STRATEGIC ALLIANCE AGREEMENT

This Strategic Alliance Agreement (this “Agreement”) is made and entered into as of April 17, 2020, by and between CBD Biotech, Inc., a California corporation (“CBD Biotech”) and Integrity Cannabis Solutions, Inc., a Florida corporation (“ICS”), hereinafter individually a “Party” and collectively the “Parties”.

RECITALS

A.                 Whereas, Bakhu Holdings Corp., a Nevada corporation (“Bakhu”) holds an exclusive license for a proprietary process and technology that uses cell culturing to grow targeted cells to produce a concentrated unique end product at a reduced cost (the “Bakhu Licensed Science”) as more fully defined below.

B.                  Whereas, CBD Biotech is a wholly-owned subsidiary of Bakhu and holds an exclusive sublicense (the “Bakhu-CBD Biotech Sublicense”) of the Bakhu Licensed Science, as it relates to the production and manufacturing of CBD, CBD byproducts and CBD derivatives, from non-psychoactive, low-THC cannabis sativa plant strains and cannabinoids (collectively “Cannabis”). The field of use under the CBD Biotech Sublicense is exclusive to production, methods, and products of CBD and its derivatives, and excludes and prohibits any THC related products having measureable tetrahydrocannabinol concentration potency above 3.0% on a dry weight basis, production methods, techniques, or Know How.

C.                  Whereas, CBD Biotech and its Affiliates have certain expertise and proprietary knowledge necessary to design and create a laboratory that can produce such CBD end product at commercial scale.

D.                 Whereas, David Ambrose, the principal owner, director, President and Chief Executive Officer of ICS, has experience in operating a pharmaceutical production laboratory at commercial scale in the state of Florida and has access to commercial space within which the Production Facility (as defined below) can be built and operated, and could be utilized as a prospective training facility for any sublicensee of the Bakhu Licensed Science.

E.                  Whereas, the Parties desire to collaborate with each other and establish a strategic alliance, as further described herein (i) to facilitate the building and operating of the Production Facility (as defined below) in the State of Florida, and (ii) exploiting the business opportunity of producing, manufacturing and selling the CBD, CBD byproducts and CBD derivatives, produced at said Production Facility.

F.                  Whereas, concurrently with the execution and delivery of this Agreement and subject to the validation of the Bakhu Licensed Science upon completion of the Bakhu Efficacy Test (as defined below), and with the delivery of an Offtake Agreement from such third-parties in accordance with terms set forth in Section 2.1.7 below, CBD Biotech and ICS shall execute and enter into the CBD Biotech Sublicense Agreement (as defined below) under which CBD Biotech shall sublicense the Bakhu Licensed Science to ICS for the expressed purpose of producing, manufacturing and selling CBD and CBD end products in the State of Florida.

G.                 Whereas, in connection with the foregoing, CBD Biotech and ICS agree and acknowledge that the cooperation between CBD Biotech and ICS is an important component to achieve their respective strategic objectives, and they desire to continue and further enhance the strategic cooperative alliance between them as contemplated under this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements and conditions contained in this Agreement, the parties hereto, intending to be legally bound hereby, agree as follows:

ARTICLE 1.
DEFINITIONS

Defined Terms. For the purposes of this Agreement, the following capitalized terms shall have the meanings ascribed to them below:

“Affiliate” means, with respect to a specified Person, a Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.

“Ambrose” means David Ambrose, the principal owner, director, President and Chief Executive Officer of ICS.

“Bakhu Efficacy Test” means the test of the Bakhu Licensed Science as conducted by Baku pursuant to the Bakhu License Agreement, to demonstrate that the application of the Bakhu Licensed Science can produce end product at a commercial scale within standards of efficacy and a reduced costs, as completed by and under such criteria as set forth on Exhibit 1, hereto, with the results of such test confirmed by a third party lab mutually agreed upon by the Parties.

“Bakhu License Agreement” means the Amended and Restated Patent and Technology License Agreement between Cell Science Holdings Ltd., as Licensor and Bakhu, s Licensee, dated December 31, 2019

“Bakhu Licensed Science” means the Licensed Science as defined in the CBD Biotech Sublicense Agreement.

“Business Day” means any day other than a Saturday or a Sunday or a day on which banks located in Los Angeles, California generally are authorized or required by Law or regulation to close.

“CBD Biotech Sublicense Agreement” means that certain Sublicense Agreement by and between CBD Biotech as Sublicensor and ICS as the Sublicensee, in the form of Exhibit 2, executed concurrently herewith.

“CBD” means Cannabidiol which is a phytocannabinoid derived from the cannabis sativa and Hemp plant which is CBD and its derivatives, and excludes and prohibits any CBD products having measureable tetrahydrocannabinol concentration potency above 3.0% on a dry weight basis.

“Commercially Reasonable Efforts” means the reasonable efforts that a reasonably prudent Person would contemplate using in similar circumstances in an effort to achieve a desired result set forth in this Agreement in a reasonably expeditious manner; provided, that, “Commercially Reasonable Efforts” shall not require the provision of any consideration to any third party of any amounts, except for the costs of making filings in the ordinary course of

business, the reasonable fees and expenses of counsel and accountants, nominal consent fees, and the customary fees and charges of Governmental Authorities.

“Delivery Schedule” means Delivery Schedule set forth on Exhibit 3, hereto, setting for the prescribed deadline for the delivery of information and materials, and completion of performance of certain tasks attributed to the Parties as set forth in this Agreement.

“Dr. Whitton” means Dr. Peter Whitton, the inventor of the CBD Biotech Licensed Science and one of the principal owners of CBD Biotech.

“Effective Date” means that date when (a) the Bakhu Efficacy Test has been successfully completed, (b) CBD Biotech has delivered the Lab Operating Manual to ICS pursuant to Section 2.1.1, and (c) CBD Biotech has delivered the Lab Equipment Requirements to ICS pursuant to Section 2.1.3.

“FDA” means United States Food and Drug Administration.

“FTC” means the United States Federal Trade Commission.

“Governmental Approval” means any authorization, consent, approval, certification, permit, franchise, privilege, variance, immunity, license or order of, or any filing, registration or qualification with, any Governmental Authority.

“Governmental Authority” means any foreign, international, multinational, national, federal, state, provincial, regional, local or municipal court or other governmental, administrative or regulatory authority, agency or body exercising executive, legislative, judicial, regulatory or administrative functions.

“Intellectual Property” means all of the following, whether arising under the Laws of the United States or any other jurisdiction in the world: (i) patents and patent applications, including continuations, continuations-in-part, divisions, reissues, reexaminations, substitutions, and extensions thereof; (ii) published and unpublished works of authorship, whether or not copyrightable, including computer software programs and databases, whether or not registered, copyrights in and to the foregoing, together with all common law rights and moral rights therein, and any applications and registrations therefor; (iii) trademarks, service marks, trade dress, brands, trade names, logos, Internet domain names and other similar identifiers of origin, in each case, as applicable, whether or not registered, and any and all common law rights thereto, and registrations and applications for registration thereof and any goodwill associated therewith; (iv) trade secrets, know-how, and other confidential or proprietary information, including methods, processes, protocols, specifications, patterns, techniques, algorithms, data, designs and models; (v) any other intellectual property rights created or arising under applicable Law; (vi) all pending applications to register or otherwise obtain legal protection for any of the foregoing in (i) through (iv) ; (vii) all rights to make an application in the future to register or otherwise obtain legal protection for any of the foregoing in (i) through (iv), (viii) all rights of priority under U.S. federal laws and international conventions with respect to any of the foregoing in (i) through (iv) ; (ix) all continuations, continuations-in-part, divisions, renewals, extensions, patents of addition, reexaminations, or reissues of any of the foregoing and all related applications therefor; (x) all goodwill associated with any of trademarks, service marks, trade identification, trade dress and trade names; (xi) all rights to sue with respect to past and future infringements, misappropriations or violations of any of the foregoing.

“Intellectual Property Rights” means the Intellectual Property that is owned or licensed by CBD Biotech and ICS, respectively, and used or held for use in the conduct of the respective business of CBD Biotech and ICS, together with (x) the right to sue and recover for past infringements or misappropriations thereof, (y) any and all corresponding rights that, now or hereafter, may be secured throughout the world with respect thereto and (z) all copies and tangible embodiments thereof.

“Knowledge” or other references to CBD Biotech’s or ICS’s knowledge or awareness shall mean the actual knowledge of Dr. Peter Whitton on behalf of CBD Biotech and David Ambrose on behalf of ICS, respectively.

“Law” means any and all foreign, international, multinational, national, federal, state, provincial, regional, local, municipal and other administrative laws (including common law), statutes, codes, orders, ordinances, rules and regulations, constitutions and treaties, other requirement or rule of law enacted, promulgated or issued and put into effect by a Governmental Authority.

“Licensee Prospect” means an unaffiliated third-party who expresses interest in the sublicensing from ICS and/or CBD Biotech of the Bakhu Licensed Science as it relates to CBD and the scope of use covered by the Bakhu-CBD Biotech Sublicense.

“Liens” means any liens, pledges, mortgages, deeds of trust, security interests, claims, leases, charges, options, rights of first refusal, easements, servitudes, conditional sales contracts and title retention agreements.

“Material Adverse Effect” shall mean any material adverse change or effect that individually or in the aggregate results in the Seller’s inability to consummate the transactions contemplated hereby or maintain the covenants of the agreements; provided, however, that changes or effects relating to: (i) changes in economic or political conditions or the financing, banking, currency or capital markets in general; (ii) changes in laws or orders or interpretations thereof; (iii) any natural disaster or any acts of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before, on or after the date of this Agreement, in each case, shall be deemed to not constitute a “Material Adverse Effect” and shall not be considered in determining whether a “Material Adverse Effect” has occurred.

“Offtake Agreement” means that Supply and Offtake Agreement as set forth in Section 2.1.7, in the form attached hereto as Exhibit 4.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or Governmental Authority.

“Production Facility” means a commercial scale production facility equipped with a minimum of two hundred ten (210), one thousand (1,000) liter bioreactors capable of yielding CBD end product concentrate utilizing the Bakhu Licensed Science.

“Proceeding” means pending, stayed, or completed action, inquiry, proceeding, suit, hearing arbitration, alternate dispute resolution mechanism, investigation, administrative hearing, whether brought by or in the right of any party or otherwise and whether civil, criminal, administrative, or investigative, in which a Party was, is, or will be involved as a party or otherwise.

“Share Compensation” means one-half percent (0.5%) of the outstanding common shares of Bakhu, as adjusted to take into account any additional issuance of shares by Bakhu, from time to time. As of the Effective Date there are 300,000,000 shares of Bakhu outstanding and therefore the Share Compensation equals one million five hundred thousand (1,500,000) shares of common stock of Bakhu.

“Sublicense Fees” means the license fees and royalty payable by ICS to CBD Biotech pursuant to and as set forth in the CBD Biotech Sublicense Agreement.

“TG United Companies” means TB United, Inc., TG United Liquids, Inc, TG United Labs, Inc. and/or TG United Pharmaceutical, Inc.

ARTICLE 2.
EVALUATION OF BAKHU LICENSED SCIENCE

SUBLICENSE LICENSE AND CONSTRUCTION OF PRODUCTION FACILITY

2.1               CBD Biotech Services, Obligations and Deliverables. In furtherance of the strategic objectives to exploit the business opportunity of producing CBD end products using the Bakhu Licensed Science, and to facilitate the building and operating of the Production Facility in the State of Florida, CBD Biotech agrees to provide the services, performed such tasks and deliver the information, set forth below, by the dates as set forth on the Delivery Schedule:

2.1.1          Bakhu Licensed Science Related Information. CBD Biotech through Whitton, and his associates shall, within thirty (30) Business Days after the completion of a successful Bakhu Efficacy Test, provide all technical and other information, and documentation and other materials reasonably (collectively the “Lab Operating Manual”) necessary as requested by ICS necessary to gain a working knowledge regarding procedures, process and protocals for utilizing the Bakhu License Science effectively.

2.1.2          Continued Support of Dr. Whitton. CBD Biotech shall facilitate the cooperation of Dr. Whitton as an information resource, and a full explanation of the Bakhu Licensed Science, as well as trade secret formulas, to ICS in furtherance of ICS working knowledge for utilizing the Bakhu License Science.

2.1.3          Production Facility Related Information. CBD Biotech shall, within thirty (30) Business Days after the Effective Date, provide all technical and other information, documentation and other materials reasonably requested by ICS, necessary for ICS to understand the production process and to evaluate the prospective cost to build the Production Facility. In this regard, CBD Biotech shall provide up to date and accurate technical information including without limitation optimal design and layout recommendations, along with the necessary lab, manufacturing and production equipment and tooling specifications (the “Lab Equipment Requirements”), end product handling protocols, testing and quality control procedures and criteria.

2.1.4          Sublicense Agreement. CBD Biotech shall enter into the CBD Biotech Sublicense Agreement with ICS in the form attached hereto as Exhibit 2, which shall become effective upon the Effective Date as defined above (i.e. the completion of the Bakhu Efficacy Test, the delivery of the Lab Operating Manual and the delivery of Lab Equipment Requirements.

The CBD Biotech Sublicense shall entitle ICS to use the Bakhu Licensed Science to produce, manufacture, market and sell CBD, CBD byproducts and CBD derivatives. In conjunction with the CBD Biotech Sublicense Agreement, CBD Biotech shall provide all documents, manuals and specifications for building proprietary equipment required and necessary for the use of the Bakhu Licensed Science. The CBD Biotech Sublicense Agreement shall be for an initial term of thirty (30) years, subject to the right of CBD Biotech to buyback and terminate the CBD Biotech Sublicense Agreement as set forth in Article 5., below.

2.1.5          CBD Biotech Resources. CBD Biotech through its contracted resources, shall procure and provide to ICS, knowledgeable engineering and laboratory design support, including assistance with all mechanical components, equipment and tooling requirements necessary in using the CBD Biotech Licensed Science, as well as operational requirements, production, safety and processing manuals, to insure that the proposed finished Production Facility as customized to the proposed location facility syncs with the current lab operations and equipment of ICS. CBD Biotech shall provide a list of all current engineers, suppliers and or vendors for all equipment and supplies necessary to support construction and operation of the Production Facility.

2.1.6          Consulting Services of Dr. Whitton. CBD Biotech shall, at CBD Biotech’s sole costs and expense, retain the consulting services of Dr. Whitton, as well, limited to up to eighty (80) hours of professional consulting services of a such mechanical and other engineer as necessary to support the ICS’s team of engineers and contractors for the construction and equipping of the Production Facility, and the initial start-up of the operation, including training the lab technicians that will be responsible for operating the Production Facility.

2.1.7          Offtake Agreement. CBD Biotech shall, prior to expenditure of funds for equipment for the Production Facility, deliver a Supply and Offtake Agreement (the “Offtake Agreement“) in the form attached hereto as Exhibit 4, from one or more parties, for the purchase of the entire monthly production or the percentage of production as required by ICS, of the CBD produced by the Production Facility in Florida, at the then current market wholesale rate for CBD concentrate. Said Offtake Agreement shall be on terms and conditions mutually agreed by ICS and the respective purchasers and for a minimum term of 24 months. Said Offtake Agreement shall become effective upon signing and shall commence upon the completion and commencement of operations of the Production Facility with the initial successful monthly production of CBD end product concentrate utilizing the Bakhu Licensed Science. In the event of failure or performance of the parties to purchase the monthly production as agreed between the parties, CBD Biotech shall have the right to substitute other parties on the same terms and conditions, and such substitution shall not constitute a breach of the terms of the agreement.

2.2               ICS Services, Obligations and Deliverables. In furtherance of the strategic objections to exploit the business opportunity of producing CBD end products using the Bakhu Licensed Science through the sublicensing of the Bakhu Licensed Science to ICS, and to facilitate the building and operating of the Production Facility in the State of Florida, ICS agrees to provide the services, performed such tasks and deliver the information, set forth below, by the dates as set forth on the Delivery Schedule:

2.2.1          Production Facility Completion and Commencement of Operations. ICS agrees to provide all resources and manpower to build out the Production Facility equipped with a minimum of two hundred ten (210), one thousand (1,000) liter bioreactors, and support equipment that can produce dried CBD concentrate in the same ratios as the Bakhu Efficacy Test per annum, with the completion of the Production Facility and commencement of operations by April 2021, subject to the availability of the necessary equipment and third party regulatory licensing and permits.

2.2.2          Oversight of and Costs of Construction of Production Facility. ICS shall have complete autonomy with regard to the construction of the Production Facility and shall be solely responsible for:

(a)                obtaining any and all necessary landlord permissions to modify any building for the expressed purpose of building and operating the Production Facility;

(b)                obtaining any required approvals and all permits necessary to make improvements and modify the proposed structures to support the Production Facility;

(c)                the payment of all costs and expenses associated therewith including without limitation the costs of the purchase or related lease for such facility, any build out of the facility, all furniture, fixtures, equipment and tooling, all utilities and, insurance associated with the Production Facility;

(d)                obtaining any and all permits and licenses necessary to operate the Production Facility and any distribution facility located in the state of Florida, included the costs of such permits or licenses;

(e)                providing and managing all staffing, as employees, and or sub-contractors necessary to support the validation and certification of the Production Facility before commercial operation begins;

(f)                 the recruitment and training of employees to operate the Production Facility and any distribution facility;

(g)                compliance with all state and federal tax regulations;

(h)                providing ongoing administrative and operational services of the Production Facility and any distribution facility in full compliance with all pertinent laws and regulations.

2.2.3          Training of Sublicensees. ICS will cooperate with CBD Biotech to develop a Licensee Training Program, and conduct the training of individual sublicensees referred by CBD Biotech, in the classroom and or laboratory setting in the Production Facility for a fee per licensee.

2.2.4          ICS Sublicensing: ICS intends to assist in the promotion and selling of sublicenses. CBD Biotech will pay ICS a fee equal to five percent (5.00%) of the gross initial upfront license fee received by CBD Biotech under each license sold in which ICS is the source of the Licensee Prospect. CBD Biotech will pay ICS a fee equal to five percent (5.00%) of the gross initial upfront license fee received by CBD Biotech from the purchase of a sublicense by a licensee in which CBD Biotech is the source of the Licensee Prospect, and ICS assists in the closing of the sale.

2.2.1          Sublicense Agreement. ICS shall enter into the CBD Biotech Sublicense Agreement with CBD Biotech in the form attached hereto as Exhibit 2, and shall pay to CBD Biotech, the licensed fees and royalties, as generally set forth in Section 3.5, below and more fully set forth in CBD Biotech Sublicense Agreement.

2.2.6          Offtake Agreement. ICS shall enter into the Offtake Agreement in the form attached hereto as Exhibit 4 pursuant to Section 2.1.7, with such Offtake Agreement becoming effective and commence upon the completion and commence of operations of the Production Facility with the initial successful monthly production of CBD end product concentrate.

ARTICLE 3.
Compensation

3.1               Compensation of ICS. In consideration of the services of ICS constructing and building of the Production Facility, as provided in this Agreement, ICS shall receive and CBD Biotech through its Parent or Affiliates shall issue or cause to be issued to ICS such number of restricted shares of Bakhu Common Stock (the “Share Compensation”), equal to one-half percent (0.5%) of the outstanding common shares of Bakhu, as adjusted to take into account any additional issuance of shares by Bakhu, from time to time. As of the Effective Date there are 300,000,000 shares of Bakhu outstanding and therefore the Share Compensation as of the Effective Date equals one million five hundred thousand (1,500,000) shares of common stock of Bakhu. The Share Compensation shall be released to ICS upon satisfaction of the conditions set forth in Section 3.3 below.

3.2               Intentionally Left Blank

3.3               Disbursement and Release of Share Compensation. CBD Biotech shall release and deliver to ICS, the Bakhu stock certificate representing the Share Compensation upon the completion and commence of operations of the Production Facility with the initial successful monthly production of CBD end product concentrate in the same production ratios as the Bakhu Efficacy Test results.

3.4               Release of Shares upon Sale of Bakhu Licensed Science or Termination of Sublicense Agreement. Notwithstanding anything to the contrary above, in the event of the sale of all rights covered by the patents or licenses relating to the Bakhu Licensed Science, or the termination of the CBD Biotech Sublicense Agreement with ICS as provided in Section 6.1, all Shares Compensation shares of Bakhu shall be released by CBD Biotech to ICS, regardless of whether or not the construction of the Production Facility has been completed.

3.5               Sublicense Fees and Royalties. In consideration of the grant of, and pursuant to the terms of the CBD Biotech Sublicense Agreement, as more specifically set forth therein, ICS shall pay to CBD Biotech a license fee (the “License Fee”) and a continuing gross royalty (the “Royalty”) as follows:

3.5.1          License Fee. As provided in the CBD Biotech Sublicense Agreement and not in addition to the license fee therein, ICS shall pay the license fee, of $250,000 to CBD Biotech, in two installments:

(a)                the first installment of the License Fee, in the amount of USD$125,000 USD, shall be paid within twelve (12) months of the sale date for the first monthly product of CBD; and

(b)                the second installment of the License Fee, in the amount of USD$125,000 shall be paid on the six month anniversary date of the payment of installment one above.

3.5.2          Royalty. ICS shall also pay to CBD Biotech, a gross royalty equal to 8% of the wholesale product price sales revenue from the production of CBD raw product concentrate, produced in the Production Facility using the Bakhu Licensed Science. The royalty payments shall be paid quarterly in arrears, beginning post the first quarter of commercial production,

3.6               Training Program Compensation. In consideration for housing and operating a training facility for sublicensees of the Bakhu Licensed Science, CBD Biotech shall pay to ICS a training fee of $10,000.00 per sublicensee being trained.

ARTICLE 4.
intellectual property rights

4.1               Each of CBD Biotech and ICS shall retain ownership of their own respective Intellectual Property and Intellectual Property Rights. Nothing in this Agreement shall convey ownership of any Intellectual Property or Intellectual Property Rights, from one Party to the other Party.

4.2               All benefits, if any, that are sourced from, or systemic to any modification, improvement or enhancement of the Bakhu Licensed Science derived or made as part of the construction and operations of the Production Facility, shall be owned by CBD Biotech and all services provided by ICS, Ambrose, or any employee or consultant of ICS, shall be consider a work for hire, with the Share Compensation paid herein, as the full and final consideration for any such modifications, improvements or enhancements or work products thereof.

ARTICLE 5.
cOVENANTS AND OTHER AGREEMENTS

5.1               Reciprocal Buyback and Sublicense Termination. The Parties agree that in the event of the sale to a non-affiliated third party, of the Bakhu Licensed Science and any license rights associated therewith, then CBD Biotech shall have the option, on 45-days prior written notice to ICS, to terminate the CBD Biotech Sublicense Agreement entered into pursuant to this Agreement, subject to payment of a termination fee by CBD Biotech to ICS as set forth in Section 5.2 below.

5.2               Termination Fee. In the event of the termination of the CBD Biotech Sublicense Agreement by CBD Biotech, as provided in Section 5.1 above, CBD Biotech shall pay to ICS a termination fee (the “Termination Fee”) equal to the actual license fees paid by ICS to CBD Biotech pursuant to the CBD Biotech Sublicense Agreement and the release and delivery by CBD Biotech to ICS of the Bakhu stock certificate representing Share Compensation. The payment of the Termination Fee shall be a condition precedent to CBD Biotech’s rights to terminate the CBD Biotech Sublicense Agreement and shall be paid on the effective date of the termination of the CBD Biotech Sublicense Agreement.

5.3               Mandatory Purchase of Production Facility Equipment. In addition to the payment of the Termination Fee as set forth in Section 5.2, in the event of the termination of the CBD Biotech Sublicense Agreement by CBD Biotech as provided in Section 6.1 above, CBD Biotech shall have the obligation to reimburse ICS and purchase from ICS all lab operational equipment acquired, installed and necessary to operate the Production Facility established by ICS pursuant to this Agreement and the CBD Biotech Sublicense Agreement, by making a single payment to ICS (the “Equipment Purchase Payment”), equal to one hundred percent (100%) of ICS’ actual cost incurred. The payment of the Equipment Purchase Payment shall be a condition precedent to CBD Biotech’s rights to terminate the CBD Biotech Sublicense Agreement and shall be paid on the effective date of the termination of the CBD Biotech Sublicense Agreement.

5.4               Post Purchase Joint Ownership of Production Facility Equipment Upon payment of the Equipment Purchase Payment by CBD Biotech as set forth in Section 5.3, CBD Biotech and ICS shall jointly and equally own the production facility lab equipment acquired, and shall jointly determine the business use of said equipment. By way of example, if ICS, at the time that CBD Biotech exercises CBD Biotech’s buyback and termination rights hereunder, has invested $3.8 million in the equipment and installation to create the Production Facility, then as a result of the termination of the CBD Biotech Sublicense Agreement with ICS, CBD Biotech shall pay ICS an Equipment Purchase Payment of $3.8 million.

5.5               CBD Biotech First Right of Refusal to Acquire ICS. In the event that ICS elects to sell all or any part or interest in the physical facilities, licenses, equipment, and operating contracts of ICS, the TG United Companies or Ambrose, CBD Biotech and its Affiliates shall the conditional first right of refusal, which must be exercised within thirty (30) days of written notice and paid within ninety (90) days of exercise, to acquire all or any part thereof, with or without the business entities, and such purchase shall be conditioned upon the payment of such price as mutually agreed to by CBD Biotech and its Affiliates, and ICS, the TG United Companies or Ambrose, respectively.

5.6               Public Announcements. Neither CBD Biotech nor ICS shall make, or permit any representative to make, any public statements, including any press releases, with respect to this Agreement or the transactions contemplated hereby without the prior written consent of both Parties. Either Party shall have the right to make such disclosures as it may deem necessary or advisable to comply with applicable law, including pursuant to the rules and regulations of the FTC or FDA. If any public announcement of release is to be made, CBD Biotech and ICS shall jointly agree on the content and substance of all public announcements concerning this Agreement.

 ARTICLE 6.
Confidential Information

6.1               Confidential Information. In conjunction with and pursuant to this Agreement, the Parties may wish to disclose confidential information to each other.  For purposes of this Agreement, “Confidential Information” means confidential, non-public information, know-how and data (technical or non-technical) that is disclosed in writing, orally, graphically, in machine readable form, or in any other manner by or on behalf of a disclosing Party to a receiving Party or its Affiliates for purposes of this Agreement (the “Purpose”).  Confidential Information may be disclosed in any form (e.g. oral, written, graphic, electronic or sample) by or on behalf of disclosing Party or its Affiliates, or may be otherwise accessible to receiving Party or its Affiliates.

6.2               Non-Disclosure and Limited Use. Without disclosing Party’s prior written consent, receiving Party will: (a) not use any part of or the whole of the Confidential Information for any purpose other than the Purpose; (b) restrict the dissemination of Confidential Information to individuals within its own organization and disclose the Confidential Information only to those of its officers, employees and Affiliates who have a legitimate need to have access to the Confidential Information, who will be bound by confidentiality and non-use commitments no less restrictive than those of this Agreement, and who will have been made aware of the confidential nature of the Confidential Information; (c) protect the Confidential Information by using the same degree of care, but not less than a reasonable degree of care, to prevent the unauthorized use, dissemination, or publication of the Confidential Information as receiving Party uses to protect its own confidential information of a like nature; (d) preserve the confidentiality of the Confidential Information, not disclose it to any third party, and take all necessary and reasonable precautions to prevent such information from being accessible to any third party; and (f) promptly notify the disclosing Party upon becoming aware of evidence or suspicion of any unauthorized use or disclosure of the Confidential Information.  The foregoing obligations will exist for a period of three (3) years from the date of completion of the Production Facility in relation to which the Confidential Information is disclosed or used.

6.3               Scope. The obligations of confidentiality and non-use listed in this Article 7 will not apply to information: (a) which is in the public domain or public knowledge at the time of disclosure, or which subsequently enters the public domain through no fault of receiving Party; (b) which was rightfully in the possession of receiving Party at the time of disclosure by disclosing Party; (c) which is independently developed by receiving Party without use of disclosing Party’s Confidential Information; (d) which the receiving Party receives legally from any third party and which is not subject to an obligation of confidentiality; or (e) is communicated to the receiving party’s scientific or other evaluation committee. The receiving Party may also disclose Confidential Information of any other Party where it is required to disclose such pursuant to Applicable Law; provided, however, that receiving Party will make reasonable efforts, if legally permissible, to (i) notify disclosing Party prior to the disclosure of any part of or the whole of the Confidential Information and (ii) allow disclosing Party the opportunity to contest and avoid such disclosure, and provided, further, that receiving Party will disclose only that portion of such Confidential Information that it is legally required to disclose.

6.4               Ownership. All Confidential Information disclosed to receiving Party pursuant to this Agreement will be and remain the disclosing Party’s property.  Nothing contained herein will be construed as granting to receiving Party any proprietary right on or in relation to any part of or the whole of the Confidential Information, or any right to use any of the Confidential Information except for the Purpose.  Receiving Party will return to disclosing Party all documents and other materials which constitute Confidential Information, as well as all copies thereof, promptly upon request or upon termination of this Agreement (whichever is earlier); provided, however, that receiving Party may keep one copy of the Confidential Information received under this Agreement in its secure files in accordance with the terms of this Agreement for the sole purpose of maintaining a record of the Confidential Information received hereunder and for compliance with this Agreement and/or Applicable Laws.

6.5               Injunctive relief. Improper use or disclosure of the Confidential Information by receiving Party is likely to cause substantial harm to disclosing Party.  Therefore, in the event of a breach, threatened breach, or intended breach of this Agreement by receiving Party, in addition to any other rights and remedies available to it at law or in equity, disclosing Party will be entitled to seek preliminary and final injunctions enjoining and restraining such breach, threatened breach, or intended breach.

ARTICLE 7.
representation and warranties OF CBD Biotech

CBD Biotech hereby represents and warrants to ICS that the following representations and warranties are true and correct as of the Effective Date.

7.1               Organization and Power. CBD Biotech is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as currently conducted, and is qualified to do business in each jurisdiction where qualification is required.

7.2               Authorization; No Breach; Valid and Binding Agreement.

(a)                CBD Biotech has full corporate power and authority to execute and deliver, and enter into, this Agreement, and to consummate the transactions contemplated by this Agreement. This Agreement is a legal, valid and binding agreement of CBD Biotech enforceable against CBD Biotech in accordance with its terms, subject to the laws of bankruptcy, insolvency and moratorium and other laws or equitable principles generally affecting creditors’ rights. CBD Biotech has obtained approval by its Board of Directors for the execution of this Agreement and the consummation of the transactions contemplated hereby. Other than obtaining the required corporate approval from its Board of Directors, no consent, authorization, order or approval is required in connection with the execution and delivery by CBD Biotech of this Agreement.

(b)                The execution, delivery, and performance by CBD Biotech of this Agreement and the other documents to be executed pursuant to this Agreement will not violate, conflict with, result in any breach of, or constitute a default under (i) CBD Biotech’s organizational documents, or (ii) any law or (iii) result in the imposition of any Lien over the CBD Biotech Licensed Science.

7.3               Governmental Consents. CBD Biotech will comply with all registration, disclosure, consent, approval or authorization of any Governmental Authority required to be obtained by CBD Biotech in connection with its execution, delivery and performance of this Agreement, or the consummation by CBD Biotech of the transactions contemplated hereby.

7.4               Litigation.  There is no Proceeding, at law or in equity, pending against or, to CBD Biotech’s Knowledge, threatened against or by CBD Biotech, relating to the Bakhu Licensed Science, nor is there any order of any Governmental Authority or arbitrator pending against or, to CBD Biotech’s Knowledge threatened against CBD Biotech, the adverse outcome of which would, individually or in the aggregate, prohibit, restrict or delay, in any material respect, the performance by CBD Biotech or CBD Biotech’s obligations under this Agreement.

ARTICLE 8.
representation and warranties OF Ics

ICS Hereby represents and warrants to CBD Biotech that the following representations and warranties are true and correct as of the Effective Date.

8.1               Organization and Power. ICS is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as currently conducted, and is qualified to do business in each jurisdiction where qualification is required.

8.2               Authorization; No Breach; Valid and Binding Agreement.

(a)                ICS has full corporate power and authority to execute and deliver, and enter into, this Agreement, and to consummate the transactions contemplated by this Agreement. This Agreement is a legal, valid and binding agreement of ICS enforceable against ICS in accordance with its terms, subject to the laws of bankruptcy, insolvency and moratorium and other laws or equitable principles generally affecting creditors’ rights. ICS has obtained approval by its Board of Directors for the execution of this Agreement and the consummation of the transactions contemplated hereby. Other than obtaining the required corporate approval from its Board of Directors, no consent, authorization, order or approval is required in connection with the execution and delivery by ICS of this Agreement.

(c)                The execution, delivery, and performance by ICS of this Agreement and the other documents to be executed pursuant to this Agreement will not violate, conflict with, result in any breach of, or constitute a default under (i) ICS’s organizational documents, or (ii) any law or (iii) result in the imposition of any Lien over any assets of ICS.

8.3               Governmental Consents. ICS will obtain any and all consent, approval or authorization of any Governmental Authority required to be obtained by ICS in connection with its execution, delivery and performance of this Agreement, or the consummation by ICS of the transactions contemplated hereby.

8.4               Litigation.  There is no Proceeding, at law or in equity, pending against or, to ICS’s Knowledge, threatened against or by ICS, nor is there any order of any Governmental Authority or arbitrator pending against or, to ICS’s Knowledge threatened against ICS, the adverse outcome of which would, individually or in the aggregate, prohibit, restrict or delay, in any material respect, the performance by ICS or ICS’s obligations under this Agreement.

8.5               Investment Representations. ICS further represents and warrants that:

(a)                Restricted Securities. The share of Bakhu which constitute the Share Compensation as set forth in Section 3.1, are “Restricted Securities” as defined in the Securities Act of 1933 (the “Act”) and may not be resold unless the shares are registered under the Act, or an exemption from registration under the Act is available.

(b)                Investment Purpose. ICS is acquiring the shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Act. Other than the potential assignment and transfer of the shares to David Ambrose, the owner of ICA, ICS does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Shares.

(c)                Reliance on Exemptions. ICS understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that Bakhu is relying in part upon the truth and accuracy of, and the compliance with, the representations, warranties, agreements, acknowledgments and understandings of each of ICS set forth herein in order to determine the availability of such exemptions and the eligibility of ICS to acquire the Shares.

(d)                ICS Can Protect Its Interest; No General Solicitation. ICS by reason of the management, business or financial experience of its owner, Ambrose, has the capacity to protect its own interests in connection with the acquisition of the Shares. ICS is aware of no publication of any advertisement or general solicitation in connection with the issuance and acquisition of the Shares contemplated in this Agreement.

(e)                Bakhu Information. ICS has had an opportunity to discuss the business, management and financial affairs of CBD and its Parent, Bakhu with such officers and management of Bakhu as ICS deems necessary, and the opportunity to ask questions of and receive answers regarding the terms and conditions of an investment in the Shares. ICS has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to its acquisition of the Shares.

(f)                 No Governmental Review. ICS understands that neither the United states Securities and Exchange Commission (the “SEC”) or any securities administrator of any state in the United States, has passed on or made any recommendation or endorsement of the Shares, or the fairness or suitability of the acquisition of the Shares.

(g)                Transfer or Resale. ICS understands that Rule 144 (“Rule 144”) promulgated under the Act requires, among other conditions, a one year holding period prior to the resale (in limited amounts) of shares acquired in a non-public offering without having to satisfy the registration requirements under the Act. ICS understands that Bakhu makes no representation or warranty regarding its fulfillment in the future of any reporting requirements under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or its dissemination to the public of any current financial or other information concerning Bakhu, as is required by Rule 144 as one of the conditions of its availability. ICS understands and hereby acknowledges that Bakhu is under no obligation to register the Shares under the Act. ICS acknowledges that Bakhu may consent and permit the transfer of Shares by ICS only if such request for transfer is accompanied by an opinion of counsel reasonably satisfactory to Bakhu and its counsel that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state “Blue Sky” laws (collectively “Securities Laws”).

(h)                Legend Requirements. ICS understands and agrees that Bakhu shall cause the legends set forth below, or substantially equivalent legends, to be placed upon any certificate evidencing ownership of the Shares, together with any other legends that may be required by the SEC or by applicable state or federal securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT.

ARTICLE 9.

CONDITIONS TO PARTIES OBLIGATIOINS

9.1               Conditions of the CBD Biotech Obligation. CBD Biotech’ obligation to effect this Agreement is subject to the satisfaction as of the following conditions precedent (any of which conditions precedent may be waived by CBD Biotech):

(a)                Representations and Warranties. Each representation and warranty of ICS set forth in Article 7., true and correct in all material respects at and as of the Effective Date.

(b)                Covenants. ICS shall have performed and observed in all material respects each covenant and other obligation required to be performed or observed by it pursuant to this Agreement and any other documents to be executed pursuant to this Agreement.

(c)                Proceedings. No action shall be pending before any Governmental Authority or government order issued the result of which would prevent or prohibit the consummation of this Agreement.

(d)                Deliverables of ICS. ICS shall have delivered, or cause to be delivered, to the CBD Biotech all information and deliverables, and any documents to which ICS is a party duly executed by ICS, including a license to produce and distribute CBD products in the State of Florida.

9.2               Conditions of the ICS’s Obligation. ICS’s obligation to effect this Agreement is subject to the satisfaction as of the following conditions precedent (any of which conditions precedent may be waived by ICS:

(a)                Representations and Warranties. Each representation and warranty of CBD Biotech set forth in Article 8., above shall be true and correct in all material respects at and as of the Effective Date.

(b)                CBD Biotech shall have performed and observed in all material respects each covenant and other obligation required to be performed or observed by it pursuant to this Agreement and any other documents to be executed pursuant to this Agreement.

(c)                Proceedings. No action shall be pending before any Governmental Authority or government order issued the result of which would prevent or prohibit the consummation of this Agreement.

(d)                Deliverables of CBD Biotech. CBD Biotech shall have delivered, or cause to be delivered, to the ICS all information and deliverables, and any documents to which CBD Biotech is a party duly executed by CBD Biotech.

ARTICLE 10.

TERMINATION

10.1            Termination. This Agreement may be terminated:

(a)                at any time by mutual written agreement of CBD Biotech and ICS;

(b)                by either CBD Biotech or ICS, if a material breach of any provision of this Agreement has been committed by the other party, and such material breach results in a condition of this Agreement becoming incapable of being satisfied and such material breach has not been waived in writing;

(c)                by ICS if CBD Biotech has failed to complete the delivery or performance of a specified milestone by the date set forth in the Delivery Schedule, and CBD Biotech fails to remedy non-delivery or non-performance within 30 days after receiving written notice describing in reasonable detail non-delivery or non-performance; and

(d)                by CBD Biotech if ICS has failed to complete the delivery or performance of a specified milestone by the date set forth in the Delivery Schedule, and ICS fails to remedy non-delivery or non-performance within 30 days after receiving written notice describing in reasonable detail non-delivery or non-performance.

(e)                Notwithstanding Sections 10.1(c) and (d) above, in the event that the non-delivery or non-performance is caused by or a result of the actions of a third party, CBD Biotech or ICS, as the case may be, demonstrating that the alleged non-delivery or non-performance is curable but the time to cure such default of breach exceeds the 30 day cure period, the cure period will be extended to such reasonable time cure in light of the applicable circumstances, as required by the third party action.

10.2            Effect of Termination.

(a)                In the event of termination of this Agreement, all obligations of the parties under this Agreement will terminate, except that the obligations of the Parties in Article 6 and Article 7, which shall continue in full force and effect in accordance with its terms.

(b)                In the event of termination of this Agreement pursuant to Section 10.1(b) due to a material breach by CBD Biotech, CBD Biotech shall be liable to ICS in an amount equal to $10,000 and the release and delivery by CBD Biotech to ICS of the stock certificate representing Share Compensation set forth in Section 3.1. The Parties intend that the Liquidated Damages constitute compensation, and not a penalty. The Parties also acknowledge and agree that ICS’s harm caused by such a material breach by CBD Biotech may be impossible or very difficult to accurately estimate, and that the Liquidated Damages are a reasonable estimate of the minimum anticipated or actual harm that would arise from such material breach by CBD Biotech.

(c)                In the event of termination of this Agreement pursuant to Section 10.1(b) due to a material breach by ICS, ICS shall be liable to CBD Biotech in an amount equal to $10,000. The Parties intend that the Liquidated Damages constitute compensation, and not a penalty. The Parties also acknowledge and agree that CBD Biotech’s harm caused by such a material breach by ICS may be impossible or very difficult to accurately estimate, and that the Liquidated Damages are a reasonable estimate of the minimum anticipated or actual harm that would arise from such material breach by ICS.

(d)                In the event of termination of this Agreement pursuant to Section 10.1(c), due to the non-performance by CBD Biotech, then CBD Biotech shall be liable to ICS in an amount equal to $10,000 and delivery by CBD Biotech to ICS of the stock certificate representing Share Compensation set forth in Section 3.1.

(e)                In the event of termination of this Agreement pursuant to Section 10.1(d), due to the non-performance by ICS, then ICS shall be liable to CBD Biotech in an amount equal to $10,000.

ARTICLE 11.

MISCELLANOUS

11.1            Expenses. Except as otherwise expressly provided herein, each of CBD Biotech and ICS shall pay all of its own fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby.

11.2            Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when delivered by a nationally recognized delivery service or (c) when delivered by facsimile or email with receipt confirmed, addressed as follows:

Notices to CBD Biotech:

CBD Biotech, Inc.

Attn: Thomas K. Emmitt

One World Trade Center, Suite 130

Long Beach, CA 90831

Facsimile: (310) 997-1484

Email: tkemmitt@yahoo.com

Notices to ICS:

Integrity Cannabis Solutions Inc.

Attn: David Ambrose

16255 Aviation Loop Drive

Brooksville, Florida 34604

Facsimile: 352-754-8507

Email: dambrose@tgunited.com

11.3            Entire Agreement. This Agreement, including the Exhibits and Schedules attached hereto, and any agreement, certificate, instrument or other document executed and delivered in connection herewith, constitute the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersede all other prior or contemporaneous covenants, agreements, undertakings, obligations, promises, arrangements, communications, representations and warranties, whether oral or written, by either party hereto or by any stockholder, director, officer, employee, agent, Affiliate or representative of either Party hereto.

11.4            Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by any of the parties hereto without the prior written consent of the non-assigning Parties.

11.5            Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

11.6            Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

11.7            Amendment and Waiver. Any provision of this Agreement may be amended or waived only in a writing signed by CBD Biotech and ICS. No waiver of any provision hereunder or any breach or default thereof shall extend to or affect in any way any other provision or prior or subsequent breach or default.

11.8            Third Party Beneficiaries. The provisions of this Agreement shall be binding upon and shall inure to the benefit of the Parties and their successors and permitted assigns. Nothing expressed or referred to in this Agreement shall be construed to give any Person other than the Parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement.

11.9            Governing Law. All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement, any documents contemplated hereby, and the Exhibits and Schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Florida, without giving effect to any choice of law or conflict of law rules or provisions.

11.10        Jurisdiction. Any action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby or thereby shall be brought in and determined exclusively by the state courts in San Diego County in the State of California (or in the event of exclusive federal jurisdiction, the courts of the Southern District of California), and each of the Parties hereby consents to the jurisdiction of such courts in any such action. In no event shall either Party have any right to recover from the other Party any consequential damages as to any matter under, relating to or arising out of this Agreement or the transactions contemplated hereby.

11.11        Waiver of Jury Trial. To the fullest extent permitted by applicable law, the Parties hereto hereby voluntarily and irrevocably waives trial by jury in any Proceeding brought in connection with this Agreement, any of the related agreements and documents, or any of the transactions contemplated hereby or thereby.

11.12        Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence. The parties hereto acknowledge that, as a material inducement to each party’s execution of this Agreement, such party will be relying upon the timely performance by the other party hereto of its obligations hereunder.

11.13        Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, portable document format (.pdf), DocuSign or other electronic transmission shall be equally as effective as delivery of a manually executed counterpart of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first above written.

	CBD BIOTECH, INC.
Dated: April 17, 2020	/s/ Thomas K. Emmitt
	_________________________________
	By:  Thomas K. Emmitt
	Title:  President and CEO

	INTERGRITY CANNABIS SOLUTIONS, INC.
Dated: April 17, 2020	/s/ David Ambrose
	_________________________________
	By:  David Ambrose
	Title:  President and CEO

Exhibit 1

BAKHU EFFICACY TESTING CRITERIA

Planned demonstration of application of proprietary science and processes at commercial scale within standards of agreed efficacy.

The Parties (as defined therein) to that certain Strategic Alliance Agreement (the “Agreement”) all agree that a commercial scaled demonstration of the Bakhu Licensed Science, as defined in the Agreement, is necessary to satisfy the claims of the inventor, and as a condition precedent to the parties obligations and the entering into the CBD Sublicense Agreement and the payment of the License Fees thereunder.

To this specific end, the Parties agree that the “Bakhu Efficacy Testing” referred to in the Agreement as conducted by Bakhu pursuant to the Bakhu License Agreement, shall have the following attributes, and target delivering the results set forth herein below, and the delivery of such results shall demonstrate, for purposes of this Exhibit and the terms of the Agreement, acceptable “efficacy” of the proprietary science underlying the Licensed Science for commercial and licensing purposes (hereinafter “Efficacy Demonstration”).

The “Science Team” as referenced in this Exhibit consists of professional scientists from ICS and Bakhu under the direction of Dr Peter Whitton.

Overall objective: The end product, in quantity, and quality shall meet the representative claims, oral and written, summarized below:

Extension of the Efficacy Demonstration Period: In the event that anything less than a 90% Efficacy Demonstration is achieved during the test, it is agreed by the Parties that Science Team may extend the efficacy test period, adding an additional test cycle with one or both bioreactors, and make adjustments to their proprietary process to attempt to achieve the claimed results and achieve a 90% Efficacy Demonstration. The purpose of the expanded test is so the Science Team may attempt to improve the results by potentially working the remaining “bugs” in the system so improvements in yield may occur.

Exhibit 2

CBD Biotech Sublicense Agreement

Exhibit 4

Offtake Agreement

[Subject to Completion between ICS and Party TBD]

PATENT AND TECHNOLOGY SUBLICENSE AGREEMENT

This Patent and Technology Sublicense Agreement (this “Agreement”) is entered into as of April 22, 2020 by and between among CBD Biotech, Inc., a California corporation (“Sublicensor”) and Integrity Cannabis Solutions, Inc., a Florida corporation (“Sublicensee”), and shall become Effective upon the Effective Date as defined below. Sublicensor and Sublicensee are sometimes hereinafter individually referred to as a “Party” and collectively as the “Parties.”

RECITALS

A.                  Whereas, this Agreement is entered into pursuant to that certain Strategic Alliance Agreement (the “Strategic Alliance Agreement”) entered into by and between Sublicensor and Sublicensee concurrently herewith.

B.                  Whereas, Bakhu Holdings Corp., a Nevada corporation (“Bakhu”) and Cell Science Holdings Ltd., a corporation organized under the laws of the Republic of Cyprus (“Licensor”) are parties to that certain Amended and Restated Patent and Technology License Agreement dated December 31, 2019 (the “Master License Agreement”), a copy of which is attached hereto as Exhibit A, pursuant to which Licensor has licensed to Sublicensor, on a fully paid-up, royalty-free basis, all of the Licensed Science.

C.                  Whereas, the Sublicensor and Bakhu are parties to that certain Sublicense Agreement dated January 5, 2020 (the “Bakhu-CBD Biotech Sublicense”), a copy of which is attached hereto as Exhibit B, pursuant to which Bakhu has licensed to Sublicensor, on a fully paid-up, royalty-free basis, the Licensed Science (as defined below) within the Field (as defined below) to make or have made the Licensed Products (as defined below) and to use, sell, lease, offer to sell, import or otherwise dispose of the Licensed Product in the Territory (as defined in the Master License Agreement) subject to the terms and conditions of the Master License Agreement.

D.                  Licensor is the sole owner of all right, title and interest in and to the Licensed Science (which includes the inventions and subject matter disclosed in the Patents) and Sublicensor holds a Sublicense to the Licensed Science from Bakhu.

E.                   The Master License Agreement and the CBD Biotech License Agreement grants Sublicensor the right, from time to time, to sublicense to any third party or parties, on a non-exclusive basis, all or a portion of its rights under the Master License Agreement.

F.                   Sublicensor desires to sublicense the Licensed Science as its relates to the production, methods, and products of CBD and its derivatives, and Sublicensee desires to acquire and receive a license of the Licensed Science from Sublicensor for the purpose of producing, manufacturing, marketing and selling Licensed Products, all on the terms and conditions contained herein.

AGREEMENTS

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1.

DEFINITIONS

Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms below:

1.1               “Affiliate” means, with respect to any Person, any other Person controlling, controlled by or under common control with such first Person. For purposes of this definition and the Agreement, the term “control” (and correlative terms) means (a) the ownership of 50% or more of the equity interest in a Person, or (b) the power, whether by contract, equity ownership or otherwise, to direct or cause the direction of the policies or management of a Person.

1.2               “Agreement” has the meaning set forth in the opening paragraph.

1.3               “Applicable Law” shall mean all applicable provisions of all (i) constitutions, treaties, statutes, laws, rules, regulations, ordinances, codes or orders of any Governmental Authority, (ii) any consent, approval, authorization, waiver, permit, grant, franchise, concession, notification, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Governmental Authority, and (iii) decisions, injunctions, judgments, awards and decrees of, or agreements with, any Governmental Authority.

1.4               “Assignment” has the meaning set forth in Section 10.5.

1.5               “Bankruptcy” means the filing by a Person of a petition commencing a voluntary case under the Bankruptcy Code; a general assignment by a Person for the benefit of creditors; an admission in writing by a Person of its inability to pay debts as they become due; the seeking or acquiescence by a Person in the appointment of any trustee, receiver, or liquidator for the Person or for any part of the Person’s property; or the commencement against a Person of an involuntary case under the Bankruptcy Code, or a proceeding under any receivership, composition, readjustment, liquidation, insolvency, dissolution or similar law or statute, if not dismissed or vacated within 60 days.

1.6               “Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder and guidance issued in conjunction therewith.

1.7               “Distributor” shall mean any entity or other person, other than an Affiliate of Licensee, which purchases finished Licensed Products from Licensee or an Affiliate of Licensee solely for the purpose of resale to an End User

1.8               “Effective Date” means the Effective Date as defined in the Strategic Alliance Agreement.

1.9               “End User” shall mean the entity or person that purchases a Licensed Product for intended use.

1.10               “Field” means the (a) production and manufacturing of CBD, CBD byproducts and CBD derivatives, from non-psychoactive, low-THC cannabis sativa plant strains and cannabinoids (collectively, “Cannabis”), for Sale and use at retail or wholesale where permitted, including, without limitation, CBD food additives, CBD edibles, and CBD hemp variations of the foregoing; (b) CBD-related research, teaching and education for both medical and other purposes; and (c) all medical uses and applications of CDB. The Field is exclusive to production, methods, and products of CBD and its derivatives, and excludes and prohibits any THC related products having measurable tetrahydrocannabinol concentration potency above 3.0% on a dry weight basis, production methods, techniques, or Know How.

1.11           “Governmental Authority” means a federal, state, or local governmental authority; a state, province, commonwealth, territory or district thereof; a county or parish; a city, town, township, village or other municipality; a district, ward or other subdivision of any of the foregoing; any executive, legislative or other governing body of any of the foregoing; any agency, authority, board, department, system, service, office, commission, committee, council or other administrative body of any of the foregoing; any court or other judicial body; and any officer, official or other representative of any of the foregoing.

1.12           “Improvements” means those modifications, revisions, derivations, updates, enhancements and improvements of the Licensed Science that are conceived, discovered, created, developed or acquired by or on behalf of Licensor, which Improvements will automatically and without any further action on the part of Licensor or Sublicensee, become part of the Licensed Science (and part of the Patent and Technology License).

1.13           “IRS” means the United States Internal Revenue Service, and any successor thereto.

1.14           “Know-How” means technical information, ideas, concepts, confidential information, trade secrets, know-how, discoveries, inventions, processes, methods, formulas, source and object codes, data, programs, other works of authorship, improvements, developments, designs and techniques related to the field other than as embodied in the Patents, that are owned or controlled by Licensor during the Term and that are necessary or desirable to use the Patents for the purpose of the license granted in Section 2 hereof.

1.15           “License Fee” has the meaning set forth in Section 2.4.

1.16           “Licensed Products” means any CBD products related to the Field, whether owned by Licensor or Sublicensor or licensed by Licensor or Sublicensor now or hereafter, that are (i) covered by any Valid Claim(s) contained in any of the Patents, and/or (ii) based on the products, processes or methods developed using the Licensed Science.

1.17           “Licensed Science” means and includes anything and everything encompassed by the Licensed Process, the Licensed Product in the Field, and the Licensed Service, as well as any Improvements developed or acquired after the Effective Date which is related to the subject matter in the Patents, whether or not such Improvements becomes the subject of a patent application during the Term.

1.18           “Licensed Science Sublicense” has the meaning set forth in Section 2.1

1.19           “Licensed Service” means performance of a service using a Licensed Product, or the practice of a Licensed Process. For clarity, non-profit research and development of Licensed Products by Sublicensor, its Affiliates, or Sublicensees do not constitute a Licensed Service.

1.20           “Loss” means losses (but expressly excluding any lost or disallowed tax credits), liabilities, demands, assessments, cleanup, removal, remediation and restoration obligations, judgments, awards, damages, natural resource damages, contribution, cost-recovery and compensation obligations, fines, fees, penalties, costs and expenses (including litigation and arbitration costs and attorneys’ and experts’ fees and expenses).

1.21           “Net Annual Sales” shall mean the total of the total gross invoiced price paid to licensee of all Licensed Products sold or otherwise transferred by Licensee or any Affiliate of Licensee to an End User or Distributor in the Territory during a specific calendar year.

1.24           “Patents” means: (i) United Kingdom Patent No. GB1717554.8 and United Sates Patent No. 16/290,708, titled “A Method of Production of Phytocannabinoids for use in Medical Treatments,(ii) any Patent Cooperation Treaty applications, and (iii) any and all continuations, continuations-in-part, and divisionals, and all patents issuing which are based on such applications, and all reissues, reexaminations, or extensions thereof, as well as any foreign counterparts, continuations, continuations-in-part or divisions thereof and patents and patent applications on any improvements, advancements, modifications, revisions or developments to the subject matter claimed in the aforesaid patents that are developed by or for Licensor, together with any other patents (U.S. or foreign and even if not listed herein) that share a common claim of priority with said patents or that, as mutually agreed upon in good faith by the Parties, cover inventions substantially similar to said patents.

1.25           “Person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other entity.

1.26           “Term” means the period commencing on the Effective Date and ending on the date provided in Section 4.1 herein.

1.27           “Territory” means the State of Florida.

1.28           “Trade Secrets” has the meaning set forth in Section 8.4.

1.29           “Valid Claim(s)” means any claim contained in an issued and unexpired patent included within the Patents that has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, or unappealable or unappealed within the time allowed for appeal, and that has not been admitted to be invalid or unenforceable through reissue or disclaimer.

ARTICLE 2.

GRANT OF SUBLICENSE; LICENSE FEES AND ROYALTIES; AUDIT RIGHTS

2.1               Grant. Sublicensor hereby grants to Sublicensee, and Sublicensee hereby accepts, a transferable (but only to the extent provided in Section 2.3 below), non-exclusive right and license under the Licensed Science to make or have made the Licensed Products and to use the Licenses Science Patents, Know-How, and Licensed Products in connection with the Field, including the distribution, sale, and marketing thereof, in the Territory.

2.2               Scope of License. The Licensed Science Sublicense granted hereby is for the purpose of engaging in the business of treating, producing, manufacturing, marketing and selling Licensed Products, and to do any and all things necessary or incidental thereto subject to the terms and conditions of this Agreement.

2.3               Right to Sublicense. Subject to and conditioned upon the prior written approval of Sublicensor, the Sublicensee may, from time to time, sublicense to any other third party all its rights granted under this Sublicense.

2.4               License Fee. In consideration of the grant of the Sublicense hereunder and as memorialized in the Strategic Alliance Agreement, Sublicense agrees to pay to Sublicensor a license fee (the “License Fee”) of USD $250,000, in two installments:

(a)                the first installment of the License Fee, in the amount of USD$125,000 USD, shall be paid within twelve (12) months after the first sale of monthly production of CBD as set forth in the Strategic Alliance Agreement; and

(b)                the second installment of the License Fee, in the amount of USD$125,000 shall be paid on the six month anniversary date of the payment of installment one above.

2.5               Royalty. Additionally, during the term of this Agreement, Sublicensee agrees to pay Sublicensor, a royalty equal to 8% (the “Royalty”) based on Sublicensee’s gross sale (as defined below) of Licensed Products accruing upon the sale of the Licensed Products (i.e., when the Licensed Product is billed, invoiced, shipped, or paid for, whichever is first regardless of the time of collection by Sublicensee), calculated on a quarterly calendar basis (the "Royalty Period") and shall be payable, in arrears, no later than thirty (30) days after the termination of the preceding full quarter, commencing ninety (90) days from the first commercially scaled production run of the Production Facility as set forth in the Strategic Alliance Agreement, with late payments incurring interest at the rate of one percent (1%) per month from the date such payments were originally due.

2.6               Royalty Statements. Sublicensee shall provide Sublicensor with a written royalty statement in a form acceptable to Sublicensor each Royalty Period whether or not any Licensed Products were sold during that Royalty Period and the receipt or acceptance by Sublicensor of any royalty statement or payment shall not prevent Sublicensor from subsequently challenging the validity or accuracy of such statement or payment.

2.7               Gross Sales. Gross sales shall mean the total gross invoice amount billed customers of all sale transactions reported in a Royalty Period, without any deductions included within the total figure. Any product exchanged by the Sublicensee in any form of barter exchange with a third party shall constitute a “sale” at the normal price point charged by the Sublicensee to any other third party, and the amount of such barter shall be added to the “gross” sale report to determine the royalty payment due.

2.8               Audit Rights.

(a)                Sublicensor shall have the right, upon at least five (5) days written notice to inspect Sublicensee’s books and records and all other documents and material in the possession of or under the control of Sublicensee with respect to the subject matter of this Agreement at a location in the United States. Sublicensor shall have free and full access thereto for such purposes and shall be permitted to make copies thereof and extracts therefrom.

(b)                In the event that such inspection reveals a discrepancy in the amount of Royalty owed Sublicensor from what was actually paid, Sublicensee shall pay such discrepancy, plus interest, calculated at the rate of one percent (1%) per month. In the event that such discrepancy is in excess of one thousand dollars ($1,000), Sublicensee shall also reimburse Sublicensor for the cost of such inspection including any attorney's fees incurred in connection therewith.

(c)                All books and records relative to Sublicensee’s obligations hereunder shall be maintained and kept accessible and available to Sublicensor for inspection in the United States for at least three (3) years after termination of this Agreement.

(d)                In the event that an investigation of Sublicensee’s books and records is made, certain confidential and proprietary business information of Sublicensee may necessarily be made available to the person or persons conducting such investigation. It is agreed that such confidential and proprietary business information shall be retained in confidence by Sublicensor and shall not be used by Sublicensor or disclosed to any third party for a period of three (3) years from the date of disclosure, or without the prior express written permission of Sublicensee unless required by law. It is understood and agreed, however, that such information may be used in any proceeding based on Sublicensee’ failure to pay its actual Royalty obligation.

ARTICLE 3.

TECHNICAL ASSISTANCE AND IMPROVEMENTS

3.1               Sublicensor shall promptly and fully advise Sublicensee in writing of any Improvements, it being understood that any Improvements conceived, discovered, created, developed or acquired by Sublicensor or Licensor during the Term will be the property of Sublicensor or Licensor, as applicable, and will be included within the Licensed Science and thereby made a part of the Licensed Science Sublicense granted to Sublicensee for the remaining duration of this Agreement. The expenses of filing and prosecuting any patent application relating to such Improvements will be borne by Licensor.

3.2               All inventions, improvements, or Know-How (based on the Licensed Science) that are conceived, discovered, created, developed or acquired by or on behalf of Sublicensee or by any of the Parties jointly are to be owned by Licensor, and all right, title and interest in and to such inventions, improvements, or Know-How are hereby assigned by Sublicensee and Sublicensor, as appropriate, to Licensor. Sublicensee and Sublicensor shall promptly and fully advise Licensor in writing of such inventions, improvements, or Know-How that are material and of which it becomes aware. All right, title, and interest in any inventions, improvements, or Know-How (with respect to the subject matter of the Licensed Science) that are conceived, discovered, created, developed or acquired (a) by or on behalf of Sublicensee or (b) by any of the Parties jointly will be sublicensed and are hereby sublicensed to Sublicensee as part of the Licensed Science Sublicense. The expenses of filing and prosecuting any patent application relating to any such inventions, improvements, or Know How will be borne by Licensor; provided, however that Sublicensee and Sublicensor, as appropriate, shall reasonably assist Licensor, at Licensor’s sole expense, in obtaining Licensor’s full ownership rights, including patent rights, in and to the subject inventions, improvements, or Know-How.

ARTICLE 4.

COVENANTS AND OTHER AGREEMENTS

4.1               Compliance. The Sublicensor and Sublicensee each agree to that the sublicense granted hereunder and the payment of the Licensee Fees and Royalty, is conditioned upon Sublicensee’s and Sublicensor’s full and complete compliance of all terms and conditions of this Agreement and with all applicable laws and regulations of the Territory and the United States, and any regulatory or other agency within the Territory or of the United States, including the rules and regulations of the Federal Trade Commission (the “FTC”) and/or the Federal Drug Administration (the “FDA”).

4.2              Sublicensor’s Termination Rights. The Parties agree that in the event of the sale to a non-affiliated third party, of the Licensed Science and any license rights associated therewith, then Sublicensor shall have the option, on 45-days prior written notice to Sublicensee, to terminate this Sublicense Agreement subject to payment of a termination fee by Sublicensor to Sublicensee as set forth in Section 4.3 below.

4.3               Termination Fee. In the event of the termination of this Sublicense Agreement by Sublicensor as provided in Section 4.2 above, Sublicensor shall pay to Sublicensee a termination fee (the “Termination Fee”) equal to the actual license fees paid by Sublicensee to Sublicensor pursuant to Section 2.4 above. The payment of the Termination Fee shall be a condition precedent to Sublicensor’s rights to terminate this Sublicense Agreement and shall be paid on the effective date of the termination of this Sublicense Agreement.

4.4               Mandatory Purchase of Production Facility Equipment. In addition to the payment of the Termination Fee as set forth in Section 4.2, in the event of the termination of the Sublicense Agreement by Sublicensor as provided in Section 4.1 above, Sublicensor shall have the obligation to reimburse Sublicensee and purchase from Sublicensee all lab operational equipment acquired, installed and necessary to operate the Production Facility (as defined in the Strategic Alliance Agreement) established by Sublicensee pursuant to the Strategic Alliance Agreement, by making a single payment to Sublicensee (the “Equipment Purchase Payment”), equal to one hundred percent (100%) of Sublicensee’s actual cost incurred within thirty (30) days of the written notice of termination as provided in Section 4.1. The payment of the Equipment Purchase Payment shall be a condition precedent to Sublicensor’s rights to terminate this Sublicense Agreement and shall be paid on the effective date of the termination of this Sublicense Agreement.

4.5               Post Purchase Joint Ownership of Production Facility Equipment. Upon payment of the Equipment Purchase Payment by Sublicensor as set forth in Section 4.4, Sublicensor and Sublicense shall jointly and equally own the production facility lab equipment acquired, and shall jointly determine the business use of said equipment. By way of example, if Sublicensee, at the time that Sublicensor exercises Sublicensor’s buyback and termination rights hereunder, has invested $3.8 million in the equipment and installation to create the Production Facility, then as a result of the termination of this Sublicense Agreement with Sublicensee, Sublicensor shall pay Sublicensee an Equipment Purchase Payment of $3.8 million.

4.6               Public Announcements. Neither Sublicensor nor Sublicensee shall make, or permit any representative to make, any public statements, including any press releases, with respect to this Agreement or the transactions contemplated hereby without the prior written consent of both Parties. Either Party shall have the right to make such disclosures as it may deem necessary or advisable to comply with applicable law, including pursuant to the rules and regulations of the FTC or FDA. If any public announcement of release is to be made, Sublicensor and Sublicensee shall jointly agree on the content and substance of all public announcements concerning this Agreement.

ARTICLE 5.

TERM AND TERMINATION

5.1               Term. Unless earlier terminated as provided herein, the term of this Agreement is from the Effective Date until the expiration of all patents issued under Patent Rights (if any) and the cancellation, withdrawal, or express abandonment of all patent applications under Patents Rights (if any). Notwithstanding the foregoing, the license granted to Licensee under this Agreement for Licensed Science that is not subject to an expiration of a Patent Right shall continue in perpetuity.

5.2               Other Termination. Any Party may terminate this Agreement prior to the end of the Term upon providing written notice to the other Party if the other Party commits a material default or breach of any representation, warranty, covenant or agreement contained herein and, if remediable, the defaulting or breaching party fails to remedy any such default or breach within 30 days after receiving written notice describing in reasonable detail the material default or breach from the non-defaulting or non-breaching Party. Notwithstanding the preceding sentence in the event that an alleged default or breach is caused by or a result of the actions of a third party, upon the defaulting or breaching party demonstrating that the alleged default or breach is curable but the time to cure such default of breach exceeds the 30 day cure period, the cure period will be extended to such reasonable time cure in light of the applicable circumstances. By way of example, if the Sublicensee received a cease and desist letter from a state or federal government agency for review of operations, the notice, response and review guidelines for such an inquiry will normally exceed ninety days, and in such an event the applicable cure period would be extended accordingly.

5.3               Effect of Termination of this Agreement or the CBD Biotech License Agreement under Certain Circumstances. The rights of Sublicensee set forth in Article 2., will survive any termination of this Agreement or the CBD Biotech Sublicense Agreement or the dissolution of the Sublicensor; provided any such termination of this Agreement does not occur as a result of a breach of this Agreement by Sublicensee (each of the foregoing, a “No-Fault Termination Event”). As provided in the Master License Agreement and the CBD Biotech Sublicense Agreement, in the event of a No-Fault Termination, Sublicensee shall have all of the rights and licenses granted to Sublicensor by Bakhu under the CBD Biotech Sublicense Agreement, and Bakhu will assume all obligations of Sublicensor in this Agreement, both without any further action by any of the Parties.

5.4               Effect of Bankruptcy of Sublicensor or Licensor. Sublicensor and Licensor acknowledge and agree that the Intellectual Property rights licensed to Sublicensee hereunder constitute “intellectual property” as such term is defined in the Bankruptcy Code and that Sublicensee is entitled to all of the rights of a licensee of intellectual property under Section 365(n) of the Bankruptcy Code with respect to all of such licensed rights, which rights under the Bankruptcy Code include, without limitation, the right, upon the rejection of this Agreement or the License Agreement in any case filed under the Bankruptcy Code with respect to Sublicensor and/or Licensor, to treat this Agreement or the License Agreement as terminated or to retain Sublicensee’s rights under this Agreement or the License Agreement, and under any agreements supplemental to this Agreement or the License Agreement, with respect to such rights (including any embodiment of the rights to the extent protected by applicable non-bankruptcy law), as such rights existed immediately before the Sublicensor’s and/or Licensor’s bankruptcy case commenced. If Sublicensee elects to retain such licensed rights under this Agreement or the License Agreement, then Sublicensee may exercise such licensed rights in accordance with the terms and conditions of this Agreement or the License Agreement. Nothing contained herein shall limit any other rights provided to Sublicensee under the Bankruptcy Code, including Section 365(n) thereof.

ARTICLE 6.

REPRESENTATIONS AND WARRANTIES

Each Party hereby represents and warrants to the other Party as of the Effective Date (except where a representation and warranty speaks as of another date) as follows: 

6.1               By Sublicensee. Sublicensee represents and warrants to Sublicensor as follows:

(a)                that Sublicensee has the full right, power and authority to enter into this Agreement and perform its obligations hereunder;

(b)                that Sublicensee it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and is qualified to conduct its business in those jurisdictions necessary to perform this Agreement;

(c)                that this Agreement constitutes the legal, valid and binding obligation of Licensee enforceable in accordance with its terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(d)                that all necessary corporate or other required action has been taken to authorize, and all necessary authorizations, notices and consents of any third party which are required to authorize, Sublicensee to execute and deliver, and to perform the transactions contemplated by, this Agreement have been obtained and remain in full force and effect;

(e)                that the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its limited liability company agreement or other governing documents or any contract to which it is a party or by which any of its properties is bound or any law, rule, regulation, order, writ, judgment, decree or other legal or regulatory determination of any governmental entity applicable to it; and

(f)                 that Sublicensor has deliver and the Sublicensee acknowledges receipt of Sublicensor’s Business Opportunity Disclosure Statement (the “Disclosure Statement”), attached hereto as Exhibit C, as required under FTC Business Opportunity Rule, 16 CFR Part 437 and Chapter 559, Part VIII of the Florida Statutes.

6.2               By Sublicensor. Sublicensor represents and warrants to Sublicensee as follows:

(a)                that Sublicensor has the full right, power and authority to enter into this Agreement and perform its obligations hereunder;

(b)                that Sublicensor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and is qualified to conduct its business in those jurisdictions necessary to perform this Agreement;

(c)                that this Agreement constitutes the legal, valid and binding obligation of Sublicensor enforceable in accordance with its terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(d)                that the Master License Agreement constitutes the legal, valid and binding obligation of Sublicensor in accordance with its terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(e)                that all necessary corporate or other required action has been taken to authorize, and all necessary authorizations, notices and consents of any third party which are required to authorize, Sublicensor to execute and deliver, and to perform the transactions contemplated by, this Agreement have been obtained and remain in full force and effect;

(f)                 that the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its limited liability company agreement or other governing documents or any contract to which it is a party or by which any of its properties is bound or any law, rule, regulation, order, writ, judgment, decree or other legal or regulatory determination of any governmental entity applicable to it;

(g)                that Sublicensor has a valid license of the Licensed Science under the Master License Agreement;

(h)                that Sublicensor has the full right and authority to grant the sublicense the Licensed Science under this Agreement to the Sublicensee;

(i)                 that there are no outstanding agreements, assignments or encumbrances inconsistent with the provisions of this Agreement;

(j)                 that to the Sublicensor’s knowledge, none of the Patents have been invalidated either wholly or partly by a tribunal or court of law within the United States or abroad or by the United States Patent and Trademark Office or any of its foreign equivalents and to the knowledge of Sublicensor there are no proceedings attempting to do so;

(k)                that neither the Patents nor the, Licensed Science or Know-How infringe or misappropriate any patent, trade secret or other intellectual property right of any third party;

(l)                 that Sublicensor has not received any notice alleging its noncompliance with any Applicable Law with respect to the Licensed Science, or Licensed Products;

(m)              that Sublicensor has not threatened or initiated any claim, suit or proceeding against any third party alleging that such third party has infringed or misappropriated any rights under the Patents, Licensed Science, and/or Know-How and, to the knowledge of Sublicensor, no third party is infringing or misappropriating any such rights; and

(n)                that the Patents, Licensed Science, and Know-How, along with know-how generally available in the Field, are all the intellectual property rights necessary for the manufacture of the Licensed Products.

ARTICLE 7.

LIMITATION OF LIABILITY

7.1               With the exception of the parties’ obligations under Article 9 or any willful misconduct or gross negligence by a party, in no event shall any party be liable to any other party or any third party for any special, consequential, indirect or incidental damages, however caused, on any theory of liability whether or not a party has been advised of the possibility of such damages, arising in any way out of this agreement.

ARTICLE 8.

MAINTENANCE OF PATENT RIGHTS

8.1               Pursuant to the Master License Agreement, Licensor shall be solely responsible for and shall pay all fees, costs or expenses of any nature required to prosecute, defend or maintain the Patents and will use reasonable commercial efforts to maintain and enhance the scope of the Valid Claim(s).

Pursuant to the Master License Agreement if any claim contained in an issued and unexpired patent included within the Patents is held unenforceable, unpatentable or invalid by a decision of a tribunal, court, or other governmental agency of competent jurisdiction, then Licensor will, at its sole expense, use reasonable commercial efforts to create, develop and/or secure functionally equivalent workarounds and, where commercially appropriate, prosecute patent applications and or patents for the same, which patent applications and/or patents will automatically be included within the Patents.

ARTICLE 9.

PROTECTION OF LICENSED SCIENCE

9.1               Pursuant to the Master License Agreement, it shall be the obligation of Licensor, at its sole cost and expense, in Licensor’s name, to protect and enforce the Patents and to prosecute or settle any third-party infringement of the Patents pursuant to the terms of the Master License Agreement. If pursuant to the Master License Agreement the Licensor determines not to diligently enforce the Patents, (in which case Licensor shall promptly notify Sublicensor in writing of the same, or if it comes to the attention of Sublicensee that Licensor is not diligently enforcing the Patents then, subject to the rights of Licensor and other licensees of the Patents (i) Sublicensee will have the right to enforce the Patents at Sublicensee’s sole expense, (ii) if requested by Sublicensee, Licensor and Sublicensor will cooperate in Sublicensee’s prosecution or defense of any dispute resolution, litigation or settlement activities hereunder, provided that Sublicensee will reimburse Licensor for all reasonable costs incurred by Licensor as a result of such cooperation, and (iii) any recoveries will be awarded to Sublicensor and Sublicensee (and any other participating licensees or sublicensees) in an amount that is proportional to their costs in so enforcing the Patents.

9.2               Indemnity by Sublicensee. Sublicensee shall defend, indemnify and hold harmless Licensor, Sublicensor and their respective Affiliates and their respective members, managers, stockholders, officers, employees, agents, representatives and attorneys against any Loss arising from or in connection with any breach by Sublicensee of the representations and warranties in Section 6.1.

9.3               Indemnity by Sublicensor. Sublicensor shall defend, indemnify and hold harmless Licensor and Sublicensee and their respective Affiliates and their respective members, managers, stockholders, officers, employees, agents, representatives and attorneys against any Loss arising from or in connection with any breach by Sublicensor of the representations and warranties in Section 6.3.

9.4               Protection and Enforcement of Licensed Science, Know-How and Trade Secrets. Sublicensor and Sublicensee will at all times during the Term use commercially reasonable efforts to preserve and protect the confidentiality of all portions of the Licensed Science, Know-How and any other information provided it such Persons that constitute “trade secrets” as that term is defined in the Uniform Trade Secret Act (the “Trade Secrets”). Furthermore, if it comes to the attention of Licensor that any Trade Secret has been misappropriated by any third party, then Licensor will use all reasonable efforts, including legal actions, to preserve and protect the confidentiality of the Trade Secret and to prevent such third party from any and all uses of the Trade Secret, so long as doing so is commercially reasonable to benefit either Licensor or Sublicensee.

9.5               Sublicensee’s Obligation to Notify Licensor of Possible Infringements or Misappropriation. Sublicensee shall notify Licensor, in writing, if it comes to the attention of Sublicensee that any of the Patents is being infringed or any Trade Secret has been or is in danger of being misappropriated by any third party, including in such notice a summary of relevant facts underlying Sublicensee’s belief as to such infringement or misappropriation.

 ARTICLE 10.

CONFIDENTIALITY

10.1           Each Party shall maintain the terms of this Agreement in confidence and shall not disclose any information concerning the terms, performance or administration of this Agreement to any other Person; provided that a Party may disclose such information: (a) to any of such Party’s Affiliates, (b) to any prospective member of such Party’s Affiliates, (c) to any actual or prospective purchaser of all or a portion of such Party and (d) to any Person providing or evaluating a proposal to provide financing to the recipient Party or any direct or indirect owner of such Party; provided in each case that the recipient Party shall provide to each Person to which disclosure is made a copy of this Article 10 and direct such Person to treat such information confidentially, and the recipient Party shall be liable for any breach of the terms of Article 9 by such Persons to which it makes any such disclosure. The foregoing restrictions will not apply (i) to information that is or becomes generally available to the public otherwise than as a result of disclosure by the recipient Party, (ii) to information that is already in, or subsequently comes into, the recipient Party’s possession, provided that the source of such information was not, to the recipient Party’s knowledge, obligated to keep such information confidential and the information was not received solely pursuant to a previous agreement between the Parties , (iii) to information that is required to be disclosed pursuant to Law or stock exchange rules and regulations or is otherwise subject to legal, judicial, regulatory or self-regulatory requests for information or documents, or (iv) subject to Section 10.2 below, to the tax treatment or tax structure of the transaction.

10.2           If any Party is required to disclose any information required by this Article 10., to be maintained as confidential in a judicial, administrative or governmental proceeding, such Party shall give the other Party at least 10 days’ prior written notice (unless less time is permitted by the applicable proceeding) before disclosing any such information in any said proceeding and, in making such disclosure, the Party required to disclose the information shall disclose only that portion thereof required to be disclosed and shall cooperate with the other Party in the other Party’s attempts to seek to preserve the confidentiality thereof, including if such Party seeks to obtain protective orders and/or any intervention.

ARTICLE 11.

GENERAL PROVISIONS

11.1           Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when delivered by a nationally recognized delivery service or (c) when delivered by e-mail with receipt confirmed, addressed as the Recipient or Discloser, as follows:

Notices to BHS:

CBD Biotech, Inc.

Attn: Thomas K. Emmitt

One World Trade Center, Suite 130

Long Beach, CA 90831

Facsimile: (310) 997-1484

Email: tkemmitt@yahoo.com

Notices to ICS:

Integrity Cannabis Solutions Inc.

Attn: David Ambrose

16255 Aviation Loop Drive

Brooksville, Florida 34604

Facsimile: 352-754-8507

Email: dambrose@tgunited.com

Each Party shall update the other Party in writing with any changes in its contact information.

11.2           Binding Effect; Third Parties. The terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the Parties and their successors and permitted assigns. Nothing in this Agreement shall be deemed to grant any third-party beneficiary or similar rights to any Person not a signatory to this Agreement.

11.3           Construction. The words “this Agreement,” “herein,” “hereby,” “hereunder,” and “hereof,” and words of similar import, refer to this Agreement as a whole (including all Annexes, Exhibits and Schedules) and not to any particular subdivision unless expressly so limited. The words “this Section,” “this subsection,” and words of similar import, refer only to the Sections or subsections hereof in which such words occur. The word “or” is not exclusive, and the word “including” (in its various forms) means “including without limitation.” Pronouns in masculine, feminine, or neuter genders shall be construed to state and include any other gender and words, terms, and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise expressly requires. Unless the context otherwise requires, all defined terms contained herein shall include the singular and plural and the conjunctive and disjunctive forms of such defined terms, and the term “Annex,” “Exhibit” or “Schedule” shall refer to an Annex, Exhibit or Schedule attached to this Agreement.

11.4           Governing Law; Jurisdiction and Venue. This Agreement will be construed and enforced in accordance with laws of the U.S. and the State of California, without regard to any choice of law and/or conflicts of law principles which would otherwise refer to and apply the laws of another jurisdiction. Any legal suit, action, proceeding, or dispute arising out of or related to this Agreement or the other agreements referred to herein, shall be instituted in the federal courts of the United States of America or the Superior Courts of the State of California, in each case located in the County of Los Angeles, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.

11.5           Waiver of Jury Trial. To the fullest extent permitted by applicable law, the Parties hereto hereby voluntarily and irrevocably waives trial by jury in any Proceeding brought in connection with this Agreement, any of the related agreements and documents, or any of the transactions contemplated hereby or thereby.

11.6           Modification. Any modification of this Agreement will be effective only if it is in writing and signed by duly authorized representatives of both Parties. No modification will be made by e-mail communications.

11.7           Severability. If any provision hereof is held to be invalid, illegal or unenforceable in any jurisdiction, the Parties hereto shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties, and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be construed in order to carry out the intentions of the Parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such other provisions in any other jurisdiction, so long as the essential essence of this Agreement remains enforceable.

11.8           Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any benefits, rights or remedies on any entity, other than the Parties and their permitted successors and assigns.

11.9           Entire Agreement. This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof, and supersedes all prior written or verbal agreements, representations and understandings relative to such matters.

11.10        Integration. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior representations, assurances, courses of dealing, agreements, and undertakings, whether written or oral, between the Parties concerning such subject matter.

11.11        Titles and Headings. Titles and headings as used in this Agreement are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of any provision.

11.12        Assignment. No Party shall assign, sublease or otherwise transfer (collectively, an “Assignment”) this Agreement or any of its rights hereunder without the prior written consent of the other Parties, and any purported Assignment made without such prior written consent shall be void. Notwithstanding the foregoing:

(a)        any Party may, without the need for consent from the other Parties, make an Assignment of this Agreement to an Affiliate of such Party provided that such Affiliate assumes all of the obligations of the Party making the Assignment, and in such event the Assigning Party shall be released from its obligations under this Agreement, except for those obligations that arose prior to such Assignment;

(b)        Sublicensee may, without the need for consent from Sublicensor or Licensor, make an Assignment of this Agreement to any Person succeeding to all or substantially all of its assets.

11.13        Amendment; Modification, and Waiver. This Agreement may not be amended or modified except by an instrument in writing signed by each of the Parties. Any failure of Sublicensee, Sublicensor, or Licensor to comply with any obligation, covenant, agreement, or condition contained herein may be waived only if set forth in an instrument in writing signed by the Party to be bound thereby, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any other failure.

11.14        Severability of Provisions. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of Applicable Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.

11.15        Entire Agreement. This Agreement shall constitute the entire agreement between the Parties hereto relating to the subject matter hereof. This Agreement expressly supersedes all prior agreements between the Parties relating to the subject matter hereof.

11.16        Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.

11.17        Survivability on Termination. The provisions of Article 8, 9 and 10, and any other provision hereof which, by its terms, expressly provides that it survive termination of the Term, shall survive the termination of the Term for any reason. All other rights and obligations of the Parties shall cease upon termination of the Term or other termination of this Agreement.

11.18        Further Assurances. Each Party shall execute and deliver to any other Party such further documents, instruments and assurances as may be reasonably requested by such other Party to fulfill the intent of the Parties hereto.

IN WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives to execute this Agreement as of the date first above written.

EXHIBIT A

Master License Agreement

between

Cell Science Holdings Ltd. and Bakhu Holdings Corp.

[Delivered]

EXHIBIT B

Sublicense License Agreement

between

Bakhu and Sublicensor.

[Delivered]

EXHIBIT C

Business Opportunity Disclosure Statement Pursuant to

FTC Business Opportunity Rule, 16 CFR Part 437

and

Chapter 559, Part VIII of the Florida Statutes.