INTELLECTUAL PROPERTY SALES AND PURCHASE AGREEMENT
EXHIBIT 10.1
TABLE
OF CONTENTS
ARTICLE
I DEFINITIONS
ARTICLE
II CONSIDERATION
AND PAYMENT
ARTICLE
III PATENT
APPLICATIONS AND PATENTS
ARTICLE
IV PUBLICITY
AND NONCOMPETE
ARTICLE V INFRINGEMENT
BY OTHERS; PROTECTION OF PATENTS
ARICLE
VI
TERM AND TERMINATION
ARTICLE
VII
ASSIGNMENT AND SALE
ARTICLE
VIII
REPRESENTATION AND WARRANTIES
ARTICLE
IX
RELEASES
ARTICLE
X MEDIATION
AND ARBITRATION
ARTICLE
XI
GENERAL
This
Intellectual Property Sales and Purchase Agreement (hereinafter referred to as
the "Purchase Agreement"), by and among PAGIC LP, (“PG”), a company incorporated
in the State of Texas, United States and having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”) a person and inventor both
having an office at 5151 ▇▇▇▇▇▇▇▇, El Paso Texas, and WEST PEAK VENTURES of
CANADA LTD. (“WPV”), a company federally incorporated in Canada and having its
registered office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇,
(collectively hereinafter referred to as the "Sellers") and Valcent Products
Inc., a company incorporated in Canada and having a place of business at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ (hereinafter referred to as the
“Purchaser”).
RECITALS
WHEREAS,
▇▇▇▇▇ is the exclusive owner of certain Verticrop and TOMORROW GARDEN®
Technologies and Intellectual Property;
WHEREAS,
Purchaser is the exclusive licensee of the TOMORROW GARDEN® Technologies and
Intellectual Property within the Territory;
WHEREAS,
the Seller and the Purchaser wish to clarify and restructure their current
rights and responsibilities resulting from the Master License Agreement to
better align with their perceived future endeavors;
WHEREAS,
Purchaser desires to own the Verticrop and TOMORROW GARDEN® Technologies and
Intellectual Property to more effectively commercialize and exploit the
Verticrop and TOMORROW GARDEN® Technologies for all industrial, commercial,
and retail applications, all as set forth in this Purchase
Agreement;
WHEREAS,
Seller desires to grant to the Purchaser such ownership rights, all as set forth
in this Purchase Agreement; and
NOW,
THEREFORE, in consideration of the promises, mutual covenants and obligations
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS
Each of
the following terms shall, whenever found in this Purchase Agreement, be used
and understood in accordance with the definition below:
1.1 “Ancillary
Products” shall mean any goods or services, including any goods or services sold
to repair or sold as replacement parts, relating to Verticrop and TOMORROW
GARDEN® Technologies products.
1.2 “Affiliate"
shall mean a company, sole proprietorship, partnership, joint venture or
corporation in which one of the parties hereto and/or their officers, directors
or shareholders, owns or controls, directly or indirectly, at least twenty
percent (20%) of the voting stock and/or equity, or a company, sole
proprietorship, person, partnership, joint venture, or corporation which owns at
least twenty percent (20%) of the voting stock and/or equity of one of the
parties hereto.
1.3 "Effective
Date" shall mean April 1, 2009 which is the day on which this Purchase Agreement
shall begin effect.
1.4 “Escrow”
shall mean the custody of designated instruments, information and/or materials
by a mutually agreed upon third person entity for delivery to a given party only
upon fulfillment of the conditions set forth in Paragraph 2.5.
1.5 “Intellectual
Property” shall mean and include all proprietary or other rights throughout the
world provided under (i) patent law, including patents and patent applications
therefore pending before any relevant authority worldwide, including, without
limitation, the Patent Rights, (ii) know-how and trade secret law, including,
without limitation, the Know-How, (iii) trademark law, (iv) copyright law, (v)
design patent or industrial design law, and (vi) any equivalent right granted
under the laws of any jurisdiction in the world which provides protective or
other intellectual property rights and relating to the Verticrop and TOMORROW
GARDEN® Technologies.
1.6 “IP”
shall mean Intellectual Property, Improvements, research and development data,
test data, and engineering data which are related to the Verticrop and TOMORROW
GARDEN® Technologies.
1.7 “IP
Purchase Price” shall mean the aggregate of the $2.0 million cash portion
referenced in Section 2.4 plus the 3% equity interest referenced in Section
2.7.
1.8 "Know-How"
shall mean all of the technical know-how, trade secrets, technical information,
and knowledge, directly or indirectly, relating to the Verticrop and TOMORROW
GARDEN® Technologies and/or the manufacture and use thereof,
including, without limitation, configurations, formulas, engineering, materials,
scientific and practical information, whether patentable or unpatentable, and
all physical manifestations or embodiments including without limitation all data
specifications, prototypes, drawings, schematics, notes, records and other
writings; all such Know-How to be used or practiced or capable of being used or
practiced in the manufacture and use of the Verticrop and TOMORROW
GARDEN® Technologies.
1.8 “Master
License Agreement” shall mean that certain Master License Agreement, which
Seller and Purchaser agree has an effective date of July 31,
2005.
1.9 “Net
Sales” of Verticrop and TOMORROW GARDEN® Technologies products and
Ancillary Products for any given period shall mean monies actually received by
Purchaser during the said period in consideration for Verticrop and TOMORROW
GARDEN® Technologies products and Ancillary Products, adjusted for
exchanges and returns of Verticrop and TOMORROW GARDEN® Technologies
products and Ancillary Products sold or delivered during a previous
period. Net Sales shall not include any charges for freight, packing,
or insurance if such charges are identified and billed separately and in
addition to the list price for the Verticrop and TOMORROW
GARDEN® Technologies products and Ancillary Products; nor shall Net
Sales include charges or tax or duty on sales or delivery of Verticrop and
TOMORROW GARDEN® Technologies products and Ancillary
Products.
1.10 "Patent
Rights" shall mean and include patents and patent applications, including the
existing patents and patent applications and any patent applications to be filed
as set forth on Exhibit "B", attached hereto and made a part hereof, relating to
the Verticrop and TOMORROW GARDEN® Technologies and/or any divisions,
continuations or reissues thereof, all foreign patent applications corresponding
thereto, and all United States and foreign patents issued upon any such
applications.
1.11 "Territory"
shall mean the entire world and each and every country, sovereign nation, and
all jurisdictions therein.
1.12 “Verticrop
and TOMORROW GARDEN® Technologies” shall mean any technologies for
industrial, commercial and retail applications, as more fully described on
Exhibit “A”.
ARTICLE
II
CONSIDERATION
AND PAYMENT
2.1 In
consideration of the rights granted herein, Purchaser hereby agrees to pay the
IP Purchase Price. The cash portion of the IP purchase price shall be
made as follows: an initial cash payment of U.S. $65,000 (the “Initial Payment”)
to ▇▇▇▇▇, of which $16,250, has been paid on signing of the Letter of Intent
dated March 30, 2009, $12,000 has been paid on May 15, 2009 and the balance of
the Initial Payment payable on the earlier of May 31, 2009 or pro-rata based on
U.S. $1.5 Million Dollars in new funds being raised (by debt or equity) by the
Purchaser. Seller and Purchaser agree that the Initial Payment shall
be applied toward payment of the IP Purchase Price. Moreover,
Purchaser shall pay reasonable pre-approved costs to the Seller in regard to
legal fees incurred with respect to preparation of this Purchase
Agreement. Additionally, Seller and Purchaser agree that the
royalties and payments as described in this Article II shall replace any further
payments due under the Master License Agreement, and any portions of the Master
License Agreement relating to the Intellectual Property shall be void and of no
further effect.
2.2 In
further consideration of the rights granted herein, Purchaser shall have
exclusive unconditional use in the Territory of the IP for research and
development and commercialization upon the signing of this Purchase
Agreement. Within ten (10) business days after execution of
this Purchase Agreement, or some later mutually agreeable time, Seller shall
supply to Purchaser, at a mutually agreeable location, without expense to
Purchaser, all Know-How, including materials and written information related to
the Verticrop and TOMORROW GARDEN® Technologies not previously delivered, if
any.
2.3 In
still further consideration of the rights granted herein, ▇▇▇▇▇ will make
reasonable best efforts to provide scientific-related support to Purchaser in
the technology transfer of the IP pursuant to Paragraph 2.2 as may be reasonably
requested at no additional cost to Purchaser. Thereafter, ▇▇▇▇▇
will make reasonable efforts to make himself available to Purchaser to support
further development of the now-existing IP on normal industry terms to be
mutually agreed.
2.4 The
Seller and Purchaser agree that the cash portion of the IP Purchase Price is
U.S. $2.0 Million Dollars. The entirety of the IP Purchase Price has
been negotiated without regard to the patentability of the Patent
Rights.
2.5 In
further consideration of the rights granted herein, ▇▇▇▇▇ shall:
a) execute a conditional assignment to
Purchaser of the IP per the Escrow Agreement in the form and substance as
attached hereto as Exhibit “D”, and
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b) terminate his rights under the Master License Agreement with
respect to the Verticrop and TOMORROW GARDEN® technology and
corresponding Ancillary Products.
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The
release of the IP from Escrow to the Purchaser is expressly conditioned upon
Purchaser making the payment in full of the cash portion of the IP Purchase
Price to Seller (the “Express Condition”). The conditional
assignment shall be held in Escrow to be released either to Purchaser if the
Express Condition occurs within the ten years following the Effective Date of
this Purchase Agreement or to ▇▇▇▇▇ if the Express Condition does not occur
within that timeframe.
2.6 Upon
the Express Condition being met pursuant to Paragraph 2.5 above, and Purchaser
taking full ownership and title to the IP as set forth in the conditional
assignment, Seller shall receive the equity portion of the IP Purchase Price,
being a 3.0% equity interest in Purchaser, and ▇▇▇▇▇ agrees to perform all acts
and to execute, acknowledge and deliver all instruments or writings reasonably
requested and necessary for Purchaser to perfect title to the Intellectual
Property upon such release from Escrow.
2.7 Excepting
the Initial Payment, the remaining cash portion of the IP Purchase Price
(Paragraph 2.4) shall be payable from the 3% of the Purchaser’s Net Sales,
excluding capital equipment sales (the “Calculated IP Payment”), provided
however that the Purchaser shall make a minimum Calculated IP Payment to the
Seller of $12,000 per month. Such monthly Calculated IP Payments
shall be cumulative and shall be applied toward payment of the IP Purchase
Price.
2.8 Payment
of the cash portion of the IP Purchase Price or any Calculated IP Payment shall
be in U.S. Dollars by certified check or wire transfer to bank accounts of ▇▇▇▇▇
or PAGIC as specified by ▇▇▇▇▇.
2.9 The
Purchaser may at any time, before the expiration of the ten years following the
Effective Date of this Purchase Agreement, elect to pay off the remaining
balance of the IP Purchase Price.
2.10 The
Purchaser shall provide PAGIC and ▇▇▇▇▇ with annual audited reports on net sales
and cost of sales and units sold as related to the use of the IP.
2.11 Purchaser
defaults in paying the Calculated IP Payment shall be handled as
follows:
a) If the Purchaser defaults in paying the
Calculated IP Payment for a period equal to three months then the conditional
assignment in Escrow shall be in default. Purchaser shall have a
period of one month (the “First Notice Period”), after receiving notice of said
default, to pay
1) the three months’ of Calculated IP Payments
2) the Calculated IP Payment due for the month which
corresponds to the First Notice Period, and
3) an additional $12,000
to cure
the default (the total of which comprises “First Cure
Payment”). Purchaser agrees that the failure to pay the First Cure
Payment within the First Notice Period is a substantial breach of this Purchase
Agreement. All of the amounts paid to cure the default shall be
applied to the IP Purchase Price.
b) Provided that the Purchaser cures a
default during the First Notice Period and the Purchaser defaults in paying the
Calculated IP Payment for a period equal to two months then the conditional
assignment in Escrow shall be in default. Purchaser shall have a
period of one month (the “Second Notice Period”), after receiving notice of said
default, to pay
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1)
the two months’ of Calculated IP
Payments,
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2) the Calculated IP Payment due for the month
which corresponds to the Second Notice Period, and
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3)
an additional $12,000
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to cure
the default (the total of which comprises “Second Cure Payment”). Purchaser
agrees that the failure to pay the Second Cure Payment within the Second Notice
Period is a substantial breach of this Purchase Agreement. All of the
amounts paid to cure the default shall be applied to the IP Purchase
Price.
c) Provided that the Purchaser cures a default during the Second
Notice Period and the Purchaser defaults in paying the Calculated IP Payment for
a period equal to one month any time thereafter then the conditional assignment
in Escrow shall be in default. Purchaser shall have a period of one
month (the “Notice Period), after receiving notice of said default, to
pay
1)
the one months’ Calculated IP Payment,
2) the Calculated IP Payment due for the month which corresponds to the Third
Notice Period, and
3)
an additional $12,000
to cure
the default (the total of which comprises “Third Cure Payment”). Purchaser
agrees that the failure to pay the Third Cure Payment within the Third Notice
Period is a substantial breach of this Purchase Agreement. All of the
amounts paid to cure the default shall be applied to the IP Purchase
Price.
d) If the default is not cured within the First Notice Period, Second
Notice Period or Notice Period then everything in Escrow shall be returned to
▇▇▇▇▇, and the Purchaser shall have no further rights with respect to the
IP. For the avoidance of doubt, upon the return of everything in
Escrow to ▇▇▇▇▇, Purchaser shall have no further rights under the IP, including
but not limited to, any license or right to make, use, sell, offer for sale,
commercialize, license, or sublicense anywhere in the
Territory.
2.12 Seller
and Purchaser agree that Purchaser’s signature to, benefits received and to be
received, and obligations under this Purchase Agreement are expressly subject to
consent and approval of the Board of Directors of Purchaser by May
26. Seller and Purchaser agree that ▇▇▇▇▇ keeps all funds paid to
date in the event Purchaser’s Board of Directors fails to approve this
Agreement.
ARTICLE
III
PATENT
APPLICATIONS AND PATENTS
3.1 Seller
and Purchaser agree that they will continue to procure Patent Rights on the
Verticrop and TOMORROW GARDEN® Technologies and Improvements. Provided Purchaser
keeps Seller promptly advised of all communications and activities with respect
thereto, and Seller retains the right to select counsel for prosecution of the
Patent Rights, Purchaser shall have the sole right to prosecute, control, and
pursue such Patent Rights under the patent laws of the United States and foreign
countries while the conditional assignment of the IP remains in Escrow pursuant
to Paragraph 2.5 above, and will retain such right after the conditional
assignment of the IP is released from Escrow to the Purchaser, pursuant to the
terms of Paragraph 2.5. Seller hereby selects the law firm of ▇▇▇▇▇▇
▇▇▇▇, P.C. as counsel to prosecute and continue to prosecute the Patent
Rights. Seller and Purchaser expressly agree that the counsel for
prosecution of the Patent Rights may be changed in the future only by mutual
written consent. Should ▇▇▇▇▇▇ ▇▇▇▇, P.C. resign as counsel for
prosecution of the Patent Rights for any reason, and Seller and Purchaser cannot
thereafter mutually agree on new counsel for prosecution of the Patent Rights,
then the Seller and Purchaser agree the choice for new counsel for prosecution
of the Patent Rights shall be submitted for mediation and arbitration as
described in Article X below. Seller shall have the sole right to
prosecute, control and pursue such Patent Rights under the patent laws of the
United States and foreign countries after the conditional assignment of the IP
is released from Escrow back to the Seller, pursuant to the terms of Paragraph
2.5. Purchaser agrees to prosecute, with good faith and due
diligence, all pending and future patent applications while the conditional
assignment of the IP is in Escrow. All fees, costs and expenses,
including annuity or maintenance fees, shall be borne by Purchaser and the
failure of Purchaser to pay such fees, costs and expenses shall constitute a
substantial breach of this Purchase Agreement. Seller and Purchaser agree to
cooperate to whatever extent is necessary to procure such patent
protection.
3.2 In
the event, while the conditional assignment of the IP is in Escrow, Purchaser
decides to abandon any pending United States or foreign patent application,
Purchaser shall give Seller thirty (30) days prior written notice of such
decision and shall allow Seller to prosecute, control and pursue such pending
United States or foreign patent application and to pay such fee. In
the event the conditional assignment of the IP is released from Escrow to the
Seller, and Seller subsequently decides to abandon any pending United States or
foreign patent application or to not pay any annuity or maintenance fee required
by any country, Seller shall give Purchaser thirty (30) days prior written
notice of such decision and shall allow Purchaser to prosecute, control and
pursue such pending United States or foreign patent application and to pay such
fee. Either party's decision shall have no effect on the payments due
under this Purchase Agreement.
3.3 While
the conditional assignment of the IP is in Escrow, Purchaser also agrees to keep
Seller fully informed, at Purchaser’s expense, of the prosecution of all U.S.
and foreign patent applications including submitting to the Seller copies of all
official actions and responses thereto.
3.4 Seller
shall have the right to conduct an audit of the IP while the conditional
assignment of the IP is in Escrow to ensure that the Patent Rights are in good
standing. In the event that Seller determines that the Patent Rights
are not in good standing, and the Seller was not given notice as set forth in
Paragraph 3.2, then Seller shall have the right to place such Patent Rights in
good standing and if necessary, to seek relief through binding mediation and
arbitration pursuant to Article X if the failure to maintain the Patent Rights
in good standing may cause or has caused the Seller damages.
3.5 Seller
and Purchaser agree to comply with any marking requirements of the other party
to insure compliance with 35 U.S.C. §287, and agree to insure compliance by the
sublicensees, if any.
ARTICLE
IV
PUBLICITY
AND NONCOMPETE
4.1 PAGIC,
▇▇▇▇▇ and WPV separately and individually agree that all future media
communications with which he/it is directly or indirectly involved, whether
written, oral and/or visual involving the IP or the business activities of
Purchaser will require prior written approval by the Purchaser.
4.2 Seller
agrees not to compete in any way against the Purchaser, including providing
consultancy or assistance to other companies, in regard to the Verticrop and
TOMORROW GARDEN® Technologies business of Purchaser from the date of this
Agreement and either:
a) continuing for a period extending five (5) years from
the date the conditional assignment of the IP is transferred to the Purchaser
from Escrow; or
b) terminating upon the date the conditional assignment
of the IP is returned to ▇▇▇▇▇ from Escrow.
Purchaser
agrees that any future support of Purchaser by ▇▇▇▇▇ for further development of
the now-existing IP (pursuant to Paragraph 2.3) is not a violation of this
noncompete.
ARTICLE
V
INFRINGEMENT
BY OTHERS; PROTECTION OF PATENTS
5.1 Seller
and Purchaser shall each promptly inform the other of any suspected infringement
of any Intellectual Property by a third party. ▇▇▇▇▇ and Purchaser
each shall have the right to institute an action for infringement of the Patent
Rights against such third party in accordance with the following
procedure:
a) ▇▇▇▇▇
shall have the right to institute suit in his name after the conditional
assignment of the IP is released from Escrow back to him pursuant to Paragraph
2.5. ▇▇▇▇▇ shall bear the entire cost thereof, including attorneys’
fees, and shall be entitled to retain the entire amount of the recoveries, if
any, whether by judgment, award, decree or settlement. ▇▇▇▇▇ shall
exercise control over such actions. If the cause of action for the
suit involves activity occurring before the time the IP is released from Escrow
back to ▇▇▇▇▇, Purchaser may, if it so desires, be represented by counsel of its
own selection, the fees for which counsel shall be borne by
Purchaser.
b) Purchaser
shall have the right to institute suit in its name after the conditional
assignment of the IP is released from Escrow to it pursuant to Paragraph
2.5. Purchaser shall bear the entire cost thereof, including
attorneys' fees, and shall be entitled to retain the entire amount of the
recoveries, if any, whether by judgment, award, decree or
settlement. Purchaser shall exercise control over such actions;
provided, however, that ▇▇▇▇▇ may, if he so desires, be represented by counsel
of his own selection, the fees for which counsel shall be borne by
Purchaser.
c) While
the conditional assignment of the IP is in Escrow and in the event that ▇▇▇▇▇
and Purchaser agree to institute suit, the suit shall be brought in both their
names, the cost thereof, including attorneys' fees, shall be borne by mutual
agreement and in the event the parties cannot reach mutual agreement, then the
cost thereof shall be borne equally. The recoveries, if any, whether
by judgment, award, decree or settlement, shall be shared in proportion to the
costs borne by each party. ▇▇▇▇▇’▇ share of the costs of such suit shall be
deducted, at his option, from one or more of the Calculated IP Payment(s)
payable to ▇▇▇▇▇ pursuant to Article II. Purchaser shall exercise control over
such actions; provided, however, that ▇▇▇▇▇ may, if it so desires, be
represented by counsel of his own selection.
d) While
the IP is in Escrow, in the absence of agreement to institute a suit jointly and
if Purchaser determines not to institute a suit, ▇▇▇▇▇ may institute suit. ▇▇▇▇▇
shall bear the cost of such litigation, including attorneys' fees, and shall be
entitled to all recoveries, if any, whether by way of judgment, award, decree or
settlement; provided, however, in the event ▇▇▇▇▇ does not recover his costs of
such litigation from all recoveries of the suit, Purchaser agrees to pay ▇▇▇▇▇
the difference between ▇▇▇▇▇’▇ costs of such litigation and the costs of such
litigation recovered by way of judgment, award, decree or settlement in the
suit.
5.2 Should
either party commence a suit under the provisions of Paragraph 5.1 and
thereafter elect to abandon the same, it shall give timely notice to the other
party who may, if it so desires, continue prosecution of such suit; provided,
however, that the sharing of expenses and recovery in such suit shall be agreed
upon between the parties.
ARTICLE
VI
TERM
AND TERMINATION
6.1 This
Purchase Agreement shall continue in full force and effect for ten years
following the Effective Date of this Purchase Agreement, unless earlier
terminated as provided in this Article VI. If the matter is submitted
to binding mediation and arbitration pursuant to Article X, then this Purchase
Agreement shall not be terminated while the arbitration is pending and before
the arbitrator's final decision has been rendered.
6.2 In
the event Seller or Purchaser commits a substantial breach of any of the
provisions of this Purchase Agreement, written notice of the substantial breach
shall be provided to the breaching party. Except for a substantial
breach of Paragraph 2.11 regarding defaults by the Purchaser in paying the
Calculated IP Payment, which breach is specially addressed in Paragraph 6.3
below, if such breach of any other provision of this Purchase Agreement is
capable of being remedied or made good, the breaching party shall have ninety
(90) days (unless otherwise specifically set forth in this Purchase Agreement)
to remedy or make good such breach or to submit the matter to binding mediation
and arbitration pursuant to Article X. If such breach is remedied
within such time period, this Purchase Agreement shall continue in full force
and effect. If such breach is not remedied within such time period,
the non-breaching party may terminate this Purchase Agreement upon a further ten
(10) days written notice. Except for any failure to cure a default of
Paragraph 2.11, any dispute as to whether a material breach has occurred, or
whether it has subsequently been cured, shall be referred to arbitration
pursuant to Article X. If the matter is submitted to binding
mediation and arbitration pursuant to Article X, then this Purchase Agreement
shall not be terminated while the arbitration is pending and pending the
arbitrator's final decision.
6.3 In
the event Purchaser fails to timely cure any of the defaults set forth in
Paragraph 2.11 of this Purchase Agreement, such failure is a substantial breach
of this Purchase Agreement, is not subject to binding mediation and arbitration
pursuant to Article X, shall result in immediate termination of this Agreement,
and everything in Escrow shall be promptly returned to ▇▇▇▇▇, and the Purchaser
shall have no further rights with respect to the IP. For the
avoidance of doubt, upon the return of everything in Escrow to ▇▇▇▇▇, Purchaser
shall have no further rights under the IP, including but not limited to, any
license or right to make, use, sell, offer for sale, commercialize, license, or
sublicense anywhere in the Territory.
6.4 This
Purchase Agreement shall automatically terminate if Purchaser shall become
bankrupt, or if a receiver shall be appointed for all of the property or assets
of Purchaser, or if Purchaser shall make a general assignment of its obligations
with its creditors, or if Purchaser files for bankruptcy
protection.
ARTICLE
VII
ASSIGNMENT
AND SALE
7.1 Excepting
as provided in Paragraph 7.2 below, upon written notice to Purchaser, ▇▇▇▇▇ and
PAGIC shall each have the right to sell, transfer or assign his/its interest in
this Purchase Agreement, upon written notice to Purchaser, without the prior
written consent of Purchaser.
7.2 The
other party’s prior written consent shall be required in the event a party to
this Purchase Agreement desires to offer to sell or assign all or any part of
its rights, privileges and interests in this Purchase Agreement or to the
Intellectual Property to a current competitor or existing customer.
a) In the event Purchaser desires to sell or
assign to an Entity, other than ▇▇▇▇▇ or PAGIC or their Affiliates, or to a
current competitor or existing customer, all or any part of its rights,
privileges and interests in this Purchase Agreement or to the Intellectual
Property, Purchaser shall first offer ("Right of First Offer") such assignment
to Seller by notifying Seller in writing of the terms and conditions upon which
Purchaser would be willing to make such an assignment; and Seller shall have the
right to acquire said rights, privileges and interests of Purchaser by accepting
the offer in accordance with said terms and conditions or equivalent
cash. If within fifteen (15) days after receipt of Purchaser's
notice, Seller advises Purchaser of its acceptance of the offer as stated in the
notice, Purchaser agrees to promptly make the assignment to Seller on the stated
terms and conditions and shall have an additional thirty (30) business days, if
the assignment price is less than $1 Million Dollars and sixty (60) days if the
assignment price is over $1 Million Dollars, to pay for the same with delivery
against payment.
b) In the
event ▇▇▇▇▇ desires to sell or assign to an Entity other than Purchaser, all or
any part of his rights, privileges and interests in this Purchase Agreement,
▇▇▇▇▇ shall first offer ("Right of First Offer") such assignment to Purchaser by
notifying Purchaser in writing of the terms and conditions upon which ▇▇▇▇▇
would be willing to make such an assignment; and Purchaser shall have the right
to acquire said rights, privileges and interests of ▇▇▇▇▇ by accepting the offer
in accordance with said terms and conditions or equivalent cash. If
within fifteen (15) days after receipt of ▇▇▇▇▇'▇ notice, Purchaser advises
▇▇▇▇▇ of its acceptance of the offer as stated in the notice, ▇▇▇▇▇ agrees to
make the assignment to Purchaser, which assignment will be effective only upon
his receipt of full payment of the Right of First Offer
price. Purchaser shall have an additional thirty (30) business days,
if the assignment price is less than $1 Million Dollars and sixty (60) days if
the assignment price is over $1 Million Dollars, to make the Right of First
Offer payment.
7.3 If
within fifteen (15) days after receipt of Purchaser's notice, Seller does not
indicate its acceptance of the offer as stated in the notice, Purchaser shall
thereafter have the right to make the assignment or sale to another person, firm
or corporation on the same terms and conditions as stated in the notice. Should
the Seller not exercise its Right of First Offer and should the terms and
conditions thereof be altered in any way that results in less desirable terms
than those set forth in the Purchaser’s notice, this Right of First Offer shall
be reinstated in any subsequent proposed assignment, or the altered terms and
conditions for the current transaction, must again be offered by Purchaser in
accordance with the terms of Paragraph 7.2.
7.4 Immediately
prior to Purchaser going into bankruptcy, Seller shall have a Right of First
Offer on any of Purchaser's assets at fair market value.
7.5 It
is hereby agreed that prior to sale by a party to this Purchase Agreement to a
third party contemplated pursuant to Paragraphs 7.2 and 7.3 above, the third
party purchaser shall agree in writing to be fully bound by the terms of this
Purchase Agreement and to assume all of the respective party’s obligations
hereunder.
ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES
8.1 PAGIC
hereby represents and warrants to Purchaser that PAGIC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas, USA. WPV hereby represents and warrants to Purchaser that WPV
is a corporation duly organized, validly existing and in good standing under the
laws of Canada.
8.2
Each of PAGIC, ▇▇▇▇▇ and WPV separately and independently represents and
warrants that it has not heretofore made any license, commitment or agreement,
or will make any license, commitment or agreement for the term of this Purchase
Agreement which is inconsistent with this Purchase Agreement and the rights
granted herein, and that it has full and complete power and authority to enter
into and carry out its obligations under this Purchase Agreement and under any
agreements and documents which may be executed in connection herewith. PAGIC
agrees to indemnify and hold Purchaser harmless of any liabilities, costs and
expenses (including attorneys' fees and expenses), obligations and causes of
action solely arising out of or relating to any breach of its representations
and warranties made by PAGIC herein. ▇▇▇▇▇ agrees to indemnify and
hold Purchaser harmless of any liabilities, costs and expenses (including
attorneys' fees and expenses), obligations and causes of action solely arising
out of or relating to any breach of its representations and warranties made by
▇▇▇▇▇ herein. WPV agrees to indemnify and hold Purchaser harmless of any
liabilities, costs and expenses (including attorneys' fees and expenses),
obligations and causes of action solely arising out of or relating to any breach
of its representations and warranties made by WPV herein.
8.3 Seller
does not represent and warrant to Purchaser that patents will issue or be
granted on any of the Patent Rights; or that any of the marks associated with
the Verticrop and TOMORROW GARDENS® Technologies are registrable as a trademark;
or that any of the Know-How is copyrightable. Further Seller does not represent
and warrant to Purchaser that any of the Intellectual Property has commercial
value.
8.4 Purchaser
hereby represents and warrants to Seller that Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of British
Columbia, Canada. Purchaser further represents and warrants that it
has not heretofore made any license, commitment or agreement, or will Licensee
make any license, commitment or agreement for the term of this Purchase
Agreement which is inconsistent with this Purchase Agreement and the rights
granted herein, and that it has full and complete power and authority to enter
into and carry out its obligations under this Purchase Agreement and under any
agreements and documents which may be executed in connection
herewith. Purchaser agrees to indemnify and hold Seller harmless of
any liabilities, costs and expenses (including attorneys' fees and expenses),
obligations and causes of action arising out of or relating to any breach of the
representations and warranties made by Purchaser herein.
ARTICLE
IX
RELEASES
9.1 The
Purchaser and Seller shall execute mutual releases for:
a) all past acts and future claims related to the Master License
Agreement;
b) all past acts and future claims against ▇▇▇▇▇ as an
individual, which acts are related to any aspect of his consulting and/or
employment with Purchaser, including as an employee, officer and/or director of
Purchaser; and
c) all past acts and future claims against ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ as an individual, which acts are related to any aspect his consulting
and/or employment with Purchaser, including as an employee, officer and/or
director of Purchaser.
These
releases will include all parties to those agreements, and shall be of the form
and content as the Release attached to this Purchase Agreement as Exhibit
“C”.
9.2 Pursuant
to the Master License Agreement, WPV shared certain royalty rights with PAGIC
and to date WPV has not received any consideration. It is hereby
acknowledged and agreed WPV has forfeited any past or future royalty rights
relating to the IP that it may have had.
ARTICLE
X
MEDIATION
AND ARBITRATION AGREEMENT
10.1 If
a dispute arises between the parties regarding this Agreement, the parties agree
to resolve the dispute in the following manner:
a) Negotiation
1) The
parties shall attempt in good faith to resolve any dispute arising out of or
relating to this Agreement promptly by negotiation between executives of the
parties who have authority to settle the controversy. Any party may give the
other party written notice of any dispute not resolved in the normal course of
business. Within 15 days after delivery of the notice, the receiving party will
submit to the other a written response. The notice and the response will include
(i) a statement of each party's position and a summary of arguments supporting
that position, and (ii) the name and title of the executive who will represent
that party and of any other person who will accompany the executive. Within 30
days after delivery of the disputing party's notice, the executives of both
parties will meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one party to the other will be
honored.
2) All negotiations pursuant to this clause are confidential and will be treated
as compromise and settlement negotiations for purposes of applicable rules of
evidence.
b) Non-binding
Mediation
If the
dispute has not been resolved by negotiation within 60 days of the disputing
party's notice, or if the parties failed to meet within 45 days, the parties
will endeavor to settle the dispute by mediation under the presently effective
Center for Public Resources ("CPR") Model Procedure for Mediation of Business
Disputes. The neutral third party will be selected from the CPR Panels of
Distinguished Neutrals with the assistance of CPR.
c) Arbitration
Any
controversy or claim arising out of or relating to this Purchase Agreement, or
the enforcement, breach, termination or validity thereof, that has not been
resolved by mediation pursuant to the preceding paragraph within 90 days from
the appointment of a neutral third party will be settled by arbitration in
accordance with the CPR Rules for Non-Administered Arbitration of Business
Disputes in effect on the date of this Purchase Agreement, by a sole arbitrator.
If the parties cannot agree upon an arbitrator for a panel recommended by CPR,
then CPR will select the arbitrator. Any other choice of law clause to the
contrary in this Purchase Agreement notwithstanding, the arbitration will be
governed by the United States Arbitration Act, 9 U.S.C. § 1-16, and judgment
upon the award rendered by the Arbitrator may be entered by any court having
jurisdiction thereof. The place of the arbitration will be Houston, Texas.
Insofar as the proceeding relates to patents, it will also be governed by 35
U.S.C. 294, to the extent applicable. The arbitrator is not empowered to award
trebled, punitive or any other damages in excess of compensatory damages, and
each party irrevocably waives any claim to recover any such damages. The
arbitrator will make a reasoned award. If the result achieved in arbitration by
the party instituting the arbitration is not more favorable to that party than
the last offer made by the other party during the mediation, the former party
will reimburse the legal fees, expert fees and other expenses reasonably
incurred by the latter in the arbitration.
ARTICLE
XI
GENERAL
11.1 Binding
Agreement. This Purchase Agreement shall be binding upon the successors
and assigns of the parties hereto. Nothing contained in this Purchase
Agreement shall be construed to place the parties in the relationship of legal
representatives, partners, or joint venturers.
11.2 Applicable
Law. This Purchase Agreement shall be construed, interpreted and applied
in accordance with the laws of the State of Texas.
11.3 Notices.
All notices, demands or other writings in this Purchase Agreement provided to be
given or made or sent, or which may be given or made or sent, by either party
hereto to the other, shall be deemed to have been fully given or made or sent
when made in writing and deposited in the United States mail, first class,
postage prepaid, sent certified or registered mail, and addressed to the
addresses first hereinabove given or at such other address as either party
hereto may specify by notice given in accordance with this
paragraph.
11.4 Waiver.
Each party covenants and agrees that if the other party fails or neglects for
any reason to take advantage of any of the terms hereof providing for the
termination of this Purchase Agreement, or if, having the right to declare this
Purchase Agreement terminated, such other party shall fail to do, any such
failure or neglect shall not be or be deemed or be construed to be a waiver of
any subsequently occurring cause for the termination of this Purchase Agreement,
or as a waiver of any of the terms, covenants or conditions of this Purchase
Agreement or the performance thereof. None of the terms, covenants or conditions
of this Purchase Agreement can be waived except by the written consent of the
waiving party. Except as otherwise stated herein, each of the parties
hereby waives any claims which it might have against the other prior to the date
of execution of this Purchase Agreement.
11.5 Force
Majeure. Neither party hereto shall be liable to the other party for
failure or delay in the performance of any duties or obligations hereunder due
to strikes, lockouts, acts of God, acts of war, fire, flood, explosions,
embargo, litigation or labor disputes, Government or any other laws and
regulations, or any other cause beyond the control or without the fault of such
party.
11.6 Scope of
Agreement. This Purchase Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof.
11.7 Construction.
The parties acknowledge that each party and its counsel have reviewed and
revised this Purchase Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Purchase Agreement or any
amendments or exhibits hereto.
11.8 Headings.
The subject headings of the paragraphs of this Purchase Agreement are included
for purposes of convenience only, and shall not effect the construction or
interpretation of any of its provisions.
11.9 Counterparts.
This Purchase Agreement may be executed in one or more counterparts, and also
executed shall constitute one agreement, binding on both parties hereto,
notwithstanding that both parties are not signatory to the same
counterpart.
11.10 Severability.
If any part or parts of this Purchase Agreement are found to be illegal or
unenforceable, the remainder shall be considered severable, shall remain in full
force and effect, and shall be enforceable.
11.11 Further
Documents. Each of the parties shall take all necessary actions,
including the execution and delivery of all necessary documents or instruments,
as may be reasonably requested by the other party in order to effectuate the
intent of this Purchase Agreement.
11.12 Entire
Agreement. This Purchase Agreement, including any exhibits hereto,
constitutes the entire agreement of the Parties with respect to the subject
matter of this Purchase Agreement and supersedes all previous communications,
representations, understandings and agreements, whether oral or written, between
the Parties with respect to the subject matter hereof. For the
avoidance of doubt, the
Letter of
Agreement dated March 30, 2009 is terminated and of no further force and
effect.
IN
WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement in
duplicate originals, individually, or by their duly authorized officers or
representatives, as of the date of the last party to execute this Purchase
Agreement.
Valcent
Products,
Inc. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Signed:
s// "▇.▇▇▇▇▇▇
Orr" Signed:s//"M ▇▇▇▇ ▇▇▇▇▇"__
Name: ▇.▇▇▇▇▇▇
Orr Name:
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title:
Director
Title: Individual
Date:_______________ Date:__________________
Pagic
LP
West Peak Ventures of Canada
Signed: s//"▇▇▇▇▇
▇▇▇▇▇▇"
Signed:s// "▇▇▇▇▇▇▇ ▇▇▇▇▇"
Name:
▇▇▇▇▇
▇▇▇▇▇
Name:▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Title:Partner Title:President
Date:_________________ Date:_________________
EXHIBIT
“A”
DESCRIPTION
OF THE VERTICROP AND
TOMORROW GARDEN®
TECHNOLOGY
The
“Verticrop and TOMORROW GARDEN® Technology” shall mean technologies directed
toward high density vegetable growing systems and plant tissue culture/micro
propagation systems as described below.
Verticrop
Technology: Relates to High Density Vegetable Growing
System(s) (HDVGS) for the production of all plants and plant crops, such
production undertaken in a vertical plane and all watering, nutrient feeding,
together with all the relevant manual and/or computerized controls employed in
the system.
TOMORROW GARDEN®
Technology: Relates to plant tissue
culture/micro-propagation systems used in the production of plant growing
kits/systems marketed under the TOMORROW GARDEN trademark, and all nutrients,
nutrient preparation systems, gas permeable bags in which the plants are kept
and all packaging and packaging designs related to the TOMORROW GARDEN®
kits. PTC or ‘micro-propagation’ is a laboratory process that allows
for the rapid production of mass quantities of genetically identical plants.
This process removes the randomness of genetics by using the plant’s own cells
that already exhibit the identified desirable traits.
EXHIBIT
“B”
PATENTS
AND APPLICATIONS
File
No.: 2405-00102
Country: United
States
Serial
No.: 08/474,872
File
Date: June
7, 1995
For: Plant
Growing Room
▇▇▇.
No.: 5,664,369
Issue
Date: September
9, 1997
File
No.: 2405-00105
Country: United
States
Serial
No.: 08/813,933
File
Date: March
10, 1997
For: Plant
Growing Room
▇▇▇.
No.: 6,173,529
Issue
Date: January
16, 2001
File
No.: 2405-00900
Country: United
States
Serial
No.: 29/321,473
File
Date: July
17, 2008
For: Plant
Acclimatizing Enclosure Design
File
No.: 2405-02100
Country: United
States
Serial
No.: 07/943,264
File
Date: September
10, 1992
For: Plant
Growing Room
▇▇▇.
No.: 5,511,340
Issue
Date: April
30, 1996
File
No.: 2405-02400
Country: United
States
Serial
No.: 61/084,311
File
Date: July
29, 2008
For: Plant
Growing Assembly
File
No.: 2405-02600
For: Tissue
Culturing Container
Unfiled
File
No.: 2405-02800
Country: United
States
Serial
No.: 61/084,308
File
Date: July
29, 2008
For: Plant
Acclimatizing Enclosure
File
No.: 2405-02900
For: Re-Usable
Micro-Propagation Containers
Unfiled
File
No.: 2405-03100
For: Water
Conserving Hydroponics
Unfiled
File
No.: 2405-03300
For: Self-Watering
Pot
Unfiled