Seed Transfer Agreement
This Seed Transfer Agreement (“Agreement”), made effective on [Date] (the “Effective Date”), is entered into by C HARLOTTE ’ S W EB , I NC . d/b/a CW H EMP S UPPLY C O ., a Delaware corporation with its principal offices located at 1600 Pearl St., Suite 300, Boulder, CO 80302, hereby referred to as (“Licensor”), and [Grower name, corporate info, address] (“Grower”), individually referred to as “Party” and together referred to as the “Parties.”
1. DEFINITIONS
1.1 Seed: Means, as the context requires, (a) hemp seed transferred to Grower at the price provided in the applicable Procurement Order, or (b) seed produced by growing and pollinating plants produced from the transferred hemp seed, or (c) any seeds obtained by breeding, cross-breeding, sexual or asexual propagation, biotechnology process, transformation techniques or other genetic manipulation of any of the Seeds described in (a) or (b), or otherwise developed or derived using any of the Seeds described in (a) or (b). Clause (a) covers only Seed acquired (i) from Licensor, (ii) from an authorized seed company having a license from Licensor to distribute the Seed in the US, or (iii) from a dealer authorized by Licensor to distribute such Seed in the US.
1.2 Viable Plant Material: Means any hemp plant grown from Seed, or any viable plant part or asexual clone thereof. The term “Viable Plant Material” does not include dried, nonviable, sinsemilla inflorescences, stalks, or extracts.
1.3 Licensor Technology(ies): Means Licensed Patents, as well as hemp plants and varieties owned by Licensor and plant variety certificates and applications. The term “Licensed Patents” means US Serial Nos. 10,888,060, and 10,888,059, as well as divisions, continuations, continuations-in-part, reissues, reexaminations, substitutes and extensions of such patent applications that are owned by or licensed to Licensor and which the production, use, distribution, offer for sale, or sale of the Seeds would, but for this Agreement, infringe a valid claim thereof. The term “Licensor Technology” also includes proprietary germplasm, transgenic and native traits, proprietary plant genetics, such as Seed, varieties produced from Seed, Viable Plant Material, and trade secrets.
1.4 Limited Use License: Means the non-exclusive, non-sublicenseable, non-transferable, limited use license, as further described below, that is granted by Licensor to Grower for the 2021 growing season pursuant to Section 2.3 of this Agreement. Seed that is not planted during the 2021 growing season is excluded from this Limited Use License, and Grower shall dispose of such Seed immediately following such growing season.
1.5 Procurement Order: Means the written order executed by the Parties pursuant to which Grower will procure Seeds for an agreed transfer and license price. Unless otherwise set forth therein, Procurement Orders shall be subject to, and incorporated by reference into, this Agreement. To the extent of any conflict between this Agreement and a Procurement Order, this Agreement shall govern.
2. TRANSFER AND LICENSE
2.1 Procurement pricing for Seed shall be set by the Licensor and require a minimum order of 1000 seeds.
2.2 Upon or promptly after the date when Licensor receives the payment for the transfer of and Limited Use License for the Seed (such payment, the “License Fee”) as set forth in the applicable Procurement Order, Licensor shall provide or make available (as specified therein) to Grower a quantity of Seed as listed in such Procurement Order. Licensor recommends that Grower review and consider the Licensor’s proprietary information sheets, FAQ sheet, or grower guides, if any, that Licensor makes available regarding the Seed (collectively, “Documentation”), provided that Licensor is not making any representations or warranties in relation to the information contained therein; and further provided that Grower will not publish or publicly disclose the information contained therein. Licensor is not responsible for any damage or failure that results from any historical information or recommendations made in the Documentation. Any references to CBD content in such Documentation are included for historical and informational purposes only, and any medical or medicinal properties mentioned in the Documentation should in no way be construed as a prescription for medical conditions, disorders or symptoms. 242816201 v2 2.
2.3 With respect to such Seeds, Licensor hereby grants to Grower a Limited Use License to procure and to plant Seed only during the 2021 growing season in accordance with the terms of this Agreement, and only in the state(s) of Grower’s then-current hemp license registration(s). At all times, Licensor retains ownership of the Licensor Technologies owned by, or licensed to, Licensor, including all plant varieties produced from Seed.
2.4 Grower is granted no license to use or exploit any of Licensor’s trademarks. More specifically, Grower will not, and will ensure that its harvesters, processors, manufacturers, distributors, agents, and other third parties do not, use any trademarks owned by Charlotte’s Web, Inc. or Leeland & Sig LLC dba Stanley Brothers, including without limitation CHARLOTTE’S WEB, CW, STANLEY BROTHERS, THE WORLD’S MOST TRUSTED HEMP EXTRACT, NATURAL COLORADO WELLNESS, CW Hemp Supply Co., or the Charlotte’s Web flower design, or any variations of those marks for any purpose in association with the Seeds, any Viable Plant Material, or any product derived, converted or produced from the Seeds or Viable Plant Material, including but not limited to extracts or CBD products, CBD edibles, CBD beverages, CBD beauty products, CBD topicals and all cannabinoids. Licensor intends to protect its trademarks and enforce this Section 2.4 to the fullest extent of the law, including suing violators for infringement.
2.5 Grower acknowledges that compliance with Licensor’s stewardship requirements is a fundamental term of this Agreement, and Grower may lose its Limited Use License to use the Seeds if Grower fails to comply with this Agreement. If Grower breaches its obligations under Section 2.4 (“Grower Breach”), Grower shall pay to Licensor an amount equal to three (3) times the License Fee for the procured Seeds (the “Liquidated Damages”). The Parties intend that the Liquidated Damages constitute compensation, and not a penalty, for such Grower Breach. The Parties acknowledge and agree that the Licensor’s harm caused by a Grower Breach would be impossible or very difficult to accurately estimate, and that the Liquidated Damages are a reasonable estimate of the anticipated or actual harm that might arise from a Grower Breach.
2.6 Grower will comply with all applicable laws and regulations, including as related to planting, harvesting, storage, transfer, distribution, and sale of Viable Plant Material or products derived therefrom. Grower will indemnify and hold harmless Licensor and its affiliates, employees, and agents from and against all liabilities, losses, damages, costs, and expenses (including attorneys’ fees) arising from Grower’s violation of any law, governmental order, or regulation.
2.7 Grower will notify Licensor in writing of any discrepancies related to the count or condition of the Seeds not later than five (5) business days after the date of transfer of the Seeds to Grower (“Inspection Period”). Grower’s sole and exclusive remedy for any rejected Seed during the Inspection Period is, in Licensor’s discretion: to (a) receive replacement Seed in the same quantity and of the same variety as the rejected Seed; or (b) a modification of the payment terms under this Agreement to reflect a reduced amount of Seeds.
3. GROWER OBLIGATIONS
Grower, including its employees, contractors, agents, subcontractors, and others under its control or supervision, shall:
3.1 Use Seed solely for planting during the 2021 growing season, only in the state(s) of Grower’s then-current hemp license registration(s), for the purpose of producing one or more commercial hemp crops during such permitted growing season. Use of the term “planting” in this Section 3.1 may encompass planting, growing and harvesting of Seed across more than one field.
3.2 Not transfer any Seed to any other person or entity, shall not export any Seed outside of the United States or across any state line within the United States, shall not save or clean any crop produced from Seed for planting or replanting, shall not produce or propagate any new seed from any crop produced from Seed, and shall not re-sell any Seed.
3.3 Not transfer to any other person or entity any Viable Plant Material, or any other tangible materials derived from Seed or Viable Plant Material that are capable of producing (e.g., regenerating) a hemp plant.
3.4 Not plant or use any Seed or Viable Plant Material derived therefrom (1) for crop breeding, inbreeding or cross-breeding purposes, (2) to produce progeny or derivatives, (3) for seed multiplication or propagation, (4) for the creation of new hybrid lines, or (5) for molecular characterization in the broadest sense possible (for example, (a) genetic 242816201 v2 3.
profiling, (b) sequencing, (c) analyzing or isolating molecular species, (d) subjecting to molecular marker analysis, including by PCR or other techniques that involve use of a nucleic or amino acid) and (e) genotyping) and shall not conduct, or transfer to others to conduct, any research or experiments, including any activities prohibited in this Section 3.4, on or with any Seed or Viable Plant Material. This restriction set forth in this Section 3.4 shall not apply with respect to Grower’s analysis of CBD in plant material grown from Seed if the harvested crop will be used for processing into CBD isolate, distillate, or such similar manufactured CBD products. Grower has a limited right to collect data pertaining to propagation of such produced crop to make agronomic comparisons, monitor crop growth, assess compliance with hemp growing laws and regulations (including THC measurements of pre-harvest plant material) , sell raw material, and conduct yield testing solely for Grower’s own use (and not for public disclosure).
3.5 At all times after transfer of Seeds to Grower, assert sole and direct control over the Seed and take all necessary and commercially reasonable steps and precautions used in this industry to protect the Seed from comingling with other seeds, microbial contamination, pests, misuse, theft, damage, and abandonment.
3.6 Notify Licensor in writing promptly after becoming aware of any acts of propagation, processing, sale or use of Seeds, Viable Plant Material or related plants or materials by others that might be a possible infringement of the Licensor Technology. Notification of such possible infringements shall include all details available to Grower, such as name and address of infringer, and location and size of plantings or production, as well as any other information that would enable Licensor to investigate and take steps to terminate such infringement. Grower shall also promptly notify Licensor if any Grower information provided to Licensor in connection with this Agreement changes.
4. DISCLAIMERS; LIMITATION OF LIABILITY.
4.1 No Warranty; General Disclaimer: (1) GROWER ACKNOWLEDGES AND AGREES THAT ALL SEED TRANSFERRED AND LICENSED BY LICENSOR HEREUNDER IS “AS IS” AND WITHOUT ANY WARRANTY OF ANY KIND. FURTHER, LICENSOR PROVIDES NO WARRANTY THAT ANY SEED TRANSFERRED AND LICENSED TO GROWER WILL BE SUITABLE FOR GROWER’S PURPOSES. (2) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LICENSOR DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, INTELLECTUAL PROPERTY INFRINGEMENT OR THIRD-PARTY RIGHTS, OR BASED ON COURSE OF CONDUCT OR TRADE CUSTOM OR USAGE. (3) LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING USE OF THE SEED FOR ANY PURPOSES INCLUDING, BUT NOT LIMITED TO, USE OF THE SEED IN APPLICATIONS INVOLVING THE DIAGNOSIS, CURE, MITIGATION, TREATMENT, OR PREVENTION OF ANY ILLNESS, INJURY, OR DISEASE.
4.2 Specific Disclaimer: The Parties acknowledge, agree, and accept that: (1) disease of plants (including Viable Plant Material) can be transmitted by wind, insects, animals, or by human contact and can be seed or soil borne, (2) the Seeds are not immune to any disease, and (3) the Seeds will perform and germinate differently in different growing environments (e.g., weather, climate, soil) and through use of different growing techniques (e.g., transplanting). Licensor provides Seeds at viable seed count according to third party germination test results; however, Licensor will not be held liable if Grower does not experience the same germination results, which depend upon germination methods used for desired cultivation practices. NO WARRANTY IS OR CAN BE GIVEN BY LICENSOR AS TO THE VIABILITY, NATURE, SIZE, YIELD, QUALITY, POTENCY, RESISTANCE, TOLERANCE, EXISTENCE OF INTENDED AND/OR UNINTENDED GENETIC TRAITS, ANY ADVENTITIOUS PRESENCE OF UNKNOWN ORIGIN, PERFORMANCE, PRODUCTIVITY, GERMINATION RATE, SEX OR APPEARANCE OF ANY VIABLE PLANT MATERIAL. DESPITE LICENSOR’S TESTING AND CERTIFICATION, LICENSOR DOES NOT WARRANT THAT THE POTENCY OF THE VIABLE PLANT MATERIAL WILL NOT EXCEED 0.3% THC, AND DISCLAIMS ALL LIABILITY FOR ANY RESULTING CROP FAILURE, CROP LOSS, OR COMPLIANCE CROP DESTRUCTION. THE PARTIES ACKNOWLEDGE, AGREE, AND ACCEPT THAT GROWER IS SOLELY RESPONSIBLE FOR DETERMINING WHETHER OR NOT THE ANTICIPATED GROWING CONDITIONS ARE SUITABLE FOR CULTIVATION OF THE SEEDS, AND ANY ADVICE, CERTIFICATES OF ANALYSIS, DOCUMENTATION, OR OTHER DATA OR INFORMATION DISCLOSED BY LICENSOR TO GROWER IN THIS RESPECT (WHETHER PRIOR TO, CONTEMPORANEOUS WITH, OR FOLLOWING THE EFFECTIVE DATE) ARE GIVEN FOR 242816201 v2 4.
HISTORICAL INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY LIABILITY TO LICENSOR, AND SUCH DISCLOSURES WILL NOT BE DEEMED TO BE A PROMISE, REPRESENTATION, WARRANTY, GUARANTEE, OR COVENANT BY LICENSOR, AS TO FUTURE PERFORMANCE, AND SHALL NOT BE DEEMED PART OF THIS AGREEMENT, OR OTHERWISE LEGALLY BINDING IN ANY WAY WHATSOEVER.
4.3 Limitation of Liability: (1) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LICENSOR’S AGGREGATE LIABILITY FOR ALL ACTIONS ARISING FROM OR RELATED TO THIS AGREEMENT WILL IN NO EVENT EXCEED THE AMOUNTS RECEIVED FROM GROWER PURSUANT TO THE PROCUREMENT ORDER GIVING RISE TO THE CLAIM, AND GROWER HEREBY WAIVES ANY OTHER REMEDY AVAILABLE AT LAW OR IN EQUITY. (2) IN NO EVENT WILL LICENSOR BE LIABLE TO GROWER OR ANY THIRD PARTY FOR ANY LOST PROFITS, LOST OPPORTUNITIES OR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES (INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, USE, DATA, OR OTHER ECONOMIC ADVANTAGE), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, REGARDLESS OF WHETHER LICENSOR WAS NOTIFIED OF THE POSSIBILITY OF THE SAME. (3) NO ACTION, REGARDLESS OF FORM, ARISING UNDER THIS AGREEMENT MAY BE BROUGHT BY GROWER MORE THAN 3 MONTHS AFTER THE OCCURRENCE OF THE EVENTS WHICH GAVE RISE TO THE CAUSE OF ACTION.
4.4 GROWER ACKNOWLEDGES AND AGREES THAT THE LIMITATIONS, EXCLUSIONS AND DISCLAIMERS IN THIS AGREEMENT ARE A BARGAINED FOR AND REASONABLE ALLOCATION OF THE RISK BETWEEN THE PARTIES, AND WILL APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EVEN IF ANY REMEDY FAILS IN ITS ESSENTIAL PURPOSE.
5. GENERAL TERMS
5.1 Term: This Agreement will commence on the Effective Date and remain in effect until either Grower or Licensor chooses to terminate the Agreement, as provided below. The Limited Use License granted herein is applicable only to Seeds procured and planted for the 2021 growing season. The submission of Procurement Orders for any future growing season(s) may be subject to a new Seed Procurement Agreement that includes amended terms and conditions.
5.2 Termination: Either Party may terminate this Agreement effective immediately by delivering written notice of termination to the other Party. Upon termination of this Agreement by either Party, Grower’s obligations, responsibilities and the other terms applicable to Grower’s use and exploitation of Seeds and Viable Plant Material, as set forth herein, shall survive (including Grower’s obligation to use Seed only for the 20210 growing season) as to Seed previously procured, and as to Viable Plant Material used or produced, by Grower. In the case of termination of this Agreement for convenience, EACH PARTY WAIVES AND RELEASES THE OTHER PARTY FROM ANY CLAIM TO COMPENSATION OR INDEMNITY DUE TO SUCH TERMINATION FOR CONVENIENCE. If Grower is alleged to have infringed one or more of Licensed Patents or any of the Licensor Technologies, then among other available remedies, Licensor shall be entitled to seek preliminary and permanent injunctions enjoining Grower, and any individual and/or entity acting on Grower’s behalf or in concert therewith, (i) from making, using, selling or having sold Seed, or from offering Seed for sale, or (ii) from making, using, selling, or offering for sale any Viable Plant Material or any other products, or portions thereof that have been obtained or derived from plants grown from Seed. Additionally, any such finding of infringement by Grower shall entitle Licensor to patent infringement damages to the full extent authorized by 35 U.S.C. § 271 et. seq. In addition, Grower will be liable for all breach of contract damages. Licensor has all other rights and remedies available to it at law or in equity in relation to Grower’s breach of this Agreement. Upon termination of this Agreement, Grower will destroy all Seeds and Viable Plant Material in Grower’s possession or under Grower’s control.
5.3 Governing Law: This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of Colorado (without regard to choice of law principles). The United Nations Convention on the International Sale of Goods is expressly excluded. Any suit, action or proceeding to determine, construe or enforce any provision of this Agreement, or the rights of a Party hereunder, shall be brought exclusively in state courts located in Denver, Colorado.
5.4 Binding Arbitration for Claims Made By Grower: Any claim, action or dispute (“Dispute”) made or asserted by Grower (or any other person or entity claiming an interest in Grower’s crop, or any person or entity involved in 242816201 v2 5.
Grower’s production, development, distribution, and/or sale of the Seed or Seed-related materials embodying or using any Licensor Technology; hereafter these persons and entities are included in the term “Grower” for purposes of this Section) against Licensor, and arising out of and/or in connection with this Agreement, must be resolved by confidential, binding arbitration. The foregoing requirement to arbitrate specifically excludes any Dispute involving the infringement, validity, or enforceability of a patent or that otherwise arises under the U.S. patent laws. As a condition precedent to arbitration of a Dispute, a Party must provide written notice to the other Party describing such Dispute in a reasonably detailed manner. If the Parties fail to resolve such Dispute within 30 days, the Dispute shall be referred to an executive of each Party (each, an “Executive”) for resolution through good faith discussions. If the Executives fail to resolve such Dispute within 30 days after referral to the Executives, the Dispute shall be resolved by final and binding arbitration administered by the American Arbitration Association (“AAA”) according to its Commercial Arbitration Rules (“Rules”). With respect to each such unresolved Dispute, the arbitration shall be conducted by a single, independent and neutral arbitrator mutually selected by the Parties, and shall apply the laws of the State of Colorado, without regard to its conflicts of law principles. If the Parties cannot agree on an arbitrator within thirty (30) days from the filing of a demand for arbitration with the AAA, the arbitrator shall be chosen pursuant to the Rules. The arbitration shall be conducted in the City and County of Denver, Colorado, and the Parties will not challenge that seat for the arbitration. The Parties shall bear their own costs and expenses of preparing testimony, presenting witnesses and evidence, including attorneys’ fees and costs. The costs of the arbitrator and the proceedings shall be borne by the Parties equally. The award of the arbitrator, and the reasons for the arbitrator’s decision, shall be in writing and shall be binding and may be enforced by any court of competent jurisdiction. GROWER MAY ONLY BRING A CLAIM IN ARBITRATION IN GROWER’S INDIVIDUAL CAPACITY AND GROWER WAIVES ANY RIGHT TO DO SO AS A REPRESENTATIVE OR MEMBER OF ANY CLASS OR PUTATIVE CLASS. The arbitration proceedings and results shall remain confidential and shall not be disclosed without the written agreement of the Parties, except to the extent necessary to effectuate the decision or award or as otherwise required by law.
5.5 Transferability: Grower may not assign or transfer its rights or obligations, or assign this Agreement, to another person or entity without the prior written consent of Licensor. Assignments by Grower without such consent shall be null and void.
5.6 Severability: If any provisions of this Agreement are in conflict or shall come into conflict with the laws or regulations of any jurisdiction or any governmental entity having jurisdiction over the Parties or this Agreement, those provisions shall be deemed automatically deleted, if such deletion is allowed by relevant law, and the remaining terms and conditions of this Agreement shall remain in full force and effect.
5.7 Attorneys’ Fees: If Grower is found by any court, or through settlement of a legal action, to have infringed one or more of the Licensed Patents or any of the Licensor Technologies or otherwise to have breached this Agreement, Grower will be obligated to pay Licensor, as appropriate, its attorneys’ fees and costs related to the case plus any other expenses reasonably incurred in the investigation of the Grower’s breach and/or infringement.
5.8 Waiver: The failure of Licensor or any owners of patents covering Licensor Technology to exercise one or more of its rights under this Agreement on one or more occasions shall not be deemed a waiver on the part of Licensor or such patent owner to exercise such right(s) on any subsequent occasion.
5.9 Entire Agreement: This Agreement represents the full understanding between the Parties with reference to the subject matter hereof, and supersedes all prior agreements between the Parties pertaining to such subject matter. Any prior agreements relating to this subject matter are hereby terminated. No statements or other verbal agreements by the Parties shall vary or modify the written terms of this Agreement.
5.10 Amendment: Neither Licensor nor Grower shall amend or modify this Agreement without mutual agreement of the Parties in writing, specifically stating that it is an amendment to this Agreement.
5.11 Notice: Each Party must deliver all notices, consents, and approvals required or permitted under this Agreement in writing to the other Party at the address listed below by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized overnight carrier. Notice will be effective upon receipt or refusal of delivery. The Grower’s notice will be timely only if it is delivered 15 days or less after Grower first observes or learns of the issue(s) regarding performance or non-performance of the Licensor Technology and/or the Seed. Each Party may change its address for receipt of notice by giving notice of such change to the other Party. 242816201 v2 6.
Charlotte’s Web, Inc.
1600 Pearl St., Suite 300