November
17, 2020


 


Advanced
Neural Dynamics, Inc.


3805
Old Easton Road


Doylestown,
PA 18902


Attn:
Douglas Brenneman, CEO


Via
email: dbrenneman@advneuraldynamics.com


 


Fox
Chase Chemical Diversity Center, Inc.


3805
Old Easton Road


Doylestown,
PA 18902


Attn:
Allen Reitz, CEO


Via
email: areitz@fc-cdci.com


 


RE:
Proposed Acquisition of Anticonvulsant IP Estate from Advanced Neural Dynamics, Inc. (“AND”) and Fox Chase
Chemical Diversity Center, Inc. (“Fox Chase”), collectively hereinafter referred to as the “AND-Fox Chase IP
Estate”


 


Gentlemen:


 


Further
to our recent discussion on Thursday, November 5, 2020, kindly accept the attached binding letter of intent (the “Letter
of Intent”) as a definitive outline of terms concerning the proposed acquisition of the AND-Fox Chase IP Estate. The
proposed acquisition and closing documents are collectively referred to in this Letter of Intent as the “Proposed Transaction”.


 


This
Binding Letter of Intent is a binding Letter of Intent meant to secure the conditions in the purchase agreement and other agreements
associated with the Proposed Transaction that are necessary for the full execution and delivery associated with the acquisition
of the AND-Fox Chase IP Estate. Such folio of agreements and documents (the “Definitive Closing Documents”)
include, but are not limited to: (a.) Technology Transfer and Purchase Agreement; (b.) Scientific Advisory Board Agreements; (c.)
Royalty Agreements (to include Reversion Rights); (d.) Stock Option Agreement for SAB; (e.) Patent Assignments; and (f.) Delivery
of Shares Evidenced by Statement of Account from Securities Transfer Corporation.


 


It
is anticipated that the full closing of this Proposed Transaction and execution of the Definitive Closing Documents take place
on or before 5:00 pm EST on Friday, December 11, 2020 (the “Closing Date”). In the event the aforementioned documentation
is made ready for execution prior to the Closing Date, all parties to this letter of intent will coordinate an earlier closing
date for the completion of the Proposed Transaction.


 


Please
review the attached Binding Term Sheet as these terms have been approved by the unaninmous consent of the board of directors of
Neuropathix, Inc. on November 10, 2020. If you have any additional questions or concerns, please do not hesitate to contact me
at (516) 782-6210 or via email at dean@neuropathix.com. I look forward to working with you both on this exciting portfolio of
technology.


 


 


Best
Regards


 


 


Dean
Petkanas, CEO


Neuropathix,
Inc.


 






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BINDING
LETTER OF INTENT – TERMS AND CONDITIONS


 


Assets
to be Purchased:All patents, patents pending, trademarks, research and development materials, raw materials, (including
compounds in storage), chemical entities in the patent estate namely AND-302; AND-378; AND-383; AND-380; and AND-407, also referenced
in and by the following (the “Intellectual Property”): (a.) PCT WO2012/074784 A2 – “Novel Fluorinated
Sulfamides Exhibiting Neuroprotective Action and Their Method of Use”; (b.) US Patent 8,609,849 – “Novel Hydroxylated
Sulfamides Exhibiting Neuroprotective Action and Their Method of Use”; (c.) All compounds contained in an original provisional
patent relating to piperidine chemistry for refractory epilepsy, namely AND-378 and AND-383; and (d.) All technology described
in the Phase 2 SBIR Research Strategy pertaining to the aforementioned body of intellectual property and technology (the “Intellectual
Property” or “IP”).


 


	Purchaser
    / Acquiror:	Neuropathix,
    Inc
	 	 
	Sellers
    / Transferors:	Advanced
    Neural Dynamics, Inc. (“AND”); Douglas Brenneman (“Brenneman”); Fox Chase Chemical Diversity Center,
    Inc. (“Fox Chase”); and Allen B. Reitz (“Reitz”), (collectively, “Sellers” or “Transferors”)
	 	 
	Purchase
    Price of IP:	Six
    Hundred Thousand Dollars ($600,000)
	Form
    of Payment:	Neuropathix,
    Inc. Restricted Common Stock under Rule 144
	Exchange
    / Ticker:	OTCQB
    / NPTX
	Lock
    Up / Leak Out:	Under
    Rule 144
	 	 
	Full
    Terms / Covenants:	See:
    Addendum To Binding Letter of Intent




 


IN
WITNESS WHEREOF, on November 17, 2020, each of the Parties has executed this Binding Term Sheet governing the entry into and
deliver of the Definitive Closing Documents on or before the proposed Closing Date.





 





	PURCHASER / ACQUIROR:	 	 
	 	 	 
	NEUROPATHIX, INC.	 	 
	 	 	 
	 	 	 
	 	 	 
	By: Dean Petkanas, CEO	 	 
	 	 	 
	SELLERS / TRANSFERORS:	 	 
	 	 	 
	ADVANCED NEURAL DYNAMICS, INC.	 	DOUGLAS BRENNEMAN
	 	 	 
	 	 	 
	 	 	 
	By: Douglas Brenneman, CEO	 	In His Individual Capacity
	 	 	 
	FOX CHASE CHEMICAL DIVERSITY CENTER, INC.	 	ALLEN B. REITZ
	 	 	 
	 	 	 
	 	 	 
	By: Allen B. Reitz, CEO	 	In His Individual Capacity



 


 



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ADDENDUM
TO TERM SHEET


 


	Terms
    of Acquisition / Binding Letter of Intent	Allen
                                         Reitz (“Reitz”) / Fox Chase Chemical Diversity Center, Inc. (“Fox Chase”)

         
	Douglas
    Brenneman (“Brenneman”) / Advanced Neural Dynamics (“AND”)
	Upfront
    Stock Grant in Consideration for the Sale of the Intellectual Property 	Reitz-Fox
                                         Chase Closing Date for issuance of shares to be scheduled on or before November 30, 2020,
                                         Reitz and/or Fox Chase shall be issued, 1,000,000 shares of Neuropathix, Inc. Common
                                         Stock, par value $.001 per share at a price of $.30 per share.

         

         

         
	Brenneman-AND
                                         Initial Closing Date for issuance of shares to be scheduled on or about January 5, 2021,
                                         Brenneman-AND shall be issued such amount of shares as equal to the compliment of $60,000
                                         divided by the average ten (10) day closing price of Neuropathix, Inc. Common Stock,
                                         par value $.001, prior to January 5, 2021 (the “Initial Installment Issuance”).

         

        In
        no case will the Initial Installment Issuance price be a price below $.30 per share or higher than $.60 per share.

         

        For
        subsequent closings, the share price for issuance of additional tranches of $60,000 (in year 2, 3, 4 and year 5) in value,
        will be determined by the average ten (10) day closing price of Neuropathix, Inc. Common Stock prior to each scheduled
        Installment Issuance Date. There will be no floor or ceiling in the range of price per share.

         

	Schedule
    of Installments 	Single
    Installment Issuance Date: On or before November 30, 2020.	Initial
                                         Installment Issuance Date: January 5, 2021.

        Second
        Installment Issuance Date: January 4, 2022.

        Third
        Installment Issuance Date: January 3, 2023.

        Fourth
        Installment Issuance Date: January 2, 2024.

        Fifth
        Installment Issuance Date: January 2, 2025.

         

	Cash
                                         Payments to Offset Tax on Shares

         

         

         

         

         

        Cash
        Payments to Offset

        Tax
        on Shares (cont’d)
	None.	Fifteen
                                         Thousand Five Hundred Dollars ($15,000) in cash annually, payable in quarterly installments
                                         of Three Thousand One Seven Hundred Fifty ($3,750), payable on March 30; June 30; September
                                         30 and December 31 of each year of an installment issuance (the “Quarterly Due
                                         Offset Payments”).

         

        Quarterly
        Due Offset payments are to be netted out against actual tax costs incurred based upon the issuance of Common Stock at
        a cost exceeding Doug Brenneman and/or AND’s basis.

         

	Ten
    Percent (10%) Penalty For Failure to Pay Offset Fees	None.	In
                                         the event a Quarterly Due Offset Payment is not made within thirty (30) days of the due
                                         date of such Quarterly Due Offset Payment (“Offset Default”), the amount
                                         payable will be Four Thousand One Hundred Twenty Five Dollars ($4,125) in total for each
                                         such Offset Default.

         

	Royalty
    Agreement Compensation	1%
                                         of Net Sales up to $500,000 per year, per participant (total of 2% of Net Sales up to
                                         a $1,000,000 per year maximum payout for both Reitz-Fox Chase and Brenneman-AND) (the
                                         “Royalty Fee”). The Royalty Fee shall continue in force in perpetuity but
                                         shall discontinue immediately upon an outright sale of the technology and/or any Reversion
                                         which eliminates on going revenue streams to Neuropathix, Inc.

         
	1%
    of Net Sales up to $500,000 per year, per participant (total of 2% of Net Sales up to a $1,000,000 per year maximum payout
    for both Reitz-Fox Chase and Brenneman-AND) (the “Royalty Fee”). The Royalty Fee shall continue in force in perpetuity
    but shall discontinue immediately upon an outright sale of the technology and/or any Reversion which eliminates on going revenue
    streams to Neuropathix, Inc.
	Reversion
                                         Rights

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        Reversion
        Rights (cont’d)

         

         

         

         

         

         

         
	1%
                                         of future milestone payments received in connection with monetization of AND-Fox Chase
                                         Intellectual Property, per participant.

         

        Total
        of 2% of Reversion Rights for all participants.

         

        This
        includes receipt of payments by Neuropathix, Inc. from any third parties for option rights; initiation fees; milestone
        payments; up-front fees; minimum annual royalties (in absence of actual commercial royalty streams); licensing and/or
        sub-licensing fees; sales and marketing rights, or outright sale of the technology.

         

        The
        Reversion Right for percentage of payout does not include payouts on third party investments to Neuropathix, Inc. for
        any Joint Venture (JV) or Special Purpose Vehicle (SPV) designed to advance the AND-Fox Chase Intellectual Property for
        clinical development, clinical trials and/or commercialization efforts. However, the Royalty Rights remain in effect.

         

        For
        example: In such an event where a Third Party pays Neuropathix, Inc. an upfront license fee of $1,000,000 and also desires
        to establish a Joint Venture (JV) whereby it contributes additional R&D, pre-clinical and clinical development funding
        into Neuropathix directly or indirectly via a Special Purpose Vehicle (SPV) for clinical development, the collective Reversion
        Rights would still be payable and equal to 2% of $1,000,000, but not on any amounts designated solely for the use of proceeds
        directly attributed to R&D, pre-clinical and clinical development costs.

         

        However,
        the Royalty payments would remain 2% of the Net Sales receipts by Neuropathix, Inc. and only to such extent as Neuropathix,
        Inc. compliment (percentage of retention) resulting in revenue as adjusted for the definition of Net Sales receipts received
        by Neuropathix directly or passed through the JV / SPV to Neuropathix, Inc.
	1%
                                         of future milestone payments received in connection with monetization of AND-Fox Chase
                                         Intellectual Property, per participant.

         

        Total
        of 2% of Reversion Rights for all participants.

         

        This
        includes receipt of payments by Neuropathix, Inc. from any third parties for option rights; initiation fees; milestone
        payments; up-front fees; minimum annual royalties (in absence of actual commercial royalty streams); licensing and/or
        sub-licensing fees; sales and marketing rights, or outright sale of the technology.

         

        The
        Reversion Right for percentage of payout does not include payouts on third party investments to Neuropathix, Inc. for
        any Joint Venture (JV) or Special Purpose Vehicle (SPV) designed to advance the AND-Fox Chase Intellectual Property for
        clinical development, clinical trials and/or commercialization efforts. However, the Royalty Rights remain in effect.

         

        For
        example: In such an event where a Third Party pays Neuropathix, Inc. an upfront license fee of $1,000,000 and also desires
        to establish a Joint Venture (JV) whereby it contributes additional R&D, pre-clinical and clinical development funding
        into Neuropathix directly or indirectly via a Special Purpose Vehicle (SPV) for clinical development, the collective Reversion
        Rights would still be payable and equal to 2% of $1,000,000, but not on any amounts designated solely for the use of proceeds
        directly attributed to R&D, pre-clinical and clinical development costs.

         

        However,
        the Royalty payments would remain 2% of the Net Sales receipts by Neuropathix, Inc. and only to such extent as Neuropathix,
        Inc. compliment (percentage of retention) resulting in revenue as adjusted for the definition of Net Sales receipts received
        by Neuropathix directly or passed through the JV / SPV to Neuropathix, Inc.

         

	Scientific
                                         Advisory Board

         

         
	Allen
                                         Reitz would come on to our SAB for additional options of 100,000 shares for each year
                                         of SAB service (2 year agreement). Two (2) year SAB agreement with options for the purchase
                                         of 100,000 shares of common stock for each year of SAB service with 1⁄4 vesting
                                         up front and 1/24th remaining for each month of service thereafter execution.
                                         Options shall be priced based upon close of trading on the day prior to the entry into
                                         the SAB Agreement.

         
	Doug
                                         Brenneman would come on to our SAB for additional options of 100,000 shares for each
                                         year of SAB service (2 year agreement). Two (2) year SAB agreement with options for the
                                         purchase of 100,000 shares of common stock for each year of SAB service with 1⁄4
                                         vesting up front and 1/24th remaining for each month of service thereafter
                                         execution. Options shall be priced based upon close of trading on the day prior to the
                                         entry into the SAB Agreement.

         

	Additional
                                         Covenants

         
	(a.)
                                         Allen Reitz and Douglas Brenneman will maintain oversight and development of the
                                         intellectual property into and through clinical development.;

         

        (b.)
        Intellectual Property being purchased shall also entail future developments and patentability of AND-378; AND-383;
        AND-380; and AND-407, as well as extension of patentability and new technology advanced under AND-302; and/or related
        sulfamides, piperidines, and other derivatives and moieties therefrom the acquired AND-Fox Chase IP Estate.;

         

        (c.)
        The Intellectual Property being purchased is free and clear of any and all liens, third party rights and encumbrances,
        and is readily transferrable by the Transferors to the Acquiror; and

         

        (d.)
        Additional new patents would be filed on AND-378 (a piperidine – activity in the hippocampal kindling model,
        useful in refractory epilepsy.

         
	(a.)
                                         Allen Reitz and Douglas Brenneman will maintain oversight and development of the
                                         intellectual property into and through clinical development.;

         

        (b.)
        Intellectual Property being purchased shall also entail future developments and patentability of AND-378; AND-383;
        AND-380; and AND-407, as well as extension of patentability and new technology advanced under AND-302; and/or related
        sulfamides, piperidines, and other derivatives and moieties therefrom the acquired AND-Fox Chase IP Estate.;

         

        (c.)
        The Intellectual Property being purchased is free and clear of any and all liens, third party rights and encumbrances,
        and is readily transferrable by the Transferors to the Acquiror; and

         

        (d.)
        Additional new patents would be filed on AND-378 (a piperidine – activity in the hippocampal kindling model,
        useful in refractory epilepsy.

         



 



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