Item 1.01 Entry into a Material Definitive Agreement.
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Chemesis International Inc. ("Chemesis") owns an 80% interest in NVPR and is also GSRX's largest shareholder.
The right of NVPR to exercise the option and acquire the 1493 Membership Interest is conditional upon NVPR performing, or causing to be performed by its parent company Chemesis, the following milestones (the "Milestones") within the applicable timelines set forth below:
(a) paying
(b) issuing to GSRX 5,190,000 common shares in the capital of Chemesis (the "Chemesis Shares") within 10 months after the Effective Date. The Chemesis Shares will be subject to a 36-month leak-out schedule; and
(c) paying an additional
Immediately upon NVPR completing, or causing Chemesis to complete, as the case may be, each of the aforementioned Milestones within the respective timelines set out above, NVPR will be deemed to have acquired all of the 1493 Membership Interest ("Exercise of the Option").
Upon Exercise of the Option, NVPR and GSRX shall enter into a royalty agreement
(the "Royalty Agreement"), the form of which was negotiated concurrent with the
Option Agreement, pursuant to which NVPR shall grant to GSRX a revenues interest
royalty and the right to receive payments in respect thereof equal to five
percent (5%) of the revenues realized by NVPR from the operations of Project
1493, LLC in
Prior to the Exercise of the Option, either NVPR or GSRX may terminate the
Option Agreement upon delivering notice to the other of its intention to
terminate. If GSRX elects to terminate, then NVPR will not acquire the 1493
Membership Interest and GSRX must, as a condition precedent to such election:
(i) return all cash payments it received under the terms of the Option
Agreement; (ii) return the Chemesis Shares (if any) it received under the terms
of the Option Agreement; and (iii) pay to Chemesis a break fee of
The Option shall be secured by way of the grant of a security interest in the
1493 Membership Interests in favor of NVPR pursuant to a security agreement,
pledge and assignment dated
The foregoing is a summary of certain material terms and conditions of the Option Agreement, Royalty Agreement and Security Agreement and are not a complete description thereof. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the Option Agreement and Royalty Agreement, attached hereto as Exhibit 10.1, 10.2 and 10.3, which are incorporated herein by reference.
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The foregoing is a summary of certain material terms and conditions of the Amended and Restated Loan Agreement and is not a complete description thereof. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the Amended and Restated Loan Agreement, attached hereto as Exhibit 10.4, which is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
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Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description 10.1 Option Agreement datedMay 7, 2020 10.2 Royalty Agreement 10.3 Security Agreement, Pledge and Assignment datedMay 7, 2020 10.4 Amended and Restated Loan Agreement datedMay 6, 2020 99.1 Press release datedMay 8, 2020
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