Item 1.01 Entry into a Material Definitive Agreement.
On
Under the Joint Venture Agreements, the Company will acquire a 70% equity
interest in both HempSmart Brazil and HempSmart Uruguay. A minority 30% equity
interest in both HempSmart Brazil and HempSmart Uruguay will be held by newly
formed entities controlled by Guerrero, a director of the Company, who is a
successful Brazilian entrepreneur. The Company will provide capital in the
amount of
The boards of directors of HempSmart Brazil and HempSmart Uruguay will consist
of three directors, elected by the joint venture partners. As part of the Joint
Venture Agreements, the Company will license, on a royalty-free basis, certain
of its intellectual property regarding the Company's existing products to
HempSmart Brazil and HempSmart Uruguay to enable the joint ventures to
manufacture and sell the Company's products in
The Joint Venture Agreements provide the partners with a right of first offer ("ROFO"). Under this right, each partner may trigger an "interest sale" ROFO process at any time pursuant to which the other partners may either acquire the triggering partner's interest in the joint ventures or permit the triggering partner to sell its interest to a third party. In addition, the Company, as majority partner, may trigger a compulsory buy-sell procedure in the event a joint venture is frustrated in its intent or purpose, pursuant to which the Company could pursue a sale of all or substantially all of the joint venture. Subject to certain exceptions, the joint venture partners may not transfer their interests in HempSmart Brazil and HempSmart Uruguay. The Joint Venture Agreements contain customary terms, conditions, representations, warranties and covenants of the parties for like transactions.
The foregoing description of the Joint Venture Agreements does not purport to be complete and is qualified in its entirety by reference to the Joint Venture Agreements, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 hereto and incorporated herein by reference.
Item 8.01 Other Events. Press Release
On
Related Party Transactions
Mr.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit Description
10.1 Joint Venture Agreement, datedSeptember 30, 2020 , by and between the Company,Marco Guerrero , and MR Hemp Ltda. * 10.2 Joint Venture Agreement, datedSeptember 30, 2020 , by and between the Company,Marco Guerrero , and MR Hemp Uruguay S.A.S. * 99.1 Press Release datedOctober 1, 2020 * * Filed Herewith 1
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