Document:

hemp_ex102.htm

EXHIBIT 10.2
  
 PATENT LICENSE AGREEMENT
  
 This Patent License Agreement (“Agreement”) is entered into on April 1, 2021 (“Effective Date”), by and between Old Belt Extracts, LLC d/b/a Open Book Extracts, a Delaware limited liability company (“OBX”) and Hempacco, Inc., a Nevada C corporation (“Hempacco”) (“LICENSEE”). OBX and Hempacco are each individually a “Party” and collectively the “Parties” to this Agreement.
  
 BACKGROUND
  
 WHEREAS, OBX specializes in the manufacturing and formulation of non-THC cannabinoids and terpenes, and OBX owns certain PATENT RIGHTS (defined herein) for the spraying of cannabinoids and terpenes on smokable botanicals (covered by U.S. Patent 9532593B2, title: “Herbal Smoking Blend”), trademarked and referred to herein as FlorSureTM;
  
 WHEREAS, OBX has the right to grant licenses under PATENT RIGHTS, and OBX desires to have the PATENT RIGHTS developed and commercialized and is willing to grant a license for this purpose;
  
 WHEREAS, LICENSEE is a leading manufacturer of hemp cigarettes and owner and wholesaler of branded hemp cigarettes;
  
 WHEREAS, LICENSEE desires to obtain a license from OBX wherein LICENSEE will commit itself to a thorough, vigorous, and diligent program of commercializing the PATENT RIGHTS, and OBX desires to license to LICENSEE an exclusive license to use FlorSureTM to make flavored and scented hemp cigarettes under the PATENT RIGHTS upon the terms and conditions set forth below.
  
 The parties therefore agree as follows:
  
 ARTICLE 1 – DEFINITIONS
  
 For purposes of this Agreement, the following words and phrases have the following meanings:
  
 1.1 “CONFIDENTIAL INFORMATION” means confidential or proprietary information relating to the PATENT RIGHTS, LICENSED PRODUCTS or LICENSED PROCESSES. CONFIDENTIAL INFORMATION may be in written, graphic, oral or physical form and may include scientific knowledge, know-how, processes, inventions, techniques, formulae, products, business operations, customer requirements, designs, sketches, photographs, drawings, specifications, reports, studies, findings, data, plans or other records, biological materials, and/or software. CONFIDENTIAL INFORMATION shall not include:
  
 	  
	  
	 (a)
	information which is, or later becomes, generally available to the public through no fault of the recipient;
	  
	  
	  
	  

	  
	  
	 (b)
	information which is provided to the recipient by an independent third party having no obligation to keep the information secret;
	  
	  
	  
	  

	  
	  
	 (c)
	information which the recipient can establish was previously known to it or was independently developed by it without reference to the CONFIDENTIAL INFORMATION;
	  
	  
	  
	  

	  
	  
	 (d)
	information that is required to be disclosed to comply with applicable law or court order, provided that the recipient gives prior written notice of the required disclosure to the discloser.

  
 	 
	
	

	 

  
 1.2 “FIELD OF USE” shall cover use of FlorSureTM to make flavored and scented hemp cigarettes and LICENSEE’s license under this Agreement shall cover the machine application of terpenes to hemp cigarettes. OBX will extend LICENSEE a ROFR (right of first refusal) on additional fields of use, whether that be form factors (e.g., flower, hand rolls, cones), application methods (e.g., spraying by hand), or materials applied (e.g., cannabinoids).
  
 1.3 “LICENSED PROCESS” means any process that is covered in whole or in part by an issued, unexpired claim contained in the PATENT RIGHTS.
  
 1.4 “LICENSED PRODUCT” means any product or product part which:
  
 	  
	 (a)
	is covered in whole or in part by an issued, unexpired claim contained in the PATENT RIGHTS in the country in which any such product or product part is made, used or sold; or
	  
	  
	  

	  
	 (b)
	is manufactured by using a process or is employed to practice a process which is covered in whole or in part by an issued, unexpired claim contained in the PATENT RIGHTS in the country in which any LICENSED PROCESS is used or in which such product or product part is used or sold.

  
 1.5 “LICENSEE” means Hempacco.
  
 1.6 “NET SALES” means the gross amount of all sales or leases of LICENSED PRODUCTS and PROCESSES by LICENSEE, Affiliates, or to any customer less:
  
 	  
	 (a)
	discounts allowed in amounts customary in the trade;
	  
	  
	  

	  
	 (b)
	sales, tariff duties and/or use taxes directly imposed and with reference to particular sales;
	  
	  
	  

	  
	 (c)
	freight and insurance, if separately itemized on the invoice and paid by the customer; and
	  
	  
	  

	  
	 (d)
	amounts allowed or credited on returns.

  
 No deductions shall be made for cost of collections or for commissions paid to individuals whether they are with independent sales agencies or regularly employed by LICENSEE and on its payroll. LICENSED PRODUCTS are “sold” when billed out or invoiced.
  
 1.7 “PATENT RIGHTS” includes the following OBX intellectual property:
  
 U.S. Patent 9532593B2 (title: “Herbal Smoking Blend”).
  
 	 
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 1.8 “TERRITORY” means North America (USA, Canada, Mexico).
  
 ARTICLE 2 – GRANT
  
 2.1 OBX grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions of this Agreement, an exclusive license in the FIELD OF USE and in the TERRITORY under PATENT RIGHTS and, to the extent not prohibited by other patents, to make, have made, use, lease, and sell LICENSED PRODUCTS and to practice the LICENSED PROCESSES.
  
 2.2 Duration: LICENSEE’s exclusive license rights under this Agreement shall last for three (3) years, as long as LICENSEE meets its Minimum Royalty payments (described herein). The Parties also agree that the exclusive license to LICENSEE shall be renewable upon the mutual agreement of the Parties.
  
 2.3 LICENSEE shall not have any rights to grant a sublicense under this Agreement, without the express prior written permission of OBX.
  
 2.4 This Agreement is effective when signed by all parties and shall extend until expiration of the last to expire of the licensed PATENT RIGHTS, unless sooner terminated as provided in Article 9.
  
 2.5 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United States shall be manufactured substantially in the United States.
  
 ARTICLE 3 – LICENSE FEES and ROYALTIES
  
 3.1 LICENSEE shall pay the following fees and royalties to OBX until the term of the PATENT RIGHTS expires or until this Agreement is terminated:
  
 	  
	  
	 (a)
	Upfront Fee: LICENSEE shall issue OBX $120,000 of equity at the anticipated RTO listing valuation, with a refresh if the RTO prices below target. Such upfront issue fee shall be due upon the effective date of this Agreement.
	  
	  
	  
	  

	  
	  
	 (b)
	Royalty: At the end of each quarter, LICENSEE shall pay OBX the greater of (a) the Minimum Royalty (defined below) or (b) $0.01/stick for each hemp cigarette leveraging FlorSureTM. The “Minimum Royalty” is an annual minimum royalty obligation that shall be applied quarterly, as listed below, where the start date for this schedule is the Effective Date:

 	  
	  
	  
	  
	Year 1: No Minimum
	  
	  
	  
	  
	Year 2: $90,000 (four installments of $22,500) Year 3: $120,000 (four installments of $30,000)

  
 	 
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 3.2 LICENSEE shall be responsible for the payment of all taxes, duties, levies, and other charges, including, but not limited to, sales, use, gross receipts, excise, VAT, and any other taxes, any withholdings or deductions, import and custom taxes, any duties, or any other charges imposed by any taxing authority with respect to the royalties payable to OBX under this agreement. Should LICENSEE be required under any law or regulation of any government entity or authority,
  
 domestic or foreign, to withhold or deduct any portion of the payments on royalties due to OBX, then the sum payable to OBX shall be increased by the amount necessary to yield to OBX an amount equal to the sum it would have received had no withholdings or deductions been made. OBX and LICENSEE agree to cooperate in the event there is any question about a specific amount that is due.
  
 3.3 Royalty payments shall be paid in United States dollars in a manner and at a place as OBX may reasonably designate. If any currency conversion is required in connection with the payment of royalties, such conversion shall be made using the currency exchange rate that is applicable and current at the time the payment is due.
  
 3.4 Royalty payments shall be made on a quarterly basis with submission of the reports required by Article 5. Such payments and reports shall be due within fourteen (14) days of March 31, June 30, September 30, and December 31 of each calendar year. Late payments shall be subject to a charge of one and one-half percent (1.5%) per month or $100, whichever is greater. The payment of such late charge shall not foreclose OBX from exercising any other rights resulting from any late payment.
  
 ARTICLE 4 – DUE DILIGENCE
  
 4.1 LICENSEE shall use its best efforts to bring one or more LICENSED PRODUCTS or LICENSED PROCESSES to market through a thorough, vigorous and diligent program for exploiting the PATENT RIGHTS and to continue active, diligent marketing efforts for one or more LICENSED PRODUCTS or LICENSED PROCESSES throughout the life of this Agreement.
  
 4.2 LICENSEE agrees to the following terms with regard to commercialization milestones for the LICENSED PRODUCTS and LICENSED PROCESSES (together the “MILESTONES”):
  
 (i) Operational Milestone: If the standard operating procedure (SOPs) for spraying smokable flower with terpenes have not been established and entered into commercial production by LICENSEE within four (4) months of the Effective Date, OBX has the option effective on thirty (30) days’ notice to LICENSEE to terminate exclusivity and forfeit its equity in Hempacco issued pursuant to this Agreement.
  
 4.3 The MILESTONES in Paragraph 4.2 will be achieved on or before the deadline dates indicated and OBX shall determine in its reasonable discretion whether a MILESTONE has been reached.
  
 ARTICLE 5 – REPORTS AND RECORDS
  
 5.1 LICENSEE shall keep full, true and accurate books of account containing all particulars necessary to show the amounts payable to OBX. The books of account shall be kept at LICENSEE’s principal place of business or the principal place of business of the appropriate division of LICENSEE to which this Agreement relates. The books and supporting data shall be open at all reasonable times for five (5) years following the end of the calendar year to which they pertain, for inspection by OBX or its agents to verify LICENSEE’s royalty statement or compliance in other respects with this Agreement. Should such inspection lead to the discovery of discrepancy in reporting which is greater than three percent (3%) to OBX’s detriment, LICENSEE agrees to pay the full cost of such inspection.
  
 	 
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 5.2 LICENSEE shall provide to OBX a written annual report on or before September 1 of each calendar year. The annual report shall include a report of progress on marketing and sales of LICENSED PRODUCT during the preceding twelve (12) months and plans for the coming year.
  
 5.3 After the first commercial sale of a LICENSED PRODUCT or LICENSED PROCESS, LICENSEE shall provide quarterly reports to OBX. The quarterly reports shall be delivered within fourteen (14) days after March 31, June 30, September 30, and December 31 of each year. The quarterly reports shall give particulars of the business conducted by LICENSEE during the preceding quarter that are pertinent to a royalty accounting, including:
  
 	  
	 (a)
	number of LICENSED PRODUCTS manufactured and sold by LICENSEE;
	  
	  
	  

	  
	 (b)
	total billings for LICENSED PRODUCTS sold by LICENSEE;
	  
	  
	  

	  
	 (c)
	accounting for all LICENSED PROCESSES used or sold by LICENSEE:
	  
	  
	  

	  
	 (d)
	deductions applicable to NET SALES as provided in Paragraph 1.6; and
	  
	  
	  

	  
	 (e)
	total royalties due.

  
 5.4 On or before ninety (90) days following the close of LICENSEE’s fiscal year, LICENSEE shall provide OBX with LICENSEE’s certified financial statements for the preceding fiscal year including, at a minimum, a Balance Sheet and an Operating Statement.
  
 ARTICLE 6 – INFRINGEMENT
  
 6.1 OBX agrees to notify LICENSEE promptly of any potential infringement of the PATENT RIGHTS by any third party of which OBX becomes aware, and vice versa.
  
 6.2 OBX shall make and control all decisions about whether to proceed with any infringement action against any third party. Notwithstanding the forgoing, with OBX’s prior approval, which shall not be unreasonably withheld, LICENSEE may proceed with an infringement action against a third party within the FIELD OF USE and TERRITORY at its own expense.
  
 ARTICLE 7 – PRODUCT LIABILITY
  
 7.1 LICENSEE shall at all times during the term of this Agreement and thereafter, indemnify, defend and hold OBX, its trustees, directors, officers, employees and affiliates, (collectively, the “Indemnitees”) harmless against all claims, proceedings, demands and liabilities of any kind whatsoever, including legal expenses and reasonable attorneys’ fees, arising out of the death of or injury to any person or persons or out of any damage to property, or resulting from the production, manufacture, sale, use, lease, consumption or advertisement of the LICENSED PRODUCT(s) and/or LICENSED PROCESS(es) or arising from any obligation of LICENSEE under this Agreement, except claims that the PATENT RIGHTS infringe third party intellectual property.
  
 	 
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 7.2 LICENSEE agrees to the following obligations:
  
 	  
	 (a)
	LICENSEE shall, at all times after the effective date of this Agreement and prior to the occurrence of an event described in Subparagraph 7.2.b, maintain commercial general liability insurance in amounts adequate to assure its obligations to OBX under Section 7.1 of this Agreement.
	  
	  
	  

	  
	 (b)
	Beginning at the time any product, or process relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or by agent of LICENSEE, LICENSEE shall, at its own expense, procure and maintain commercial general liability insurance in amounts of not less than one million dollars ($1,000,000.00) per incident and two million dollars ($2,000,000.00) annual aggregate and naming Indemnitees as additional insureds. The general commercial liability insurance required under this paragraph shall provide (i) product liability coverage and (ii) broad form contractual coverage for LICENSEE’s indemnification under this Agreement.
	  
	  
	  

	  
	 (c)
	LICENSEE shall provide OBX with written evidence of such insurance upon request of OBX. LICENSEE shall provide OBX with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change of such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, OBX shall have the right to terminate this Agreement effective at the at the end of such fifteen (15) day period without notice or any additional waiting periods.
	  
	  
	  

	  
	 (d)
	LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during (i) the period that any product, process, or service relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or agent of LICENSEE and (ii) a reasonable period after the period referred to in Paragraph 7.2.d.i above which in no event shall be less than fifteen (15) years.

  
 7.3 Except as otherwise expressly set forth in this agreement, OBX, its Directors, Officers, employees, and affiliates make no representations and extend no warranties of any kind, either express or implied, including but not limited to warranties of merchantability, fitness for a particular purpose, and the absence of latent or other defects, whether or not discoverable.
  
 ARTICLE 8 – CONFIDENTIALITY
  
 8.1 During the course of this Agreement, OBX and LICENSEE may provide each other with CONFIDENTIAL INFORMATION. All CONFIDENTIAL INFORMATION shall be designated in writing as such by the discloser. OBX and LICENSEE each intend to maintain the confidential status of their CONFIDENTIAL INFORMATION. Each shall exercise reasonable care to protect the CONFIDENTIAL INFORMATION from disclosure to third parties; no such disclosure shall be made without the other’s written permission. Upon termination or expiration of this Agreement, OBX and/or LICENSEE shall comply with the other’s written request to discontinue using and/or return all CONFIDENTIAL INFORMATION. This Confidentiality provision shall continue for a period of three (3) years following the termination or expiration of this Agreement.
  
 	 
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 ARTICLE 9 – TERMINATION
  
 9.1 If LICENSEE becomes bankrupt or insolvent, or files a petition in bankruptcy court, or if the business of LICENSEE is placed in the hands of a receiver, assignee or trustee for the benefit of creditors, whether by the voluntary act of LICENSEE or otherwise, the exclusive license granted under Article 2 herein will automatically convert to a nonexclusive license that may not be assumed or assigned without the consent of OBX.
  
 9.2 If LICENSEE fails to make any payment due to OBX, OBX has the right to terminate this Agreement effective on thirty (30) days’ written notice, unless LICENSEE makes all such payments within the thirty (30) day period. If LICENSEE has not made all such payments to OBX by the time the thirty (30) day period expires, this Agreement shall automatically terminate.
  
 9.3 If LICENSEE defaults on its obligations under Paragraph 7.2, OBX shall have the right to terminate this Agreement without further notice as provided under Subparagraph 7.2(c).
  
 9.4 Upon any material breach or default of this Agreement by LICENSEE, OBX has the right to terminate this Agreement effective on ninety (90) days’ written notice to LICENSEE. Such termination shall become automatically effective upon expiration of the ninety (90) day period unless LICENSEE cures the material breach or default before the period expires.
  
 9.5 LICENSEE has the right to terminate this Agreement effective on ninety (90) days’ written notice to OBX if the PATENT RIGHTS are rendered invalid or unenforceable and OBX is unable to cure the PATENT RIGHTS before the period expires.
  
 9.6 Termination of this Agreement shall not release OBX and LICENSEE from any obligation that matured prior to the effective date of such termination. Articles 1, 7, 8, 9 and 12 shall survive termination. LICENSEE may, however, after the effective date of such termination, complete and sell LICENSED PRODUCTS in the process of manufacture and sell all LICENSED PRODUCTS already in existence at the time of termination, if LICENSEE pays OBX as required by Article 3 and submits the reports required by Article 5 of this Agreement.
  
 	 
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 ARTICLE 10 - PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS
  
 10.1 Any payment, notice or other communication required by this Agreement shall be sufficiently made or given on the date of mailing if sent by recognized express carrier or certified first class mail, postage prepaid, addressed to OBX or LICENSEE at its address below or as it designates by written notice to the other.
  
 For OBX:
  
 Oscar Hackett
 President, Open Book Extracts 9367 Smith Rd
 Waite Hill, OH 44094
  
 For LICENSEE:
  
 ARTICLE 11 – REPRESENTATIONS AND WARRANTIES
  
 11.1 LICENSEE represents and warrants that it has the full corporate power and authority to enter into this Agreement, that this Agreement constitutes the binding legal obligation of LICENSEE, and that the execution and performance of this Agreement by LICENSEE will not violate or conflict with any other agreement to which LICENSEE is a party or by which it is bound or with any law, rule or regulation applicable to LICENSEE. LICENSEE shall not seek to file for any intellectual property rights with any US or foreign government agency with respect to LICENSED PRODUCTS and PROCESSES.
  
 ARTICLE 12 – MISCELLANEOUS PROVISIONS
  
 12.1 This Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the State of Nevada, United States of America, without regard to conflicts of law, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent was granted.
  
 12.2 Each Party shall comply in all respects with the U.S. Foreign Corrupt Practices Act (the “FCPA”). Further, each Party shall provide anticorruption training (which shall include FCPA training) to each of its employees engaged in the business contemplated by this Agreement. If a Party engages any third party in relations to the business contemplated by this Agreement, such Party shall require that third party to conduct its duties in all respect in compliance with FCPA. A Party may terminate this Agreement with immediate effect and without further obligation to the counterparty in the event it receives reasonably credible information that the other Party has violated the FCPA.
  
 12.3 LICENSEE agrees to comply with all applicable laws and regulations. LICENSEE agrees to be solely responsible for any violation of such laws and regulations, and to defend and hold OBX harmless if any legal action of any nature results from the violation.
  
 12.4 LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States with all applicable United States patent numbers, specifically U.S. Patent 9532593B2. All LICENSED PRODUCTS shipped to or sold in other countries in the TERRITORY shall be marked to comply with the patent laws and practice of the country of manufacture or sale, including the patent number.
  
 	 
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 12.5 Referral fee for OBX: If OBX refers a white label client to LICENSEE, LICENSEE will pay OBX a referral fee of 5% of sales for as long as the client is active.
  
 12.6 Corporate Structure Representation: LICENSEE represents that both LICENSEE’s consumer-facing brands and LICENSEE’s hemp cigarette co-manufacturing business will be 100% owned by the RTO entity.
  
 12.7 The failure of either OBX or LICENSEE to assert a right or insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other.
  
 12.8 If LICENSEE would like to use the name of OBX in any publicity or advertising, LICENSEE agrees to obtain the advance written consent of OBX.
  
 12.9 LICENSEE may not assign this Agreement or any of the rights herein without the prior written consent of OBX, unless the assignment is by operation of law such as by way of merger and consolidation.
  
 12.10 Force Majeure. In the event any Party hereto is prevented from or delayed in the performance of any of its obligations hereunder (other than the payment of monies due and owing) by reason of acts of God, war, terrorism, strikes, riots, storms, fires, electrical or telecommunications outages or any other cause whatsoever beyond the reasonable control of the Party, the Party so prevented or delayed shall be excused from the performance of any such obligation to the extent and during the period of such prevention or delay, provided that such Party takes all reasonable steps to overcome such cause(es) as soon as is reasonably possible.
  
 12.11 Nothing contained in this Agreement will be deemed to place the parties in a partnership, joint venture or agency relationship and neither party will have the right or authority to obligate or bind the other party in any manner.
  
 12.12 This Agreement shall bind and inure to the benefit of the Parties named herein and their respective successors and assigns.
  
 12.13 The provisions of this Agreement are severable. If any provisions of this Agreement are determined invalid or unenforceable under any controlling body of law, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining provisions.
  
 12.14 OBX and LICENSEE acknowledge that this Agreement sets forth their entire understanding concerning the subject matter of this Agreement, and no modification of the Agreement will be effective unless both OBX and LICENSEE agree to it in writing.
  
 12.15 This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.
  
 	 
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 The authorized signatures of OBX and LICENSEE below signify their acceptance of the terms of this Agreement.
  
 Old Belt Extracts, LLC d/b/a Open Book Extracts Hempacco, Inc.
  
 	 By:
	 /s/ David Neundorfer
	  
	 By:
	 /s/ Sandro Piancone
	  

	 Name: 
	 David Neundorfer
	  
	 Name: 
	 Sandro Piancone
	  

	 Title:
	 CEO
	  
	 Title:
	 president
	  

	 Date:
	 3/18/2021
	  
	 Date:
	 3/20/2021
	  

  
 	 
	10hemp_ex103.htm

EXHIBIT 10.3
  
 Limited Liability Company Agreement of
 Cali Vibes D8 LLC
  
 A Limited Liability Company
  
 TIDS OPERATING AGREEMENT (this “Agreement”) of Cali Vibes D8 LLC, (the “Company”), is executed and agreed to, for good and valuable consideration, by the undersigned full members and the undersigned assignee member (“Assignee”) collectively referred to throughout this agreement as (“Members”).
  
 I. Formation.
  
 A. State of Formation. This is a Limited Liability Company Operating Agreement (the “Agreement”) for Cali Vibes D8 LLC, a Member-managed Delaware limited liability company (the “Company”) formed under and pursuant to Delaware law.
  
 B. Operating Agreement Controls. To the extent that the rights or obligations of the Members or the Company under provisions of this Operating Agreement differ from what they would be under Delaware law absent such a provision, this Agreement, to the extent permitted under Delaware law, shall control.
  
 C. Primary Business Address. The location of the primary place of business of the Company is:
  
 9925 Airway Road, San Diego, California 92154, or such other location as shall be selected from time to time by the Members.
  
 D. Registered Agent and Office. The Company’s initial agent (the “Agent”) for service of process is Corporation Service Company. The Agent’s registered office is 251 Little Falls Drive, Wilmington, Delaware 19808. The Company may change its registered office, its registered agent, or both, upon filing a statement with the Delaware Secretary of State.
  
 E. No State Law Partnership. No provisions of this Agreement shall be deemed or construed to constitute a partnership (including, without limitation, a limited partnership) or joint venture, or any Member a partner or joint venturer of or with any other Member, for any purposes other than federal and state tax purposes.
  
 	 
	
	

	 

  
 II. Purposes and Powers.
  
 A. Purpose. The Company is created for the following business purpose:
  
 To Market and sell Delta 8 THC products: Delta 8 THC is a hemp-derived cannabinoid. Under the federal 2018 Farm Bill, all hemp-derived cannabinoids are no longer considered a controlled substance and can be legally produced and sold.
  
 The fact that Delta-8 is typically manufactured from hemp-derived cannabidiol (CBD) and not extracted directly from the hemp plant, has led to some confusion as to the Federal legality of Delta-8.
  
 Thus, Members of the Company acknowledge that the Federal legality of Delta-8 is clouded by the late 2020 “Interim Final Rule” issued by the Drug Enforcement Agency (“DEA”) which stated that all synthetically derived tetrahydrocannabinols (“THC”) remain Schedule 1 controlled substances.
  
 Should Delta-8 remain an illegal substance under DEA rules, then the Company’s business plan, its forecasted revenues, its inventories of finished product and raw materials, and its capital expenditures could all be adversely affected.
  
 The legal situation in the States adds another level of confusion. The Company undertakes to obtain all necessary licenses and permits on a State-by-State basis, to legally sell and distribute its products.
  
 B. Powers. The Company shall have all of the powers of a limited liability company set forth under Delaware law.
  
 C. Duration. The Company’s term shall commence on April 19, 2021 the filing date of the Articles of Organization and all other such necessary materials with the state of Delaware. The Company will operate until terminated as outlined in this Agreement unless:
  
 1. The Members vote unanimously to dissolve the Company;
  
 2. No Member of the Company exists, unless the business of the Company is continued in a manner permitted by Delaware law;
  
 3. It becomes unlawful for either the Members or the Company to continue in business;
  
 4. A judicial decree is entered that dissolves the Company; or
  
 5. Any other event results in the dissolution of the Company under federal or Delaware law.
  
 	 
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 III. Members
  
 	  
	 A.
	 Membership Classes. The Members of the Company (jointly the “Members”) shall br represented by two classes, as defined below:

   
 	  
	  
	 (a)
	Class 1 - “Full Members” with full ownership and voting rights as specified below.
	  
	  
	  
	  

	  
	  
	 (b)
	Class 2- “Assignee Members” with rights to a profit/loss-sharing interest only until such time as they may be admitted to Membership by a unanimous vote of the Members.

   
 	  
	 B.
	  Members & Membership Interests

  
 	 (a) Full Members 
	  Contribution Ratio
	  
	 Sharing Ratio
	  
	  
	 Voting Rights
	  

	 Hempacco Co., Inc. (“Hempacco”) 
	  50%
	  
	  
	 25%
		  
	  
	 50%
	
	 VZ Ventures, 50% (‘‘VZ”) 
	  50%
	  
	  
	 50%
		  
	  
	 50%
	
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 (b) Assignee Members
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 BX2SD Hospitality, LLC 
	  0%
	  
	  
	 25%
		  
	  
	 0%
	

  
 C. Initial Contribution. Each Full Member shall make an Initial Contribution to the Company. The Initial Contributions of each shall be as described in Attachment A, Initial Contributions of the Members.
  
 No Member shall be entitled to interest on their Initial Contribution. Except as expressly provided by this Agreement, or as required by law, no Member shall have any right to demand or receive the return of their Initial Contribution. Any modifications as to the signatories’ respective rights as to the receipt of their initial contributions must be set forth in writing signed by all interested parties.
  
 C. Limited Liability of the Members. Except as otherwise provided for in this Agreement or otherwise required by Delaware law, no Member shall be personally liable for any acts, debts, liabilities or obligations of the Company beyond their respective Initial Contribution, including liability arising under a judgment, decree or order of a court. The Members shall look solely to the Company property for the return of their Initial Contribution, or value thereof, and if the Company property remaining after payment or discharge of the debts, liabilities or obligations of the Company is insufficient to return such Initial Contributions, or value thereof, no Member shall have any recourse against any other Member except as is expressly provided for by this Agreement or as otherwise allowed by law.
  
 	 
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 D. Death, Incompetency, Resignation or Termination of a Member. Should a Member die, be declared incompetent, or withdraw from the Company voluntarily or involuntarily, the remaining Members will have the option to buy out that Member’s Membership Interest in the Company. If a Member is removed involuntarily, it must be by vote recorded in the official minutes. If a Member resigns, they should submit a notarized resignation letter to the Registered Agent. Should the Members agree to buy out the Membership Interest of the withdrawing Member, that Interest shall be paid for proportionately by the remaining Members, according to their existing Membership Interest and distributed proportionately among the remaining Members. The Members agree to hire an outside firm to assess the value of the Membership Interest.
  
 The Members will have 30 days to decide if they want to buy the Membership Interest together and disperse it proportionately. If all Members do not agree to buy the Membership Interest, individual Members will then have the right to buy the Membership Interest individually. If more than one Member requests to buy the remaining Membership Interest, the Membership Interest will be paid for and split proportionately among those Members wishing to purchase the Membership Interest. If all Members agree by unanimous vote, the Company may choose to allow a non-Member to buy the Membership Interest thereby replacing the previous Member.
  
 If no individual Member(s) finalize a purchase agreement by 30 days, the withdrawing Member, or their estate, may dispose of their Membership Interest however they see fit, subject to the limitations in Section III (E) below. If a Member is a corporation, trust, partnership, limited liability company or other entity and is dissolved or terminated, the powers of that Member may be exercised by its legal representative or successor.
  
 The name of the Company may be amended upon the written and unanimous vote of all Members if a Member withdraws, dies, is found incompetent or is terminated.
  
 E. Creation or Substitution of New Members. Any Member may assign in whole or in part its Membership Interest only after granting their fellow Members the right of first refusal, as established in Section III (D) above.
  
 	  
	 1.
	New Members. The Company will amend this agreement to include new Members upon the written and unanimous vote of all Members. The name of the Company may be amended if a new Member is added to the Company upon the written and unanimous vote of all Members.

   
 	 
	4
	

	 

  
 	  
	 2.
	Entire transfer. If a Member transfers all of its Membership Interest, the transferee shall be admitted to the Company as a substitute Member upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately upon the transfer, and, simultaneously, the transferor Member shall cease to be a Member of the Company and shall have no further rights or obligations under this Agreement.
	  
	  
	  

	  
	 3.
	Partial transfer. If a Member transfers only a portion of its Membership Interest, the transferee shall be admitted to the Company as an additional Member upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement.
	  
	  
	  

	  
	 4.
	Whether a substitute Member or an additional Member, absent the written consent of all existing Members of the Company, the transferee shall be a limited Member and possess only the percentage of the monetary rights of the transferor Member that was transferred without any voting power as a Member in the Company.

   
 F. Member Voting.
  
 1. Voting power. The Company’s Full Members shall each have voting power equal to their share of Membership Interest in the Company.
  
 2. Proxies. At all meetings of Members, a Member may vote in person or by proxy executed in writing by the Member or by his duly authorized attorney-in-fact. Such proxy shall be delivered to the Secretary of the Company before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.
  
 G. Duties of the Members- Jointly. The Members shall cause the Company to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. The Members also shall cause the Company to:
  
 1. Maintain its own books, records, accounts, financial statements, stationery, invoices, checks and other limited liability company documents and bank accounts separate from any other person;
  
 2. At all times hold itself out as being a legal entity separate from the Members and any other person and conduct its business in its own name;
  
 3. File its own tax returns, if any, as may be required under applicable law, and pay any taxes required to be paid under applicable law;
  
 4. Not commingle its assets with assets of the Members or any other person, and separately identify, maintain and segregate all Company assets;
  
 5. Pay its own liabilities only out of its own funds, except with respect to organizational expenses;
  
 6. Maintain an arm’s length relationship with the Members, and, with respect to all business transactions entered into by the Company with the Members, require that the terms and conditions of such transactions (including the terms relating to the amounts paid thereunder) are the same as would be generally available in comparable business transactions if such transactions were with a person that was not a Member;
  
 Members providing quantifiable business services or products to the Company will apply an agreed upon discount to the third-party price of such products or services.
  
 7. Pay the salaries of its own employees, if any, out of its own funds and maintain a sufficient number of employees in light of its contemplated business operations;
  
 8. Not guarantee or become obligated for the debts of any other person or hold out its credit as being available to satisfy the obligations of others;
  
 9. Allocate fairly and reasonably any overhead for shared office space;
  
 10. Not pledge its assets for the benefit of any other person or make any loans or advances to any person;
  
 11. Correct any known misunderstanding regarding its separate identity;
  
 12. Maintain adequate capital in light of its contemplated business purposes;
  
 13. Cause its Members to meet or act pursuant to written consent and keep minutes of such meetings and actions and observe all other Delaware limited liability company formalities;
  
 	 
	5
	

	 

  
 14. Make any permitted investments directly or through brokers engaged and paid by the Company or its agents;
  
 15. Not require any obligations or securities of the Members; and
  
 16. Observe all other limited liability formalities.
  
 Failure of the Members to comply with any of the foregoing covenants shall not affect the status of the Company as a separate legal entity or the limited liability of the Members.
  
 H. Operational Duties& Responsibilities of the Members- Severally:
  
 As to Hempacco Co., Inc.
  
 1. Product Manufacturing - All product inventory will be purchased through Hempacco unless otherwise agreed upon by both parties.
  
 2. Direct to Consumer Fulfillment.
  
 3. Wholesale Sales and Retail Distribution.
  
 As to VZ Ventures
  
 4. Online Marketing Design.
  
 5. CRM Integration & Management.
  
 6. Credit Card Processing for Internet Sales - using Company bank account(s) maintained by Hempacco
  
 I. Fiduciary Duties of the Members.
  
 1. Loyalty and Care. Except to the extent otherwise provided herein, each Member shall have a fiduciary duty of loyalty and care similar to that of members of limited liability companies organized under the laws of Delaware.
  
 2. Duties Only to the Company. The Member’s fiduciary duties of loyalty and care are to the Company and not to the other Members. The Members shall owe fiduciary duties of disclosure, good faith and fair dealing to the Company and to the other Members. A Member who so performs their duties shall not have any liability by reason of being or having been a Member.
  
 	 
	6
	

	 

  
 3. Reliance on Reports. In discharging the Member’s duties, a Member is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by any of the following:
  
 i. One or more Members, Officers, or employees of the Company whom the Member reasonably believes to be reliable and competent in the matters presented.
  
 ii. Legal counsel, public accountants, or other persons as to matters the Member reasonably believes are within the persons’ professional or expert competence.
  
 iii. A committee of Members of which the affected Member is not a participant, if the Member reasonably believes the committee merits confidence.
  
 J. Waiver of Partition: Nature of Interest. Except as otherwise expressly provided in this Agreement, to the fullest extent permitted by law, each Member hereby irrevocably waives any right or power that such Member might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company. No Member shall have any interest in any specific assets of the Company.
  
 K. Compensation of Members. The Members shall have the authority to fix the compensation of individual Members. All Members may be paid their expenses, if any, of attendance at meetings of the Members, which may be a fixed sum for attendance at each meeting of the Members or a stated salary as a Member. No such payment shall preclude any Member from serving the Company in any other capacity and receiving compensation therefor.
  
 L. Additional Compensation. At a later date, both Members will agree to certain milestones to reach which, when reached, trigger additional compensation to VZ in the form of equity in Hempacco Co., Inc. or, if applicable in the Parent Company of Hempacco.
  
 L. Members as Agents. All Members are agents of the Company for the purpose of its business. An act of any Member, including the signing of an instrument in the Company’s name, binds the Company where the Member executed the act for apparently carrying on the Company’s business or business of the kind carried on by the Company in the ordinary course, unless the Member had no authority to act for the Company in the particular matter and the person with whom the Member was dealing knew or had notice that the Member lacked authority. An act of a Member binds the Company, however, even where the Member executed the act not apparently for carrying on the Company’s business or business of the kind carried on by the Company in the ordinary course only if the act was authorized by the other Members.
  
 	 
	7
	

	 

  
 IV. Accounting and Distributions.
  
 A. Fiscal Year. The Company’s fiscal year shall end on the last day of December.
  
 B. Records. All financial records including tax returns and financial statements will be maintained and held by Hempacco Co., Inc. at the Company’s primary business address and will be accessible to all Members upon 24 hours written notice.
  
 Separate Capital Accounts for Members’ Contributions and Distributions will be maintained in the Company books.
  
 In accordance with GAAP and IRS S.448 accounting records will be kept on an accrual basis.
  
 C. Distributions. Distributions shall be issued, as directed by the Company’s Treasurer or Assistant Treasurer, on a monthly basis, based upon the Company’s fiscal year. The distribution shall not exceed the remaining net cash of the Company after making appropriate provisions for the Company’s ongoing and anticipatable liabilities and expenses.
  
 D. Tax Distributions. As soon as possible after the issuance of Forms Kl to Members, and assuming that these documents include an allocation of profits that may potentially require a payment of taxes on said profit by the Member, a distribution will be made, prior to any distribution as specified in “B” above, based upon the amount of the profit allocation multiplied by an arbitrary income tax rate to be decided by the Managing Members at the time of said distributions.
  
 E. Each Member shall receive a percentage of the overall distribution that matches that Member’s percentage of Membership Interest in the Company, as defined by the balance of the members’ capital accounts and in accordance with the “sharing ratio” as specified in Section 111B above.
  
 V. Tax Treatment Election.
  
 The Company has not filed with the Internal Revenue Service for treatment as a corporation. Instead, the Company will be taxed as a pass-through organization. The Company will, upon completion of the annual financial statements prepare Form 1065 for submission to the IRS, and distribute Forms Kl to each Member recording each Members Opening Capital Account plus or minus each member’s share of the Company’s Net Income or Loss, in accordance with IRS Code Section 704(b).
  
 The Members may, with unanimous consent, elect for the Company to be treated as a C- Corporation, S-Corporation or a Partnership at any time.
  
 	 
	8
	

	 

  
 VI. Officers.
  
 A. Appointment and Titles of Officers. The initial Officers shall be appointed by the Members and shall consist of at least a Chairman, a Secretary and a Treasurer. Any additional or substitute Officers shall be chosen by the Members. The Members may also choose one or more President, Vice-President, Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person, as permitted by Delaware law. The Members may appoint such other Officers and agents as they shall deem necessary or advisable who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Members. The Officers and agents of the Company shall hold office until their successors are chosen and qualified. Any Officer elected or appointed by the Members may be removed at any time, with or without cause, by the affirmative vote of a majority of the Members. Any vacancy occurring in any office of the Company shall be filled by the Members. Unless the Members decide otherwise, if the title of an Officer is one commonly used for officers of a limited liability company formed under Delaware law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office.
  
 1. Chairman. The Chairman shall be the chief executive officer of the Company, shall preside at all meetings of the Members, shall be responsible for the general and active management of the business of the Company and shall see that all orders and resolutions of the Members are carried into effect. The Chairman shall execute all contracts on behalf of the Company, except:
  
 i. where required or permitted by law or this Agreement to be otherwise signed and executed;
  
 ii. where signing and execution thereof shall be expressly delegated by the Members to some other Officer or agent of the Company.
  
 2. President. In the absence of the Chairman or in the event of the Chairman’s inability to act, the President shall perform the duties of the Chairman, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman. The President shall perform such other duties and have such other powers as the Members may from time to time prescribe.
  
 3. Vice-Presidents. In the absence of the Chairman and President or in the event of their inability to act, any Vice-Presidents in the order designated by the Members (or, in the absence of any designation, in the order of their election) shall perform the duties of the Chairman, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman. Vice-Presidents, if any, shall perform such other duties and have such other powers as the Members may from time to time prescribe.
  
 	 
	9
	

	 

  
 4. Secretary and Assistant Secretary. The Secretary shall be responsible for filing legal documents and maintaining records for the Company. The Secretary shall attend all meetings of the Members and record all the proceedings of the meetings of the Company and of the Members in a book to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the Members, as required in this Agreement or by Delaware law, and shall perform such other duties as may be prescribed by the Members or the Chairman, under whose supervision the Secretary shall serve. The Secretary shall cause to be prepared such reports and/or information as the Company is required to prepare by applicable law, other than financial reports. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Members (or if there be no such determination, then in order of their election), shall, in the absence of the Secretary or in the event of the Secretary’s inability to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Members may from time to time prescribe.
  
 5. Treasurer and Assistant Treasurer. The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company according to generally accepted accounting practices, using a fiscal year ending on the last day of the month of December. The Treasurer shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Members. The Treasurer shall distribute the Company’s profits to the Members. The Treasurer shall disburse the funds of the Company as may be ordered by the Members and shall render to the Chairman and to the Members, at their regular meetings or when the Members so require, an account of all of the Treasurer’s transactions and of the financial condition of the Company. As soon as practicable after the end of each fiscal year of the Company, the Treasurer shall prepare a statement of financial condition as of the last day of the Company’s fiscal year, and a statement of income and expenses for the fiscal year then ended, together with supporting schedules. Each of said annual statements shall be prepared on an income tax basis and delivered to the Members forthwith upon its preparation. In addition, the Treasurer shall keep all financial records required to be kept pursuant to Delaware law. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Members (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Members may from time to time prescribe.
  
 B. Officers as Agents. The Officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Members not inconsistent with this Agreement, are agents of the Company for the purpose of the Company’s business, and the actions of the Officers taken in accordance with such powers shall bind the Company.
  
 	 
	10
	

	 

  
 C. Fiduciary Duties of the Officers.
  
 	  
	 1. 
	Loyalty and Care. Except to the extent otherwise provided herein, each Officer shall have a fiduciary duty of loyalty and care similar to that of officers of limited liability companies organized under the laws of Delaware.
	  
	  
	  

	  
	 2. 
	Duties Only to the Company. The Officers’ fiduciary duties of loyalty and care are to the Company and not to the Members or other Officers. The Officers shall owe fiduciary duties of disclosure, good faith and fair dealing to the Company and to the Members, but shall owe no such duties to Officers unless the Officer is a Member. An Officer who so performs their duties shall not have any liability by reason of being or having been an Officer.
	  
	  
	  

	  
	 3. 
	Reliance on Reports. In discharging the Officer’s duties, an Officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by any of the following:

  
 	  
	 i.
	One or more Members, Officers, or employees of the Company whom the Officer reasonably believes to be reliable and competent in the matters presented.
	  
	  
	  

	  
	 ii. 
	Legal counsel, public accountants, or other persons as to matters the Officer reasonably believes are within the persons’ professional or expert competence.
	  
	  
	  

	  
	 iii. 
	A committee of Members of which the affected Officer is not a participant, if the Officer reasonably believes the committee merits confidence.

  
 VII. Dissolution.
  
 A. Limits on Dissolution. The Company shall have a perpetual existence, and shall be dissolved, and its affairs shall be wound up only upon the provisions established in Section II (C) above.
  
 Notwithstanding any other provision of this Agreement, the Bankruptcy of any Member shall not cause such Member to cease to be a Member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.
  
 	 
	11
	

	 

  
 Each Member waives any right that it may have to agree in writing to dissolve the Company upon the Bankruptcy of any Member or the occurrence of any event that causes any Member to cease to be a Member of the Company.
  
 B. Winding Up. Upon the occurrence of any event specified in Section Il(C), the Company shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. One or more Members, selected by the remaining Members, shall be responsible for overseeing the winding up and liquidation of the Company, shall take full account of the liabilities of the Company and its assets, shall either cause its assets to be distributed as provided under this Agreement or sold, and if sold as promptly as is consistent with obtaining the fair market value thereof, shall cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided under this Agreement.
  
 C. Distributions in Kind. Any non-cash asset distributed to one or more Members in liquidation of the Company shall first be valued at its fair market value (net of any liability secured by such asset that such Member assumes or takes subject to) to determine the profits or losses that would have resulted if such asset were sold for such value, such profit or loss shall then be allocated as provided under this Agreement. The fair market value of such asset shall be determined by the Members or, if any Member objects, by an independent appraiser (any such appraiser must be recognized as an expert in valuing the type of asset involved) approved by the Members.
  
 D. Termination. The Company shall terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Members in the manner provided for under this Agreement and (ii) the Company’s registration with the state of Delaware shall have been canceled in the manner required by Delaware law.
  
 E. Accounting. Within a reasonable time after complete liquidation, the Company Treasurer shall furnish the Members with a statement which shall set forth the assets and liabilities of the Company as at the date of dissolution and the proceeds and expenses of the disposition thereof.
  
 F. Limitations on Payments Made in Dissolution. Except as otherwise specifically provided in this Agreement, each Member shall only be entitled to look solely to the assets of the Company for the return of its Initial Contribution and shall have no recourse for its Initial Contribution and/or share of profits (upon dissolution or otherwise) against any other Member.
  
 	 
	12
	

	 

  
 G. Notice to Delaware Authorities. Upon the winding up of the Company, the Member with the highest percentage of Membership Interest in the Company shall be responsible for the filing of all appropriate notices of dissolution with Delaware and any other appropriate state or federal authorities or agencies as may be required by law. In the event that two or more Members have equally high percentages of Membership Interest in the Company, the Member with the longest continuous tenure as a Member of the Company shall be responsible for the filing of such notices.
  
 VIII. Exculpation and Indemnification.
  
 A. No Member, Officer, employee or agent of the Company and no employee, agent or affiliate of a Member (collectively, the “Covered Persons11 shall be liable to the Company or any other person who has an interest in or claim against the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct.
  
 B. To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement. Expenses, including legal fees, incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall be paid by the Company. The Covered Person shall be liable to repay such amount if it is determined that the Covered Person is not entitled to be indemnified as authorized in this Agreement. No Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence or willful misconduct with respect to such acts or omissions. Any indemnity under this Agreement shall be provided out of and to the extent of Company assets only.
  
 C. A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any person as to matters the Covered Person reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to the Members might properly be paid.
  
 D. To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered
  
 Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of the Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.
  
 	 
	13
	

	 

  
 E. The foregoing provisions of this Article VIII shall survive any termination of this Agreement.
  
 IX. Insurance.
  
 The Company shall have the power to purchase and maintain insurance, including insurance on behalf of any Covered Person against any liability asserted against such person and incurred by such Covered Person in any such capacity, or arising out of such Covered Person’s status as an agent of the Company, whether or not the Company would have the power to indemnify such person against such liability under the provisions of Article VIII or under applicable law. This is separate and apart from any business insurance that may be required as part of the business in which the Company is engaged.
  
 X. Dispute Resolution.
  
 The parties will attempt to resolve any dispute arising out of or relating to the Company or this Agreement through friendly negotiations amongst the parties. If the matter is not resolved by negotiation, the parties will resolve the dispute using the below Alternative Dispute Resolution(ADR) procedure.
  
 Any controversies or disputes arising out of or relating to this Agreement will be submitted to mediation in accordance with any statutory rules of mediation in the state of California If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration under the rules of the American Arbitration Association. The arbitrator’s award will be final, and judgment may be entered upon it by any court having proper jurisdiction within the state of California.
  
 XI. Independent Counsel.
  
 All Members entering into this Agreement have been advised of their right to seek the advice of independent legal counsel before signing this Agreement. All Members and each of them have entered into this Agreement freely and voluntarily and without any coercion or duress.
  
 	 
	14
	

	 

  
 XII. General Provisions.
 A. Notices. All notices, offers or other communications required or permitted to be given pursuant to this Agreement shall be in writing and may be personally served or sent by United States mail and shall be deemed to have been given when delivered in person or three (3) business days after deposit in United States mail, registered or certified, postage prepaid, and properly addressed, by or to the appropriate party. 
 B. Number of Days. In computing the number of days (other than business days) for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which national banks are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.
  
 C. Execution of Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument.
  
 D. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.
  
 E. Headings. The Article and Section headings in this Agreement are for convenience and they form no part of this Agreement and shall not affect its interpretation.
  
 F. Controlling Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of the state of Delaware (without regard to conflicts of law principles thereof).
  
 G. Application of Delaware Law. Any matter not specifically covered by a provision of this Agreement shall be governed by the applicable provisions of Delaware law.
  
 H. Amendment. This Agreement may be amended only by written consent of all the Members. Upon obtaining the approval of any such amendment, supplement or restatement as to the Certificate, the Company shall cause a Certificate of Amendment or Amended and Restated Certificate to be prepared, executed and filed in accordance with Delaware law.
  
 I. Entire Agreement. This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, except as herein contained.
  
 	 
	15
	

	 

  
 IN WITNESS WHEREOF, the Members have executed and agreed to this Limited Liability Company Operating Agreement, which shall be effective as of April 20, 2021.
  
 	 By: 
	 /s/ Sandro Piancone 
	  
	  Date: 6-3-21
	  

	  
	 Hempacco Co., Inc.
	  
	  
	  

	  
	 By Sandro Piancone, its President
	  
	  
	  

	  
	  
	  
	  
	  

	  By:
	 /s/ Vlad Zatulovsky 
	  
	  Date: 6-3-21
	  

	  
	 VZ Ventures
	  
	  
	  

	  
	 By Vlad Zatulovsky, its President
	  
	  
	  

	  
	  
	  
	  
	  

	  By: 
	 /s/ Louis Anthony Pelliccia 
	  
	  Date: 6-3-21
	  

	  
	 BX2SD Hospitality, LLC
	  
	  
	  

	  
	 By Louis Anthony Pelliccia, its
	  
	  
	  

	  
	 Managing Member
	  
	  
	  

  
 	 
	16
	

	 

  
 ATTACHMENT A
 Initial Contributions of the Full Members
  
 The Initial Contributions of the Full Members of Cali Vibes D8 LLC are as follows:
  
 Hempacco Co., Inc.
 Contribution:
 Cash: $15,000.00
  
 VZ Ventures
 Contribution:
 Cash: $15,000.00
  
 	 
	17

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