Document:

SHARE
PURCHASE AND EXCHANGE AGREEMENT

 

by
and among

 

 

 

 

 

Novo
Integrated Sciences, Inc.

 

Novo
Healthnet Limited

 

Pulse
Rx Inc. o/a Pulse Rx LTC Pharmacy

 

And

 

Shareholders
of Pulse Rx Inc.

 

    	 	 	 

     

    

 

TABLE
OF CONTENTS

 

	 	 	 	 	PAGE
	 	 	 	 	 
	ARTICLE
    I.	 	DEFINITIONS	 	2
	Section
    1.01	 	Definitions.	 	2
	Section
    1.02	 	Interpretive
    Provisions.	 	4
	 	 	 	 	 
	ARTICLE
    II.	 	SHARE
    PURCHASE AND EXCHANGE	 	5
	Section
    2.01	 	The
    Purchase	 	5
	Section
    2.02	 	The
    Exchange	 	5
	Section
    2.03	 	Additional
    Terms	 	6
	Section
    2.04	 	Closing	 	6
	Section
    2.05	 	Tax
    Consequences.	 	6
	Section
    2.06	 	Conveyance
    Taxes.	 	6
	 	 	 	 	 
	ARTICLE
    III.	 	REPRESENTATIONS,
    COVENANTS, AND WARRANTIES OF SPR and PR	 	7
	Section
    3.01	 	Corporate
    Existence and Power.	 	7
	Section
    3.02	 	Due
    Authorization.	 	7
	Section
    3.03	 	Valid
    Obligation	 	7
	Section
    3.04	 	Governmental
    Authorization.	 	7
	Section
    3.05	 	Authorized
    Shares and Capital.	 	7
	Section
    3.06	 	Validity
    of Shares.	 	8
	Section
    3.07	 	Title
    to and Issuance of the PR Stock.	 	8
	Section
    3.08	 	Subsidiaries
    and Predecessor Corporations.	 	8
	Section
    3.09	 	Books
    and Records.	 	8
	Section
    3.10	 	Financial
    Statements.	 	8
	Section
    3.11	 	Absence
    of Certain Changes or Events.	 	8
	Section
    3.12	 	Litigation
    and Proceedings.	 	9
	Section
    3.13	 	Contracts.	 	9
	Section
    3.14	 	Compliance
    with Law and Regulations.	 	9
	Section
    3.15	 	Taxes.	 	9
	Section
    3.16	 	Tax
    Returns and Audits.	 	9
	Section
    3.17	 	Employee
    Benefit Plans; ERISA.	 	9
	Section
    3.18	 	Investment
    Representations	 	10
	 	 	 	 	
	ARTICLE
    IV.	 	REPRESENTATIONS,
    COVENANTS, AND WARRANTIES OF NOVO INTEGRATED SCIENCES AND NOVO HEALTHNET LIMITED (collectively “the Buyers”)	 	11
	Section
    4.01	 	Organization.	 	11
	Section
    4.02	 	Due
    Authorization.	 	12
	Section
    4.03	 	Governmental
    Authorization.	 	12
	Section
    4.04	 	Capitalization.	 	12
	Section
    4.05	 	Options
    or Warrants.	 	12
	Section
    4.06	 	Validity
    of Shares.	 	12
	Section
    4.07	 	Subsidiaries
    and Predecessor Corporations.	 	12
	Section
    4.08	 	Information.	 	12
	Section
    4.09	 	Books
    and Records.	 	12
	Section
    4.10	 	Financial
    Statements.	 	13
	Section
    4.11	 	Absence
    of Certain Changes or Events.	 	13
	Section
    4.12	 	Litigation
    and Proceedings.	 	13
	Section
    4.13	 	No
    Conflict with Other Instruments.	 	13
	Section
    4.14	 	Compliance
    with Law and Regulations.	 	14
	Section
    4.15	 	Approval
    of Agreement.	 	14
	Section
    4.16	 	Valid
    Obligation.	 	14
	Section
    4.17	 	Contracts.	 	14

 

    	 	i	 

     

    

 

	Section
    4.18	 	Taxes.	 	14
	Section
    4.19	 	Tax
    Returns and Audits.	 	14
	Section
    4.20	 	Investment
    Representations.	 	15
	 	 	 	 	 
	ARTICLE
    V.	 	CONDITIONS
    TO CLOSING	 	15
	Section
    5.01	 	Condition
    to the Obligations of all of the Parties.	 	15
	Section
    5.02	 	Condition
    to the Obligations of the Buyers.	 	15
	Section
    5.03	 	Condition
    to the Obligations of PR and SPR	 	16
	 	 	 	 	 
	ARTICLE
    VI.	 	ADDITIONAL
    COVENANTS OF THE PARTIES	 	16
	Section
    6.01	 	Access
    to Properties and Records.	 	16
	Section
    6.02	 	Delivery
    of Books and Records.	 	16
	Section
    6.03	 	Third
    Party Consents and Certificates.	 	16
	Section
    6.04	 	Actions
    Prior to Closing.	 	17
	Section
    6.05	 	Limitations
    on Actions.	 	17
	Section
    6.06	 	Actions
    at the Closing.	 	17
	 	 	 	 	 
	ARTICLE
    VII.	 	TERMINATION	 	18
	Section
    7.01	 	Termination.	 	18
	Section
    7.02	 	Survival
    After Termination.	 	18
	Section
    7.03	 	Disposition
    of Shares After Termination.	 	18
	 	 	 	 	 
	ARTICLE
    VIII.	 	INDEMNIFICATION	 	18
	Section
    8.01	 	Indemnification
    of Parent and NHL.	 	18
	Section
    8.02	 	Indemnification
    of SPR and PR.	 	18
	Section
    8.03	 	Procedure.	 	19
	Section
    8.04	 	Periodic
    Payments.	 	20
	Section
    8.05	 	Insurance.	 	20
	Section
    8.06	 	Time
    Limit.	 	20
	 	 	 	 	 
	ARTICLE
    IX.	 	DISPUTE
    RESOLUTION	 	20
	Section
    9.01	 	Arbitration.	 	20
	Section
    9.02	 	Waiver
    of Jury Trial; Exemplary Damages.	 	22
	 	 	 	 	 
	ARTICLE
    X.	 	MISCELLANEOUS	 	22
	Section
    10.01	 	Brokers.	 	22
	Section
    10.02	 	Governing
    Law .	 	22
	Section
    10.03	 	Notices.	 	22
	Section
    10.04	 	Attorneys’
    Fees.	 	23
	Section
    10.05	 	Confidentiality.	 	23
	Section
    10.06	 	Public
    Announcements and Filings.	 	23
	Section
    10.07	 	Schedules;
    Knowledge.	 	24
	Section
    10.08	 	Third
    Party Beneficiaries.	 	24
	Section
    10.09	 	Expenses.	 	24
	Section
    10.10	 	Entire
    Agreement.	 	24
	Section
    10.11	 	Survival;
    Termination.	 	24
	Section
    10.12	 	Amendment;
    Waiver; Remedies; Agent.	 	24
	Section
    10.13	 	Arm’s
    Length Bargaining; No Presumption Against Drafter.	 	24
	Section
    10.14	 	Headings.	 	25
	Section
    10.15	 	Exhibits
    and Schedules.	 	25
	Section
    10.16	 	No
    Assignment or Delegation.	 	25
	Section
    10.17	 	Commercially
    Reasonable Efforts.	 	25
	Section
    10.18	 	Further
    Assurances.	 	25
	Section
    10.19	 	Specific
    Performance.	 	25
	Section
    10.20	 	Counterparts.	 	25

 

	Exhibits	 
	 	 
	Exhibit
    A	Novo
    Integrated Sciences FY’18 Annual Audit 10-K (8/31/18)
	 	 
	Schedules	 
	 	 
	Schedule
    1	Novo
    Healthnet Limited Disclosure Schedule
	Schedule
    2	Novo
    Integrated Sciences, Inc. Disclosure Schedule
	Schedule
    3	Pulse
    Rx Inc. Disclosure Schedule
	Schedule
    4	Certificate
    of Use of Funds Directive
	Schedule
    5	Certificate
    Respecting Employment Contracts
	Schedule
    6	Certificate
    Respecting Loan Funding

 

    	 	ii	 

     

    

 

SHARE
PURCHASE AND EXCHANGE AGREEMENT

 

Dated
as of February 20, 2019

 

This
Share Purchase and Exchange Agreement (this “Agreement”) is entered into as of the date first set forth above (the
“Effective Date”) by and between (i) Novo Integrated Sciences, Inc., a Nevada corporation (the “Parent”);
(ii) Novo Healthnet Limited, a limited company incorporated under the Laws (as defined below) of the Province of Ontario, Canada
(“NHL” and together with the Parent, the “Buyer”) and (iii) the shareholders of Pulse Rx Inc. (the “SPR”
or the “Sellers” wherever referred to collectively) and (iv) Pulse Rx Inc., an Ontario, Canada corporation (“PR”).
Each of the Parent, NHL, SPR and PR may be referred to herein collectively as the “Parties” and separately as a “Party.”

 

RECITALS

 

WHEREAS,
Parent is a public company, the common stock, $0.001 par value per share (the “Common Stock”), of which is
registered under the Securities Act, which files periodic reports with the Securities and Exchange Commission (the
“SEC”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

 

WHEREAS,
NHL is a wholly-owned subsidiary of the Parent and is in the business of providing multi-disciplinary primary healthcare services
and products throughout Canada;

 

WHEREAS,
PR is in the business of providing pharmacy services to the LTC, Retirement and contract-based sectors. ;

 

WHEREAS,
the Parent, NHL, the SPR and PR agree to enter into this definitive Share Purchase and Exchange Agreement resulting in NHL having
total ownership interest in PR and shareholders of Class B common shares of PR (“PRB”) having ownership in the NHL,
as defined herein, ;

 

WHEREAS,
the Parent will arrange to be advanced at the Closing (as defined below) up to CAD $6,000,000.00 for the purposes of existing
PR payables discharging and debt restructuring, as stipulated herein;

 

WHEREAS,
for federal income tax purposes, it is intended that the Exchange (as defined below) qualify as a reorganization under the provisions
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”);

 

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NOW
THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and
the mutual benefits to the Parties to be derived herefrom, and intending to be legally bound hereby, it is hereby agreed as follows:

 

Article
I. DEFINITIONS

 

Section
1.01 Definitions. For the purposes of this Agreement, unless the context otherwise requires, the following terms shall
have the respective meanings set forth below and grammatical variations of such terms shall have corresponding meanings:

 

	 	(a)	“Action”
    means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes
    or otherwise.
	 	 	 
	 	(b)	 “Affiliate”
    means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control
    with such Person.
	 	 	 
	 	(c)	“Agreement”
    means this Share Purchase and Exchange Agreement, dated February 20, 2019.
	 	 	 
	 	(d)	“Authority”
    means any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator,
    or any public, private or industry regulatory authority, whether international, national, federal, state, provincial or local.
	 	 	 
	 	(e)	“Business
    Day” means any day that is not a Saturday, Sunday or other day on which banking institutions in Nevada (in the case
    of the Buyer) or Ontario (in the case of SPR and PR) are closed for regular business.
	 	 	 
	 	(f)	“Buyer”
    has the meaning set forth in the Preamble.
	 	 	 
	 	(g)	“Closing
    Date” has the meaning set forth in Section 2.04.
	 	 	 
	 	(h)	“Control”
    of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management
    and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”,
    “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing,
    a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”)
    (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 10% or more
    of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated
    or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general
    partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that
    is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew,
    mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the
    benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.
	 	 	 
	 	(i)	 “Effective
    Date” means 4:00 pm EST February 20, 2019.
	 	 	 
	 	(j)	“ERISA”
    means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.
	 	 	 
	 	(k)	“Escrow
    Agent” means an independent agent appointed by the Parent which will hold the all of the shares being transacted pursuant
    to this Agreement until the Closing Date.
	 	 	 
	 	(l)	“Escrow
    Closing Date” means 4: 00 pm EST March 15, 2019.
	 	 	 
	 	(m)	“Exchange
    Act” means the Securities Exchange Act of 1934, as amended.
	 	 	 
	 	(n)	“Loan”
    means the loan being advanced by the Buyer to PR in satisfaction of the condition precedent to purchase the PRAS.
	 	 	 
	 	(o)	“Law”
    means any domestic or foreign, federal, state, provincial, municipal or local law, statute, ordinance, code, rule, or regulation
    having the force of law.
	 	 	 
	 	(p)	 “Lien”
    means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, and any conditional
    sale or voting agreement or proxy, including any agreement to give any of the foregoing.

 

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	 	(q)	“Material
    Adverse Effect” or “Material Adverse Change” means a material and adverse change or a material and adverse
    effect, individually or in the aggregate, on the condition (financial or otherwise), net worth, management, earnings, cash
    flows, business, operations or properties of a Party taken as a whole, whether or not arising from transactions in the ordinary
    course of business.
	 	 	 
	 	(r)	“Material
    Contract” means any contract, agreement, franchise, license agreement, debt instrument or other commitment to which
    any Party is a party or by which it or any of its assets, products, technology, or properties are bound and which (i) will
    remain in effect for more than six (6) months after the date of this Agreement or (ii) involves aggregate obligations of at
    least ten thousand dollars ($10,000).
	 	 	 
	 	(s)	“Order”
    means any decree, order, judgment, writ, award, injunction, rule or consent of or by an Authority.
	 	 	 
	 	(t)	“Parent”
    has the meaning set forth in the Preamble.
	 	 	 
	 	(u)	“Parent
    Shares” means the common shares of the publicly traded Parent, represented by the trading symbol “OTCQB:NVOS”
    that are being allotted to PRB pursuant to this Agreement.
	 	 	 
	 	(v)	“Person”
    means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership),
    limited liability company, association, trust or other entity or organization, including a government, domestic or foreign,
    or political subdivision thereof, or an agency or instrumentality thereof.
	 	 	 
	 	(w)	 “PRA”
    means the shareholder of PRAS; namely, Family Pharmacy Clinic Inc. (“FPC”), an Ontario, Canada corporation.
	 	 	 
	 	(x)	“PRAS”
    means 100 Class A Common Shares of PR, representing all of the issued and outstanding Class A Common Shares in the capital
    stock of PR.
	 	 	 
	 	(y)	“PRB”
    means the shareholders of PRBS; namely, Martin Kusmirek (“MK”), Tanya Kusmirek, Andrew Kusmirek, and Christine
    Kusmirek, each owning 40, 20, 20, and 20 of the PRBS, respectively. Any reference to PRB, where several allocation and/or
    endorsement to each of them is required, shall apply a pro rata apportionment in relation to their respective holdings.
	 	 	 
	 	(z)	“PRBS”
    means 100 Class B Common Shares of PR, representing all of the issued and outstanding Class B Common Shares in the capital
    stock of PR.
	 	 	 
	 	(aa)	“Rule
    144” means Rule 144 of the Securities Act.
	 	 	 
	 	(bb)	“Securities
    Act” means the Securities Act of 1933, as amended.
	 	 	 
	 	(cc)	“SPR”
    or “Seller” means, collectively, all of the shareholders of PR shares, regardless of their class of shares.
	 	 	 
	 	(dd)	“Tax(es)”
    means any federal, state, provincial, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment
    of any kind or nature imposed by any Taxing Authority (including any income (net or gross), gross receipts, profits, windfall
    profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers
    compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property,
    intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability
    therefor as a transferee (including under Section 6901 of the Code or similar provision of applicable Law) or successor, as
    a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing,
    indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with
    respect thereto.
	 	 	 
	 	(ee)	“Taxing
    Authority” means the Internal Revenue Service, the Canada Revenue Agency and any other Authority responsible for the
    collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax.
	 	 	 
	 	(ff)	“Tax
    Return” means any return, information return, declaration, claim for refund or credit, report or any similar statement,
    and any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated,
    combined, unitary or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination,
    assessment, collection or payment of a Tax or the administration of any Law relating to any Tax.

 

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Section
1.02 Interpretive Provisions. Unless the express context otherwise requires:

 

	 	(a)	the
    words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this
    Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
	 	 	 
	 	(b)	terms
    defined in the singular shall have a comparable meaning when used in the plural, and vice versa;
	 	 	 
	 	(c)	the
    terms “Dollars” and “$” means United States Dollars (USD) unless otherwise indicated to mean Canadian
    Dollars (CAD);
	 	 	 
	 	(d)	references
    herein to a specific Section, Subsection, Recital, Schedule or Exhibit shall refer, respectively, to Sections, Subsections,
    Recitals, Schedules or Exhibits of this Agreement;
	 	 	 
	 	(e)	wherever
    the word “include,” “includes,” or “including” is used in this Agreement, it shall be
    deemed to be followed by the words “without limitation”;
	 	 	 
	 	(f)	references
    herein to any gender shall include each other gender;
	 	 	 
	 	(g)	references
    herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors
    and assigns; provided, however, that nothing contained in this Section 1.02(g) is intended to authorize any assignment or
    transfer not otherwise permitted by this Agreement;
	 	 	 
	 	(h)	references
    herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity;
	 	 	 
	 	(i)	references
    herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or
    modified from time to time in accordance with the terms thereof;
	 	 	 
	 	(j)	with
    respect to the determination of any period of time, the word “from” means “from and including” and
    the words “to” and “until” each means “to and including”;
	 	 	 
	 	(k)	references
    herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded
    in whole or in part, and in effect from time to time; and
	 	 	 
	 	(l)	references
    herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder.

 

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Article
II. SHARE PURCHASE AND EXCHANGE

 

Section
2.01 The Purchase

 

	 	(a)	On
    the terms and subject to the conditions set forth in this Agreement, on the Escrow Closing Date PRA will endorse for transfer
    the PRAS in favor of the Buyer, or as directed, and deliver them to the Escrow Agent.
	 	 	 
	 	(b)	The
    purchase price for the PRAS shall be CAD $10.00 and the condition precedent that up to CAD $6,000,000.00 is arranged by the
    Buyer and advanced to PR (the “Loan”) to discharge payables and restructure debt pursuant to and in accordance
    with the Certificate of Use of Funds Directive forming Schedule 4 hereof.

 

Section
2.02 The Exchange

 

	 	(a)	On
    the terms and subject to the conditions set forth in this Agreement, on the Escrow Closing Date PRB will endorse for transfer
    the PRBS in favor of NHL and deliver them to the Escrow Agent, free and clear of all Liens;
	 	 	 
	 	(b)	In
    exchange for the PRBS to NHL, on the Escrow Closing Date, NHL shall issue in favor of PRB, exchangeable preferred shares (the
    “NHL Exchangeable Shares”) free and clear of all Liens, which shares can only be utilized for the purposes of
    exchange for Parent Shares and will be delivered to the Escrow Agent. The Parent shall allot in favor of PRB, CAD $6,000,000.00
    worth of the Parent restricted common stock (the “Parent Shares”), free and clear of all Liens, which shares will
    be solely used for the purposes of exchange with the NHL Exchangeable Shares . The number of Parent Shares allotted in favor
    of PRB will be based on a per share price of $1.7975, as was determined by establishing the 30-trading day closing average
    as of the close of business on the Business Day immediately preceding the date of this Agreement;
	 	 	 
	 	(c)	The
    Parties acknowledge and agree that the CAD-to-USD conversion rate for the CAD $6,000,000.00 shall be based on the conversion
    rate of 0.757669, as reported by X-Rates.com, as of the close of business on the Business Day immediately preceding the date
    of this Agreement. The CAD $6,000,000 converts to $4,546,013, rounded-up to the nearest whole dollar amount. Dividing by the
    determined per share price of $1.7975, as noted in Sec 2.02 (b), provides for a total share allotment of 2,529,076 restricted
    shares of the Parent’s common stock, rounded-up to the nearest whole number, to be allotted to PRB under this Agreement;
	 	 	 
	 	(d)	The
    exchange as set forth in Section 2.02(a) through 2.02(c), subject to the other terms and conditions herein, is referred to
    as the “Exchange”; and
	 	 	 
	 	(e)	The
    Parties acknowledge and agree that the Parent Shares allotted in favor of PRB, under the terms of the Exchange will be available
    to be exchanged for the NHL Exchangeable Shares, at any time, subject only to any of the PRB providing written direction to
    effect the exchange of any or all of their NHL Exchangeable Shares and Rule 144 restrictions placed on the unregistered Parent
    Shares.

 

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Section
2.03 Additional Terms

 

	 	(a)	The
    Buyer has the right to restructure the PR board resulting in the Parent having control of the PR board, subject to the condition,
    a requirement to maintain PR’s accreditation with the Ontario College of Pharmacists, that the majority of the board
    of directors remain to be registered and accredited pharmacists in the Province of Ontario, Canada, and PRB has the right
    to appoint one (1) board member, with voting rights, to the Parent Board of Directors. Each Party shall take all necessary
    corporate action required to ensure that the other Party has the irrevocable right to appoint directors as provided herein.
	 	 	 
	 	(b)	MK
    will enter into an employment agreement with PR outlining duties and expectations for PR performance as well as integration
    performance into existing NHL business silos. MK’s employment agreement will identify PR and NHL performance levels
    for bonus metrics based on gross and net delta revenue from an agreed revenue benchmark. Bonus payout will comprise of shares
    or options and cash as identified within the employment agreement.
	 	 	 
	 	(c)	The
    existing director of PR will enter into an employment agreement with PR outlining duties and expectations for PR performance.
    The director’s employment agreement will identify PR performance levels for bonus metrics based on gross and net delta
    revenue from an agreed revenue benchmark. Bonus payout will comprise of shares or options and cash as identified within the
    employment agreement.
	 	 	 
	 	(d)	NHL,
    SPR and PR shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and
    all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required
    by this Agreement to be so delivered at or prior to the Escrow Closing, together with such other items as may be reasonably
    requested by the Parties and their respective legal counsel in order to effectuate or evidence the transactions contemplated
    hereby.

 

Section
2.04 Closing. The closing shall occur upon the Buyer advancing the Loan funds to PR, and the mutual delivery of the PRAS,
PRAB, and the NHL Exchangeable Shares held by the Escrow Agent to the respective beneficial Parties by April 15, 2019, the “Closing
Date”. Notwithstanding the foregoing, the Closing Date shall be accelerated by the earlier availability to the Buyer of
the Loan funds, which availability shall immediately trigger an earlier Closing Date, to be effected within 10 business days thereof.
For greater certainty, the availability of the Loan funds shall be determined in accordance with the Certificate Respecting Loan
Funding forming Schedule 6 hereof. Prior to the Escrow Closing Date, the Parties shall have either been satisfied with or provided
their waiver (by the Party for whose benefit the conditions exist) of the conditions to closing set forth in Article V, at the
offices of Legal & Compliance, LLC, 330 Clematis Street, Suite 217, West Palm Beach, FL 33401, at 10:00 a.m. local time, or
at such other date, time or place as the Parties may agree. At the Closing:

 

	 	(a)	The
    Escrow Agent shall deliver the NHL Exchangeable Shares to PRB and the PRAS and the PRBS to NHL;
	 	 	 
	 	(b)	The
    Buyer shall have caused the Loan funds to be advanced to PR such that they may be disbursed pursuant to the Certificate of
    Use of Funds Directive.

 

Section
2.05 Tax Consequences. For U.S. federal income tax purposes, the Exchange is not intended to be a reorganization within
the meaning of the Code and the Treasury Regulations. Each party is responsible for their own taxable consequences as a result
of the Exchange.

 

Section
2.06 Conveyance Taxes. The respective beneficiaries will pay all sales, use, value added, transfer, stamp, registration,
documentary, excise, real property transfer or gains, or similar Taxes incurred as a result of the transactions contemplated by
this Agreement.

 

    	 	 	Page | 6

     

    

 

Article
III. REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF SPR and PR

 

As
an inducement to, and to obtain the reliance of the Buyer, except as set forth in the disclosure schedules attached hereto as
Schedule 3, and referencing the particular section of this Article III to which the disclosure relates (the “PR Disclosure
Schedules”), SPR and PR represents and warrants to the Buyer, as of the Effective Date and as of the Closing Date, as follows:

 

Section
3.01 Corporate Existence and Power. PR is a corporation duly organized, validly existing, and in good standing under the
Laws of the Province of Ontario, Canada, and has the corporate power and is duly authorized under all applicable Laws, regulations,
ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. PR
has delivered to NHL complete and correct copies of the organizational documents in effect on the Effective Date (the “PR
Organizational Documents”). PR has full corporate power and authority to carry on its businesses as it is now being conducted
and as now proposed to be conducted and to own or lease its properties and assets. Except as set forth in the PR Disclosure Schedules,
PR does not have any subsidiaries or direct or indirect interest (by way of stock ownership or otherwise) in any firm, corporation,
limited liability company, partnership, association or business.

 

Section
3.02 Due Authorization. The execution, delivery and performance of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate (i) any provision of the PR Organizational Documents, or (ii) any applicable
Law. PR has taken all actions required by Law, the PR Organizational Documents or otherwise to authorize the execution, delivery
and performance of this Agreement and to consummate the transactions herein contemplated. This Agreement has been duly executed
and delivered by SPR and PR upon its execution and delivery, will constitute a valid and legally binding agreement in accordance
with its terms.

 

Section
3.03 Valid Obligation. This Agreement and all agreements and other documents executed by SPR and PR in connection herewith
constitute the valid and binding obligations of SPR and PR, enforceable in accordance with its or their terms, except as may be
limited by bankruptcy, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally
and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before
which any proceeding therefore may be brought.

 

Section
3.04 Governmental Authorization. Neither the execution, delivery nor performance of this Agreement by SPR and PR requires
any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section
3.05 Authorized Shares and Capital.

 

	 	(a)	The
    authorized capital stock of PR consists of an unlimited number of Class A common shares, of which 100 shares are issued and
    outstanding as of the Effective Date.
	 	 	 
	 	(b)	The
    authorized capital stock of PR consists of an unlimited number of Class B common shares, of which 100 shares are issued and
    outstanding as of the Effective Date.
	 	 	 
	 	(c)	Except
    as set forth in the PR Disclosure Schedules, PR has no outstanding options, rights or commitments to issue shares of PR Stock
    or any other equity security of PR, and there are no outstanding securities convertible or exercisable into or exchangeable
    for shares of PR Stock or any other equity security of PR.
	 	 	 
	 	(d)	There
    is no voting trust, agreement or arrangement among any of the beneficial holders of PR Stock affecting the nomination or election
    of directors or the exercise of the voting rights of PR Stock.
	 	 	 
	 	(e)	The
    offer, issuance and sale of such shares of PR Stock were (a) exempt from the registration and prospectus delivery requirements
    under applicable Canadian securities Law, (b) registered or qualified (or were exempt from registration or qualification)
    under the registration or qualification requirements of all applicable Canadian securities Laws and (c) accomplished in conformity
    with all other applicable securities Laws.

 

    	 	 	Page | 7

     

    

 

Section
3.06 Validity of Shares. The PR Shares to be delivered at the Closing, shall be duly and validly issued, fully paid and
non-assessable and free and clear of any Liens.

 

Section
3.07 Title to and Issuance of the PR Stock. The PR Shares issued to NHL under this Exchange are, and on the Closing Date
will, not be subject to any pre-emptive or similar rights, either pursuant to any Organizational Document, requirement of Law
or any contract.

 

Section
3.08 Subsidiaries and Predecessor Corporations. PR does not have any predecessor corporation(s), no subsidiaries, and does
not own, beneficially or of record, any shares of any other corporation other than any set forth in the PR Disclosure Schedules.

 

Section
3.09 Books and Records. The books and records, financial and otherwise, of PR are in all material aspects complete and
correct and have been maintained in accordance with good business and accounting practices.

 

Section
3.10 Financial Statements.

 

Intentionally
Blank

 

Section
3.10(i) Executive Summary and Projections. PR will provide a corporate Executive Summary and a detailed one, three- and five-year
projection report with expenditures and gross and net revenue expectations. The Executive Summary and Projection report will be
provided to the Buyer prior to the Escrow Closing Date.

 

Section
3.11 Absence of Certain Changes or Events. Since the date of this Agreement:

 

	 	(a)	there
    has not been any Material Adverse Change in the business, operations, properties, assets, or condition (financial or otherwise)
    of PR;
	 	 	 
	 	(b)	PR
    has not (i) amended the PR Organizational Documents; (ii) declared or made, or agreed to declare or make, any payment of dividends
    or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem,
    any of its shares; (iii) made any material change in its method of management, operation or accounting; (iv) entered into
    any other material transaction other than sales in the ordinary course of its business; or (v) made any increase in or adoption
    of any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment,
    or arrangement made to, for, or with its officers, directors, or employees; and
	 	 	 
	 	(c)	PR
    has not (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities
    calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material
    obligation or liability (absolute or contingent) except as disclosed herein and except liabilities incurred in the ordinary
    course of business; or (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights
    or canceled, or agreed to cancel, any debts or claims.

 

    	 	 	Page | 8

     

    

 

Section
3.12 Litigation and Proceedings. Save and except as disclosed in the PR Disclosure Schedules, there are no actions, suits,
proceedings, or investigations pending or, to the knowledge of PR after reasonable investigation, threatened by or against PR
or affecting PR or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic
or foreign, or before any arbitrator of any kind. PR does not have any knowledge of any material default on its part, which has
not been disclosed in the PR Disclosure Schedule, with respect to any judgment, order, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.

 

Section
3.13 Contracts.

 

	 	(a)	All
    Material Contracts to which PR is a party or by which it or any of its assets, products, technology, or properties are bound
    other than those incurred in the ordinary course of business are set forth on the PR Disclosure Schedules.
	 	 	 
	 	(b)	All
    Material Contracts to which PR is a party or by which its properties are bound and which are material to the operations of
    PR taken as a whole are valid and enforceable by PR in all respects, except as limited by bankruptcy and insolvency Laws and
    by other Laws affecting the rights of creditors generally.
	 	 	 
	 	(c)	As
    at the Closing Date, save and except for those employment contracts disclosed to the Buyer, PR is not a party to any oral
    or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation,
    stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing
    of money, (iv) guaranty of any obligation; (vi) collective bargaining agreement; or (vii) agreement with any present or former
    officer or director of PR.

 

Section
3.14 Compliance with Law and Regulations. To the best of its knowledge, PR has complied with all applicable statutes and
regulations of any provincial, federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties, assets, or condition of PR or except to the extent
that noncompliance would not result in the occurrence of any material liability for PR.

 

Section
3.15 Taxes. Save and except as noted in the PR Disclosure Schedule PR has duly paid all governmental fees and taxes which
it has become liable to pay and has duly allowed for all taxes reasonably foreseeable and is under no liability to pay any penalty
or interest in connection with any claim for governmental fees or taxes and PR has made any and all proper declarations and returns
for tax purposes and all information contained in such declarations and returns is true and complete.

 

Section
3.16 Tax Returns and Audits. All required federal, state, provincial and local Tax Returns of PR have been accurately prepared
in all material respects and duly filed, and all federal, provincial and local Taxes required to be paid with respect to the periods
covered by such returns have been paid to the extent that the same have become due, except as noted on the PR Disclosure Schedule.
PR has not had a Tax deficiency assessed against it and has not executed a waiver of any statute of limitations or the assessment
or collection of any Tax, except as noted on the PR Disclosure Schedule. PR (i) is not a party to, nor is it bound by or obligated
under, any tax sharing agreements, and (ii) does not have any potential liability or obligation to any Person as a result of,
or pursuant to, any such tax sharing agreements. PR has no liability for any other taxpayer under U.S. Treasury Regulation 1.1502-6
or any other similar provision.

 

Section
3.17 Employee Benefit Plans; ERISA. Except as disclosed in the NHL Schedules, there are no “employee benefit plans”
(within the meaning of Section 3(3) of ERISA) nor any other employee benefit or fringe benefit arrangements, practices, contracts,
policies or programs other than programs merely involving the regular payment of wages, commissions, or bonuses established, maintained
or contributed to by PR, whether written or unwritten and whether or not funded. Any plans listed in the PR Schedules are hereinafter
referred to as the “PR Employee Benefit Plans.”

 

    	 	 	Page | 9

     

    

 

Section
3.18 Investment Representations.

 

	 	(a)	Investment
    Purpose. As of the Closing Date, PR and PRB understands and agrees that the consummation of the exchange of NHL Exchangeable
    Shares for the Parent Shares, as contemplated hereby, constitutes the offer and sale of securities under the Securities Act
    and applicable state statutes and that the Parent Shares are being acquired for PRB’s own account and not with a present
    view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under
    the Securities Act.
	 	 	 
	 	(b)	Investor
    Status. PRB is (i) an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited
    Investor”), and/or (ii) an exempt investor in accordance with the provisions of Regulation S promulgated under the Securities
    Act. PRB has been furnished with all documents and materials relating to the business, finances and operations of both the
    Parent and NHL, and NHL’s subsidiaries and information that such PRB has requested and deemed material to making an
    informed decision regarding this Agreement and the underlying transactions.
	 	 	 
	 	(c)	Reliance
    on Exemptions. PRB understands that the Parent Shares are being offered and sold to PRB in reliance upon specific exemptions
    from the registration requirements of United States federal and state securities Laws and that the Parent and NHL are relying
    upon the truth and accuracy of, and PRB’s compliance with, the representations, warranties, agreements, acknowledgments
    and understandings of PRB set forth herein in order to determine the availability of such exemptions and the eligibility of
    PRB to acquire the Parent Shares.
	 	 	 
	 	(d)	Information.
    PRB, and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
    the Buyer and materials relating to the offer and sale of the Parent Shares which have been requested by PRB. PRB and its
    advisors, if any, have been afforded the opportunity to ask questions of the Buyer. PRB and its advisors understand that their
    investment in the Parent Shares involves a significant degree of risk. PRB and its advisors are not aware of any facts that
    may constitute a breach of any of the Buyer’s representations and warranties made herein.
	 	 	 
	 	(e)	Governmental
    Review. PRB and its advisors understand that no United States federal or state agency or any other government or governmental
    agency has passed upon or made any recommendation or endorsement of the Parent Shares.
	 	 	 
	 	(f)	Transfer
    or Resale. PRB understands that upon exchanging the NHL Exchangeable Shares for Parent Shares (i) the sale or re-sale
    of the Parent Shares has not been and is not being registered under the Securities Act or any applicable state securities
    Laws, and the Parent Shares may not be transferred unless (a) the Parent Shares are sold pursuant to an effective registration
    statement under the Securities Act, (b) PRB has delivered to the Parent, at the cost of PRB, an opinion of counsel that shall
    be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Parent
    Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion
    shall be accepted by the Parent, (c) the Parent Shares are sold or transferred to an “affiliate” (as defined in
    Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of PRB who agree to sell or
    otherwise transfer the Parent Shares only in accordance with this Section 3.18 and who is an Accredited Investor, (d) the
    Parent Shares are sold pursuant to Rule 144, or (e) the Parent Shares are sold pursuant to Regulation S under the Securities
    Act (or a successor rule) (“Regulation S”), and PRB shall have delivered to the Parent, at the cost of PRB, an
    opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions,
    which opinion shall be accepted by the Parent; (ii) any sale of such Parent Shares made in reliance on Rule 144 may be made
    only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Parent Shares
    under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as
    that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the
    rules and regulations of the SEC thereunder; and (iii) neither the Parent or NHL nor any other person is under any obligation
    to register such Parent Shares under the Securities Act or any state securities Laws or to comply with the terms and conditions
    of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary,
    the Parent Shares may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

    	 	 	Page | 10

     

    

 

	 	(g)	Legends.
    PRB understand that the Parent Shares issued as a result of an exchange of NHL Exchangeable Shares, until such time as the
    Parent Shares have been registered under the Securities Act, or may be sold pursuant to Rule 144 or Regulation S without any
    restriction as to the number of securities as of a particular date that can then be immediately sold, the Parent Shares may
    bear a standard Rule 144 legend and a stop-transfer order may be placed against transfer of the certificates for such Parent
    Shares.
	 	 	 
	 	(h)	Removal.
    The legend(s) referenced in Section 3.18(g) shall be removed and the Parent shall issue a certificate without such legend
    to the holder of any Parent Shares upon which it is stamped, if, unless otherwise required by applicable state securities
    Laws, (a) the Parent Shares are registered for sale under an effective registration statement filed under the Securities Act,
    or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of
    a particular date that can then be immediately sold, or (b) such holder provides the Parent with an opinion of counsel, in
    form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or
    transfer of such Parent Shares may be made without registration under the Securities Act, which opinion shall be accepted
    by the Parent so that the sale or transfer is affected. PRB agrees to sell all Parent Shares, including those represented
    by a certificate(s) from which the legend has been removed, in compliance with SEC regulations.
	 	 	 
	 	(i)	Residency.
    PRB represents and warrants to the Buyers that it is not a United States legal entity or U.S. citizen and it will not be a
    United States legal entity or U.S. citizen at the time of Closing, and that the PR signatories were not in the United States
    at the time this Agreement was signed by such signatory.

 

Article
IV. REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF NOVO INTEGRATED SCIENCES AND NOVO HEALTHNET LIMITED (collectively “the Buyers”)

 

As
an inducement to, and to obtain the reliance of SPR, except as set forth in the disclosure schedules as attached hereto as Schedule
4, and referencing the particular section of this Article IV to which the disclosure relates (the “Buyer’s Schedules”),
the Buyers represent and warrant to SPR, as of the Effective Date and as of the Closing Date, as follows:

 

Section
4.01 Organization. Novo Integrated he execution Organization. Novo Integrated Sciences, Inc. is a corporation duly organized,
validly existing, and in good standing under the Laws of the State of Nevada and has the corporate power and is duly authorized
under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material
respects as it is now being conducted. Novo Healthnet Limited is a limited corporation duly organized, validly existing, and in
good standing under the Laws of the Province of Ontario, Canada and has the corporate power and is duly authorized under all applicable
Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now
being conducted. NHL has delivered to complete and correct copies of the articles of incorporation and bylaws of the Buyers as
in effect on the Effective Date (the “Buyer’s Organizational Documents”).

 

    	 	 	Page | 11

     

    

 

Section
4.02 Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate (i) any provision of the Buyer’s Organizational Documents, or (ii) any applicable
Law. The Buyers have taken all action required by Law, the Buyer’s Organizational Documents, or otherwise to authorize the
execution and delivery of this Agreement, and the Buyers have full power, authority, and legal right and has taken all action
required by Law, the Buyer’s Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

Section
4.03 Governmental Authorization. Neither the execution, delivery nor performance of this Agreement by the Buyers requires
any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section
4.04 Capitalization. As of February 13, 2019, the Parent’s authorized capitalization consists of (a) 499,000,000
shares of common stock, par value $0.001 per share (“the Parent Common Stock”) and (b) 1,000,000 shares of preferred
stock, par value $0.001 per share, none of which are issued and outstanding and all of which are undesignated. There are currently
222,589,856 shares of Parent Common Stock issued and outstanding. Additionally, the Parent has 10,105,000 granted stock options
and warrants to purchase Parent Common Stock. All issued and outstanding Parent Common Stock is legally issued, fully paid, non-assessable
and not issued in violation of the preemptive or other rights of any person.

 

Section
4.05 Options or Warrants. Other than as set forth on the Buyer’s Schedules, there are no options, warrants, convertible
securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements, arrangements
or commitments (contingent or otherwise) of any character issued or authorized by the Parent relating to the issued or unissued
capital stock of the Parent (including, without limitation, rights the value of which is determined with reference to the capital
stock or other securities of the Parent) or obligating the Parent to issue or sell any shares of capital stock of, or options,
warrants, convertible securities, subscriptions or other equity interests in, the Parent. There are no outstanding contractual
obligations of the Parent to repurchase, redeem or otherwise acquire any shares of the Parent Common Stock, to pay any dividend
or make any other distribution in respect thereof, or to provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any person.

 

Section
4.06 Validity of Shares. The Parent Shares to be allotted at the Closing, can be duly and validly issued, fully paid and
non-assessable and free and clear of any Liens.

 

Section
4.07 Subsidiaries and Predecessor Corporations. NHL is the wholly-owned subsidiary of Parent. The Parent and NHL do not
have any other subsidiaries, and does not own, beneficially or of record, any shares of any other corporation other than set forth
in Buyer’s Disclosure Schedules.

 

Section
4.08 Information. The information concerning the Buyers set forth in this Agreement and the Buyer’s Disclosure Schedules
is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state
a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

 

Section
4.09 Books and Records. The books and records, financial and otherwise, of the Buyers are in all material aspects complete
and correct and have been maintained in accordance with good business and accounting practices.

 

    	 	 	Page | 12

     

    

 

Section
4.10 Financial Statements. The Buyer’s annual audited consolidated financial statements (Exhibit A) for the fiscal
year ending August 31, 2018: (i) have been prepared in accordance with generally accepted accounting principles on a basis consistent
with prior fiscal periods; (ii) are complete and accurate; and (iii) present fairly the assets, liabilities (whether accrued,
absolute, contingent or otherwise) and financial condition of the Buyer at the applicable balance sheet date, and the results
of operations of the Buyer. Except to the extent reflected or reserved against in the balance sheet (including the notes thereto)
forming part of the Buyer’s annual audited consolidated financial statements for the fiscal year ending August 31, 2018
or incurred subsequent to the date thereof and disclosed in Buyer’s Disclosure Schedule, and except in respect of normal
trade payables arising in the ordinary course of the Business, the Buyers do not have any outstanding indebtedness or any liabilities
(whether accrued, absolute, contingent or otherwise) nor any outstanding commitments or obligations of any kind.

 

Section
4.11 Absence of Certain Changes or Events. Since the date of this Agreement or such other date as provided for herein:

 

	 	(a)	there
    has not been any Material Adverse Change in the business, operations, properties, assets or condition of the Buyer;
	 	 	 
	 	(b)	the
    Buyer has not (i) amended the Buyer’s Organizational Documents except as required by this Agreement; (ii) declared or
    made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to stockholders
    or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which
    in the aggregate are outside of the ordinary course of business or material considering the business of the Buyers; (iv) made
    any material change in its method of management, operation, or accounting; (v) entered into any transactions or agreements
    other than in the ordinary course of business; (vi) made any accrual or arrangement for or payment of bonuses or special compensation
    of any kind or any severance or termination pay to any present or former officer or employee; (vii) increased the rate of
    compensation payable or to become payable by it to any of its officers or directors or any of its salaried employees whose
    monthly compensation exceed $1,000; or (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance,
    pension, retirement, or other employee benefit plan, payment, or arrangement, made to, for or with its officers, directors,
    or employees;
	 	 	 
	 	(c)	to
    its knowledge, the Buyers have not become subject to any Law or regulation which materially and adversely affects, or in the
    future, may adversely affect, the business, operations, properties, assets or condition of the Buyers.

 

Section
4.12 Litigation and Proceedings. There are no actions, suits, proceedings or investigations pending or, to the knowledge
of either the Parent or NHL after reasonable investigation, threatened by or against the Buyers or affecting the Buyers or their
properties, at Law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind except as disclosed in the Buyers Schedules. The Buyer has no knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental
agency or instrumentality or any circumstance which after reasonable investigation would result in the discovery of such default.

 

Section
4.13 No Conflict with Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated
by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate
or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which either the
Parent or NHL are a party or to which any of its assets, properties or operations are subject, which would result in a Material
Adverse Effect on either the Parent or NHL.

 

    	 	 	Page | 13

     

    

 

Section
4.14 Compliance with Law and Regulations. The Parent has complied with all United States federal, state or local or any
applicable foreign Laws applicable to the Parent and the operation of its business, except where the failure to so comply would
reasonably be expected to result in a Material Adverse Effect on the Parent. NHL has complied with all Canadian, provincial, local
or any applicable foreign Laws applicable to NHL and the operation of its business, except where the failure to so comply would
reasonably be expected to result in a Material Adverse Effect on NHL.

 

Section
4.15 Approval of Agreement. The Board of Directors of both the Parent and NHL have authorized the execution and delivery
of this Agreement by the Buyers and has approved this Agreement and the transactions contemplated hereby.

 

Section
4.16 Valid Obligation. This Agreement and all agreements and other documents executed by the Buyers in connection herewith
constitute the valid and binding obligation of both the Parent and NHL, enforceable in accordance with its or their terms, except
as may be limited by bankruptcy, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights
generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.

 

Section
4.17 Contracts.

 

	 	(a)	All
    Material Contracts to which the Buyers are a party or by which it or any of its assets, products, technology, or properties
    are bound other than those incurred in the ordinary course of business are set forth on the Buyer’s Disclosure Schedules.
	 	 	 
	 	(b)	All
    Material Contracts to which any Buyer is a party or by which its properties are bound and which are material to the operations
    of the Buyers taken as a whole are valid and enforceable by the Buyers in all respects, except as limited by bankruptcy and
    insolvency Laws and by other Laws affecting the rights of creditors generally.

 

Section
4.18 Taxes.

 

	 	(a)	The
    Parent has duly and punctually paid all governmental fees and taxes which it has become liable to pay and has duly allowed
    for all taxes reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim
    for governmental fees or taxes and the Parent has made any and all proper declarations and returns for tax purposes and all
    information contained in such declarations and returns is true and complete, except as noted on the Parent’s Disclosure
    Schedule.
	 	 	 
	 	(b)	NHL
    has duly and punctually paid all governmental fees and taxes which it has become liable to pay and has duly allowed for all
    taxes reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim for governmental
    fees or taxes and NHL has made any and all proper declarations and returns for tax purposes and all information contained
    in such declarations and returns is true and complete, except as noted on the Buyer’s Disclosure Schedule.

 

Section
4.19 Tax Returns and Audits. All required federal, state, provincial and local Tax Returns of the Buyers have been accurately
prepared in all material respects and duly and timely filed, and all federal, provincial and local Taxes required to be paid with
respect to the periods covered by such returns have been paid to the extent that the same have become due, except where the failure
so to file or pay could not reasonably be expected to have a Material Adverse Effect on the Buyers. The Buyers are not and have
not been delinquent in the payment of any Tax, except as noted on the Buyer’s Disclosure Schedule. The Buyers have not had
a Tax deficiency assessed against it and have not executed a waiver of any statute of limitations or the assessment or collection
of any Tax. None of the Buyer’s federal income, provincial and local income and franchise tax returns has been audited by
any Authority. The reserves for Taxes reflected on the Buyers Consolidated Financial Statements are and will be sufficient for
the payment of all unpaid Taxes payable by the Buyers. The Buyers have not received any notice of any proposed audits, investigations,
claims or administrative proceedings relating to Taxes or any Tax Returns. The Buyers (i) are not a party to, nor are they bound
by or obligated under, any tax sharing agreements, and (ii) do not have any potential liability or obligation to any Person as
a result of, or pursuant to, any such tax sharing agreements. The Parent has no liability for any other taxpayer under U.S. Treasury
Regulation 1.1502-6 or any other similar provision. The Buyer’s file a consolidated Financial Statement with the SEC, based
on a fiscal year end of August 31. The Fiscal Year 2018 Annual Audited Financial Statements filed with the SEC as Form 10-K are
provided as Exhibit A to this Agreement.

 

    	 	 	Page | 14

     

    

 

Section
4.20 Investment Representations.

 

INTENTIONALLY
BLANK

 

Article
V. CONDITIONS TO CLOSING

 

Section
5.01 Condition to the Obligations of all of the Parties. The obligations of all of the Parties to consummate the Closing
are subject to the satisfaction, or waiver by each of the Parties, at or before the Closing Date, of all the following conditions:

 

	 	(a)	No
    provisions of any applicable Law, and no Order shall prohibit or impose any condition on the consummation of the Closing.
	 	 	 
	 	(b)	There
    shall not be any Action brought by a third-party to enjoin or otherwise restrict the consummation of the Closing.
	 	 	 
	 	(c)	The
    Parties shall have received all necessary approvals from all required Authorities to consummate the transactions contemplated
    herein.

 

Section
5.02 Condition to the Obligations of the Buyers. The obligations of the Buyers to consummate the Closing are subject to
the satisfaction (or waiver by the Buyers), at or before the Escrow Closing Date, of the following conditions:

 

	 	(a)	the
    Buyers shall have completed its due diligence investigation of PR to the Buyer’s satisfaction in the Buyers sole discretion;
	 	 	 
	 	(b)	the
    Closing shall not result in PR being debarred or losing its status with any third-party or government payor for the provision
    of pharmacy services;
	 	 	 
	 	(c)	The
    representations and warranties made by PR and SPR in this Agreement shall have been true and correct when made and shall be
    true and correct in all material respects at the Escrow Closing Date with the same force and effect as if such representations
    and warranties were made at and as of the Closing Date, except for changes therein permitted by this Agreement;
	 	 	 
	 	(d)	No
    Material Adverse Change shall have occurred in the business, assets, liabilities, results, financial condition, affairs or
    prospects of PR from the Effective Date to the Escrow Closing Date;
	 	 	 
	 	(e)	PR
    and SPR shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied
    with by PR and SPR prior to or at the Escrow Closing Date;
	 	 	 
	 	(f)	No
    Order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been
    enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits
    the consummation of the transactions contemplated hereby; and
	 	 	 
	 	(g)	PR’s
    Board of Directors shall have approved this Agreement and the transactions contemplated herein.

 

    	 	 	Page | 15

     

    

 

Section
5.03 Condition to the Obligations of PR and SPR. The obligation of SPR to consummate the Closing is subject to the satisfaction
(or waiver by PR), at or before the Escrow Closing Date, of the following conditions:

 

	 	(a)	SPR
    shall have completed its due diligence investigation of the Buyers to SPR’s satisfaction in its discretion;
	 	 	 
	 	(b)	The
    representations and warranties made by the Buyers in this Agreement shall have been true and correct when made and shall be
    true and correct in all material respects at the Closing Date with the same force and effect as if such representations and
    warranties were made at and as of the Closing Date, except for changes therein permitted by this Agreement;
	 	 	 
	 	(c)	No
    Material Adverse Change shall have occurred in the business, assets, liabilities, results, financial condition, affairs or
    prospects of the Buyers from the Effective Date to the Escrow Closing;
	 	 	 
	 	(d)	The
    Buyers shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied
    with by the Buyers prior to or at the Closing;
	 	 	 
	 	(e)	No
    order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been
    enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits
    the consummation of the transactions contemplated hereby; and
	 	 	 
	 	(f)	The
    Parent’s and NHL’s Boards of Directors shall have approved this Agreement and the transactions contemplated herein.

 

Article
VI. ADDITIONAL COVENANTS OF THE PARTIES

 

Section
6.01 Access to Properties and Records. From the Effective Date until the Closing or the earlier termination of this Agreement
in accordance with its terms, each of the Parent, NHL and PR will each afford to the officers and authorized representatives of
the other full access to the properties, books and records of the Parent, NHL and PR, as the case may be, in order that each may
have a full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and other information as to the business and properties
of the Parties, as the case may be, as the other shall from time to time reasonably request.

 

Section
6.02 Delivery of Books and Records. At the Escrow Closing, PR will identify to Parent and NHL the location on record where
the books and records are kept.

 

Section
6.03 Third Party Consents and Certificates. The Parent, NHL and PR and SPR agree to cooperate with each other
in order to obtain any required third-party consents to this Agreement and the transactions herein contemplated.

 

    	 	 	Page | 16

     

    

 

Section
6.04 Actions Prior to Closing. From and after the Effective Date until the Closing Date and except as set forth in the
Buyers Schedules, if any, or the PR Schedules, or as permitted or contemplated by this Agreement, the Parties, respectively, will
each:

 

	 	(a)	carry
    on its business in substantially the same manner as it has heretofore;
	 	 	 
	 	(b)	maintain
    and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear
    and tear and damage due to casualty;
	 	 	 
	 	(c)	maintain
    in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it;
	 	 	 
	 	(d)	perform
    in all material respects all of its obligations under material contracts, leases, and instruments relating to or affecting
    its assets, properties, and business;
	 	 	 
	 	(e)	use
    its best efforts to maintain and preserve its business organization intact, to retain its key employees, and to maintain its
    relationship with its material suppliers and customers; and
	 	 	 
	 	(f)	fully
    comply with and perform in all material respects all obligations and duties imposed on it by all applicable Laws (including
    without limitation, all securities Laws) and all rules, regulations, and orders imposed by federal, state or provincial governmental
    authorities.

 

Section
6.05 Limitations on Actions. From and after the Effective Date until the Closing Date, except as required by this Agreement
neither of the Parties will:

 

	 	(a)	make
    any changes in their charter documents, except as contemplated by this Agreement;
	 	 	 
	 	(b)	enter
    into or amend any contract, agreement, or other instrument of any of the types described in such Party’s schedules,
    except that a Party may enter into or amend any contract, agreement, or other instrument in the ordinary course of business
    involving the sale of goods or services; or
	 	 	 
	 	(c)	sell
    any assets or discontinue any operations, sell any shares of capital stock or conduct any similar transactions other than
    in the ordinary course of business.

 

Section
6.06 Actions at the Closing.

 

	 	(a)	As
    of the Closing, the Board of Directors of the Parent shall allow for the appointment of one more board member appointed by
    PRB
	 	 	 
	 	(b)	 The
    Escrow Agent will complete its duties and release the PRAS, the PRBS and the Parent Shares as contemplated in this Agreement.
	 	 	 
	 	(c)	The
    Parties shall ensure that all previously provided personal guarantees respecting PR and the mortgage provided by MK to LPG
    Pharmaceuticals Inc. (“LPG”), as additional security for the PR indebtedness to LPG, will have been discharged
    prior to or on Closing.

 

    	 	 	Page | 17

     

    

 

Article
VII. TERMINATION

 

Section
7.01 Termination. This Agreement may be terminated on or prior to the Closing Date:

 

	 	(a)	By
    the mutual written consent of the Parent, NHL and SPR;
	 	 	 
	 	(b)	By
    the Buyer if the conditions to Closing as set forth in Section 5.01 and Section 5.02 have not been satisfied or waived by
    the Buyer, which waiver the Buyer may give or withhold in its sole discretion, by the Escrow Closing Date, provided, however,
    that the Buyer may not terminate this Agreement pursuant to this Section 7.01(b) if the reason for the failure of any such
    condition to occur was the breach of the terms of this Agreement by the Buyer;
	 	 	 
	 	(c)	By
    SPR if the conditions to Closing as set forth in Section 5.01 and Section 5.03 have not been satisfied or waived by SPR, which
    waiver SPR may give or withhold in its sole discretion, by the Closing Date, provided, however, that SPR may not terminate
    this Agreement pursuant to this Section 7.01(c) if the reason for the failure of any such condition to occur was the breach
    of the terms of this Agreement by SPR;
	 	 	 
	 	(d)	By
    any Party, if a court of competent jurisdiction or other Authority shall have issued an order or taken any other action permanently
    restraining, enjoining or otherwise prohibiting the transactions contemplated under this Agreement and such order or action
    shall have become final and non-appealable.

 

Section
7.02 Survival After Termination. If this Agreement is terminated in accordance with Section 7.01, this Agreement shall
become void and of no further force and effect with no liability to any Person on the part of any Party hereto (or any officer,
agent, employee, direct or indirect holder of any equity interest or securities, or Affiliates of any Party); provided, however,
that this Section 7.02, Article VIII and Article X shall survive the termination of this Agreement and (iii) nothing herein shall
relieve any Party from any liability for fraud or any willful and material breach of the provisions of this Agreement prior to
the termination of this Agreement.

 

Section
7.03 Disposition of Shares After Termination. If this Agreement is terminated without completion of the transaction contemplated
herein, then the Escrow Agent will return all respective shares to the original shareholders.

 

Article
VIII. INDEMNIFICATION

 

Section
8.01 Indemnification of Parent and NHL. SPR hereby agrees to indemnify and hold harmless to the fullest extent permitted
by applicable law the Parent, NHL, each of its Affiliates and each of its and their respective members, managers, partners, directors,
officers, employees, stockholders, attorneys and agents and permitted assignees (each a “Buyer Indemnified Party”),
against and in respect of any and all loss, cost, payments, demand, penalty, forfeiture, expense, liability, judgment, deficiency
or damage, and diminution in value or claim (including actual costs of investigation and attorneys’ fees and other costs
and expenses) (all of the foregoing collectively, “Losses”) incurred or sustained by any Buyer Indemnified Party as
a result of or in connection with (a) any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment
of any of the representations, warranties, covenants and agreements of SPR contained herein or in any of the additional agreements
or any certificate or other writing delivered pursuant hereto, and (b) any Actions by any third parties with respect to the business
or operations of PR (including breach of contract claims, violations of warranties, trademark infringement, privacy violations,
torts or consumer complaints) for any period on or prior to the Closing Date.

 

Section
8.02 Indemnification of SPR and PR. The Parent and NHL hereby agree, jointly and severally, to indemnify and hold harmless
to the fullest extent permitted by applicable law SPR AND PR, its Affiliates, and each of their respective officers, directors,
employees, stockholders, attorneys and agents and permitted assignees (each a “SPR AND PR Indemnified Party”), against
and in respect of any and all Losses incurred or sustained by any SPR AND PR Indemnified Party as a result of or in connection
with (a) any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment of any of the representations,
warranties, covenants and agreements of the Buyers contained herein or in any of the additional agreements or any certificate
or other writing delivered pursuant hereto, and (b) any Actions by any third parties with respect to the business or operations
of the Buyers (including breach of contract claims, violations of warranties, trademark infringement, privacy violations, torts
or consumer complaints) for any period on or prior to the Closing Date.

 

    	 	 	Page | 18

     

    

 

Section
8.03 Procedure. The following shall apply with respect to all claims by any SPR AND PR Indemnified Party or Buyer Indemnified
Party for indemnification in respect of Third-Party Claims:

 

	 	(a)	An
    indemnified Party shall give the indemnifying Party prompt notice (an “Indemnification Notice”) of any third-party
    Action with respect to which such indemnified Party seeks indemnification pursuant to Section 8.01 or Section 8.02 (a “Third-Party
    Claim”), which shall describe in reasonable detail the Loss that has been or may be suffered by the indemnified Party.
    The failure to give the Indemnification Notice shall not impair any of the rights or benefits of such indemnified Party under
    Section 8.01 or Section 8.02, except to the extent such failure materially and adversely affects the ability of the indemnifying
    Party to defend such claim or increases the amount of such liability.
	 	 	 
	 	(b)	In
    the case of any Third-Party Claims as to which indemnification is sought by any indemnified Party, such indemnified Party
    shall be entitled, at the sole expense and liability of the indemnifying Party, to exercise full control of the defense, compromise
    or settlement of any Third-Party Claim unless the indemnifying Party, within a reasonable time after the giving of an Indemnification
    Notice by the indemnified Party (but in any event within ten (10) days thereafter), shall (i) deliver a written confirmation
    to such indemnified Party that the indemnification provisions of Section 8.01 or Section 8.02 are applicable to such Action
    and the indemnifying Party will indemnify such indemnified Party in respect of such Action pursuant to the terms of this Article
    VIII and, notwithstanding anything to the contrary, shall do so without asserting any challenge, defense, limitation on the
    indemnifying Party’s liability for Losses, counterclaim or offset, (ii) notify such indemnified Party in writing of
    the intention of the indemnifying Party to assume the defense thereof, and (iii) retain legal counsel reasonably satisfactory
    to such indemnified Party to conduct the defense of such Third-Party Claim.
	 	 	 
	 	(c)	If
    the indemnifying Party assumes the defense of any such Third-Party Claim pursuant to Section 8.03(b), then the indemnified
    Party shall cooperate with the indemnifying Party in any manner reasonably requested in connection with the defense, and the
    indemnified Party shall have the right to be kept fully informed by the indemnifying Party and their legal counsel with respect
    to the status of any legal proceedings, to the extent not inconsistent with the preservation of attorney-client or work product
    privilege. If the indemnifying Party so assumes the defense of any such Third-Party Claim, the indemnified Party shall have
    the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof,
    but the fees and expenses of such counsel employed by the indemnified Party shall be at the expense of such indemnified Party
    unless (i) the indemnifying Party has agreed to pay such fees and expenses, or (ii) the named parties to any such Third-Party
    Claim (including any impleaded parties) include an indemnified Party and the indemnifying Party and the indemnified Party
    shall have been advised by 2its counsel that there may be a conflict of interest between such indemnified Party and the indemnifying
    Party in the conduct of the defense thereof, and in any such case the reasonable fees and expenses of such separate counsel
    shall be borne by the indemnifying Party.

 

    	 	 	Page | 19

     

    

 

	 	(d)	If
    the indemnifying Party elects to assume the defense of any Third-Party Claim pursuant to Section 8.03(b), the indemnified
    Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability unless the
    indemnifying Party withdraws from or fails to vigorously prosecute the defense of such asserted liability, or unless a judgment
    is entered against the indemnified Party for such liability. If the indemnifying Party does not elect to defend, or if, after
    commencing or undertaking any such defense, the indemnifying Party fails to adequately prosecute or withdraw such defense,
    the indemnified Party shall have the right to undertake the defense or settlement thereof, at the indemnifying Party’s
    expense. Notwithstanding anything to the contrary, the indemnifying Party shall not be entitled to control, but may participate
    in, and the indemnified Party (at the expense of the indemnifying Parties) shall be entitled to have sole control over, the
    defense or settlement of (x) that part of any Third Party Claim (i) that seeks a temporary restraining order, a preliminary
    or permanent injunction or specific performance against the indemnified Party, or (ii) to the extent such Third Party Claim
    involves criminal allegations against the indemnified Party or (y) the entire Third Party Claim if such Third Party Claim
    would impose liability on the part of the indemnified Party. In the event the indemnified Party retains control of the Third-Party
    Claim, the indemnified Party will not settle the subject claim without the prior written consent of the indemnifying Party,
    which consent will not be unreasonably withheld or delayed.
	 	 	 
	 	(e)	If
    the indemnified Party undertakes the defense of any such Third-Party Claim pursuant to Section 8.03(b) and proposes to settle
    the same prior to a final judgment thereon or to forgo appeal with respect thereto, then the indemnified Party shall give
    the indemnifying Party prompt written notice thereof and the indemnifying Party shall have the right to participate in the
    settlement, assume or reassume the defense thereof or prosecute such appeal, in each case at the indemnifying Party’s
    expense. The indemnifying Party shall not, without the prior written consent of such indemnified Party settle or compromise
    or consent to entry of any judgment with respect to any such Third-Party Claim (i) in which any relief other than the payment
    of money damages is or may be sought against such indemnified Party, (ii) in which such Third Party Claim could be reasonably
    expected to impose or create a monetary liability on the part of the indemnified Party (such as an increase in the indemnified
    Party’s income Tax) other than the monetary claim of the third party in such Third-Party Claim being paid pursuant to
    such settlement or judgment, or (iii) which does not include as an unconditional term thereof the giving by the claimant,
    person conducting such investigation or initiating such hearing, plaintiff or petitioner to such indemnified Party of a release
    from all liability with respect to such Third-Party Claim and all other Actions (known or unknown) arising or which might
    arise out of the same facts.

 

Section
8.04 Periodic Payments. Any indemnification required by this Article VIII for costs, disbursements or expenses of any indemnified
Party in connection with investigating, preparing to defend or defending any Action shall be made by periodic payments by the
indemnifying Party to each indemnified Party during the course of the investigation or defense, as and when bills are received
or costs, disbursements or expenses are incurred.

 

Section
8.05 Insurance. Any indemnification payments hereunder shall take into account any insurance proceeds or other third-party
reimbursement actually received.

 

Section
8.06 Time Limit. The obligations of SPR AND PR and the Buyers Indemnifying Party under Section 8.01 and Section 8.02 shall
expire two (2) years from the Closing Date, except with respect to (i) an indemnification claim asserted in accordance with the
provisions of this Article VIII which remains unresolved, for which the obligation to indemnify shall continue until such claim
is resolved; and (ii) resolved claims for which payment has not yet been paid to the indemnified Party.

 

Article
IX. DISPUTE RESOLUTION

 

Section
9.01 Arbitration.

 

	 	(a)	The
    Parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement (including with
    respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Agreement) or any
    alleged breach thereof (including any action in tort, contract, equity, or otherwise), to binding arbitration before one arbitrator
    (the “Arbitrator”). Binding arbitration shall be the sole means of resolving any dispute, claim, or controversy
    arising out of or relating to this Agreement (including with respect to the meaning, effect, validity, termination, interpretation,
    performance or enforcement of this Agreement) or any alleged breach thereof (including any claim in tort, contract, equity,
    or otherwise).

 

    	 	 	Page | 20

     

    

 

	 	(b)	If
    the Parties cannot agree upon the Arbitrator within ten (10) Business Days of the commencement of the efforts to so agree
    on an Arbitrator, each of the Parties shall select one arbitrator and the two arbitrators so selected shall select the Arbitrator.
	 	 	 
	 	(c)	The
    laws of the State of Nevada shall apply to any arbitration hereunder. In any arbitration hereunder, this Agreement and any
    agreement contemplated hereby shall be governed by the laws of the State of Nevada applicable to a contract negotiated, signed,
    and wholly to be performed in the State of Nevada, which laws the Arbitrator shall apply in rendering his decision. The Arbitrator
    shall issue a written decision, setting forth findings of fact and conclusions of law, within sixty (60) days after he shall
    have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages.
	 	 	 
	 	(d)	The
    arbitration shall be held in Palm Beach County, Florida in accordance with and under the then-current provisions of the rules
    of the American Arbitration Association, except as otherwise provided herein.
	 	 	 
	 	(e)	On
    application to the Arbitrator, any Party shall have rights to discovery to the same extent as would be provided under the
    Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply to any arbitration under this Agreement; provided,
    however, that the Arbitrator shall limit any discovery or evidence such that his decision shall be rendered within the period
    referred to in Section 9.01(c).
	 	 	 
	 	(f)	The
    Arbitrator may, at his discretion and at the expense of the Party who will bear the cost of the arbitration, employ experts
    to assist him in his determinations.
	 	 	 
	 	(g)	The
    costs of the arbitration proceeding and any proceeding in court to confirm any arbitration award or to obtain relief, as applicable
    (including actual attorneys’ fees and costs), shall be borne by the unsuccessful Party and shall be awarded as part
    of the Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such costs in such decision. The determination
    of the Arbitrator shall be final and binding upon the Parties and not subject to appeal.
	 	 	 
	 	(h)	Any
    judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction.
    The Parties expressly consent to the non-exclusive jurisdiction of the courts (Federal and state) in Palm Beach County, Florida
    to enforce any award of the Arbitrator or to render any provisional, temporary, or injunctive relief in connection with or
    in aid of the Arbitration. The Parties expressly consent to the personal and subject matter jurisdiction of the Arbitrator
    to arbitrate any and all matters to be submitted to arbitration hereunder. None of the Parties hereto shall challenge any
    arbitration hereunder on the grounds that any party necessary to such arbitration (including the Parties) shall have been
    absent from such arbitration for any reason, including that such Party shall have been the subject of any bankruptcy, reorganization,
    or insolvency proceeding.

 

    	 	 	Page | 21

     

    

 

Section
9.02 Waiver of Jury Trial; Exemplary Damages.

 

	 	(a)	EACH
    PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
    ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
    (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
    OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
    TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
    THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 9.02(a).
	 	 	 
	 	(b)	Each
    of the Parties acknowledge that each has been represented in connection with the signing of this waiver by independent legal
    counsel selected by the respective Party and that such Party has discussed the legal consequences and import of this waiver
    with legal counsel. Each of the Parties further acknowledge that each has read and understands the meaning of this waiver
    and grants this waiver knowingly, voluntarily, without duress and only after consideration of the consequences of this waiver
    with legal counsel.

 

Article
X. MISCELLANEOUS

 

Section
10.01 Brokers. The Parent, NHL and SPR agree that there were no finders or brokers involved in bringing the Parties together
or who were instrumental in the negotiation, execution or consummation of this Agreement. The Parent, NHL and SPR each agree to
indemnify the other against any claim by any third person other than those described above for any commission, brokerage, or finder’s
fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying
Party and such third person, whether express or implied from the actions of the indemnifying Party.

 

Section
10.02 Governing Law. This Agreement shall be governed by, enforced, and construed under and in accordance with the Laws
of the State of Nevada, without giving effect to the principles of conflicts of law thereunder. Each of the Parties (a) irrevocably
consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall
be brought exclusively in the state or federal courts of the United States with jurisdiction in Palm Beach County, Florida. By
execution and delivery of this Agreement, each Party hereto irrevocably submits to and accepts, with respect to any such action
or proceeding, generally and unconditionally, the jurisdiction of the aforesaid courts, and irrevocably waives any and all rights
such Party may now or hereafter have to object to such jurisdiction.

 

Section
10.03 Notices.

 

	 	(a)	Any
    notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally
    delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

 

If
to the Parent:

 

Novo
Integrated Sciences, Inc.

Attn:
Chris David, President

11120
NE 2nd St., Suite 200

Bellevue,
WA 98004

Email:
xxxxxxxxxxxxx.com

 

    	 	 	Page | 22

     

    

 

If
to NHL:

 

Novo
Healthnet Limited

Attn:
Robert Mattacchione, Chairman

119
Westcreek Drive, Suite 1

Woodbridge,
Ontario Canada L4L 9N6

Email:
xxxxxxxxxxx.com

 

If
to PR:

 

Pulse
Rx LTC Pharmacy

Attn:
Martin S. Kusmirek, President

111
Zenway Blvd., Suite 3

Woodbridge,
Ontario Canada, L4H 3H9

Email:
xxxxxxxxxxx.ca

 

	 	(b)	Any
    Party may change its address for notices hereunder upon notice to each other Party in the manner for giving notices hereunder.
	 	 	 
	 	(c)	Any
    notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch,
    if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt requested and received and
    (iv) three (3) days after mailing, if sent by registered or certified mail.

 

Section
10.04 Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to
secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all
costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment
rendered therein.

 

Section
10.05 Confidentiality. Each Party agrees that, unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another
Party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal
inspection, of such other Party, and shall not use such data or information or disclose the same to others, except (i) to the
extent such data or information is published, is a matter of public knowledge, or is required by Law to be published; or (ii)
to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by
this Agreement. In the event of the termination of this Agreement, each Party shall return to the applicable other Party all documents
and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials
relating thereto, and each Party will continue to comply with the confidentiality provisions set forth herein.

 

Section
10.06 Public Announcements and Filings. Unless required by applicable Law or regulatory authority, none of the Parties
will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or
to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the Parties.
The Parties acknowledge and agree that the Parent is obligated to file a Form 8-K pursuant to the Exchange Act relating to this
Agreement and the transactions contemplated herein (the “Form 8-K”). In addition, the Parties acknowledge and agree
that information related to this Agreement and the transactions contemplated herein shall be provided to the prospective investors
in the Parent, NHL or PR, on a confidential basis, with written permission from the other party. Other than the Form 8-K or the
confidential disclosures referenced in the immediately preceding sentence, copies of any such filings, public announcements or
disclosures, including any announcements or disclosures mandated by Law or regulatory authorities, shall be delivered to each
Party at least one (1) business day prior to the release thereof.

 

    	 	 	Page | 23

     

    

 

Section
10.07 Schedules; Knowledge. Each Party is presumed to have full knowledge of all information set forth in the other Party’s
schedules delivered pursuant to this Agreement.

 

Section
10.08 Third Party Beneficiaries. This contract is strictly between the Parent, NHL and PR AND SPR, except as specifically
provided, no other Person and no director, officer, stockholder, employee, agent, independent contractor or any other Person shall
be deemed to be a third-party beneficiary of this Agreement.

 

Section
10.09 Expenses. Subject to Section 10.04, whether or not the Exchange is consummated, each of the Buyers and PR AND SPR
will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange
or any of the other transactions contemplated hereby.

 

Section
10.10 Entire Agreement. This Agreement represents the entire agreement between the Parties relating to the subject matter
thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

 

Section
10.11 Survival; Termination. The representations, warranties, and covenants of the respective Parties shall survive the
Closing Date and the consummation of the transactions herein contemplated for a period of two years.

 

Section
10.12 Amendment; Waiver; Remedies; Agent.

 

	 	(a)	At
    any time prior to the Closing Date, this Agreement may be amended, modified, superseded, terminated or cancelled, and any
    of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed
    by all of the Parties hereto.
	 	 	 
	 	(b)	Every
    right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law,
    or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance of any obligation by
    the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.
	 	 	 
	 	(c)	Neither
    any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor
    any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring
    satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party
    or impairs any right of the Party giving such notice or making such demand, including any right to take any action without
    notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of
    this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with
    respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.
	 	 	 
	 	(d)	Notwithstanding
    anything else contained herein, no Party shall seek, nor shall any Party be liable for, consequential, punitive or exemplary
    damages, under any tort, contract, equity, or other legal theory, with respect to any breach (or alleged breach) of this Agreement
    or any provision hereof or any matter otherwise relating hereto or arising in connection herewith.

 

Section
10.13 Arm’s Length Bargaining; No Presumption Against Drafter. This Agreement has been negotiated at arm’s-length
by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented
by counsel and having participated in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship
between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction
or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement
or such provision.

 

    	 	 	Page | 24

     

    

 

Section
10.14 Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights
of the Parties.

 

Section
10.15 Exhibits and Schedules. Any matter, information or item disclosed in the Schedules delivered under any specific representation,
warranty or covenant or Schedule number hereof, shall be deemed to have been disclosed for all purposes of this Agreement in response
to every representation, warranty or covenant in this Agreement where its application is reasonably apparent on the face of the
disclosure, even in the absence of an explicit cross reference. The inclusion of any matter, information or item in any Schedule
to this Agreement shall not be deemed to constitute an admission of any liability by the Parent or NHL to any third party or otherwise
imply, that any such matter, information or item is material or creates a measure for materiality for the purposes of this Agreement.

 

Section
10.16 No Assignment or Delegation. No Party may assign any right or delegate any obligation hereunder, including by merger,
consolidation, operation of law, or otherwise, without the written consent of the all of the other Parties and any purported assignment
or delegation without such consent shall be void, in addition to constituting a material breach of this Agreement. This Agreement
shall be binding on the permitted successors and assigns of the Parties.

 

Section
10.17 Commercially Reasonable Efforts. Subject to the terms and conditions herein provided, PR AND SPR and the Buyers shall
use their respective commercially reasonable efforts to perform or fulfill all conditions and obligations to be performed or fulfilled
by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable, and to take,
or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws
and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

 

Section
10.18 Further Assurances. Each Party shall execute and deliver such documents and take such action, as may reasonably be
considered within the scope of such Party’s obligations hereunder, necessary to effectuate the transactions contemplated
by this Agreement.

 

Section
10.19 Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party
hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches
of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in
addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the
security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting
of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy
at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.

 

Section
10.20 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original
and all of which taken together shall be but a single instrument. The execution and delivery of a facsimile or other electronic
transmission of a signature to this Agreement shall constitute delivery of an executed original and shall be binding upon the
person whose signature appears on the transmitted copy.

 

[Signatures
Appear on Following Page]

 

    	 	 	Page | 25

     

    

 

IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first-above written.

 

	 	Novo
    Integrated Sciences, Inc.
	 	 	 
	 	By:
    	/s/
    Robert Mattacchione
	 	Name:
    	Robert
    Mattacchione
	 	Title:	CEO
	 	 	 
	 	Novo
    Healthnet Limited
	 	 	 
	 	By:
    	/s/
    Dr. Pierre Dalcourt
	 	Name:
    	Dr.
    Pierre Dalcourt
	 	Title:	President
	 	 	 
	 	Family
    Pharmacy Clinic Inc., PRA Shareholder
	 	 	 
	 	By:
    	/s/
    Martin S. Kusmirek
	 	Name:
    	Martin
    S. Kusmirek
	 	Title:
    	President
	 	 	 
	 	Address
    for Notices:
	 	 
	 	2-111
    Zenway Blvd.
	 	Woodbridge,
    Ontario, Canada L4H 3H9
	 	Email:	xxxxxxxxxxxxx.com
	 	 	 
	 	Pulse
    Rx Inc. o/a Pulse Rx LTC Pharmacy
	 	 	 
	 	By:
    	/s/
    Martin S. Kusmirek
	 	Name:
    	Martin
    S. Kusmirek
	 	Title:
    	President
	 	 	 
	 	Martin
    Kusmirek, an individual, PRB shareholder
	 	 	 
	 	By:
    	/s/
    Martin S. Kusmirek
	 	Name:
    	Martin
    S. Kusmirek
	 	 	 
	 	Address
    for Notices:
	 	 
	 	xxxxxxxxxxx
    Rd.
	 	xxxxxxxxxx
    Ontario, Canada XXX XR8
	 	Email:	xxxxxxxxxxxxxx.ca

 

    	 	 	Page | 26

     

    

 

	 	Tanya
    Kusmirek, an individual, PRB shareholder
	 	 	 
	 	By:
    	/s/
    Tanya Kusmirek
	 	Name:
    	Tanya
    Kusmirek
	 	 	 
	 	Address
    for Notices:
	 	 
	 	xxxxxxxxxxx
    Rd.
	 	xxxxxxxxxxxx
    Ontario, Canada XXX 1R8
	 	Email:	xxxxxxxxxxxxxx.com
	 	 	 
	 	Andrew
    Kusmirek, an individual, PRB shareholder
	 	 	 
	 	By:
    	/s/
    Andrew Kusmirek
	 	Name:
    	Andrew
    Kusmirek
	 	 	 
	 	Address
    for Notices:
	 	 
	 	xxxxxxxxxxxxxx
    Ave.
	 	xxxxxxxxxx
    B.C., Canada XXX 2V1
	 	Email:	xxxxxxxxxx.com
	 	 	 
	 	Christine
    Kusmirek, an individual, PRB shareholder
	 	 	 
	 	By:
    	/s/
    Christine Kusmirek
	 	Name:
    	Christine
    Kusmirek
	 	 	 
	 	Address
    for Notices:
	 	 
	 	Xxxxxxxxxxxxx
    Ave.
	 	xxxxxxxxxxx
    B.C., Canada XXX 2V1
	 	Email:	xxxxxxxxxxxxxxxx.com

 

    	 	 	Page | 27

     

    

 

EXHIBIT
A

 

NOVO
INTEGRATED SCIENCES, INC. 

(formerly
Turbine Truck Engines, Inc.)

Consolidated
Financial Statements

 

Contents

 

	 	Page
	Financial
    Statements:	 
	 	 
	Report of Independent Registered Public Accounting Firms	F-1
	Report of NVS Chartered Accountants Professional Corporation	F-1
	Report of AJ Robbins CPA LLC	F-2
	 	 
	Consolidated Balance Sheets as of August 31, 2018 and 2017 	F-3
	 	 
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended August 31, 2018 and 2017	F-4
	 	 
	Consolidated Statement of Stockholders’ Equity (Deficit) for the Years Ended August 31, 2018 and 2017	F-5
	 	 
	Consolidated Statements of Cash Flows for the Years Ended August 31, 2018 and 2017	F-6
	 	 
	Notes to Consolidated Financial Statements	F-7

 

    	 	 	Exhibit  A

     

    

 

REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To
the Board of Directors and

Stockholders
of Novo Integrated Sciences, Inc.

 

We
have audited the accompanying consolidated balance sheets of Novo Integrated Sciences, Inc and Subsidiaries (collectively “the
Company”) as of August 31, 2018, and the related consolidated statements of operations and comprehensive loss, changes in
stockholders’ deficit, and cash flows for the year then ended. The Company’s management is responsible for these consolidated
financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

 

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Novo Integrated Sciences, Inc. as of August 31, 2018, and the consolidated results of their operations and
their cash flows for each of the year then ended, in conformity with accounting principles generally accepted in the United States
of America.

 

 /s/
NVS Chartered Accountants Professional Corporation

 

NVS
Chartered Accountants Professional Corporation

 

Markham,
Ontario

November
6, 2018

 

NVS
CHARTERED ACCOUNTANTS PROFESSIONAL CORPORATION

100
Allstate Parkway, Suite 303, Markham, Ontario L3R 6H3 Tel: 905.415.2511 Fax: 905.415.2011

 

    	F-1

    	 

    

 

 

 

To
the Board of Directors and

Stockholders
of Novo Integrated Sciences, Inc.

 

We
have audited the accompanying consolidated balance sheet of Novo Integrated Sciences, Inc and Subsidiaries (collectively “the
Company”) as of August 31, 2017, and the related consolidated statements of operations and comprehensive loss, changes in
stockholders’ deficit, and cash flows for the year then ended. The Company’s management is responsible for these consolidated
financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

 

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Novo Integrated Sciences, Inc. as of August 31, 2017 , and the consolidated results of their operations
and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States
of America.

 

Denver,
Colorado

 

December
6, 2017

 

aj@ajrobbins.com

400
South Colorado Blvd, Suite 870 East, Denver, Colorado 80246

(B)303-537-5898   
(M)720-339-5566   (F)303-845-9078

 

    	F-2

    	 

    

 

NOVO
INTEGRATED SCIENCES, INC.

CONSOLIDATED
BALANCE SHEETS

As
of August 31, 2018 and 2017 

 

	 	 	August
    31, 2018	 	 	August
    31, 2017	 
	ASSETS	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Current Assets:	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	$	675,705	 	 	$	1,896,572	 
	Accounts receivable, net	 	 	1,337,545	 	 	 	1,128,898	 
	Other receivables, current portion	 	 	393,821	 	 	 	372,024	 
	Prepaid expenses and
    other current assets	 	 	161,838	 	 	 	252,536	 
	Total current assets	 	 	2,568,909	 	 	 	3,650,030	 
	 	 	 	 	 	 	 	 	 
	Property and equipment, net	 	 	400,321	 	 	 	302,951	 
	Other receivables, net of current portion	 	 	57,352	 	 	 	-	 
	Acquisition deposits	 	 	1,112,404	 	 	 	1,162,009	 
	Goodwill	 	 	604,113	 	 	 	399,400	 
	TOTAL
    ASSETS	 	$	4,743,099	 	 	$	5,514,390	 
	 	 	 	 	 	 	 	 	 
	LIABILITIES AND
    STOCKHOLDERS’ EQUITY (DEFICIT)	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Current Liabilities:	 	 	 	 	 	 	 	 
	Accounts payable	 	$	1,307,599	 	 	$	1,703,342	 
	Accrued expenses	 	 	383,998	 	 	 	341,657	 
	Accrued interest (principally to related parties)	 	 	156,121	 	 	 	403,119	 
	Due to related parties	 	 	1,116,261	 	 	 	1,812,613	 
	Notes payable, current
    portion	 	 	382,350	 	 	 	13,171	 
	Total current liabilities	 	 	3,346,329	 	 	 	4,273,902	 
	 	 	 	 	 	 	 	 	 
	Debentures, related parties	 	 	1,224,000	 	 	 	5,114,327	 
	Notes payable, net of current portion	 	 	-	 	 	 	414,351	 
	TOTAL
    LIABILITIES	 	 	4,570,329	 	 	 	9,802,580	 
	 	 	 	 	 	 	 	 	 
	Commitments and contingencies	 	 	-	 	 	 	-	 
	 	 	 	 	 	 	 	 	 
	STOCKHOLDERS’ EQUITY (DEFICIT)	 	 	 	 	 	 	 	 
	Novo Integrated Sciences, Inc.	 	 	 	 	 	 	 	 
	Convertible Preferred stock; $0.001 par value;
    1,000,000 shares authorized; 0 and 0 shares issued and outstanding at August 31, 2018 and 2017	 	 	 	 	 	 	 	 
	Common stock; $0.001 par value; 499,000,000
    shares authorized; 207,881,743 and 201,837,254 shares issued and outstanding at August 31, 2018 and 2017	 	 	207,882	 	 	 	201,837	 
	Additional paid-in capital	 	 	10,053,683	 	 	 	3,381,643	 
	Other comprehensive income	 	 	1,139,815	 	 	 	1,240,844	 
	Accumulated deficit	 	 	(11,199,989	)	 	 	(9,091,977	)
	Total Novo Integrated Sciences, Inc. stockholders’
    equity (deficit)	 	 	201,391	 	 	 	(4,267,653	)
	Noncontrolling interest	 	 	(28,621	)	 	 	(20,537	)
	Total stockholders’
    equity (deficit)	 	 	172,770	 	 	 	(4,288,190	)
	TOTAL
    LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	 	$	4,743,099	 	 	$	5,514,390	 

 

The
accompanying footnotes are an integral part of these consolidated financial statements.

 

    	F-3

    	 

    

 

NOVO
INTEGRATED SCIENCES, INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For
the Years Ended August 31, 2018 and 2017

 

	 	 	Years
    Ended	 
	 	 	August
    31, 2018	 	 	August
    31, 2017	 
	Revenues	 	$	8,894,464	 	 	$	7,963,045	 
	 	 	 	 	 	 	 	 	 
	Cost of revenues	 	 	5,471,376	 	 	 	4,985,715	 
	 	 	 	 	 	 	 	 	 
	Gross profit	 	 	3,423,088	 	 	 	2,977,330	 
	 	 	 	 	 	 	 	 	 
	Operating expenses:	 	 	 	 	 	 	 	 
	Selling expenses	 	 	109,295	 	 	 	59,026	 
	General and administrative
    expenses	 	 	4,883,221	 	 	 	3,031,348	 
	Total operating expenses	 	 	4,992,516	 	 	 	3,090,374	 
	 	 	 	 	 	 	 	 	 
	Income (loss) from operations	 	 	(1,569,428	)	 	 	(113,044	)
	 	 	 	 	 	 	 	 	 
	Non operating income (expense)	 	 	 	 	 	 	 	 
	Interest income	 	 	16,702	 	 	 	34,139	 
	Interest expense	 	 	(564,467	)	 	 	(554,657	)
	Total other income (expense)	 	 	(547,765	)	 	 	(520,518	)
	 	 	 	 	 	 	 	 	 
	Loss before income taxes	 	 	(2,117,193	)	 	 	(633,562	)
	 	 	 	 	 	 	 	 	 
	Income tax expense	 	 	-	 	 	 	111,702	 
	 	 	 	 	 	 	 	 	 
	Net loss	 	$	(2,117,193	)	 	$	(745,264	)
	 	 	 	 	 	 	 	 	 
	Net loss attributed to noncontrolling interest	 	 	(9,181	)	 	 	(6,880	)
	 	 	 	 	 	 	 	 	 
	Net loss attributed to Novo Integrated Sciences,
    Inc.	 	$	(2,108,012	)	 	$	(738,384	)
	 	 	 	 	 	 	 	 	 
	Comprehensive loss:	 	 	 	 	 	 	 	 
	Net loss	 	 	(2,117,193	)	 	 	(745,264	)
	Foreign currency translation
    gain (loss)	 	 	(101,029	)	 	 	(36,605	)
	Comprehensive loss:	 	$	(2,218,222	)	 	$	(781,869	)
	 	 	 	 	 	 	 	 	 
	Weighted average common shares outstanding
    - basic and diluted	 	 	207,568,978	 	 	 	177,675,415	 
	 	 	 	 	 	 	 	 	 
	Net loss per common share - basic and diluted	 	$	(0.01	)	 	$	(0.00	)

 

The
accompanying footnotes are an integral part of these consolidated financial statements.

 

    	F-4

    	 

    

 

NOVO
INTEGRATED SCIENCES, INC.

CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

For
the Years Ended August 31, 2018 and 2017

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Novo	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Additional	 	 	Other	 	 	 	 	 	Stockholders’	 	 	 	 	 	Total	 
	 	 	Common
    Stock	 	 	Paid-in	 	 	Comprehensive	 	 	Accumulated	 	 	Equity/	 	 	Noncontrolling	 	 	Equity/	 
	 	 	Shares	 	 	Amount	 	 	Capital	 	 	Income	 	 	Deficit	 	 	(Deficit)	 	 	Interest	 	 	(Deficit)	 
	Balance,
    August 31, 2016	 	 	167,797,406	 	 	$	92	 	 	$	-	 	 	$	1,277,449	 	 	$	(8,353,593	)	 	$	    (7,076,052	)	 	$	(12,668	)	 	$	(7,088,720	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common
    stock issued in connection with reverse merger transaction	 	 	22,751,307	 	 	 	190,457	 	 	 	(183,553	)	 	 	-	 	 	 	-	 	 	 	6,904	 	 	 	-	 	 	 	6,904	 
	Common
    stock issued for cash	 	 	11,288,541	 	 	 	11,288	 	 	 	3,375,272	 	 	 	-	 	 	 	-	 	 	 	3,386,560	 	 	 	-	 	 	 	3,386,560	 
	Offering
    costs	 	 	-	 	 	 	-	 	 	 	(62,504	)	 	 	-	 	 	 	-	 	 	 	(62,504	)	 	 	-	 	 	 	(62,504	)
	Fair
    value of vested stock options	 	 	-	 	 	 	-	 	 	 	252,428	 	 	 	-	 	 	 	-	 	 	 	252,428	 	 	 	-	 	 	 	252,428	 
	Foreign
    currency translation loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(36,605	)	 	 	-	 	 	 	(36,605	)	 	 	(989	)	 	 	(37,594	)
	Net
    loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(738,384	)	 	 	(738,384	)	 	 	(6,880	)	 	 	(745,264	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance,
    August 31, 2017	 	 	201,837,254	 	 	 	201,837	 	 	 	3,381,643	 	 	 	1,240,844	 	 	 	(9,091,977	)	 	 	(4,267,653	)	 	 	(20,537	)	 	 	(4,288,190	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common
    stock issued for cash	 	 	25,104	 	 	 	25	 	 	 	15,539	 	 	 	-	 	 	 	-	 	 	 	15,564	 	 	 	-	 	 	 	15,564	 
	Common
    stock issued for acquisition	 	 	384,110	 	 	 	384	 	 	 	232,771	 	 	 	-	 	 	 	-	 	 	 	233,155	 	 	 	-	 	 	 	233,155	 
	Common
    stock issued for conversion of debt	 	 	12,452,356	 	 	 	12,453	 	 	 	5,110,446	 	 	 	-	 	 	 	-	 	 	 	5,122,899	 	 	 	-	 	 	 	5,122,899	 
	Cancellation
    of common stock previously issued	 	 	(6,817,081	)	 	 	(6,817	)	 	 	6,817	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	Fair
    value of vested stock options	 	 	-	 	 	 	-	 	 	 	1,274,931	 	 	 	-	 	 	 	-	 	 	 	1,274,931	 	 	 	-	 	 	 	1,274,931	 
	Fair
    value of modification of stock option terms	 	 	-	 	 	 	-	 	 	 	31,536	 	 	 	-	 	 	 	-	 	 	 	31,536	 	 	 	-	 	 	 	31,536	 
	Foreign
    currency translation loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(101,029	)	 	 	 	 	 	 	(101,029	)	 	 	1,097	 	 	 	(99,932	)
	Net
    loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(2,108,012	)	 	 	(2,108,012	)	 	 	(9,181	)	 	 	(2,117,193	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance,
    August 31, 2018	 	 	207,881,743	 	 	$	207,882	 	 	$	10,053,683	 	 	$	1,139,815	 	 	$	(11,199,989	)	 	$	201,391	 	 	$	(28,621	)	 	$	172,770	 

 

The
accompanying footnotes are an integral part of these consolidated financial statements.

 

    	F-5

    	 

    

 

NOVO
INTEGRATED SCIENCES, INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS

For
the Years Ended August 31, 2018 and 2017

 

	 	 	Years
    Ended	 
	 	 	August
    31, 2018	 	 	August
    31, 2017	 
	CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 
	Net loss	 	$	(2,117,193	)	 	$	(745,264	)
	Adjustments to reconcile net loss to net cash
    used in operating activities:	 	 	 	 	 	 	 	 
	Depreciation	 	 	73,447	 	 	 	67,776	 
	Fair value of vested stock options	 	 	1,274,931	 	 	 	252,428	 
	Expense associated with modified stock option
    terms	 	 	31,536	 	 	 	-	 
	Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 
	Accounts receivable	 	 	(263,152	)	 	 	(289,316	)
	Prepaid expenses and other current assets	 	 	23,244	 	 	 	(84,161	)
	Accounts payable	 	 	(331,870	)	 	 	(412,877	)
	Accrued expenses	 	 	58,328	 	 	 	89,937	 
	Accrued interest	 	 	316,228	 	 	 	310,790	 
	Net cash used in operating activities	 	 	(934,501	)	 	 	(810,687	)
	 	 	 	 	 	 	 	 	 
	CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	 	 	 	 
	Purchase of furniture and equipment	 	 	(178,626	)	 	 	(38,238	)
	Deposit paid for acquisition	 	 	-	 	 	 	(1,101,639	)
	Amounts loaned for other receivables	 	 	(38,604	)	 	 	-	 
	Cash acquired in reverse merger transaction	 	 	-	 	 	 	12,249	 
	Repayments of other
    receivables	 	 	-	 	 	 	378,098	 
	Net cash provided by (used in) investing
    activities	 	 	(217,230	)	 	 	(749,530	)
	 	 	 	 	 	 	 	 	 
	CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 
	Advances (repayments) to related parties	 	 	(20,141	)	 	 	(85,063	)
	Proceeds from the sale of common stock	 	 	15,564	 	 	 	3,386,560	 
	Offering cost paid	 	 	-	 	 	 	(62,504	)
	Payments on notes payable	 	 	(6,997	)	 	 	(131,454	)
	Net cash used in financing activities	 	 	(11,574	)	 	 	3,107,539	 
	 	 	 	 	 	 	 	 	 
	Effect of exchange rate changes on cash
    and equivalents	 	 	(57,562	)	 	 	238,935	 
	 	 	 	 	 	 	 	 	 
	NET DECREASE IN CASH AND CASH EQUIVALENTS	 	 	(1,220,867	)	 	 	1,786,257	 
	 	 	 	 	 	 	 	 	 
	CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD	 	 	1,896,572	 	 	 	110,315	 
	 	 	 	 	 	 	 	 	 
	CASH AND CASH EQUIVALENTS,
    END OF PERIOD	 	$	675,705	 	 	$	1,896,572	 
	 	 	 	 	 	 	 	 	 
	CASH PAID FOR:	 	 	 	 	 	 	 	 
	Interest	 	$	240,366	 	 	$	186,618	 
	Income taxes	 	$	-	 	 	$	-	 
	 	 	 	 	 	 	 	 	 
	SUPPLEMENTAL NON-CASH INVESTING AND FINANCING
    ACTIVITIES:	 	 	 	 	 	 	 	 
	Note payable issued
    for purchase of assets	 	$	-	 	 	$	375,450	 

 

The
accompanying footnotes are an integral part of these consolidated financial statements.

 

    	F-6

    	 

    

 

Note
1 - Organization and Basis of Presentation

 

Organization
and Line of Business

 

Novo
Integrated Sciences, Inc. (“Novo Integrated”) was incorporated in Delaware on November 27, 2000, under the name Turbine
Truck Engines, Inc. On February 20, 2008, the Company was re-domiciled to the State of Nevada. Effective July 12, 2017, the Company’s
name was changed to Novo Integrated Sciences, Inc. When used herein, the terms the “Company,” “we,” “us”
and “our” refer to Novo Integrated and its consolidated subsidiaries.

 

The
Company delivers multi-disciplinary primary healthcare to over 400,000 patients annually through our 16 corporate-owned clinics
and a contracted network of 88 affiliate clinics and 234 eldercare centric homes located across Canada. Our team of practitioners
and staff are trained for assessment, diagnosis, treatment, pain management, rehabilitation and primary prevention. Our specialized
services and products include physiotherapy, chiropractic care, occupational therapy, eldercare, laser therapeutics, massage therapy,
acupuncture, chiropody, neurological functions, kinesiology, concussion management and baseline testing, women’s pelvic
health, sports medicine therapy, assistive devices and private personal training. We do not provide primary care medical services,
none of our employees practices primary care medicine, and our services do not require a medical or nursing license.

 

Since
inception and through May 9, 2017, our activities and business operations were limited to raising capital, organizational matters
and the implementation of our business plan related to research, development, testing and commercialization of various alternative
energy technologies.

 

On
April 25, 2017 (the “Effective Date”), we entered into a Share Exchange Agreement (the “Share Exchange Agreement”)
by and between (i) Novo Integrated; (ii) NHL, (iii) ALMC-ASAP Holdings Inc. (“ALMC”); (iv) Michael Gaynor Family Trust
(the “MGFT”); (v) 1218814 Ontario Inc. (“1218814”) and (vi) Michael Gaynor Physiotherapy Professional
Corp. (“MGPP,” and together with ALMC, MGFT and 1218814, the “NHL Shareholders”). Pursuant to the terms
of the Share Exchange Agreement, Novo Integrated agreed to acquire from the NHL Shareholders all of the shares of both common
and preferred stock of NHL, held by the NHL Shareholders, in exchange for the issuance by Novo Integrated to the NHL Shareholders
of shares of Novo Integrated’s common stock, such that following the closing of the Share Exchange Agreement, the NHL Shareholders
would own 167,797,406 restricted shares Novo Integrated common stock, representing 85% of the issued and outstanding Novo Integrated
common stock, calculated including all granted and issued options or warrants to acquire Novo Integrated common stock as of the
Effective Date, but to exclude shares of Novo Integrated common stock that are subject to a then-current Regulation S offering
that was undertaken by Novo Integrated (the “Exchange”).

 

On
May 9, 2017, the Exchange closed and, as a result, NHL became a wholly owned subsidiary of Novo Integrated.

 

The
Exchange was accounted for as a reverse acquisition under the purchase method of accounting since NHL obtained control of Novo
Integrated Sciences, Inc. Accordingly, the Exchange was recorded as a recapitalization of NHL, with NHL being treated as the continuing
entity. The historical financial statements presented are the financial statements of NHL. The Share Exchange Agreement was treated
as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. At the closing date
of the Exchange, the net assets of the legal acquirer, Novo Integrated Sciences, Inc., were $6,904.

 

On
May 9, 2017, our Board of Directors determined, in connection with the closing of the Exchange, to change our fiscal year end
from December 31 to August 31 but did not memorialize such determination in writing. On July 17, 2017, the Board ratified and
memorialized in writing its May 9, 2017 determination regarding the change in fiscal year end.

 

On
April 1, 2017, NHL purchased assets of Apka Health to expand our community OT services. On December 1, 2017, NHL acquired substantially
all of the assets of Executive Fitness Leaders, with operations located in Ottawa Ontario Canada, entered into an Asset Purchase
Agreement, pursuant to which NHL acquired substantially all of the assets of Executive Fitness Leaders in exchange for the issuance
by Novo Integrated of 384,110 restricted shares of its common stock.

 

    	F-7

    	 

    

 

Basis
of Presentation

 

The
accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the
United States of America (“U.S. GAAP”). The Company’s functional currency is the Canadian Dollar (“CAD”);
however, the accompanying consolidated financial statements were translated and presented in United States Dollars (“$”
or “USD”).

 

Foreign
Currency Translation

 

The
accounts of the Company’s Canadian subsidiaries are maintained in CAD. The accounts of these subsidiaries are translated
into USD in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification
(“ASC”) Topic 830, Foreign Currency Transaction, with the CAD as the functional currency. According to Topic
830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated
at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The
resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, Comprehensive
Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the
statement of operations and comprehensive income. The following table details the exchange rates used for the respective periods:

 

	 	 	August 31, 2018	 	 	August 31, 2017	 
	 	 	 	 	 	 	 
	Period end: CAD to USD exchange rate	 	$	0.7647	 	 	$	0.7988	 
	Average period: CAD to USD exchange rate	 	$	0.7835	 	 	$	0.7573	 

 

Note
2 – Summary of Significant Accounting Policies

 

Use
of Estimates

 

The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company
regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience
and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s
estimates. To the extent there are material differences between the estimates and the actual results, future results of operations
will be affected.

 

Principles
of Consolidation

 

The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, NHL, Novo
Peak Health Inc., Novo Healthnet Rehab Limited, Novo Assessments Inc., an 80% interest in Novo Healthnet Kemptville Centre, Inc.,
a Back on Track Physiotherapy and Health Centre clinic operated by NHL, and a 50% stake in a joint venture with the Sophie Freeman
Dental Hygiene Professional Corporation operated as Novo Dental. All of the Company’s subsidiaries are incorporated under
the laws of the Province of Ontario, Canada. All intercompany transactions have been eliminated.

 

Noncontrolling
Interest

 

The
Company follows FASB ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests
(“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions
of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that
increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather
than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated
to the NCI even when such allocation might result in a deficit balance.

 

    	F-8

    	 

    

 

The
net income (loss) attributed to the NCI is separately designated in the accompanying consolidated statements of operations and
other comprehensive income (loss).

 

Cash
Equivalents

 

For
the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid
debt instruments with original maturities of three months or less.

 

Accounts
Receivable

 

Accounts
receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts
receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and
changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful
accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management
has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for
doubtful accounts when identified. As of August 31, 2018 and 2017, the allowance for uncollectible accounts receivable was $464,527
and $507,636, respectively.

 

Property
and Equipment

 

Property
and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals
and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated
depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property
and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows:

 

	Leasehold
    improvements	5
    years
	Clinical
    equipment	5
    years
	Computer
    equipment	3
    years
	Office
    equipment	5
    years
	Furniture
    and fixtures	5
    years

 

Long-Lived
Assets

 

The
Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived
assets used in operations when indicators of impairment are present and the discounted cash flows estimated to be generated by
those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which
the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined
in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at August 31, 2018 and
2017, the Company believes there was no impairment of its long-lived assets.

 

Goodwill

 

Goodwill
represents the excess of purchase price over the underlying net assets of businesses acquired. Under accounting requirements,
goodwill is not amortized but is subject to annual impairment tests. At August 31, 2018, the Company recorded goodwill of $382,350
and $221,763, respectively, related to its acquisition of Apka Health, Inc. during the fiscal year ended August 31, 2017 and Executive
Fitness Leaders during the fiscal year ended August 31, 2018. As of August 31, 2018 and 2017, the Company performed the required
impairment reviews. Based on its reviews at August 31, 2018 and 2017, the Company believes there was no impairment of its goodwill.

 

    	F-9

    	 

    

 

Acquisition
Deposits

 

The
Company has signed letters of understanding with two potential acquisition candidates which includes refundable acquisition deposits
totaling $1,112,404 and $1,162,009, as of August 31, 2018 and 2017, respectively.

 

Fair
Value of Financial Instruments

 

For
certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, advances
to suppliers, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due
to their short maturities.

 

FASB
ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments
held by the Company. FASB ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation
hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying
amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments
and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments
and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined
as follows:

 

	 	●	Level
    1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. 
	 	 	 
	 	●	Level
    2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices
    for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly
    or indirectly, for substantially the full term of the financial instrument. 
	 	 	 
	 	●	Level
    3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the fair value measurement.
    

 

The
Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing
Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

 

As
of August 31, 2018 and 2017, respectively, the Company did not identify any assets and liabilities required to be presented on
the balance sheet at fair value.

 

Revenue
Recognition

 

ASU
No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on March
1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this
new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation
of Topic 606. As sales are and have been primarily from providing healthcare services, and the Company has no significant
post-delivery obligations, this new standard did not result in a material recognition of revenue on the Company’s accompanying
consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to
its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting
practices under Topic 605, Revenue Recognition.

 

Revenue
from providing healthcare services are recognized under Topic 606 in a manner that reasonably reflects the delivery of
its services to customers in return for expected consideration and includes the following elements:

 

	 	●	executed
    contracts with the Company’s customers that it believes are legally enforceable;
	 	●	identification
    of performance obligations in the respective contract;
	 	●	determination
    of the transaction price for each performance obligation in the respective contract;
	 	●	allocation
    the transaction price to each performance obligation; and
	 	●	recognition
    of revenue only when the Company satisfies each performance obligation.

 

    	F-10

    	 

    

 

These
five elements, as applied to each of the Company’s revenue category, is summarized below:

 

	 	●	Healthcare
    services - gross service revenue is recorded in the accounting records at the time the services is provided on an accrual
    basis at the provider’s established rates, regardless of whether the provider expects to collect that amount. The Company
    reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports
    revenues net of any sales, use and value added taxes.

 

Income
Taxes

 

The
Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the
asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary
differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not
be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of
enactment.

 

Under
ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would
be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount
of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more
likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting
periods presented.

 

Basic
and Diluted Earnings Per Share

 

Earnings
per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”)
is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive
securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants
are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby
were used to purchase common stock at the average market price during the period. There were 10,030,000 and 7,860,000 options/warrants
outstanding as of August 31, 2018 and 2017, respectively. Due to the net loss incurred potentially dilutive instruments
would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss for all periods presented.

 

Foreign
Currency Transactions and Comprehensive Income

 

U.S.
GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however,
require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as
a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive
income. The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar. Translation gains of $1,139,815
and $1,240,844 for the years ended August 31, 2018 and 2017, respectively, are classified as an item of other comprehensive income
in the stockholders’ equity section of the balance sheet.

 

Statement
of Cash Flows

 

Cash
flows from the Company’s operations are calculated based upon the local currencies using the average translation rates.
As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with
changes in the corresponding balances on the balance sheets.

 

Recent
Accounting Pronouncements

 

In
January 2017, the FASB issued an Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805)
Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective
of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals
of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill,
and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied
prospectively on or after the effective date. The adoption of this ASU did not have an impact on its financial statements.

 

    	F-11

    	 

    

 

In
November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted
cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash
flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet.
ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The
adoption of this ASU did not have an impact on its financial statements.

 

In
October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory,
which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when
the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption
permitted. The Company is in the process of evaluating the impact of this ASU on its financial statements.

 

In
August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and
Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are
classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for
interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not
have an impact on its financial statements.

 

In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets
and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective
for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with
early adoption permitted. The Company is in the process of evaluating the impact of this ASU on its financial statements.

 

In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue
recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace
it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue
based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure
about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective
for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods
beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either
retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this ASU beginning on March
1, 2018 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the
Company’s financial statements and disclosures.

 

Management
does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying
financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

 

Note
3 – Related Party Transactions

 

Due
to related parties

 

Amounts
loaned to the Company by stockholders and officers of the Company that are non-interest bearing and payable upon demand. At August
31, 2018 and 2017, the amount due to related parties was $1,116,261 and $1,812,613, respectively.

 

    	F-12

    	 

    

 

On
January 31, 2018, a related party converted $813,125 of outstanding principal and accrued interest into 1,976,483 shares
of the Company’s common stock. The per share price used for the conversion of this loan was $0.4114 which was determined
as the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the
calculated per share price.

 

Note
4 – Accounts Receivables, net

 

Accounts
receivables, net at August 31, 2018 and 2017 consisted of the following:

 

	 	 	2018	 	 	2017	 
	Trade receivables	 	$	1,564,180	 	 	$	1,394,507	 
	Amounts earned but not billed	 	 	237,892	 	 	 	242,028	 
	 	 	 	1,802,072	 	 	 	1,636,535	 
	Allowance for doubtful accounts	 	 	(464,527	)	 	 	(507,637	)
	Accounts receivable, net	 	$	1,337,545	 	 	$	1,128,898	 

 

Note
5 – Other Receivables

 

Other
receivables at August 31, 2018 and 2017 consisted of the following:

 

	 	 	2018	 	 	2017	 
	Notes receivable dated November 15, 2014; accrues interest
    at 8% per annum; secured by assets; due November 15, 2016.	 	$	-	 	 	$	39,940	 
	Notes receivable dated April 1, 2015 and amended on May 23, 2017;
    interest at 8% per annum; secured by certain assets; due March 1, 2019.	 	 	286,763	 	 	 	299,550	 
	Advance to corporation; non-interest bearing; unsecured; payable
    upon demand.	 	 	30,588	 	 	 	32,534	 
	Advance to corporation; accrues interest at 12% per annum;
    unsecured; due to September 2019.	 	 	76,470	 	 	 	-	 
	Advance to corporation; accrues interest
    at 10% per annum; unsecured; due May 1, 2022	 	 	57,352	 	 	 	-	 
	Total other receivables	 	 	451,173	 	 	 	372,024	 
	Current portion	 	 	(393,821	)	 	 	(372,024	)
	Long-term portion	 	$	57,352	 	 	$	-	 

 

Note
6 – Property and Equipment

 

Property
and equipment at August 31, 2018 and 2017 consisted of the following:

 

	 	 	2018	 	 	2017	 
	Leasehold Improvements	 	$	372,010	 	 	$	329,985	 
	Clinical equipment	 	 	269,741	 	 	 	177,514	 
	Computer equipment	 	 	22,636	 	 	 	21,020	 
	Office equipment	 	 	24,658	 	 	 	24,319	 
	Furniture and fixtures	 	 	39,620	 	 	 	18,218	 
	 	 	 	728,665	 	 	 	571,056	 
	Accumulated depreciation	 	 	(328,344	)	 	 	(268,105	)
	Total	 	$	400,321	 	 	$	302,951	 

 

Depreciation
expense for the years ended August 31, 2018 and 2017 was $73,447 and $67,776, respectively.

 

    	F-13

    	 

    

 

Note
7 – Accrued Expenses

 

Accrued
expenses at August 31, 2018 and 2017 consisted of the following:

 

	 	 	2018	 	 	2017	 
	Accrued liabilities	 	$	266,123	 	 	$	241,174	 
	Accrued payroll	 	 	106,761	 	 	 	100,105	 
	Other	 	 	11,114	 	 	 	378	 
	 	 	$	383,998	 	 	$	341,657	 

 

Note
8 – Notes Payable

 

Notes
payable at August 31, 2018 and 2017 consisted of the following:

 

	 	 	2018	 	 	2017	 
	Notes payable to financial institution; accrues interest
    at 7.2% per annum; monthly principal and interest payment of $3,567; unsecured; due October 2017. This note has been fully
    repaid.	 	$	-	 	 	$	7,134	 
	Notes payable issued in connection with purchase of assets; accrues
    interest at 0% per annum; due on March 27, 2019.	 	 	382,350	 	 	 	399,400	 
	Notes payable assumed with acquisition;
    accrues interest at 6% per annum; monthly principal and interest payment of $615; unsecured; This note has been fully repaid.	 	 	-	 	 	 	20,988	 
	 	 	 	382,350	 	 	 	427,522	 
	Current portion	 	 	(382,350	)	 	 	(13,171	)
	Long-term portion	 	$	-	 	 	$	414,351	 

 

Note
9 – Debentures, related parties

 

On
September 30, 2013, the Company issued five debentures totaling CAD$6,402,512 ($5,114,327 at August 31, 2017) in connection with
the acquisition of certain business assets. The holders of the debentures are current stockholders, officers and/or affiliates
of the Company. The debentures are secured by all the assets of the Company, accrue interest at 8% per annum and were originally
due on September 30, 2016. On December 2, 2017, the debenture holders agreed to extend the due date to September 30, 2019.

 

On
January 31, 2018, the debenture holders converted 75% of the debenture value of $3,894,809 plus accrued interest of $414,965 into
10,475,872 shares of the Company’s common stock. The per share price used for the conversion of each debenture was $0.4114
which was determined as the average price of the five (5) trading days immediately preceding the date of conversion with a 10%
premium added to the calculated per share price. At August 31, 2018, the amount of debentures outstanding was $1,224,000.

 

    	F-14

    	 

    

 

Note
10 – Stockholders’ Deficit

 

Convertible
preferred stock

 

The
Company has authorized 1,000,000 shares of $0.001 par value convertible preferred stock. As of August 31, 2018 and 2017 there
were 0 and 0 convertible preferred shares issued and outstanding, respectively.

 

Common
stock

 

The
Company has authorized 499,000,000 shares of $0.001 par value common stock. As of August 31, 2018 and 2017 there were 207,881,743
and 201,837,254 common shares issued and outstanding, respectively.

 

During
the year ended August 31, 2018, the Company:

 

	 	●	issued
    384,110 shares of common stock for the acquisition of Executive Fitness Leaders valued at $233,155. The value was based on
    the closing price of the Company’s common stock on the acquisition date. The shares were issued on December 5, 2017;
	 	 	 
	 	●	issued
    12,452,356 shares of common stock for the conversion of debt totaling $5,122,899. The per share price used for the conversion
    was $0.4114 which was determined as the average price of the five (5) trading days immediately preceding the date of conversion
    with a 10% premium added to the calculated per share price. The shares were issued on February 9, 2018;
	 	 	 
	 	●	issued
    25,104 shares of common stock for a $15,564 for cash proceeds of $15,564; 
	 	 	 
	 	●	cancelled
    6,817,084 shares of common stock for no consideration that were being held as security in connection with a loan agreement.

 

During
the year ended August 31, 2017 the Company issued:

 

	 	●	22,751,307
    shares of common stock in connection with the reverse merger transaction; and
	 	 	 
	 	●	11,288,541
    shares of common stock for cash proceeds of $3,386,560.

 

Stock
Options and Warrants

 

On
September 8, 2015, the Company adopted the 2015 Incentive Compensation Plan (the “2015 Plan”), which authorizes the
issuance of up to 5,000,000 shares of common stock to employees, officers, directors or independent consultants of the Company,
provided that no person can be granted shares under the 2015 Plan for services related to raising capital or promotional activities.
During 2018 and 2017, the Company did not grant any awards under the 2015 Plan. As of August 31, 2018, 4,987,500 shares were available
under the 2015 Plan for future grants, awards, options or share issuances. However, because the shares issuable under the 2015
Plan or issuable upon conversion of awards granted under the Plan are no longer registered under the Securities Exchange Act of
1934, as amended, the Company does not intend to issue any additional grants under the 2015 Plan.

 

On
January 16, 2018, the Company adopted the Novo Integrated Sciences, Inc. 2018 Incentive Plan (the “2018 Plan”). Under
the 2018 Plan, 10,000,000 shares of common stock are authorized for issuance to employees, non-employees, directors and key consultants
to the Company or its subsidiaries. The 2018 Plan authorizes equity-based and cash-based incentives for participants. There were
9,950,000 shares available for award at August 31, 2018 under the 2018 Plan.

 

    	F-15

    	 

    

 

The
following is a summary of stock option/warrant activity:

 

	 	 	 	 	 	 	 	 	Weighted	 	 	 	 
	 	 	 	 	 	Weighted	 	 	Average	 	 	 	 
	 	 	Options/	 	 	Average	 	 	Remaining	 	 	Aggregate	 
	 	 	Warrants	 	 	Exercise	 	 	Contractual	 	 	Intrinsic	 
	 	 	Outstanding	 	 	Price	 	 	Life	 	 	Value	 
	Outstanding, August 31, 2016	 	 	-	 	 	 	 	 	 	 	 	 	 	 	 	 
	Transfer from reverse merger transactions	 	 	6,610,000	 	 	$	0.24	 	 	 	 	 	 	 	 	 
	Granted	 	 	1,250,000	 	 	$	0.42	 	 	 	 	 	 	 	 	 
	Forfeited	 	 	-	 	 	 	 	 	 	 	 	 	 	 	 	 
	Exercised	 	 	-	 	 	 	 	 	 	 	 	 	 	 	 	 
	Outstanding, August 31, 2017	 	 	7,860,000	 	 	$	0.27	 	 	 	3.53	 	 	$	660,000	 
	Granted	 	 	2,170,000	 	 	 	0.42	 	 	 	 	 	 	 	 	 
	Forfeited	 	 	-	 	 	 	 	 	 	 	 	 	 	 	 	 
	Exercised	 	 	-	 	 	 	 	 	 	 	 	 	 	 	 	 
	Outstanding, August 31, 2018	 	 	10,030,000	 	 	 	0.30	 	 	 	4.56	 	 	$	7,045,500	 
	Exercisable, August 31, 2018	 	 	10,030,000	 	 	$	0.30	 	 	 	4.56	 	 	$	7,045,500	 

 

The
exercise price for options/warrants outstanding at August 31, 2018:

 

	Outstanding
    and Exercisable	 
	Number of	 	 	 	 
	Options/	 	 	Exercise	 
	Warrants	 	 	Price	 
	 	5,500,000	 	 	$	0.16	 
	 	1,000,000	 	 	 	0.32	 
	 	50,000	 	 	 	0.33	 
	 	120,000	 	 	 	0.40	 
	 	2,000,000	 	 	 	0.42	 
	 	100,000	 	 	 	0.50	 
	 	1,000,000	 	 	 	0.62	 
	 	250,000	 	 	 	0.80	 
	 	10,000	 	 	 	2.00	 
	 	10,030,000	 	 	 	 	 

 

For
options granted during fiscal year 2018 where the exercise price equaled the stock price at the date of the grant, the weighted-average
fair value of such options was $0.41 and the weighted-average exercise price of such options/warrants was $0.42. No options were
granted during fiscal year 2018 where the exercise price was less than the stock price at the date of grant or the exercise price
was greater than the stock price at the date of grant.

 

For
options granted during fiscal year 2017 where the exercise price equaled the stock price at the date of the grant, the weighted-average
fair value of such options was $0.58 and the weighted-average exercise price of such options/warrants was $0.42. No options were
granted during fiscal 2017 where the exercise price was less than the stock price at the date of grant or the exercise price was
greater than the stock price at the date of grant.

 

The
fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock
option expense of $1,274,931 and $252,428 during the years ended August 31, 2018 and 2017, respectively. At August 31, 2018, the
unamortized stock option expense was $0.

 

    	F-16

    	 

    

 

The
assumptions used in calculating the fair value of options granted using the Black-Scholes option- pricing model for options granted
are as follows:

 

	 	 	2018	 	 	2017	 
	Risk-free interest rate	 	 	1.83	%	 	 	1.50	%
	Expected life of the options	 	 	2.5
                                         to 3.5 years	 	 	 	2.5
                                         years	 
	Expected volatility	 	 	314	%	 	 	323	%
	Expected dividend yield	 	 	0	%	 	 	0	%

 

During
the year ended August 31, 2018, the Company extended the expiration date of 5,600,000 options by three years. The change in fair
value between the options using the original terms and the options using the new expiration dates was $31,536 which has been recorded
as expense in the accompanying consolidated statement of operations.

 

Note
11 – Income Taxes

 

The
Company’s Canadian subsidiaries are subject to the income tax laws of the Province of Ontario and the country of Canada.

 

Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against all net deferred
tax assets as of August 31, 2018 and 2017 based on estimates of recoverability. While the Company has optimistic plans for its
business strategy, it determined that such a valuation allowance was necessary given the current and expected near term losses
and the uncertainty with respect to its ability to generate sufficient profits from its business model.

 

Income
tax expense for the years ended August 31, 2018 and 2017 is as follows:

 

	 	 	2018	 	 	2017	 
	 	 	 	 	 	 	 
	Current taxes:	 	 	 	 	 	 	 	 
	Federal	 	$	   -	 	 	$	  -	 
	State	 	 	-	 	 	 	-	 
	Foreign	 	 	-	 	 	 	111,702	 
	 	 	 	-	 	 	 	111,702	 
	Deferred taxes:	 	 	 	 	 	 	 	 
	Federal	 	 	-	 	 	 	-	 
	State	 	 	-	 	 	 	-	 
	Foreign	 	 	-	 	 	 	-	 
	 	 	 	-	 	 	 	-	 
	 	 	 	 	 	 	 	 	 
	Total income tax expense	 	$	-	 	 	$	111,702	 

 

A
reconciliation of the differences between the effective and statutory income tax rates are as follows:

 

Year
Ended August 31, 2018

 

	 	 	Canada	 	 	United
    States	 	 	Total	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Combined statutory tax rate	 	 	 	 	 	 	39.0	%	 	 	 	 	 	 	40.0	%	 	 	 	 	 			 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 
	Pretax loss	 	$	(438,587	)	 	 	 	 	 	$	(1,678,606	)	 	 	 	 	 	$	(2,117,193	)	 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 
	Expected income tax expense (benefit)	 	 	(171,049	)	 	 	-39.0	%	 	 	(671,442	)	 	 	-40.0	%	 	 	(842,491	)	 	 		 
	Stock based compensation	 	 	-	 	 	 	0.0	%	 	 	509,972	 	 	 	30.4	%	 	 	509,972	 	 	 		 
	Change in valuation allowance	 	 	171,049	 	 	 	39.0	%	 	 	161,470	 	 	 	9.6	%	 	 	332,519	 	 	 		 
	 	 	$	-	 	 	 	0.0	%	 	$	-	 	 	 	0.0	%	 	$	-	 	 	 	0.0	%

 

    	F-17

    	 

    

 

Year
Ended August 31, 2017

 

	 	 	Canada	 	 	United
    States	 	 	Total	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Combined
    statutory tax rate	 	 	 	 	 	 	39.0	%	 	 	 	 	 	 	40.0	%	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pretax
    loss	 	$	(257,900	)	 	 	 	 	 	$	(375,662	)	 	 	 	 	 	$	(699,551	)	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Expected
    income tax expense (benefit)	 	 	(100,581	)	 	 	-39.0	%	 	 	(150,265	)	 	 	-40.0	%	 	 	(276,582	)	 	 	 	 
	Income
    tax from subsidiaries not part of consolidated return	 	 	111,702	 	 	 	43.3	%	 	 	-	 	 	 	0.0	%	 	 	111,702	 	 	 	 	 
	Stock
    based compensation	 	 	-	 	 	 	0.0	%	 	 	100,971	 	 	 	26.9	%	 	 	100,971	 	 	 	 	 
	Change
    in valuation allowance	 	 	100,581	 	 	 	39.0	%	 	 	49,294	 	 	 	13.1	%	 	 	175,611	 	 	 	 	 
	 	 	$	111,702	 	 	 	43.3	%	 	$	-	 	 	 	0.0	%	 	$	111,702	 	 	 	17.6	%

 

At
August 31, 2018 and 2017, the significant components of the deferred tax assets are summarized below:

 

	 	 	2018	 	 	2017	 
	Deferred income tax asset	 	 	 	 	 	 	 	 
	Net operating loss carryforwards	 	$	2,075,037	 	 	$	1,856,218	 
	Total deferred income tax asset	 	 	2,075,037	 	 	 	1,856,218	 
	Less: valuation allowance	 	 	(2,075,037	)	 	 	(1,856,218	)
	Total deferred income tax asset	 	$	-	 	 	$	-	 

 

The
valuation allowance for the years ended August 31, 2018 and 2017 increased by $218,818 and $464,751, respectively, as a result
of the Company generating additional net operating losses and additional net operating losses resulting from the merger transaction.

 

The
Company has recorded as of August 31, 2018 and 2017 a valuation allowance of $2,075,037 and $1,856,218, respectively, as it believes
that it is more likely than not that the deferred tax assets will not be realized in future years. Management has based its assessment
on the Company’s lack of profitable operating history.

 

The
Company conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of August 31, 2018
and 2017.

 

The
Company has net operating loss carry-forwards of approximately $1,142,000 and $4,162,000 in the United States and Canada, respectively.
The use of the net operating losses in the United States may be significantly limited due to Internal Revenue Code section 382.
The 2018, 2017 and 2016 tax years are still subject to audit.

 

Note
12 – Acquisition of Assets

 

During
the year ended August 31, 2017, the Company acquired certain assets in exchange for a note payable of $399,400 (CAD$500,000) at
April 1, 2017 (the acquisition date). The purchase of these assets was not considered significant for accounting purposes; therefore,
pro forma financial statements are not presented.

 

    	F-18

    	 

    

 

On
December 1, 2017, the Company and Executive Fitness Leaders, located in Ottawa Ontario Canada,
entered into an Asset Purchase Agreement, pursuant to which the Company acquired substantially all of the assets of Executive
Fitness Leaders in exchange for the issuance, by the Company, of 384,110 restricted shares of its common stock valued at $233,155.
The purchase price was allocated to furniture and equipment of $7,772 and goodwill of $225,383. The transaction closed on December
1, 2017. The purchase of these assets was not considered significant for accounting purposes; therefore, pro forma financial statements
are not presented.

 

Note
13 – Commitments and Contingencies

 

Litigation

 

The
Company is party to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could
result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that
the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially
adverse effect on our consolidated financial position, results of operations and cash flows in the period in which a ruling or
settlement occurs. However, based on information available to the Company’s management to date, the Company’s management
does not expect that the outcome of any matter pending against the Company is likely to have a materially adverse effect on the
Company’s consolidated financial position as of August 31, 2018, results of operations, cash flows or liquidity of the Company.

 

Leases

 

The
Company leases its office space and certain facilities under long-term operating leases expiring through fiscal year 2023. Rent
expense under these leases was $823,752 and $796,745 for the years ended August 31, 2018 and 2017, respectively.

 

Future
minimum annual payments under operating lease agreements for fiscal years ending August 31 are as follows:

 

	Years ending August 31:	 	 	 	 
	 	2019	 	 	$	280,280	 
	 	2020	 	 	 	179,960	 
	 	2021	 	 	 	162,145	 
	 	2022	 	 	 	104,149	 
	 	2023	 	 	 	52,558	 
	 	 	 	 	$	779,092	 

 

    	F-19

    	 

    

 

Note
14 – Subsequent Events

 

Increase
in Board Size; Officer and Director Changes

 

On
October 17, 2018, the Company’s Board of Directors increased the size of the Board from three members to four members. On
the same date, Pierre Dalcourt resigned his position as Chairman of the Board. Dr. Dalcourt will continue to serve as a member
of the Board.

 

In
addition, on October 17, 2018, the Board appointed Robert Mattacchione to fill the vacancy resulting from the increase in the
size of the Board and named him as Chairman of the Board and Chief Executive Officer.

 

CannaPiece
Binding Letter of Intent

 

On
October 10, 2018, the Company and NHL executed a binding letter of intent (“LOI”) with CannaPiece Group Inc. (“CannaPiece”).
Pursuant to the terms of the LOI, NHL and CannaPiece will enter into a joint venture relationship with CannaPiece and CannaPiece
will invest in the Company. The Company and CannaPiece also agreed to enter into a share exchange agreement resulting in each
of the Company and CannaPiece having an interest in the other company.

 

Pursuant
to the terms of the LOI, the parties agreed to the following:

 

	 	1.	CannaPiece
    will purchase from the Company CAD $5,000,000 (approximately USD $3,868,988 as of October 16, 2018) worth of the Company’s
    shares. The share price will be determined by a 30-day closing average based on the 30-day period ending on October 10, 2018
    and the application of a market acceptable discount to the determined average.
	 	2.	CannaPiece,
    the Company and NHL will enter into a share exchange agreement pursuant to which (a) NHL will own or control 25% of CannaPiece’s
    common stock, and (b) CannaPiece will own or control CAD $25,000,000 (approximately USD $19,346,938 as of October 16, 2018)
    worth of the Company’s stock, which value will be established by a 30-day closing average based on the 30-day period
    ending on October 10, 2018, and the application of a market acceptable discount to the determined average. The CAD $25,000,000
    value is based on a pre-revenue, post-licensing evaluation of CannaPiece in the amount of CAD $100,000,000.
	 	3.	The
    Company will have the right to appoint one board member on CannaPiece’s board of directors, and CannaPiece will have
    the right to appoint one board member on the Company’s board of directors.
	 	4.	CannaPiece
    will rollout a clinic cannabis access program in all applicable Novo network clinics.
	 	5.	CannaPiece
    will enter into a case conference program with applicable Novo network stakeholders.

 

The
LOI provides that the parties will carry out due diligence and will proceed reasonably and in good faith toward the negotiation
and execution of definitive documentation regarding the transactions that are the subject of the LOI. Closing of the transaction
is conditioned upon the following, among other customary closing conditions, including receipt of required regulatory approvals:

 

	 	(i)	Completion
    of due diligence,
	 	(ii)	CannaPiece’s
    continuing toward full cannabis license producer status and not having the license application compromised in any way, and
	 	(iii)	The
    Company shares that will be the subject of the share exchange will be held in escrow until CannaPiece receives licensed producer
    status.

 

If
a definitive agreement is not executed by the parties on or before November 15, 2018 (or such other date agreed to by the parties),
the LOI will terminate.

 

    	F-20

     

    

 

Schedule
1

Novo
Healthnet Limited Disclosure Schedule

 

Section
4.01 - Organization

 

Effective
September 2013 to present, Novo Healthnet Limited holds a 100% shareholder position in Novo Assessments Inc. and Novo Healthnet
Rehab Limited. As such, each Ontario Incorporated entity is a wholly owned subsidiary of Novo Healthnet Limited.

 

Pursuant
to the Agreement of Purchase and Sale of Assets dated September 30, 2013 in which Novo Healthnet Limited purchased the assets
of Peak Health LTC Inc., Healthnet Assessments Inc., ICC Healthnet Canada Inc. and Michael Gaynor Physiotherapy Professional Corporation,
Novo Healthnet Limited operates in the rehabilitative, eldercare and IME areas of business through the acquired assets.

 

NOVO
HEALTHNET KEMPTVILLE CENTRE INC.

 

Effective
November 2014 to present, Novo Healthnet Limited holds an 80% shareholder position in Novo Healthnet Kemptville Centre Inc. As
such Novo Healthnet Limited holds 80 common shares and Micheline Dione holds 20 common shares of Novo Healthnet Kemptville Centre
Inc. an Ontario Incorporated company.

 

Pursuant
to the Asset Purchase Agreement entered into November 2014 between Novo Healthnet Kemptville Centre Inc. (Purchaser) and Synergy
Physiotherapy and Sports Injury Clinic and Micheline Dionne Professional Corp. (collectively the Sellers) Novo Healthnet Kemptville
Centre Inc. operates a rehabilitative wellness clinic in Kemptville, Ontario, Canada.

 

Section
4.12 - Contracts

 

APKA
Health

 

Pursuant
to the Asset Purchase Agreement dated April 1, 2017 between Novo Healthnet Limited and APKA Health, an Ontario incorporated
company, Novo Healthnet limited established an Occupational Therapy and Services division operating in eldercare, IME and
community care sectors.

 

EXECUTIVE
FITNESS LEADERS INC.

 

Effective
December 1, 2017 to present, Novo Healthnet Limited executed an Asset Purchase Agreement with Executive Fitness Leaders Inc. (“EFL”)
pursuant to which Novo Healthnet Limited and Novo Integrated Sciences, Inc. acquired substantially all of EFL’s assets.
EFL conducts the business of personalized training and fitness and related ancillary services based in a wellness model of delivery
and operated by the Seller at 6 Antares Drive, Phase I, Unit 3, Ottawa, ON K2E 8A9.

 

NOVO
PEAK HEALTH ELDERCARE CENTRIC

 

Certain
contracts held with client homes and client companies follow standard formats and include generally accepted terms of reference.
Specific clauses within the NHL contracts for services contain language are intended to (1) clarify which entity is the health
information custodian of the medical files (usually held by the client home or company), (2) define release of liability, (3)
ensure privacy and confidentiality of proprietary information or private health information, (4) define provisions of worker’s
compensation clearance or benefits for employees and/or contractors, (5) detail provisions of value-added items, services or programs,
(6) set out terms and conditions of the contract (often for a set number of years with an option to a renew), (7) provide for
termination conditions, and (8) detail invoicing and billing procedures.

 

    	 	 	Schedule 1 Page | 1

     

    

 

AFFILIATE
CLINICS

 

In
order to strengthen our position within the Canadian Preferred Provider Network (“PPN”), we have built a contracted
affiliate relationship with 88 clinics across Canada, including approximately 76 clinics in Ontario province and approximately
12 clinics located throughout Newfoundland, Nova Scotia, New Brunswick and Alberta. The PPN is a network of three major insurance
companies and their subsidiaries, totaling approximately 16 insurance companies. PPN member insurance companies in need of specific
primary healthcare solutions for their patients send referrals to specific clinics registered through the PPN. We, as one of five
major providers to the PPN, receive referrals through the PPN. This subset of business is a continuous source of referrals, from
the insurance company payer to the approved group of clinics meeting the insurance companies’ pre-determined set of criteria
for what they believe to be an appropriate clinical setting. Affiliate clinics pay us a mix of a flat fee and a percentage-based
fee upon receipt of a payment for a service referred through the PPN.

 

BRANDS

 

Pursuant
to a binding Letter of Intent dated January 30, 2017 between Novo Healthnet Limited (Purchaser) and Rubinoff (Seller), Novo Healthnet
Limited will acquire 70% of the total share capital of Brands International Corp., an Ontario incorporated company. Novo Healthnet
Limited will assume majority share position and control in Brands International Corp. a company involved in the manufacturing
of Health and Beauty products.

 

CannaPiece
Group Inc

 

Pursuant
to a Share Exchange Agreement, dated December 12, 2018, between Novo Integrated Sciences, Inc., Novo Healthnet Limited and CannaPiece
Group, Inc, an Ontario province corporation, (“CPG”), NHL will acquire 25%, at closing, of the total share capital
of CPG, a company in the business of producing and selling cannabis related products and services throughout Canada. CPG is currently
in the process (through its wholly-owned subsidiary) of obtaining a license to cultivate and sell cannabis under the Cannabis
Act (Canada) and its associated regulations (the “Cannabis Act”). The closing of this transaction is primarily dependent
on CPG receiving approved Licensed Producer Status under the Cannabis Act. The identified termination date is June 1, 2019 unless
amended by all parties.

 

Section
4.13 - Taxes

 

Effective
the date of this Agreement, NHL is in arrears in its HST account as well as Payroll account. Arrangements with tax authorities
have been made to manage arrears through a payment plan acceptable to both parties. The liability is reflected in the Parent’s
consolidated Financial Statements.

 

*****************************************************************************

 

    	 	 	Schedule 1 Page | 2

     

    

 

Schedule
2

Novo
Integrated Sciences, Inc. Disclosure Schedule

 

Section
4.01 - Organization

 

Novo
Integrated Sciences, Inc. (“Novo Integrated”) was incorporated in Delaware on November 27, 2000, under the name Turbine
Truck Engines, Inc. On February 20, 2008, Novo Integrated was re-domiciled to the State of Nevada. Effective July 12, 2017, Novo
Integrated’s name was changed to Novo Integrated Sciences, Inc.

 

Section
4.05 - Stock Options and Warrants

 

As
of the Effective Date, a number of these options and warrants are vested, as follows: (i) There are stock options issued and outstanding
to acquire 10,095,000 shares of Company Common Stock at exercise prices ranging from $0.16 to $0.95 per share of Company Common
Stock.

 

2018
Incentive Plan

 

On
January 16, 2018, the Parent adopted the Novo Integrated Sciences, Inc. 2018 Incentive Plan (the “2018 Plan”). Under
the 2018 Plan, 10,000,000 shares of common stock are authorized for issuance to employees, non-employees, directors and key consultants
to Novo Integrated or its subsidiaries. The 2018 Plan authorizes equity-based and cash-based incentives for participants. Currently,
there are 9,875,000 shares available for award at under the 2018 Plan.

 

Potential
Common Stock Obligation for Asset Purchase Agreement DCGT and GTL Technology

 

Pursuant
to the Asset Purchase Agreement dated as of October 14, 2014, by and between Robert L. Scragg and Barbara J. Scragg (collectively,
the “Sellers”), Alpha Engines Corporation (“Alpha”) and the Parent (the “APA”), if either
(i) the Parent certifies as to the viability of the Detonation Cycle Gas Turbine Engine (the “DCGT”) or the Gas-to-Liquid
(the “GTL”) technology or (ii) commercial sales of either the DCGT or GTL technology occur by the Parent, then the
Parent is obligated to issue 50,000 common shares to the Sellers. The APA references 1,000,000 shares of Parent’s Common
Stock, but with the effect of the Parent’s 1:20 reverse split, effective May 5, 2015, this potential obligation is now 50,000
common shares. With the execution of the Share Exchange Agreement in which Novo Healthnet Limited is now a wholly-owned subsidiary
of the Parent, the DCGT and the GTL alternative energy technology purchased under this subject APA is dormant and not worth pursuing
or selling which makes it extremely unlikely this obligation will ever be paid.

 

Section
4.04 - Subsidiaries and Predecessor Corporations

 

Share
Exchange Agreement to Acquire Novo Healthnet Limited and its Subsidiaries

 

On
April 25, 2017, the Parent entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and between
(i) Novo Integrated; (ii) NHL, (iii) ALMC-ASAP Holdings Inc. (“ALMC”); (iv) Michael Gaynor Family Trust (the “MGFT”);
(v) 1218814 Ontario Inc. (“1218814”) and (vi) Michael Gaynor Physiotherapy Professional Corp. (“MGPP,”
and together with ALMC, MGFT and 1218814, the “NHL Shareholders”). Pursuant to the terms of the Share Exchange Agreement,
Novo Integrated agreed to acquire from the NHL Shareholders all of the shares of both common and preferred stock of NHL, held
by the NHL Shareholders, in exchange for the issuance by Novo Integrated to the NHL Shareholders of shares of Novo Integrated’s
common stock, such that following the closing of the Share Exchange Agreement, the NHL Shareholders would own 167,797,406 restricted
shares Novo Integrated common stock, representing 85% of the issued and outstanding Novo Integrated common stock, calculated including
all granted and issued options or warrants to acquire Novo Integrated common stock as of the Effective Date, but to exclude shares
of Novo Integrated common stock that are subject to a then-current Regulation S offering that was undertaken by Novo Integrated
(the “Exchange”).

 

On
May 9, 2017, the Exchange closed and, as a result, NHL became a wholly owned subsidiary of Novo Integrated.

 

Novomerica
Health Group, Inc., a Parent wholly-owned Subsidiary

 

Effective
November 3, 2017, Novomerica Health Group, Inc., a Nevada corporation (“NHG”), was incorporated as a wholly owned
subsidiary of Novo Integrated Sciences, Inc. NHG was formed for the Parent to have a vehicle for acquisition of U.S. based assets.
Currently, NHG is not conducting any operations but is an active corporation.

 

*****************************************************************************

 

    	 	 	Schedule 2  Page | 1

     

    

 

Schedule
3

Pulse
Rx Inc. Disclosure Schedule

 

Section
1.01 - Organization and Premises

 

Ownership
structure of all issued and outstanding shares of PR

 

100
Class A Common Shares held by:

	 	-	Family Pharmacy Clinic Inc.

 

100
Class B Common Shares held by:

	 	-	40 Martin Kusmirek
	 	-	20 Tanya Kusmirek
	 	-	20 Andrew Kusmirek
	 	-	20 Christine Kusmirek

 

Governance

 

Directors
and Officers of PR

	 	Sole
    Director:	Thelma
    Sarsam
	 	President:	Martin
    Kusmirek
	 	Secretary:	Martin
    Kusmirek

 

PR
has a valid and subsisting lease for the premises located at:

 

111
Zenway Blvd., Units 2&3

Woodbridge,
Ontario L4H 3H9

 

Section
1.02 - Employee Matters and Existing Benefits

 

General
Employee Matters

 

A
registered pharmacy technician is currently on maternity leave and expected to return to work in July 2019.

 

Employee
Benefits

	 	o	Non-Pharmacist

	 	●	$500
    Annual Employee Health Benefit Allowance

	 	●	Paid
    to Employee, upon employee’s presentment of paid health expense invoice, on their subsequent pay cheque.

	 	o	Pharmacists

	 	●	$2000
    Annual Blend of Employee Health Benefit Allowance and Continued Pharmacy Related Educational Allowance

	 	●	Paid
    to Employee, upon employee’s presentment of paid health expense invoice, on their subsequent pay cheque.

 

    	 	 	Schedule 3 Page | 1

     

    

 

Employee
Reimbursements

	 	o	Reimbursement
    of Annual Ontario College of Pharmacists Membership Dues and Professional Insurance (pro-rated for part-time employees)

	 	●	Pharmacists;
    and
	 	●	Registered
    pharmacy technicians

	 	o	Travel
    Allowance and Reimbursement Policy
	 	o	Any
    other prior authorized expenditures incurred on behalf of PR.

 

Section
1.02 - Restriction to Carrying on Business

 

On
Dec 1, 2014, by way of an Asset Purchase Agreement, PR sold a pharmacy location in Ottawa. Pursuant to the terms of the sale,
PR has a 5-year non-compete precluding it from competing with the buyer of those assets within 100km of the pharmacy location
in Ottawa. This non-compete expires on November 30, 2019 and the documents of the asset sale are available for the Buyers to review.

 

Section
1.03 - Legal Actions

 

PR
is currently defending a legal action for wrongful dismal initiated by a prior part-time employee of PR. Mediation has been set
for April 30. The entire legal file is available for the Buyers’ review. The employee has been paid all Statutory entitlements
and it is not believed that the exposure to any additional payments would be adversely material.

 

PR
has received correspondence threatening legal action from Leviathan Cannabis Group Inc. in respect of a deposit advance pursuant
to their initiative to buy the shares of PR. Copies of all related material have been provided to the Buyer.

 

Section
1.04 - Taxes

 

PR
owes approximately $500,000 in payroll taxes which will be discharged upon Closing from the advanced loan funds. PR has been working
closely with CRA in addressing this arrears amount and will obtain an accurate discharge statement prior to Closing.

 

Section
1.05 - Audits

 

PR
has undergone several tax audits, including an appeal that was awarded in full. The most recent audit results were sent to PR
on January 17, 2019 and are available to the Buyers for review. As a result of the audits, the corporate annual returns require
filing and the corporate accountants will provide all necessary documentation to this effect.

 

Section
1.06 - Contracts

 

PR
has existing contracts for the provision of pharmacy services to nursing and retirement homes. These contracts are all in good
standing and available to the Buyers for review.

 

Section
1.07 - Indebtedness, Claim, Liability or Obligation

 

Disclosure
in Certificate of Use of Funds Directive dated February 20, 2019.

 

Section
1.08 - Remaining Encumbrances

 

Due
to ongoing operations and the continued requirement to place daily orders for pharmaceutical products with PR’s wholesalers,
PR will need to maintain its accounts with McKesson and LPG Inventory Solutions and; accordingly, their respective security registrations
will need to remain.

 

Company
vehicles leases remain to be registered.

 

***********************************************************

 

    	 	 	Schedule 3 Page | 2

     

    

 

Schedule
4

Certificate
of Use of Funds Directive

 

Disclosed
in certificate of Martin Kusmirek, dated February 20, 2019.

 

    	 	 	Schedule 4 Page | 1

     

    

 

Schedule
5

Certificate
Respecting Employment Contracts

 

Disclosed
in certificate of Robert Mattacchione, dated February 20, 2019.

 

    	 	 	Schedule 5 Page | 1

     

    

 

Schedule
6

Certificate
Respecting Loan Funding

 

Disclosed
in certificate of Robert Mattacchione, dated February 20, 2019.

 

    	 	 	Schedule 6 Page | 1Exhibit

Exhibit 10.1

TRI POINTE GROUP, INC. 
AMENDED AND RESTATED 
2013 LONG-TERM INCENTIVE PLAN
I.INTRODUCTION
1.1    Purposes. The purposes of the TRI Pointe Group, Inc. Amended and Restated 2013 Long-Term Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining directors, officers, employees, and other service providers; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.
1.2    Certain Definitions.
“Agreement” shall mean the written or electronic agreement evidencing an award hereunder between the Company and the recipient of such award.
“Board” shall mean the Board of Directors of the Company.
“Bonus Stock” shall mean shares of Common Stock that are not subject to a Restriction Period or Performance Measures.
“Bonus Stock Award” shall mean an award of Bonus Stock under this Plan.
“Cause” shall be defined as that term is defined in the participant’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Cause” means, as determined by the Company in its sole discretion and unless provided otherwise in the applicable Agreement, any of the following: (i) the participant’s breach of any agreement with the Company or any Subsidiary; (ii) the participant’s failure or refusal to satisfactorily perform the duties reasonably required of him or her as an employee to the Company or any Subsidiary; (iii) the participant’s commission of any act of fraud, embezzlement, dishonesty, or insubordination; (iv) the participant’s unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary; (v) the participant’s breach of a policy of the Company or any Subsidiary or the rules of any governmental or regulatory body applicable to the Company or any Subsidiary; or (vi) any other misconduct by the participant that has, or could have, an adverse impact on the business, reputation, or affairs of the Company or any Subsidiary. A Separation from Service for Cause shall be deemed to include a determination by the Company after the participant’s separation that circumstances existing before the separation would have entitled the Company or a Subsidiary to have terminated the participant’s service for Cause. All rights that a participant has or may have under this Plan shall be suspended automatically during the pendency of any investigation by the Company, or during any negotiations between the Company and the participant, regarding any actual or alleged act or omission by the participant of the type described in the applicable definition of Cause. 
“Change in Control” shall be defined as that term is defined in the participant’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Change in Control” shall have the meaning set forth in Section 5.8(b).
“Chief Executive Officer” shall mean the Chief Executive Officer of the Company.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Committee” shall mean the Committee designated by the Board, consisting of two or more members of the Board, each of whom may be (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code, and (iii) “independent” within the meaning of the rules of the New York Stock Exchange or any other stock exchange on which the shares of Common Stock have been listed by the Company.
“Common Stock” shall mean the common stock, par value $0.01 per share, of the Company, and all rights appurtenant thereto.
“Company” shall mean TRI Pointe Group, Inc., a Delaware corporation, or any successor thereto.
“Consultant” means any consultant or advisor who is a natural person and who provides services to the Company or any Subsidiary, so long as that person (i) renders bona fide services that are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, (ii) does not directly or indirectly promote or maintain a market for the Company’s securities, and (iii) otherwise qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of securities on a Form S-8 registration statement (or any successor thereto).
“Disability” shall be defined as that term is defined in the participant’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Disability” means the participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of 180 days or more, as determined by an independent physician selected with the approval of the Company or any Subsidiary and the participant.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Fair Market Value” shall mean the closing transaction price of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there are no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as it shall at such time deem appropriate.
“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.
“Incentive Stock Option” shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option.
“Non-Employee Director” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.
“Nonqualified Stock Option” shall mean an option to purchase shares of Common Stock that is not an Incentive Stock Option.
“Performance Award” shall mean a right to receive an amount of cash, shares of Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.
“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such award, or, in the case of a Restricted Stock Unit Award or Performance Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award. Such criteria and objectives may include, without limitation, one or more of the following corporate-wide or subsidiary, division, operating unit, or individual measures, stated in either absolute terms or relative terms, such as rates of growth or improvement: the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time, earnings per share, return to stockholders (including dividends), return on assets, return on equity, earnings of the Company before or after taxes and/or interest, revenues, expenses, market share, cash flow or cost reduction goals, interest expense after taxes, return on investment, return on investment capital, return on operating costs, economic value created, operating margin, gross margin, the achievement of annual operating profit plans, net income before or after taxes, pretax earnings before interest, depreciation and/or amortization, pretax operating earnings after interest expense and before incentives, and/or extraordinary or special items, operating earnings, net cash provided by operations, and strategic business criteria, specified market penetration, cost targets, customer satisfaction, or any combination of the foregoing. The Committee may amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in law or accounting principles.
“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect.
“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.
“Restricted Stock Award” shall mean an award of Restricted Stock under this Plan.
“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.
“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under this Plan.
“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated, or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.
“Retirement” shall mean a participant’s voluntary Separation from Service without Cause at or after the time the participant has (i) attained age 60 and (ii) worked for the Company or its Subsidiaries for at least five years, provided that each of the following conditions must also be satisfied in order for the participant’s Separation from Service to constitute a Retirement.
		
	(a)
	The participant must provide the Company with written notice of his or her intent to retire on a form provided by the Company electing Retirement treatment under this Plan (a “Retirement Notice”) at least 180 days prior to the participant’s anticipated date of Retirement, as stated in the Retirement Notice. During this period, the participant shall remain an at-will employee and must remain in good standing and continue to meet all applicable performance standards, as determined by the Company.

		
	(b)
	The participant must execute a separation agreement and general release in a form acceptable to the Company.

		
	(c)
	The participant’s length of service with the Company and its Subsidiaries shall be determined by the Company.

“SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.
“Section 409A” shall mean Section 409A of the Code.
“Separation from Service” shall mean the termination of the applicable participant’s employment with, and performance of services for, the Company and each Subsidiary, in each case as determined by the Company in its sole discretion. Unless otherwise determined by the Company, if a participant’s employment or service with the Company or a Subsidiary terminates but the participant continues to provide services to the Company or a Subsidiary in a Non-Employee Director capacity or as an employee, officer, or Consultant, as applicable, such change in status shall not be deemed a Separation from Service. Approved temporary absences from employment because of illness, vacation, or leave of absence and transfers among the Company and its Subsidiaries shall not be considered Separations from Service.
“Stock Award” shall mean a Bonus Stock Award, Restricted Stock Award, or a Restricted Stock Unit Award.
“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture, or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.
“Substitute Award” shall mean an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation, or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an option or SAR.
“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock) with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, which is surrendered.
“Tax Date” shall have the meaning set forth in Section 5.5.
“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).
1.3    Administration. This Plan shall be administered by the Committee. Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free-Standing SARs; (iii) Stock Awards in the form of Bonus Stock, Restricted Stock, or Restricted Stock Units; and (iv) Performance Awards. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount, and timing of each award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs, the number of Restricted Stock Units, the dollar value subject to an award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award, and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock or Restricted Stock Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding Restricted Stock, Restricted Stock Units or Performance Award shall lapse, and (iv) the Performance Measures (if any) applicable to any outstanding award shall be deemed to be satisfied at the target or any other level. The Committee, subject to the terms of this Plan, shall interpret this Plan and the application thereof and establish rules and regulations it deems necessary or desirable for the administration of this Plan, and may impose, incidental to the grant of an award, conditions with respect to the award. All such interpretations, rules, regulations, conditions, and other actions by the Committee under this Plan shall be in the Committee’s sole discretion and shall be conclusive and binding on all parties. 
The Committee may delegate some or all of its power and authority hereunder to the Board or, subject to applicable law, to the Chief Executive Officer or such other executive officer as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to the Chief Executive Officer or any other executive officer with regard to the selection for participation in this Plan of an officer, director, or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing, or amount of an award to such an officer, director, or other person.
No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction, or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer and any other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage, or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or Bylaws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.
A majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at which a quorum is present or (ii) acts approved in writing by all of the members of the Committee without a meeting.
1.4    Eligibility. Participants in this Plan shall consist of such officers, Non-Employee Directors, employees, and Consultants, and persons expected to become officers, Non-Employee Directors, employees, and Consultants of the Company and its Subsidiaries as the Committee may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time. The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during any periods during which such participant is on an approved leave of absence.
1.5    Shares Available. Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Section 1.5, 10,942,517 shares of Common Stock shall be available for all awards under this Plan, of which no more than 10,942,517 shares of Common Stock in the aggregate may be issued under this Plan in connection with Incentive Stock Options. The number of shares of Common Stock available under this Plan shall be reduced by the sum of the aggregate number of shares of Common Stock which become subject to outstanding options, outstanding Free-Standing SARs, outstanding Stock Awards, and outstanding Performance Awards. To the extent that shares of Common Stock subject to an outstanding option, SAR, stock award, or performance award granted under this Plan or any predecessor plan are not issued or delivered by reason of (i) the expiration, termination, cancellation, or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related tandem SAR or shares subject to a tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock shall again be available under this Plan.
Notwithstanding anything in this Section 1.5 to the contrary, shares of Common Stock subject to an award under this Plan may not be made available again for issuance under this Plan if such shares are: (i) shares that were subject to a stock-settled SAR and were not issued upon the net settlement or net exercise of such SAR; (ii) shares delivered to or withheld by the Company to pay the purchase price or the withholding taxes related to an outstanding option or SAR; or (iii) shares repurchased on the open market with the proceeds of an option exercise. Shares delivered to or withheld by the Company to pay the withholding taxes for Stock Awards or Performance Awards shall again be available under this Plan.
The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder approved plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) which become subject to awards granted under this Plan (subject to applicable stock exchange requirements).
Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.
Subject to adjustment as provided in Section 5.7, notwithstanding anything herein to the contrary, options and SARs may be granted, in the aggregate, to any one participant with respect to a maximum of 2,000,000 shares of Common Stock during a single calendar year. In addition, any Stock Award (other than a Bonus Stock Award) or Performance Award may be granted, in the aggregate, to any one participant, with respect to a maximum of 2,000,000 shares of Common Stock during a single calendar year. Such numbers shall be calculated and adjusted pursuant to Section 5.7 only to the extent that such calculation or adjustment will not affect the status of any award intended to qualify as “performance-based compensation” under Section 162(m) of the Code. The maximum cash amount payable pursuant to that portion of a Performance Award earned for any 12-month period to any participant under this Plan shall not exceed $10.0 million.
Notwithstanding the foregoing, if the participant is a Non-Employee Director, the maximum amount of options, SARs, Stock Awards (including Bonus Stock Awards) and Performance Awards that may be granted during a single calendar year to any one Non-Employee Director shall be in the aggregate $300,000 as determined by the Fair Market Value of the shares of Common Stock underlying such options, SARs, Stock Awards (including Bonus Stock Awards), and Performance Awards on the applicable grant dates.
II.STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1    Stock Options. The Committee may grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee; provided, however, that Incentive Stock Options shall be granted only to persons who are employees of the Company or one of its Subsidiaries that is a corporation within the meaning of Section 7701(a)(3) of the Code, in accordance with Section 422 of the Code. Each option, or portion thereof, that is not an Incentive Stock Option, shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Nonqualified Stock Options.
Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan (including Sections 5.8 and 5.9), as the Committee shall deem advisable:
(a)    Number of Shares and Purchase Price. The number of shares of Common Stock subject to an option and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided, further, that if an Incentive Stock Option is granted to any person who, at the time such option is granted, owns, or is deemed to own pursuant to Section 424(d) of the Code, capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.
Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate purchase price of such shares.
(b)    Option Period and Exercisability. The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than ten years after its date of grant; provided, further, that if an Incentive Stock Option is granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant. The Committee may establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant of such option or to the exercisability of all or a portion of such option. The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.
(c)    Method of Exercise. An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise, or (E) a combination of (A), (B), and (C), in each case to the extent set forth in the Agreement relating to the option or as otherwise authorized by the Committee; (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the option; and (iii) by executing such documents as the Company may reasonably request. Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).
2.2    Stock Appreciation Rights. The Committee may grant SARs to such eligible persons as may be selected by the Committee. The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.
SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan (including Sections 5.8 and 5.9), as the Committee shall deem advisable:
(a)    Number of SARs and Base Price. The number of SARs subject to an award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR.
Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.
(b)    Exercise Period and Exercisability. The period for the exercise of an SAR shall be determined by the Committee; provided, however, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture, or other termination of the related option and no Free-Standing SAR shall be exercised later than ten years after its date of grant. The Committee may establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.3(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.3(d). Prior to the exercise of an SAR, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.
(c)    Method of Exercise. A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are cancelled by reason of the exercise of the Tandem SAR, and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised (A) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).
2.1    No Repricing Without Stockholder Approval. Other than in connection with any equity restructuring or any other change in the Company’s capitalization (as described in Section 5.7), the Committee shall not, without stockholder approval, reduce the exercise price of a previously awarded option or SAR and, at any time when the exercise price of a previously awarded option or SAR is above the Fair Market Value of a share of Common Stock, the Committee shall not, without stockholder approval, cancel and re-grant or exchange such option or SAR for cash or a new award with a lower (or no) exercise price.
III.STOCK AWARDS
3.1    Stock Awards. The Committee may grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Bonus Stock Award, Restricted Stock Award, or Restricted Stock Unit Award.
3.2    Terms of Bonus Stock Awards. The number of shares of Common Stock subject to a Bonus Stock Award shall be determined by the Committee. Bonus Stock Awards shall not be subject to any Restriction Periods or Performance Measures. Upon the grant of a Bonus Stock Award, subject to the Company’s right to require payment of any taxes in accordance with Section 5.5, a certificate or certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award or such shares shall be transferred to the holder in book entry form.
3.3    Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
(a)    Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any), and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.
(b)    Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee and subject to the provisions of this Plan (including Sections 5.8 and 5.9), for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award does not incur a Separation from Service during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award incurs a Separation from Service during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.
(c)    Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms, and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award.
(d)    Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that (i) a distribution with respect to shares of Common Stock, other than a regular cash dividend, and (ii) a regular cash dividend with respect to shares of Common Stock that are subject to performance-based vesting conditions, in each case, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.
3.4    Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
(a)    Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any), and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.
(b)    Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee and subject to the provisions of this Plan (including Sections 5.8 and 5.9), for the vesting of such Restricted Stock Unit Award (i) if the holder of such award does not incur a Separation from Service during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award incurs a Separation from Service during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.
(c)    Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive, on a current or deferred basis, dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents with respect to Restricted Stock Units that are subject to performance-based vesting conditions shall be subject to the same restrictions as such Restricted Stock Units. Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.
IV.PERFORMANCE AWARDS
4.1    Performance Awards. The Committee may grant Performance Awards to such eligible persons as may be selected by the Committee.
4.2    Terms of Performance Awards. Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
(a)    Value of Performance Awards and Performance Measures. The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee.
(b)    Vesting and Forfeiture. The Agreement relating to a Performance Award shall provide, in the manner determined by the Committee and subject to the provisions of this Plan (including Sections 5.8 and 5.9), for the vesting of such Performance Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period.
(c)    Settlement of Vested Performance Awards. The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.3(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.3(d). Any dividends or dividend equivalents with respect to a Performance Award that is subject to performance-based vesting conditions shall be subject to the same restrictions as such Performance Award. Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company.
V.GENERAL
5.1    Effective Date and Term of Plan. This Plan originally became effective January 30, 2013. This Plan was subsequently amended effective as of June 23, 2014; July 7, 2015; and August 12, 2015, respectively. The terms and conditions set forth herein constitute an amendment and restatement of this Plan, effective as of February 21, 2019 (the “Amendment Date”), and shall not apply to any awards granted under this Plan prior to the Amendment Date. Each award under this Plan shall be governed by the terms of this Plan as in effect at the time the award was granted, i.e., amendment of this Plan shall not affect the terms or conditions of any award granted hereunder prior to amendment, unless specifically set forth in the amendment. This Plan shall terminate on January 30, 2023, unless terminated earlier by the Board. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination. Awards hereunder may be made at any time prior to the termination of this Plan, provided that no such award may be made later than January 30, 2023.
5.2    Amendments. The Board may amend this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code and any rule of the New York Stock Exchange, or, if the Common Stock is not listed on the New York Stock Exchange, any rule of the principal national stock exchange on which the Common Stock is then traded; provided, however, that no amendment may impair the rights of a holder of an outstanding award without the consent of such holder.
5.3    Agreement. Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award. No award shall be valid until an Agreement is executed by the Company and, to the extent required by the Company, either executed by the recipient or accepted by the recipient by electronic means approved by the Company within the time period specified by the Company. Upon such execution or electronic acceptance, such award shall be effective as of the effective date set forth in the Agreement.
5.4    Non-Transferability. No award shall be transferable other than by will, the laws of descent and distribution, or pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes, a charitable organization designated by the holder, or pursuant to a domestic relations order, in each case, without consideration. Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered, or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment, or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.
5.5    Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local, or other taxes which may be required to be withheld or paid in connection with such award. An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of an option and except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise; or (E) any combination of (A), (B), and (C), in each case to the extent set forth in the Agreement relating to the award or as otherwise authorized by the Committee. Shares of Common Stock to be delivered or withheld may have an aggregate Fair Market Value up to the maximum amount required as may be necessary to satisfy the withholding obligations in this Section 5.5, and the shares so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. To the extent applicable, a participant may satisfy his or her withholding obligation only with shares that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder.
5.6    Restrictions on Shares. Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration, or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval, or other action has been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer, or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder. The Committee may require any participant to sign such additional documentation, make such representations, and furnish such information as the Committee may consider appropriate in connection with the grant of awards under this Plan or issuance or delivery of shares under this Plan in compliance with applicable laws.
5.7    Adjustment. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through an extraordinary dividend, the number and class of securities available under this Plan, the terms of each outstanding option and SAR (including the number and class of securities subject to each outstanding option or SAR and the purchase price or base price per share), the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award (including the number and class of securities subject thereto), and the terms of each outstanding Performance Award shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such adjustment shall be final, binding, and conclusive.
5.8    Change in Control.
(a)    Subject to the terms of the applicable award Agreement, in the event of a Change in Control, the Board (as constituted prior to such Change in Control) may, in its discretion:
(i)    provide that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (B) the Restriction Period applicable to some or all outstanding Restricted Stock Awards and Restricted Stock Unit Awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (D) the Performance Measures applicable to some or all outstanding awards shall be deemed to be satisfied at the target or any other level;
(ii)    require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding award, with an appropriate and equitable adjustment to such award as shall be determined by the Board in accordance with Section 5.7; and/or
(iii)    require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of an option or an SAR, the number of shares of Common Stock then subject to the portion of such option or SAR surrendered, to the extent such option or SAR is then exercisable or becomes exercisable pursuant to Section 5.8(a)(i), multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (2) in the case of a Stock Award or a Performance Award denominated in shares of Common Stock, the number of shares of Common Stock then subject to the portion of such award surrendered, to the extent the Restriction Period and Performance Period, if any, on such Stock Award or Performance Award have lapsed or will lapse pursuant to Section 5.8(a)(i) and to the extent that the Performance Measures, if any, have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(i), multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (3) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered, to the extent the Performance Period applicable to such award has lapsed or will lapse pursuant to Section 5.8(a)(i) and to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(i); (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.
(a)    A “Change in Control” of the Company shall be deemed to have occurred upon the happening of any of the following events:
(i)    The acquisition, other than from the Company, by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its Subsidiaries, or any employee benefit plan (or related trust) of the Company or its Subsidiaries, or any entity with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding equity of such entity and the combined voting power of the then outstanding voting equity of such entity entitled to vote generally in the election of all or substantially all of the members of such entity’s governing body is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Common Stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common Stock or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; or
(ii)    The consummation of a reorganization, merger, or consolidation of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Common Stock and voting securities of the Company immediately prior to such reorganization, merger, or consolidation do not, following such reorganization, merger, or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of Common Stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger, or consolidation; or
(iii)    A complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company; or
(iv)    Individuals who at the beginning of any two-year period constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a director of the Company during such two-year period and whose election, or whose nomination for election by the Company’s stockholders, to the Board was either (A) approved by a vote of at least a majority of the directors then comprising the Incumbent Board or (B) recommended by a nominating committee comprised entirely of directors who are then Incumbent Board members, shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act), other actual or threatened solicitation of proxies or consents, or an actual or threatened tender offer.
Further, solely to the extent required by Section 409A, an event described above shall not constitute a Change in Control for purposes of the payment (but not vesting) terms of any Plan award subject to Section 409A unless such event also constitutes a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the Company’s assets within the meaning of Section 409A.
Notwithstanding the foregoing, any bona fide primary or secondary public offering shall not constitute a Change in Control.
5.1    Separation from Service. This Section 5.9 shall only apply to awards granted under this Plan on or after the Amendment Date.
(a)    Retirement. Unless provided otherwise by the Committee, if a participant incurs a Retirement, the participant’s outstanding unvested awards under this Plan shall be eligible to vest as follows: 
(i)    For awards that vest based solely on continued service, the proportion of an award vesting under this provision shall be equal to the number of days in the Restriction Period for such award that elapsed before the Separation from Service divided by the total number of days in such Restriction Period (for the avoidance of doubt, net of any proportion of the award that has already vested), provided that, if the first anniversary of the grant of an award has not occurred or will not occur by Retirement, a minimum of 365 days (but in no event more than 100%) of vesting shall be allotted to the participant. If the participant incurs a Separation from Service due to death or Disability after the participant provides a Retirement Notice but before Retirement, the participant’s awards shall be treated as though the participant’s Retirement occurred upon such Separation from Service. Any awards vesting under this Section 5.9(a)(i) shall vest upon the participant’s Retirement or upon the participant’s earlier Separation from Service due to death or Disability, as applicable.
(ii)    For stock-based Performance Awards, (A) the proportion of an award vesting under this provision shall be equal to the number of days in the Performance Period for such award that elapsed before the Separation from Service divided by the total number of days in such Performance Period (for the avoidance of doubt, net of any proportion of the award that has already vested), provided that a minimum of 365 days (but in no event more than 100%) of vesting shall be allotted to the participant, and (B) the amount of the award vesting under this provision shall be based on actual achievement of the Performance Measures for such award measured at the end of the Performance Period, provided that if, after providing a Retirement Notice but before the end of the Performance Period, the participant incurs a Separation from Service due to death or Disability, the participant’s awards shall be treated as provided in Section 5.9(b). If a Change in Control occurs after the participant provides a Retirement Notice but before the end of the Performance Period, the participant’s awards shall be treated in accordance with the “Change in Control” provisions of the applicable Agreements. Any awards vesting under this Section 5.9(a)(ii) shall vest at the end of the applicable Performance Period, upon the participant’s earlier Separation from Service due to death or Disability, or upon an earlier Change in Control, as applicable.
(iii)    For cash-based Performance Awards, (A) the proportion of an award vesting under this provision shall be equal to the number of days in the Performance Period for such award that elapsed before the Separation from Service divided by the total number of days in such Performance Period (for the avoidance of doubt, net of any proportion of the award that has already vested), and (B) the amount of the award vesting under this provision shall be based on actual achievement of the Performance Measures for such award measured at the end of the Performance Period, provided that if, after providing of a Retirement Notice but before the end of the Performance Period, the participant incurs a Separation from Service due to death or Disability, the participant’s awards shall be treated as provided in Section 5.9(b). Any awards vesting under this Section 5.9(a)(iii) shall vest at the end of the applicable Performance Period or upon the participant’s earlier Separation from Service due to death or Disability, as applicable.
(b)    Death or Disability. Unless provided otherwise by the Committee, if a participant incurs a Separation from Service due to death or Disability, the participant’s outstanding unvested awards under this Plan shall be eligible to vest as follows:
(i)    For awards that vest based solely on continued service, the proportion of an award vesting under this provision shall be equal to the number of days in the Restriction Period for such award that elapsed before the Separation from Service divided by the total number of days in such Restriction Period (for the avoidance of doubt, net of any proportion of the award that has already vested).
(ii)    For stock-based Performance Awards, (A) the proportion of an award vesting under this provision shall be equal to the number of days in the Performance Period for such award that elapsed before the Separation from Service divided by the total number of days in such Performance Period (for the avoidance of doubt, net of any proportion of the award that has already vested), and (B) the amount of the award vesting under this provision shall be based on an assumed achievement of all relevant Performance Measures at the “target” level.
(iii)    For cash-based Performance Awards, the amount of an award vesting under this provision shall be based on an assumed achievement of all relevant Performance Measures at the “target” level.
Any awards vesting under this Section 5.9(b) shall vest upon the participant’s Separation from Service due to death or Disability.
(c)    In calculating the proportion of an award vesting under Sections 5.9(a) and 5.9(b), (A) for options and SARs, if the number of shares subject to an option or SAR becoming exercisable as of a vesting date is a fractional number, the number of shares becoming exercisable shall be rounded down to the nearest whole number with any fractional portion carried forward, and (B) for Restricted Stock, Restricted Stock Units and Performance Awards, if the number of shares determined as of a vesting date is a fractional number, the number of shares vesting shall be rounded down to the nearest whole number with any fractional portion carried forward.
(d)    Separation from Service for Cause. The Company may annul an award under this Plan if the participant incurs a Separation from Service for Cause. All awards under this Plan shall also be subject to the Company’s Executive Recoupment Policy and any Company clawback or similar policy and any applicable law related to such actions. A participant’s acceptance of a Plan award shall be deemed to constitute the participant’s acknowledgement of and consent to the Company’s application, implementation, and enforcement of the Executive Recoupment Policy and any other applicable Company clawback or similar policy that may apply to the participant, whether adopted before or after the Amendment Date, and any applicable law relating to clawback, cancellation, recoupment, rescission, payback, or reduction of compensation, and the participant’s agreement that the Company may take any actions that may be necessary to effectuate any such policy or applicable law, without further consideration or action.
(e)    Other Separations from Service. Except as provided in Sections 5.9(a), 5.9(b), and 5.9(d), and otherwise in this Plan, any other terms relating to the treatment of an award under this Plan upon a Separation from Service shall be determined by the Committee and set forth in the applicable award Agreement.
5.2    Deferrals. The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any award (other than awards of Incentive Stock Options, Nonqualified Stock Options, and SARs) made hereunder shall be deferred, or the Committee may approve deferral elections made by holders of awards. Deferrals shall be for such periods and upon such terms as the Committee may determine.
5.3    No Right of Participation, Employment, or Service. Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary, or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary, or any affiliate of the Company to terminate the employment or service of any person at any time without liability hereunder.
5.4    Rights as Stockholder. No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.
5.5    Designation of Beneficiary. A holder of an award may file with the Committee a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity. To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Committee.
Each beneficiary designation shall become effective only when filed in writing with the Committee during the holder’s lifetime on a form prescribed by the Committee. The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Committee of a new beneficiary designation shall cancel all previously filed beneficiary designations.
If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding option and SAR hereunder held by such holder, to the extent exercisable, may be exercised by such holder’s executor, administrator, legal representative, or similar person.
5.6    Governing Law. This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.
5.7    Foreign Employees. Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans, and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.
5.8    Severability. If any term or condition of this Plan or any Agreement is determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining terms and conditions hereof and thereof shall be severable and enforceable, and all terms and conditions shall remain enforceable in any other jurisdiction.
5.9    Section 409A. This Plan is intended to comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Plan shall be interpreted and administered to be in compliance therewith. Any payments described in this Plan that are due within the “short-term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable laws require otherwise. For purposes of Section 409A, each installment payment under this Plan shall be treated as a separate payment. Notwithstanding any other term or condition of this Plan, to the extent required to avoid accelerated taxation or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided under this Plan during the six-month period immediately after a participant’s Separation from Service shall instead be paid on the first payroll date after the six-month anniversary of the participant’s Separation from Service (or the participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Board shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any participant under Section 409A and neither the Company nor the Board shall have any liability to any participant for such tax or penalty.
5.10    No Limitations on Company. The grant of awards under this Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.

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