Exhibit 10.1

 

 ARMEAU BRANDS, INC.

6610 North University Drive, Suite 200

Tamarac, FL 33321

 

June 12, 2017

 

Mr. Alexander M. Salgado, Manager

271 Lake Davis Holdings, LLC d/b/a SanSal

8648 Lake Davis Rd

Pueblo, CO 81005

 

Gentlemen:

 

This letter of intent (this “Letter”), when signed where indicated below, shall
constitute a statement of our mutual intent to consummate a transaction (the
“Transaction”) by and among Armeau Brands, Inc., a Nevada corporation (the
“Company”), 271 Lake Davis Holdings, LLC, a Delaware limited liability company
d/b/a/ SanSal (“SanSal”) and Alexander M. Salgado, the manager of SanSal, on
behalf of all the members of SanSal (collectively, the “Members” and
individually, a “Member”), pursuant to which, the Company will acquire a 100% of
all of the issued and outstanding membership interests of SanSal (the
“Interests”) from the Members on the terms and conditions set forth in this
Letter.

 

1.                       Outstanding Capitalization of the Company. Immediately
prior to Closing (as hereinafter defined), the Company shall have outstanding,
56,700,000 of common stock, of which 45,000,000 shares shall be “restricted”
shares and 11,700,000 shares shall be freely tradable without restriction under
federal and applicable state securities laws. At Closing, Jaitegh Singh, the
holder of the then outstanding 45,000,000 shares of common stock of the Company
shall contribute those shares to the capital of the Company. All references in
this Letter to shares of the Company’s common stock give pro forma effect to
implementation of the Stock Split (as hereinafter defined).

 

2.                       Outline of the Transaction. At Closing, the Company
will acquire the Interests from the Members, in exchange for the issuance to the
Members, pro rata, of 46,800,000 “restricted” shares of the Company’s common
stock (the “Shares”).

 

3.                       Additional Terms and Conditions of the Transaction.
Immediately following execution of this letter, the parties hereto shall enter
into negotiations with respect to definitive transaction documents, including,
without limitation, a Securities Exchange Agreement (the “Exchange Agreement”)
and the other corporate and employment agreements referenced in this letter
(collectively, the “Transaction Documentation”). The Transaction Documentation
shall provide that the Transaction shall be consummated (“Closing”) immediately
following the satisfaction or waiver of the conditions set forth therein. The
Transaction Documentation shall contain such representations, warranties,
covenants and indemnities of the parties customary for agreements of this type
and nature, as well as the following and the other the specific terms set forth
in this Letter:

 

(a)                 The Interests, when sold by the Members to the Company at
Closing, shall be free and clear of any and all liens and encumbrances of any
type and nature whatsoever.

 

(b)                 At Closing, the parties shall have received all permits,
authorizations, regulatory approvals and third party consents necessary for the
consummation of the Transaction and all applicable legal requirements shall have
been satisfied.

 

(c)                 SanSal shall and the Manager shall cause SanSal to furnish
the Company, at or prior to Closing, with audited and unaudited financial
statements of San Sal for such periods as required by Regulation S-X under the
Securities Exchange Act of 1934 (the “Exchange Act”), prepared in accordance
with U.S. generally accepted accounting principles consistently applied and the
applicable rules and regulations promulgated by the Securities and Exchange
Commission.

 

(d)                 Prior to Closing, the Company shall have effected a six for
one stock split in the form of a stock dividend.

 

(e)                 Prior to Closing, the Company shall have secured approval of
its board of directors, its shareholders and FINRA, as applicable, to amend its
Articles of Incorporation to (i) change its corporate name to “SanSal Wellness,
Inc.” (with a comparable change in its trading symbol); and (ii) authorize a
class of “blank check” preferred stock.

 

 

 

 

(f)                  At or prior to Closing, shares of the Company’s common
stock shall be DTC eligible and a bid price shall have been entered by market
makers for the shares of common stock.

 

(g)                 At Closing, the Company shall be current in all its filings
under the Exchange Act.

 

(h)                 At Closing, all of the Company’s existing liabilities shall
have been paid.

 

(i)                   At Closing, all of the current officers and directors of
the Company shall resign and designees of the Members shall be appointed as
officers and directors of the Company.

 

(j)                  At Closing, the Company shall enter into employment
agreements with each of Alexander M. Salgado and Erduis Sanabria, on terms and
in form and substance acceptable to the parties thereto.

 

(k)                 At or prior to Closing, the Company shall have adopted an
Incentive Stock Plan on terms and in form and substance acceptable to the
Company and the Members.

 

(l)                   All of the Transaction Documentation shall be approved by
respective legal counsel to the parties.

 

4. Expenses. Each party shall have independent counsel and as such, each party
shall bear its respective legal fees and expenses relating to the Transaction.

 

5. Conduct of Business Pending Closing. Until Closing or the earlier termination
of the Transaction pursuant to this Letter or the Transaction Documentation,
SanSal will and the Members will cause SanSal conduct its businesses only in the
ordinary course and none of the assets of SanSal shall be sold or disposed of
without the prior written consent of the Company (which shall not be
unreasonably withheld or delayed), other than inventory in the ordinary course
of business.

 

6. Due Diligence Investigation. From the date of execution of this Letter and
until Closing or the earlier termination of the Transaction pursuant to this
Letter or the Transaction Documentation, the Members shall cause SanSal to
afford the Company, its officers, directors, attorneys, accountants and
advisors, reasonable access at reasonable times (upon reasonable advance notice)
to all books, records and documentation regarding SanSal for purposes of
examining the same in connection with the Transaction. The results of such due
diligence investigation shall be satisfactory to the Company in its reasonable
discretion and shall be a condition to consummating the Transaction. The Company
may terminate this Letter at any time by written notice to SanSal and the
Members as a result of such due diligence investigation.

 

7. Confidentiality. All non-public information and documentation disclosed by
the Members and/or SanSal to the Company pursuant to this Letter, as well as the
existence of negotiations among the parties with respect to the Transaction,
shall be maintained in strict confidence by the Company and shall not be
disclosed to any third party other than officers, directors, attorneys,
accountants and advisors of the Company involved in the Transaction or as
required under applicable law.

 

8. No Negotiations. In order to permit the negotiation and preparation of the
Transaction Documentation, neither the Members nor SanSal shall, directly or
indirectly, encourage, solicit, initiate or engage in discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or any other entity or group (other than the Company) concerning any sale
or any substantial portion of the assets of or outstanding or new Interests in
SanSal until the termination of the Transaction pursuant to this Letter or the
Transaction Documentation.

 

9. Termination. In the event that the parties, despite their good faith efforts,
are unable to agree upon and execute the Transaction Documentation on or before
July 31, 2017, or such later date as may be mutually agreed upon by the parties,
this Letter hall terminate and the parties hereto shall thereafter have no
liability to each other, except as may arise from a breach of Paragraphs 5, 6,
7, 8 or 10 hereof.

 

10. Letter of Intent. The provisions of Paragraphs 4, 5, 6, 7, 8, 9, 10 and 11
of this Letter shall be binding legal obligations of the parties hereto. All of
the remaining portions of this Letter are not intended to and shall not be
deemed to constitute a binding legal obligation. The parties acknowledge and
agree that, except as set forth in this Paragraph 10, they only intend to be
legally bound with respect to the Transaction upon the execution and delivery of
the Transaction Documentation.

11.       Governing Law. This Letter shall be governed by and construed in
accordance with the laws of the state of Florida. Exclusive venue for any
dispute arising hereunder shall be in a Federal or state court of competent
jurisdiction in Broward County, Florida. The prevailing party in any action
arising hereunder shall be entitled to recover legal fees and costs (at both the
trial and appellate levels) from the non-prevailing party.

 

12. Facsimile and Electronic Signatures. For purposes of this letter, the
facsimile, .PDF or other electronic signature of any party hereto shall
constitute and be deemed an original signature.

If the foregoing accurately summarizes our understanding, please so indicate by
signing this Letter.

 

 

THE COMPANY:

 

ARMEAU BRANDS, INC.

 

 

 

By: /s/ Jaitegh Singh

Jaitegh Singh, President

 

 

SANSAL:

 

271 LAKE DAVIS HOLDINGS, LLC

 

 

By: /s/ Alexander M. Salgado

Alexander M. Salgado, Manager

 

 

THE MEMBERS:

 

 

/s/ Alexander M. Salgado

Alexander M. Salgado, on behalf of all of the

Members of SanSal