SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported): July 25, 2018

 

TYG SOLUTIONS CORP.

(Exact name of registrant as specified in its charter)

 

Delaware

 

000-55657

 

46-2645343

(State or other jurisdiction of incorporation)

 

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

550 West C Street, Suite 2040

San Diego, CA

 

92101

(Address of principal executive offices)

 

(Zip Code)

 

(760) 607-8268

(Registrant’s telephone number, including area code)

 

 

(Former name if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


Item 1.01 Entry into a Material Definitive Agreement.  

 

On July 25, 2018, TYG Solutions Corp., a Delaware corporation (“TYYG” or the “Company”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Kannalife Sciences, Inc., a Delaware corporation (“Kannalife”) and certain stockholders of Kannalife (the “Kannalife Stockholders”).

 

Pursuant to the terms of the Share Exchange Agreement, TYYG acquired approximately 99.7% of the issued and outstanding shares of Kannalife by means of a share exchange with the Kannalife Stockholders in exchange for 60,324,141 newly issued shares of the common stock of TYYG (the “Share Exchange”), which increased the Company's issued and outstanding shares of common stock to 69,854,141. As a result of the Share Exchange, Kannalife became a 99.7% owned subsidiary of TYYG, which on a going forward basis will result in consolidated financial reporting by TYYG to include the results of Kannalife. The initial closing of the Share Exchange occurred concurrently with entry into the Share Exchange Agreement (the “Initial Closing”). After the Initial Closing and for a period of no more than 120 days thereafter, unless extended in the sole discretion of TYYG, TYYG may issue, on the same terms and conditions as those contained in the Share Exchange Agreement, additional shares of the common stock of TYYG to Kannalife Stockholders that did not participate in the Initial Closing, provided that each additional Kannalife Stockholder becomes a party to the transaction documents (the “Additional Closing”).

 

As a condition of the Share Exchange, certain of the Kannalife Stockholders executed agreements which contained certain lock-up and leak-out restrictions on their ability to sell the shares of TYYG common stock acquired in the Share Exchange (the “Lock-up Agreement(s)”).

 

Certain non-management Kannalife Stockholders agreed to lock-up and leak out restrictions on TYYG securities they beneficially own as follows:

 

the Kannalife Stockholders may sell such securities at any time following the 2-year anniversary and prior to the 3-year anniversary of the Initial Closing, provided that (i) the average daily volume for the three months prior to the date that the Kannalife Stockholder desires to sell securities is equal to or greater than 250,000 shares per day, and (ii) the Kannalife Stockholder does not sell securities in an amount greater than 1.0% of the daily volume on any given trading day;  

 

the Kannalife Stockholders may sell such securities at any time following the 3-year anniversary and prior to the 4-year anniversary of the Initial Closing, provided that the Kannalife Stockholder does not sell securities in an amount greater than 2.5% of the daily volume on any given trading day; and  

 

contractual lock-up and leak-out restrictions for such Kannalife Stockholders expire on the fourth anniversary of the Initial Closing.  

 

A form of Kannalife Stockholder Lock-up Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

Existing management of Kannalife that have become officers of TYYG (the “Management Stockholders”) in connection with the Share Exchange have certain lock-up and leak out restrictions on TYYG securities they beneficially own as follows:

 

the Management Stockholder may sell such securities at any time following the 1-year anniversary and prior to the 2-year anniversary of the Initial Closing, provided that said Management Stockholder does not sell such securities in an amount greater than 2.5% of the daily volume times a percentage equal to their pro rata share of the aggregate shares owned by the Management Stockholders as a group on any given trading day;  

 

the Management Stockholder may sell such securities at any time following the 2-year anniversary and prior to the 3-year anniversary of the Initial Closing provided the Management Stockholder does not sell securities in an amount greater than 5.0% of the daily volume times a percentage equal to their pro rata share of the aggregate shares owned by the Management Stockholders as a group on any given trading day; and  

 

contractual lock-up and leak-out restrictions for such Management Stockholders expire on the third anniversary of the Initial Closing.  

 

The Management Stockholders are also subject to certain trading volume and other affiliate selling limitations and insider trading blackout restrictions by virtue of their status as officers of TYYG. A form of Management Stockholder Lock-up Agreement is attached hereto as Exhibit 10.2 and incorporated herein by reference.


Lastly, TYYG’s incoming Chief Executive Officer, Dean Petkanas, has certain specific restrictions to a block of 3,750,000 shares of TYYG common stock he beneficially owns (the “Petkanas Block”). All other shares beneficially owned by Mr. Petkanas are subject to the above lock-up and leak-out restrictions of the Management Stockholders. The following lock-up and leak out restrictions apply solely to the Petkanas Block:

 

after the Initial Closing and any time prior to the 1-year anniversary of the Initial Closing, Mr. Petkanas may sell the Petkanas Block securities in an amount no greater than the lesser of 1,000 shares per day or 2.5% of the daily volume on any given trading day;  

 

at any time following the 1-year anniversary and prior to the 2-year anniversary of the Initial Closing, Mr. Petkanas may sell the Petkanas Block securities in an amount no greater than the lesser of 2,000 shares per day or 2.5% of the daily volume on any given trading day;  

 

at any time following the 2-year anniversary and prior to the 3-year anniversary of the Initial Closing, Mr. Petkanas may sell the Petkanas Block securities in an amount no greater than the lesser of 3,000 shares per day or 2.5% of the daily volume on any given trading day; and  

 

contractual lock-up and leak-out restrictions on the Petkanas Block expire on the third anniversary of the Initial Closing.  

 

The Petkanas Block is also subject to certain trading volume and other affiliate selling limitations and insider trading blackout restrictions by virtue of Mr. Petkanas’ status as an officer and director of TYYG. A copy of said Petkanas Block Lock-up Agreement is attached hereto as Exhibit 10.3 and incorporated herein by reference.

 

After giving effect to the Lock-Up Agreements, approximately 54% of the Company's issued and outstanding common shares are subject to lock-up. Of the 46% of common shares not subject to lock-up, approximately 94% of such shares are subject to certain trading volume and other affiliate selling limitations by virtue of the holders' status as affiliates of TYYG under Rule 144.

 

The Share Exchange Agreement also includes customary representations, warranties and covenants by the parties, including, but not limited to, representations by Kannalife related to its business, by the Kannalife Stockholders related to their right, title and interest in their shares of Kannalife and accredited investor status, and by TYYG related to its capitalization and its authority to enter into the agreement.

 

The 60,324,141 newly issued shares of TYYG common stock issued to the Kannalife Stockholders shall constitute approximately 86% of the number of shares of the issued and outstanding common stock of TYYG after giving effect to the Share Exchange. The shares of common stock of TYYG issued and outstanding immediately prior to the Initial Closing will remain issued and outstanding. As a result of the Share Exchange, TYYG will acquire the business of Kannalife, which includes all assets owned by Kannalife. Kannalife is a pharmaceutical and phyto-medical company involved in the research and development of novel new cannabis-related therapeutic agents designed to reduce oxidative stress, and act as immuno-modulators and neuroprotectants.

 

The Share Exchange was approved by unanimous written consent of the Board of Directors of TYYG (the “Board”).

 

The foregoing descriptions of the Share Exchange Agreement and forms of Lock-up Agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the Share Exchange Agreement and forms of Lock-up Agreements, copies of which are filed as Exhibits 2.1, 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.  

 

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

 

Item 3.02 Unregistered Sales of Equity Securities.  

 

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

 

The issuance of the shares of TYYG’s common stock upon consummation of the Share Exchange is exempt from registration under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions from the registration requirements of the Act in transactions not involved in a public offering pursuant to Section 4(a)(2) of the Act and Rule 506(b) of Regulation D, as promulgated by the SEC thereunder.


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.  

 

Officer and Director Appointments

 

Effective as of July 25, 2018, the following officers were appointed to the following positions with TYYG:

 

Name Title  

 

Dean Petkanas Chief Executive Officer  

Thomas Kikis Chief Communications Officer  

Mark Corrao Chief Financial Officer  

William Kinney, PhD Chief Scientific Officer  

 

Effective as of July 25, 2018, the following directors were appointed to the Board of TYYG:

 

Dean Petkanas (Chairman)

Thomas Kikis

Dr. Timothy R. Scott

Blake N. Schroeder

 

Mr. Robert Malasek previously served as the sole officer and director of TYYG. Mr. Malasek will no longer serve as an officer of TYYG but will remain as a member of the Board.  

 

As described in Amendment No. 1 to our Current Report on Form 8-K previously filed with the Securities and Exchange Commission on May 24, 2018 (the “Prior 8-K”), the holders of a majority of Series A Preferred Stock holders are entitled to elect up to four (4) directors to TYYG’s Board and the holders of a majority of Series B Preferred Stock holders are entitled to elect up to three (3) directors to TYYG’s Board. The appointment of the above five (5) directors leaves two (2) vacancies on the Board. The majority of Series A and Series B Preferred Stock holders each have the authority to appoint one additional member to the Board to fill these vacancies at their discretion.  

 

The newly-appointed officers entered into executive employment agreements with TYYG concurrently with the Initial Closing of the Share Exchange.  

 

Mr. Petkanas will receive an annual base salary of $240,000 and will be eligible to receive equity awards in the future, as determined by the Board. In addition, Mr. Petkanas will have severance benefits in the form of salary continuation and health benefits through the employment term remaining on the contract. The employment agreement has a two-year term, provided, however, after the end of one year, the agreement will automatically renew for successive one year terms. A copy of Mr. Petkanas’ executive employment agreement is attached hereto as Exhibit 10.4.

 

Mr. Kikis will receive an annual base salary of $150,000 and will be eligible to receive equity awards in the future, as determined by the Board. In addition, Mr. Kikis will have severance benefits in the form of salary continuation and health benefits through the employment term remaining on the contract. The employment agreement has a one-year term, provided, however, after the end of six months, the agreement will automatically renew for successive six month terms. A copy of Mr. Kikis’ executive employment agreement is attached hereto as Exhibit 10.5.

 

Mr. Corrao will receive an annual base salary of $150,000 and will be eligible to receive equity awards in the future, as determined by the Board. In addition, Mr. Corrao will have severance benefits in the form of salary continuation and health benefits through the employment term remaining on the contract. The employment agreement has a one-year term, provided, however, after the end of six months, the agreement will automatically renew for successive six month terms. A copy of Mr. Corrao’s executive employment agreement is attached hereto as Exhibit 10.6.

 

Dr. Kinney will receive an annual base salary of $150,000 and will be eligible to receive equity awards in the future, as determined by the Board. In addition, Dr. Kinney will have severance benefits in the form of salary continuation and health benefits through the employment term remaining on the contract. The employment agreement has a one-year term, provided, however, after the end of six months, the agreement will automatically renew for successive six month terms. A copy of Dr. Kinney’s executive employment agreement is attached hereto as Exhibit 10.7.

 

None of our officers have any family relationships with any of TYYG’s directors or executive officers.


The foregoing descriptions of the Executive Employment Agreement(s) do not purport to be complete and are qualified in their entirety by reference to the full text of the Executive Employment Agreement(s), copies of which are filed as Exhibits 10.4, 10.5, 10.6 and 10.7, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

Executive Officer Biographies

 

Dean Petkanas, 54, Chief Executive Officer  

 

Dean Petkanas is a corporate finance and executive management professional with over 25 years of investment banking and capital markets experience.

 

In 2010 Mr. Petkanas co-founded Kannalife Sciences, Inc. and for the past 8 years was principally responsible for the creation and execution of the Company’s business model, including the licensing of US Patent #6630507 “Cannabinoids as Antioxidants and Neuroprotectants” from the National Institutes of Health for disease indications Hepatic Encephalopathy (HE) and Chronic Traumatic Encephalopathy (CTE). Mr. Petkanas is a co-inventor of US Patent #9611213 “Novel Functionalized 1,3 Benzene Diols and Their Method of Use for the Treatment of Hepatic Encephalopathy.”

 

Mr. Petkanas’ background in pharmaceutical extends to his work as investment banker and subsequently V.P. of Business Development for Xechem International, Inc. where he was principally responsible for Xechem’s IPO and EXIM Bank rounds of financing. Mr. Petkanas was involved with Xechem from 1992 to 2007. While at Xechem, he was involved in the financing of Xechem’s lead target drug candidate (generic paclitaxel) and later on from 2003 to 2007, was the the lead petitioner for Xechem International in steering their federal anti-trust lawsuit against Bristol-Myers-Squibb for their illegal monopoly of the drug market for the anti-cancer drug, Taxol®. Mr. Petkanas also was an integral part of the development team that named, trademarked and commercialized Hemoxin (Nicosan), a phyto-pharmaceutical compound for the treatment of Sickle Cell disease.

 

Thomas Kikis, 40, Chief Communications Officer  

 

Mr. Kikis co-founded Kannalife Sciences, Inc. in August 2010. Since co-founding Kannalife Sciences, Mr. Kikis handled all communications and marketing efforts of Kannalife Sciences serving in various executive roles and as a member of its board of directors. Mr. Kikis also designed and helped formulate Kannactiv – a skincare product line for Kannalife Sciences. Mr. Kikis is an entrepreneur who has a passion for great stories, new ideas, groundbreaking technologies, popular culture and their collective point of impact. Most recently, Mr. Kikis has designed dozens of commercial typographical software distributed for web, print and mobile applications and has produced several films and documentaries available on movie streaming platforms. Mr. Kikis holds a Bachelor of Science in Communications Management from New York University and a degree from the New York Film Academy. He is also a member of MIT Enterprise Forum (NYC Chapter), Summit Series and a member of the (ICRS) International Cannabinoid Research Society.

 

Mark Corrao, 60, Chief Financial Officer  

 

Prior to joining the Company, Mr. Corrao served as the CFO of Kannalife Sciences, Inc. beginning in January 2012. Mr. Corrao currently serves as the Managing Director of The CFO Squad LLC, a CFO and accounting consulting business, and as CFO of Generex Biotechnologies, Inc. beginning in January 2017. Mr. Corrao was formerly a founder and CFO of Strikeforce Technologies, Inc., a publicly traded software development and services company specializing in the development of a suite of integrated computer network security products. In addition to the ten years of his service at Strikeforce, Mr. Corrao has spent numerous years in the public accounting arena specializing in certified auditing, SEC accounting, corporate taxation and financial planning. Mr. Corrao’s background also includes numerous years on Wall Street with Merrill Lynch, Spear Leeds & Kellogg and Greenfield Arbitrage Partners. While on Wall Street, Mr. Corrao was involved in several initial public offerings and has been a guiding influence in several startup companies. Prior to joining StrikeForce, he was the Director of Sales at Applied Digital Solutions from December 2000 through December 2001. Mr. Corrao was the Vice President of Sales at Advanced Communications Sciences from March 1997 through December 2000. Mr. Corrao has a B.S. in Accounting from The City University of New York.

 

William Kinney, 61, Chief Scientific Officer  

 

Mr. Kinney is a medicinal chemist and entrepreneur with more than 25 years of experience in large pharmaceutical (Wyeth, Johnson & Johnson), biotechnology (Magainin), and non-profit (Blumberg Institute) research and development. He has demonstrated expertise in drug design; synthesis; lead optimization and development of peptides, small molecules, and natural products; and is inventor of three molecules that advanced to human clinical trials – Perzinfotel (CNS disorders and pain), Squalamine (oncology, AMD, Parkinson's Disease), and Trodusquemine (obesity). Currently, Dr. Kinney is Senior VP at Enterin, Inc. (July 2016) and Chief Scientific Officer at KannaLife Sciences. His scientific contributions include more than 70 publications and presentations; and inventorship on 38 issued U.S. patents. Dr. Kinney is a co-inventor of Kannalife’s recent US Patent #9611213 “Novel Functionalized 1,3 Benzene Diols and Their Method of Use for the Treatment of Hepatic Encephalopathy. Dr. Kinney obtained his B.S. (1979) and Ph.D. (1984) degrees from the Ohio State University.


Item 7.01 Regulation FD Disclosure.  

 

A press release announcing the Share Exchange is furnished with this report as Exhibit 99.1.

 

In accordance with General Instructions B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits.  

 

(a) Financial Statements of Business Acquired.

 

As permitted by Item 9.01(a)(4) of Form 8-K, the financial statements required by Item 9.01(a) of Form 8-K will be filed by the registrant by an amendment to this Current Report on Form 8-K not later than 71 days after the date upon which this Current Report on Form 8-K must be filed.

 

(b) Pro Forma Financial Information.

 

As permitted by Item 9.01(b)(2) of Form 8-K, the pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by the registrant by an amendment to this Current Report on Form 8-K not later than 71 days after the date upon which this Current Report on Form 8-K must be filed.

 

(d) Exhibits  

 

Exhibit No.

Description

 

2.1

Share Exchange Agreement, dated as of July 25, 2018 by and among TYG Solutions Corp., Kannalife Sciences, Inc. and its stockholders.

 

10.1

Form of Lock-up Agreement (Kannalife Stockholders).

 

10.2

Form of Lock-up Agreement (Management Stockholders).

 

 

10.3

Form of Lock-up Agreement (Petkanas Block).

 

 

10.4

Executive Employment Agreement, dated as of July 25, 2018, by and between TYG Solutions Corp. and Dean Petkanas.

 

10.5

Executive Employment Agreement, dated as of July 25, 2018, by and between TYG Solutions Corp. and Thomas Kikis.

 

10.6

Executive Employment Agreement, dated as of July 25, 2018, by and between TYG Solutions Corp. and Mark Corrao.

 

10.7

Executive Employment Agreement, dated as of July 25, 2018, by and between TYG Solutions Corp. and William Kinney, PhD.

 

99.1

Press Release, dated as of July 31, 2018.

 

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

 

This Current Report on Form 8-K may contain forward-looking statements that are made pursuant to the safe harbor provisions of Section 21E of the Exchange Act. The forward-looking statements in this Current Report on Form 8-K are not historical facts, do not constitute guarantees of future performance, and are based on numerous assumptions which, while believed to be reasonable, may not prove to be accurate. Any forward-looking statements in this Current Report on Form 8-K do not constitute guarantees of future performance and involve a number of factors that could cause actual results to differ materially, including risks more fully described in TYYG’s most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K. TYYG assumes no obligation to update any forward-looking information contained in this Current Report on Form 8-K.


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

TYG SOLUTIONS CORP

 

 

 

Dated: July 31, 2018

By:

/s/ Dean Petkanas

 

 

Name: Dean Petkanas

 

 

Chief Executive Officer

 

 

 

 

 

 

SHARE EXCHANGE AGREEMENT

 

This Share Exchange Agreement, dated as of July 25, 2018 (this “Agreement”), is made and entered into by and among TYG Solutions Corporation, a Delaware corporation (“TYYG” or the “Company”) on the one hand; and Kannalife Sciences, Inc., (“Kannalife”) a Delaware corporation and the Stockholders of Kannalife listed on Exhibit A attached hereto (each, a “Kannalife Stockholder” and collectively the “Kannalife Stockholders”) that meet the requirements of eligibility and participate in the Share Exchange (as hereinafter defined), on the other hand.

 

RECITALS

 

WHEREAS, TYYG desires to acquire up to 100% of the issued and outstanding shares of Kannalife by means of a share exchange with the eligible Kannalife Stockholders (the “Share Exchange”), upon the terms and conditions hereinafter set forth in this Agreement;

 

WHEREAS, the Kannalife Stockholders hold an amount of shares of Kannalife’s common stock which represents up to 100% of the issued and outstanding capital stock of Kannalife (the “Kannalife Shares”);

 

WHEREAS, upon the Initial Closing (as hereinafter defined) of the Share Exchange, Kannalife would become a subsidiary of TYYG, and the Kannalife Stockholders immediately prior to closing that were eligible and participated in the Share Exchange would become stockholders of TYYG; and

 

WHEREAS, it is intended by the parties hereto that the Agreement shall constitute a tax­ free reorganization within the meaning of Section 368 of the Internal Revenue Code.

 

AGREEMENT

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE 1

 

THE SHARE EXCHANGE

 

1.1 The Share Exchange. Upon the terms and subject to the conditions hereof, at the Closing (as hereinafter defined) the parties shall do the following: 

 

(a) The eligible Kannalife Stockholders will sell, convey, assign, transfer and deliver to TYYG the Kannalife Shares, which shall constitute up to 100% of the issued and outstanding shares of capital stock of Kannalife, through delivery of a properly executed and authenticated assignment separate from certificate (the "Assignment Separate from Certificate") attached hereto as Exhibit B

 

(b) In exchange for the transfer of the Kannalife Shares that are eligible for the Share Exchange as set forth herein, TYYG will issue to the eligible Kannalife Stockholders that number of shares of TYYG's newly-issued common stock as set forth opposite the Kannalife Stockholder's name on Exhibit A hereof (the "TYYG Shares"), provided however, the eligibility of certain of the Kannalife Stockholders to participate in the Share Exchange shall be subject to certain lock-up and leak-out restrictions agreed upon by and between TYYG, Kannalife and the Kannalife Stockholders pursuant to those certain Lock-Up and Leak-Out and Release Agreements (the "Lock-Up Agreements"). Those Kannalife Shareholders required to execute a Lock-Up Agreement shall only be eligible for the Share Exchange upon execution and delivery of the Lock-Up Agreement so designated for that particular Kannalife Stockholder (each·such Kannalife Stockholder required to execute a Lock-Up Agreement may also be referred to herein as a "Kannalife Lock-Up Stockholder" and collectively may be referred to as the "Kannalife Lock-Up Stockholders"). For the avoidance of doubt, not every Kannalife Stockholder shall be required by the Company to execute a Lock-Up Agreement as a condition to their eligibility to participate in the Share Exchange, and not every Lock-Up Agreement is identical in its terms. The Company will sign the acknowledgment on the Stockholder signature page upon receipt of executed versions of all necessary documents, including a Lock-Up Agreement, if any is required, verifying that the Stockholder has executed the necessary documents and is eligible to participate in the Share Exchange, provided however, nothing contained in such acknowledgement shall be construed to relieve the Stockholder from the requirements of Section 1.3 of this Agreement or similar provisions found in the Lock-Up Agreements. 


1


(c) As more particularly set forth in Article 6 (Conditions to Closing), the effectiveness of this Agreement and the Company's obligation to consummate the transactions contemplated hereby with respect to any Kannalife Lock-Up Stockholder is conditioned upon the delivery by such Kannalife Lock-Up Stockholder of a duly executed copy of their respective Lock-Up Agreement. 

 

1.2 Closing. 

 

(a) The initial closing of the Share Exchange shall take place remotely via the exchange of documents and signatures at such time and place as the parties mutually agree upon, orally or in writing (which time and place are designated as the "Initial Closing"). In the event there is more than one closing, the term "Closing" shall apply to each such closing unless otherwise specified and the date of each such Closing shall be its respective "Closing Date". Following the Initial Closing, the Kannalife Stockholders will be provided with an updated version of Exhibit A setting forth those Kannalife Stockholders that were eligible for and participated in the Share Exchange. 

 

(b) After the Initial Closing and for a period of no more than one hundred twenty (120) days thereafter, unless extended in the sole discretion of the Company, the Company may issue, on the same terms and conditions as those contained in this Agreement, additional TYYG Shares (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or similar recapitalization affecting such shares) (the "Additional TYYG Shares") to Kannalife Stockholders that did not participate in the Initial Closing (the "Additional Kannalife Stockholder(s)"), provided that each Additional Kannalife Stockholder shall become a party to the Transaction Documents (as defined below) by executing and delivering a counterpart signature page to each of the Transaction Documents. Exhibit A to this Agreement shall be updated to reflect the number of Additional TYYG Shares issued and exchanged at each such Closing and the parties acquiring such Additional TYYG Shares. The term Additional Kannalife Stockholders shall include Kannalife Stockholders that acquired their Kannalife Shares either after the date of this Agreement or after the Initial Closing as contemplated in Section 2.2. For purposes of this Agreement, "Transaction Documents" means this Agreement, the Lock-up Agreement and the Assignment Separate from Certificate. 

 

1.3 Taking of Necessary Action; Further Action. If, at any time either before or after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the Kannalife Stockholders, Kannalife and/or TYYG (as applicable) shall perform or cause to be performed any further acts and execute and deliver any documents that may be reasonably necessary or advisable to carry out the provisions of this Agreement. 


2


ARTICLE 2

 

REPRESENTATIONS AND WARRANTIES OF KANNALIFE

 

Kannalife hereby represents and warrants to TYYG as follows:

 

2.1 Organization. Kannalife has been duly organized, validly exists as a corporation, and is in good standing under the laws of Delaware, and has the requisite power to carry on its business as now conducted. 

 

2.2 Capitalization. Kannalife's authorized capital stock consists of 180,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock, of which (a) up to 170,000,000 shares of Common Stock, but in no case less than 133,671,482 shares of Common Stock (the "Minimum KLSI Common Stock Outstanding") shall be issued and outstanding immediately prior to the Initial Closing, and (b) 0 shares of Preferred Stock shall be issued and outstanding immediately prior to the Initial Closing. Exhibit A sets forth Kannalife's estimate of Common Stock that will be outstanding immediately prior to the Initial Closing, subject to, however, additional issuances of Common Stock Kannalife intends to issue prior to the Initial Closing as more particularly detailed in Footnotes 1 through 11 of Exhibit A . Such additional shares of Common Stock to be issued is undetermined as of the date hereof, and may differ from the number of shares set forth on Exhibit A, and Footnotes 1 through 11, as agreed upon and approved by KLSI and TYYG and may not have been completed by the Initial Closing (the "Projected Pre-Closing Share Issuances"). When transferred pursuant to this Agreement, the Kannalife Shares will be duly authorized, validly issued, fully-paid, non-assessable and free of preemptive rights. There are no outstanding or authorized options, rights, warrants, calls, convertible securities, rights to subscribe, conversion rights or other agreements or commitments to which Kannalife is a party or which are binding upon Kannalife providing for the issuance by Kannalife or transfer by Kannalife of additional shares of Kannalife's capital stock and Kannalife has not reserved any shares of its capital stock for issuance, nor are there any outstanding stock option rights, phantom equity or similar rights, contracts, arrangements or commitments to issue capital stock of Kannalife. There are no voting trusts or any other agreements or understandings with respect to the voting of Kannalife's capital stock. There are no obligations of Kannalife to repurchase, redeem or otherwise acquire any shares of its capital stock as of the Closing. Notwithstanding the foregoing, at any time after the date hereof but prior to the expiration of ninety (90) days after the Initial Closing, Kannalife reserves the right to increase the number of shares of its Common Stock outstanding by up to 36,328,518 shares above the Minimum KLSI Common Stock Outstanding (to a maximum of 170,000,000 shares of Common Stock), all of which such shares will be offered to participate in the Share Exchange, in order to (i) complete the Projected Pre-Closing Share Issuances (either at the projected number of shares to be issued or at different share amounts acceptable to KLSI and TYYG), and (ii) issue up to 15,000,000 shares in exchange for a contemplated investment by a third-party either directly or pursuant to an option that KLSI may issue to the investor (which option is not issued or outstanding as of the date of this Agreement) to facilitate such share purchase (the "Potential Investment Shares"). There can be no assurance that a transaction to issue the Potential Investment Shares will be completed, and no Kannalife Stockholder shall rely upon or base 

. his/her/its decision whether to enter into this Agreement and participate in the Share Exchange on any transaction resulting in the issuance of the Potential Investment Shares or any funding of Kannalife or TYYG in connection therewith.

 

2.3 Authority Relative to this Agreement. Kannalife has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Agreement by Kannalife and the consummation by Kannalife of the transactions contemplated hereby have been duly authorized and no other actions on the part of Kannalife are necessary to authorize this Agreement or the transactions contemplated hereby. 

 

2.4 Consents and Approvals; No Violations. Except for applicable requirements of federal securities laws and state securities or blue-sky laws, no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by Kannalife of the transactions contemplated by this Agreement. 


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2.5 Intellectual Property. Kannalife owns or possesses or can acquire on commercially reasonable terms sufficient legal rights to all Kannalife Intellectual Property without any known conflict with, or infringement of, the rights of others. To Kannalife's knowledge, no product or service marketed or sold (or proposed to be marketed or sold) by Kannalife violates or will violate any license or infringes or will infringe any intellectual property rights of any other party. There are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Kannalife Intellectual Property, nor is Kannalife bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other Person. Kannalife has not received any communications alleging that Kannalife has violated, or by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any other Person. To Kannalife's knowledge, it will not be necessary to use any inventions of any of its employees or consultants (or Persons it currently intends to hire) made prior to their employment by Kannalife, unless such inventions have been duly assigned to Kannalife at or prior to the Initial Closing. Each employee and consultant has assigned to Kannalife all intellectual property rights he or she owns that are related to Kannalife's business as now conducted and as presently proposed to be conducted. For purposes of this Subsection 2.6, Kannalife shall be deemed to have knowledge of a patent right if Kannalife has actual knowledge of the patent right or would be found to be on· notice of such patent right as determined by reference to United States patent laws. 

 

2.6 Disclosure. The representations and warranties and statements of fact made by Kannalife in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading. 

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE KANNALIFE STOCKHOLDERS

 

The Kannalife Stockholders hereby jointly and severally represent and warrant to TYYG as follows:

 

3.1 Ownership of the Kannalife Shares. Each Kannalife Stockholder owns, beneficially and of record, valid and marketable title to the Kannalife Shares set forth opposite such Kannalife Stockholder's name in Exhibit A attached hereto, free and clear of any and all security interests, liens, adverse claims, charges, pledges, restrictions, rights of first refusal or co­ sale, encumbrances, equities, proxies, options, shareholders' agreements or exceptions to title of any kind. Each Kannalife Stockholder represents that such person has no right or claims whatsoever to any shares of Kannalife, other than the interests listed across such Kannalife Stockholder on Exhibit A and does not have any options, warrants or any other instruments entitling such Kannalife Stockholder to exercise to purchase or convert into any shares of Kannalife. At the Closing, the Kannalife Stockholders will convey to TYYG good and marketable title to the Kannalife Shares, free and clear of any security interests, liens, adverse claims, encumbrances, equities, proxies, options, shareholders' agreements or restrictions. 

 

3.2 Authority Relative to this Agreement. This Agreement has been duly and validly executed and delivered by each Kannalife Stockholder and constitutes a valid and binding agreement of each eligible Kannalife Stockholder, enforceable against each eligible Kannalife Stockholder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally or by general principles of equity. 

 

3.3 No Consents. No consent, approval, authorization, license, qualification, exemption or order of any court or governmental agency or body or third party is required for the execution of this Agreement by any Kannalife Stockholder or for the consummation by each Kannalife Stockholder of any of the transactions contemplated hereby. 

 

3.4 Restricted Securities. Each Kannalife Stockholder acknowledges that the TYYG· Shares will not be registered pursuant to the Securities Act of 1933, as amended (the "Securities Act") or any applicable state securities laws, that the TYYG Shares will be characterized as "restricted securities" under federal securities laws, and that under such laws and applicable regulations the TYYG Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this regard, each Kannalife Stockholder is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 

 

3.5 Disclosure of Information. The Kannalife Stockholder has had an opportunity to discuss the Company's business, management, financial affairs and the terms and conditions of the offering of the TYYG Shares with the Company's management and has had an opportunity to consult with his/her/its financial, legal and tax advisor(s) in connection with the transactions contemplated by this Agreement and the Lock-Up Agreement. The foregoing, however, does not limit or modify the representations and warranties of the Company in Article 4 of this Agreement or the right of the Kannalife Stockholders to rely thereon. 


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3.6 No General Solicitation. Neither the Kannalife Stockholder, nor any of its 

. officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the TYYG Shares.

 

3.7 Status of Stockholder. Each of the Kannalife Stockholders hereby represents and warrants that it is an "Accredited Investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act; or 

 

3.8 Investment Risk. Each Kannalife Stockholder is able to bear the economic risk of acquiring the TYYG Shares pursuant to the terms of this Agreement, including a complete loss of such Kannalife Stockholder's investment in the TYYG Shares. Each Kannalife Stockholder acknowledges that Kannalife makes no representations or warranties concerning the merits of an investment in the TYYG Shares, and each Kannalife Stockholder understands and acknowledges that neither the Company nor Kannalife makes any representations concerning the liquidity of the Company's shares or any Kannalife Stockholder's ability to sell his/her/its TYYG Shares at a price he/she/it deems favorable. 

 

3.9 Restrictive Legends. Each Kannalife Stockholder acknowledges that the certificate(s) representing such Kannalife Stockholder's pro rata portion of the TYYG Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form: 

 

REGULATION D LEGEND:

 

''THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

 

Each Kannalife Lock-Up Stockholder further acknowledges and agrees that the following legend shall also be placed on their certificate(s):

 

LOCK-UP/LEAK-OUT LEGEND

 

"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A LOCK-UP AND LEAK-OUT AND RELEASE AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). THE SECRETARY OF THE COMPANY WILL, UPON WRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."

 

3.10 Disclosure. The representations and warranties and statements of fact made by the Kannalife Stockholders in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading. 


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ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES TYYG

 

TYYG hereby represents and warrants to Kannalife and the Kannalife Stockholders as of the date hereof and as of the Initial Closing (unless otherwise indicated), as follows:

 

4.1 Organization. TYYG is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, and has the requisite corporate power to carry on its business as now conducted. 

 

4.2 Capitalization. TYYG's authorized capital stock consists of 200,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, of which 9,530,000 shares of Common Stock and 75 shares of Series A Preferred Stock and 75 shares of Series B Preferred Stock are issued and outstanding immediately prior to the Initial Closing. When issued pursuant to this Agreement, the TYYG Shares will be duly authorized, validly issued, fully-paid, non­ assessable and free of preemptive rights. In addition to the Common Stock and Preferred Stock outstanding immediately prior to the Initial Closing, TYYG also has outstanding a convertible note, $500,000 face value, which is convertible into TYYG shares at a conversion price of $0.10 per share. 

 

4.3 Certain Corporate Matters. TYYG is licensed or qualified to do business and is in good standing as a foreign corporation in every jurisdiction in which the character of such properties or nature of such business requires it to be so licensed or qualified other than such jurisdictions in which the failure to be so licensed or qualified does not, or insofar as can reasonably be foreseen, in the future will not, have a material adverse effect. TYYG has delivered to Kannalife true, accurate and complete copies of its certificate or articles of incorporation and bylaws of TYYG, which reflect all restatements of and amendments made thereto at any time prior to the date of the Initial Closing. 

 

4.4 Authority Relative to this Agreement. TYYG has the requisite power and authority to enter into this Agreement and carry out its or his obligations hereunder. The execution, delivery and performance of this Agreement by TYYG and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of TYYG, and no other actions on the part of TYYG are necessary to authorize this Agreement or the transactions contemplated hereby. 

 

4.5 Consents and Approvals; No Violations. Except for applicable requirements of federal securities laws and state securities or blue-sky laws, no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by TYYG of the transactions contemplated by this Agreement. 

 

4.6 Disclosure. The representations and warranties and statements of fact made by TYYG in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading. 

 

ARTICLE 5

 

INDEMNIFICATION

 

5.1 Kannalife Indemnification. For a period of two (2) years after the Closing, Kannalife and the Kannalife Stockholders (each, an "Indemnifying Party" and together the ''Indemnifying Parties") agree, jointly and severally, to indemnify TYYG and each of their respective officers, directors, agents, successors and representatives (each, an "Indemnified Party" and collectively the "Indemnified Parties") against any loss, liability, claim, damage or expense (including, but not limited to, any and all expenses whatsoever reasonably and actually incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (each, a "Claim") to which it or they may become subject arising out of or based on either (i) with respect to all Indemnifying Parties, any breach of or inaccuracy in any of his/her/its representations and warranties or covenants or conditions made in this Agreement; or (ii) with respect to Kannalife, any and all liabilities arising out of or in connection with: (A) any of the assets of Kannalife prior to the Closing; or (B) the operations of Kannalife prior to the Closing (the "TYYG Indemnification"); provided, however, that the foregoing indemnification will not apply to any Claims to the extent they are based upon or arise out of (x) any breach of this Agreement by any Indemnified Party, or (y) bad faith, gross negligence or willful misconduct on the part of any Indemnified Party or their representatives, agents and advisors. During the period of the TYYG Indemnification, if TYYG shall become reasonably aware of any Claim covered by this Section 5 .1, and while such Claim is unresolved, TYYG shall have the right to issue stop transfer instructions to its transfer agent with respect to the TYYG Shares held by the Indemnifying Party. The parties specifically intend that the applicable statutes of limitations be superseded and replaced by the parties' agreement herein. 


6


5.2 Indemnification Procedures. If any action shall be brought against any Indemnified Party in respect of which indemnity may be sought pursuant to this Agreement, such Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall have the right to assume the defense thereof with counsel of its own choosing. Any Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party except to the extent that the employment thereof has been specifically authorized by the Indemnifying Party in writing, the Indemnifying Party has failed after a reasonable period of time to assume such defense and to employ counsel or in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party. The Indemnifying Party will not be liable to any Indemnified Party under this Article 5 for any settlement by an Indemnified Party effected without the Indemnifying Party's prior written consent, which shall not be unreasonably withheld or delayed; or to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Indemnified Party's indemnification pursuant to this Article 5. 

 

ARTICLE 6

 

CONDITIONS TO CLOSING

 

6.1 Conditions to Obligations of Kannalife and the Kannalife Stockholders. The obligations of Kannalife and the Kannalife Stockholders under this Agreement shall be subject to each of the following conditions: 

 

(a) Closing Deliveries. At the Closing, TYYG shall have delivered or caused to be delivered to Kannalife and the Kannalife Stockholders that were eligible for and participated in the Share Exchange the following: 

 

(i) resolutions duly adopted by the Board of Directors of TYYG·approving the following events or actions, as applicable: 

 

a. the execution, delivery and performance of this Agreement; 

 

b. the Share Exchange and the terms thereof; and 

 

c. the execution, delivery and performance of the respective 

 

(ii) Stock certificates issued to the Kannalife Stockholders evidencing the issuance of the TYYG Shares as contemplated by this Agreement; and 

 

(iii) this Agreement duly executed by TYYG. 

 

6.2 Conditions to Obligations of TYYG. The obligations of TYYG under this Agreement shall be subject to each of the following conditions: 

 

(a) Closing Deliveries. On the Closing Date, Kannalife and/or the Kannalife Stockholders shall have delivered to TYYG the following: 

 

Stockholders;

(i) this Agreement duly executed by Kannalife and the Kannalife 

 

(ii) the respective Lock-up Agreements duly executed by Kannalife and the Kannalife Stockholders to the satisfaction of TYYG; and 

 

(iii) the Assignment Separate from Certificate duly executed by the Kannalife Stockholders, a true and correct copy of which is attached hereto as Exhibit B.  

 

(b) Required Number of Shares Tendered for the Share Exchange. On the Closing Date, the eligible Kannalife Stockholders shall tender for participation in the Share Exchange a number of shares of Kannalife common stock that is satisfactory to the Company in its sole discretion, but in no case less than 80% of the Kannalife common shares outstanding immediately prior to the Initial Closing. 


7


ARTICLE 7

 

GENERAL PROVISIONS

 

7.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, sent by overnight courier or mailed by registered or certified mail (postage prepaid and return receipt requested) to the party to whom the same is so delivered, sent or mailed at addresses set forth on the signature pages hereof (or at such other address for a party as shall be specified by like notice). 

 

7.2 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated and the parties shall negotiate in good faith to modify this Agreement to preserve each party's anticipated benefits under this Agreement. 

 

7.3 Miscellaneous. This Agreement (together with all other documents and instruments referred to herein): (a) constitutes the entire agreement and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof; (b) except as expressly set forth herein, is not intended to confer upon any other person any rights or remedies hereunder and (c) shall not be assigned by operation of law or otherwise, except as may be mutually agreed upon by the parties hereto. 

 

7.4 Separate Counsel. Each party hereby expressly acknowledges that it has been advised to seek its own separate legal counsel for advice with respect to this Agreement, and that no counsel to any party hereto has acted or is acting as counsel to any other party hereto in connection with this Agreement. 

 

7.5 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. 

 

7.6 Counterparts and Facsimile Signatures. This Agreement may be executed in two or more counterparts, which together shall constitute a single agreement. This Agreement and any documents relating to it may be executed and transmitted to any other party by facsimile, which facsimile shall be deemed to be, and utilized in all respects as, an original, wet-inked manually executed document. 

 

7.7 Parties In Interest. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties hereto. 

 

7.8 Waiver. No waiver by any party of any default or breach by another party of any representation, warranty, covenant or condition contained in this Agreement shall be deemed to be a waiver of any subsequent default or breach by such party of the same or any other representation, warranty, covenant or condition. No act, delay, omission or course of dealing on the part of any party in exercising any right, power or remedy under this Agreement or at law or in equity shall operate as a waiver thereof or otherwise prejudice any of such party's rights, powers and remedies. All remedies, whether at law or in equity, shall be cumulative and the election of any one or more shall not constitute a waiver of the right to pursue other available remedies. 

 

7.9 Waiver of Conflicts. Each party to this Agreement acknowledges and agrees that Procopio, Cory, Hargreaves & Savitch LLP ("Procopio") is acting as counsel only to the Company in connection with the preparation of this Agreement (the "TYYG Matters"), and that Procopio has in the past represented, and may, now or in the future, represent the Company, Kannalife or other Kannalife Stockholders in matters unrelated to the TYYG Matters. The applicable rules of professional conduct require that Procopio inform the parties previously or presently represented by Procopio of this representation and obtain their consent. Procopio has served as counsel to the Company and has negotiated the terms of this Agreement solely on behalf of the Company. Each party to this Agreement acknowledges, represents and warrants to Procopio that (A) (i) the party has read this Agreement; (ii) the party has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of the party's own choice or has voluntarily declined to seek such counsel; and (iii) the party understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect; and (B) the party understands that (i) Procopio has been retained by the Company in connection with the preparation, negotiation and execution of this Agreement; and (ii) the party has not engaged the services of Procopio in connection with the preparation, negotiation and execution of this Agreement and the party is not represented by Procopio in the preparation, negotiation and execution of this Agreement. 


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7.10 Expenses. At or prior to the Closing, the parties hereto shall pay all of their own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel and financial advisers. 

 

 

[Remainder of Page Left Blank Intentionally, Signature Page to Follow]


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IN WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of the date first written above.

 

TYYG:

 

TYG SOLUTIONS CORPORATION

 

By:

 

Name:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

Email:

 

 

 

 

 

KANNALIFE:

 

 

KANNALIFE SCIENCES, INC.

 

By:

 

Name:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

Email:

 

 

 


10


SIGNATURE PAGE OF KANNALIFE STOCKHOLDERS

 

KANNALIFE STOCKHOLDERS:

 

 

(Name of Kannalife Stockholder)

 

 

(Signature)

 

 

(Name of Authorized Representative, if applicable)

 

 

(Title of Authorized Representative, if applicable)

 

 

Address

 

 

Email

 

 

ACKNOWLEDGEMENT:

 

Pursuant to and subject to the proviso found in Section 1.1(b), by signing below the Company affirms that it has received executed versions of the required documents from the above-named Stockholder, including a Lock-Up Agreement, if any is required, and confirms and acknowledges that the above-named Stockholder is eligible to participate in the Share Exchange at the applicable Closing, if any.

 

 

By: Robert T. Malasek,

Chief Financial Officer


11


EXHIBIT A

 

(List of Stockholders of Kannalife Sciences, Inc.)


12


EXHIBIT B

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

 

FOR VALUE RECEIVED, effective as of the Closing, the undersigned stockholder of Kannalife Sciences, Inc. ("Kannalife Stockholder") hereby assigns and transfers unto TYG Solutions Corp. (the "Company"), all of its shares in Kannalife Sciences, Inc. totaling shares (the "Kannalife Shares"), standing in the name of Kannalife Stockholder on the books of Kannalife Sciences, Inc. ("Kannalife"). Kannalife Stockholder does hereby irrevocably constitute and appoint Kannalife and its transfer agent as Attorney-in-Fact to transfer the Kannalife Shares on the books of Kannalife with full power of substitution in the premises. Kannalife Stockholder agrees to indemnify Kannalife in connection

·with the transfer of the Kannalife Shares.

 

Dated: _________________

 

KANNALIFE STOCKHOLDER:

 

 

(Name of Kannalife Stockholder)

 

 

(Signature)

 

 

(Name of Authorized Representative, if applicable)

 

 

(Title of Authorized Representative, if applicable)


13

 

LOCK-UP AND LEAK-OUT AND RELEASE AGREEMENT

 

This Lock-Up and Leak-Out and Release Agreement (the "Agreement") is entered into by and between TYG Solutions, Corp., a Delaware corporation (the "Company"), Kannalife Sciences, Inc., a Delaware corporation ("Kannalife") and those Kannalife stockholders that have executed this Agreement, the Share Exchange Agreement (as defined below) and any other documents required by the Company related to this Agreement and the Share Exchange Agreement (each a "Participating Stockholder"), with reference to the following facts:

 

RECITALS

 

A. The Board of Directors of the Company has approved the Company entering into a share exchange agreement with the stockholders of Kannalife (the "Share Exchange Agreement"). 

 

B. Only those Kannalife stockholders set forth on Exhibit A, and that have executed this Agreement, the Share Exchange Agreement and any other document required by the Company related to this Agreement and the Share Exchange Agreement, shall be governed by this Agreement. 

 

C. The closing of the Share Exchange (the "Closing") shall occur at a time and place acceptable to the Company and Kannalife (the "Closing Date"). 

 

D. The consummation of the share exchange set forth under the Share Exchange Agreement (the "Share Exchange") shall be conditioned upon, among other things, that the number of Participating Stockholders and other Kannalife stockholders entering into the Share Exchange Agreement is satisfactory to the Company in its sole discretion and, if the number of stockholders is satisfactory, the right of the Company to exclude from the Share Exchange (i) those stockholders set forth on Exhibit A that have not executed this Agreement, the Share Exchange Agreement and any other documents required by the Company in relation to this Agreement and the Share Exchange Agreement (the "Related Agreements"), and (ii) any other Kannalife stockholder that has not executed the Share Exchange Agreement and any other documents required by the Company. 

 

E. The effectiveness of this Agreement as to any Participating Stockholder signatory hereto is conditioned upon the delivery by such Participating Stockholder of a duly executed copy of this Agreement, the Share Exchange Agreement, the Related Agreements (if any) and the Closing of the Share Exchange. 

 

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, and other good valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereby agree as follows:

 

1. Representations and Warranties. The undersigned Participating Stockholder; (i) owns the shares of Kannalife common stock as set forth opposite their name on Exhibit A (the "Shares") free and clear of all liens and encumbrances and such Shares are fully earned, paid for in full and non-assessable, (ii) is not an affiliate of Kannalife or the Company (as the term "affiliate" is defined under Rule l 44(a)( I ) and (2), e.g., an officer, director, I 0% stockholder or someone, alone or in combination with others, having control over the issuer) and has not been an affiliate for the past 90 days, (iii) does not have any arrangement, agreement, or understanding of any kind with Kannalife, written or oral, whereby the Participating Stockholder has the right to acquire shares of Kannalife other than the Shares set forth on exhibit A, (iv) shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any of the Shares held by the undersigned, including any securities acquired by the undersigned hereafter in respect of the Shares by way of (a) the Share Exchange, or (b) any dividends, stock splits, or other reclassification, whether such acquisitions are in respect of the Shares or in respect of shares received by the undersigned in the Share Exchange (any securities acquired by way of either (a) or (b) are collectively, the "Lock-Up Securities"), or (v) shall not enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of common stock or other securities, in cash or otherwise. 



2. Allowable Transfers of the Lock-Up Securities. Notwithstanding anything contained herein to the contrary, the undersigned may transfer Lock-Up Securities (any transferred being the "Permitted Transfer Shares") (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree in writing to be bound by the restrictions set forth herei n, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees in writing to be bound by the restrictions set forth herein, and provided further, that any such transfer shall not involve a disposition for value, (iii) as part of a sale of I00% of the outstanding capital stock of the Company, or (iv) in one or more private transactions to a bona.fide third-party purchaser not conducted through the Trading Market, provided that (A) the sale and transfer is effected in accordance with any applicable securities laws, and if requested by the Company, the undersigned shall have delivered an opinion of counsel reasonably acceptable to the Company to that effect, and (B) the proposed transferee agrees in writing that the provisions of this Agreement shall continue to apply to the transferred Shares in the hands of such proposed transferee. 

 

3. Sale of Lock-Up Securities. 

 

(a) In addition to Permitted Transfer Shares, the Lock-U p Securities shall be released from the restrictions, obligations and covenants set forth in Section 1, only in accordance with the following schedule (the "Leak-Out Schedule"): 

 

Leak-Out Milestones:

Amount to be Released:

2-year anniversary of the Closing Date

The undersigned Participating Stockholder may sell Lock-Up Securities, in addition to Permitted Transfer Shares, at any time following the 2-year anniversary and prior to the 3-year anniversary, provided that (i) the average daily volume for the three months prior to the date that the undersigned desires to sell Lock-up Securities is equal to or greater than 250,000 shares per day, and (ii) the Participating Stockholder does not sell Lock-up Securities in an amount greater than 1.0% of the daily volume on any given trading day.

3-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any, provided the Participating Stockholder does not sell Lock-up Securities in an amount greater than 2.5% of the daily volume on any given trading day.

4-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any.

 

(b) The Company may require that the undersigned Participating Stockholder deposit their Lock-Up Securities, for sales of such Lock-Up Securities pursuant to the Leak-Out Schedule,, in a broker-dealer designated by the Company and the undersigned will execute whatever reasonable documentation is required by the Company and the broker-dealer, as necessary, to insure compliance with the Leak-Out Schedule. 

 

4. Release. Except in regard to your rights under the Share Exchange Agreement, this Agreement, and the Related Agreements (if any), you, for and on behalf of yourself and your predecessors, successors, heirs, executors, administrators, beneficiaries, legatees and assigns (collectively, the "Releasors") hereby knowingly, fully, unconditionally, irrevocably and completely forever release and discharge Kannalife, the Company, each "Affiliate" (within the meaning of Rule 405 promulgated under the Securities Act of 1933, as amended) of Kannalife, the Company, and its direct and indirect subsidiaries (together, the "Companies") and each of the Companies' respective past or present stockholders, partners, members, officers, directors, consultants, attorneys, subsidiaries, Affiliates, agents, advisors, representatives and employees and each of their respective heirs, executors, predecessors, successors, administrators, beneficiaries, legatees and assigns (collectively, the "Releasees"), from, and agree not to sue any of the Releasees with respect to, any and all claims, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, expenses, executions, affirmative defenses, demands and other obligations or liabilities whatsoever, in law or equity, whether known or unknown, past or present, asserted or unasserted, suspected or unsuspected, fixed or contingent (collectively, "Claims"), which you or any of the Releasors ever had, now have or may ever have had against any of Releasees from the beginning of the world until the Effective Date (as defined in Section 7 below), provided, however, that the foregoing shall not release any Releasee from any obligation of any Releasee to the undersigned Participating Stockholder under any provision of the Share Exchange Agreement, this Agreement or any Related Agreements. 



With the exception of the rights and obligations created by this Agreement or expressly reserved under this Agreement, it is the intent of the parties to waive the provisions of § 1542 of the California Civil Code, which provide as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

5. Transfer Agent Instructions Intended to Enforce This Agreement. The undersigned Participating Stockholder hereby irrevocably agrees and consents to the delivery by the Company to its transfer agent or registrar of stock transfer instructions and/or restrictions consistent with the terms of this Agreement and by executing this Agreement the undersigned waives any and all objections to such instructions and/or restrictions. 

 

6. Participating Stockholder Compliance with Securities Laws and Regulations. The undersigned further acknowledges and agrees that the ability to sell the Lock-Up Securities in accordance with the Leak-Out Schedule is subject to state and federal securities laws including, but not limited to Rule 144, Rule I ObS-1 and other affiliate or insider selling restrictions, if applicable. 

 

7. Condition to Effectiveness. This Agreement shall be effective as to any Participating Stockholder upon completion of the Closing Date of the Share Exchange as to the Participating Stockholder signatory hereto. 

 

8. This Agreement is Irrevocable. This Agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned Participating Stockholder. 

 

9. Choice of Law; Venue. This Agreement will be construed and enforced in accordance with and governed by the laws of the State of California and the federal law of the United States without reference to principles of conflicts of law. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in San Diego, California, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

10. Severability. Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable, such provision(s) shall (i) be modified to the minimum extent necessary to render it valid and enforceable, or (ii) if it cannot be so modified, be deemed not to be a part of this Agreement and shall not affect the validity or enforceability of the remaining provisions. 

 

11. Further A ssurances. Each party shall perform or cause to be performed any further acts and execute and deliver any documents that may be reasonably necessary or advisable to carry out the provisions of this Agreement. 

 

12. Counterparts/Facsimile Signatures. This Agreement may be executed in one or more counterparts, each of which when so signed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. In lieu of the original, a facsimile transmission or copy of the original shall be as effective and enforceable as the original. 

 

 

 

[Signature Page to Follow]



IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up and Leak-Out and Release Agreement as of the day and year set forth below.

 

THE COMPANY:

 

TYG Solutions, Corp., a Delaware corporation

 

By:

Robert T. Malasek

Date:

 

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

KANNALIFE:

 

 

 

 

 

 

Kannalife Sciences, Inc., a Delaware corporation

 

 

 

 

 

 

By:

Dean Petkanas,

Date:

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

PARTICIPATING STOCKHOLDER:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a

 

 

 

 

 

 

 

 

 

 

 

By:

 

Date:

 

Name:

 

 

 

Title:

 

 

 



Exhibit A

 

(List of Kannalife Stockholders)


 

LOCK-UP AND LEAK-OUT AND RELEASE AGREEMENT

 

This Lock-Up and Leak-Out and Release Agreement (the “ Agreement ”) is entered into by and between TYG Solutions, Corp., a Delaware corporation (the “ Company ”), Kannalife Sciences, Inc., a Delaware corporation (“ Kannalife ”) and those Kannalife stockholders that have executed this Agreement, the Share Exchange Agreement (as defined below) and any other documents required by the Company related to this Agreement and the Share Exchange Agreement (each a “ Participating Stockholder ”), with reference to the following facts:

 

RECITALS

 

A. The Board of Directors of the Company has approved the Company entering into a share exchange agreement with the stockholders of Kannalife (the “ Share Exchange Agreement ”). 

 

B. Only those Kannalife stockholders set forth on Exhibit A, and that have executed this Agreement, the Share Exchange Agreement and any other document required by the Company related to this Agreement and the Share Exchange Agreement, shall be governed by this Agreement. 

 

C. The closing of the Share Exchange (the “ Closing ”) shall occur at a time and place acceptable to the Company and Kannalife (the “ Closing Date ”). 

 

D. The consummation of the share exchange set forth under the Share Exchange Agreement (the “ Share Exchange ”) shall be conditioned upon, among other things, that the number of Participating Stockholders and other Kannalife stockholders entering into the Share Exchange Agreement is satisfactory to the Company in its sole discretion and, if the number of stockholders is satisfactory, the right of the Company to exclude from the Share Exchange (i) those stockholders set forth on Exhibit A that have not executed this Agreement, the Share Exchange Agreement and any other documents required by the Company in relation to this Agreement and the Share Exchange Agreement (the “ Related Agreements ”), and (ii) any other Kannalife stockholder that has not executed the Share Exchange Agreement and any other documents required by the Company. 

 

E. Current management of Kannalife, including Dean Petkanas, Thomas Kikis, William Kinney and Mark Corrao (the “ Management Stockholders ”) have certain additional restrictions as agroup as set forth herein. 

 

F. The effectiveness of this Agreement as to any Participating Stockholder signatory hereto is conditioned upon the delivery by such Participating Stockholder of a duly executed copy of this Agreement, the Share Exchange Agreement, the Related Agreements (if any) and the Closing of the Share Exchange. 

 

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, and other good valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereby agree as follows:

 

1. Representations and Warranties . The undersigned Participating Stockholder; (i) owns the shares of Kannalife common stock as set forth opposite their name on Exhibit A (the “ Shares ”) free and clear of all liens and encumbrances and such Shares are fully earned, paid for in full and non-assessable, (ii) is not an affiliate of Kannalife or the Company (as the term “affiliate” is defined under Rule 144(a)(l) and (2), e.g., an officer, director, 10% stockholder or someone, alone or in combination with others, having control over the issuer) and has not been an affiliate for the past 90 days, (iii) does not have any arrangement, agreement, or understanding of any kind with Kannalife, written or oral, whereby the Participating Stockholder has the right to acquire shares of Kannalife other than the Shares set forth on Exhibit A, (iv) shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any of the Shares held by the undersigned, including any securities acquired by the undersigned hereafter in respect of the Shares by way of (a) the Share Exchange, or (b) any dividends, stock splits, or other reclassification, whether such acquisitions are in respect of the Shares or in respect of shares received by the undersigned in the Share Exchange (any securities acquired by way of either (a) or (b) are collectively, the “ Lock-Up Securities ”), or (v) shall not enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of common stock or other securities, in cash or otherwise. 



2. Allowable Transfers of the Lock-Up Securities . Notwithstanding anything contained herein to the contrary, the undersigned may transfer Lock-Up Securities (any transferred being the “ Permitted Transfer Shares ”) (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree in writing to be bound by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees in writing to be bound by the restrictions set forth herein, and provided further, that any such transfer shall not involve a disposition for value, (iii) as part of a sale of 100% of the outstanding capital stock of the Company, or (iv) in one or more private transactions to a bona fide third-party purchaser not conducted through the Trading Market, provided that (A) the sale and transfer is effected in accordance with any applicable securities laws, and if requested by the Company, the undersigned shall have delivered an opinion of counsel reasonably acceptable to the Company to that effect, and (B) the proposed transferee agrees in writing that the provisions of this Agreement shall continue to apply to the transferred Shares in the hands of such proposed transferee. 

 

3. Sale of Lock-Up Securities

 

(a) In addition to Permitted Transfer Shares, the Lock-Up Securities shall be released from the restrictions, obligations and covenants set forth in Section 1, only in accordance with the following schedule (the “ Leak-Out Schedule ”): 

 

Leak-Out Milestones :

Amount to be Released :

1-year anniversary of the Closing Date

The undersigned Participating Stockholder may sell Lock-Up Securities, in addition to Permitted Transfer Shares, at any time following the 1-year anniversary and prior to the 2-year anniversary, provided that Participating Stockholder does not sell Lock-up Securities in an amount greater than 2.5% of the daily volume times a percentage equal to their pro rata share of the aggregate shares owned by the Management Stockholders as a group on any given trading day.

2-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any, provided the Participating Stockholder does not sell Lock-up Securities in an amount greater than 5.0% of the daily volume times a percentage equal to their pro rata share of the aggregate shares owned by the Management Stockholders as a group on any given trading day.

3-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any.

 

(b) The Company may require that the undersigned Participating Stockholder deposit their Lock-Up Securities, for sales of such Lock-Up Securities pursuant to the Leak-Out Schedule, in a broker-dealer designated by the Company and the undersigned will execute whatever reasonable documentation is required by the Company and the broker-dealer, as necessary, to insure compliance with the Leak-Out Schedule. 

 

4. Release . Except in regard to your rights under the Share Exchange Agreement, this Agreement, and the Related Agreements (if any), you, for and on behalf of yourself and your predecessors, successors, heirs, executors, administrators, beneficiaries, legatees and assigns (collectively, the “ Releasors ”) hereby knowingly, fully, unconditionally, irrevocably and completely forever release and discharge Kannalife, the Company, each “ Affiliate ” (within the meaning of Rule 405 promulgated under the Securities Act of 1933, as amended) of Kannalife, the Company, and its direct and indirect subsidiaries (together, the “ Companies ”) and each of the Companies’ respective past or present stockholders, partners, members, officers, directors, consultants, attorneys, subsidiaries, Affiliates, agents, advisors, representatives and employees and each of their respective heirs, executors, predecessors, successors, administrators, beneficiaries, legatees and assigns (collectively, the “ Releasees ”), from, and agree not to sue any of the Releasees with respect to, any and all claims, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, expenses, executions, affirmative defenses, demands and other obligations or liabilities whatsoever, in law or equity, whether known or unknown, past or present, asserted or unasserted, suspected or unsuspected, fixed or contingent (collectively, “ Claims ”), which you or any of the Releasors ever had, now have or may ever have had against any of Releasees from the beginning of the world until the Effective Date (as defined in Section 7 below), provided, however, that the foregoing shall not release any Releasee from any obligation of any Releasee to the undersigned Participating Stockholder under any provision of the Share Exchange Agreement, this Agreement or any Related Agreements. 


2


With the exception of the rights and obligations created by this Agreement or expressly reserved under this Agreement, it is the intent of the parties to waive the provisions of § 1542 of the California Civil Code, which provide as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

5. Transfer Agent Instructions Intended to Enforce This Agreement . The undersigned Participating Stockholder hereby irrevocably agrees and consents to the delivery by the Company to its transfer agent or registrar of stock transfer instructions and/or restrictions consistent with the terms of this Agreement and by executing this Agreement the undersigned waives any and all objections to such instructions and/or restrictions. 

 

6. Participating Stockholder Compliance with Securities Laws and Regulations . The undersigned further acknowledges and agrees that the ability to sell the Lock-Up Securities in accordance with the Leak-Out Schedule is subject to state and federal securities laws including, but not limited to Rule 144, Rule 10b5-1 and other affiliate or insider selling restrictions, if applicable. 

 

7. Condition to Effectiveness . This Agreement shall be effective as to any Participating Stockholder upon completion of the Closing Date of the Share Exchange as to the Participating Stockholder signatory hereto. 

 

8. This Agreement is Irrevocable . This Agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned Participating Stockholder. 

 

9. Choice of Law; Venue . This Agreement will be construed and enforced in accordance with and governed by the laws of the State of California and the federal law of the United States without reference to principles of conflicts of law. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in San Diego, California, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

10. Severability . Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable, such provision(s) shall (i) be modified to the minimum extent necessary to render it valid and enforceable, or (ii) if it cannot be so modified, be deemed not to be a part of this Agreement and shall not affect the validity or enforceability of the remaining provisions. 

 

11. Further Assurances . Each party shall perform or cause to be performed any further acts and execute and deliver any documents that may be reasonably necessary or advisable to carry out the provisions of this Agreement. 

 

12. Counterparts/Facsimile Signatures . This Agreement may be executed in one or more counterparts, each of which when so signed shall be deemed to be an original, and such counterparts, together shall constitute one and the same instrument. In lieu of the original, a facsimile transmission or copy of the original shall be as effective and enforceable as the original. 

 

[Signature Page to Follow]


3


IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up and Leak-Out and Release Agreement as of the day and year set forth below.

 

THE COMPANY :

TYG Solutions, Corp.,

a Delaware corporation

 

By: ____________________________________ Date___________________ 

Robert T. Malasek, Chief Financial Officer 

 

KANNALIFE :

Kannalife Sciences, Inc.,

a Delaware corporation

 

By: ____________________________________ Date___________________ 

Dean Petkanas, Chief Executive Officer 

 

PARTICIPATING STOCKHOLDER :

_________________________________________,

a _____________________________

By: ____________________________________ Date___________________ 

Name: 

Title: 


4

 

LOCK-UP AND LEAK-OUT AND RELEASE AGREEMENT

 

This Lock-Up and Leak-Out and Release Agreement (the “ Agreement ”) is entered into by and between TYG Solutions, Corp., a Delaware corporation (the “ Company ”), Kannalife Sciences, Inc., a Delaware corporation (“ Kannalife ”) and those Kannalife stockholders that have executed this Agreement, the Share Exchange Agreement (as defined below) and any other documents required by the Company related to this Agreement and the Share Exchange Agreement (each a “ Participating Stockholder ”), with reference to the following facts:

 

RECITALS

 

A. The Board of Directors of the Company has approved the Company entering into a share exchange agreement with the stockholders of Kannalife (the “ Share Exchange Agreement ”). 

 

B. Only those Kannalife stockholders set forth on Exhibit A, and that have executed this Agreement, the Share Exchange Agreement and any other document required by the Company related to this Agreement and the Share Exchange Agreement, shall be governed by this Agreement. 

 

C. The closing of the Share Exchange (the “ Closing ”) shall occur at a time and place acceptable to the Company and Kannalife (the “ Closing Date ”). 

 

D. The consummation of the share exchange set forth under the Share Exchange Agreement (the “ Share Exchange ”) shall be conditioned upon, among other things, that the number of Participating Stockholders and other Kannalife stockholders entering into the Share Exchange Agreement is satisfactory to the Company in its sole discretion and, if the number of stockholders is satisfactory, the right of the Company to exclude from the Share Exchange (i) those stockholders set forth on Exhibit A that have not executed this Agreement, the Share Exchange Agreement and any other documents required by the Company in relation to this Agreement and the Share Exchange Agreement (the “ Related Agreements ”), and (ii) any other Kannalife stockholder that has not executed the Share Exchange Agreement and any other documents required by the Company. 

 

E. The effectiveness of this Agreement as to any Participating Stockholder signatory hereto is conditioned upon the delivery by such Participating Stockholder of a duly executed copy of this Agreement, the Share Exchange Agreement, the Related Agreements (if any) and the Closing of the Share Exchange. 

 

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, and other good valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereby agree as follows:

 

1. Representations and Warranties . The undersigned Participating Stockholder; (i) owns the shares of Kannalife common stock as set forth opposite their name on Exhibit A (the “ Shares ”) free and clear of all liens and encumbrances and such Shares are fully earned, paid for in full and non-assessable, (ii) is not an affiliate of Kannalife or the Company (as the term “affiliate” is defined under Rule 144(a)(l) and (2), e.g., an officer, director, 10% stockholder or someone, alone or in combination with others, having control over the issuer) and has not been an affiliate for the past 90 days, (iii) does not have any arrangement, agreement, or understanding of any kind with Kannalife, written or oral, whereby the Participating Stockholder has the right to acquire shares of Kannalife other than the Shares set forth on Exhibit A, (iv) shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any of the Shares held by the undersigned, including any securities acquired by the undersigned hereafter in respect of the Shares by way of (a) the Share Exchange, or (b) any dividends, stock splits, or other reclassification, whether such acquisitions are in respect of the Shares or in respect of shares received by the undersigned in the Share Exchange (any securities acquired by way of either (a) or (b) are collectively, the “ Lock-Up Securities ”), or (v) shall not enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of common stock or other securities, in cash or otherwise. 



2. Allowable Transfers of the Lock-Up Securities . Notwithstanding anything contained herein to the contrary, the undersigned may transfer Lock-Up Securities (any transferred being the “ Permitted Transfer Shares ”) (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree in writing to be bound by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees in writing to be bound by the restrictions set forth herein, and provided further, that any such transfer shall not involve a disposition for value, (iii) as part of a sale of 100% of the outstanding capital stock of the Company, or (iv) in one or more private transactions to a bona fide third-party purchaser not conducted through the Trading Market, provided that (A) the sale and transfer is effected in accordance with any applicable securities laws, and if requested by the Company, the undersigned shall have delivered an opinion of counsel reasonably acceptable to the Company to that effect, and (B) the proposed transferee agrees in writing that the provisions of this Agreement shall continue to apply to the transferred Shares in the hands of such proposed transferee. 

 

3. Sale of Lock-Up Securities

 

(a) In addition to Permitted Transfer Shares, the Lock-Up Securities shall be released from the restrictions, obligations and covenants set forth in Section 1, only in accordance with the following schedule (the “ Leak-Out Schedule ”): 

 

Leak-Out Milestones :

Amount to be Released :

After the Closing Date

The undersigned Participating Stockholder may sell Lock-Up Securities, in addition to Permitted Transfer Shares, if any, at any time prior to the 1-year anniversary, provided that the Participating Stockholder does not sell Lock-up Securities in an amount greater than the lesser of 1,000 shares per day or 2.5% of the daily volume on any given trading day.

1-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any, at any time following the 1-year anniversary and prior to the 2-year anniversary, provided the Participating Stockholder does not sell Lock-up Securities in an amount greater than the lesser of 2,000 shares per day or 2.5% of the daily volume on any given trading day.

2-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any, at any time following the 2-year anniversary and prior to the 3-year anniversary, provided the Participating Stockholder does not sell Lock-up Securities in an amount greater than the lesser of 3,000 shares per day or 2.5% of the daily volume on any given trading day.

3-year anniversary of the Closing Date

Balance of all remaining unreleased Lock-Up Securities, including Permitted Transfer Shares, if any.

 

(b) The Company may require that the undersigned Participating Stockholder deposit their Lock-Up Securities, for sales of such Lock-Up Securities pursuant to the Leak-Out Schedule, in a broker-dealer designated by the Company and the undersigned will execute whatever reasonable documentation is required by the Company and the broker-dealer, as necessary, to insure compliance with the Leak-Out Schedule. 


2


4. Release . Except in regard to your rights under the Share Exchange Agreement, this Agreement, and the Related Agreements (if any), you, for and on behalf of yourself and your predecessors, successors, heirs, executors, administrators, beneficiaries, legatees and assigns (collectively, the “ Releasors ”) hereby knowingly, fully, unconditionally, irrevocably and completely forever release and discharge Kannalife, the Company, each “ Affiliate ” (within the meaning of Rule 405 promulgated under the Securities Act of 1933, as amended) of Kannalife, the Company, and its direct and indirect subsidiaries (together, the “ Companies ”) and each of the Companies’ respective past or present stockholders, partners, members, officers, directors, consultants, attorneys, subsidiaries, Affiliates, agents, advisors, representatives and employees and each of their respective heirs, executors, predecessors, successors, administrators, beneficiaries, legatees and assigns (collectively, the “ Releasees ”), from, and agree not to sue any of the Releasees with respect to, any and all claims, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, expenses, executions, affirmative defenses, demands and other obligations or liabilities whatsoever, in law or equity, whether known or unknown, past or present, asserted or unasserted, suspected or unsuspected, fixed or contingent (collectively, “ Claims ”), which you or any of the Releasors ever had, now have or may ever have had against any of Releasees from the beginning of the world until the Effective Date (as defined in Section 7 below), provided, however, that the foregoing shall not release any Releasee from any obligation of any Releasee to the undersigned Participating Stockholder under any provision of the Share Exchange Agreement, this Agreement or any Related Agreements. 

 

With the exception of the rights and obligations created by this Agreement or expressly reserved under this Agreement, it is the intent of the parties to waive the provisions of § 1542 of the California Civil Code, which provide as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

5. Transfer Agent Instructions Intended to Enforce This Agreement . The undersigned Participating Stockholder hereby irrevocably agrees and consents to the delivery by the Company to its transfer agent or registrar of stock transfer instructions and/or restrictions consistent with the terms of this Agreement and by executing this Agreement the undersigned waives any and all objections to such instructions and/or restrictions. 

 

6. Participating Stockholder Compliance with Securities Laws and Regulations . The undersigned further acknowledges and agrees that the ability to sell the Lock-Up Securities in accordance with the Leak-Out Schedule is subject to state and federal securities laws including, but not limited to Rule 144, Rule 10b5-1 and other affiliate or insider selling restrictions, if applicable. 

 

7. Condition to Effectiveness . This Agreement shall be effective as to any Participating Stockholder upon completion of the Closing Date of the Share Exchange as to the Participating Stockholder signatory hereto. 

 

8. This Agreement is Irrevocable . This Agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned Participating Stockholder. 

 

9. Choice of Law; Venue . This Agreement will be construed and enforced in accordance with and governed by the laws of the State of California and the federal law of the United States without reference to principles of conflicts of law. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in San Diego, California, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

10. Severability . Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable, such provision(s) shall (i) be modified to the minimum extent necessary to render it valid and enforceable, or (ii) if it cannot be so modified, be deemed not to be a part of this Agreement and shall not affect the validity or enforceability of the remaining provisions. 

 

11. Further Assurances . Each party shall perform or cause to be performed any further acts and execute and deliver any documents that may be reasonably necessary or advisable to carry out the provisions of this Agreement. 

 

12. Counterparts/Facsimile Signatures . This Agreement may be executed in one or more counterparts, each of which when so signed shall be deemed to be an original, and such counterparts, together shall constitute one and the same instrument. In lieu of the original, a facsimile transmission or copy of the original shall be as effective and enforceable as the original. 

 

[signature page to follow]


3


IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up and Leak-Out and Release Agreement as of the day and year set forth below.

 

THE COMPANY :

TYG Solutions, Corp.,

a Delaware corporation

 

By: ____________________________________ Date___________________ 

Robert T. Malasek, Chief Financial Officer 

 

KANNALIFE :

By: ____________________________________ Date___________________ 

Dean Petkanas, Chief Executive Officer 

 

PARTICIPATING STOCKHOLDER :

_________________________________________,

a _____________________________

By: ____________________________________ Date___________________ 

Name: 

Title: 


4

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”), dated as of July 25, 2018 (the “ Effective Date ”), is entered into by and between TYG Solutions Corp., a Delaware corporation (the “ Company ”), and Dean Petkanas (“ Executive ”).

 

RECITALS

 

WHEREAS , Executive is the Chief Executive Officer of the Company, and Executive and the Company desire to set forth the terms and conditions of Executive’s employment by the Company.

 

NOW, THEREFORE , in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:

 

AGREEMENT

 

Section 1. Term . Unless sooner terminated as provided in Section 9 of this Agreement, the term of this Agreement shall be for a period of two (2) years commencing on the Effective Date (the “ Initial Term ”). This Agreement shall automatically renew for successive one (1) year terms (the “ Renewal Term(s) ,” collectively with the “ Initial Term ”, the “ Term ”), unless either party provides written notice to the other of its intent to terminate this Agreement not less than thirty (30) days before the end of the then current Term. Notwithstanding the foregoing, the Company and Executive acknowledge and agree that Executive’s employment hereunder shall at all times be “at will,” which means that either Executive may resign at any time for any reason or for no reason, and that the Company may terminate Executive’s employment at any time for any reason or for no reason, in either case, subject to the applicable provisions of this Agreement. 

 

Section 2. Position, Duties and Responsibilities . During the Term, subject to the terms and conditions of this Agreement, the Company shall employ Executive, and Executive shall serve, as Chief Executive Officer of the Company, reporting directly to the Board of Directors of the Company (as constituted from time to time, the “ Board ”). Executive shall also hold such other positions with the Company or any of its affiliated companies during the Term as the Board may specify and Executive may agree from time to time. Executive shall have such duties and responsibilities as shall be commensurate with the positions held by him at any time. Executive shall devote such professional time as is necessary to perform his obligations under this Agreement, and shall faithfully, industriously and to the best of his ability, experience and talent, perform the duties and responsibilities of his position(s). 

 

Section 3. Principal Location. Executive’s principal location of employment shall be 3805 Old Easton Road, Doylestown, PA 18902 (the “ Principal Executive Office ”), provided, however, that the Company may from time to time require Executive to travel temporarily to other locations in connection with the Company’s business. 

 

Section 4. Base Salary. During the Term, Executive shall be paid a base salary (the “ Base Salary ”) that initially shall be $20,000 per month, which is equivalent to $240,000 annually, subject to applicable tax withholding. The Base Salary will be paid bi-monthly on the first and the fifteenth day of each month, or otherwise in accordance with the regular payroll practices of the Company from time to time in effect. The Board may increase the Base Salary in its sole discretion. 

 

Section 5. Equity Awards. In further consideration for Executive’s services, the Board shall consider in good faith whether to grant equity awards to Executive based upon, among other things as the Board may deem relevant, the performance of the Executive and the Company. 

 

Section 6. Other Benefits. During the Term, Executive shall be entitled to receive such other employment-related benefits and perquisites as are provided to senior executives of the Company and its subsidiaries under the Company’s employee benefit plans and policies generally that are not specifically otherwise addressed herein, as such benefits may be changed from time to time in the sole discretion of the Company. 

 

Section 7. Reimbursement of Expenses. During the Term, the Company shall pay (or promptly reimburse Executive) for all reasonable out-of-pocket expenses incurred by Executive in the course of performing his duties and responsibilities hereunder, which are consistent with the Company’s policies in effect from time to time with respect to business expenses. 

 

Section 8. Payments. All payments by the Company to Executive shall be paid in U.S. dollars and shall be subject to any deductions for state and federal withholding tax, social security and all other employment taxes and payroll deductions required by law.  


[SIGNATURE PAGE TO TYG EXECUTIVE EMPLOYMENT AGREEMENT]


Section 9. Termination of Employment.  

 

(a) Upon any termination of Executive’s employment, Executive (or his estate in the event his employment terminates upon his death) shall be entitled to be paid (i) all accrued but unpaid Base Salary through the last day of employment, (ii) any unpaid or unreimbursed expenses incurred during the Term in accordance with Section 7 of this Agreement, and (iii) any vested and accrued benefits with the inclusion of unused vacation accruals provided under the Company’s employee benefit plans and policies (including vacation policies) upon termination of employment in accordance with the terms contained therein (collectively, the “ Accrued Obligations ”). 

(b) The Company may terminate Executive’s employment at any time for Cause. “ Cause ” shall mean a good faith determination by the Board that Executive has: (i) engaged in any act of willful and gross misconduct or fraud in the course of his employment; (ii) been convicted of or pleaded “guilty” or “no contest” to a felony or other crime of moral turpitude; or (iii) materially breached this Agreement which, in the case of clause (iii) only, has not been cured within 30 days of written notice to Executive of such violation. Any termination for Cause shall be effective immediately upon delivery to Executive of written notice of such termination, subject to the cure right in clause (iii) above. In the event that the Company terminates Executive’s employment for Cause, he shall be entitled only to be paid the Accrued Obligations and shall have no right to any further compensation or any other benefits under this Agreement. 

(c) The Company may terminate Executive’s employment at any time without Cause, and Executive may resign for Good Reason at any time. “ Good Reason ” shall mean Executive’s voluntary resignation due to the Company, without Executive’s written consent, (A) effecting any material diminution in Executive’s duties and responsibilities that is inconsistent with Executive’s position with the Company, (B) materially reducing Executive’s compensation, (C) changing the Principal Executive Office to a location more than 50 miles from the prior Principal Executive Office, or (D) materially breaching this Agreement or any other agreement with Executive. Executive shall provide at least 30 days’ notice of his intent to resign for Good Reason. If the Company remedies the basis on which Executive proposes to resign for Good Reason prior to the expiration of the 30-day notice period, Executive’s resignation will be deemed withdrawn and shall not become effective. 

 

(d) If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, Executive shall be entitled to (1) be paid the Accrued Obligations; (2) receive his then current Base Salary during the then remaining Term (payable over the period in accordance with the Company’s regular payroll practices);and (3) in the event that Executive participates in any group health or benefit plans of the Company as of the time of such termination, (x) if Executive elects coverage under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA), continued coverage for himself and his family under the Company’s group health or benefit plan in which Executive was participating as of immediately prior to such termination of employment and reimbursement (the “ Premium Reimbursement ”) of the portion of the premiums that the Company would have paid had Executive’s employment continued for the then remaining Term following such termination (the “ Continued Coverage Period ”) until the earlier of (1) the end of the Continued Coverage Period or (2) the date on which Executive becomes eligible for health coverage through another employer; or (y) if such Premium Reimbursement would result in the imposition of an excise tax or other penalties on the Company or is not permissible under the terms of the Company’s applicable health or benefit plan, a dollar amount payable each month during the Continued Coverage Period (or applicable portion thereof) equal to the Premium Reimbursement that the Company would have paid for such month under clause (x) above (clauses (2) and (3) together, “ Severance ”). Executive’s right to receive Severance is expressly conditioned on Executive not engaging in any activities that violate any of the covenants set forth herein. Should executive engage in any such prohibited activities, then Executive shall have no further right or claim to any Severance to which Executive may otherwise be entitled under this subsection (d), from and after the date on which Executive engages in such activities and the Company shall have no further obligations with respect to the payment of Severance. 

 

Section 10. Non-Competition; Non-Hire; Non-Disparagement . During the Term and for an additional period of one and one-half (1 1/2) years, Executive, and/or any business he is affiliated with, shall not engage or participate in any cannabis based business (for purposes of this Agreement, wherever the term "cannabis-based business" is used it shall mean any business engaged in the manufacture, sale, development, distribution, marketing or research and development of products that are derived from, related to any cannabinoids, including but not limited to, synthetic versions of cannabinoids, whether pharmaceutical or over-the-counter) that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company (the “ Restricted Period ”). In furtherance of, and not in limitation of the foregoing, during the Restricted Period, Executive shall not, directly or indirectly, accept employment with, be a consultant or advisor to, or own any equity interest in (other than shares of a publicly traded company that represent less than 2% of the outstanding shares) any business enterprise that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company. During the Restricted Period, neither Executive nor his affiliates shall solicit for employment or hire any employee of the Company or any affiliate. Executive shall not directly or indirectly make any statement or any other expressions (in writing, orally or otherwise) on television, radio, the Internet or other media or to any third party, including in communication with any customers, vendors, prospects, employees, equity holders, governmental agency, sales or leasing representatives or distributors, which are in any way disparaging of the Company or any of its affiliates (or of any of their respective equity holders) or the products or services of the Company or any of its affiliates (or any of their respective equity holders) or places any of the foregoing in a negative light. 


Section 11. Section 409A . This Agreement and the amounts payable hereunder are intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), and shall be interpreted, construed, and performed consistent with such intent. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision in this Agreement to the contrary: (a) the payment of any “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive also has undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive’s termination of employment hereunder) shall be paid to Executive as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive’s ultimate “separation from service”; (b) any payment otherwise required to be made hereunder to Executive as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (to the extent applicable to Executive), in which case Executive shall be paid on the first business day following the expiration of such period of time, in a single payment, an amount equal to the aggregate amount of all delayed payments, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein; and (c) to the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation, (i) any such expense reimbursement shall be made by Executive no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year. 

 

Section 12. Disclosure of Information.  

 

(a) Obligation of Executive . Executive recognizes that the Company possesses a body of existing technology and intellectual property right and is engaged in a continuous program of research, development and production with respect to its business (present and future). Executive further understands and hereby acknowledges, understands and agrees that all Confidential and Proprietary Information, as set forth in Section 12(b), is the exclusive and confidential property of the Company and shall be at all times regarded, treated and protected as such in accordance with this Agreement. Executive acknowledges that all such Confidential and Proprietary Information is in the nature of a trade secret. Failure to mark any writing “confidential” shall not affect the confidential nature of such writing or the information contained therein. Notwithstanding any provision herein to the contrary, for purposes of this Section 12, the term “ Company ” shall refer to the Company and each of its parent and subsidiaries. 

 

(b) Definition of Confidential and Proprietary Information . “ Confidential and Proprietary Information ” shall mean information which is used in the Company’s business and (1) is proprietary to, about or created by the Company; (2) gives the Company some competitive business advantage or the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interest of the Company; or (3) is designated as Confidential and Proprietary Information by the Company, known by the Executive to be considered confidential by the Company, or from all relevant circumstances should reasonably be assumed by the Executive to be confidential and proprietary to the Company, except such Confidential and Proprietary Information that (i) becomes known generally to the public through no fault of the Executive, (ii) is required to be disclosed by the Executive in connection with the performance of his duties as set forth in this Agreement, (iii) the disclosure of which, is necessary to comply with the applicable federal, state or local laws, legal process or any order or mandate of a court or other governmental authority, (iv) is reasonably believed by the Executive, based upon the advice of legal counsel, to be required to be disclosed in defense of a lawsuit or other legal or administrative action brought against the Executive, and (v) the Executive can show was acquired, or is acquired after the date of this Agreement from a third party and such third party did not obtain such Confidential and Proprietary Information from the Executive subject to or in violation of obligations similar to those set forth in this Section 12; provided, however, that in the case of subparagraphs (iii) and (iv), the Executive shall give the Company reasonable advance written notice of the Confidential and Proprietary Information intended to be disclosed and the reasons and circumstances surrounding such disclosure, in order to permit the Company to seek a protective order or other appropriate request for confidential treatment of the applicable Confidential and Proprietary Information. Such Confidential and Proprietary Information includes, but is not limited to, the following types of information and other information of a similar nature (whether or not reduced to writing or designated as confidential): 

 

(i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques; 


(ii) prototype products, current and currently contemplated products and projects, prototype resource information, copyrights, and other proprietary information, including, but not limited to, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, and know how related to the current, future and proposed products, projects, documents and services of the Company, prices or other financial data, volume of sales, promotional methods, marketing plans, lists of names or classes of customers or personnel, mode of operation and other details of its products and services, as well as names and expertise of employees, consultants, customers and prospects, lists of suppliers, business plan, forecasts, strategies, product or project development plans, forecasts, strategies, business opportunities, or financial statements and further includes, without limitation, any information of the Company concerning research, development, design details and specifications, financial information, procurement requirements, purchasing, customer lists, business forecasts, and such other information that derives independent economic value, actual or potential, for not being generally known to the public or to other persons; and 

 

(iii) Confidential and proprietary information provided to the Company by any actual or potential customer, government agency, or other third party (including businesses, consultants and other entities and individuals). 

 

In furtherance of, and not in limitation of the foregoing, Confidential and Proprietary Information shall include any copies, summaries, reports, analyses, compilations, interpretations, reflections, studies, derivatives or extracts thereof, or the like, prepared, contributed to and/or reviewed or received by Executive and which contains Confidential Proprietary Information.

 

(c) Covenants of Executive . As a consequence of Executive’s position with the Company, Executive will occupy a position of trust and confidence with respect to the Company’s affairs and business and will have access to Confidential and Proprietary Information. In view of the foregoing and of the consideration to be provided to the Executive, the Executive agrees that it is reasonable and necessary that the Executive make the following covenants, which covenants shall survive the termination of this Agreement, as follows: 

(i) Except as set forth in Section 12(b), the Executive will not disclose Confidential and Proprietary Information to any person or entity, either inside or outside the Company without first obtaining the Company’s prior written consent. 

 

(ii) Except as set forth in Section 12(b), Executive will not use, copy or transfer Confidential and Proprietary Information without first obtaining the Company’s prior written consent. 

 

(iii) Upon the termination of the Term, the Executive shall promptly deliver to the Company (or its designee) all written materials, records and documents made by the Executive or coming into his possession prior to or during the Term concerning the business or affairs of the Company, including all materials containing Confidential and Proprietary Information. Further, the Executive will make available to the Company all devices, at such times as reasonably requested, to remove any and all Confidential and Proprietary Information. 

 

Section 13 Intellectual Property, Inventions and Patents  

.

 

(a) Executive hereby assigns and agrees to assign in the future to the Company all of Executive’s right, title and interest in and to any and all Inventions (as defined below) (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or jointly with others, prior to or during Executive’s relationship with the Company (other than the Inventions owned by Kannalife Sciences, Inc. which already have been acquired by the Company), and any other product, idea, discovery or Invention related to the present or anticipated business of the Company. The foregoing shall be in addition to any rights of the Company as a result of such Inventions being “ work for hire ” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended). For purposes of this Agreement, “ Inventions ” shall mean trade secrets, inventions, mask works, ideas, processes, formulas, data, research, results, programs or other works of authorship, improvements, discoveries, developments, designs and techniques, patented or unpatented. 

 

(b) Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Confidential and Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive (whether alone or jointly with others) while engaged by the Company, whether before or after the date hereof (“ Work Product ”), shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended) and belong exclusively to the Company. Executive shall promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions reasonably requested by the Board (whether during or after the Term) to establish and confirm such title and ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). 


(c) Executive shall promptly disclose any outside activities or interests, including any ownership or participation in the development of any Inventions. Executive understands that Executive is required to make such disclosures promptly if the activity or interest is related, either directly or indirectly, to (i) an area of research, development, service, product or product line of the Company, (ii) a manufacturing, development or research methodology or process of the Company or (iii) any activity that Consultant may be involved with on behalf of the Company. In furtherance of, and not in limitation of the foregoing, during the period of this Agreement and for twelve (12) months after termination of this Agreement, Executive will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by Executive, either alone or jointly with others. In addition, Executive will promptly disclose to the Company all patent applications filed by Executive or on Executive’s behalf within twelve (12) months after termination of this Agreement. 

 

(d) Notwithstanding anything to the contrary contained herein or in any other document, instrument or agreement between the Company and Executive, Executive shall not collaborate with any person or entity (a " Collaborating Party "), to develop any Inventions that are related to, arise out of or are in connection with cannabis (including but not limited to any products related thereto), and any other product, idea, discovery or Invention related to the present or anticipated cannabis based business of the Company (the " Covered Inventions "), unless prior to such collaboration the Collaborating Party acknowledges the obligations of Executive hereunder and irrevocably agrees to assign, transfer and convey all of its/their right, title and interest in and to any and all such Collaborative Inventions (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by the Collaborating Party, either alone or jointly with others, prior to or during the Collaborating Party's relationship with the Company and/or Executive. Prior to engaging with a Collaborating Party to develop Collaborative Inventions, Executive shall provide to the Company written substantiation that the Collaborating Party has agreed to assign any and all Collaborative Inventions in form and substance acceptable to the Company. 

 

Section 14. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company. The Company shall require any successor to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Any attempted assignment in contravention of this Section 14 shall be void ab initio

 

Section 15. Waiver and Amendments. Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 

 

Section 16. Severability . If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, (i) the remaining terms and provisions hereof shall be unimpaired, and (ii) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof. 

 

Section 17. Governing Law . Except to the extent preempted by federal law, the validity, interpretation, construction, and performance of this agreement is governed by and is to be construed under the laws of the State of Pennsylvania applicable to agreements made and to be performed in that state, without regard to conflict of laws rules. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in Philadelphia, PA, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

Section 18. Notices . Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices and communications by Executive to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices and communications byte Company to Executive may be given to Executive personally or may be mailed to Executive at Executive’s last known address, as reflected in the Company’s records. Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing. 

 

Section 19. Entire Agreement . This Agreement and the agreements referred to herein constitute the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between Executive and the Company and its affiliates relating to the subject matter of this Agreement. 


Section 1. 

 

Section 20. Counterparts; Electronic Delivery . This Agreement may be executed in two 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. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 

 

Section 21. Survival of Operative Sections . Upon any termination of Executive’s employment, the provisions of Section 7 through this Section 21 of this Agreement shall survive to the extent necessary to give effect to the provisions thereof. 

 

[Signature page follows.]


IN WITNESS WHEREOF , the undersigned have executed this Executive Employment Agreement as of the date first above written.

 

THE COMPANY:

 

 

 

 

TYG SOLUTIONS CORP.

 

 

 

 

 

By:

/s/ Robert T. Malasek

 

 

Name:

Robert T. Malasek

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

/s/ Dean Petkanas

 

 

Name:

Dean Petkanas

 

 

 

 

 

 

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”), dated as of July 25, 2018 (the “ Effective Date ”), is entered into by and between TYG Solutions Corp., a Delaware corporation (the “ Company ”), and Thomas Kikis(“ Executive ”).

 

RECITALS

 

WHEREAS , Executive and the Company desire to set forth the terms and conditions of Executive’s employment by the Company.

 

NOW, THEREFORE , in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:

 

AGREEMENT

 

Section 1. Term. Unless sooner terminated as provided in Section 9 of this Agreement, the term of this Agreement shall be for a period of one (1) year commencing on the Effective Date (the “ Initial Term ”). This Agreement shall automatically renew for successive six (6) month terms (the “ Renewal Term(s) ,” collectively with the “ Initial Term ”, the “ Term ”), unless either party provides written notice to the other of its intent to terminate this Agreement not less than thirty (30) days before the end of the then current Term. Notwithstanding the foregoing, the Company and Executive acknowledge and agree that Executive’s employment hereunder shall at all times be “at will,” which means that either Executive may resign at any time for any reason or for no reason, and that the Company may terminate Executive’s employment at any time for any reason or for no reason, in either case, subject to the applicable provisions of this Agreement. 

 

Section 2. Position, Duties and Responsibilities. During the Term, subject to the terms and conditions of this Agreement, the Company shall employ Executive, and Executive shall serve, as Chief Communications Officer of the Company, reporting directly to the Chief Executive Officer of the Company. Executive shall also hold such other positions with the Company or any of its affiliated companies during the Term as the Board of Directors of the Company (as constituted from time to time, the “ Board ”) may specify and Executive may agree from time to time. Executive shall have such duties and responsibilities as shall be commensurate with the positions held by him at any time. Executive shall devote such professional time as is necessary to perform his obligations under this Agreement, and shall faithfully, industriously and to the best of his ability, experience and talent, perform the duties and responsibilities of his position(s). 

 

Section 3. Principal Location. Executive’s principal location of employment shall be 3805 Old Easton Road, Doylestown, PA 18902 (the “ Principal Executive Office ”), provided, however, that the Company may from time to time require Executive to travel temporarily to other locations in connection with the Company’s business. 

 

Section 4. Base Salary . During the Term, Executive shall be paid a base salary (the “ Base Salary ”) that initially shall be $12,500 per month, which is equivalent to $150,000 annually, subject to applicable tax withholding. The Base Salary will be paid bi-monthly on the first and the fifteenth day of each month, or otherwise in accordance with the regular payroll practices of the Company from time to time in effect. The Board may increase the Base Salary in its sole discretion. 

 

Section 5. Equity Awards . In further consideration for Executive’s services, the Board shall consider in good faith whether to grant equity awards to Executive based upon, among other things as the Board may deem relevant, the performance of the Executive and the Company. 

 

Section 6. Other Benefits . During the Term, Executive shall be entitled to receive such other employment-related benefits and perquisites as are provided to senior executives of the Company and its subsidiaries under the Company’s employee benefit plans and policies generally that are not specifically otherwise addressed herein, as such benefits may be changed from time to time in the sole discretion of the Company. 

 

Section 7. Reimbursement of Expenses . During the Term, the Company shall pay (or promptly reimburse Executive) for all reasonable out-of-pocket expenses incurred by Executive in the course of performing his duties and responsibilities hereunder, which are consistent with the Company’s policies in effect from time to time with respect to business expenses. 

 

Section 8. Payments . All payments by the Company to Executive shall be paid in U.S. dollars and shall be subject to any deductions for state and federal withholding tax, social security and all other employment taxes and payroll deductions required by law.  



Section 9. Termination of Employment.  

 

(a) Upon any termination of Executive’s employment, Executive (or his estate in the event his employment terminates upon his death) shall be entitled to be paid (i) all accrued but unpaid Base Salary through the last day of employment, (ii) any unpaid or unreimbursed expenses incurred during the Term in accordance with Section 7 of this Agreement, and (iii) any vested and accrued benefits with the inclusion of unused vacation accruals provided under the Company’s employee benefit plans and policies (including vacation policies) upon termination of employment in accordance with the terms contained therein (collectively, the “ Accrued Obligations ”). 

 

(b) The Company may terminate Executive’s employment at any time for Cause. “ Cause ” shall mean a good faith determination by the Board that Executive has: (i) engaged in any act of willful and gross misconduct or fraud in the course of his employment; (ii) been convicted of or pleaded “guilty” or “no contest” to a felony or other crime of moral turpitude; or (iii) materially breached this Agreement which, in the case of clause (iii) only, has not been cured within 30 days of written notice to Executive of such violation. Any termination for Cause shall be effective immediately upon delivery to Executive of written notice of such termination, subject to the cure right in clause (iii) above. In the event that the Company terminates Executive’s employment for Cause, he shall be entitled only to be paid the Accrued Obligations and shall have no right to any further compensation or any other benefits under this Agreement. 

 

(c) The Company may terminate Executive’s employment at any time without Cause, and Executive may resign for Good Reason at any time. “ Good Reason ” shall mean Executive’s voluntary resignation due to the Company, without Executive’s written consent, (A) effecting any material diminution in Executive’s duties and responsibilities that is inconsistent with Executive’s position with the Company, (B) materially reducing Executive’s compensation, (C) changing the Principal Executive Office to a location more than 50 miles from the prior Principal Executive Office, or (D) materially breaching this Agreement or any other agreement with Executive. Executive shall provide at least 30 days’ notice of his intent to resign for Good Reason. If the Company remedies the basis on which Executive proposes to resign for Good Reason prior to the expiration of the 30-day notice period, Executive’s resignation will be deemed withdrawn and shall not become effective. 

 

(d) If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, Executive shall be entitled to (1) be paid the Accrued Obligations; (2) receive his then current Base Salary during the then remaining Term (payable over the period in accordance with the Company’s regular payroll practices);and (3) in the event that Executive participates in any group health or benefit plans of the Company as of the time of such termination, (x) if Executive elects coverage under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA), continued coverage for himself and his family under the Company’s group health or benefit plan in which Executive was participating as of immediately prior to such termination of employment and reimbursement (the “ Premium Reimbursement ”) of the portion of the premiums that the Company would have paid had Executive’s employment continued for the then remaining Term following such termination (the “ Continued Coverage Period ”) until the earlier of (1) the end of the Continued Coverage Period or (2) the date on which Executive becomes eligible for health coverage through another employer; or (y) if such Premium Reimbursement would result in the imposition of an excise tax or other penalties on the Company or is not permissible under the terms of the Company’s applicable health or benefit plan, a dollar amount payable each month during the Continued Coverage Period (or applicable portion thereof) equal to the Premium Reimbursement that the Company would have paid for such month under clause (x) above (clauses (2) and (3) together, “ Severance ”). Executive’s right to receive Severance is expressly conditioned on Executive not engaging in any activities that violate any of the covenants set forth herein. Should executive engage in any such prohibited activities, then Executive shall have no further right or claim to any Severance to which Executive may otherwise be entitled under this subsection (d), from and after the date on which Executive engages in such activities and the Company shall have no further obligations with respect to the payment of Severance. 


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Section 10. Non-Competition; Non-Hire; Non-Disparagement . During the Term and for an additional period of one and one-half (1 1/2) years, Executive, and/or any business he is affiliated with, shall not engage or participate in any cannabis based business (for purposes of this Agreement, wherever the term "cannabis-based business" is used it shall mean any business engaged in the manufacture, sale, development, distribution, marketing or research and development of products that are derived from, related to any cannabinoids, including but not limited to, synthetic versions of cannabinoids, whether pharmaceutical or over-the-counter) that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company (the “ Restricted Period ”). In furtherance of, and not in limitation of the foregoing, during the Restricted Period, Executive shall not, directly or indirectly, accept employment with, be a consultant or advisor to, or own any equity interest in (other than shares of a publicly traded company that represent less than 2% of the outstanding shares) any business enterprise that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company. During the Restricted Period, neither Executive nor his affiliates shall solicit for employment or hire any employee of the Company or any affiliate. Executive shall not directly or indirectly make any statement or any other expressions (in writing, orally or otherwise) on television, radio, the Internet or other media or to any third party, including in communication with any customers, vendors, prospects, employees, equity holders, governmental agency, sales or leasing representatives or distributors, which are in any way disparaging of the Company or any of its affiliates (or of any of their respective equity holders) or the products or services of the Company or any of its affiliates (or any of their respective equity holders) or places any of the foregoing in a negative light. 

 

Section 11. Section 409A . This Agreement and the amounts payable hereunder are intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), and shall be interpreted, construed, and performed consistent with such intent. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision in this Agreement to the contrary: (a) the payment of any “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive also has undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive’s termination of employment hereunder) shall be paid to Executive as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive’s ultimate “separation from service”; (b) any payment otherwise required to be made hereunder to Executive as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (to the extent applicable to Executive), in which case Executive shall be paid on the first business day following the expiration of such period of time, in a single payment, an amount equal to the aggregate amount of all delayed payments, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein; and (c) to the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation, (i) any such expense reimbursement shall be made by Executive no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year. 

 

Section 12. Disclosure of Information.  

 

(a) Obligation of Executive . Executive recognizes that the Company possesses a body of existing technology and intellectual property right and is engaged in a continuous program of research, development and production with respect to its business (present and future). Executive further understands and hereby acknowledges, understands and agrees that all Confidential and Proprietary Information, as set forth in Section 12(b), is the exclusive and confidential property of the Company and shall be at all times regarded, treated and protected as such in accordance with this Agreement. Executive acknowledges that all such Confidential and Proprietary Information is in the nature of a trade secret. Failure to mark any writing “confidential” shall not affect the confidential nature of such writing or the information contained therein. Notwithstanding any provision herein to the contrary, for purposes of this Section 12, the term “ Company ” shall refer to the Company and each of its parent and subsidiaries. 


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(b) Definition of Confidential and Proprietary Information . “ Confidential and Proprietary Information ” shall mean information which is used in the Company’s business and (1) is proprietary to, about or created by the Company; (2) gives the Company some competitive business advantage or the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interest of the Company; or (3) is designated as Confidential and Proprietary Information by the Company, known by the Executive to be considered confidential by the Company, or from all relevant circumstances should reasonably be assumed by the Executive to be confidential and proprietary to the Company, except such Confidential and Proprietary Information that (i) becomes known generally to the public through no fault of the Executive, (ii) is required to be disclosed by the Executive in connection with the performance of his duties as set forth in this Agreement, (iii) the disclosure of which, is necessary to comply with the applicable federal, state or local laws, legal process or any order or mandate of a court or other governmental authority, (iv) is reasonably believed by the Executive, based upon the advice of legal counsel, to be required to be disclosed in defense of a lawsuit or other legal or administrative action brought against the Executive, and (v) the Executive can show was acquired, or is acquired after the date of this Agreement from a third party and such third party did not obtain such Confidential and Proprietary Information from the Executive subject to or in violation of obligations similar to those set forth in this Section 12; provided, however, that in the case of subparagraphs (iii) and (iv), the Executive shall give the Company reasonable advance written notice of the Confidential and Proprietary Information intended to be disclosed and the reasons and circumstances surrounding such disclosure, in order to permit the Company to seek a protective order or other appropriate request for confidential treatment of the applicable Confidential and Proprietary Information. Such Confidential and Proprietary Information includes, but is not limited to, the following types of information and other information of a similar nature (whether or not reduced to writing or designated as confidential): 

(i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques; 

 

(ii) prototype products, current and currently contemplated products and projects, prototype resource information, copyrights, and other proprietary information, including, but not limited to, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, and know how related to the current, future and proposed products, projects, documents and services of the Company, prices or other financial data, volume of sales, promotional methods, marketing plans, lists of names or classes of customers or personnel, mode of operation and other details of its products and services, as well as names and expertise of employees, consultants, customers and prospects, lists of suppliers, business plan, forecasts, strategies, product or project development plans, forecasts, strategies, business opportunities, or financial statements and further includes, without limitation, any information of the Company concerning research, development, design details and specifications, financial information, procurement requirements, purchasing, customer lists, business forecasts, and such other information that derives independent economic value, actual or potential, for not being generally known to the public or to other persons; and 

 

(iii) Confidential and proprietary information provided to the Company by any actual or potential customer, government agency, or other third party (including businesses, consultants and other entities and individuals). 

In furtherance of, and not in limitation of the foregoing, Confidential and Proprietary Information shall include any copies, summaries, reports, analyses, compilations, interpretations, reflections, studies, derivatives or extracts thereof, or the like, prepared, contributed to and/or reviewed or received by Executive and which contains Confidential Proprietary Information.

 

(c) Covenants of Executive . As a consequence of Executive’s position with the Company, Executive will occupy a position of trust and confidence with respect to the Company’s affairs and business and will have access to Confidential and Proprietary Information. In view of the foregoing and of the consideration to be provided to the Executive, the Executive agrees that it is reasonable and necessary that the Executive make the following covenants, which covenants shall survive the termination of this Agreement, as follows: 

(i) Except as set forth in Section 12(b), the Executive will not disclose Confidential and Proprietary Information to any person or entity, either inside or outside the Company without first obtaining the Company’s prior written consent. 

 

(ii) Except as set forth in Section 12(b), Executive will not use, copy or transfer Confidential and Proprietary Information without first obtaining the Company’s prior written consent. 

 

(iii) Upon the termination of the Term, the Executive shall promptly deliver to the Company (or its designee) all written materials, records and documents made by the Executive or coming into his possession prior to or during the Term concerning the business or affairs of the Company, including all materials containing Confidential and Proprietary Information. Further, the Executive will make available to the Company all devices, at such times as reasonably requested, to remove any and all Confidential and Proprietary Information. 


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Section 13. Intellectual Property, Inventions and Patents.  

 

(a) Executive hereby assigns and agrees to assign in the future to the Company all of Executive’s right, title and interest in and to any and all Inventions (as defined below) (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or jointly with others, prior to or during Executive’s relationship with the Company (other than the Inventions owned by Kannalife Sciences, Inc. which already have been acquired by the Company), and any other product, idea, discovery or Invention related to the present or anticipated business of the Company. The foregoing shall be in addition to any rights of the Company as a result of such Inventions being “ work for hire ” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended). For purposes of this Agreement, “ Inventions ” shall mean trade secrets, inventions, mask works, ideas, processes, formulas, data, research, results, programs or other works of authorship, improvements, discoveries, developments, designs and techniques, patented or unpatented. 

 

(b) Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Confidential and Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive (whether alone or jointly with others) while engaged by the Company, whether before or after the date hereof (“ Work Product ”), shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended) and belong exclusively to the Company. Executive shall promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions reasonably requested by the Board (whether during or after the Term) to establish and confirm such title and ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). 

 

(c) Executive shall promptly disclose any outside activities or interests, including any ownership or participation in the development of any Inventions. Executive understands that Executive is required to make such disclosures promptly if the activity or interest is related, either directly or indirectly, to (i) an area of research, development, service, product or product line of the Company, (ii) a manufacturing, development or research methodology or process of the Company or (iii) any activity that Consultant may be involved with on behalf of the Company. In furtherance of, and not in limitation of the foregoing, during the period of this Agreement and for twelve (12) months after termination of this Agreement, Executive will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by Executive, either alone or jointly with others. In addition, Executive will promptly disclose to the Company all patent applications filed by Executive or on Executive’s behalf within twelve (12) months after termination of this Agreement. 

 

(d) Notwithstanding anything to the contrary contained herein or in any other document, instrument or agreement between the Company and Executive, Executive shall not collaborate with any person or entity (a " Collaborating Party "), to develop any Inventions that are related to, arise out of or are in connection with cannabis (including but not limited to any products related thereto), and any other product, idea, discovery or Invention related to the present or anticipated cannabis based business of the Company (the " Covered Inventions "), unless prior to such collaboration the Collaborating Party acknowledges the obligations of Executive hereunder and irrevocably agrees to assign, transfer and convey all of its/their right, title and interest in and to any and all such Collaborative Inventions (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by the Collaborating Party, either alone or jointly with others, prior to or during the Collaborating Party's relationship with the Company and/or Executive. Prior to engaging with a Collaborating Party to develop Collaborative Inventions, Executive shall provide to the Company written substantiation that the Collaborating Party has agreed to assign any and all Collaborative Inventions in form and substance acceptable to the Company. 

 

Section 14. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company. The Company shall require any successor to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Any attempted assignment in contravention of this Section 14 shall be void ab initio

 

Section 15. Waiver and Amendments . Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 


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Section 16. Severability . If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, (i) the remaining terms and provisions hereof shall be unimpaired, and (ii) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof. 

 

Section 17. Governing Law . Except to the extent preempted by federal law, the validity, interpretation, construction, and performance of this agreement is governed by and is to be construed under the laws of the State of Pennsylvania applicable to agreements made and to be performed in that state, without regard to conflict of laws rules. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in Philadelphia, PA, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

Section 18. Notices . Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices and communications by Executive to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices and communications byte Company to Executive may be given to Executive personally or may be mailed to Executive at Executive’s last known address, as reflected in the Company’s records. Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing. 

 

Section 19. Entire Agreement . This Agreement and the agreements referred to herein constitute the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between Executive and the Company and its affiliates relating to the subject matter of this Agreement. 

 

Section 20. Counterparts; Electronic Delivery . This Agreement may be executed in two 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. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 

 

Section 21. Survival of Operative Sections . Upon any termination of Executive’s employment, the provisions of Section 7 through this Section 21 of this Agreement shall survive to the extent necessary to give effect to the provisions thereof. 

 

[Signature page follows.]


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IN WITNESS WHEREOF , the undersigned have executed this Executive Employment Agreement as of the date first above written.

 

 

THE COMPANY:

 

 

 

 

TYG SOLUTIONS CORP.

 

 

 

 

 

By:

/s/ Robert T. Malasek

 

 

Name:

Robert T. Malasek

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

/s/ Thomas Kikis

 

 

Name:

Thomas Kikis

 

 


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EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”), dated as of July 25, 2018 (the “ Effective Date ”), is entered into by and between TYG Solutions Corp., a Delaware corporation (the “ Company ”), and Mark Corrao (“ Executive ”).

 

RECITALS

 

WHEREAS , Executive and the Company desire to set forth the terms and conditions of Executive’s employment by the Company.

 

NOW, THEREFORE , in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:

 

AGREEMENT

 

Section 1. Term . Unless sooner terminated as provided in Section 9 of this Agreement, the term of this Agreement shall be for a period of one (1) year commencing on the Effective Date (the “ Initial Term ”). This Agreement shall automatically renew for successive six (6) month terms (the “ Renewal Term(s) ,” collectively with the “ Initial Term ”, the “ Term ”), unless either party provides written notice to the other of its intent to terminate this Agreement not less than thirty (30) days before the end of the then current Term. Notwithstanding the foregoing, the Company and Executive acknowledge and agree that Executive’s employment hereunder shall at all times be “at will,” which means that either Executive may resign at any time for any reason or for no reason, and that the Company may terminate Executive’s employment at any time for any reason or for no reason, in either case, subject to the applicable provisions of this Agreement. 

 

Section 2. Position, Duties and Responsibilities . During the Term, subject to the terms and conditions of this Agreement, the Company shall employ Executive, and Executive shall serve, as Chief Financial Officer of the Company, reporting directly to the Chief Executive Officer of the Company. Executive shall also hold such other positions with the Company or any of its affiliated companies during the Term as the Board of Directors of the Company (as constituted from time to time, the “ Board ”) may specify and Executive may agree from time to time. Executive shall have such duties and responsibilities as shall be commensurate with the positions held by him at any time. Executive shall devote such professional time as is necessary to perform his obligations under this Agreement, and shall faithfully, industriously and to the best of his ability, experience and talent, perform the duties and responsibilities of his position(s). 

 

Section 3. Principal Location . Executive’s principal location of employment shall be 3805 Old Easton Road, Doylestown, PA 18902 (the “ Principal Executive Office ”), provided, however, that the Company may from time to time require Executive to travel temporarily to other locations in connection with the Company’s business. 

 

Section 4. Base Salary . During the Term, Executive shall be paid a base salary (the “ Base Salary ”) that initially shall be $12,500 per month, which is equivalent to $150,000 annually, subject to applicable tax withholding. The Base Salary will be paid bi-monthly on the first and the fifteenth day of each month, or otherwise in accordance with the regular payroll practices of the Company from time to time in effect. The Board may increase the Base Salary in its sole discretion. 

 

Section 5. Equity Awards . In further consideration for Executive’s services, the Board shall consider in good faith whether to grant equity awards to Executive based upon, among other things as the Board may deem relevant, the performance of the Executive and the Company. 

 

Section 6. Other Benefits. During the Term, Executive shall be entitled to receive such other employment-related benefits and perquisites as are provided to senior executives of the Company and its subsidiaries under the Company’s employee benefit plans and policies generally that are not specifically otherwise addressed herein, as such benefits may be changed from time to time in the sole discretion of the Company. 

 

Section 7. Reimbursement of Expenses. During the Term, the Company shall pay (or promptly reimburse Executive) for all reasonable out-of-pocket expenses incurred by Executive in the course of performing his duties and responsibilities hereunder, which are consistent with the Company’s policies in effect from time to time with respect to business expenses. 

 

Section 8. Payments . All payments by the Company to Executive shall be paid in U.S. dollars and shall be subject to any deductions for state and federal withholding tax, social security and all other employment taxes and payroll deductions required by law.  


Section 9. Termination of Employment.  

 

(a) Upon any termination of Executive’s employment, Executive (or his estate in the event his employment terminates upon his death) shall be entitled to be paid (i) all accrued but unpaid Base Salary through the last day of employment, (ii) any unpaid or unreimbursed expenses incurred during the Term in accordance with Section 7 of this Agreement, and (iii) any vested and accrued benefits with the inclusion of unused vacation accruals provided under the Company’s employee benefit plans and policies (including vacation policies) upon termination of employment in accordance with the terms contained therein (collectively, the “ Accrued Obligations ”). 

 

(b) The Company may terminate Executive’s employment at any time for Cause. “ Cause ” shall mean a good faith determination by the Board that Executive has: (i) engaged in any act of willful and gross misconduct or fraud in the course of his employment; (ii) been convicted of or pleaded “guilty” or “no contest” to a felony or other crime of moral turpitude; or (iii) materially breached this Agreement which, in the case of clause (iii) only, has not been cured within 30 days of written notice to Executive of such violation. Any termination for Cause shall be effective immediately upon delivery to Executive of written notice of such termination, subject to the cure right in clause (iii) above. In the event that the Company terminates Executive’s employment for Cause, he shall be entitled only to be paid the Accrued Obligations and shall have no right to any further compensation or any other benefits under this Agreement. 

 

(c) The Company may terminate Executive’s employment at any time without Cause, and Executive may resign for Good Reason at any time. “ Good Reason ” shall mean Executive’s voluntary resignation due to the Company, without Executive’s written consent, (A) effecting any material diminution in Executive’s duties and responsibilities that is inconsistent with Executive’s position with the Company, (B) materially reducing Executive’s compensation, (C) changing the Principal Executive Office to a location more than 50 miles from the prior Principal Executive Office, or (D) materially breaching this Agreement or any other agreement with Executive. Executive shall provide at least 30 days’ notice of his intent to resign for Good Reason. If the Company remedies the basis on which Executive proposes to resign for Good Reason prior to the expiration of the 30-day notice period, Executive’s resignation will be deemed withdrawn and shall not become effective. 

 

(d) If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, Executive shall be entitled to (1) be paid the Accrued Obligations; (2) receive his then current Base Salary during the then remaining Term (payable over the period in accordance with the Company’s regular payroll practices);and (3) in the event that Executive participates in any group health or benefit plans of the Company as of the time of such termination, (x) if Executive elects coverage under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA), continued coverage for himself and his family under the Company’s group health or benefit plan in which Executive was participating as of immediately prior to such termination of employment and reimbursement (the “ Premium Reimbursement ”) of the portion of the premiums that the Company would have paid had Executive’s employment continued for the then remaining Term following such termination (the “ Continued Coverage Period ”) until the earlier of (1) the end of the Continued Coverage Period or (2) the date on which Executive becomes eligible for health coverage through another employer; or (y) if such Premium Reimbursement would result in the imposition of an excise tax or other penalties on the Company or is not permissible under the terms of the Company’s applicable health or benefit plan, a dollar amount payable each month during the Continued Coverage Period (or applicable portion thereof) equal to the Premium Reimbursement that the Company would have paid for such month under clause (x) above (clauses (2) and (3) together, “ Severance ”). Executive’s right to receive Severance is expressly conditioned on Executive not engaging in any activities that violate any of the covenants set forth herein. Should executive engage in any such prohibited activities, then Executive shall have no further right or claim to any Severance to which Executive may otherwise be entitled under this subsection (d), from and after the date on which Executive engages in such activities and the Company shall have no further obligations with respect to the payment of Severance. 


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Section 10. Non-Competition; Non-Hire; Non-Disparagement . During the Term and for an additional period of one and one-half (1 1/2) years, Executive, and/or any business he is affiliated with, shall not engage or participate in any cannabis based business (for purposes of this Agreement, wherever the term "cannabis-based business" is used it shall mean any business engaged in the manufacture, sale, development, distribution, marketing or research and development of products that are derived from, related to any cannabinoids, including but not limited to, synthetic versions of cannabinoids, whether pharmaceutical or over-the-counter) that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company (the “ Restricted Period ”). In furtherance of, and not in limitation of the foregoing, during the Restricted Period, Executive shall not, directly or indirectly, accept employment with, be a consultant or advisor to, or own any equity interest in (other than shares of a publicly traded company that represent less than 2% of the outstanding shares) any business enterprise that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company. During the Restricted Period, neither Executive nor his affiliates shall solicit for employment or hire any employee of the Company or any affiliate. Executive shall not directly or indirectly make any statement or any other expressions (in writing, orally or otherwise) on television, radio, the Internet or other media or to any third party, including in communication with any customers, vendors, prospects, employees, equity holders, governmental agency, sales or leasing representatives or distributors, which are in any way disparaging of the Company or any of its affiliates (or of any of their respective equity holders) or the products or services of the Company or any of its affiliates (or any of their respective equity holders) or places any of the foregoing in a negative light. 

 

Section 11. Section 409A . This Agreement and the amounts payable hereunder are intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), and shall be interpreted, construed, and performed consistent with such intent. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision in this Agreement to the contrary: (a) the payment of any “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive also has undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive’s termination of employment hereunder) shall be paid to Executive as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive’s ultimate “separation from service”; (b) any payment otherwise required to be made hereunder to Executive as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (to the extent applicable to Executive), in which case Executive shall be paid on the first business day following the expiration of such period of time, in a single payment, an amount equal to the aggregate amount of all delayed payments, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein; and (c) to the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation, (i) any such expense reimbursement shall be made by Executive no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year. 

 

Section 12. Disclosure of Information.  

 

(a) Obligation of Executive . Executive recognizes that the Company possesses a body of existing technology and intellectual property right and is engaged in a continuous program of research, development and production with respect to its business (present and future). Executive further understands and hereby acknowledges, understands and agrees that all Confidential and Proprietary Information, as set forth in Section 12(b), is the exclusive and confidential property of the Company and shall be at all times regarded, treated and protected as such in accordance with this Agreement. Executive acknowledges that all such Confidential and Proprietary Information is in the nature of a trade secret. Failure to mark any writing “confidential” shall not affect the confidential nature of such writing or the information contained therein. Notwithstanding any provision herein to the contrary, for purposes of this Section 12, the term “ Company ” shall refer to the Company and each of its parent and subsidiaries. 


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(b) Definition of Confidential and Proprietary Information . “ Confidential and Proprietary Information ” shall mean information which is used in the Company’s business and (1) is proprietary to, about or created by the Company; (2) gives the Company some competitive business advantage or the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interest of the Company; or (3) is designated as Confidential and Proprietary Information by the Company, known by the Executive to be considered confidential by the Company, or from all relevant circumstances should reasonably be assumed by the Executive to be confidential and proprietary to the Company, except such Confidential and Proprietary Information that (i) becomes known generally to the public through no fault of the Executive, (ii) is required to be disclosed by the Executive in connection with the performance of his duties as set forth in this Agreement, (iii) the disclosure of which, is necessary to comply with the applicable federal, state or local laws, legal process or any order or mandate of a court or other governmental authority, (iv) is reasonably believed by the Executive, based upon the advice of legal counsel, to be required to be disclosed in defense of a lawsuit or other legal or administrative action brought against the Executive, and (v) the Executive can show was acquired, or is acquired after the date of this Agreement from a third party and such third party did not obtain such Confidential and Proprietary Information from the Executive subject to or in violation of obligations similar to those set forth in this Section 12; provided, however, that in the case of subparagraphs (iii) and (iv), the Executive shall give the Company reasonable advance written notice of the Confidential and Proprietary Information intended to be disclosed and the reasons and circumstances surrounding such disclosure, in order to permit the Company to seek a protective order or other appropriate request for confidential treatment of the applicable Confidential and Proprietary Information. Such Confidential and Proprietary Information includes, but is not limited to, the following types of information and other information of a similar nature (whether or not reduced to writing or designated as confidential): 

 

(i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques; 

 

(ii) prototype products, current and currently contemplated products and projects, prototype resource information, copyrights, and other proprietary information, including, but not limited to, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, and know how related to the current, future and proposed products, projects, documents and services of the Company, prices or other financial data, volume of sales, promotional methods, marketing plans, lists of names or classes of customers or personnel, mode of operation and other details of its products and services, as well as names and expertise of employees, consultants, customers and prospects, lists of suppliers, business plan, forecasts, strategies, product or project development plans, forecasts, strategies, business opportunities, or financial statements and further includes, without limitation, any information of the Company concerning research, development, design details and specifications, financial information, procurement requirements, purchasing, customer lists, business forecasts, and such other information that derives independent economic value, actual or potential, for not being generally known to the public or to other persons; and 

 

(iii) Confidential and proprietary information provided to the Company by any actual or potential customer, government agency, or other third party (including businesses, consultants and other entities and individuals). 

In furtherance of, and not in limitation of the foregoing, Confidential and Proprietary Information shall include any copies, summaries, reports, analyses, compilations, interpretations, reflections, studies, derivatives or extracts thereof, or the like, prepared, contributed to and/or reviewed or received by Executive and which contains Confidential Proprietary Information.

 

(c) Covenants of Executive . As a consequence of Executive’s position with the Company, Executive will occupy a position of trust and confidence with respect to the Company’s affairs and business and will have access to Confidential and Proprietary Information. In view of the foregoing and of the consideration to be provided to the Executive, the Executive agrees that it is reasonable and necessary that the Executive make the following covenants, which covenants shall survive the termination of this Agreement, as follows: 

(i) Except as set forth in Section 12(b), the Executive will not disclose Confidential and Proprietary Information to any person or entity, either inside or outside the Company without first obtaining the Company’s prior written consent. 

 

(ii) Except as set forth in Section 12(b), Executive will not use, copy or transfer Confidential and Proprietary Information without first obtaining the Company’s prior written consent. 

 

(iii) Upon the termination of the Term, the Executive shall promptly deliver to the Company (or its designee) all written materials, records and documents made by the Executive or coming into his possession prior to or during the Term concerning the business or affairs of the Company, including all materials containing Confidential and Proprietary Information. Further, the Executive will make available to the Company all devices, at such times as reasonably requested, to remove any and all Confidential and Proprietary Information. 


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Section 13. Intellectual Property, Inventions and Patents.  

 

(a) Executive hereby assigns and agrees to assign in the future to the Company all of Executive’s right, title and interest in and to any and all Inventions (as defined below) (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or jointly with others, prior to or during Executive’s relationship with the Company (other than the Inventions owned by Kannalife Sciences, Inc. which already have been acquired by the Company), and any other product, idea, discovery or Invention related to the present or anticipated business of the Company. The foregoing shall be in addition to any rights of the Company as a result of such Inventions being “ work for hire ” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended). For purposes of this Agreement, “ Inventions ” shall mean trade secrets, inventions, mask works, ideas, processes, formulas, data, research, results, programs or other works of authorship, improvements, discoveries, developments, designs and techniques, patented or unpatented. 

 

(b) Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Confidential and Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive (whether alone or jointly with others) while engaged by the Company, whether before or after the date hereof (“ Work Product ”), shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended) and belong exclusively to the Company. Executive shall promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions reasonably requested by the Board (whether during or after the Term) to establish and confirm such title and ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). 

 

(c) Executive shall promptly disclose any outside activities or interests, including any ownership or participation in the development of any Inventions. Executive understands that Executive is required to make such disclosures promptly if the activity or interest is related, either directly or indirectly, to (i) an area of research, development, service, product or product line of the Company, (ii) a manufacturing, development or research methodology or process of the Company or (iii) any activity that Consultant may be involved with on behalf of the Company. In furtherance of, and not in limitation of the foregoing, during the period of this Agreement and for twelve (12) months after termination of this Agreement, Executive will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by Executive, either alone or jointly with others. In addition, Executive will promptly disclose to the Company all patent applications filed by Executive or on Executive’s behalf within twelve (12) months after termination of this Agreement. 

 

(d) Notwithstanding anything to the contrary contained herein or in any other document, instrument or agreement between the Company and Executive, Executive shall not collaborate with any person or entity (a " Collaborating Party "), to develop any Inventions that are related to, arise out of or are in connection with cannabis (including but not limited to any products related thereto), and any other product, idea, discovery or Invention related to the present or anticipated cannabis based business of the Company (the " Covered Inventions "), unless prior to such collaboration the Collaborating Party acknowledges the obligations of Executive hereunder and irrevocably agrees to assign, transfer and convey all of its/their right, title and interest in and to any and all such Collaborative Inventions (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by the Collaborating Party, either alone or jointly with others, prior to or during the Collaborating Party's relationship with the Company and/or Executive. Prior to engaging with a Collaborating Party to develop Collaborative Inventions, Executive shall provide to the Company written substantiation that the Collaborating Party has agreed to assign any and all Collaborative Inventions in form and substance acceptable to the Company. 

 

Section 14. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company. The Company shall require any successor to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Any attempted assignment in contravention of this Section 14 shall be void ab initio

 

Section 15. Waiver and Amendments . Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 


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Section 16. Severability . If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, (i) the remaining terms and provisions hereof shall be unimpaired, and (ii) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof. 

 

Section 17. Governing Law . Except to the extent preempted by federal law, the validity, interpretation, construction, and performance of this agreement is governed by and is to be construed under the laws of the State of Pennsylvania applicable to agreements made and to be performed in that state, without regard to conflict of laws rules. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in Philadelphia, PA, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

Section 18. Notices . Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices and communications by Executive to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices and communications byte Company to Executive may be given to Executive personally or may be mailed to Executive at Executive’s last known address, as reflected in the Company’s records. Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing. 

 

Section 19. Entire Agreement . This Agreement and the agreements referred to herein constitute the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between Executive and the Company and its affiliates relating to the subject matter of this Agreement. 

 

Section 20. Counterparts; Electronic Delivery . This Agreement may be executed in two 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. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 

 

Section 21. Survival of Operative Sections . Upon any termination of Executive’s employment, the provisions of Section 7 through this Section 21 of this Agreement shall survive to the extent necessary to give effect to the provisions thereof. 

 

[Signature page follows.]


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IN WITNESS WHEREOF , the undersigned have executed this Executive Employment Agreement as of the date first above written.

 

THE COMPANY:

 

 

 

 

TYG SOLUTIONS CORP.

 

 

 

 

 

By:

/s/ Robert T. Malasek

 

 

Name:

Robert T. Malasek

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

/s/ Mark Corrao

 

 

Name:

Mark Corrao

 

 

 

 

 

 


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EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”), dated as of July 25, 2018 (the “ Effective Date ”), is entered into by and between TYG Solutions Corp., a Delaware corporation (the “ Company ”), and William Kinney (“ Executive ”).

 

RECITALS

 

WHEREAS , Executive and the Company desire to set forth the terms and conditions of Executive’s employment by the Company.

 

NOW, THEREFORE , in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:

 

AGREEMENT

 

Section 1. Term . Unless sooner terminated as provided in Section 9 of this Agreement, the term of this Agreement shall be for a period of one (1) year commencing on the Effective Date (the “ Initial Term ”). This Agreement shall automatically renew for successive six (6) month terms (the “ Renewal Term(s) ,” collectively with the “ Initial Term ”, the “ Term ”), unless either party provides written notice to the other of its intent to terminate this Agreement not less than thirty (30) days before the end of the then current Term. Notwithstanding the foregoing, the Company and Executive acknowledge and agree that Executive’s employment hereunder shall at all times be “at will,” which means that either Executive may resign at any time for any reason or for no reason, and that the Company may terminate Executive’s employment at any time for any reason or for no reason, in either case, subject to the applicable provisions of this Agreement. 

 

Section 2. Position, Duties and Responsibilities . During the Term, subject to the terms and conditions of this Agreement, the Company shall employ Executive, and Executive shall serve, as Chief Scientific Officer of the Company, reporting directly to the Chief Executive Officer of the Company. Executive shall also hold such other positions with the Company or any of its affiliated companies during the Term as the Board of Directors of the Company (as constituted from time to time, the “ Board ”) may specify and Executive may agree from time to time. Executive shall have such duties and responsibilities as shall be commensurate with the positions held by him at any time. Executive shall devote such professional time as is necessary to perform his obligations under this Agreement, and shall faithfully, industriously and to the best of his ability, experience and talent, perform the duties and responsibilities of his position(s). 

 

Section 3. Principal Location. Executive’s principal location of employment shall be 3805 Old Easton Road, Doylestown, PA 18902 (the “ Principal Executive Office ”), provided, however, that the Company may from time to time require Executive to travel temporarily to other locations in connection with the Company’s business. 

 

Section 4. Base Salary . During the Term, Executive shall be paid a base salary (the “ Base Salary ”) that initially shall be $12,500 per month, which is equivalent to $150,000 annually, subject to applicable tax withholding. The Base Salary will be paid bi-monthly on the first and the fifteenth day of each month, or otherwise in accordance with the regular payroll practices of the Company from time to time in effect. The Board may increase the Base Salary in its sole discretion. 

 

Section 5. Equity Awards . In further consideration for Executive’s services, the Board shall consider in good faith whether to grant equity awards to Executive based upon, among other things as the Board may deem relevant, the performance of the Executive and the Company. 

 

Section 6. Other Benefits . During the Term, Executive shall be entitled to receive such other employment-related benefits and perquisites as are provided to senior executives of the Company and its subsidiaries under the Company’s employee benefit plans and policies generally that are not specifically otherwise addressed herein, as such benefits may be changed from time to time in the sole discretion of the Company. 

 

Section 7. Reimbursement of Expenses . During the Term, the Company shall pay (or promptly reimburse Executive) for all reasonable out-of-pocket expenses incurred by Executive in the course of performing his duties and responsibilities hereunder, which are consistent with the Company’s policies in effect from time to time with respect to business expenses. 

 

Section 8. Payments . All payments by the Company to Executive shall be paid in U.S. dollars and shall be subject to any deductions for state and federal withholding tax, social security and all other employment taxes and payroll deductions required by law.  


Section 9. Termination of Employment.  

 

(a) Upon any termination of Executive’s employment, Executive (or his estate in the event his employment terminates upon his death) shall be entitled to be paid (i) all accrued but unpaid Base Salary through the last day of employment, (ii) any unpaid or unreimbursed expenses incurred during the Term in accordance with Section 7 of this Agreement, and (iii) any vested and accrued benefits with the inclusion of unused vacation accruals provided under the Company’s employee benefit plans and policies (including vacation policies) upon termination of employment in accordance with the terms contained therein (collectively, the “ Accrued Obligations ”). 

 

(b) The Company may terminate Executive’s employment at any time for Cause. “ Cause ” shall mean a good faith determination by the Board that Executive has: (i) engaged in any act of willful and gross misconduct or fraud in the course of his employment; (ii) been convicted of or pleaded “guilty” or “no contest” to a felony or other crime of moral turpitude; or (iii) materially breached this Agreement which, in the case of clause (iii) only, has not been cured within 30 days of written notice to Executive of such violation. Any termination for Cause shall be effective immediately upon delivery to Executive of written notice of such termination, subject to the cure right in clause (iii) above. In the event that the Company terminates Executive’s employment for Cause, he shall be entitled only to be paid the Accrued Obligations and shall have no right to any further compensation or any other benefits under this Agreement. 

 

(c) The Company may terminate Executive’s employment at any time without Cause, and Executive may resign for Good Reason at any time. “ Good Reason ” shall mean Executive’s voluntary resignation due to the Company, without Executive’s written consent, (A) effecting any material diminution in Executive’s duties and responsibilities that is inconsistent with Executive’s position with the Company, (B) materially reducing Executive’s compensation, (C) changing the Principal Executive Office to a location more than 50 miles from the prior Principal Executive Office, or (D) materially breaching this Agreement or any other agreement with Executive. Executive shall provide at least 30 days’ notice of his intent to resign for Good Reason. If the Company remedies the basis on which Executive proposes to resign for Good Reason prior to the expiration of the 30-day notice period, Executive’s resignation will be deemed withdrawn and shall not become effective. 

 

(d) If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, Executive shall be entitled to (1) be paid the Accrued Obligations; (2) receive his then current Base Salary during the then remaining Term (payable over the period in accordance with the Company’s regular payroll practices);and (3) in the event that Executive participates in any group health or benefit plans of the Company as of the time of such termination, (x) if Executive elects coverage under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA), continued coverage for himself and his family under the Company’s group health or benefit plan in which Executive was participating as of immediately prior to such termination of employment and reimbursement (the “ Premium Reimbursement ”) of the portion of the premiums that the Company would have paid had Executive’s employment continued for the then remaining Term following such termination (the “ Continued Coverage Period ”) until the earlier of (1) the end of the Continued Coverage Period or (2) the date on which Executive becomes eligible for health coverage through another employer; or (y) if such Premium Reimbursement would result in the imposition of an excise tax or other penalties on the Company or is not permissible under the terms of the Company’s applicable health or benefit plan, a dollar amount payable each month during the Continued Coverage Period (or applicable portion thereof) equal to the Premium Reimbursement that the Company would have paid for such month under clause (x) above (clauses (2) and (3) together, “ Severance ”). Executive’s right to receive Severance is expressly conditioned on Executive not engaging in any activities that violate any of the covenants set forth herein. Should executive engage in any such prohibited activities, then Executive shall have no further right or claim to any Severance to which Executive may otherwise be entitled under this subsection (d), from and after the date on which Executive engages in such activities and the Company shall have no further obligations with respect to the payment of Severance. 


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Section 10. Non-Competition; Non-Hire; Non-Disparagement . During the Term and for an additional period of one and one-half (1 1/2) years, Executive, and/or any business he is affiliated with, shall not engage or participate in any cannabis based business (for purposes of this Agreement, wherever the term "cannabis-based business" is used it shall mean any business engaged in the manufacture, sale, development, distribution, marketing or research and development of products that are derived from, related to any cannabinoids, including but not limited to, synthetic versions of cannabinoids, whether pharmaceutical or over-the-counter) that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company (the “ Restricted Period ”). In furtherance of, and not in limitation of the foregoing, during the Restricted Period, Executive shall not, directly or indirectly, accept employment with, be a consultant or advisor to, or own any equity interest in (other than shares of a publicly traded company that represent less than 2% of the outstanding shares) any business enterprise that is in competition in any manner whatsoever with the current or anticipated cannabis based business of the Company. During the Restricted Period, neither Executive nor his affiliates shall solicit for employment or hire any employee of the Company or any affiliate. Executive shall not directly or indirectly make any statement or any other expressions (in writing, orally or otherwise) on television, radio, the Internet or other media or to any third party, including in communication with any customers, vendors, prospects, employees, equity holders, governmental agency, sales or leasing representatives or distributors, which are in any way disparaging of the Company or any of its affiliates (or of any of their respective equity holders) or the products or services of the Company or any of its affiliates (or any of their respective equity holders) or places any of the foregoing in a negative light. 

 

Section 11. Section 409A . This Agreement and the amounts payable hereunder are intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), and shall be interpreted, construed, and performed consistent with such intent. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision in this Agreement to the contrary: (a) the payment of any “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive also has undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive’s termination of employment hereunder) shall be paid to Executive as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive’s ultimate “separation from service”; (b) any payment otherwise required to be made hereunder to Executive as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (to the extent applicable to Executive), in which case Executive shall be paid on the first business day following the expiration of such period of time, in a single payment, an amount equal to the aggregate amount of all delayed payments, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein; and (c) to the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation, (i) any such expense reimbursement shall be made by Executive no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year. 

 

Section 12. Disclosure of Information.  

 

(a) Obligation of Executive . Executive recognizes that the Company possesses a body of existing technology and intellectual property right and is engaged in a continuous program of research, development and production with respect to its business (present and future). Executive further understands and hereby acknowledges, understands and agrees that all Confidential and Proprietary Information, as set forth in Section 12(b), is the exclusive and confidential property of the Company and shall be at all times regarded, treated and protected as such in accordance with this Agreement. Executive acknowledges that all such Confidential and Proprietary Information is in the nature of a trade secret. Failure to mark any writing “confidential” shall not affect the confidential nature of such writing or the information contained therein. Notwithstanding any provision herein to the contrary, for purposes of this Section 12, the term “ Company ” shall refer to the Company and each of its parent and subsidiaries. 


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(b) Definition of Confidential and Proprietary Information . “ Confidential and Proprietary Information ” shall mean information which is used in the Company’s business and (1) is proprietary to, about or created by the Company; (2) gives the Company some competitive business advantage or the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interest of the Company; or (3) is designated as Confidential and Proprietary Information by the Company, known by the Executive to be considered confidential by the Company, or from all relevant circumstances should reasonably be assumed by the Executive to be confidential and proprietary to the Company, except such Confidential and Proprietary Information that (i) becomes known generally to the public through no fault of the Executive, (ii) is required to be disclosed by the Executive in connection with the performance of his duties as set forth in this Agreement, (iii) the disclosure of which, is necessary to comply with the applicable federal, state or local laws, legal process or any order or mandate of a court or other governmental authority, (iv) is reasonably believed by the Executive, based upon the advice of legal counsel, to be required to be disclosed in defense of a lawsuit or other legal or administrative action brought against the Executive, and (v) the Executive can show was acquired, or is acquired after the date of this Agreement from a third party and such third party did not obtain such Confidential and Proprietary Information from the Executive subject to or in violation of obligations similar to those set forth in this Section 12; provided, however, that in the case of subparagraphs (iii) and (iv), the Executive shall give the Company reasonable advance written notice of the Confidential and Proprietary Information intended to be disclosed and the reasons and circumstances surrounding such disclosure, in order to permit the Company to seek a protective order or other appropriate request for confidential treatment of the applicable Confidential and Proprietary Information. Such Confidential and Proprietary Information includes, but is not limited to, the following types of information and other information of a similar nature (whether or not reduced to writing or designated as confidential): 

 

(i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques; 

 

(ii) prototype products, current and currently contemplated products and projects, prototype resource information, copyrights, and other proprietary information, including, but not limited to, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, and know how related to the current, future and proposed products, projects, documents and services of the Company, prices or other financial data, volume of sales, promotional methods, marketing plans, lists of names or classes of customers or personnel, mode of operation and other details of its products and services, as well as names and expertise of employees, consultants, customers and prospects, lists of suppliers, business plan, forecasts, strategies, product or project development plans, forecasts, strategies, business opportunities, or financial statements and further includes, without limitation, any information of the Company concerning research, development, design details and specifications, financial information, procurement requirements, purchasing, customer lists, business forecasts, and such other information that derives independent economic value, actual or potential, for not being generally known to the public or to other persons; and 

 

(iii) Confidential and proprietary information provided to the Company by any actual or potential customer, government agency, or other third party (including businesses, consultants and other entities and individuals). 

In furtherance of, and not in limitation of the foregoing, Confidential and Proprietary Information shall include any copies, summaries, reports, analyses, compilations, interpretations, reflections, studies, derivatives or extracts thereof, or the like, prepared, contributed to and/or reviewed or received by Executive and which contains Confidential Proprietary Information.

 

(c) Covenants of Executive . As a consequence of Executive’s position with the Company, Executive will occupy a position of trust and confidence with respect to the Company’s affairs and business and will have access to Confidential and Proprietary Information. In view of the foregoing and of the consideration to be provided to the Executive, the Executive agrees that it is reasonable and necessary that the Executive make the following covenants, which covenants shall survive the termination of this Agreement, as follows: 

(i) Except as set forth in Section 12(b), the Executive will not disclose Confidential and Proprietary Information to any person or entity, either inside or outside the Company without first obtaining the Company’s prior written consent. 

 

(ii) Except as set forth in Section 12(b), Executive will not use, copy or transfer Confidential and Proprietary Information without first obtaining the Company’s prior written consent. 

 

(iii) Upon the termination of the Term, the Executive shall promptly deliver to the Company (or its designee) all written materials, records and documents made by the Executive or coming into his possession prior to or during the Term concerning the business or affairs of the Company, including all materials containing Confidential and Proprietary Information. Further, the Executive will make available to the Company all devices, at such times as reasonably requested, to remove any and all Confidential and Proprietary Information. 


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Section 13. Intellectual Property, Inventions and Patents.  

 

(a) Executive hereby assigns and agrees to assign in the future to the Company all of Executive’s right, title and interest in and to any and all Inventions (as defined below) (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or jointly with others, prior to or during Executive’s relationship with the Company (other than the Inventions owned by Kannalife Sciences, Inc. which already have been acquired by the Company), and any other product, idea, discovery or Invention related to the present or anticipated business of the Company. The foregoing shall be in addition to any rights of the Company as a result of such Inventions being “ work for hire ” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended). For purposes of this Agreement, “ Inventions ” shall mean trade secrets, inventions, mask works, ideas, processes, formulas, data, research, results, programs or other works of authorship, improvements, discoveries, developments, designs and techniques, patented or unpatented. 

 

(b) Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Confidential and Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive (whether alone or jointly with others) while engaged by the Company, whether before or after the date hereof (“ Work Product ”), shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended) and belong exclusively to the Company. Executive shall promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions reasonably requested by the Board (whether during or after the Term) to establish and confirm such title and ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). 

 

(c) Executive shall promptly disclose any outside activities or interests, including any ownership or participation in the development of any Inventions. Executive understands that Executive is required to make such disclosures promptly if the activity or interest is related, either directly or indirectly, to (i) an area of research, development, service, product or product line of the Company, (ii) a manufacturing, development or research methodology or process of the Company or (iii) any activity that Consultant may be involved with on behalf of the Company. In furtherance of, and not in limitation of the foregoing, during the period of this Agreement and for twelve (12) months after termination of this Agreement, Executive will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by Executive, either alone or jointly with others. In addition, Executive will promptly disclose to the Company all patent applications filed by Executive or on Executive’s behalf within twelve (12) months after termination of this Agreement. 

 

(d) Notwithstanding anything to the contrary contained herein or in any other document, instrument or agreement between the Company and Executive, Executive shall not collaborate with any person or entity (a " Collaborating Party "), to develop any Inventions that are related to, arise out of or are in connection with cannabis (including but not limited to any products related thereto), and any other product, idea, discovery or Invention related to the present or anticipated cannabis based business of the Company (the " Covered Inventions "), unless prior to such collaboration the Collaborating Party acknowledges the obligations of Executive hereunder and irrevocably agrees to assign, transfer and convey all of its/their right, title and interest in and to any and all such Collaborative Inventions (and all proprietary rights thereto) whether or not patentable or registrable under copyright of similar statutes, made or conceived or reduced to practice or learned by the Collaborating Party, either alone or jointly with others, prior to or during the Collaborating Party's relationship with the Company and/or Executive. Prior to engaging with a Collaborating Party to develop Collaborative Inventions, Executive shall provide to the Company written substantiation that the Collaborating Party has agreed to assign any and all Collaborative Inventions in form and substance acceptable to the Company. 

 

Section 14. Successors and Assigns . This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company. The Company shall require any successor to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Any attempted assignment in contravention of this Section 14 shall be void ab initio

 

Section 15. Waiver and Amendments. Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 


5


Section 16. Severability . If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, (i) the remaining terms and provisions hereof shall be unimpaired, and (ii) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof. 

 

Section 17. Governing Law . Except to the extent preempted by federal law, the validity, interpretation, construction, and performance of this agreement is governed by and is to be construed under the laws of the State of Pennsylvania applicable to agreements made and to be performed in that state, without regard to conflict of laws rules. The parties agree that, in the event of any dispute arising out of this Agreement or the transactions contemplated thereby, venue for such dispute shall be in the state or federal courts located in Philadelphia, PA, and that each party hereto waives any objection to such venue based on forum non conveniens. 

 

Section 18. Notices . Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices and communications by Executive to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices and communications byte Company to Executive may be given to Executive personally or may be mailed to Executive at Executive’s last known address, as reflected in the Company’s records. Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing. 

 

Section 19. Entire Agreement . This Agreement and the agreements referred to herein constitute the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between Executive and the Company and its affiliates relating to the subject matter of this Agreement. 

 

Section 20. Counterparts; Electronic Delivery . This Agreement may be executed in two 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. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 

 

Section 21. Survival of Operative Sections . Upon any termination of Executive’s employment, the provisions of Section 7 through this Section 21 of this Agreement shall survive to the extent necessary to give effect to the provisions thereof. 

 

[Signature page follows.]


6


IN WITNESS WHEREOF , the undersigned have executed this Executive Employment Agreement as of the date first above written.

 

THE COMPANY:

 

 

 

 

TYG SOLUTIONS CORP.

 

 

 

 

 

By:

/s/ Robert T. Malasek

 

 

Name:

Robert T. Malasek

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

/s/ William Kinney

 

 

Name:

William Kinney

 

 

 

 

 

 


7

 

Kannalife Sciences Finalizes Share Exchange Agreement

with TYG Solutions Corp.

 

July 31, 2018 – Kannalife Sciences, Inc. (“Kannalife”), a bio-pharmaceutical and phyto-medical company, is pleased to announce the completion of a share exchange transaction with TYG Solutions Corp. (OTC: TYYG). The closing of this transaction marks an important step in making Kannalife the only publicly traded company in the cannabinoid therapeutics space which holds an exclusive license to a U.S. government patent from the National Institutes of Health (“NIH”).

 

Eight years ago, as a privately held company, Kannalife embarked on a mission to advance the scientific and potential therapeutic value of cannabinoid therapeutics in treatment of certain diseases. The completion of the share exchange transaction with TYG Solutions Corp. brings the company to another starting point in the company’s history – now as a publicly traded company. This is especially noteworthy as the biotechnology space is in the middle of a very exciting resurgence, coupled with burgeoning investor interest in “anything cannabis.”

 

“While we certainly don’t consider ourselves an ‘anything cannabis’ company, we haven’t lost sight of the fact that Kannalife was among a select few companies in the pharmaceutical space to approach drug development in cannabinoid therapeutics,” Kannalife Sciences CEO Dean Petkanas said. “We were indeed, not only early movers, but also a pioneer in the pre-clinical research of cannabidiol (CBD) for certain disorders. In that, we have also developed alternative cannabidiol-derived new chemical entities (NCEs) to advance some of the clinical benefits of CBD while improving upon some of the pharmacokinetic limitations of CBD.”

 

“The transaction with TYYG allows us to look toward the future as a publicly traded company and continue our research into developing disruptive cannabinoid-based therapeutics for neurodegenerative and oxidative stress-related diseases,” Petkanas continued.

 

Kannalife Sciences currently holds two licenses with NIH. The first, an exclusive license for the commercialization of U.S. Patent #6,630,507, “Cannabinoids as Antioxidants and Neuroprotectants” (the “‘507 Patent”), to research and develop novel cannabinoid-based therapeutics to treat hepatic encephalopathy (HE); and the second, a non-exclusive license under the same ‘507 Patent to treat chronic traumatic encephalopathy (CTE).

 

Further, Kannalife has developed its own patented molecules led by KLS-13019 and was recently awarded U.S. Patent #9,611,213, “Functionalized 1,3-benzene diols and their method of use for the treatment of hepatic encephalopathy.” According to a February 10, 2016 publication in the American Chemical Society KLS-13019 was found to be 50-fold more potent as a neuroprotectant and >400-fold safer than CBD.

 

About Kannalife Sciences, Inc. – A Phyto-Medical Company™

 

Kannalife Sciences, Inc. is a phyto-medical company involved in the research and development of novel therapeutic agents designed to be neuroprotectants and immuno-modulators. Kannalife is currently conducting research and development at the Pennsylvania Biotechnology Center in Doylestown, PA, for target drug candidates to treat hepatic encephalopathy (“HE”) and chronic traumatic encephalopathy (“CTE”). HE and CTE are oxidative stress-related diseases that affect cognitive and behavioral functions. For more information, visit www.kannalife.com .

 

About TYG Solutions Corp.

 

TYG Solutions Corp. (OTC: TYYG) is a publicly-traded, SEC reporting company and parent entity of Kannalife Sciences, Inc. For more information, including current SEC filings, visit www.tygsolutionscorp.com.

 

FORWARD-LOOKING DISCLAIMER AND DISCLOSURES

 

This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks and uncertainties. The statements in this press release have not been evaluated by the FDA and are not intended to diagnose, treat or cure any disease. Kannalife does not sell or distribute any products that are in violation of the United States Controlled Substances Act. Kannalife does sell and distribute hemp-based products.


CONTACT:

 

Public Relations Contact:

Andrew Hard

Chief Executive Officer

CMW Media

P: 888-829-0070

andrew.hard@cmwmedia.com

www.cmwmedia.com