorney CV-001, Rev. 07/15 Page 2 of3 INSTRUCTIONS FOR COMPLETING SUMMARY SHEET I. County of Filing / District Court Jurisdiction. For Superior Court cases enter the county name where this complaint is being filed. For District Court cases enter the location of the District Court where this complaint is being filed. II. Cause of Action. Report the civil statute directly related to the primary cause of action and give a brief description of the cause. If the cause of action is not statutorily based enter N/A. III. Nature of Filing. Place an "X" in the appropriate box. Initial Complaint. Check this box if the complaint is being filed as an original proceeding. A filing fee is required. Third-Party Complaint. Check this box if the original defendant is filing an action against a third party, not part of the original proceeding. A filing fee is required. Cross-Claim or Counterclaim. Check this box if an original defendant is filing a cross-claim against another original defendant or if an original defendant if filing a counterclaim against a party not part ofthe original proceeding. Reinstated or Reopened. Check this box for cases reinstated or reopened in the court. Use the reopening date as the filing date. Indicate the docket number of the original proceeding. This should be filled in for Money Judgment second or subsequent Disclosures, or for post-judgment motions. IV. Title to Real Estate. Place an "X" in the box if this case is not designated as Real Estate action but Title to Real Estate is involved. V. Most Definitive Nature of Action. Place an "X" in the appropriate box. If the cause fits more than one nature of action, select the category that best describes the primary cause of action. VI. Place an "X" in the appropriate box if the case is exempt from alternative dispute resolution as required by M. R. Civ. P. 16B. VII.(a) Plaintiffs, Third-Party or Counterclaim or Cross-Claim Plaintiffs. Enter names (first, middle initial, last) of all plaintiffs and their address including county of residency. If the plaintiff is a government agency, use only the full name or standard abbreviations. If the plaintiff is an official within a government agency, identify first the agency and then the official, giving both name and title. If there are several plaintiffs, list as many plaintiffs as possible and list the additional plaintiffs on an attachment and note "(see attachment)." (b)Plaintiffs Attorney. Enter firm name, attorney of record, attorney of record bar number, address and telephone number. If there are several attorneys, list as many as possible and list the additional attorneys on an attachment, noting in this section "(see attachment)." If more than one attorney is listed for a party, a lead attorney must be designated. If all counsel listed do NOT represent all plaintiffs, specify who the listed attorney(s) represent. VIII.(a) Defendants Enter names (first, middle initial, last) of all defendants and their address including county of residency. If the defendant is a government agency, use only the full name or standard abbreviations. If the defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. If there are several defendants, list as many defendants as possible and list the additional defendants on an attachment and note "(see attachment)". (b)Defendant's Attorney. Enter firm name, attorney ofrecord, attorney ofrecord bar number, address and telephone number. If there are several attorneys, list as many as possible and list the additional attorneys on an attachment, noting in this section "(see attachment)." If more than one attorney is listed for a party, a lead attorney must be designated. If all counsel listed do NOT represent all defendants, specify who the listed attorney(s) represent. IX.(a) Parties of Interest. Enter names (first, middle initial, last) of all parties of interest and their address including county of residency. If the party of interest is a government agency, use only the full name or standard abbreviations. If the party of interest is an official within a government agency, identify first the agency and then the official, giving both name and title. If there are several parties of interest, list as many parties of interest as possible and list the additional parties of interest on an attachment and note "(see attachment)." (b)Party of Interest's Attorney. Enter firm name, attorney of record, attorney of record bar number, address and telephone number. If there are several attorneys, list as many as possible and list the additional attorneys on an attachment, noting in this section "(see attachment)." If more than one attorney is listed for a party, a lead attorney must be designated. If all counsel listed do NOT represent all parties of interest, specify who the listed attorney(s) represent. X.Related Cases. This section is used to reference relating pending cases if any. If there are related pending cases, insert the docket numbers and the corresponding justices name when appropriate for such cases. Date, Attorney or Pro se Party Name and Signature. I. Date the summary sheet. 2. Sign the summary sheet. Type or print the name of the Plaintiff or lead attorney ofrecord. The attorney signing the filing document should sign the summary sheet. The information on the cover sheet is subject to the requirements of M. R. Civ. P. 11. The Maine Rules of Civil Procedure, and all other Court Rules, are found at: www.courts.maine.gov. CV-001 Instructions, Rev. 07/15 Page 3 of3 SUPERIOR COURT Civil Action Docket No. STATE OF MAINE CUMBERLAND,SS. NORTHEAST PATIENTS GROUP,INC. d/b/a WELLNESS CONNECTION OF MAINE, COMPLAINT Plaintiff, v. CANWELL,LLC, Defendant. Northeast Patients Group, Inc. d/b/a Wellness Connection of Maine("WCM")contracted with Canwell, LLC in 2015 to, among other things, obtain a high-end processing system with equipment to extract THC and standard operating procedures for using that system and equipment. The purpose of the parties' agreement was to significantly increase WCM's capacity to extract THC from cannabis so it could add this THC to a variety of products for use by WCM's medical cannabis patients. Canwell provided WCM with standard operating procedures for its system and equipment which resulted in incredibly low yields of THC per batch of processed cannabis. As a result, WCM lost large quantities of valuable THC. Eventually, when Canwell failed to take meaningful steps to fix the problems it had caused, WCM terminated the Agreement with Canwell. Unfortunately, Canwell responded to WCM's termination by filing a lengthy, speculative, and often inaccurate 'Request for Arbitration' in Rhode Island against several of WCM's financial partners and consultants. The Rhode Island action filed by Canwell attempts to elevate this dispute to something much broader than Canwell's breach of contract and failure to meet its obligations to WCM under the Agreement. In reality, the facts of this dispute are quite simple: Canwell did not do what it had promised to do and, as a result, WCM has lost enormous sums of money. 1 Plaintiff Northeast Patients Group, Inc. d/b/a Wellness Connection of Maine further complains against Defendant Canwell, LLC as follows: PARTIES AND JURISDICTION 1. This is a civil action seeking damages for breach of contract and a declaratory judgment pursuant to 14 M.R.S.A. § 5951, et seq., arising from Canwell's failure to perform under the Alternative Dosage Service Agreement(the "Agreement")it entered into with WCM. A copy of the Agreement is attached as Exhibit A. 2. Northeast Patients Group, Inc. d/b/a Wellness Connection of Maine is a mutual benefit nonprofit corporation organized pursuant to Maine statutory Title 13-B. It holds registration certificates to operate four medical marijuana dispensaries in Maine and is the largest provider of medical marijuana in the state. 3. Canwell, LLC is a Delaware limited liability company headquartered in Warwick, Rhode Island and is self-described as "the holding company of a New England-focused medical and recreational cannabis business." 4. This lawsuit is properly before Maine's Superior Court because it concerns the Alternative Dosage Services Agreement between, inter alia, WCM and Canwell, which provides that "[e]ach of the parties hereby submits to the exclusive jurisdiction ofthe courts of Maine, with respect to any dispute between the parties pertaining to this Agreement." Ex. A, ¶ 13.7. 5. Venue is proper in Cumberland County pursuant to 14 M.R.S. § 501 because WCM operates a dispensary in Portland, Maine and has administrative offices in Westbrook, Maine. BACKGROUND 6. The State of Maine began issuing medical marijuana dispensary registration certificates in 2010 in an effort to expand Maine's medical marijuana program, following passage 2 of a statewide citizen's initiative to create medical marijuana dispensaries. Pursuant to legislation passed in 2010 the State awarded eight total dispensary registration certificates. WCM,through a competitive and merit-based process, won four of these registration certificates. 7. By 2012, WCM had begun operating its four dispensary locations in Portland, Brewer, Hallowell(now Gardiner), and Thomaston(now Bath). Throughout its operations, WCM has served many thousands of patients annually. 8. Since its inception, WCM has been organized as a nonprofit mutual benefit corporation because this is what Maine's medical marijuana statute required until 2018. See 22 MRSA § 2422(6)(2010)(prior to the 2018 amendment). State law prohibited WCM,or any other registered dispensary, from having shareholders or any other class of owners. 9. In order to open and expand over time, WCM has naturally needed capital. Because WCM was a nonprofit mutual benefit corporation unable to sell shares or equity interests, it could only obtain capital through other forms of investment. This was recognized and contemplated by the State of Maine when it created the selection criteria for dispensaries. 10. WCM has carefully chosen financial partners who can provide not only necessary capital, but also expertise in distinct areas of the cannabis industry. Its earliest such partner was The Wellness Pain & Management Connection,LLC("WPMC")which provided WCM with loans and contracted with WCM to provide certain necessary consulting services. WCM obtained explicit approval from the Maine Department of Health and Human Services in 2011 before it entered into either a loan or consulting agreement with WPMC. 1 1. WPMC is WCM's primary long-term financial partner. Acreage Holding's, Inc. (also a defendant in Canwell's Rhode Island action) has acquired majority ownership interest in WPMC. 3 THE ALTERNATIVE DOSAGE SERVICES AGREEMENT WITH CANWELL 12. In 2015 WCM needed equipment and expertise to expand its cannabis processing operation. The company determined that it could better serve patients and meet market demand by increasing its capacity to extract and refine THC from cannabis plants. This extracted, concentrated and purified THC is used in products such as edibles, capsules, tinctures, vaporizers and topicals. 13. Canwell represented that it was an expert in extraction and refinement ofTHC from cannabis. Based on Canwell's representations, WCM and its partners begin negotiating the terms for Canwell to provide the necessary systems, equipment, standard operating procedures, and services to WCM. 14. Eventually the parties executed the Alternative Dosage Services Agreement, the effective date of which was October 1, 2015. The Agreement was long-term, effective until September 30, 2038, subject to earlier termination due to mutual written consent of the parties or material breach of a material term of the Agreement. Ex A, § 4.2. 15. Canwell's representations regarding its expertise in extraction and refinement of cannabis are embedded in the Agreement. The Agreement states in particular that Canwell's services to be provided to WCM "incorporate expertise not only from the 'cannabis industry' but from other industries subject to strict governmental guidelines and oversight" and that this expertise encompasses "many new and better practices, standards, inventions, protocols, efficiencies, products and related items." Ex. A, Recitals. The scope of Canwell's claimed expertise is exceedingly broad, covering all of the 'alternative dosage form' matters which the Agreement collectively refers to as the 'Enhancements': "without limitation those relating to improved product quality and diversity, extraction and refinement processes and methodologies, 4 testing procedures, improved operational and training protocols, design and build-out techniques, improved, new and/or other products, quality control features including clean room standards, and internal research and development activities." Id. 16. Pursuant to the Agreement, Canwell promised to use its expertise to provide to WCM,among other things, a CO2 extraction system, including all necessary equipment; standard operating procedures for using the extraction and refinement system and equipment ("SOPs"); a proprietary processing plan; training for WCM staff related to processing and extraction; specific categories of processing methodologies; and a complete quality control system. 17. Canwell promised that the equipment, systems, and SOPs (along with all other goods and services to be provided) would be provided "in a professional manner and in accordance with prudent industry standards." See Ex. A, § 3.1. Elsewhere in the Agreement, Canwell also represented that its system, equipment and SOPs were so advanced that they would ultimately result in "higher industry standards for the benefit of WCM and" its medical marijuana program. Ex. A, Recitals. 18. The Agreement requires Canwell to update and upgrade its services and equipment to keep pace as "prudent industry standards" evolve. Canwell's obligations in this regard were to last for the duration of the 23 year agreement. 19. In exchange for the systems, equipment, SOPs, and services to be provided by Canwell, WCM agreed that Canwell would receive 20 percent of WCM's gross sales of certain products in the form of a royalty over the life of the Agreement.' WCM also agreed to pay additional amounts to WPMC,as can be seen from reviewing the Agreement attached to this Complaint. 5 20. The Agreement also states that "[d]uring the term of this Agreement and for a period of two years thereafter, the parties hereto and their respective successors or assigns shall not pursue contracts or operations similar to that which is contemplated herein within Maine or other States within New England without the prior written consent of Canwell." Sec. 5.1. 21. The parties did not intend this provision to prevent, and this provision does not prevent, WCM from engaging with other vendors in New England related to any or all aspects of its alternative dosage business. Nor did the parties intend that the noncompetition provision in the Agreement would endure a termination caused by Canwell's breach and failure to perform. CANWELL BREACHES THE ALTERNATIVE DOSAGE SERVICES AGREEMENT 22. After executing the Agreement in 2015, Canwell did provide systems, equipment, and SOPs to WCM,but failed to do so in an orderly fashion. Canwell also trained WCM personnel to follow the Canwell SOPs for THC extraction and refinement. WCM relied on Canwell's claimed expertise throughout this start-up process. 23. For several years, WCM continued to rely on the Canwell's SOPs, guidance and training to run its extraction and refinement operations. Canwell's delivery of its services to WCM was not always timely or consistent, but WCM trusted that, in exchange for the large amounts of money that Canwell was receiving under the Agreement, Canwell was performing its overarching obligations and had provided a system, equipment and SOPs which met (and would continue to meet) industry standards. 24. In reality, Canwell had created an extraction process for WCM that was deeply flawed and inefficient, extracting only 20 to 30 percent ofTHC in any particular batch of cannabis, which was many multiples less than the prudent industry standard. Eventually even Canwell's own consultant, John Pierce, the designer of the equipment and SOPs, confirmed that the 6 equipment provided by Canwell should have been obtaining a 90 to 95 percent yield per batch all along. 25. In late summer 2018, WCM began to independently question the efficiency of the processes and equipment provided by Canwell. Canwell did not assist with this inquiry and eventually, several months after WCM first asked about measuring the percentage of total THC actually extracted in the process, Canwell stated that it had never bothered to measure the efficiency of the process and so it had no idea what percentage of THC was being extracted from each batch. This was the first time Canwell admitted that it had not designed WCM's system to meet prudent industry standards in terms of efficiency and output of total THC. 26. On its own, WCM began measuring THC yield and discovered that it was incredibly low as compared to industry standards. WCM demanded that Canwell send someone to help trouble-shoot the problem. Canwell sent its consultant, John Pierce, to WCM's facility but Mr. Pierce was unable to identify any problems and admitted that he did not know why the yield efficiency was so dramatically below industry standards. 27. Canwell's inability or lack of interest in assisting WCM with its incredibly low yields was consistent with Canwell's broader lack ofinterest in WCM's operations over the life of the Agreement. Canwell was intensely focused on providing services to its client in Rhode Island, to the apparent detriment of WCM,which meant that WCM had to often beg Canwell to provide it with services and consults required by the Agreement. Even when Canwell would agree to provide required services, it would at times only do so on the condition that WCM staff traveled all the way to Rhode Island. This broader dynamic, along with Canwell's lack of expertise, could explain why Canwell was unable or unwilling to diagnose the issues with low THC yield in WCM's process. 7 28. Despite Canwell's failure to assist WCM at this point, WCM did eventually figure out that the SOPs provided by Canwell were missing a key step which, when followed, dramatically increased the yield to levels consistent with industry standards. 29. Specifically, through its own investigation, WCM learned that Canwell's SOPs failed to instruct WCM to do an initial decarboxylation of their raw plant matter before beginning the extraction process. Decarboxylation involves subjecting cannabis plants to low heat for an extended period oftime with the result that THCA in the plant matter is converted to THC,thereby making it easier to extract with CO2. This increased concentration of THC is then extracted through the remaining processes. 30. By decarboxylating its plant matter prior to extraction, WCM immediately saw its THC yields increase from 20 to 30 percent per batch all the way up to 90 to 95 percent per batch. 31. After discovering that decarboxylation was a necessary step when using the equipment provided by Canwell, WCM inquired further into industry standards and practices among its competitors and other vendors. WCM discovered that high-end extraction equipment and processes (which Canwell had promised to provide) generally should not require decarboxylation of the plant matter prior to extraction because this extra step increases cost and decreases efficiency of the process. 32. After WCM determined, through its own efforts, that Canwell's equipment was deficient and its SOPs were missing key steps in the extraction process, it notified Canwell of this fact. At this point, Canwell attempted to reengage with WCM,but not in a meaningful way and its efforts amounted to too little too late. For example, Canwell recommended that WCM begin decarboxylating its plant matter, but(as outlined above) WCM had already reached this conclusion 8 on its own initiative sometime earlier after Canwell initially failed to provide meaningful assistance with the low yields. 33. By providing equipment that requires decarboxylation, and by failing to instruct WCM (in the SOPs or otherwise) to decarboxylate its plant matter prior to processing, Canwell caused WCM to lose a substantial volume of THC worth a significant sum of money. To this day Canwell continues to fail to provide satisfactory equipment, SOPs,training and consulting services under the Agreement. 34. Canwell's performance under the Agreement was marred by a number of other failures and breaches as well. To name a few: a. Canwell provided WCM with faulty equipment, including a vape cartridge filler, and then refused to replace or repair the equipment. b. Canwell failed to provide the full range of support and updated equipment, SOPs, and advice which it was obligated to provide under the Agreement when the State of Maine implemented new requirements for marijuana extraction facilities. c. Canwell did not provide meaningful assistance with research and development of new products, product packaging, and recipes for new products despite its obligation to do so, and despite WCM's repeated requests for such assistance. 35. Facing significant losses as a result of Canwell's past and ongoing breaches of the Agreement, WCM attempted to negotiate a resolution that would allow the parties to continue their relationship. After some initial constructive discussions, Canwell rejected any effort by WCM to find a constructive path forward. 36. Canwell did not receive royalty payments under the Agreement for at least several months in 2019 due to its non-performance and breach of the Agreement. 9 37. Faced with no other practical choice, on July 12, 2019 WCM provided notice to Canwell that it was terminating the Alternative Dosage Services Agreement. The termination was provided pursuant to Section 4.2 of the Agreement which permits termination of the Agreement in the event of "material breach by WCM or Canwell of a material term or condition of this Agreement." This termination is effective 60 days later, on September 10, 2019, if Canwell fails to cure its non-performance. See section 4.2 of the Agreement. 38. WCM intended to wait until September 10 to determine whether a lawsuit would be necessary, but Canwell has forcefully indicated that it does not intend to negotiate a resolution, cure its non-performance, or compensate WCM for its losses caused by Canwell's breaches. On August 21, 2019, in response to WCM's termination notice, Canwell filed a 'Demand for Arbitration' in Rhode Island Superior Court against WPMC,Acreage Holdings, and several other defendants. Canwell's court filing in Rhode Island(though it does not and could not include WCM as a party) asserts that the grounds for termination of the Alternative Dosage Services Agreement asserted by WCM are "completely meritless" and "entirely manufactured." 39. Canwell's Rhode Island Request for Arbitration is an attempt to litigate the effectiveness of WCM's termination of the Agreement while avoiding the jurisdiction of Maine courts and without including WCM as a party. The Request for Arbitration falsely speculates that Acreage Holdings caused WCM to terminate the Agreement when, in fact, Canwell's failure to perform was the real cause. As stated above, Acreage Holdings is the majority owner of WCM's long-term financial partner WPMC,but any disputes between Acreage and Canwell are immaterial to damage which Canwell has caused WCM. COUNT I (DECLARATORY JUDGMENT —14 MRS §5951, et seq.) 40. WCM repeats the prior paragraphs as if fully set forth herein. 10 41. WCM terminated the Alternative Dosage Services Agreement by letter to Canwell dated July 12, 2019. 42. The termination was justified by Canwell's material breach of multiple material terms of the Agreement. 43. WCM contends that the termination of the Agreement is lawful and effective as of September 10, 2019 and that WCM is not bound by any restrictions within the Agreement, including exclusivity or non-competition provisions, as of that date. 44. Canwell contends through its Rhode Island Demand for Arbitration and elsewhere that WCM's termination of the Agreement was unlawful and ineffective. Canwell also therefore contends that WCM is still bound, after September 10, by the restrictions contained within the Agreement. 45. A declaration as to the validity of WCM's termination notice and the effectiveness ofthe Agreement as of September 10 will resolve the controversy around these issues. 46. A declaration as to the whether WCM remains bound by the non-competition and exclusivity restrictions within the Agreement following a termination of the Agreement. for cause due to Canwell's breach 47. The parties also disagree as to the enforceability of the non-competition and exclusivity provisions in the Agreement generally, since WCM contends that these provisions are overbroad and therefore unenforceable as to any and all aspects of WCM's alternative dosage business in New England, and a declaration as to the enforceability ofthese provisions will resolve this controversy. COUNT II (BREACH OF CONTRACT) 48. WCM repeats the prior paragraphs as if fully set forth herein. 11 49. The Alternative Dosage Services Agreement is a valid and enforceable contract (with the caveat that the non-compete provisions are unenforceable in part because they are overbroad). 50. WCM has fully performed its obligations under the Agreement. 51. Canwell has breached its obligations under the Agreement in a number of ways including, among others, by failing to test the SOPs and equipment it provided to WCM,and which WCM relied upon, to ensure that they led to an efficient THC yield per batch. 52. Canwell also breached its obligations under the Agreement by providing WCM with SOPs that were missing key steps necessary for extraction results that meet industry standards, including decarboxylation prior to extraction, and then refusing or failing to address the resulting low yields. 53. Canwell also breached its obligations under the Agreement by providing WCM with equipment that requires decarboxylation of the plant matter prior to extraction, since other vendors in the industry obtain a satisfactory yield of 90 to 95 percent without going through this step in the first place. Canwell has failed to repair, replace, or modify its equipment and extraction system to obtain THC yields consistent with industry standards without the need for an initial decarboxylation of the plant matter. 54. Canwell also breached its obligations under the Agreement by providing WCM with faulty equipment and refusing to replace or repair the equipment. 55. Canwell also breached its obligations under the Agreement by failing to provide the on-going support and updated equipment, SOPs, and advice which it was obligated to provide when the State of Maine implemented new requirements for marijuana extraction facilities. Ex. A, § 3.8. 12 56. Canwell also breached its obligations under the Agreement by failing to provide assistance with research and development of new products, product packaging, and recipes for new products despite its obligation to do so, and despite WCM's repeated requests for such assistance. 57. WCM has been damaged by Canwell's multiple breaches of contract because it failed to satisfactorily provide equipment and services under the Agreement; and because WCM relied upon and followed Canwell's SOPs, equipment, and guidance, which caused to WCM inadvertently discard enormous quantities of plant matter that contained extractable and valuable THC. 58. Pursuant to the Alternative Dosages Service Agreement, WCM is entitled to special and consequential damages and lost profits resulting from Canwell's breach, and reimbursement of its legal fees and expenses, plus any other remedies that it may have at law. See Ex. A,¶ 11. DEMAND FOR RELIEF WCM requests judgment in its favor on its claims against Canwell as follows: A. A declaration that Canwell breached the Agreement and that WCM's termination ofthe Agreement is lawful and effective; B. A declaration that the exclusivity and non-competition provisions are no longer effective following WCM's termination of the Agreement; C. A declaration that the exclusivity and non-competition provisions in the Agreement are unenforceable in whole or in part; D. An award of compensatory damages to compensate WCM for all of its losses caused by Canwell's breaches of the Agreement; E. An award of pre and post-judgment interest; 13 F. An award of WCM's attorneys' fees and costs; and G. Such other and further relief as the Court deems just and proper. Dated at Portland, Maine this 3rd day of September, 2019. Matthew S. Warner, Bar No. 4823 Timothy D. Connolly, Bar No. 5322 Attorneys for Northeast Patients Group, Inc. d/b/a Wellness Connection of Maine Preti Flaherty Beliveau & Pachios LLP One City Center P.O. Box 9546 Portland, ME 04112-9546 207.791.3000 mwarner@preti.corn tconnolly@preti.com 14 EXHIBIT A ALTERNATIVE BOSAGE SERVICES AGREEMENT This Alternative Desege Services Aggeemeet (the ?Agreement? is effective as of Oeteber 1, 2015 (the ?Effective Date?), by and among Northeesi Patients Group dfb/a Welmess Cenneetien of Maine Canwell, LLC er its ?esignee (?Canereil?), Weilness Connection Consulting, LLC and e1h1ess and Pain Management Connection, LLC WCM, Canwe?, W6C and WMC are sometimes celiectivety referred to as the ?Parties? or ?parties?, an? each as a ?Party? or ?paw?. RECWALS: WHEREAS, WCM prevides a State of Maine regulated system ef patient access to herbal medicine, health and, wakiness services in additiee to a vmiety of community and educational activities Services?) in connection with faei??es iecated in the State ef Maine {the ?Maine Facilities?) operated by WCM (collectively, the ?ngam?m and WHEREAS, in cemectien with aitemetive dosage form aspects of the Program, many new and betier practices, standards, inventions, protocols, ef?ciencies, products and related items have arisen and/er evolved in eenneetien wi?: alternative desage fem matters beyond that which is eentempiated in that certain License Agreement dated August 3, .2011 by and bemeen WPMC and WCM (the License Agreement") which would bene?t WCM, WCM Services, the Maine Facilities and the f?regram in gcaetal, ineiudin without Iimitetien those relating to impreveci precinct quality and diversity, extraction and re?nement processes anti methodologies, nesting precedures, improveci operational and training protoeels, design and huiidueut techniques, impmved, new andfer ether products, quality control feamres including clean room standards, and internal research and development activities (coliec?vely, the ?Enhancements"); and WHEREAS, WPMC has the exclusive right to provide WCM with speci?cations, guidance end/01' training with respect to certain alternative dosage preduets (?Limited Services?) for WCM to produce such cumin alternative dosage products (?Limited Products?) ie censideration for fair market vaiue cempensatien pursuant to the WPMC License Agreement; WHEREAS, it: comedian with the WPMC License Agreement, WCM and WPMC desire to engage Carmen to provide the Limited Services in connection with the Limited Preducts, for the bene?t 0f WCM and the Program; and REFEREAS, the services aed practices of Caewe? incerporate expertise not only ?ee: the ?eaneabis in?use'y? but frem other industries subject te st?e?c governmental guidelines and overeight thus eonu?ibeting to higher standards further advancing the Enhmcemente {eeilectivelx the Enhancements, as ?lrther improve? by such higher standards, the ?Imgrevements?); and WHEREAS, the ?nprovemems are presentiy within the possessien ef a limited eumber of persons within New England, and are unique vise-vie their counterparts in parts of the country outskle New England; and 54/0 ?zz: WHEREAS, Caowo? possesses the improvements which, when maplomontod, wili better servo and meet the expectations of patients, sod snow for higoer industry sfaodards for the heno?t of WCM sad the Program; and WEREAS, Carmen has boon instrumental in. assisting WCM advance with processing mothods, particularly in connection. with oximotion and re?nement methodologies, found acceptable by the State of Mame, 3.116 is able to provide services and related final produoss incorporating tho and hnprovomonts, including without limitation processing, quality control testing and dean room platforms (oo?ootivoly, the ?Enhanced Services and Products?), which Enhanced Services and Products are desired by WCM for the benefit of itself sod the Program; and WW8, WCM arid WPMC desire to engage Canwo? to grovide to WCM the Limited Services in connection with the Limited Products, and the Enhanced Services and Froducts, in each case to and for tho oono?t of WCM and the Program and in accordance: with this Agreement; and WHEREAS, WPMC consents to the engagement of Canwoll and Canwoll?s provision of the Limited Sewicos, Limiiod Products, and Enhanced Sowioes and Produdts to WCM in accordance with this Agreement. NOW, THEREFDRB, for good and valuable consideration, inolutiing the mutual promises and covenants containeo in this Agroomom, the suf?ciency of which is hereby aciosowlodgod, the parties hereto hereby agroe as follows: 1. BACKGROUND. 1.1 WCM. WCM ?osiros immediate and extensive alternative dosage form processing and quality control assets and practices, and hands?on services relating thereto, so as to capture market share, moot patient demand and create higher standauis through: a processing systom to he designeci and retro?tted to tho Gardiner location in 28.15 to the extent directed by WCM, and one to be designed and instaliod at the Auburn 2.0 Iooa?on in late 2015 early 2016, subject to WCM with respect to permitting and trades (if necessary) such as and piumbing, and (ii) clean room attributes, design, processing equipment deiivory and installation, and physical presence relating to advice and guidance speci?c to the Auburn location with respect to oversight, training and ?rst?year production mos as appropriato and oocossaxy. 1.2 Canwoli. Caoweii is a service and products provider with rosooct to botanical processing practices oharaoto?zed by the hnprovomonts, including that which relates to advice and guidance as necessary and appropriate misting to: alternative dosage form products; training and staf?ng; oxosctioo, re?nement and quality control system dosigo, issta?a?os and oversight; qusiity contest measures and pretends; clean reem design and insta?atien; alternative dosage form busieess development strategies; proprietary processing plans, ineim?ng without timitation that which relates te extraction and re?nement; proprietary standard eperating prececiures manual; amt research and deveiopment. 3-3 m. WMC prevides certaie csnsulting services and. assistance in WCM pursuant to that certain Agreement made as of August 3, 2811 between WMC and WCM (the Master Services Aggeement?) bene?cial to efforts to previde a safe and law?? system of patient access to herbs} medicme, health sad we?ness services. 2. WCM, WPMC and Canweii desire to, and hereby do, enter inte 21 products and services arrangement to effect, in addition te Cenweii?s previsien of the Limited Sentiees and Limited Precincts to be provided to WCM under the WPMC License Agreement, Canweil?s previsien of the Enhanced Services and Products, including, without limitstiee: systems featuring C02 extraction machines, codeustampeti vessels, C92 pumps, chiller systems, re?nement equipment and related parts as necessary 351d appropriate subject te ?nal design and deployment directed by and {ii} quality centre} features in Asthma 2.8, including the presence 0f high pressured liquid and/er gas ehmmategraphy equipment and. other lsheratory equipment and reiated parts as necessary and appropriate; anti systems featurieg, as necessary and appropriate and directed by WCM, 180 14644?1 clean room attributes as described in Exhibit A attached hereto. 3- In addition to the Limited Services and Limited Preducts, Csnweti shell movies, advise and/or guicie, as necessary and appropriate, WCM with respect to the Enhanced Serviees anti Products as described in Sectioes 3.1 through 3.8 below: 3.1 Processigg and Refining gistem. Csnwe? shall provide, advise and/er guide, as necessaly and WCM with. or on, as determined by WCM, as applicable, the fellewing, in each case in a prefessienai manner and in with prudent industzy standards: a. System: Besign of a high perfermaace processing system in the Gardiner facility single; te that tiepieted by Canwe? for the bene?t of WCM in Exhibit attached hereto to the extent directed by WCM, and in the Auburn facility, subject to ?nal design and depioyment directed By b. Eguigmen {stated equipment provided and insta?ed by Cauwell to inefude C02 extraction machines, vessels, C02 pumps, retary? screw air compressors, and systems and related re?nement equipment, as necessary, sppropsiste and sppiieabke, the cempenems of which shall be deemed new and warran?eci for one-year after installation; e. E?ackaging: Packaging and labeling precesses, methadoiegies, designs, protoceks and/er seeming as such may be deemed necessary and appropriate and Speci?cally requested by WCM understanding that WCM may have its own paekaging, branding sewer relased plans and programs in 91sec; d. Training: Training relating so aitems?ve dosage form including that which relates to extraction and re?nement, by an individual acceptable ts bet}: parties; e. Plan: Proprietary processing plan, including that which relates to extraction and re?nement, 331:1 updating, as generally presented by Canwel} as described in Exhibit attache? hereto; f. SOP: Standard eperating procedures 1123111131 rela?ng to processing protoeeis, inelm?ng that which relates to extraction and re?nement; g, Staffing: Advice and guidance with sesgeci ts estabiishing optimum staf?ng pians ineleding pro?le andjeb dese?ptiens; h. Sgeei?eity: Advice and guidamce with respect to missing products, as guided by WCM, to the masses of Maine and patient base; and i. Methodologies: Processing methadolegies invelving Phase I (extraction utilizing C02 in the liquid phase {1200 psi and 55F) and in recirculating and non- reeirculating fashien as applicable), Phase removing water and waxes, collecting terpenes and decarbexy?ze the acid form into active form, and Phase 111 {?na?zatien of effective e?l for use for all alternative dosage fosms, including transfonsstion into a dry product for use in edible predue?en), all as necessary and appropriate and subj eet to desired changes overtime. 3.2 Qualim Contmi System. Canwe? shall px'evide, advise audio: guide, as Recessary 311d appfepriate, WCM with or on, as applicable, the feliewing: a. System: Design ef a quality comm}. testis}; system subject to ?ne} design and; deployment directed by b. Eguigment: Equipment fer quaiity centre} testing or measures, meiuciing high pressured ?qui? 01' gas chromatography equipment as determined by 2. Training: Training misting to quality centre? testing, isoiuding that which relates 9 to testing and/or pro?ling equipment; SOP: Standard operating procedures manual misting to quality control testing protocois; anci c. Staf?ng: Advice anti guidance with respect to estabiishing optimum staf?ng plans including pro?ic and job descriptions- 3.3 Dosage Form i?rg?ucts. Conweii shaii advise, guide, support andlor provide, as necessary and appropriate, WCM on or with processes, recipes and methodologies in connection Wii?h manufacmring sitersative dosage form products fcamring various ?avors, fragrances, servings of active andfor delivery mechanisms including Mthcut a- Cagsuics: that are turwpiecc, criteric coated and ?lled with ?owabie iiquid under inert atmosphere of dry nitrogen or with powder extract; b. Tinctures: that are characterized by biologicai and a stable shcif~iifc, anci a decm?boxylatcd ?nished product oil speci?c to different brands and foms; c. Togicais: that. incicdc creams arid iotions based with lavender andfor other fragrants, and foaming various servings of active; or Vaporizers: that include chargers and cartridges (Wi?i medicine) enabiing active cannabinoid inhalation and consistent dosing without smokesciatcd toxins; and e. Other: ali other alternative dosage form products and delivery systems including without iimitation extract and oils and all other desired alternative dosage form products {by way of exampie, and not ?m?ation, sheets, strips, baker?s mix, edibics, parables, patches, oils, waxes and other cannabis related products a?dfor de?very systems) or recipes as desired by WCM. 3.4 Health and Ccomcr Protecriczg. Canweli shall advise guide, as necessary and appropriate, WCM wi?i respect to operational compliance with Good Manufacturing Prac?ces for Food as appiicabie. 3.5 116393ch and Canweil shaii aiiow WCM to bene?t from Caoweii?s research and cicvcicpmeot activities, as necessary and appropriate and to the extent appiicabie, which may include the following: a. (3133?s: Somcing, amassing audio: working with CED-dominant strains and products, including emerging strain genetics, as such are ??eciy developed or possessed by Canweii including strains with a high (EBB and low THC raiic; b. Delivery: New delivery devices and systems as such are freely deveioped or passages by Canwcii; 7/27 f/g U6 5/10 @710? c. Molecular: Isolation, skeraticn and recembisatics activi?es at the mciecular Ievci with items such as THC, audit}? terpencs as such are ?eeiy develeped or possessed by Cacwe?; and/er Studies: Participation in studies or crisis icvciving alternative dosage form products misting to chemotherapy advances, seizcre meanest, opiate dependency abatemcm or ctherwise tn the extent such are ?eely developed or possessed by Carmel}. 3.6 Lace! Branding. To the extent directed by WCM, Canwell shall snow branding to be Maine or WCM ?centric? sensitive to the local patient base, ccmmum'ty and laws, as to and mandatcry branding arrangements required by previders. Safctv and Security. Canwell shall advise, guicic and/er provi?e, as necessary and appropriate and applicable, WCM en 01' with proprietary safety and security piacs and practices speci?c to processicg and quaiity central system, including measures relaticg to employee and personal safety matters. 3.3 Other Services and Prc?ucts. Canweli shall advise, guide end/c: suepcrt, as necessary and appropriate, WCM with respect to edecaticn,? prospective legisiaticn and regciatory pclicies for the State chaine is ccnnecticn with alternative dosage forms. Tc and assist the provision of the Limited Services, the Limited Products, sad the Enhanced Services and Products to WCM, WFMC shall provide engcing oversight and strategic cocrc?naticn with respect to the Limited Services, the Limited Products, acct the Enhanced Services and Products, and shell faci?tatc regular communications bemecn WCM and with respect to the Limited Services, the Limited Prcducts, and the Enhanced Services and Products and the parties? performance under this Agreement, 4. EOMPENSATEGN AND ANS TERM AND TERMENATION. 4.1 Ccmgecsa?ec and Fairness. In ccnsideraticn cf Canwe??s cb?gsticns and cadet this Agreement, WCM .9th make royalty payments to (the ?Maine Royalty?) as previdcd in this section and Based on a percentage cf Gross Sales of Products as fciiows in ihc below Table?: Period Maine Re?ux October 1, 2015 September 30, 2023 30.6% of Sales cf Products October 1, 2023 - September 30, 2831 25.9% of Gross Sales of I, 203% Scptembcr 36, 2038 22-5% of Sales cf Products ?er035 Sales? means sakes net of taxes, seams and. related rebates. ?Prcduc?s? 11163115 any alternative dosage form preduct, delivery device or hardware in?lsed with or characterized by extract product, processing or manufacturing precesses and/er methedcicgies, and/or 3 54/0 equipment contemplated in this Agreement, inciuding, without limitation, the Limited Services, the Limited Products, and the Enhanced Services amt Products; provided, however, that the Limited Services, the Limited Protluets, and the Enhanced Services and Products shall not include: recipes utilized and sold by WCM prior to the; Effective Date, (ii) any ?nal and packaged product of WCM that is ready for immediate sale and existing as of the Effective Date, those products and recipes developeo and soid by WCM not using or characterized by any of the extract product, processing or manufacturing procosses andlor mothodotogics, anolor equipment contemplated is this Agreement, and (iv) traditional ??ower? or ?bud? products, moaning all oon~alterostive dosage form products or services, sold by WCM that arc aircady to compensation in favor of WPMC pursuaot to the WPMC Master Scrviccs Agcomcot and the compensation formula described in Exhibit A attached thereto. WCM shall deliver quarterly statements of account to WPMC and Caoweli Within thirty (30) days after the end of March, Jone, September and December rospeotiveiy. Together with each statement of account, WCM shall remit the Maine Royalty payments pursuant to the provisions of the Compensation Table and this Section 4 to WPMC. Within ?ve (5) days of receiving any such Maine Royalty payment, WPMC shall retain such amount of the Maine Royalty payment which exceeds the amount that represents twenty percent of Gross Sales of Products, and (ii) rctoit to Caoweil of the balance of such Maine Royalty payment. Each of the parties to this Agreement acknowledges and agrees that the Mains Royalty, and the apportionment of such Maine Royaity described herein, has been oegotiatcd in good faith, is consistent with norms of rcasonat?c compensation and fair market value, and has taken into account comparable pricing in similar markets, risk factors rotated to the partieotar industry, the uniqueness sod bread?r of the services, and other pertinent factors. Except as speci?cally provided for it} this Agreement, WPMC and Canwell hereby acknowiedge and agree that no compensation shat} be due ??om WCM to either of such parties in connection with the sale of the Products, and, not in. iimitatioo of the foregoing, WPMC and Caowell hereby acknowledge and agree that the Maine Royalty shall not apply to any item sates made. by WCM prior to the Effective Date regardiess of whether such items consisted of ??ower? or ?but?? products or byproducts. Cauwc? hereby con?rms that upon such payment of the Maine Royaity to WPMC as provided herein, an payment obligations of WCM with respect to the Maine Royalty shati have been satis?ed. In no event shall WCM have any whatsoever to Cooweli for any failure of WPMC to remit ail or any portion of the Maine Royalty to Canweit. WPMC and Cantrell each hereby agroe to indemnify and hold harmless WCM ?om and against any damages, losses and inciuoing without limitation, attorneys? fees and costs, incurred by WCM in connection with any failurc of WPMC to remit any portion of the Maine Royalty to Conwe? as contemplated herein. For the avoidance: of doubt, each of the parties to this Agreement acknowledges amt agrees that nothing herein shall modify in any respect the terms of the WPMC Master Services Agreement, (ii) Exhibit ?t to the WMC Master Services Agreement remains is: full force and effect, the compensation payabie by WCM in respect of the Limited Products, Limiteri Services, or Enhanced Services and Products is not and shalt not be based on, and shalt not be subject to, the compensation set forth on Exhibit A to tho WPMC Master Services Agreement. J?fgvg/ 64/0 of: 4&2 Term and Tem?natioo. This Agreement shall commence on the Effeceve Date, and shall continue in full force and effect for as initial term of 8 years, an automatically renewed and immediately succeeding second. term of 3 years, and an automatically renewed and immediaiely succeeding {bird term of ?7 years, subject to earlier termination as follows: by the mutual written consent of all parties; or (ii) materiel breach by WCM or Csnwell (the ?Charged Baily?) of a material term or condition of this Agreement provided that the Charged Party receive 60 days" prior written notice {the ?Tegm. instion Notice?) floss the party hereto alleging such material breach (the terminating Para?) clearly detailing and describing the concerns and nature of such material breech; presided, however, that such potential termz?nation shall not take effect if the Charged Party has cured such material breach prior to the end of the condo}; period following receipt of the Tennioation Notice or, if the material breach cannot. reasonably be cured by the Charged Party within said (SD-clay period, the Charged Party within said 69-day period has commenced and maintains rcasoosble and good faith actions to attempt to core or address such material breach. {in} Uses lemonade}: of this Agreement, the parties shall immediately return, delete or destroy (at each party?s direction), and cease osiog, all con?dential mformation and intellectual progeny disclosed or provided under this Agreement includiog without limitation Intellectual Psoperty ans Con?dential Information as de?ned in Section 5 provides hoWever, that either party may maintain a copy of any con?dential infonnetion or intellecmsl property disclosed to the extent reqz?re? to comely with applicable law or regulation, Not in limita?oo of the foregoing, upon termination of this Agreement: WCM and WPMC shall continue to be obligate? to make payments is the manner provided in Section 4.1 for all services actually perfonned by Csnwell up to the effective date of such termination, and shall continue to honor all fmancial obligations due under this Agreement from such party to Csnwell that may remain due and owing, and (ii) except in the event that this Agreement is terminated clue to Cenwell?s matezial breach, the other parties hereto shall forfeit to (Ewell effective as of the effective date of such textsination their respective isteres?s) or right(s) as described in Section 6.1. 5. ANB OTHER RIGHTS ANB WITH RESPECT TO PRODUCTS, SERVICES ARE INTELLECTUAL PROPERTY. 5.1 License. Canwell hereby grants to WCM, and to no other parties to this Agreement, a linseed, non-exclusive, non?transferable license to use Canwell?s processing and re?nement processes, methocloiogies, Con?dential Information as hereinafter de?ned in this Section 5, plans sod other intellectual property whether conveyed in emitters document, image, verbal or other form lo design, manufacozre, extract, process, re?ne, use, into other products, apply, sell, distribute, support, advertise and/or psomote the Limited Products, Limite? Services, and Enhanced. Services and Products (collectively, the ?Intellectual Property?). Not in limitation of the foregoing, Intellectual Property shall also be deemed to include this Agreement. WCM shall not purchase or license ?oor; a third party any of the products or services provided by Carmel], unless Csowell is unable or unwilling to supply WCM with products equivalent or similar to the one offered to be provided by such third party. In addition to the restrictions on Intellectual Property set forth above and elsewhere in gw 54% l? this Agreement, this limited license is provided subject to the terms sod provisioos of this Section 5, and the foiiowing restrictions and prohibitions on use of such Inteiiectoai Property; except in the performance of or obligations under this Agreement, each of WPMC, WCM and WCC shall not: copy, print, republish, dispiay, distribute, transmit, sell, root, lease, loan or otherwise make avaiiebie to any third oarty in any form or by any means 21% or any portion of the ioteiiectosl Property?, use the Intellectual Property to deveiop, or as a component of, any information, doemnent, system, process, simiiar resource {in any media now existing or hereafter developed); create compilations or derivative works of, or any modi?catioos of or improvements to, any Property; use any intellectusi Property in any manner that may infringe any copyright, Meliectuai properw right, proprietary right or property right of Centred or any third parodies); or remove, change or obscure any copyright notiee or other proprietary notice or terms of use contained in the Intellectual Property. 5.2 Gwnersirig. All Property that is received, generated, improved, re?ned, modi?ed, expanded, customized, reduced to practice or derived by Canwoii or the other parties hereto in connection with this Ageemeot, or that is provided to any of the parties hereto by Caoweil, inciuding without iimitatioo, this Agreement, or any other matters or properties as part of or in connection with the performance of Conweli?s services and/or obligations under this Agreement, shaii be, are and shall remain the sole property of Canwei], and no other party will have any rights to member, disclose, distribute or use such property other than as expressly set forth in this Agreement without the prior written consent of Cooweil; provided, however, that ootwidxstondiog anything herein to the contrary, the property which is expressly oontempiated under the WMC Master Services Agreement or the License Agreement and has been shared with or provided to WCM by WPMC outside of this Agreement and deiivery by Canweii shall not be deemed to be Inteiiecmei Property or Con?dentiai Information that is protected hereby or owned by Centred (it being understood that the intellectual property reiating to the Enhanced Services and Products is not exoressiy contemplated under the WPMC Master Services Agreement or the License Agreement), and (ii) each party shat} retain ail right, title and interest to all intellectual property owned by such party. During the term of this Agreement sad for a period of two years theres?er, the parties hereto and their respective successors or assigns shali not pursue contracts or operations similar to that which is contemplated herein Within Maine or other States within New England Without the prior written consent of Canweil. 5.3 Con?dential Information .. Definition. For purposes of this Agreement, ?Con?dential informstioo? shall mean ail coo?dentiai and/or proprietary information and motorists regarding the business or affairs of Caowe?it, or the manner in which Canweil?s services are carried out, or relating to pricing of Caoweii?s services, or misting to Sections 2 and ofthis Agreement, that is: disclosed or provided by Csoweii to or for the bene?t of the other parties hereto in writing, orally or otherwise; (ii) obtained by the other parties hereto from a third party or other source by vime of or relating to Ceoweii?s or the other parties? position under this Agreement; deveioped by Caoweii pursuant to this Agreement; or (iv) observed by the other parties hereto during the course of Cooweii?s performance of services pursuant to this Agreement. Not in limitation of the foregoing, it is expressly agreed that ?Con?dential Information? shad irreiude but is not iimited to any and all agreements between Ceoweli and any of the 66/0 parties berets, issleding udtheut limitation this Agreement, (ii) any and all agreements between any (if the patties hereto and any of Csnweii?s principais, officers, agents, representatives, members or partners, any and. all agreements between Canweli and the other paities? respective principsis, efiieers, agents, representatives, members or partners, (iv) any and ail agreements between Cesweli and third parties er sources by virtue of or relating to Cenweli?s position sixties this Agreement, the intellectual Prescriy, and (Vi) any and teehsieai data, trade secrets, knew~how, research, marketing, precinct plans, products, services, partners, vendors, suppliers, wbcoeiracters, markets, software, developments, inventions, precesses, fenni?ss, technelegy, methedelegies, techniques, pistes, pelicies and proee?ures, business strategies, operations and ether manuals, tiesigns, drawings, enginee?ng, hardware con-figuration marketing, projections, budget informatics, ?nances er other business infomatice disclosed by Canweli to any of the parties hereto, either directly or indirectly in suiting, orally, by drawings, observation or otherwise. 5.4 Cen??eetisl inferms?ee - Eseinsiens. Con?dential hibernation dees not include information that: was siready in the pessessien of the ether parties hereto before Canwell?s er its principals? or members? disclosure to such other parties and as see he established by seek other parties through clear and convincing e?desee; (ii) is independently develcped by any of the other parties berets Witheut teferesce tc Carmen?s Con?dential informatics except with respect te mess matters described in any licensing agreements between the parties, those matters described, in Sections 2 and sf this Agreement and/or pricing relating thereto; is, as ef the Effeetive Date, or subsequently beesmes, matter of eubiic knowledge generally other than by a breach of this Agreement by any ef the parties hereto; or (iv) is obtained by any of the parties heretc frets a third party under no obligation set to disclose the same. 5.5 Cen?tientisi Infernistisn Obliggsiens. Each of WPMC, WCM ens WCC agrees to maintain all Con?dential informatics tiiat it receives in safekeeping and in con?desce; not disclose sueh Con?deetiai Infomtsties 1:0 any third parties; (6) seat at: Con?dential Informatics with the same degree of care with which it treats and protects its own cen?dentiai infeimstien that it dees not wish to disciese is third parties and, in any event, with not less than reasonabie care; and limit access to the Cen??entiai infermation to only those directors, of?cers, empleyees, other personnel, advisers and representatives (celiectiveiy, ?Represestatives?) whe have a need is know such for the puzpcse for which such Con?dential information was provided or disclesed {it being understood. that such Representatives shall be informed by WMC, WCM or WCC, as applicable, of the con?dential namre of such in?ammation and shall be directed to, and agree to, treat such infemaiien cen?dentiaiiy and to comply with the requirements cfthis Section In the event that any ef WPMC, WCM or WCC, or its Representatives, or anyone else is when: it has supplied the Con?dential infermstiee or any of the facts or information referee to therein er herein are requested or required (by oral questions, intermgateries, requests for infemmtioe er derailment subpoena, chitii investigative demand, law, regulation, any fennel or isi?emai investigatiee by any government or governmental agency, authority or etherwise) to disciese any Con?dential Informatics or any ef the facts er summation referred to therein er herein, (in) any isfosnatiee relating is any 01? the parties? business mangemest with Canweil (cs ?V/ig em soy of Ceewell?s principals, of?cers, agents, representatives, members or partners), or such peison?s opinion, judgment, View or reeommencietioo concemmg Ceowell as developed from the Con?dential Information, each of WFMC, WCM and WCC agees to (letemtine whether such requests are duly authorize? and proper, (if) enmedietely notify Canwell of the existence, terms arid circumstances surrounding such a request, consult with Canwell on the advisability of taking legally available steps to resistor emote such request, including without limitation determining to seek judicial review of such governmental requests or orders before complying, amt (iv) if disclosure of soot} infometion is reqeircd, ?m?sh only that portien of the Con?dential Information, which, in the opitlloo of Canwell?s counsel and such other parties" respective cotmsel, such other part?ies) is legally compelled to disclose and to cooperate with any action by Caowell to obtain an appropriate protective order or other reliable assurance that con?dential treatment will be accorded the Con?dential Information. 6. ECONGMIC IN MAINE AND QTHER MARKETS: mom CHANGES. Economic Psrtieigatiee in Maine sod (litter Mykets. In coosidctetioo of and ongoing and good faith efforts and obligations under this Agreement, including without limitation WCC providing an exclusive license to Cen?well with respect to all of intelleemal propel-g7 in connection with edible and topical recipes, and breeding and packaging matters, WCC shell own, and shall issue to WCC, a 4% economic interest, anti WPMC shall own, and Canwell shall issue to WMC, 3% economic interest (or sueh other interest or right agreezl to in waiting Canwell and WMC), in the Seawall entity providing the services anti products in Maine pursuant to and as contemplated in this Agreement, and (ii) to the extent Canwell enters into other alternative dosage form and processing contracts in States other than Maine similar to that which is centemplated herein, either directly or through another entity, then WCC shall also own, and Ceowell shall also issue to WCC, e. 4% interest, and WPMC shall also own, and Canwell shall also issue to WPMC, a 3% economic interest (or such other interest or right agreed to in writing lac-tween Canwell and in whatever economic interest exists for Caewell in such controct(s). 6.2 Future Changes. All of the parties hereto hereby covenant and agree that this Agzeemcnt, as it relates to the Limited Products, the Limited Services, and the Enhanced Services and Products, but in all cases subject to the teams of the WPMC Master Services Agreement, shall apply to any and all existing, renewed, additional or ?lters licenses and operations that WCM, WPMC, WCC or any of their respective af?liates or successors or assigns secure with respect to the State of Maine, Whether such licenses relate to adult or medical use, fooprofit or eat?forvpro?t entities, or etherwise, subject is all eases to such, additional clocmnentatioo as my be reasonably necessary in comedies-1 therewith, In the event that existing, reoewecl, additional or ?tters: licenses relating to WCM, WPMC, WCC or any of their respective affiliates or successors or assigns evolve or change due to changes in mutant law or otherwise, then this Agreement shall continue with and apply to all such resulting licenses, operations, anti licensed entities with respect to the State of Meme. 7. MINING AND ASSISTANCE FOR WCM Xv]? MFW Canweli shall bring in professionals as necessary for WCM staff ts be properly trained. Until {he esriier 01? December 31, 2016 or span WCM staff being fully trained (as reasanabiy determined by WCM), Canwe? shall ?edicate to WCM a professional for up to ten (16} days evsry three (3) months as the licensed premises to create at least three (3) monms? worth of extract inventory to the extent such raw or fesd material} is avaiiabie WCM. s. MAWTENANCE ANB REPAIR. Canwell shali preside ongoing maistenancs of cquipmc?t ans any ether in?astructurc and systems provi?ed by Canwe? to WCM, including any sf critica'i spare parts such as pumgs, vessels, chiilers and the like, at most favored fees and prices. Canweii will also have a speciaiist available ts WCM to perferm maintenance and repairs, and to be om sail, during the: hears of the ?rst?year production runs through December 31, 2016 being physica?y overseen by Canwe?. Canwell acknowledgcs that techmlogy changes rapidly and that such will he made ava?able t0 WCM to the extent such are freely develepsd or by CEEWEH, does net creme an umeasonabie cost ?mden, and can be previ?ed in a costre??ective manner. 9. 9.1 Befmi?sns. For purposes if this Agreement, ?Bguigment? sha? mean any and all pmvided by or an beha?f {if Canweil for the bene?t of and-?the Maine 9.2 Gram sf Right is Uss the Equipmsm. Subject to the imms and con?i?ens sf this Agreemmt as wall as any other 162.33, agreement or contrast which Caswe? reasonabiy requires WCM to sweats with respect to the Equipment, but which in no event wouid require payment of any additio?al rent at fees for such Equipment, Canwe? hereby grants to WCM the right ts utilize the Equipment at the Maine Facilities ??aring the tem ofthis Agreement for described in this Agreement, purposes anci?ary thereto, and for isms} central purposes as determined by WCM. 9.3 Tithe to Essinment. Unless and until WCM purchases the Equipment ?sm Carmel} under terms and conditions acceptable to title is 12hr. Equipment sha? at times remain in Canwe?, and such equipment shali not be subjected ta any liens, security interests, cucumbmices or the like from any perssn{s) other than Canwe?. 9.4 Limited Renrasentstims and Warm??e?s. WCM and the other pariies hereto and agree that Carmen is making :10 representations or warranties, express or implied, as to design, capasity, workmanship 01' perfonnance of the qu?pment, which is being pro?de? to WCM on an IS, WHERE basis, sxcept as foilcws: Canweil warrants that is its knowledge such Equipment is ?t for its intended pmpose and is of merchantable quality, and (ii) is ?ee: from defects in materials, workmanship and design. )9 w? 99? i FGRCE MAJEERE. anything to the contrary contained herein, the faiicre by any of the parties hereto to perform any of the teens and sci-edi?ces of this Agreement resulting frem force majecre shall not be considered a breach cf this Agreement. 1 i. REMEBEES. The rights; and cbligaticcs set faith impcsed by this Agreement are cf a unique and speciei name. Breach cf any of such obiigeticns weuid iejcre the parties to this Agreement; such injury is likely to be dif?cult to measure; and monetary ?emagec, even if ascertainehie, are Iikciy to be inadequate compensation for such injury. Therefore, the parties to this Agreement acknowledge and agree that protection of the respective interests in this Agreement would require equitable relief, including without limitation speci?c performance and preiiminary and permanent injunctive relief, in additicn to any other remedy er remedies that the parties may have at iaw or under this Agmement, inciuding Without limitation. enticement it} special and consequential damages, lest profits, reimbursement by the breaching party cf parties cf the iegei fees and expenses ofthe injured party er parties in such suit. i2. Except as provided in this Agreement, all notices prc?ded cede: this Agreement: shaii be in waiting, referencing this Agreement; (ii) shaii be sent via maii (deiivery ccn?rmaticc requested), certified US meii {retum receipt requested), courier or facsimile, tc such address as is designated by a party in writing to the ether parties hereto; and shail be deemed is have been given ?ve calendar days from the date cf postmark if sent via certified US mail, or on the ciate cf de?very ccn?rmatien if sent Via email, courier or facsimile. i3. MESCELLANEGUS. 13.1 Aseigcmeat. This Agreemem sheii be binding apart, and shall inure to the bene?t cf, the parties hereto and their respective successors and assigns, inciudicg without Iin?taticn any new companies, licenses arid/ct licensed cpereticns as described in Section 6.2. Canweii may assign this Agreement without the prior written ccnsent of any of the parties hetetc; provided, hcwever, anti notwithstanding the foregcing, such assignment must receive the prior written cement cf WCM and which consent shall not be unreasonably withheid. 13.2 Ne 50th Venture; Indecemient This Agreement shaii not create, give effect to or ctherwise imply a teeming, partnership, joint venture, ieader? fciicwcr at other joint employment arrangement or other femai business relationship between the parties hereto, and Cacweli shall act be deemed an agent, voiunteer or einpicyee of any cf the parties hereto. Further, ncthieg herein shaii be ccnetrueci as providing for the cha?ng cf prc?ts or lessee arising out of the efforts of any cf the parties, Canweii sheii not be liable to any of the other parties for any of the costs, expenses, risks er arising out (if or ether partics? efforts activities in connection with this Agreement or any iicense or permits issueti by Maine. Canweii assumes sole and mu for withholding any and all taxes connection with fees earned by Cacweii under this Agreement. Canweli will have as authority to enter into contracts that bind WCM {3r WPMC or create obligations on the part of WCM 01" WPMC M?hsut the prior mittsn authorizatian of such party. WCM and the ether parties harem will have 110 authority ts enter lute contracts that bind or create {)bligations on the par: of Canwell without the prior written authorization of Csnwell. {3.3 Na Rights Granted. Unless expressly stated herein, nothing in this Agreement shall be constmed as any license or sther rights to (31* under my gos?will, trademark, patent, formulae er other intellectual property right of one party to the other party, net shall this Agreement grant any ?ghts in or to one paIty?s intellectual property is ansther party, except the limited licenses set {'lo in Saction 5. 13.4 Assessments. Any term 0f this Agreement may be: amended, modifisd. or waived Emly with the written senses: cf the parties. This Agreement, including any exhibits or appendices here?s}, constitutes the sols of the parties and supersedes all oral negatiatinns and prior writings with respect is ?st: subjest matter hereof. 13.5 Waiver. The failure of any party in enforce at asy time any of the previsions 0r terms of this Agreemem, or any rights in respect thereof, or the exercise of or failure is exercise by any party as}; rights at any sf its electiass herein previded, shall in :10 way be censidered to be a waiver of such provisisns, terms, rights or Elections 02? is any way t9 affect the validity of this Agreemcni or such party?s sight to exercise such provisisns, isms, rights or elections at any other time. ?16 Severabiligg. if any provisisn of this Agreemsnt Or the: applicatisn thereof to any person as entity or circumstance shall, t0 any extent, be hel? illegal, invalid unenforceable by a mutt 0f campetsm jurisdictien, than the remainder of this Agreement or the application of such provision is or entities sr circumstances other than those as is which it is illegal, invalid smile:- unenforceable, as the case may he, shall not be affected, sash provisisn sf this Agreement shall be legal, vali? and mforceablc to the pmmittcd by law, and the affending provision at application thereef shall he modi?ed. 03: stricken solely to the extent necessary to malts it legal, valid and/0r enforceable. The illegality, invalidity smaller unenforceah?ity of any prevision of this is any jurisziiction shall set affect the legality, validity and/or enfsresability thereof in any other jurisdiciian that is net affected by the court?s dsslaration. 13.? Gavern?ng Law and Vengg. This Agreement and the sf all obligatisns hereunder shall be govsmed by and construed in accordance: with the laws of Maia: Mikes: reference to its cosflict sf laws principles. Bach sf the parties hereby submits to the excl?sivs jurisdiction of ?le smarts 3f Mains, with respect to any dispute between the parties pertaining ?0 this Agreemest. 13.8 Atmmegs? Fees. if a party brings any type if actisn or praceeding to Enforce the farms hares? or declare any rights hersunder, the substantially prevailing party in any action, pressedng 0: appeal mamas shall be entitled to reasonable attomeys? fees and casts. Such ?363 and costs may be awarded in the same procss?ing or in a separate: proceeding. The term ?sabstantially grevsiling Qargf? shall be a party who substantially obtaizis 0r defeats the rciief sought, as the case may be, whether By compromise, awaz?, judgment or abandenment by the ather party of im claim 0r defense. 13.9 Survival. In order that the parties hereto may fully exercise their rights 312d perform their obligations hereunder arising un?cr this Agreement, any wavisions ?f this Agreement that are required :0 insure such exercise: or performance sha? survive the termination of this Agreement. Not in limitatien of the foregoing, the fo?owing sections 333312. smive termination 31* cancellation (for any reason whatsoever) of this Agreemerxt: 452(1)), 5.2, 5.5, 9, 12 and B. 13.10 Entemreta?m- This Agreament is the product of negatiatian betwean the parties and shall net he intezpretcd far or against ei?aer party whethar or mt such party is the dra?er. 13.1: Headings. AH headings ara far reference purposes 011131 and shall not be considered in the construing of this Agreement. ?3.12 Conniemarts. This Agreement may he: execuied in one (I) or more saunterparts, and by way of scanned amail or facsimile transfer, each of which shall be deemed as: odginai but all ofwhich togather shall canstitute 011a and the same instrument. (The remaiader 0f this page is intentiena?y Iafg 131 2133;; signature page immediateiy fallows) EN WHEREOF the Parties by their duiy authorized signatums below have executed and delivered this Agreement as of the Effective Date. Nertheast Patients Gravy, Inc. By Name: 9% g; ,3ch Title: Canwe?g 1714;: Name: M, @3314 Title: 4w?imu 364? Wm The Weilness E?aiz: Management Cmnec?on, LLC By: Name: FileTitle: 53y; arm Wellness Cmnec?su Gimmi?ngg LLC By: )3 [Jog/0% Name: Mam? CU?v?x-ca Title; 616339 ?ag; 16- H. EXHIBIT A: PRDCESSWG SYSTEM WITH CLEANRGOM ATTRIBUTES ISO 8, Class 160,080 clean room with 15?29 air changes per hour in the area. A preperly pressurized clean mere (preseerize? te WE.) so as to better prevent pestilence and outside debris from entering the process. A mere ?laminar? ?ew ef clean, eenditieneci air within the applicabie space it: wash the produe?en area with eiean air anti better preveni debris from entering the process. Proper placement of low well remixes aimed at seeming any particuiete that may eater though personnel or process, and previding anather layer of protection fer the product. Ciean conditioned air to previ?e comfert for personnel within the space 36 as It} minimize particulate and bio burden sweet, skin squame) that can: be abserbed by the product. The supply of air meugh Filters 0: Fan Pewered HEPA units and the recircuiation of eenditionezi air (including mixing the realm air with fresh eutside air), to better remove existing imem'ities (eii, duct, etc.) from the space thereby creating a cleaner environment. A clean ream environment :0 previde less Waste during processing as a clean (and easy to clean) space will enhance the chance for epiiled preduct(e) to be contained and recycled fer use. CmbonfMERV ?fters to be used as necessary to better remeve processing odere. Waiie to be modular clean mom wall panels creating a smooth, progressive and easy to clean surface that State agencies will favor. Such materials are FDchompiiaet, have been tested against some cf the harshest cleaning cempeunde found in the Pharma industzy, can easiiy be cleaned, and can better prevent the grewth and spread of?mel?. A properly designed air deiivery system is better assist with centrei?ng meld. A clean room ceiling system with vinyl faced tiles, {egether with gaskets and sealed light ?xmres, to better prevent any er pestilence ?em ente?ng the space. The ceiling ?les will be eemprised of vinyi faced gypsum with sealed edges (or simiiar features) to be easily ?swi?'ered? for cleaning. EXHIBET B: ROEGE ARCEITECTURAL DESIGN may)?: .1 _o 32151353113015 .3 1?5 4 1' musswi'mrm?E n- .. ?an; .- 1.. aimusr .i A5095 {Ad-Lahnf??ai' . - 1.7.593:: n; 4 1 1? I 71,29- 3 atmmw__ rammra USE w? Lawms ?was mu m: 1 .- swam Ink-mass Wigwam ?9 wuwm? 4 $3335 . SPLAEH SAW F?lm? i 55mm 5 39 84 1. mm w: Imsaksa KITCHENA man Rd: 1321 ??aw-1w. NEW1315.3!) FREEZE ,a?xms ?01.3.1113 Roam; 34:22:; _s1~m . saw mam; mm 3 imam-9 EHELF Mimi? . came . . Haw ?uvm. . Vania": zmm?w .m i. 6:131. F. ?msesze .2 . . SHELF 62 .1 .n 1:2? A ?re-mag- n" ma 1" {lib-HIM 1? W'acmrb in}; ?ma: Ema?: i 5 .1 3:11-. .- ;02?3 1: nit 5? 1-4-19" ~13. :5 5-44-15? 1. 21a -.- ?.14 11-). {1?77 131. a- . ~31? - (ffm v.11: 6M2 1.. EXEEBET C: REWMENT PLAN. PRUCESSING EWCTIGN 1. 3.. OVERVIEW. ?Physical Attributes. ?Experiz?se_ -Pracessing Methadoiogy. nExzfracz?ion Methodolog. SPECIFIC FEATURES AND CHARXCTERXSTICS. ~Processz'ng and Extracz?z?on Facility. ?Quality Comm)! Tesiizzg Facility nHeaf?z and Consumer Protection. ~Researcfz and Developmerzt. 4:00:22 Fams and Branding. ?Safety a?d Securily. Pragmms and Procedures. BESIGN AND CLEAN ROOM ?Facih?ty Design arid Maie?afs/Equgpment {and Diagrams). nCIean Roam gimme: and Maferiaiy/Eguipmem {and Diagrams). PREPARATION, PROCESS, FRODUCTS PACKAGING. Processing Sckematfc. ?Preparazian - Clippirzgs and Pam?cfe Sizing -Process Steps and Equ?vmenz, a. 816;; I - Extractimz Pracess and Equipment. 3). Step II Pastugxtracrz'ozz Process and Eguipment. 5. Step HI Firza! Form, Tes?ng and Stamge, and Equipmem ~Praducts Production and Types, a. Akarmz'ive Dasage Farm Production Process. 117. Alternative Dosage arm Products, ~Packagfng and La?eiz?rig. ~Maizzrmance and Refaz?ed Eqmpmem. 56/0