PURE ROOTS MODULAR GROW UNITS & LICENSE PURCHASE AGREEMENT
Exhibit 6.6
PURE ROOTS MODULAR GROW UNITS & LICENSE PURCHASE AGREEMENT
This PURE ROOTS MODULAR UNITS & LICENSE PURCHASE AGREEMENT (“Agreement”) is entered into as of this 10th day of October 2019, by and amongst Grow Solutions Holdings, Inc. (“GRSO”), Pure Roots Holdings Canada Inc.., Pure Roots Urban Farms™ Corp.. (“GRSO subsidiaries”), and Pure Roots Urban Farms BC, Inc. (“BC-URBN” or “Licensee”) This Agreement may refer to GRSO and its subsidiaries, as “Licensors,” or “Sellers” and it may refer to Licensors and BC-URBN individually as a “Party” or collectively as the “Parties.”
BACKGROUND
Licensors manufactures modular grow units, which covers the manufacturing and distribution of / and intellectual property rights to manufacture, design, license and market the Pure Roots Urban Farm™ modular grow units; additionally holding the controlling brand use, horticultural knowledge, and go-to-market strategy from Pure Roots Urban Farms Corp.
Licensors desire to sell to BC-URBN, and BC-URBN desires to purchase 3 modular grow units for the purpose of vertical growing of non-cannabis plants and 1 modular pre/post processing unit (the “Pure Roots Urban Farm”) and obtain, the license to the Geographic Region (as defined below), subject to the terms and conditions of this Agreement.
BC-URBN desires to obtain from Sellers, and Sellers desire to provide to BC-URBN, certain services relating to the Pure Roots Urban Farms Corp, Pure Roots Holdings Canada Inc., as well as operating the Pure Roots Urban Farm to achieve maximum growing / operating efficiency, along with growing expertise, brand use and knowledge transfer (in regards to any advancements in growing techniques and nutritional formulas) from Pure Roots Urban Farms Corp.
After the first Pure Roots Urban Farm is operational for a period of three (3) months, BC-URBN will commit to purchasing six more Pure Roots Urban Farms (each farm consisting of 3 Modular grow units for the purpose of growing of non-cannabis plants and 1 modular pre/post processing unit) on a three month after operation interval (as described in section 5.1.3) and that BC-URBN will chose the locations within the BC-URBN’s geographic region (defined later in Agreement) for installation for the purchase price of each Pure Roots Urban Farm is as described in section 5.1.1.
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties agree as follows:
ARTICLE I
For the purpose of this Agreement:
1.1 “Affiliate” means, with respect to an entity, any person or entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such entity.
1.2 “BC-URBN” means B.C. Urban Farms, Inc. a company incorporated in British Columbia, Canada.
1.3 “Confidential Information” has the meaning stated in Section 7.1.
1.4 “Pure Roots Modular Grow Units” are the modular grow rooms for the purpose of growing plants manufactured using the Designs, Brand Name and Intellectual Property from Pure Roots Holdings Canada Inc. and GRSO.
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1.5 “Documentation” means, instruction manuals, product manuals, advertising materials, and other documentation that relates to any of the Pure Roots Urban Farm.
1.6 “Effective Date” means the date on which the deposit is paid, 5.1.1 (a).
1.7 “Encumbrance” means any lien, pledge, security interest, license, option, right of first refusal or similar restriction or third-party right.
1.8 “End User” means an individual or company who is authorized to build and use the Pure Roots Modular Grow Units under the Pure Roots Urban Farms Corp brand and business model.
1.9 “Pure Roots Urban Farm” 3 Pure Roots Modular Grow Units & 1 modular pre/post processing unit, including but not limited to its respective processing equipment, fridges, tables, prep areas and other finishes to make up a turn-key operation. .
1.10 “License” means the Pure Roots Urban Farms License.
1.11 “License Acquisition Fee” has the meaning stated in Section 5.1.
1.12 “Other IP License” has the meaning stated in Section 2.1.
1.13 “Patents” means every patent or patent application that any Licensor owns or otherwise has rights to in any country, and which claims technology used in or is otherwise relevant to the Manufacturing and Distribution or the Products, along with any continuations, continuations-in-part, divisional, reissues, reexaminations, foreign counterparts or other patents or applications claiming priority to, or sharing a common claim of priority with, any such patent or patent application.
1.14 “Products” means any Manufacturing & Distribution code, toolkit, electronic libraries or related technology that is developed by or under authorization of BC-URBN using the Pure Roots Urban Farm and products or technology
1.15 “Purchase Agreements” means that certain Pure Roots Urban Farm Purchase Agreement dated on or about the date hereof entered into by and between BC-URBN and GRSO.
1.16 “Purchase Order” means the final purchase order for the 3 AeroPods and 1 pre/post processing modular unit.
1.17 “Royalties” means the payments to be made to the Licensor by the Licensee under Section 5.4.
1.18 “Right of First Refusal” has the meaning stated in Section 5.5.
1.19 “Term” has the meaning stated in Section 4.1.
1.20 “Training Period” has the meaning stated in Section 3.2.
1.21 “Pure Roots Urban Farms Corp” – a wholly owned subsidiary of GRSO.
1.22 “Pu re Ro o ts Xx xx in g s C anada Inc” – a wholly owned subsidiary of GRSO.
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ARTICLE II
PURCHASE & LICENSE
2.1 Pure Roots Urban Farm & Documentation License. Subject to payment of the License Acquisition Fee and Licensors’ rights in Section 2.2, Licensors hereby grant to BC-URBN an exclusive, fully paid-up license to the geographic regions of British Columbia, Alberta, and Yukon Territory for the growing of non-cannabis plants (the “Geographic Region”).
2.2 Rights and Ownership Retained by Licensors.
2.2.1 Use By Licensors. Notwithstanding the exclusive rights of BC-URBN, Licensors retain and have the right and license to practice, use and collaborate on further developing the Pure Roots Modular Grow Units, including making improvements..
2.2.2 IP Ownership. Ownership of and title to the intellectual property rights in the Pure Roots Modular Grow Units and other products or technology shall remain Pure Roots Holdings Canada Inc., unless expressly agreed otherwise in a written agreement between the relevant Parties.
2.2.3 Licensors’ rights in this Section 2.2. may not be assigned or sublicensed.
ARTICLE III
3.3 Pure Roots Urban Farm to Work as Described. The Pure Roots Modular Grow Units will perform as described in regards to the environment that the Pure Roots Modular Grow Unit will be able to sustain for the plants, the amount and type of nutrition to deliver to the plants, and that the electronics will operate as described.
ARTICLE IV
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ARTICLE V
5.1 Purchase Order & License Acquisition Fee.
5.1.1 The aggregate consideration for the Purchase of the Pure Roots Urban Farm, License, the available Maintenance agreement, and other rights and benefits granted to BC-URBN in this Agreement shall be One Million Five Hundred Thousand Canadian Dollars (CDN $1,500,000) (the “Pure Roots Urban Farm License Acquisition Fee”). Because, BC-URBN is purchasing the Pure Roots Urban Farm, GRSO shall wave the Geographical Exclusivity License Fee of two million dollars ($2,000,000) and grant BC- URBN the license to the Geographic Region in order to allow BC-URBN to expand their operations in the most expedient manner. The payment by BC-URBN shall be made in the following manner:
a. | $25,000 as a refundable deposit, at the signing of this Agreement, in order for GRSO to release the purchase order to BC-URBN (refundable until the $300,000 deposit has been transferred); |
b. | $50,000 as a refundable deposit three days after receiving the Purchase Order, in order for GRSO to release the operation and training manuals, schedules, etc. (refundable until the $300,000 deposit has been transferred); |
c. | BC-URBN will visit the headquarters and manufacturing site in Saskatoon, SK. |
d. | BC-URBN will have their legal and accounting professionals approve the final documentation |
e. | $300,000 will then be deposited (non-refundable) for the purchase of the Pure Roots Urban Farm, after the License Agreement and Purchase Agreement have been finalized; |
f. | $200,000 will then be deposited (non-refundable) upon 50% completion of the building of the Pure Roots Urban Farm; |
g. | $175,000 remaining, will be deposited (non-refundable) upon the delivery and full set-up of the Pure Roots Urban Farm at the BC-URBN site; |
h. | The Remaining $750,000 (of the initial $1,500,000) with 8% interest per annum will be paid to GRSO over the following five (5) year period, paid monthly from BC-URBN to Pure Roots Urban Farms Corp., beginning three months after first delivery of the Pure Roots Urban Farm, and after satisfaction of the conditions set forth in Section 5.2. After the full Pure Roots Urban Farm & License Acquisition Fee has been paid BC-URBN will then grant Pure Roots Urban Farms Corp a 10% royalty on Gross Revenue in perpetuity (lifetime royalties) of the operation of those Pure Roots Urban Farms by BC-URBN. |
5.1.2 Following the first purchase of the Pure Roots Urban Farm, BC-URBN will commit to purchase Six (6) more Pure Roots Urban Farms for a purchase price of $1,500,000 each in the first two years of this Agreement in order to maintain exclusivity over the Geographic Region. If BC-URBN does not purchase Six (6) Pure Roots Urban Farms over the first two years of this Agreement then the exclusivity of the Geographic Region is waved and becomes a right of first refusal on all projects within the Geographic Region for an additional 12 months after the exclusivity is waved, where BC-URBN would have to match any offers in order to gain use of the proposed purchase.
5.1.3 BC-URBN will commit to purchasing each of the six (6) Pure Roots Urban Farms after three (3) months of operation of the last Pure Roots Urban Farm to be purchased. Example, if Pure Roots Urban Farm 1 is operational February 28, 2020, the three-month period begins upon that operation date (February 28, 2020) and at the end of that three-month period May 31, 2020, BC-URBN would be required to have purchased their next Pure Roots Urban Farm in order to maintain exclusivity. During the first two (2) years BC-URBN may catch up and complete the Six (6) Pure Roots Urban Farm purchases by the end of the two (2) year period in order to maintain exclusivity.
5.1.4 BC-URBN may also pay the $750,000 financed portion of the purchase price anytime before the five (5) year period and not be liable for the interest payments that would have occurred had the $750,000 financed portion been outstanding for the total five (5) year period.
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5.4 Royalties & License Fees paid to the Licensor. In addition to the Purchase & License Acquisition Fee the rights granted by the Licensor in Article II, the Licensee shall pay to the Licensor a royalty equal to an amount of:
5.4.1 As referred to in 5.1.1 (h), [10] % of the Gross Revenue in perpetuity, in respect of all BC-URBN operations using the Pure Roots Urban Farm and/or Pure Roots Urban Farms™ Corp brand and products designed by the Licensor if any; after the full purchase price of $1,500,000 has been paid, for as long as BC-URBN operates the Pure Roots Urban Farm.
ARTICLE VI
6.1.1 Notwithstanding the License and other rights granted to BC-URBN in this Agreement, Licensors shall have the right and authority, at its sole discretion, to undertake efforts to obtain a discontinuance of any infringement of any trademarks, brand use, intellectual property rights in the Manufacturing, Distribution or Documentation, or of any of the Patents to the extent that such infringement involves a feature of the Manufacturing, Distribution or any Product, including, but not limited to filing suit against the infringing party. BC-URBN agrees to cooperate with Licensors to provide Licensors with such assistance as is reasonably requested by Licensors in connection with any such litigation.
6.1.2 If Licensors provide BC-URBN with written notice that Licensors decline to take action to obtain a discontinuance of an infringement under Section 6.1.1 above, or if Licensors fail to do so within a reasonable time of being notified of the infringement, then BC-URBN may undertake efforts to obtain a discontinuance of the infringement. Licensors shall execute such legal papers necessary for the litigation of any such action as may reasonably be requested by BC-URBN. Licensors agree to cooperate with BC-URBN to provide BC-URBN with such assistance as is reasonably requested by BC-URBN in connection with any such litigation.
6.1.3 The Party who takes the lead in any enforcement action under this Section 6.1 shall be responsible for the expenses incurred in connection with the enforcement action.
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ARTICLE VII
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF LICENSORS
8.6 Warranty Disclaimer. EXCEPT FOR THE WARRANTIES PROVIDED ABOVE, LICENSORS MAKE NO OTHER WARRANTIES WITH RESPECT TO THE MERCHANTABILITY, SUITABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE AEROPOD FARM.
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ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF BC-URBN
ARTICLE X
ARTICLE XI
If to Grow Solutions Holdings, Inc.: | With a copy to: |
ATTN: Xxxx Xxxxxx, CEO & President | |
230 – 000 Xxxxxxxx Xxxxx | |
Xxxxxxxxx, Xxxxxxxxxxxx, Xxxxxx. | |
X0X 0X0 |
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If to BC-URBN: | With a copy to: |
Attn: Xxxxx or Xxxx | |
Pure Roots Urban Farms BC, Inc. | Pure Roots Urban Farms BC, Inc. |
17688 – 00 Xxxxxx, Xxxxxx, XX. |
11.5 Governing Law. This Agreement will be governed by and construed under the laws of the province of Saskatchewan, Canada (“Saskatchewan, Canada”).
11.6 Arbitration. The parties agree to submit any and all disputes arising hereunder, or relating in any manner hereto, to binding arbitration before a panel of three arbitrators, with one arbitrator selected by each party and the third arbitrator selected by the two arbitrators selected by the parties, who will proceed in accordance with the procedures of the Forum Code of Procedure of the National Arbitration Forum. The arbitrators will have full authority to render any ruling in law or in equity and to assess costs against any party(ies) they deem appropriate. Such arbitration will be held in Saskatoon, Saskatchewan, Canada. The parties acknowledge that a breach of or a default under any of the terms and conditions of this Agreement may, in some cases, result in irreparable harm, and in such case, any remedies that the parties may have at law may be insufficient. Accordingly, the parties agree that in the case of a breach or default that could cause irreparable harm, nothing contained in this Section 11.6 will deny the aggrieved party of the right to seek injunctive relief in any court having jurisdiction.
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Intending to be legally bound, the Parties have executed this Agreement as of the Effective Date.
Grow Solutions Holdings, Inc. and Subsidiaries
By: | /s/ Xxxx Xxxxxx | |
Name: Xxxx Xxxxxx | ||
Title: President |
Pure Roots Urban Farms BC Inc. | Pure Roots Urban Farms BC Inc. | |||
By: | /s/ Xxxxx Xxx | By: | /s/ Xxxx Xxxxxxx | |
Name: Xxxxx Xxx | Name: Xxxx Xxxxxxx | |||
Title: CEO / CF | Title: President |
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