SEPARATION AGREEMENT

 

This Separation Agreement (this “Agreement”) is made and entered into as of
October 3, 2014 (the “Effective Date”), by and between DigiPath, Inc., a Nevada
corporation (the “Company”) and Joe Tanner, an individual (“Tanner”). The
Company and Tanner are hereinafter collectively referred to as the “Parties.”

 

RECITALS

 

WHEREAS, the Company and Tanner are parties to that certain Consulting,
Confidentiality and Proprietary Rights Agreement, dated May 30, 2014, as amended
by that certain Amendment No. 1 to Consulting, Confidentiality and Proprietary
Rights Agreement, dated September 12, 2014 (collectively, the “Consulting
Agreement”); and

 

WHEREAS, the Company and Tanner wish to fully settle and discharge all claims
and damages, whether known or unknown, and whether anticipated or unanticipated,
which are or may be the subject of any lawsuit or any other claim which has
arisen or which may arise between the Parties upon the terms and conditions set
forth herein.

 

NOW THEREFORE, in consideration of the foregoing recitals and for good and
valuable mutual consideration, the receipt of which is hereby acknowledged, the
Parties, intending to be legally bound, do hereby agree to the following terms
and conditions:

 

AGREEMENT

 

1. Settlement Consideration. As satisfaction and performance in full of all
obligations due and payable by and among the Parties (including those due
pursuant to the Consulting Agreement):

 

(a) The Company shall pay to Tanner the amount of One Hundred Twenty Five
Thousand Dollars (US $125,000) (which amount shall not be subject to withholding
by the Company) as set forth below:

 

  i) Seventy Five Thousand Dollars (US $75,000) within two business days of the
execution of this Agreement; and         ii) Commencing November 1, 2014, Twelve
Thousand Five Hundred Dollars ($12,500) on the first calendar day of each month
for a period of four months, for an aggregate of Fifty Thousand Dollars (US
$50,000).

 

(b) Within five business days of the execution of this Agreement, the Company
shall deliver to Tanner certificates representing 250,000 shares of the
Company’s common stock, free of all liens, pledge, charge, claim, restriction on
transfer, mortgage, security interest or other encumbrance other than statutory
liens for liabilities not yet due and payable and transfer restrictions imposed
by applicable securities laws. Such securities shall not be subject to any
pre-emptive rights or rights of first refusal created by any agreement or
understanding to which the Company is a party.

 

(c) In addition to the amounts set forth above in Sections 1(a) hereof, the
Company shall pay in full to Tanner all cash consideration that would have
accrued pursuant to the Consulting Agreement as of the Effective Date assuming
the continuation of the Consulting Agreement up to and including the Effective
Date.

 

 

 

  

(d) Effective upon Tanner’s receipt of the amounts set forth in Sections 1(a)i)
and 1(c) above, Tanner hereby resigns from all of his positions with the Company
and its subsidiaries, including without limitation, all positions as an officer
or director of the Company and any of its subsidiaries and all other positions
purporting to represent or act on behalf of the Company and or its subsidiaries
(including bank signatories).

 

(e) The Company shall timely file all forms, reports or other documents required
by the Securities and Exchange Commission to be filed by it and on behalf of
Tanner in connection with the transactions contemplated herein, including all
Section 16 filings; provided, however, that the Company shall not be liable for
any delinquent filings or failures to file arising from Tanner’s failure to
reasonably cooperate with the Company in the preparation, review and filing of
such forms, reports or documents.

 

2. Advisory Services. For a period of four (4) months after the Effective Date,
Tanner agrees to make himself available to advise the Company in matters
relating to cannabis lab operations in Washington State, when requested to do
so. In such capacity, Mr. Tanner shall report and communicate solely to Todd
Denkin, Director of the Company. The Parties agree and acknowledge that in
providing such advisory services Tanner shall receive compensation in addition
to the amounts set forth in Section 1 above.

 

3. Releases.

 

(a) Effective upon Tanner’s receipt of all consideration due to him pursuant to
Sections 1(a)i), 1(b) and 1(c) hereof, the Parties, on behalf of itself and each
of its representatives, agents, affiliates, successors, predecessors, attorneys,
heirs, executors, administrators, agents and assigns, and each and all of them,
fully release and forever discharge each other, each of its former and current
principals, officers, members, managers, directors, shareholders, employees,
representatives, agents, parents, subsidiaries, affiliates, successors,
predecessors, attorneys, heirs, executors, administrators, agents and assigns,
and each and all of them, as applicable, of and from any and all claims, debts,
rights, liabilities, damages, costs, expenses, attorneys’ fees, causes of
action, lawsuits, arbitrations, loss of use and loss of services of every kind,
nature, or description, whether known or unknown, suspected or unsuspected,
which previously existed, now exist, or may exist hereafter, accruing, occurring
or arising from or in any way related to the Consulting Agreement, the
separation of the Parties, the operation and business of the Company, and the
performance and other conduct of the Parties in connection with the operation
and business of the Company including Tanner’s conduct as a director and
executive officer of the Company and or its subsidiaries, whether based on tort,
contract, statute, insurance policy, or other theory of recovery, and whether
for compensatory or punitive damages, including attorneys’ fees and costs, as
well as statutory sanctions, which the Parties ever had against each other or
now have against each other including, but not limited to, defamation,
intentional infliction of emotional distress, interference with contract,
impairment of economic opportunity, breach of promise, conspiracy, fiduciary
breach, declaratory relief, prohibited transactions, fraud, misrepresentation,
and retaliation. All of the foregoing released matters are hereinafter
collectively referred to as the “Released Matters.”

 

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(b) The releases set forth above are not intended to, and shall not, extend to
or otherwise release or discharge any rights, privileges, benefits, duties, or
obligations of any of the Parties by reason of, or otherwise arising under, (i)
this Agreement, (ii) Tanner’s right to seek indemnification from the Company
pursuant to this Agreement or any existing indemnification agreement with the
Company, or (iii) with regard to any director and officer insurance policy
covering Tanner.

 

(c) The Parties, and each of them, acknowledge that they may hereafter discover
facts different from, or in addition to, those which they now believe to be true
with respect to any and all of the Released Matters, including without
limitation, unknown or unanticipated claims which, if known or anticipated, on
the date of execution of this Agreement, might have materially affected such
Party’s decision to execute this Agreement. Each of the Parties acknowledges and
agrees that by reason of the mutual general release set forth above, they are
assuming the risk of such unknown claims and agree that this Agreement shall
apply thereto. Nevertheless, the Parties hereto, and each of them, hereby agree
that each of the releases set forth above shall be and remain effective in all
respects, notwithstanding the discovery of such different or additional facts.

 

4. Civil Code Section 1542. The Parties represent that they are not aware of any
disputes or causes of action they have other than the disputes and causes of
action that are released by this Agreement. The Parties expressly agree and
understand that this Agreement is a full and final release of all claims of
every nature and kind, known or unknown, suspected or unsuspected, past,
present, or future, of all Released Matters, and execution of this Agreement by
the Parties operates as a complete bar and defense against any and all claims
that may be made by the Parties with regard to the Released Matters, and that,
should any proceeding be instituted with respect to matters released herein,
this Agreement shall be deemed in full and complete accord, satisfaction and
settlement of any such released matter and sufficient basis for its dismissal.
The Parties have read and fully understand the statutory language of section
1542 of the California Civil Code and on that basis expressly and specifically
waive all rights under said statute or any analogous state law or federal law or
regulation. Section 1542 of the California Civil Code reads as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

The Parties expressly waive any rights they may have under it, as well as under
any other statute or common law principles of similar effect. Each Party
represents further that as of the date of execution of this Agreement, it has
not brought any claims of the type released against any of the released parties
set forth above.

 

5. Warranty Of Non-Assignment. Each of the Parties hereby warrants, represents
and agrees that it is the sole and lawful owner of all right, title and interest
in and to all of the respective Released Matters which are referred to in the
mutual general release set forth above and that it has not heretofore
voluntarily, by operation of law or otherwise, assigned or transferred or
purported to assign or transfer to any person whomsoever any such Released
Matters, or any part or portion thereof. The Parties shall not assign, encumber
or otherwise transfer to any party or person any such Released Matters, or any
part or portion thereof.

 

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6. No Admission of Liability. It is specifically understood and agreed that this
Agreement constitutes a complete compromise and settlement of disputed claims,
and that neither the execution of this Agreement nor the payment of any monies
hereunder is to be deemed an admission of liability by the Parties or any of
them. Each Party acknowledges that this Agreement is not, and cannot be
construed as, any admission of fault by the other Parties.

 

7. Indemnification. The Company and its subsidiaries (collectively, the
“Indemnifying Parties”) shall jointly and severally indemnify Tanner (the
“Indemnitee”) in accordance with the provisions of this Section 7 if Indemnitee
is, or is threatened to be made, a party to or a participant in any Proceeding.
Pursuant to this Section 7, Indemnitee shall be indemnified against all
Expenses, judgments, fines and amounts paid in settlement actually incurred by
Indemnitee or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and, in the case of a criminal proceeding had no reasonable cause to believe
that his conduct was unlawful. The Indemnitees hereby agree and acknowledge that
Indemnitee has acted in good faith and in a manner Indemnitee reasonably
believes to be in the best interest of the Company at all times during the
Consulting Agreement and thereafter. “Proceeding” shall include any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or investigative
nature, including any appeal therefrom, in which Indemnitee was, is or will be
involved as a party, a potential party, a non-party witness or otherwise by
reason of the fact that Indemnitee is or was a director, officer or shareholder
of the Company, by reason of any action taken by him or of any action or
inaction on his part while acting as director or officer of the Company, or by
reason of the fact that he is or was serving at the request of the Company as a
director, trustee, general partner, manager, member, officer, employee or agent
of another corporation, partnership, joint venture, trust or fiduciary of the
Company or any other enterprise, in each case whether or not serving in such
capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can be provided under
this Agreement. “Expenses” shall include all attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond, or other appeal bond or its equivalent.

 

(a) Advancement of Expenses. The Indemnifying Parties shall, jointly and
severally, advance all Expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or criminal action or
Proceeding referenced in Section 7 hereof (but not amounts actually paid in
settlement of any such action or Proceeding). Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it shall ultimately
be determined that Indemnitee is not entitled to be indemnified by the Company
as authorized hereby or elsewhere. The advances to be made hereunder shall be
paid by the Indemnifying Parties to Indemnitee within ten (10) days following
delivery of a written request therefor by Indemnitee to the Indemnifying
Parties.

 

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(b) Notice/Cooperation by Indemnitee. Indemnitee shall give the Indemnifying
Parties notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Indemnifying Parties shall be directed the Company at
the address shown on the signature page of this Agreement (or such other address
as the Company shall designate in writing to Indemnitee). Notice shall be deemed
received as set forth in Section 11(o) hereof. In addition, Indemnitee shall
give the Indemnifying Parties such information and cooperation in the defense of
any pending, threatened or completed action or Proceeding as shall be within
Indemnitee’s power, except that Indemnitee shall not be required to give the
Indemnifying Parties information that is privileged or confidential as to
Indemnitee. The giving of notice required under this Section 7(b) shall be a
condition precedent to Indemnitee’s right to be indemnified under this Agreement
if the failure to give such notice materially prejudices any right, claim or
defense available to the Indemnifying Parties.

 

(c) Procedure. Any indemnification provided for in Section 7 shall be made no
later than forty-five (45) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Consulting Agreement providing for indemnification, is not paid
in full by the Indemnifying Parties within forty-five (45) days after a written
request for payment thereof has first been received by the Indemnifying Parties,
Indemnitee may, but need not, at any time thereafter bring an action against the
Indemnifying Parties to recover the unpaid amount of the claim, and Indemnitee
shall also be entitled to be paid for the Expenses (including attorneys’ fees)
of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for Expenses incurred in connection with any
action or Proceeding in advance of its final disposition) that Indemnitee has
not met the standards of conduct which make it permissible under applicable law
for the Indemnifying Parties to indemnify Indemnitee for the amount claimed, but
the burden of proving such defense shall be on the Indemnifying Parties, and
Indemnitee shall be entitled to receive interim payments of Expenses pursuant to
Subsection 7(a) unless and until such defense may be finally adjudicated by
court order or judgment from which no further right of appeal exists. It is the
Parties’ intention that if the Indemnifying Parties contest Indemnitee’s right
to indemnification, the question of Indemnitee’s right to indemnification shall
be for the court to decide on a de novo basis, and neither the failure of the
Indemnifying Parties (including the Board of Directors or officers of the
Company, any committee or subgroup of the Board of Directors or officers,
independent legal counsel, or the shareholders of the Company) to have made a
determination that indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Indemnifying Parties
(including the Board of Directors or officers of the Company, any committee or
subgroup of the Board of Directors or officers, independent legal counsel, or
the shareholders of the Company) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.

 

(d) Notice to Insurers. If, at the time of the receipt of a notice of a claim
pursuant to Section 7(b) hereof, the Company has director and officer liability
insurance in effect, the Indemnifying Parties shall give prompt notice of the
commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Indemnifying Parties shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Proceeding
in accordance with the terms of such policies.

 

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(e) Selection of Counsel. In the event the Indemnifying Parties shall be
obligated under Section 7 hereof to pay the Expenses of any Proceeding against
Indemnitee, the Indemnifying Parties, if appropriate, shall be entitled to
assume the defense of such Proceeding, with counsel approved by Indemnitee,
which approval shall not be unreasonably delayed, upon the delivery to
Indemnitee of written notice of its election so to do. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Indemnifying Parties, the Indemnifying Parties will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee
shall have the right to employ his or her counsel in any such Proceeding at
Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Indemnifying Parties, (B) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between the
Indemnifying Parties and Indemnitee in the conduct of any such defense or (C)
the Indemnifying Parties shall not, in fact, have employed counsel to assume the
defense of such Proceeding, then the fees and Expenses of Indemnitee’s counsel
shall be at the expense of the Indemnifying Parties.

 

(f) Settlement of Claims. The Indemnifying Parties shall not settle any claim,
action or Proceeding (in whole or in part) which would impose any Expense,
judgment, fine, penalty or limitation on Indemnitee without the Indemnitee’s
prior written consent, which consent shall not be unreasonably delayed or
withheld.

 

8. Additional Indemnification Rights; Nonexclusivity.

 

(a) Scope. Notwithstanding any other provision of this Agreement, the
Indemnifying Parties hereby agree to, jointly and severally, indemnify
Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Consulting Agreement, or by statute. In the event of any change
after the date of this Agreement, in any applicable law, statute or rule which
expands the right of a Nevada corporation or the Indemnifying Parties to
indemnify a member of its board of directors, an officer or shareholder, such
changes shall be, ipso facto, within the purview of Indemnitee’s rights and the
obligations of the Indemnifying Parties, under this Agreement. In the event of
any change in any applicable law, statute or rule which narrows the right of a
Nevada corporation or the Indemnifying Parties to indemnify a member of its
Board of Directors or an officer or shareholder, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the Parties’ rights and obligations
hereunder.

 

(b) Nonexclusivity. The indemnification and advancement provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Consulting Agreement, any agreement, any vote of
shareholders/members or disinterested directors, the Nevada Revised Statutes,
California Corporations Code or otherwise, both as to action in Indemnitee’s
official capacity and as to action in another capacity while holding such
office. The indemnification and advancement provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though he may have ceased to serve in such capacity at
the time of any action or other covered Proceeding.

 

(c) Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement or otherwise to indemnification by the Indemnifying Parties for
some or a portion of the Expenses, judgments, fines or penalties actually or
reasonably incurred by him in the investigation, defense, appeal or settlement
of any civil or criminal action or Proceeding, but not, however, for the total
amount thereof, the Indemnifying Parties shall nevertheless indemnify Indemnitee
for the portion of such Expenses, judgments, fines or penalties to which
Indemnitee is entitled.

 

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(d) Mutual Acknowledgment. The Parties acknowledge that in certain instances,
applicable law or public policy may prohibit the Company from indemnifying its
directors, managers, officers and members under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company’s right under public policy to
indemnify Indemnitee.

 

9. Directors’ and Officers’ Liability Insurance. In the event the Indemnifying
Parties shall obtain or maintain one or more director and officer liability
insurance policy or policies: (i) Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee with the same rights and benefits as are
accorded to the most favorably insured of the Company’s directors, officers, and
key employees; and (ii) insurance coverage shall be allocated so that claims
against Indemnitee shall be satisfied prior to claims against the Indemnifying
Parties.

 

10. Representations and Warranties. Each of the Parties expressly represents and
warrants for itself and himself to the other that:

  

(a) it or he has the power, capacity and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby
and on behalf of all whom might claim through it or him to bind them to the
terms and conditions of this Agreement;

 

(b) the execution and delivery by it or him of this Agreement, and the
performance by it or him of its or his obligations hereunder, have been duly and
validly authorized by all action on its or his part;

 

(c) this Agreement has been duly and validly executed and delivered by it or him
and constitutes its or his legal, valid and binding agreement, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization, fraudulent conveyance or
other laws affecting the enforcement of creditors’ rights generally or by
general equitable principles, including without limitation, those limiting the
availability of specific performance, injunctive relief and other equitable
remedies and those providing for equitable defenses;

 

(d) it or he is not entering into this Agreement in reliance upon any express or
implied representation, agreement, or understanding of any kind by the others,
or any person representing (or purporting to represent) any of the other
Parties, or any other person, except as expressly stated in this Agreement and
the other Parties shall not directly or indirectly be liable or responsible for
the truth, accuracy, or enforcement of any representations, agreements, or
understandings which may now or hereafter exist between any of the Parties and
any other Non-Party person and/or entity; and

 

(e) it or he has signed the Agreement voluntarily, without any duress or undue
influence on the part, or on behalf, of any Party.

 

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11. Confidentiality. Tanner agrees that Tanner will not, except when required by
applicable law or order of a court, at any time, disclose directly or indirectly
to any person or entity, or copy, reproduce or use, any Trade Secrets (as
defined below) or Confidential Information (as defined below) or other
information treated as confidential by the Company known, learned or acquired by
the Tanner during the period of the Tanner’s engagement by the Company. For
purposes of this Agreement, “Confidential Information” shall mean any and all
Trade Secrets, knowledge, data or know-how of the Company, any of its affiliates
or of third parties in the possession of the Company or any of its affiliates,
and any nonpublic technical, training, financial and/or business information
treated as confidential by the Company or any of its affiliates, whether or not
such information, knowledge, Trade Secret or data was conceived, originated,
discovered or developed by Consultant hereunder. For purposes of this Agreement,
“Trade Secrets” shall include, without limitation, any formula, concept,
pattern, processes, designs, device, software, systems, list of customers,
training manuals, marketing or sales or service plans, business plans, marketing
plans, financial information, or compilation of information which is used in the
Company’s business or in the business of any of its affiliates. Any information
of the Company or any of its affiliates which is not readily available to the
public shall be considered to be a Trade Secret unless the Company advises
Tanner in writing otherwise. Tanner acknowledges that all of the Confidential
Information is proprietary to the Company and is a special, valuable and unique
asset of the business of the Company, and that Tanner’s past, present and future
engagement by the Company has created, creates and will continue to create a
relationship of confidence and trust between the Tanner and the Company with
respect to the Confidential Information. Furthermore, Tanner shall immediately
notify the Company of any information which comes to its attention which might
indicate that there has been a loss of confidentiality with respect to the
Confidential Information. In such event, Tanner shall take all reasonable steps
within its power to limit the scope of such loss.

 

12. Return of the Company’s Proprietary Materials. Tanner agrees to deliver
promptly to the Company within three business days of the Effective Date, all
documents, records, artwork, designs, data, drawings, flowcharts, listings,
models, sketches, apparatus, notebooks, disks, notes, copies and similar
repositories of Confidential Information and any other documents of a
confidential nature belonging to the Company, including all copies, summaries,
records, descriptions, modifications, drawings or adaptations of such materials
which Tanner may then possess or have under its control.

 

13. Miscellaneous Provisions

 

(a) Future Suits. If any Party hereafter commences any action or proceeding
against the other based upon any of the claims released by this Agreement, the
provisions of this Agreement shall be deemed breached and such non-breaching
Party shall be entitled to recover attorneys’ fees and other costs of suit
sustained by him, her or it due to such action or proceeding and shall be
indemnified by the other for such fees and costs. This Agreement may be pleaded
by such non-breaching Party as a defense, counterclaim or cross-claim in any
such action or proceeding.

 

(b) No Disparagement. Each of the Parties agrees that it shall not knowingly and
intentionally make disparaging and damaging comments about the other, including
its officers, managers, directors, employees, investors, shareholders, members,
administrators, affiliates, divisions, subsidiaries and predecessor and
successor corporations, as applicable.

 

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(c) Survival. All representations, warranties and covenants of the Parties shall
survive the execution of this Agreement.

 

(d) No Waiver. This Agreement (including all exhibits thereto) may not be
changed, waived, discharged, or terminated orally or in writing, except by a
writing signed by the Parties and the observance of any such term may be waived
(either generally or in a particular instance either retroactively or
prospectively) by a writing signed by the Party against whom such waiver is to
be asserted.

 

(e) No Precedential Value. The settlement reflected in this Agreement shall be
without precedential value. It shall not be used as evidence, or in any other
manner, in any court or other dispute resolution proceeding, to create, prove,
or interpret the obligations of the Parties to each other or to any other person
or entity except for those already stipulated in this Agreement.

 

(f) Further Assurances. Each Party agrees that it will, from time to time after
the date of this Agreement, execute and deliver such other certificates,
documents and instruments and take such other action as may be reasonably
requested by the other Party to carry out the actions and transactions
contemplated by this Agreement.

 

(g) Entire Agreement. This Agreement constitutes the entire agreement by and
among the Parties, and any prior or contemporaneous agreements, understandings,
promises, representations, warranties and covenants, whether written or oral, or
whether expressed, implied or apparent are hereby deemed merged into and made a
part of this Agreement. The terms of this Agreement are contractual and not
merely a recital.

 

(h) Successors and Assigns. This Agreement shall bind, and inure to the benefit
of the directors, officers, shareholders, employees, agents, partners,
representatives, attorneys, parent and affiliated corporations, subsidiaries,
divisions, insurers and reinsurers, joint venturers, predecessors, successors,
beneficiaries, grantees, vendees, transferees, assigns, heirs, executors,
administrators, trustees, and estates of each Party, as applicable.

 

(i) Expenses; Taxes. Each Party shall bear its own costs and expenses relating
to the transactions contemplated in this Agreement including, without
limitation, costs and expenses of its respective counsels as well as taxes
levied on each part as a result of the execution and performance of this
Agreement.

 

(j) Counterparts. This Agreement may be executed in any number of counterparts
by the Parties hereto, each of which shall constitute an original but all
together shall constitute but one and the same instrument. Confirmation of
execution by telecopy or telefax of a facsimile signature page shall be binding
upon that Party so confirming.

 

(k) No Other Contracts. There are no other contracts, instruments, documents,
agreements, understandings, facts, or rights of any person which could alter the
literal meaning or effect of this Agreement.

 

(l) No Other Conditions. There are no conditions precedent or subsequent to the
obligations of or release or waivers by the Parties, except as expressly stated
in this Agreement.

 

(m) Governing Law. This Agreement shall be construed in accordance with the laws
of the State of California without regard to conflict of laws principles. If any
action is filed to enforce or interpret any of the terms or provisions of this
Agreement or any of the other documents executed in connection with this
Agreement, or otherwise, the Parties agree that the appropriate venue shall be a
state or federal court of competent jurisdiction located in Los Angeles County,
State of California.

 

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(n) Construction. This Agreement has been negotiated at arm’s length and between
and among persons or entities sophisticated and knowledgeable in the matters
dealt with in this Agreement. In addition, this Agreement was drafted by
experienced and knowledgeable legal counsel for each of the Parties. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the purposes of the Parties and this Agreement.

 

(o) Notices. All notices, demands, consents, approvals, requests and other
communications required or permitted hereby shall be in writing and shall be
deemed to have been duly and sufficiently given only if (a) personally delivered
with proof of delivery thereof (any notice or communication so delivered being
deemed to have been received at the time so delivered), or (b) sent by Federal
Express (or other similar overnight courier) (any notice or communication so
delivered being deemed to have been received only when delivered), (c) sent by
telecopier or facsimile (any notice or communication so delivered being deemed
to have been received if a copy is also delivered by one of the other means of
delivery and shall be deemed to have been received (i) on the business day so
sent, if so sent prior to 4:00 p.m. (based upon the recipient’s time) of the
business day so sent, and (ii) on the business day following the day so sent, if
so sent on a non-business day or on or after 4:00 p.m. (based upon the
recipient’s time) of the business day so sent (unless actually received by the
addressee on the day so sent)), or (d) sent by United States registered or
certified mail, postage prepaid, at a post office regularly maintained by the
United States Postal Service (any notice or communication so sent being deemed
to have been received only when delivered), in any such case addressed to the
respective Parties as follows:

 

If to Tanner:

C/o The Convenience Group

P.O. Box 5883

Vancouver, WA. 98668

Facsimile: 360-892-3293

        If to the Company:   With copy to (which copy shall not constitute
notice thereof): DigiPath, Inc.  

6450 Cameron Street, Suite 113

Las Vegas, Nevada 89118

Attn: President

Facsimile: 702-446-2769

 

Manatt, Phelps & Phillips, LLP

Park Tower

695 Town Center Drive, 14th Floor

Costa Mesa, California 92626

Facsimile: 714-371-2550

 

or to such other address or party as the other Party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address or addresses shall only be effective upon receipt.

 

(p) Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all of the Released Matters. Each
Party acknowledge for itself that: (a) he or it has read this Agreement; (b) he
or it has been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of his or its own choice or that he or it has
voluntarily declined to seek such counsel; (c) he or it understands the terms
and consequences of this Agreement and of the release it contains; and (d) he or
it is fully aware of the legal and binding effect of this Agreement.

 

[Signature Page Follows]

 

10

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates first
set forth above.

 

DigiPath, Inc.,     a Nevada corporation           By: /s/ Todd Denkin    /s/
Joe Tanner   Todd Denkin, Director   Joe Tanner