November
23, 2018


 


Activa
Clinics


6610
Turner Valley Road, Suite 200


Mississauga,
Ontario L5N 2Pl


 


Attention:
Neil Dhalla


 


RE:
Binding Letter of Intent for the Acquisition, by Novo Healthnet Limited, of 100% of the issued and outstanding equity stock of
Activa Clinics in exchange for Common Stock of Novo Integrated Sciences Inc.


 


This
binding letter of intent (“LOI” or “Letter”) is to generally record terms and conditions
of the proposed agreement whereby Novo Integrated Sciences Inc., a Nevada corporation (“NVOS”) and Novo Healthnet
Limited, a wholly owned Canadian subsidiary of NVOS (“NHL”), will acquire all of the issued and outstanding
shares of Activa Clinics, a limited company incorporated under the laws of Ontario (“AC”), in exchange for
common shares of Novo Integrated Sciences, Inc. (the “Transaction”). This Letter represents only our good-faith
intention to negotiate and enter into a definitive agreement in a form acceptable to NVOS, NHL and AC.


 


This
Letter is a binding agreement between us. Notwithstanding the foregoing, the parties acknowledge and confirm it is their intention
that this Letter will serve only as a preliminary interim agreement in relation to the matters described herein, which will apply
until the Definitive Agreement (as defined below) is concluded.


 


Statements
below as to what we, or you, will do, or agree to do, or the like, are so expressed for convenience only, and are understood in
all instances (except for the items identified below in Section 11) to be subject to our mutual continued willingness to proceed
with the Transaction.


 


The
following paragraphs reflect our preliminary agreement with respect to the Transaction (as defined below):


 


	1.	Structure:
    The parties intend to enter into a share exchange or other similar business combination in which:


 


	 	(i)	NVOS
    will issue, based on a valuation of AC purchase price of 35 million CAD, the equivalent in NVOS common shares based on the
    30-trading day average share price for the period ending on the date of execution of this LOI to include the application of
    a market acceptable discount to the determined average, in exchange for all issued and outstanding shares held by the shareholders
    of AC. The shares issued to AC will be subject to a two-year lock up coinciding with the claw-back identified in Section 1(viii)
    of this Agreement. In the event the claw-back is waived prior to the two-year claw-back term, the lock-up will be removed
    and normal rule 144 restrictions will apply.
	 	 	 
	 	(ii)	For
    the sake of clarity; the current shareholder structure is referenced in our filings.


 


11120
NE 2nd Street, Suite 200 Bellevue, WA 98004 USA


Phone:
(206) 617-9797


www.novointegrated.com


 




    	 	 	 



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	 	(iii)	Upon
    completion of the Transaction, NHL will hold all the issued and outstanding shares of AC and AC shall be a wholly-owned subsidiary
    of NHL.
	 	 	 
	 	(iv)	AC
    will have the right to appoint a board member to the NVOS Board of Directors.
	 	 	 
	 	(v)	NVOS-NHL
    will have the right to appoint a board member to the AC Board of Directors.
	 	 	 
	 	(vi)	Performance
    bonuses related to proprietary SOP’s and other AC intellectual property will be identifiable in a definitive agreement.
	 	 	 
	 	(vii)	Each
    AC shareholders shall enter into an employment agreement for a period of no less than two years from the close of the transaction.
    The employment agreement will identify specific bonus structures related to subsidiary revenue performance as well as total
    corporate performance.
	 	 	 
	 	(viii)	AC
    has the right to exercise a ‘ claw-back’ within a two-year period commencing the date of the closing of this transaction.
    The claw-back will result in the mutual return of AC and NVOS shares to the respective parties should targets not be met by
    NVOS as identified in a definite agreement.


 


	2.	Due
    Diligence: The parties will work promptly to carry out all required due diligence in respect of the proposed Transaction
    including without limitation, the completion of standard business, legal and other inquiries and a review of applicable laws
    and regulations. The parties will afford each other, its employees, auditors, legal counsel, and other authorized representatives
    all reasonable opportunity and access during normal business hours to inspect and investigate the business and financial affairs
    of the other party.
	 	 
	3.	Definitive
    Agreement. We mutually agree to proceed reasonably and in good faith toward the negotiation and execution of definitive
    documentation which shall contain the terms and conditions set out in the LOI and such other terms, conditions, indemnities,
    representations, warranties, covenants as are customary for transactions of this nature (the “Definitive Agreement”).
    The parties shall cooperate in structuring the Transaction in the most effective manner having regard to applicable tax,
    corporate, and securities laws. Upon the execution and delivery of the Definitive Agreement, it will supersede this Letter.
	 	 
	4.	Regulatory
    Approvals and Contractual Consents: Each of the parties will use its commercially reasonable best efforts to obtain:


 


	 	(i)	the
    necessary board approvals and shareholder approvals for the Transaction prior to the execution of the Definitive Agreement;
    and
	 	 	 
	 	(ii)	all
    necessary regulatory approvals (including approvals from any licensing authorities) and third-party consents and the necessary
    shareholder approvals prior to the closing of the Transaction and to cooperate in providing any submissions necessary to affect
    the Transaction.


 


	5.	Other
    Conditions. The Definitive Agreement shall include, but will not be limited to, the following:


 


	 	(i)	the
    parties having completed a due diligence investigation the results of which are satisfactory to the parties their sole discretion;



 






    	 	 	 



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	 	(ii)	at
    the time of the Transaction, AC will have no liabilities, contingent or otherwise, unless such liabilities have been specifically
    agreed to by NHL in writing;
	 	 	 
	 	(iii)	AC
    will not be debarred or lose its status with any third-party or government payor/services for the provision of medical services
    because of the Transaction;
	 	 	 
	 	(iv)	AC
    will have received all regulatory approvals required to complete the Transaction;
	 	 	 
	 	(v)	the
    parties agree to cooperate to prepare for filing the necessary current reports with the Securities and Exchange Commission
    with respect to the Transaction, including a Form 8-K/A, within the regulatory required time limits following the closing
    of the Transaction;
	 	 	 
	 	(vi)	the
    representations and warranties of contained herein shall be true and correct in all material respects as of the closing of
    the Transaction; and
	 	 	 
	 	(vii)	no
    material adverse change shall have occurred in the business, assets, liabilities, results, financial condition, affairs or
    prospects of AC from the date hereof to the closing of the Transaction.


 


	6.	Adjustment
    of Officers and Directors: At the closing of the Transaction, both parties will appoint directors to each other’s
    boards as described above.
	 	 
	7.	Confidentiality:
    Each party agrees that, subject to compliance with applicable laws, it will keep confidential, and not release to any
    other person, this proposal, the contents of this Binding Letter of Intent and any of the proprietary business, technical
    or other information obtained by it during its due diligence inquiries and any related negotiations. Each party’s obligations
    in this respect shall survive the closing of the Transaction or any termination of the proposed Transaction between the parties
    or the termination of this LOI.
	 	 
	8.	Disclosure:
    No public announcement concerning the Transaction contemplated herein or the status of the discussions between the parties
    hereto shall be made by either party unless and until the same has been approved by both parties hereto, unless such disclosure
    is required by any government laws, rules or regulations, by any government regulatory authorities or any stock exchange
    having jurisdiction over either party provided prior written notice is provided to the other party respecting such disclosure
    or public announcement and such party has been provided reasonable opportunity to review and comment on the proposed disclosure.
	 	 
	9.	Costs:
    The parties will each be solely responsible for and bear their own respective expenses, including, without limitation,
    expenses of legal counsel, accountants, and other advisors, incurred at any time in connection with pursuing or consummating
    the Transaction. Each party’s obligations in this respect shall survive the closing of the Transaction or any termination
    of the proposed Transaction between the parties. It is expressly understood that both parties’ counsel will be together,
    responsible for preparing the documents required to complete the Transaction including the filing statement required to be
    filed with the Securities and Exchange Commission in connection with the Transaction.



 






    	 	 	 



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	10.	Exclusivity:
    The parties hereby agree that until the Termination Date (as defined below) and the date the parities enter into the Definitive
    Agreement, that neither party, their respective directors, officers, agents and representatives will not, directly or indirectly:


 


	 	(i)	solicit,
    initiate or encourage the initiation of any expression of interest, inquiries or proposals regarding, constituting or that
    may reasonably be expected to lead to any merger, amalgamation, take-over bid, tender offer, arrangement, recapitalization,
    liquidations dissolution, share exchange, sale of material assets involving the parties or a proposal or offer to do so (the
    “Acquisition Proposal”) (including without limitation, any grant of an option or other right to take any
    such action);
	 	 	 
	 	(ii)	participate
    in any discussions or negotiations regarding an Acquisition Proposal;
	 	 	 
	 	(iii)	accept
    or enter into, or propose publicly to accept or enter into, any agreement, letter of intent, memorandum of understanding or
    any arrangement in respect of an Acquisition Proposal; and
	 	 	 
	 	(iv)	otherwise
    cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any person to do any of the
    foregoing.


 


	11.	Binding
    Effect: The consummation of the Transaction is subject to the entry of the Definitive Agreement. The Definitive Agreement
    is subject to the board approval of each of the parties.
	 	 
	12.	Termination:
    If the Definitive Agreement is not negotiated and executed by both parties on or before December 31st, 2018 or such other
    date as agreed to by the parties, (the “Termination Date”) the terms of this LOI will be of no further
    force or effect except for Section 7 (Confidentiality), Section 9 (Costs) and Section 13 (Governing Laws). Section 7 (Confidentiality)
    and Section 13 (Governing Laws) will remain in effect for a period of one (1) year following the date this LOI is terminated.
	 	 
	13.	Governing
    Laws: This Letter of Intent will be governed by and be construed in accordance with the laws of the Province of Ontario
    and the federal laws of Canada applicable therein. The parties agree that any dispute arising out of or relating to this LOI
    shall be subject to the exclusive jurisdiction of the courts in and for the Province of Ontario and each party agrees to submit
    to the personal and exclusive jurisdiction and venue of such courts. Governing law and jurisdiction regarding the Definitive
    Agreement shall be negotiated between and agreed to by the parties and set out in the Definitive Agreement.


 


If
the terms outlined above are acceptable to you please sign and date this Letter in the space provided below and return a signed
copy to the undersigned.


 


	 	Very
    truly yours,
	 	 
	 	By:	/s/
    Robert     Mattacchione
	 	 	Robert
    Mattacchione
	 	 	CEO,
    Novo Integrated Sciences, Inc.
	 	 	Chairman,
    Novo Healthnet Limited
	 	 	 
	 	ACKNOWLEDGED
    AND AGREED to on 11/23/18
	 	 	 
	 	By:	/s/
    Dr.     Neil Dhalla
	 	 	Dr.
    Neil Dhalla
	 	 	CEO,
    Activa Clinics