UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 reported): February 26, 2019

 

Novo Integrated Sciences, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   333-109118   59-3691650
(State or other jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification Number)

 

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

(Address of principal executive offices)

 

(206) 617-9797

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, 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 (see General Instruction A.2.)

 

[  ] 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 CF$ 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

     

 

 

Item 1.01. Entry into a Material Definitive Agreement .

 

On February 26, 2019, Novo Integrated Sciences, Inc. (the “Company”) and Novo Healthnet Limited (“NHL”) entered into a Software License Agreement (the “Cloud DX License”) with Cloud DX Inc. (“Cloud DX”) pursuant to which Cloud DX agreed to sell, and NHL agreed to purchase, a fully paid up, perpetual license, with 5-year conditional exclusivity, for the Cloud DX Bundled Pulsewave PAD-1A USB Blood Pressure Device, up-to-date product releases and Licensed Software Products (the “Licensed Software”) to include the:

 

  ● Cloud DX Connected Health web portal for clinical users,
  ● Cloud DX Connected Health mobile app,
  ● Cloud DX Connected Health Windows app, and
  ● Cloud DX Connected Health MacOS app.

 

Pursuant to the terms of the Cloud DX License, Cloud DX also agreed to sell, and NHL agreed to purchase, 4,000 fully functional Pulsewave PAD 1A USB blood pressure monitor devices bundled with the perpetual license discussed above (the “Bundled Devices”).

 

The Cloud DX License granted to NHL and its majority-owned subsidiaries, holding companies, divisions and affiliates, other than physiotherapy clinics owned and operated by Closing The Gap Healthcare Inc., the right to use and sub-license the Licensed Software and re-sell the Bundled Devices pursuant to the terms of the Cloud DX License in the physical therapy clinic marketplace in North America in exchange for the purchase price as set forth below:

 

  ● Upon the closing, the Company issued 458,349 restricted shares of its common stock having a value (as calculated as set forth in the Cloud DX License) of CAD$1,000,000 (approximately $758,567 as of February 26, 2019), and
     
  ● Cloud DX will invoice CAD$250,000 (approximately $189,642 as of February 26, 2019) to NHL based on the following deliverables, and paid on the following schedule:

 

Cloud DX deliverable   Novo payment (terms: Net 15)
Heart Friendly Program launches in Clinic #1   CAD$ 50,000 (approximately $37,929 as of February 26, 2019)
Novo-branded Android app delivered as APK file   CAD$ 35,000 (approximately $26,550 as of February 26, 2019)
Novo-branded Clinical portal website delivered   CAD$ 35,000 (approximately $26,550 as of February 26, 2019)
Pulsewave PAD-1A devices – 1st delivery   CAD$ 20,000 (approximately $15,171 as of February 26, 2019)
Marketing services / materials delivered   CAD$ 25,000 (approximately $18,964 as of February 26, 2019)
Cloud DX hires dedicated Novo support FTE   CAD$ 85,000 (approximately $64,478 as of February 26, 2019)

 

Pursuant to the terms of the Cloud DX License, the perpetual license with 5-year conditional exclusivity is subject to the following conditions:

 

  a) Year 1 – NHL has the right to sell and market the Licensed Software exclusively to “Physical Therapy Clinics,” as hereinafter defined, in Canada and the U.S. for the first 5 years after the execution date of the Cloud DX License, with the exception of clinics operated by Closing the Gap Healthcare. “Physical Therapy Clinics” means any clinic that offers para-medical services focused on physical therapy, orthotics, chiropractic, nutrition, massage, wellness, esthetic and cosmetic services (e.g. “botox”, “restylane”) and related non-medical services, sometimes called “multi-disciplinary clinics”, and excludes pharmacies and services offered by licensed medical professionals including medical doctors (MD/PhD), nurses, nurse practitioners, physician assistants, licensed practical nurses and staff that deliver medical care.
  b) During the 5-year initial period, NHL is expected to sell a minimum of 4,000 Bundled Devices and to sell a minimum of 200 franchises.
  c) In Year 6 and beyond, additional 1-year periods of conditional exclusivity will be granted provided that NHL sales in the preceding 12 months are equal to total sales achieved in Year 5.
  d) If the minimums set forth in item (b) above are not met, continued exclusivity will require the payment of an additional fee, to be negotiated in good faith between the parties.
  e) 2-Way Exclusivity – NHL agrees not to replace the Software and Bundled Devices or offer a competitive offering as long as NHL is representing the Cloud DX product line.

 

     

 

 

On February 27, 2019, the Company, NHL and Activa Clinics (“Activa”) entered into a letter agreement (the “Letter Agreement”) that extends the termination date of the Binding Letter of Intent among the Company, NHL and Activa, as amended, from February 28, 2019 to April 5, 2019. The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

 

On February 27, 2019, the Company, NHL and CannaPiece Group Inc. (“CannaPiece”) entered into Amendment No. 3 (“Amendment No. 3”) to the Share Exchange Agreement, dated December 18, 2018, by and among the Company, NHL and CannaPiece, as amended, pursuant to which the parties agreed to extend the delivery date of the Investment (as defined therein) from February 28, 2019 to April 30, 2019.

 

The foregoing description of the Cloud DX License, the Letter Agreement and Amendment No. 3 does not purport to be complete and is qualified in its entirety by reference to the full text of the Cloud DX License, the Letter Agreement and Amendment No. 3, copies of which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
10.1   Software License Agreement dated February 26, 2019 by and among Novo Integrated Sciences, Inc., Novo Healthnet Limited and Cloud DX Inc.
10.2   Letter Agreement dated February 27, 2019 by and among Novo Integrated Sciences, Inc., Novo Healthnet Limited and Activa Clinics.
10.3   Amendment No. 3, dated February 27, 2019, to Share Exchange Agreement dated December 18, 2018, as amended, by and among Novo Integrated Sciences, Inc., Novo Healthnet Limited and CannaPiece Group Inc.

 

     

 

 

SIGNATURE

 

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

 

  Novo Integrated Sciences, Inc.
     
Dated: March 5, 2019 By: /s/ Robert Mattacchione
    Robert Mattacchione
    Chief Executive Officer

 

     

 

 

 

Exhibit 10.1

 

THIS SOFTWARE LICENSE AGREEMENT made the 26th day of February 2019.

 

B E T W E E N:

 

NOVO INTEGRATED SCIENCES INC., a corporation incorporated under the laws of the State of Nevada;

 

(“ Parent ” )

 

-and-

 

NOVO HEALTHNET LIMITED , a wholly owned Canadian subsidiary of the Parent;

 

(“Purchaser”)

 

- and -

 

CLOUD DX INC., a corporation incorporated under the laws of the State of Delaware;

 

(“ Seller ”)

 

BACKGROUND:

 

1. Seller owns all rights, title and interest to the Software; and
   
2. Seller has the exclusive right to License the Software worldwide into all industry sectors; and
   
3. Seller wishes to sell, and Purchaser wishes to buy, a fully paid up, perpetual license to use the Seller’s Software in accordance with the terms set forth herein;
   
4. Seller wishes to sell, and Purchaser wishes to buy, 4,000 fully functional Pulsewave PAD 1A USB Blood Pressure Monitor Devices bundled with the perpetual license mentioned in point 3 above.

 

NOW THEREFORE in consideration of the background and the mutual covenants contained herein and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties agree as follows:

 

Article 1
INTERPRETATION

 

1.1 Definitions

 

Whenever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following words and terms shall have the meaning ascribed to them in this Section 1.1:

 

 
 

 

  (a) “ Agreement ” means this Software License Agreement, all Schedules hereto and all and any other instruments supplemental hereto or in amendment or confirmation hereof; the words “hereof”, “hereto” and “hereunder” and similar expressions refer to this Agreement and not to any particular article or section; the word “Article” or “Section” refers to the specified article or section of this Agreement;
     
  (b) “ Business Day ” means any day, other than a Saturday, Sunday, statutory or civic holiday in New York, NY;
     
  (c) “Confidential Information” of a Party means all data and information relating to the business and management of such Party which, when disclosed to the other Party, is reasonably designated as confidential, provided, however, that Confidential Information shall not include any data or information which:

 

  (i) is or becomes publicly available through no fault of the other Party;
     
  (ii) is already in the rightful possession of the other Party prior to its receipt from the Party
     
  (iii) is independently developed by the other Party without knowledge or use of or reference to the Confidential Information of the Party;
     
  (iv) is rightfully obtained by the other Party from a third party not in violation of any confidentiality obligation of such third party;
     
  (v) is disclosed with the written consent of the Party whose information it is; or
     
  (vi) is disclosed pursuant to court order or other legal compulsion;

 

  (d) “ Closing ” means the date of execution by all parties and the subsequent filing of the Agreement with the SEC.
     
  (e) “ Documentation ” means any and all interpretative comments therein and all information in documentary form used or useful in or relating to the design, use, sale, maintenance or marketing of the Licensed Software and associated Bundled Pulsewave Devices including, but not limited to, systems manuals, program manuals, test and diagnostic information, maintenance information, program listings, flow charts, drawings, application manuals, user manuals and operating procedures including the documentation identified in Schedule A;
     
  (f) “ Group ” in relation to a company, its majority-owned subsidiaries, holding companies, divisions and affiliates;
     
  (g) “ Including ” means “including without limitation” and is not to be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it;
     
  (h) “ Intellectual Property ” includes any proprietary right provided under

 

  (i) patent law,
     
  (ii) copyright law,

 

 
 

 

  (iii) trademark law,
     
  (iv) design patent or industrial design law,
     
  (v) internet domain names,
     
  (vi) any other statutory provision or common law principle applicable to the Licensed Software and Bundled Pulsewave Devices which may provide a right in either:

 

  (A) ideas, formulae, algorithms, concepts, inventions or know-how generally including trade secret law, or
     
  (B) the expression of such ideas, formulae, algorithms, concepts, invention or know-how;

 

  (i) “Licensed Software” means the software product licensed by Purchaser as specified on Schedule “A”;
     
  (j) “Bundled Pulsewave Devices” means the Pulsewave Devices that were sold to the Purchaser to be used with the Licensed Software as specified in Schedule “A”.
     
  (k) “ Parties ” means Seller, Purchaser and Parent, collectively, and “ Party ” means any one of them;
     
  (l) “ Person ” includes an individual, corporation, partnership, joint venture, trust, unincorporated organization, or any agency or instrumentality thereof or any other juridical entity;
     
  (m) “ Purchase Price ” means the purchase price to be paid by the Purchaser to Seller for the Licensed Software and Bundled Pulsewave Devices as defined in Schedule “B”.
     
  (n) “Physiotherapy Clinics” means any clinic that offers para-medical services focused on physical therapy, orthotics, chiropractic, nutrition, massage, wellness, esthetic & cosmetic services (e.g. “botox”, “restylane”) and related non-medical services, sometimes called “multi-disciplinary clinics”. This definition excludes pharmacies and services offered by licensed medical professionals including medical doctors (MD/PhD), nurses, nurse practitioners, physician assistants, licensed practical nurses and staff that deliver medical care.
     
  (o) “Exclusivity Conditions” means the conditions as specified in Schedule “C”.
     
  (p) “Additional Services & Privileges” means the additional services & privileges that are provided by CDX on a “for fee” basis or “no fee” basis as specified in schedule “D”
     
  (q) “CTG Carve Out” means that Physiotherapy Clinics owned and operated by Closing The Gap Healthcare Inc. (CTG) are excluded from the exclusive rights granted and marketplace that is assigned to the Purchaser by this Agreement. (CTG currently owns and operates 11 Physiotherapy Clinics in Canada).

 

1.2 Extended Meanings

 

Words expressed in the singular include the plural and vice versa and words in one gender include all genders.

 

 
 

 

1.3 Entire Agreement

 

This Agreement, including Schedules “A/B/C/D” hereto, together with the agreements and other documents to be delivered pursuant hereto, constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth herein and therein. The execution of this Agreement has not been induced by, nor do either of the Parties regard as material any representation not made expressly herein. No supplement, modification or waiver or termination of this Agreement shall be binding unless executed in writing by the Party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

 

1.4 Headings

 

The division of this Agreement into Articles, Sections, Subsections and Schedules and the insertion of headings are for convenience of reference only and shall not affect the construction of interpretation of this Agreement. The Article, Section, Subsection and Schedule headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer and shall not be considered part of this Agreement.

 

1.5 Schedules

 

The following Schedules form part of this Agreement:

 

  Schedule “A” - Description and Use of Licensed Software & Bundled Pulsewave Devices
     
  Schedule “B” - Description of Payment of Purchase Price
     
  Schedule “C”- Description of Exclusivity Conditions
     
  Schedule “D”- Description of Additional Services & Privileges

 

Article 2

PURCHASE AND SALE OF PERPETUAL SOFTWARE LICENSE & BUNDLED PULSEWAVE DEVICES

 

2.1 Software License & Bundled Pulsewave Devices

 

Seller hereby grants to Purchaser and its Group a fully paid up, perpetual, conditionally exclusive licence (Except for the CTG carve out as specified in section 1.1 (o)) to use the Licensed Software with the Bundled Pulsewave Devices in the form and with the conditions outlined in detail in Schedule “A/C/D” in the Physical Therapy Clinic marketplace in North America, for the Purchase Price and Purchaser accepts such license on the terms set out herein. .

 

2.2 No Sale of Intellectual Property

 

The grant of a licence to use the Licensed Software, as set forth herein, shall not in any way be construed to (i) effect any sale to Purchaser of any of the Seller’s proprietary technology or (ii) grant Purchaser any rights in, or to, any Intellectual Property Rights of the Seller other than in accordance with this Agreement.

 

 
 

 

Article 3

CONSIDERATION FOR PURCHASED LICENSE & BUNDLED PULSEWAVE DEVICES

 

3.1 Purchase Price

 

The purchase price (the “ Purchase Price ”) payable by the Purchaser to Seller for the Software License shall be in the form outlined in detail in Schedule “B”.

 

Article 4

REPRESENTATIONS AND WARRANTIES

 

4.1 Representations and Warranties of Seller

 

Seller represents and warrants to Purchaser (and acknowledges that Purchaser is relying thereon) that:

 

  (a) Seller Capacity to Own Assets – Seller has all necessary corporate power, authority and capacity to own its property and assets (including the Licensed Software).
     
  (b) Due Authorization – Seller has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder have been duly authorized by all necessary corporate action on the part of Seller.
     
  (c) Enforceability of Obligations - This Agreement constitutes a valid and binding obligation of Seller enforceable against it in accordance with its terms, provided that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws generally affecting enforceability of creditors’ rights and that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.
     
  (d) Absence of Conflicting Agreements – Seller is not party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, charter or by-law provision, statute, regulation, order, judgment, decree or law which would be violated, contravened, breached by, or under which default would occur as a result of, the execution and delivery of this Agreement or the consummation of any of the transactions provided for herein other than with respect to certain third party consents which are to be obtained as contemplated hereunder and the CTG Carve Out as defined above in this agreement.
     
  (e) Schedules- Schedule “A” includes an accurate and comprehensive description of the Licensed Software & Bundled Pulsewave Devices. Schedule “B” contains a complete and accurate description of the Purchase Price. Schedule “C”- contains a description of Conditional Exclusivity Conditions. Schedule “D”- contains a description of Additional Services & Privileges provided by CDX to the Purchaser.
     
  (f) Intellectual Property - The Seller is the sole legal and beneficial owner of the Intellectual Property and holds its interest in the Intellectual Property free and clear of all encumbrances whatsoever.
     
  (g) Maintenance of Intellectual Property - Seller has dealt with the Intellectual Property in the Licensed Software in such manner as to preserve its rights therein including the use of proper notices indicating ownership of and/or rights to use the Intellectual Property, to the extent reasonably necessary for the protection of the Intellectual Property, and the prevention of any disclosure to the public of any of the confidential information of each which would impair Seller’s rights therein;

 

 
 

 

  (h) Standards - Seller used consistent and reasonable commercial standards of quality in their creation and development of the Licensed Software. Seller complied in all material respects with all applicable laws and regulations of Canada in the development of the Licensed Software.
     
  (i) Documentation – Seller will deliver to Purchaser all Documentation pertaining to the Licensed Software & Bundled Pulsewave Devices that it generally provides to other customers, including any copies of documentation held by companies that developed the Licensed Software; provided that the Documentation will not include any source code or other trade secrets of Seller.
     
  (j) Third Party Claims - Seller represents and warrants, and to the best of their knowledge, no claim has been made that the use of any of the Intellectual Property does or may violate the rights of any Person;
     
  (k) Right to License – Seller is the absolute beneficial owner of the Licensed Software and has the absolute right and ability to license the Licensed Software.
     
  (l) No Litigation - Seller represents and warrants, there is no suit, action, litigation, arbitration proceeding or governmental proceeding, including appeals and applications for review, in progress, pending or to the best of Seller’s knowledge, threatened against or relating to Seller or affecting the Licensed Software which if determined adversely to Seller might materially and adversely affect the Licensed Software and, to the best of Seller’s knowledge, there is not presently outstanding against Seller any judgment, decree, injunction, rule or order of any court, governmental department, commission, agency, instrumentality or arbitrator relating to or affecting the Licensed Software.

 

4.2 Representations and Warranties of Purchaser and Parent

 

Purchaser and Parent hereby represents and warrants to Seller (and acknowledges that the Seller is relying thereon) that:

 

  (a) Organization and Good Standing – Purchaser and Parent are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction of incorporation.
     
  (b) Due Authorization – Purchaser and Parent have all necessary corporate power and authority to enter into this Agreement and to carry out their obligations hereunder; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder have been duly authorized by all necessary corporate action on the part of Purchaser and Parent.
     
  (c) Enforceability of Obligations - This Agreement constitutes a valid and binding obligation of Purchaser and Parent enforceable against it in accordance with its terms provided that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws generally affecting enforceability of creditor’s rights and that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.

 

 
 

 

4.3 Investment Representations .

 

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

 

 
 

 

  (g) Legends . Cloud Dx Inc. understand that the Parent Shares issued, until such time as the Parent Shares have been registered under the Securities Act, or may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Parent Shares may bear a standard Rule 144 legend and a stop-transfer order may be placed against transfer of the certificates for such Parent Shares.
     
  (h) Removal . The legend(s) referenced in Section 3.18(g) shall be removed and the Parent shall issue a certificate without such legend to the holder of any Parent Shares upon which it is stamped, if, unless otherwise required by applicable state securities Laws, (a) the Parent Shares are registered for sale under an effective registration statement filed under the Securities Act, or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Parent with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Parent Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Parent so that the sale or transfer is affected. Cloud Dx Inc. agrees to sell all Parent Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with SEC regulations.

 

4.4 Non-Waiver

 

No investigations made by or on behalf of either Party at any time shall have the effect of waiving, diminishing the scope of or otherwise affecting any representation or warranty made by the other Party herein or pursuant hereto. No waiver by either Party of any condition, in whole or in part, shall operate as a waiver of any other condition.

 

4.5 Nature and Survival of Representations and Warranties

 

All statements contained in any certificate or other instrument delivered by or on behalf of a Party pursuant to or in connection with the transactions contemplated by this Agreement shall be deemed to be made by such Party hereunder. All representations, warranties, covenants and agreements herein contained on the part of each of the Parties shall survive the transfer of title to the Licensed Software and the payment of the consideration therefor until the date that is 18 months after the closing of the transactions contemplated by this Agreement.

 

 
 

 

Article 5

OTHER COVENANTS OF THE PARTIES

 

5.1 Confidentiality

 

The Purchaser covenants and agrees that it shall not ever directly or indirectly use or divulge to any other Person any information that is confidential or proprietary information relating to or forming part of the Licensed Software, including any Intellectual Property therein. Seller shall at all times take such steps as reasonably may be necessary to ensure that their directors, officers, employees and agents retain the confidentiality of all such confidential or proprietary information.

 

Article 6

INDEMNIFICATION; LIMITATION OF LIABILITY

 

6.1 Indemnification for Breaches of Covenants, Representations and Warranties

 

Seller covenants and agrees with Purchaser and Parent to indemnify and save harmless Purchaser and Parent from and against any third party claims, demands, actions, causes of action, damage, loss, costs, liability or expense (hereinafter in this Article Six called “ Claims ”) which may be made or brought against Purchaser and/or which it may suffer or incur as a result of, in respect of, or arising out of any non-fulfillment of any covenant or agreement on the part of Seller under this Agreement or any document, agreement or instrument delivered pursuant hereto or any incorrectness in or breach of any representation or warranty of Seller contained herein. The foregoing obligation of indemnification in respect of such Claims shall be subject to the requirement that the Seller shall, in respect of any Claim made by any third party, have the right, but not the obligation, in its sole expense to resist, defend and compromise such claim provided it does so diligently and reasonably throughout the period while such Claim exists; otherwise the Purchaser and Parent shall have the right to resist, defend and compromise such Claim at the sole expense of Seller. Regardless of the Party who defends against any such Claim, the other Party agrees to cooperate in good faith with the defending Party.

 

6.2 Limitation of Liability

 

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, COVER, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST DATA OR LOST PROFITS, HOWEVER ARISING, WHETHER BASED IN CONTRACT, TORT, OR ANY LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATIONS SHALL NOT APPLY TO CLAIMS FOR BODILY INJURY OR DEATH OR DAMAGE TO REAL OR TANGIBLE PROPERTY DIRECTLY CAUSED BY SELLER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN ANY CASE, SELLER’S ENTIRE LIABILITY UNDER ANY PROVISION OF THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY PURCHASER FOR THE LICENSE TO THE SOFTWARE DURING THE SIX MONTH PERIOD PRECEDING SUCH CLAIM.

 

Article 7
GENERAL

 

7.1 Limited Warranty

 

Notwithstanding the Limited Warranties included with each device sold by the Seller to the Purchaser under this Agreement, any Pulsewave PAD-1A device found to be defective within 30 days of activation by an end user during the first 24 months of this agreement can be exchanged for a fully functional equivalent Pulsewave device at no cost to the Purchaser.

 

 
 

 

7.2 Expenses

 

Each Party represents and warrants to the other Party that the other Party will not be liable for any brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated hereby because of any action taken by, or agreement or understanding reached by, that Party. Each Party shall be responsible for its own costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Agreement and the transactions contemplated hereby.

 

7.3 Time

 

Time shall be of the essence hereof.

 

7.4 Notices

 

Any notice, demand or other communication required or permitted to be given or made hereunder or for the purposes hereof (hereinafter in this Section 7.4 called a “ Notice ”) to any Party shall be in writing and shall be sufficiently given / made if:

 

  (a) Delivered in person during normal business hours on a Business Day and left with a receptionist or other responsible employee of the relevant party at the applicable address set forth below;
     
  (b) Sent by prepaid first-class mail; or
     
  (c) Sent by any electronic means of sending messages, including facsimile transmission, which produces a paper record (“ Electronic Transmission ”) during normal business hours on a Business Day;

 

In the case of a notice to Seller, address to:

 

  Cloud DX Inc., -and/or-
  100 - 72 Victoria Street South 20 Jay Street, #834
  Kitchener, ON N2G 4Y9, Canada Brooklyn NY, 11201
  Email – ceo@clouddx.com  

 

And in the case of a notice to Purchaser, addressed to it at:

 

Novo Healthnet Limited

119 Westcreek Drive, Suite 1

Woodbridge, ON L4L 9N6

Email - pdalcourt@novohealthnet.com

 

Novo Integrated Sciences Inc.

 

Attn: Chris David, President

11120 NE 2 nd St., Suite 200

Bellevue, WA 98004

 

Email: cdavid@novointegrated.com

 

 
 

 

Each notice sent in accordance with this section shall be deemed to have been received:

 

  (i) On the third Business Day after it was mailed (excluding each Business day during which there existed a general interruption of postal services due to strike, lockout or other cause); or
     
  (ii) On the same day that it was delivered in person or sent by Electronic Transmission, or at the start of business on the first Business Day thereafter if the day on which it was sent by Electronic Transmission was not a Business Day.

 

Any Party may change its address for notice by giving notice to the other Parties (as provided in this section).

 

7.5 Assignment

 

No Party shall assign its rights under this Agreement without the prior written consent of the other Party.

 

7.6 Binding on Successors

 

This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

 

7.7 Waiver

 

Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Party giving it, and only in the specific instance and for the specific purpose for which it has been given. No failure on the part of any Party to exercise, and no delay in exercising any right under this Agreement shall operate as a waiver of such right. No single or partial exercise of any such right shall preclude any other or further exercise of such right or the exercise of any other right.

 

7.8 Invalidity

 

If any of the provisions contained in this Agreement is found by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein shall not be in any way affected or impaired thereby.

 

7.9 Further Assurances

 

Each Party shall do such acts and shall execute such further documents, conveyances, deeds, assignments, transfers and the like as may be reasonably required, and will cause the doing of such acts and will cause the execution of such further documents as are within its power as any other Party may in writing at any time and from time to time reasonably request be done and or executed, in order to give full effect to the provisions of this Agreement.

 

7.10 Survival

 

The provisions of Article 4, Article 5, Article 6, and Article 7 shall remain in force and effect after the termination hereof, until the date that is 36 months after such termination.

 

 
 

 

7.11 Independent Legal Advice

 

The Parties hereby acknowledge that each has been advised to seek independent legal counsel in respect of the Agreement and the matters contemplated herein. To the extent that a Party declines to receive independent legal counsel in respect of the agreement, that Party waives the right, should a dispute later develop, to rely on its lack of independent legal counsel to avoid its obligations, to seek indulgences from the other Parties or to otherwise attack the integrity of the agreement and the provisions thereof, in whole or in part.

 

7.12 Venue

 

The Parties agree that the venue for all disputes arising under this agreement or relating hereto shall be the federal and state courts of the State of Delaware, United States of America. Each Party agrees to the jurisdiction of such courts for all disputes between the Parties relating to this Agreement.

 

7.13 Counterparts and Facsimile

 

This agreement may be executed by the Parties in one or more counterparts by original or facsimile signature or by electronic transmission or pdf, each of which when so executed and delivered shall be an original and such counterparts shall together constitute one and the same instrument.

 

[Signature page follows]

 

 
 

 

SIGNATURE PAGE

 

IN WITNESS WHEREOF the Parties have duly executed this Agreement.

 

 

Seller

CLOUD DX, INC.

     
  By: /s/ Robert Kaul
  Name: Robert Kaul
  Title: CEO

 

 

Purchaser

NOVO HEALTHNET LIMITED.

     
  By: /s/ Robert Mattacchione
  Name: Robert Mattacchione
  Title: CHAIRMAN

 

 

Parent

Novo Integrated Sciences Inc.

   
  By: /s/ Robert Mattacchione
  Name: Robert Mattacchione
  Title: CEO

 

 
 

 

SCHEDULE “A”

DESCRIPTION OF & THE RIGHT TO USE THE LICENSED SOFTWARE & BUNDLED PULSEWAVE DEVICES

 

1) Licensed Software Products

 

The Licensed Software Products consist of the following CLOUD DX software products, which represent the current production releases:

 

a. Cloud DX Connected Health web portal for Clinical users
     
b. Cloud DX Connected Health Mobile app
     
c. Cloud DX Connected Health Windows app
     
d. Cloud DX Connected Health MacOS app

 

2) Bundled Pulsewave Devices : An initial Pulsewave PAD-1A USB Blood Pressure Device inventory of 4,000 units is included in the upfront fee
     
3) The PAD - 1A devices shall be stored at the Purchaser’s expense in a climate controlled, ISO certified warehouse rented to the Purchaser by the Seller, and shipped at the Purchaser’s expense upon delivery of written shipping instructions, as per the Sellers standard shipping & handling terms.
     
4) Right to Use:

 

a. Purchaser hereby licenses the right to use and sub-license the Licensed Software Products and resell the Bundled Pulsewave Devices mentioned above subject to the following conditions:

 

(I) Internally within their corporate operations, and the operations of their majority-owned subsidiaries, divisions and affiliates throughout the world.
     
(II) Externally (by way of sub-licence or otherwise) as part of the services offered by the Purchaser and/or any one or more of its majority-owned subsidiaries, divisions and affiliates to its and/or their customers, clients and franchisees in accordance with the terms and conditions in this Agreement.
     
(III) The Seller specifically reserves any and all rights to the Licensed Products, and this agreement contains no rights whatsoever to any Intellectual Property of the Licensed Products or the Bundled Pulsewave Devices.

 

 
 

 

SCHEDULE “B”

 

PAYMENT OF PURCHASE PRICE

 

Payment Terms : The total Purchase Price of the perpetual license including an initial Bundled Pulsewave Device stocking order as described in Schedule “A” point (d) and the Additional Services & Privileges as described in Schedule “D” is $1,250,000.00 CAD which shall be paid to the Seller upon the following terms:

 

  1. Upon closing - $1,000,000 CAD shall be paid in the form of common shares in Novo Integrated Sciences Inc. (the “Payment Shares”) having a par value of $0.001.
     
    The number of shares paid to Cloud DX, Inc. will equal $1,000,000 CAD, converted to US dollars (USD) based on X-rates.com exchange rate on the day prior to the closing date, divided by the average closing price of Novo Integrated Sciences Inc. shares over the 10 business days preceding the closing date.
     
2. Cash component of $250,000 CAD shall be invoiced to the Purchaser by the Seller based on the following deliverables, and paid on the following schedule:

 

Cloud DX deliverable  

Novo payment

(terms: Net 15)

       
Heart Friendly Program launches in Clinic #1   $ 50,000 CAD
         
Novo-branded Android app delivered as APK file   $ 35,000 CAD
         
Novo-branded Clinical portal website delivered   $ 35,000 CAD
         
Pulsewave PAD-1A devices – 1 st delivery   $ 20,000 CAD
         
Marketing services / materials delivered   $ 25,000 CAD
         
Cloud DX hires dedicated Novo support FTE   $ 85,000 CAD

 

Payments to the Seller shall be made by wire transfer to the following account:

 

Cloud DX, Inc.

20 Jay Street, #834 Brooklyn NY, 11201

Bank Name: Santander Bank

Bank Address: 40 Washington Street, Brooklyn NY, 11201

Account name: Cloud DX, Inc.

Account number: 2771788527

Routing number: 231372691

SWIFT number (if needed) - SVRNUS33

 

 
 

 

SCHEDULE “C”

 

CONDITIONAL EXCLUSIVITY CONDITIONS

 

Licensed Software Exclusivity Conditions

 

  ● Perpetual license – With 5-year Conditional Exclusivity based on the following criteria:

 

  a. Year 1 - The Purchaser shall have the right to sell and market the Licensed Software exclusively to “Physical Therapy Clinics” as defined in Section 1.1 (m), in Canada and the United States of America, for the first 5 years after the execution date of the agreement, with the exception of Clinics operated by Closing the Gap Healthcare.
     
  b. During the 5 year initial period, Novo is expected to sell a minimum of 4,000 Pulsewave devices, and sell a minimum of 200 Franchises;
     
  c. In Year 6 and beyond, additional 1-year periods of conditional exclusivity shall be granted provided that Novo sales in the preceding 12 months are equal to total sales achieved in Year 5.
     
  d. If the minimums in section (b) above are not met, continued Exclusivity will require the payment of an additional fee, to be negotiated in good faith between the parties.
     
  e. 2-Way Exclusivity – Novo agrees not to replace the Licensed Software and Pulsewave Devices or offer a competitive offering as long as they are representing the CDX product line.

 

 
 

 

SCHEDULE “D”

 

ADDITIONAL SERVICES & PRIVILEGES

 

Additional Services & Privileges

 

  1. Cloud DX will pay to white label the mobile apps and the Clinician website portal as part of the upfront fee. This project will be described in a separate Statement of Work negotiated between the parties in good faith, including the scope and specifications for the addition of the Purchasers brand images, colors and logos to the Licensed Software.
     
  2. Cloud DX will offer a dedicated support person for a minimum of 1 year, M-F, business hours – as part of the upfront license fee. This person will be employed by Cloud DX, starting on a mutually agreed date, and will be responsible for deliverables agreed upon between Cloud DX and the Purchaser. Subject to that agreement, the Purchaser may offer certain incentives based on this Cloud DX employee meeting agreed upon deliverables.
     
  3. Cloud DX will provide mutually agreed upon marketing collateral to a total value of $10,000 as part of the upfront fee
     
  4. Cloud DX will provide up to 100 hours per year of graphic design time for 1 year as part of the upfront fee
     
  5. Cloud DX will allow Novo to purchase an additional 2,000 Pulsewave PAD-1A blood pressure cuffs at a cost of C$64.00 CAD/unit, subject to availability.
     
  6. Cloud DX will allow Novo to purchase other/additional Cloud DX devices (scales, oximeters, thermometers, Pulsewave BT adapters) at the Seller’s full landed cost +15% for the duration of the exclusivity period.
     
  7. The Parties agree that Cloud DX services in addition to the Licensed Products & Bundled Pulsewave Devices, including but not limited to customization, localization, installation, hardware configuration, second level technical support, hosting services and any other implementation or delivery service requested of the Seller by the Purchaser shall be quoted and invoiced as a separate service, not covered by this Software License Agreement.
     
  8. The first year of hosting is included in the upfront license fee,
     
  9. The costs for hosting during years 2 through 5 will be billed to the Purchaser as follows:

 

  (i) For every user activated on the system, Cloud DX will bill $3.00 per month.
  (ii) Hosting costs will be invoiced to the Purchaser 30 days after the end of each calendar quarter
  (iii) Total hosting costs will be capped at $6,250.00 per quarter
  (iv) Once the maximum hosting cost is reached, if the Purchaser agrees to pay that cost in a lump sum, Cloud DX will reduce the total by 12%, for an annual cost of $22,000.

 

  10. Notwithstanding #6 above, Cloud DX will guarantee most-favoured-customer prices on all Cloud DX devices and services based on similar quantities and products, as long as the Purchaser is under license.
     
  11. The cost of ISO-approved storage for the Pulsewave PAD 1A devices at 100 – 72 Victoria Street S, Kitchener, ON is included for a period of twelve (12) months from the closing date of this Agreement. Additional storage, if required, shall be charged at $300 CAD per month and invoiced to the Purchaser on Net 30 terms.
     
  12. Cloud DX will allow Novo to design additions to device packaging stating that devices are distributed by Novo, so long as these additions meet medical device regulations (listing Cloud DX as manufacturer and Novo as licensee).
     
  13. Cloud DX will allow Novo to offer turnkey versions of Cloud DX powered programs (including but not limited to Weight Loss management, Hypertension Management and Stress Management) to their Franchisees under a separate Statement of Work for each program. That Statement of Work will describe the program deliverables, costs and revenue sharing between Novo and Cloud DX.
     
  14. Notwithstanding Schedule A, 4(a)(III), any such versions of Cloud DX powered programs, including but not restricted to Novo-branded versions Weight Management, Hypertension Management, or other wellness programs customized for Novo using the Licensed Products shall constitute Intellectual Property of Novo and shall be a permitted use under this License.
     
  15. Cloud DX will allow Novo to own the trademarks to their versions to any such jointly marketed products, so long as all medical device regulations including FDA and Health Canada regulations are met and all Novo marketing materials mention Cloud DX as the manufacturer/developer of the underlying technology as required by law.

 

 
 

 

 

Exhibit 10.2

 

February 27, 2019

 

Activa Clinics

6610 Turner Valley Road, Suite 200

Mississauga, Ontario L5N 2PI

Attn: Dr. Neil Dhalla, CEO

Via email

 

RE: Amendment No. 2 to Extend the Termination Date of the Binding Letter of Intent, dated November 23, 2018, between Novo Integrated Sciences, Inc., Novo Healthnet Limited and Activa Clinics

 

Dear Dr. Dhalla:

 

Novo Integrated Sciences, Inc., a Nevada corporation (“NVOS”), Novo Healthnet Limited, an Ontario corporation and Activa Clinics, an Ontario corporation (“AC”) (collectively the “parties”), are parties to the Letter of Intent, dated 11-23-18, as attached hereto as Exhibit A (the “LOI”).

 

On December 31, 2018, all parties to the LOI executed Amendment No. 1, extending the LOI Termination Date to February 28, 2019.

 

The purpose of this letter is to amend the LOI to extend the termination date therein. As we have discussed, the “Termination Date” for all purposes under the LOI is hereby amended to be April 5, 2019. The LOI, as amended herein, shall remain in full force and effect.

 

We continue to look forward to working with you to complete the transaction successfully and expeditiously. If the foregoing correctly sets forth your understanding, please execute a copy of this Letter in the space set forth below and return to me.

 

  Very truly yours,
     
  By: /s/ Robert Mattacchione
    Robert Mattacchione
    CEO, Novo Integrated Sciences, Inc.
    Chairman, Novo Healthnet Limited

 

  ACKNOWLEDGED AND AGREED to on February 27, 2019:
     
  By: /s/ Dr. Neil Dhalla               
    Dr. Neil Dhalla
    CEO, Activa Clinics

 

     

 

 

Letter of Intent

 

(Attached)

 

     

 

 

 

November 23, 2018

 

Activa Clinics

6610 Turner Valley Road, Suite 200

Mississauga, Ontario L5N 2Pl

 

Attention: Neil Dhalla

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

Phone: (206) 617-9797

www.novointegrated.com

 

     
    Page | 2

 

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

 

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

 

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

 

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

 

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

 

     
    Page | 3

 

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

 

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

 

     
    Page | 4

 

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

 

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

 

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

 

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

 

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

 

     

 

 

 

December 31, 2018

 

Activa Clinics

6610 Turner Valley Road, Suite 200

Mississauga, Ontario L5N 2PI

Attn: Neil Dhalla, CEO

Via email

 

RE: Amend the Termination Date of the Binding Letter of Intent, dated November 23, 2018, between Novo Integrated Sciences, Inc., Novo Healthnet Limited and Activa Clinics

 

Dear Mr. Dhalla:

 

Novo Integrated Sciences, Inc., a Nevada corporation (“NVOS”), Novo Healthnet Limited, an Ontario corporation and Activa Clinics, an Ontario corporation (“AC”), are parties to the Letter of Intent, dated 11-23-18, as attached hereto as Exhibit A (the “LOI”).

 

The purpose of this letter is to amend the LOI to extend the termination date therein. As we have discussed, the “Termination Date” for all purposes under the LOI is hereby amended to be February 28, 2019. The LOI, as amended herein, shall remain in full force and effect.

 

We continue to look forward to working with you to complete the transaction successfully and expeditiously. If the foregoing correctly sets forth your understanding, please execute a copy of this Letter in the space set forth below and return to me.

 

  Very truly yours,
     
  By: /s/ Robert Mattacchione
    Robert Mattacchione
    CEO, Novo Integrated Sciences, Inc.
    Chairman, Novo Healthnet Limited
     
  ACKNOWLEDGED AND AGREED to on January 7, 2018:
     
  By: /s/ Neil Dhalla
    Neil Dhalla
    CEO, Activa Clinics

 

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

Phone: (206) 617-9797

www.novointegrated.com

 

     

 

 

Exhibit 10.3

 

Amendment No. 3 to

SHARE EXCHANGE AGREEMENT

Dated as of February 27, 2019

 

This Amendment No. 3 to Share Exchange Agreement (this “Amendment”) is entered into as of the date first set forth above by and between (i) Novo Integrated Sciences, Inc., a Nevada corporation (the “Parent”); (ii) Novo Healthnet Limited, a limited company incorporated under the Laws (as defined below) of the Province of Ontario, Canada (“NHL” and together with the Parent, the “Buyer”) and (iii) CannaPiece Group Inc., an Ontario, Canada corporation (“CPG”, “Seller”). Each of the Parent, NHL and CPG may be referred to herein collectively as the “Parties” and separately as a “Party.

 

WHEREAS, the Parent, NHL and CPG are parties to that certain Share Exchange Agreement dated as of December 18. 2018 (the “Original Agreement”); and

 

WHEREAS, on January 7, 2019, the Parties amended Section 2.02 (b) of the Original Agreement (“Amendment #1”) as follows:

 

(a) Section 2.02(b) of the Original Agreement is hereby amended in its entirety to provide as follows: “The Subscription Agreements value will be CAD $5,000,000 in the aggregate (the “Investment”). The Subscription Agreements for the total Investment will be executed and delivered by CPG, together with payment of the applicable subscription funds, by no later than January 31, 2019.”

 

WHEREAS, on January 31, 2019, the Parties amended Section 2.02 (b) of the Original Agreement (“Amendment #2”) as follows:

 

  (a) Section 2.02(b) of the Original Agreement is hereby amended in its entirety to provide as follows: “The Subscription Agreements value will be CAD $5,000,000 in the aggregate (the “Investment”). The Subscription Agreements for the total Investment will be executed and delivered by CPG, together with payment of the applicable subscription funds, by no later than February 28, 2019.”

 

WHEREAS, the Parties now desire to amend the Original Agreement, Amendment #1 and Amendment #2, as set forth herein;

 

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

 

  2. Definitions . Defined terms used herein without definition shall have the meaning given them in the Original Agreement.

 

3. Amendment .

 

(a) Section 2.02(b) of the Original Agreement is hereby amended in its entirety to provide as follows: “The Subscription Agreements value will be CAD $5,000,000 in the aggregate (the “Investment”). The Subscription Agreements for the total Investment will be executed and delivered by CPG, together with payment of the applicable subscription funds, by no later than April 30, 2019.”

 

4. Miscellaneous .

 

  (a) Other than as amended herein, the Original Agreement shall remain in full force and effect.
     
  (b) This Amendment #3 shall be governed by, enforced, and construed under and in accordance with the Laws of the State of Nevada, without giving effect to the principles of conflicts of law thereunder. Each of the Parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Amendment #3 shall be brought exclusively in the state or federal courts of the United States with jurisdiction in Palm Beach County, Florida. By execution and delivery of this Amendment #3, each Party hereto irrevocably submits to and accepts, with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid courts, and irrevocably waives any and all rights such Party may now or hereafter have to object to such jurisdiction.
     
  (c) The headings contained in this Amendment #3 are intended solely for convenience and shall not affect the rights of the Parties.
     
  (d) This Amendment #3 may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. The execution and delivery of a facsimile or other electronic transmission of a signature to this Amendment #3 shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.

 

[Signatures Appear on Following Page]

 

     
 

 

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

 

  Novo Integrated Sciences, Inc.
     
  By: /s/ Robert Mattacchione
  Name: Robert Mattacchione
  Title: Chief Executive Officer
     
  Novo Healthnet Limited
     
  By: /s/ Dr. Pierre Dalcourt
  Name: Dr. Pierre Dalcourt
  Title: President
     
  CannaPiece Group Inc.
     
  By: /s/ Ahmad Rasouli
  Name: Ahmad Rasouli
  Title: CEO