Document:

6450
Cameron Street #113 | Las Vegas, NV | 89014 | 702.209.2429 | www.digipath.com | info@digipath.com

 

Strictly
Confidential

 

September
25, 2019

 

Kyle
Remenda

Philippe
Henry

VSSL
Enterprises Ltd.

1-1385
Stevens Road

West
Kelowna, British Columbia

Canada
V1Z2S9

 

Re: Binding
Letter of Intent to for the Acquisition of VSSL Enterprises Ltd. by Digipath

 

Ladies
and Gentlemen:

 

This
letter sets forth the terms and conditions under which Digipath, Inc., a Nevada corporation (“Purchaser”),
will acquire from Kyle Remenda and Philippe Henry (the “Shareholders”) all of the outstanding shares of capital
stock of VSSL Enterprises Ltd., a British Columbia corporation (the “Company”). We are enthusiastic about this
opportunity and look forward to proceeding with the preparation of definitive documentation and an expeditious closing of the
acquisition (the “Transaction”).

 

1. Acquisition
of Shares. As soon as possible following the execution of this letter, Purchaser, Shareholders and the Company will
enter into a definitive Stock Purchase Agreement (the “Sale Agreement”) providing for the sale by the
Shareholders to Purchaser of all of the outstanding shares of capital stock of the Company (the “Shares”),
so that following the closing of the Transaction (the “Closing”), the Company will be a wholly owned
subsidiary of the Purchaser.

 

2. Purchase
Price. The Sale Agreement will provide that as consideration for the sale of the Shares to Purchaser, Purchaser
will, upon the Closing:

 

(a) pay
to the Shareholders, in cash, the aggregate amount of $200,000; and

 

(b) cause
to be issued to the Shareholders an aggregate of 6,000,000 shares of common stock of the Purchaser.

 

    	 

    	 

    

 

3. Definitive
Agreements. Upon receipt of a fully countersigned copy of this letter, we will instruct our counsel to commence the
drafting of a definitive Sale Agreement. It will contain, among other things, covenants, representations, warrantees, closing
conditions, indemnities, and other terms and provisions that are customary in transactions of this type.

 

4. Employment
and Consulting Agreements. Concurrently with the execution of this Agreement, the Purchaser will enter into (i) an
Employment Agreement with Kyle Remenda, pursuant to which he will serve as the Purchaser’s Chief Executive Officer (the
“Employment Agreement”), and (ii) a Consulting Agreement with Philippe Henry pursuant to which he will
serve as the Purchaser’s Chief Operating Officer (the “Consulting Agreement”).

 

5. Closing
Conditions. The consummation of the Transaction will be subject to the satisfaction of various conditions that are
customary for a transaction of this type, including, but not limited to, the following:

 

(a) the
Purchaser shall have completed its due diligence investigation of the Company, and the results thereof shall be satisfactory
to the Purchaser in its sole discretion (provided that such due diligence investigation shall be completed within 30 days of
the execution of this letter);

 

(b) the
Company’s financial statements required to be filed by the Purchaser with the Securities and Exchange Commission as a
result of the Closing in connection with Purchaser’s reporting obligations under the Securities Exchange Act of 1934,
as amended (the “1934 Act”), shall been audited as required by the 1934 Act;

 

(c) any
required governmental approvals to the Transaction shall have been obtained; including, without limitation, as it relates to
the Access to Cannabis for Medical Purposes Regulations - Registration Certificate issued by Health Canada to Philippe
Henry;

 

(d) at
the date of the Closing (the “Closing Date”), Kyle Remenda shall continue to be employed by the Purchaser
as its Chief Executive Officer pursuant to the Employment Agreement, and Philippe Henry shall continue to be a consultant to
the Purchaser serving as its Chief Operating Officer pursuant to the Consulting Agreement;

 

(e) the
Shareholders shall have transferred and assigned to the Company all of the assets owned by them that are related to the
business conducted or proposed to be conducted by the Company, including, without limitation, the intellectual property,
genetic and other assets described on Exhibit A hereto (the “Shareholder Assets”).

 

(f) the
parties shall have complied with and fulfilled all covenants and agreements set forth in the Sale Agreement which are, by
their terms, to be complied with or fulfilled prior to or simultaneously with the Closing, including, without limitation,
that the Company shall own the Shareholder Assets free and clear of all liens, encumbrances and restrictions; and

 

(g) there
shall have been no occurrence prior to the Closing Date of any material adverse change (as defined in the Sale Agreement)
with respect to the Company, nor any pending or threatened material adversarial proceeding affecting the Company.

 

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6. Exclusivity.
Seller agrees that, from the date hereof until 5:00 P.M. Pacific Standard Time on the date that is 90 calendar days after
and excluding the date hereof (the “Exclusivity Period”):

 

(a) The
Shareholders and the Company shall deal exclusively with Purchaser with regard to the Transaction;

 

(b) The
Shareholders, the Company and their affiliates will not, directly or indirectly, (i) solicit submission of offers from any
person other than the Purchaser relating to any acquisition of any capital stock or assets of the Company (outside the
ordinary course of business), or any merger, consolidation or business combination with the Company (an “Acquisition
Proposal”), (ii) respond in any way to an unsolicited Acquisition Proposal (other than to respond that the
Shareholders and the Company are under an exclusivity obligation during the Exclusivity Period and not able to respond
substantively), or (iii) participate in any discussions or negotiations with, or furnish any information regarding the
Shareholders or the Company to, any person other than the Purchaser, in each case in connection with or furtherance of an
Acquisition Proposal, or otherwise in any manner knowingly encourage or engage in any Acquisition Proposal by any person
other than the Purchaser;

 

(c) The
Shareholders, the Company and their affiliates shall cease any discussions or negotiations with any third parties that may
be ongoing with respect to any potential Acquisition Proposal or any transaction inconsistent with, or that would frustrate
or render it materially more difficult to consummate the Transaction; and

 

(d) If,
at any time during the Exclusivity Period, any Shareholder, the Company or any of their affiliates receives, or learns that
any of their representatives has received, any written communication from any person or entity other than the Purchaser that
constitutes or could reasonably lead to an indication of interest, an offer or proposal regarding any potential Acquisition
Proposal, the Shareholders shall promptly, and in any event within 48 hours of receipt of such communication, inform the
Purchaser of the communication and the party from whom the communication is received.

 

7. Conduct
of Business. During the Exclusivity Period, the Company shall conduct its business in the ordinary course of
business consistent with past practice and shall notify the Purchaser of: (a) any change to the manner in which it conducts
such business relative to its past conduct; or (b) any event or circumstance of which any Shareholder becomes aware and which
it reasonably believes could have a material adverse effect on the condition (financial or otherwise), business operations,
management, commercial relationships or goodwill of the Company.

 

8. Binding
Letter of Intent. This letter shall be considered a binding letter of intent subject to definitive
documentation.

 

9. Fees
and Expenses. Each party will bear its own expenses in connection with the Transaction, whether or not the
Transaction is consummated.

 

10. Miscellaneous.
This letter shall be governed by, and construed in accordance with, the laws of the State of Nevada without reference to
conflict of laws principles. This letter may be executed in counterparts, each of which shall be deemed an original, but
which all together shall constitute one and the same document. This letter shall be effective upon the exchange of executed
signature pages, whether in original form, by facsimile, or in pdf format.

 

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Please
sign and return the signature page that follows to evidence your agreement to the terms of this letter.

 

	 	Very
    truly yours,
	 	 	 
	 	DIGIPATH,
    INC.
	 	 	 
	 	By:	/s/
    Todd Denkin
	 	Name:	Todd
    Denkin
	 	Title:	Chief
    Executive Officer

 

Agreed
and accepted this 25th day of September, 2019:

 

	/s/
    Kyle Remenda	 
	Kyle
    Remenda	 

 

	/s/
    Philippe Henry	 
	Philippe
    Henry 	 

 

VSSL
ENTERPRISES LTD.

 

	By:	/s/
    Kyle Remenda	 
	Name:
    	Kyle
    Remenda	 
	Title:
    	Chief
    Executive Officer	 

 

    	4

    	 

    

 

EXHIBIT
A

 

Shareholder
Assets

 

 1. Health Canada Licenses:

 

a.
SEC-72FH6VU9O2-2018: Security clearance granted to Philippe Henry attached.

 

b.
MCR-136403: Cultivation license to Philippe Henry under which VSSL genetic IP, including TRU-HEMP ID was developed, attached.

 

c.
APP-C21CWUPL1W-2019: Research license in progress. Proposal attached.

 

d.
APP-9T4634C8UW-2019: Analytical testing license submitted for targeted genotyping.

 

e.
APP-WTJX26HT0N: Industrial Hemp license draft for 1216644 B.C. Ltd. share certificate provided in due diligence folder.

 

f.
LIC-1DJC7509IB-2019: Industrial Hemp license at Nursery site (provided in due diligence folder).

 

g.
Nursery License in preparation for 1211884 B.C. Ltd. (share certificate provided in due diligence folder) to be submitted
October 2019.

 

2.
Genetic declaration of seed stock for nursery license applications attached.

 

3.
RBC Hemp LLC. Share certificate attached.

 

4.
Lab equipment and reagent stock attached.

 

5.
NIRLab proposal attached.

 

    	 	5AGREEMENT

 

THIS
AGREEMENT (“Agreement”) is made as of September 25, 2019 (the “Effective Date”) between DIGIPATH,
INC., a Nevada corporation (the “Company”), and Philippe Henry (“Consultant”, and together with Company,
the “Parties”).

 

WHEREAS,
the Company is desirous of obtaining the services of Consultant, and Consultant is desirous of offering his services to the Company,
on the terms set forth herein.

 

NOW,
THEREFORE, the Parties do hereby agree as follows:

 

1.
Appointment. The Company hereby appoints and designates Consultant to furnish consulting services to the Company in connection
with the business operations of the Company consistent with the services provided to a corporation by its Chief Operating Officer
(the “Consulting Services”), subject to the direction of the Company’s Chief Executive Officer and the terms
and conditions set forth below, and Consultant hereby accepts such appointment. Upon the execution of this Agreement, Consultant
shall serve as the Company’s Chief Operating Officer.

 

2.
Consulting Fee Arrangements. As compensation for the Consulting Services rendered by Consultant on behalf of the Company
as herein provided, Consultant shall be paid a monthly consulting fee of $10,000. The Company shall also pay or reimburse Consultant
for all reasonable business-related expenses approved in advance by the Company, provided that Consultant provides the Company
with appropriate receipts and other documentation.

 

3.
Option Grant. On the Effective Date, Consultant shall be awarded a stock option (the “Option”) to purchase
five hundred thousand (500,000) shares of the Company’s common stock, par value $.001 per share (“Common Stock”),
at an exercise price equal to the closing market price of the Common Stock on the Effective Date. The Option shall be exercisable
for a 10-year period commencing on the Effective Date (subject to continued employment with the Company), and shall vest as to
(i) one-quarter of such shares on the Effective Date, (ii) an additional one-quarter of such shares on the one-year anniversary
of the Effective Date, (iii) an additional one-quarter of such shares on the two-year anniversary of the Effective Date, and (iv)
the remaining one-quarter of such shares on the three-year anniversary of the Effective Date.

 

4.
Term and Termination.

 

(a)
The term of this Agreement shall be for an initial period of one year beginning on the date hereof (the “Initial Term”)
and shall automatically continue following the Initial Term for successive periods of one year unless either the Consultant or
the Company delivers a written notice of termination to the other party at least 30 days prior to the start of any such renewal
period (as so extended, the “Term”); provided that the Company may terminate this Agreement at any time subject to
the terms of this Section 4.

 

(b)
In the event that (a) the Company terminates this Agreement for any reason other than for “Cause” or Consultant’s
death or Disability, Consultant shall be entitled to receive severance payments consisting of continuing payments of Consultant’s
fees under Section 2 for the lesser of (a) six-months, and (b) the remainder of the Term; provided in each case Consultant is
then in compliance with his obligations under this Agreement.

 

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(c)
“Disability” shall mean the Consultant becomes incapacitated or disabled so as to be unable (either mentally
or physically) to substantially perform the services required of Consultant pursuant to this Agreement for a period of ninety
(90) or more consecutive days, or one hundred and twenty (120) or more non-consecutive days, in any twelve (12) month period.

 

(d)
“Cause” means (a) gross negligence or willful and serious misconduct, that is, or could reasonably be expected
to be, injurious to the operations, financial condition, or business reputation of the Company or its subsidiaries, (b) conviction
of a felony offense involving moral turpitude, (c) commission of fraud or dishonesty in connection with the Company’s business,
(d) a material breach of any other provision of this Agreement or willful violation of any express direction or any reasonable
rule or regulation established by the Board from time to time, after, in each case under this clause (d) which is capable of curing,
written notice is provided to Consultant and Consultant has failed to cure such acts or action after a period of ten (10) days.

 

5.
Disclosure of Confidential Information. Consultant may have access to the Company’s books and records.

 

5.1
Except to the extent (a) authorized by the express prior written consent of the Board, (b) required by law or any legal process,
or (c) reasonably believed by Consultant to be desirable and appropriate in performing its duties under this Agreement, Consultant,
will not, directly or indirectly, at any time during the term, or at any time subsequent to the termination of the Agreement,
use or exploit, disseminate, disclose, or divulge to any person, firm, corporation, association or other business entity, Company
Confidential Information (defined below). In no event shall Consultant use Company Confidential Information for his own personal
benefit not in furtherance of the Company’s business, unless authorized by the express prior written consent of the Board.

 

5.2
As used herein, but subject to the limitations below in this Section 5.2, “Company Confidential Information” means
all confidential or proprietary information concerning the Company or its subsidiaries’ business furnished to Consultant,
in whatever form stored, including without limitation, know-how, business plans, computer software, client lists, prospective
client lists, price lists, contract terms, business records and files. All Company Confidential Information is acknowledged to
be the property of the Company and shall not be duplicated or made use of other than in pursuit of the Company’s business
or as may otherwise be required by law or any legal process, or approved by the Company, or as is necessary in connection with
any adversarial proceeding against the Company. Upon termination of this Agreement for any reason, or upon termination of Consultant’s
services hereunder, Consultant shall deliver to the Company, without further demands, all copies of Company Confidential Information,
including paper documents and/or electronic storage media containing Company Confidential Information which are then in its possession
or under its control. Notwithstanding anything to the contrary herein, information shall not be deemed Company Confidential Information
if such information (a) becomes generally known to the public in a reasonably integrated form, through no violation of this Agreement
on the part of Consultant, (b) becomes available to or known by Consultant through disclosure by sources other than from or through
Consultant, and such sources are not known by Consultant to be legally prohibited from disclosing such information, or (c) was
available to or within the possession of Consultant on a non-confidential basis prior to its disclosure to Consultant by the Company.

 

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6.
Non-Compete.

 

6.1
Definitions. The following words and expressions used in this Agreement shall have the respective meanings hereby assigned to
them as follows:

 

“Customer”
means any past or current customer of the Company or its subsidiaries.

 

“Competitor”
means any individual, partnership, corporation, association or other business enterprise in any form, other than the Company and
its subsidiaries, which at any time during the Restriction Period, either directly or indirectly engages in the business of (i)
testing cannabis (including hemp) or products derived from cannabis, or (ii) providing any predictive, molecular or genomic tools
or similar services relating to the cultivation or processing of cannabis or cannabis products.

 

“Personnel”
means any and all employees, contractors, agents, brokers, consultants or other individuals rendering services to the Company
or any of its subsidiaries.

 

“Restriction
Period” shall mean and refer to the period of time, commencing on the date hereof and expiring 24 months after the start
of the Term.

 

6.2
During the Restriction Period, Consultant shall not directly or indirectly (i) own, manage, invest or acquire any economic stake
or interest in, or otherwise engage or participate in any manner whatsoever in any Competitor (whether as a proprietor, partner,
shareholder, investor, manager, director, officer, employee, venturer, representative, agent, broker, independent contractor,
consultant, or other participant), provided however, that Consultant shall not be prohibited from owning a passive investment
of less than two percent (2%) of the outstanding shares of capital stock or bonds of a corporation, which stock or bonds are listed
on a national securities exchange or are publicly traded in the over-the-counter market, (ii) solicit, induce or influence, or
attempt to induce or influence, any Customer to terminate a relationship which has been formed or that Consultant knows is being
formed with the Company or any of its subsidiaries, or to reduce the extent of, discourage the development of, or otherwise harm
its relationship with the Company or any of its subsidiaries, or (iii) recruit, solicit, induce or influence, any Personnel known
by Consultant to be employed by the Company or any of its subsidiaries to discontinue, reduce the extent of, discourage the development
of, or otherwise harm their relationship or commitment to the Company or any of its subsidiaries, including, without limitation,
by employing, seeking to employ or inducing or influencing a Competitor to employ or seek to employ any such Personnel.

 

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6.3
The Parties acknowledge that the provisions and restrictions of Section 6.2 are reasonable and necessary for the protection of
the legitimate interests of the Company, and that any breach or threatened breach of any of these provisions or restrictions by
Consultant will provide the Company with no adequate remedy at law, and the result will be irreparable harm to the Company. Therefore,
the parties agree that upon a breach or threatened breach of the provisions or restrictions of Section 6.2 by Consultant, the
Company shall be entitled, in addition to any other remedies which may be available to it, to institute and maintain proceedings
at law or in equity, to recover damages, obtain specific performance or a temporary or permanent injunction, without the necessity
of establishing the likelihood of irreparable injury or proving damages and without being required to post bond or other security.

 

6.4.
If the Restriction Period or the scope of activity restricted in Section 6.2 should be adjudged unreasonable in any proceeding,
then the Restriction Period shall be reduced by such number of months, the restriction area shall be reduced by the elimination
of such portion thereof or the scope of the restricted activity shall be modified, or any or all of the foregoing, so that such
restrictions may be enforced in such area and for such time as is adjudged to be reasonable. If Consultant violates any of the
restrictions contained in Section 6.2, the Restriction Period shall not run in favor of Consultant from the time of commencement
of any such violation until such time as such violation shall be cured by Consultant to the reasonable satisfaction of the Company.

 

7.
Independent Contractor. During the Term, Consultant shall be treated as an independent contractor for all employment and
tax law purposes, and nothing herein shall be deemed to confer upon Consultant the rights, privileges or benefits of an employee
of the Company, nor shall any of Consultant’s duties hereunder constitute him an employee of the Company. Consultant will
not receive and hereby waives and relinquishes any and all right, claim or interest he now may have, and hereby rejects any and
all right, claim or interest he might otherwise have in the future, to any privileges, or to any benefit, welfare plan or other
employee plans, benefits or perquisites, provided by Company to its employees with respect to the services provided by him to
the Company. Without limiting the generality of the foregoing, Consultant shall be solely responsible for any unemployment or
disability insurance payments, or any social security, income tax or other withholdings, deductions or payments which may be required
by federal, state or local law with respect to any sums paid to Consultant by the Company.

 

8.
Controlling Law/Remedies. The execution, validity, interpretation and performance of this Agreement shall be determined
and governed by the laws of the State of Nevada without giving effect to any principles thereof relating to the conflict of laws.

 

9.
Amendments; Waivers. This Agreement cannot be changed, modified or amended, and no provision or requirement hereof may
be waived, without the consent in writing of Consultant and the Company. No waiver by a party of the breach of any term or covenant
contained in this Agreement shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver
of the breach of any other term or covenant contained in this Agreement.

 

10.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile
or email transmission, and a facsimile or email transmission of this Agreement or of a signature of a party will be effective
as an original.

 

11.
Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof.

 

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

 

	 	DIGIPATH, INC.
	 	 	 
	 	By	/s/
    Todd Peterson
	 	Name:
    	Todd
    Peterson
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	/s/ Philippe Henry
	 	Philippe Henry

 

    	 	5

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