Document:

EXHIBIT 10.1

 

EXCHANGE AGREEMENT

 

BY AND AMONG

 

JIN-EN INTERNATIONAL GROUP HOLDING COMPANY,

 

NASCENT BIOTECH, INC.

 

AND

 

CERTAIN STOCKHOLDERS OF EACH

 

Dated July 15, 2014

 

	 
	
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EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (the "Agreement"), is made and entered into as of July 15, 2014, by and among Jin-En International Group Holding Company, a Nevada corporation ("JIN"), Nascent Biotech, Inc., a Nevada corporation ("NBI"), and the stockholders of NBI set forth on the signature pages to this Agreement (collectively, the "Sellers" and individually, a "Seller"), with respect to the following facts:

 

RECITALS:

 

A. Sellers own at least 80% of the issued and outstanding shares of common stock of NBI, par value $.001 per share (the "NBI Shares"), in the denominations as set forth opposite their respective names on Schedule I to this Agreement;

 

B. JIN desires to acquire from Sellers, and Sellers desire to sell and transfer to JIN, all of the NBI Shares owned by Sellers on the Closing Date in exchange for the issuance and delivery by JIN of one (1) share of Common Shares, par value $0.001 per share, of JIN ("JIN Exchange Shares"), in restricted form, for each NBI Share owned (the "Exchange Ratio"), on the terms and conditions set forth below (the "Exchange"), with fractional shares to be rounded down;

 

C. It is intended that, for federal income tax purposes, the Exchange shall qualify as an exchange described in Section 351 of the of the Internal Revenue Code of 1986, as amended (the "Code") and a reorganization described in Section 368 of the Code.

 

NOW, THEREFORE, in consideration of the foregoing premises and representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

ARTICLE I

 

EXCHANGE OF SECURITIES

 

Section 1.1 The Exchange. On the terms and subject to the conditions of this Agreement, on the Closing Date, JIN shall issue and deliver to each of the Sellers such number of shares of NBI Exchange Shares as is set forth opposite such Seller's name on Schedule I hereto, subject to adjustment as set forth in Section 1.2, and each such Seller shall sell, transfer and deliver to JIN, the number of issued and outstanding NBI Shares set forth opposite such Seller's name on Schedule I hereto along with a duly executed share assignment endorsed in favor of JIN.

 

Section 1.2 Exchange Ratio

 

(a) JIN currently has outstanding 22,829,400 shares of common stock (“Common Stock”) and no shares of preferred stock issued and outstanding. NBI currently has issued and outstanding 7,500,200 shares of its common stock, par value $0.001.

 

	 
	
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(b) If between the date of this Agreement and the Closing Date, there shall be any other change in the number of shares of outstanding capital stock of either JIN or NBI, the Exchange Ratio shall be adjusted such that immediately following the Closing, the aggregate number of shares of Common Stock issued to each represents the percentage ownership set forth above except for the cancellation of 15,000,000 shares of the common stock of JIN which will occur after Closing but which will not change the JIN Exchange Shares to be issued as set forth hereinabove.

 

(c) If between the date of this Agreement and the Closing Date, the holders of issued and outstanding NBI Shares constituting less than one hundred percent (100%) but more than eighty percent (80%) have agreed to the Exchange contemplated hereunder, then NBI shall proceed to the Closing of the Exchange, subject to satisfaction of the conditions set forth in Section 7.1. For a period of three months following the Closing Date, JIN may, but shall not be required to accept for Exchange any NBI Shares then held by any shareholder who has not yet accepted the Exchange (a "Delayed Shareholder"), subject to such shareholder's execution of this Agreement as a Seller for all intents and purpose, including but not limited to assuming all representations, warranties and undertakings of the Sellers hereunder and performance of all of the conditions for Closing to be performed by each Seller hereunder. Until such time as a Delayed Shareholder executes this Agreement and submits his NBI Shares in exchange for shares of JIN Exchange Shares (thereby becoming a Seller), and such exchange is accepted by JIN, such Delayed Shareholder shall remain a shareholder of NBI and shall not be considered a shareholder of JIN and shall not be entitled to any of the rights thereof, including without limitation the right to vote or receive any distributions with respect thereto.

 

ARTICLE II

 

THE CLOSING

 

Section 2.1 Closing Date. The closing of the Exchange and the other transactions contemplated by this Agreement (the "Closing") shall take place at the offices of McDowell Odom LLP, 28494 Westinghouse Place, Suite 213, Valencia, CA 91355 at 10:00 a.m. on July 15, 2014, or at such other location, date and time as JIN and NBI may agree. The time and date upon which the Closing actually occurs being referred to herein as the "Closing Date").

 

Section 2.2 Transactions at Closing. At the Closing, the following transactions shall take place simultaneously and no transaction shall be deemed to have been completed or any document delivered until all such transactions have been completed and all required documents delivered:

 

(a) JIN shall deliver the following documents and take the following actions:

 

(i) Validly executed stock certificates corresponding to the JIN Exchange Shares issued in the name of the Sellers in the amounts set forth in Schedule I;

 

(ii) Instructions directing its transfer agent to register the allotment of the JIN Exchange Shares to the Sellers;

 

	 
	
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(iii) True copies of all consents and waivers obtained by JIN, in accordance with the provisions of Section 7.1 below;

 

(iv) Certificate of good standing from the Secretary of State of the State of Nevada, dated at or about the Closing Date, to the effect that JIN is in good standing under the laws of said state;

 

(v) Certified copy of the Certificate of Incorporation of JIN, as certified by the Secretary of State of the State of Nevada at or about the Closing Date;

 

(vi) Secretary's certificate duly executed by JIN's secretary attaching and attesting to the accuracy of: (a) the bylaws of JIN, (b) the resolutions of JIN's board of directors hereto issuing and allotting the JIN Exchange Shares to the Sellers subject to the provisions hereof, appointing the designees of NBI as directors of JIN, and (c) an incumbency certificate signed by all of the executive officers of JIN dated at or about the Closing Date;

 

(vii) An officer's certificate duly executed by JIN's chief executive officer to the effect that the conditions set forth in Section 7.1(a) below have been satisfied, dated as of the date of the Closing;

 

(viii) Resignation and release letters from certain of the current officers and directors of JIN who are not serving in those capacities post-Exchange;

 

(ix) All corporate books and records of JIN;

 

(x) Such other documents and instruments as NBI may reasonably request;

 

(xi) The Board of Directors of JIN shall consist of Mark Glassy, Lowell Holden, Brandon Price and Sean Carrick. The officers of JIN shall be Mark Glassy as CEO, Lowell Holden as CFO, and Sean Carrick as Secretary. The parties agree to execute such other further agreements and consents as necessarily to put into effect this section.

 

(b) NBI shall deliver or cause to be delivered the following documents and/or shall take the following actions:

 

(i) NBI shall deliver to JIN share certificates in the name of JIN in respect of all NBI Shares and shall register NBI Shares in the name of JIN in the shareholders register of NBI;

 

(ii) Certificate of good standing from the Secretary of State of the State of Nevada, dated at or about the Closing Date, to the effect that NBI is in good standing under the laws of said state;

 

(iii) Certified copy of the Certificate of Incorporation of NBI, as amended to date certified by the Secretary of State of the State of Nevada at or about the Closing Date;

 

	 
	
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(iv) Secretary's certificate duly executed by NBI's secretary attaching and attesting to the accuracy of: (a) the bylaws of NBI, (b) the resolutions of NBI's board of directors, approving the transactions contemplated hereby, including the Exchange, and (c) an incumbency certificate signed by all of the executive officers of NBI dated at or about the Closing Date;

 

(v) An officer's certificate duly executed by NBI's chief executive officer of NBI to the effect that the conditions set forth in Section 7.2(a) below have been satisfied, dated as of the date of the Closing;

 

(vi) True copies of all consents and waivers obtained by NBI, in accordance with the provisions of Section 7.1 below; and

 

(vii) Originally executed letters of acceptance for NBI directors being elected to the Board and for those officers being appointed officers of JIN;

 

(viii) Copies of all corporate books and records of NBI, including a complete listing of shareholders and financial records.

 

(c) The Sellers shall deliver the following documents:

 

(i) to JIN, duly executed share assignments effecting the immediate and unconditional sale, assignment and irrevocable transfer of NBI Securities to JIN, free and clear of any liens, or any other third party rights of any kind and nature, whether voluntarily incurred or arising by operation of law along with the completely executed Investor Questionnaire, substantially in the form attached hereto as Schedule II;

 

(ii) to NBI, as agent for JIN, all share certificates in respect of NBI Shares.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF JIN

 

JIN hereby makes the following representations and warranties to NBI and each Seller:

 

Section 3.1 Organization and Qualification. JIN is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with the corporate power and authority to own and operate its business as presently conducted, except where the failure to be or have any of the foregoing would not have a Material Adverse Effect. JIN is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of their activities makes such qualification necessary, except for such failures to be so qualified or in good standing as would not have a Material Adverse Effect. JIN has no subsidiaries and is not a participant in any joint venture, partnership, or similar arrangement.

 

	 
	
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Section 3.2 Authorization. JIN has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Exchange.

 

Section 3.3 Validity and Effect of Agreement. This Agreement has been duly and validly executed and delivered by JIN and, assuming that it has been duly authorized, executed and delivered by the other parties hereto, constitutes a legal, valid and binding obligation of JIN, in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally.

 

Section 3.4 No Conflict. Neither the execution and delivery of this Agreement by JIN nor the performance by such party of its respective obligations hereunder, nor the consummation of the Exchange, will: (i) conflict with JIN's Certificate of Incorporation or Bylaws; (ii) violate any statute, law, ordinance, rule or regulation, applicable to JIN or any of the properties or assets of JIN; or (iii) violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any obligation of JIN, or result in the creation or imposition of any Lien upon any properties, assets or business of JIN under, any Contract or any order, judgment or decree to which JIN is a party or by which it or any of its assets or properties is bound or encumbered except, in the case of clauses (ii) and (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate, would not have a material adverse effect on its obligation to perform its covenants under this Agreement.

 

Section 3.5 Required Filings and Consents. The execution and delivery of this Agreement by JIN does not, and the performance of this Agreement by JIN will not, require any consent, approval, authorization or permit of, or filing with or notification to, Governmental Authority with respect to JIN except: (i) compliance with applicable requirements of the Securities Act, the Exchange Act and state securities laws ("Blue Sky Laws"); and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on JIN, or would not prevent or materially delay consummation of the Exchange or otherwise prevent the parties hereto from performing their respective obligations under this Agreement.

 

Section 3.6 Capitalization. The authorized capital stock of JIN consists of 100,000,000 shares of Common Stock, par value $0.001 per share, of which 22,829,400 shares are issued and outstanding, and 10,000,000 shares of Preferred Stock, par value $0.001 per share, of which none are issued and outstanding. Except for the transactions contemplated by this Agreement or as otherwise described herein, there are no other share capital, preemptive rights, convertible securities, outstanding warrants, options or other rights to subscribe for, purchase or acquire from JIN any shares of capital stock of JIN and there are no contracts or commitments providing for the issuance of, or the granting of rights to acquire, any shares of capital stock of JIN or under which JIN is, or may become, obligated to issue any of its securities. All shares of capital stock of JIN outstanding as of the date of this Agreement have been duly authorized and validly issued, are fully paid and nonassessable, and are free of preemptive rights. As of the Closing Date (as defined herein), there will be no more than 22,829,400 shares of Common Stock issued or outstanding prior to the Exchange.

 

	 
	
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Section 3.7 Status of JIN Series Exchange Shares. The JIN Exchange Shares, when issued and allotted at the Closing in exchange for NBI Shares, in restricted form, will be duly authorized, validly issued, fully paid, nonassessable, and free of any preemptive rights, will be issued in compliance with all applicable laws concerning the issuance of securities, and will have the rights, preferences, privileges, and restrictions set forth in JIN's charter and bylaws, and will be free and clear of any Liens of any kind and duly registered in the name of the Sellers, in JIN's stockholders ledger.

 

Section 3.8 Financial Statements. Each of the financial statements (the "JIN Financial Statements") for the years ended December 31, 2013 and 2012 and the unaudited financial statements for the six (6) month period ended June 30, 2014 have been (or will be) filed in accordance with any applicable law and prepared from, and are in accordance with, the books and records of JIN, comply in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial positions and the results of operations and cash flows of JIN as of the dates thereof or for the periods presented therein (subject, in the case of unaudited statements, to normal year-end audit adjustments not material in amount).

 

Section 3.9 No Undisclosed Assets or Liabilities. Except as disclosed in the JIN Financial Statements, JIN does not have any liabilities, indebtedness or obligations, whether known or unknown, absolute, accrued, contingent or otherwise, and whether due or to become due (collectively, "Liabilities"), and, there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a Liability, including without limitation any liabilities for foreign, federal, state, local or other taxes (including deficiencies, interest and penalties). As of the Closing Date, JIN shall have no properties or assets of any kind, whether real personal or intangible and whether owned or leased (other than cash, cash equivalents or marketable securities) and no Liabilities.

 

Section 3.10 No Contract Rights or Commitments. On the Closing Date, there will not be any Contract to which JIN is a party or by which any of its assets or properties are bound.

 

Section 3.11 No Intellectual Property Rights or Infringement. JIN does not own, has not obtained the right to use, and has not violated nor otherwise trespassed upon any patents, trademarks, service marks, trade names, copyrights, and applications, licenses and rights with respect to the foregoing, and/or any trade secrets, including know-how, inventions, designs, processes, works of authorship, computer programs and/or technical data and/or information.

 

Section 3.12 Litigation. There is no Action pending or threatened against JIN that, individually or in the aggregate, directly or indirectly, would be reasonably likely to have a Material Adverse Effect, nor is there any outstanding judgment, decree or injunction, in each case against JIN, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect.

 

	 
	
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Section 3.13 Taxes. JIN has not filed with the appropriate tax authorities all tax returns required to be filed by it or on behalf of it, and JIN does not owe any material Taxes due and owing by it, regardless of whether required to be shown or reported on a tax return, including Taxes required to be withheld by it. No deficiency for a material Tax has been asserted in writing or otherwise, to JIN's Knowledge, against JIN or with respect to any of its assets, except for asserted deficiencies that either (i) have been resolved and paid in full or (ii) are being contested in good faith. There are no material Liens for Taxes upon JIN's assets.

 

Section 3.14 Trading. No order suspending the sale or ceasing the trading or quotation of the Common Stock in the over the counter market has been issued by any court, securities commission or regulatory authority in the United States, and no proceedings for such purpose are pending or, to the knowledge of JIN, after reasonable inquiry, threatened.

 

Section 3.15 Books and Records. The books and records, financial and others, of JIN are in all material respects complete and correct and have been maintained in accordance with good business accounting practices.

 

Section 3.16 Insurance. JIN has no insurable properties and JIN does not maintain any insurance covering its assets, business, equipment, properties, operations, employees, officers, or directors. To JIN's knowledge, since JIN's inception there has not been any damage, destruction or loss, which could have been deemed as an "Insurance Event".

 

Section 3.17 Compliance. JIN is in compliance with all foreign, federal, state and local laws and regulations of any Governmental Authority, except to the extent that failure to comply would not, individually or in the aggregate, have a Material Adverse Effect. JIN has not received any notice asserting a failure, or possible failure, to comply with any such law or regulation, the subject of which notice has not been resolved as required thereby or otherwise to the satisfaction of the party sending the notice, except for such failure as would not, individually or in the aggregate, have a Material Adverse Effect. JIN does not, and is not require to, hold any permits, licenses or franchises from Governmental Authorities.

 

Section 3.18 Absence of Certain Changes. Since June 30, 2014, except as described in this Agreement or with the consent of NBI, JIN has not:

 

(a) sold or otherwise issued any shares of capital stock except as described herein;

 

(b) acquired any assets or incurred any Liabilities;

 

(c) amended its certificate of incorporation or bylaws;

 

(d) waived any rights of value which in the aggregate are extraordinary or material considering the business of JIN;

 

	 
	
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(e) made any material change in its method of management, operation or accounting;

 

(f) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee;

 

(g) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, which option, warrant or other right has not been cancelled as of the Closing Date;

 

(h) borrowed or agreed to borrow any funds or incurred or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business;

 

(i) become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect, the business, operations, properties, assets or condition of JIN or become subject to any change or development in, or effect on, JIN that has or could reasonably be expected to have a Material Adverse Effect; or

 

(j) entered into any agreement to take any action described in clauses (a) through (i) above.

 

Section 3.19 Material Transactions or Affiliations. There is no contract, agreement or arrangement between JIN and any person who was, at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known by JIN to own beneficially, five percent or more of the issued and outstanding Common Stock and which is to be performed in whole or in part after the date hereof. JIN has no commitment, whether written or oral, to lend any funds to, borrow any money from or enter into any other material transactions with, any such affiliated person.

 

Section 3.20 Employees. JIN has no employees other than its officers and directors. JIN has no liabilities and/or debts towards any such officers and directors. JIN has no agreement, obligation or commitment with respect to the election of any individual or individuals to JIN's board of directors.

 

Section 3.21 Previous Sales of Securities. Since inception, JIN has sold Common Stock to investors only in reliance upon applicable exemptions from the registration requirements under any applicable law including the laws of the United States and any applicable states and all such sales were made in accordance with the laws of said jurisdictions. Except as provided in this Agreement, JIN has not granted or agreed to grant any registration rights, including piggyback rights, to any Person or entity.

 

	 
	
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Section 3.22 Principals of JIN. During the past five years, no officer or director of JIN has been:

 

(a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

(b) the subject of any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(c) the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

 

(d) found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

 

Section 3.23 Tax-Free Exchange. JIN has not taken any action, nor does JIN know of any fact, that is reasonably likely to prevent the Exchange from qualifying as a "reorganization" within the meaning of Section 351 or 368 of the Code.

 

Section 3.24 Brokers and Finders. Neither JIN nor any of its officers, directors, employees or managers, has employed any broker, finder, advisor or consultant, or incurred any liability for any investment banking fees, brokerage fees, commissions or finders' fees, advisory fees or consulting fees in connection with the Exchange for which JIN has or could have any liability.

 

Section 3.25 Disclosure. As of the Closing Date, there is no known material fact or information relating to the business, condition (financial or otherwise), affairs, operations or assets of JIN and/or its subsidiaries that has not been disclosed in writing to NBI and/or Sellers by JIN. No representation or warranty of JIN in this Agreement or any statement or document delivered in connection herewith or therewith, contained or will contain any untrue statement of a material fact or fail to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF NBI

 

NBI hereby makes the following representations and warranties to JIN:

 

Section 4.1 Organization and Qualification. NBI is duly organized and validly existing under the laws of its jurisdiction of organization, with the corporate power and authority to own and operate its business as presently conducted, except where the failure to be or have any of the foregoing would not have a Material Adverse Effect. NBI is duly qualified as a foreign corporation to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as would not have a Material Adverse Effect. NBI has no subsidiaries.

 

	 
	
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Section 4.2 Authorization; Validity and Effect of Agreement. NBI has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Exchange. This Agreement has been duly and validly executed and delivered by NBI and, assuming that it has been duly authorized, executed and delivered by the other parties hereto, constitutes a legal, valid and binding obligation of NBI, in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally.

 

Section 4.3 No Conflict. Neither the execution and delivery of this Agreement by NBI nor the performance by NBI of its obligations hereunder, nor the consummation of the Exchange, will: (i) conflict with NBI's Certificate of Incorporation; (ii) violate any statute, law, ordinance, rule or regulation, applicable to NBI or any of its properties or assets; or (iii) violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any obligation of NBI, or result in the creation or imposition of any Lien upon any properties, assets or business of NBI under, any Material Contract or any order, judgment or decree to which JIN is a party or by which it or any of its assets or properties is bound or encumbered except, in the case of clauses (ii) or (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate, would not have a Material Adverse Effect on its obligation to perform its covenants under this Agreement.

 

Section 4.4 Required Filings and Consents. The execution and delivery of this Agreement by NBI do not, and the performance of this Agreement by NBI will not require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, with respect to NBI, except: (i) compliance with applicable requirements of the Securities Act, the Exchange Act, and Blue Sky Laws; and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on NBI, or materially delay consummation of the Exchange or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

Section 4.5 Capitalization. The authorized capital stock of NBI consists of 10,000,000 shares of Common Stock par value $0.001, of which 7,500,200 shares are issued and outstanding, and no shares of preferred stock. All NBI Shares outstanding as of the date of this Agreement have been duly authorized and validly issued, are fully paid and nonassessable, and are free of preemptive rights. All NBI Shares have been issued and NBI has no obligation to issue any additional NBI Shares.

 

Section 4.6 Financial Statements. NBI has previously furnished to JIN true and complete copies of its unaudited balance sheet of NBI for the period ended December 31, 2013 and the related statements of operations, shareholders equity and cash flows for the period from inception through December 31, 2013 and for the period from January 1, 2014 through June 30, 2014 (all of such financial statements of NBI collectively, the "NBI Financial Statements"). The NBI Financial Statements (including the notes thereto) present fairly in all material respects the financial position and results of operations and cash flows of NBI at the date or for the period set forth therein, in each case in accordance with GAAP applied on a consistent basis throughout the periods involved (except as otherwise indicated therein). The NBI Financial Statements have been prepared from and in accordance with the books and records of NBI and its subsidiaries, as applicable.

 

	 
	
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Section 4.7 No Undisclosed Liabilities. Except as disclosed in the NBI Financial Statements, NBI has no material liabilities, indebtedness or obligations, except those that have been incurred in the ordinary course of business, whether absolute, accrued, contingent or otherwise, and whether due or to become due, and to the Knowledge of NBI, there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a liability, indebtedness or obligation. Properties and Assets. NBI has good and marketable title to, valid leasehold interests in, or the legal right to use, all of the assets, properties and leasehold interests reflected in the most recent NBI Financial Statements, except for those sold or otherwise disposed of since the date of such NBI Financial Statements in the ordinary course of business consistent with past practice.

 

Section 4.8 Litigation. There is no Action pending or threatened against NBI that, individually or in the aggregate, directly or indirectly, would be reasonably likely to have a Material Adverse Effect, nor is there any outstanding judgment, decree or injunction, in each case against NBI, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect.

 

Section 4.9 Taxes. NBI has not filed with the appropriate tax authorities all tax returns required to be filed by it or on behalf of it and is unaware of any material Taxes due and owing by it, regardless of whether required to be shown or reported on a tax return, including Taxes required to be withheld by it. No deficiency for a material Tax has been asserted in writing or otherwise, to NBI's Knowledge, against NBI or with respect to any of its assets, except for asserted deficiencies that either (i) have been resolved and paid in full or (ii) are being contested in good faith. There are no material Liens for Taxes upon NBI's assets. EQCO2, Inc. is also delinquent in its tax filings, federal and state.

 

Section 4.10 Compliance. To NBI's Knowledge, NBI is in compliance with all federal, state and local laws and regulations of any Governmental Authority applicable to its operations or with respect to which compliance is a condition of engaging in the business thereof, except to the extent that failure to comply would not, individually or in the aggregate, have a Material Adverse Effect. NBI has not received any notice asserting a failure, or possible failure, to comply with any such law or regulation, the subject of which notice has not been resolved as required thereby or otherwise to the satisfaction of the party sending the notice, except for such failure as would not, individually or in the aggregate, have a Material Adverse Effect. To NBI's Knowledge, NBI holds all permits, licenses and franchises from Governmental Authorities required to conduct its business as it is now being conducted, except for such failures to have such permits, licenses and franchises that would not, individually or in the aggregate, have a Material Adverse Effect.

 

Section 4.11 Absence of Certain Changes. Since the date of the most recent NBI Financial Statements, (i) there has been no change or development in, or effect on, NBI that has or could reasonably be expected to have a Material Adverse Effect, (ii) NBI has not sold, transferred, disposed of, or agreed to sell, transfer or dispose of, any material amount of its assets other than in the ordinary course of business, (iii) NBI has not paid any dividends or distributed any of its assets to any of its shareholders, (iv) NBI has not acquired any material amount of assets except in the ordinary course of business, nor acquired or merged with any other business, (v) NBI has not waived or amended any of its respective material contractual rights except in the ordinary course of business, and (vi) NBI has not entered into any agreement to take any action described in clauses (i) through (v) above.

 

	 
	
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Section 4.12 Previous Sales of Securities. Since inception, NBI has sold the NBI Common Stock to accredited investors only in reliance upon applicable exemptions from the registration requirements under any applicable law including the laws of the United States and any applicable states and all such sales were made in accordance with the laws of said jurisdictions and all required blue sky and federal filings have been filed. NBI has not granted or agreed to grant any registration rights, including piggyback rights, to any Person or entity.

 

Section 4.13 Principals of NBI. During the past five years, no officer or director of NBI has been:

 

(a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

(b) the subject of any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(c) the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

 

(d) found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

 

Section 4.14 Brokers and Finders. NBI has not, nor to NBI's Knowledge have any of its officers, directors, employees or managers, employed any broker, finder, advisor or consultant, or incurred any liability for any investment banking fees, brokerage fees, commissions or finders' fees, advisory fees or consulting fees in connection with the Exchange for which NBI has or could have any liability.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF EACH SELLER

 

Each Seller, severally and not jointly, hereby make the following representations and warranties to NBI and JIN:

 

	 
	
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Section 5.1 Authority and Validity. Such Seller has all requisite power to execute and deliver, to perform its obligations under, and to consummate the transactions contemplated by, this Agreement.

 

Section 5.2 Validity. Upon the execution and delivery of each other document to which such Seller is a party (assuming due execution and delivery by each other party thereto) each such other document will be the legal, valid and binding obligations of such Seller, enforceable against such Seller in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally.

 

Section 5.3 No Breach or Violation. The execution, delivery and performance by such Seller of this Agreement and each other document to which it is a party, and the consummation of the transactions contemplated hereby and thereby in accordance with the terms and conditions hereof and thereof, do not and will not conflict with (i) the certificate of incorporation or bylaws of such Seller, if applicable, or (ii) any agreement to which such Seller is a party, or by which such Seller or such Seller's Assets are bound or affected.

 

Section 5.4 Consents and Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to, any Government Authority or any other Person is necessary to be obtained, made or given by such Seller in connection with the execution, delivery and performance by such Seller of this Agreement or any other document to which it is a party or for the consummation by such Seller of the transactions contemplated hereby or thereby.

 

Section 5.5 Title. NBI Shares to be delivered by such Seller in connection with the transactions contemplated herein are, and at the Closing will be owned, of record and beneficially, solely by such Seller, free and clear of any Lien and represent such Seller's entire ownership interest in NBI.

 

Section 5.6 Investor Status. Such Seller is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D under the Securities Act and has properly completed the form attached hereto as Schedule II.

 

Section 5.7 No Government Review. Such Seller understands that neither the SEC nor any securities commission or other Governmental Authority of any state, country or other jurisdiction has approved the issuance of the JIN Exchange Shares or passed upon or endorsed the merits of the Common Stock or the Exchange Agreement or any of the other documents relating to the Exchange (collectively, the "Offering Documents"), or confirmed the accuracy of, determined the adequacy of, or reviewed the Exchange Agreement or the other Offering Documents.

 

Section 5.8 Investment Intent. The shares of JIN Exchange Shares are being acquired by Seller for Seller's own account for investment purposes only, not as a nominee or agent and not with a view to the resale or distribution of any part thereof, and Seller has no present intention of selling, granting any participation in or otherwise distributing the same. Seller further represents that Seller does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or third person with respect to any of NBI Shares.

 

	 
	
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Section 5.9 Restrictions on Transfer. Seller understands that the shares of JIN Exchange Shares have not been registered under the Securities Act or registered or qualified under any foreign or state securities law, and may not be, directly or indirectly, sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and registration or qualification under applicable state securities laws or the availability of an exemption therefrom. In any case where such an exemption is relied upon by Seller from the registration requirements of the Securities Act and the registration or qualification requirements of such state securities laws, Seller shall furnish JIN with an opinion of counsel stating that the proposed sale or other disposition of such securities may be effected without registration under the Securities Act and will not result in any violation of any applicable state securities laws relating to the registration or qualification of securities for sale, such counsel and opinion to be reasonably satisfactory to JIN. Seller acknowledges that it is able to bear the economic risks of an investment in the JIN Exchange Shares for an indefinite period of time, and that its overall commitment to investments that are not readily marketable is not disproportionate to its net worth.

 

Section 5.10 Informed Investment. Seller has made such investigations in connection herewith as it deemed necessary or desirable so as to make an informed investment decision without relying upon NBI for legal or tax advice related to this investment. In making its decision to acquire the JIN Exchange Shares, Seller has not relied upon any information other than information contained in this Agreement and in the other Offering Documents.

 

Section 5.11 Access to Information. Seller acknowledges that it has had access to and has reviewed all documents and records relating to JIN that it has deemed necessary in order to make an informed investment decision with respect to an investment in JIN; that it has had the opportunity to ask representatives of JIN certain questions and request certain additional information regarding the terms and conditions of such investment and the finances, operations, business and prospects of JIN and has had any and all such questions and requests answered to its satisfaction; and that based on the foregoing it understands the risks and other considerations relating to an investment in JIN.

 

Section 5.12 Reliance on Representations. Seller understands that the shares of JIN Exchange Shares are being offered and sold to it in reliance on specific exemptions from the registration and/or public offering requirements of the U.S. federal and state securities laws and that JIN and NBI is relying in part upon the truth and accuracy of, and such Seller's compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Seller set forth herein in order to determine the availability of such exemptions and the eligibility of such Seller to acquire the JIN Exchange Shares. Seller represents and warrants to JIN and NBI that any information Seller has heretofore furnished or furnishes herewith to JIN and NBI is complete and accurate, and further represents and warrants that it will notify and supply corrective information to JIN and NBI immediately upon the occurrence of any change therein occurring prior to NBI's issuance of the JIN Exchange Shares. Within five (5) days after receipt of a request from NBI, Seller will provide such information and deliver such documents as may reasonably be necessary to comply with any and all laws and regulations to which NBI is subject.

 

	 
	
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Section 5.13 No General Solicitation. Seller is unaware of, and in deciding to participate in the transactions contemplated hereby is in no way relying upon, and did not become aware of the transactions contemplated hereby through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media, or broadcast over television or radio or the internet, in connection with the transactions contemplated hereby.

 

Section 5.14 Placement and Finder's Fees. No agent, broker, investment banker, finder, financial advisor or other person acting on behalf of Seller or under its authority is or will be entitled to any broker's or finder's fee or any other commission or similar fee, directly or indirectly, in connection with the transactions contemplated hereby, and no person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreements, arrangements or understanding made by or on behalf of Seller.

 

ARTICLE VI

 

CERTAIN COVENANTS

 

Section 6.1 Conduct of Business by JIN. Except (i) as expressly permitted or required by this Agreement, or (ii) with the consent of NBI, during the period commencing with the date of this Agreement and continuing until the Closing Date, JIN shall conduct (directly and/or indirectly, including through subsidiaries, other than subsidiaries that will be disposed of prior to Closing, and subject to the provisions hereof) its trade and business, preserve intact its business organizations and maintain the registration of JIN and the Common Stock under the Exchange Act.

 

Section 6.2 Access to Information. At all times prior to the Closing or the earlier termination of this Agreement in accordance with the provisions of Article IX, and in each case subject to Section 6.3 below, each party hereto shall provide to the other party (and the other party's authorized representatives) reasonable access during normal business hours and upon reasonable prior notice to the premises, properties, books, records, assets, liabilities, operations, contracts, personnel, financial information and other data and information of or relating to such party (including without limitation all written proprietary and trade secret information and documents, and other written information and documents relating to intellectual property rights and matters), and will cooperate with the other party in conducting its due diligence investigation of such party, provided that the party granted such access shall not interfere unreasonably with the operation of the business conducted by the party granting access, and provided that no such access need be granted to privileged information or any agreements or documents subject to confidentiality agreements.

 

	 
	
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Section 6.3 Confidentiality; No Solicitation. Each party shall hold, and shall cause its respective Affiliates and representatives to hold, all Confidential Information made available to it in connection with the Exchange in strict confidence, shall not use such information except for the sole purpose of evaluating the Exchange and shall not disseminate or disclose any of such information other than to its directors, officers, managers, employees, shareholders, interest holders, Affiliates, agents and representatives, as applicable, who need to know such information for the sole purpose of evaluating the Exchange (each of whom shall be informed in writing by the disclosing party of the confidential nature of such information and directed by such party in writing to treat such information confidentially). The above limitations on use, dissemination and disclosure shall not apply to Confidential Information that (i) is learned by the disclosing party from a third party entitled to disclose it; (ii) becomes known publicly other than through the disclosing party or any third party who received the same from the disclosing party, provided that the disclosing party had no Knowledge that the disclosing party was subject to an obligation of confidentiality; (iii) is required by law or court order to be disclosed by the parties; or (iv) is disclosed with the express prior written consent thereto of the other party. The parties shall undertake all necessary steps to ensure that the secrecy and confidentiality of such information will be maintained. In the event a party is required by court order or subpoena to disclose information which is otherwise deemed to be confidential or subject to the confidentiality obligations hereunder, prior to such disclosure, the disclosing party shall: (i) promptly notify the non-disclosing party and, if having received a court order or subpoena, deliver a copy of the same to the non-disclosing party; (ii) cooperate with the non-disclosing party, at the expense of the non-disclosing party, in obtaining a protective or similar order with respect to such information; and (iii) provide only that amount of information as the disclosing party is advised by its counsel is necessary to strictly comply with such court order or subpoena.

 

Section 6.4 Further Assurances. Each of the parties hereto agrees to use its best efforts before and after the Closing Date to take or cause to be taken all action, to do or cause to be done, and to assist and cooperate with the other party hereto in doing, all things necessary, proper or advisable under applicable laws to consummate and make effective, in the most expeditious manner practicable, the Exchange, including, but not limited to: (i) satisfying the conditions precedent to the obligations of any of the parties hereto; (ii) obtaining all waivers, consents and approvals from other parties necessary for the consummation of the Exchange, (iii) making all filings with, and obtain all consents, approvals and authorizations that are required to be obtained from, Governmental Authorities, (iv) defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (v) executing and delivering such instruments, and taking such other actions, as the other party hereto may reasonably require in order to carry out the intent of this Agreement.

 

Section 6.5 Public Announcements. JIN, the Sellers and NBI shall consult with each other before issuing any press release or otherwise making any public statements with respect to the Exchange or this Agreement, and shall not issue any other press release or make any other public statement without prior consent of the other parties, except as may be required by law or, with respect to JIN, by obligations pursuant to rule or regulation of the Exchange Act, the Securities Act, any rule or regulation promulgated thereunder or any rule or regulation of the Financial Authority Regulatory Authority (“FINRA”).

 

Section 6.6 Notification of Certain Matters. Each party hereto shall promptly notify the other party in writing of any events, facts or occurrences that would result in any breach of any representation or warranty or breach of any covenant by such party contained in this Agreement.

 

	 
	
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Section 6.7 Prohibition on Trading in JIN Securities. All parties acknowledge that information concerning the matters that are the subject matter of this Agreement may constitute material non-public information under United States federal securities laws, and that United States federal securities laws prohibit any person who has received material non-public information relating to JIN from purchasing or selling securities of JIN, or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell securities of JIN. Accordingly, until such time as any such non-public information has been adequately disseminated to the public, the parties to this Agreement shall not purchase or sell any securities of JIN.

 

Section 6.8 Registration Statement. As soon as practicable after Closing and following completion of the required audited financial statements for NBI, JIN will file a Registration Statement with the SEC on Form S-1 to register shares of its common stock for sale to the public to raise capital for the operations of JIN post-Exchange. The parties hereto have also agreed to seek out private investment opportunities to raise capital for the operations of JIN post-Exchange. The timing and filing of the Registration Statement shall be dependent upon market conditions, amount of capital required and require SEC review and effectiveness, none of which is in the control of either party to this Agreement.

 

Section 6.9 Tax-Free Exchange Status. The parties hereto shall take (or refrain from taking) any and all actions necessary to ensure that, for United States federal income tax purposes: (i) the Exchange shall qualify as a reorganization within the meaning of Sections 368(a)(1)(B) of the Code, and (ii) that the tax consequences to the shareholders of both companies are minimized. 

 

Section 6.10 Waiver of Claims. Each Seller for himself and his heirs, executors, administrators, attorneys and assigns, hereby releases and acknowledges full accord, satisfaction, discharge and settlement of, and further irrevocably and unconditionally forever releases, remises, and acquits NBI, JIN and any of its present or former officers, directors, shareholders, employees, agents, affiliates, parents, subsidiaries, predecessors, successors, attorneys and assigns (the "NBI Released Parties") of and from any and all manner of actions, causes of action, arbitrations, controversies, expenses, damages, liabilities, demands, claims, counterclaims, cross-claims, obligations, losses, costs, promises, covenants, agreements, and suits of any kind or nature, whether known or unknown, whether contingent or fixed, whether developed or undeveloped, in law or equity, in tort or in contract from the beginning of time through the date of the full execution of this Agreement and the attachments and schedules hereto, which he may have or claim to have against NBI Released Parties.Each Seller expressly acknowledges that such claims released and discharged by this Section include, but are not limited to, any and all claims against NBI Released Parties for remuneration, compensation or benefits (including but not limited to fees, salary, expense reimbursements, commissions, stock, options or warrants for stock, success fees, insurance or other benefits, or any other form of remuneration, compensation or benefits of any kind) and any and all other claims of any kind and nature arising prior to execution of this Agreement and the attachments and schedules hereto, which relate in any way to NBI. This release shall extend to all claims, known and unknown. Each Seller is aware of, and specifically waives the provisions of Section 1542 of the Civil Code of the State of California, which states as follows: 

 

	
"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor"

 

	 
	
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ARTICLE VII 

 

CONDITIONS TO CONSUMMATION OF THE EXCHANGE

 

Section 7.1 Conditions to Obligations of NBI. The obligations of NBI and Sellers to consummate the Exchange shall be subject to the fulfillment, or written waiver by NBI, at or prior to the Closing, of each of the following conditions:

 

(a) JIN shall have delivered to NBI each of the documents required by Section 2.2(a) of this Agreement;

 

(b) The representations and warranties of JIN set out in this Agreement shall be true and correct in all material respects at and as of the time of the Closing as though such representations and warranties were made at and as of such time;

 

(c) JIN shall have performed and complied in all material respects with all covenants, conditions, obligations and agreements required by this Agreement to be performed or complied with by such parties on or prior to the Closing Date;

 

(d) All consents, approvals, permits, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Governmental Authority or Person as provided herein shall have been obtained;

 

(e) NBI shall have completed a due diligence review of the business, operations, financial condition and prospects of JIN and shall have been satisfied with the results of its due diligence review in its sole and absolute discretion;

 

(f) There has been no Material Adverse Effect on the business, condition or prospects of JIN until the Closing Date;

 

(g) JIN shall have had no Material changes in the business operations;

 

(h) Holders of at least 80% of NBI Shares shall have become party to the Exchange; and

 

(i) The outstanding shares of Common Stock of JIN prior to the Closing shall not exceed 22,829,400 shares.

 

	 
	
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Section 7.2 Conditions to Obligations of JIN. The obligations of JIN to consummate the Exchange shall be subject to the fulfillment, or written waiver by JIN, at or prior to the Closing of each of the following conditions:

 

(a) NBI shall have delivered to JIN each of the documents required by Section 2.2(b) of this Agreement;

 

(b) The Sellers shall have delivered to JIN the documents required by Section 2.2(c) of this Agreement;

 

(c) The representations and warranties of NBI and Sellers set out in this Agreement shall be true and correct in all material respects at and as of the time of the Closing as though such representations and warranties were made at and as of such time;

 

(d) NBI shall have performed and complied in all material respects with all covenants, conditions, obligations and agreements required by this Agreement to be performed or complied with by NBI on or prior to the Closing Date;

 

(e) All consents, approvals, permits, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Governmental Authority or Person as provided herein shall have been obtained;

 

(f) JIN shall have completed a due diligence review of the business, operations, financial condition and prospects of NBI and shall have been satisfied with the results of its due diligence review in its sole and absolute discretion;

 

(g) There has been no Material Adverse Effect on the business, condition or prospects of NBI until the Closing Date;

 

(h) NBI shall have paid all of the costs and expenses of NBI associated with the transactions contemplated herein;

 

(i) Holders of at least 80% of NBI Shares shall have become party to the Exchange; and

 

(j) The outstanding shares of Common Stock of NBI prior to the Closing shall not exceed 7,500,200 shares.

 

	 
	
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ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.1 Indemnification by JIN

 

(a) Notwithstanding any other indemnification provision hereunder, JIN (the "Indemnifying Party") shall, severally and jointly, indemnify and hold harmless NBI and its officers, directors and employees and each of the Sellers (each an "Indemnified Party"), from and against any and all demands, claims, actions or causes of action, judgments, assessments, losses, liabilities, damages or penalties and reasonable attorneys' fees and related disbursements (collectively, "Claims") suffered by such Indemnified Party resulting from or arising out of (i) any inaccuracy in or breach of any of the representations or warranties made by the Indemnifying Party at the time they were made, and, except for representations and warranties that speak as of a specific date or time (which need only be true and correct as of such date or time), on and as of the Closing Date, (ii) any breach or nonfulfillment of any covenants or agreements made by the Indemnifying Party, (iii) any misrepresentation made by the Indemnifying Party, in each case as made herein or in the Schedules or Exhibits annexed hereto or in any closing certificate, schedule or any ancillary certificates or other documents or instruments furnished by the Indemnifying Party pursuant hereto or in connection with the Exchange, (iv) any untimely filing of or inaccuracy in, any SEC Document, and (v) the operations and liabilities of JIN and/or any of its subsidiaries, whether known or unknown, arising out of any action, omission and/or period of time preceding the Closing Date, including but not limited to any taxes levied with respect to same.

 

Section 8.2 Indemnification by NBI

 

(a) Notwithstanding any other indemnification provision hereunder, NBI and Sellers (each, the "Indemnifying Party") shall, severally and jointly, indemnify and hold harmless JIN and each of its officers, directors, attorneys, accountants and employees (each an "Indemnified Party"), from and against any and all demands, claims, actions or causes of action, judgments, assessments, losses, liabilities, damages or penalties and reasonable attorneys' fees and related disbursements (collectively, "Claims") suffered by such Indemnified Party resulting from or arising out of (i) any inaccuracy in or breach of any of the representations or warranties made by the Indemnifying Party at the time they were made, and, except for representations and warranties that speak as of a specific date or time (which need only be true and correct as of such date or time), on and as of the Closing Date, (ii) any breach or nonfulfillment of any covenants or agreements made by the Indemnifying Party, or (iii) any misrepresentation made by the Indemnifying Party, in each case as made herein or in the Schedules or Exhibits annexed hereto or in any closing certificate, schedule or any ancillary certificates or other documents or instruments furnished by the Indemnifying Party pursuant hereto or in connection with the Exchange.

 

	 
	
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Section 8.3 Indemnification Procedures for Third-Party Claim

 

(a) Upon obtaining knowledge of any Claim by a third party which has given rise to, or is expected to give rise to, a claim for indemnification hereunder, the Indemnified Party shall give written notice ("Notice of Claim") of such claim or demand to the Indemnifying Party, specifying in reasonable detail such information as the Indemnified Party may have with respect to such indemnification claim (including copies of any summons, complaint or other pleading which may have been served on it and any written claim, demand, invoice, billing or other document evidencing or asserting the same). No failure or delay by the Indemnified Party in the performance of the foregoing shall reduce or otherwise affect the obligation of the Indemnifying Party to indemnify and hold the Indemnified Party harmless, except to the extent that such failure or delay shall have actually adversely affected the Indemnifying Party's ability to defend against, settle or satisfy any Claims for which the Indemnified Party entitled to indemnification hereunder.

 

(b) If the claim or demand set forth in the Notice of Claim given by an Indemnified Party pursuant to Section 8.1 hereof is a claim or demand asserted by a third party, the Indemnifying Party shall have fifteen (15) days after the date on which Notice of Claim is given to notify Indemnified Party in writing of their election to defend such third party claim or demand on behalf of the Indemnified Party. If the Indemnifying Party elects to defend such third party claim or demand, Indemnified Party shall make available to the Indemnifying Party and its agents and representatives all records and other materials that are reasonably required in the defense of such third party claim or demand and shall otherwise cooperate with, and assist the Indemnifying Party in the defense of, such third party claim or demand. So long as the Indemnifying Party is defending such third party claim in good faith, the Indemnified Party shall not pay, settle or compromise such third party claim or demand. If the Indemnifying Party elects to defend such third party claim or demand, the Indemnified Party shall have the right to participate in the defense of such third party claim or demand, at such Indemnified Party's own expense. In the event, however, that such Indemnified Party reasonably determines that representation by counsel to the Indemnifying Party of both the Indemnifying Party and such Indemnified Party could reasonably be expected to present counsel with a conflict of interest, then the Indemnified Party may employ separate counsel to represent or defend it in any such action or proceeding and the Indemnifying Party will pay the fees and expenses of such counsel. If the Indemnifying Party does not elect to defend such third party claim or demand or does not defend such third party claim or demand in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Indemnifying Party's expense, to defend such third party claim or demand; provided, however, that (i) such Indemnified Party shall not have any obligation to participate in the defense of, or defend, any such third party claim or demand; (ii) such Indemnified Party's defense of or its participation in the defense of any such third party claim or demand shall not in any way diminish or lessen the obligations of the Indemnifying Party under the agreements of indemnification set forth in this Article VII; and (iii) such Indemnified Party may not settle any claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

 

	 
	
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(c) The Indemnifying Party and the other Indemnified Parties, if any, shall cooperate fully in all aspects of any investigation, defense, pre-trial activities, trial, compromise, settlement or discharge of any claim in respect of which indemnity is sought pursuant to this Article VIII, including, but not limited to, by providing the other party with reasonable access to employees and officers (including as witnesses) and other information.

 

(d) Except for third party claims being defended in good faith, the Indemnifying Party shall satisfy its obligations under this ARTICLE VIII in respect of a valid claim for indemnification hereunder that is not contested by NBI in good faith in cash within thirty (30) days after the date on which Notice of Claim is given.

 

Section 8.4 Indemnification Procedures for Non-Third Party Claims. In the event any Indemnified Party should have an indemnification claim against the Indemnifying Party under this Agreement that does not involve a claim by a third party, the Indemnified Party shall promptly deliver notice of such claim to the Indemnifying Party in writing and in reasonable detail. The failure by any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party, except to the extent that the Indemnifying Party has been actually prejudiced by such failure. If the Indemnifying Party does not notify the Indemnified Party within fifteen (15) Business Days following its receipt of such notice that the Indemnifying Party disputes such claim, such claim specified by the Indemnifying Party in such notice shall be conclusively deemed a liability of the Indemnifying Party under this Article VIII and the Indemnifying Party shall pay the amount of such liability to the Indemnified Party on demand, or in the case of any notice in which the amount of the claim is estimated, on such later date when the amount of such claim is finally determined. If the Indemnifying Party disputes its liability with respect to such claim in a timely manner, NBI and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved pursuant to Section 10.11.

 

Section 8.5 Limitations on Indemnification. No claim for indemnification under this Article VIII shall be asserted by, and no liability for such indemnify shall be enforced against, the Indemnifying Party to the extent the Indemnified Party has theretofore received indemnification or otherwise been compensated for such Claim. In the event that an Indemnified Party shall later collect any such amounts recovered under insurance policies with respect to any Claim for which it has previously received payments under this Article VIII from the Indemnifying Party, such Indemnified Party shall promptly repay to the Indemnifying Party such amount recovered.

 

	 
	
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ARTICLE IX

 

TERMINATION

 

Section 9.1 Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a) by mutual consent of JIN and NBI;

 

(b) by NBI, if the Closing shall not have occurred on or before August 31, 2014 or if any of the conditions to the Closing set forth in Section 7.1 shall have become incapable of fulfillment by August 31, 2014 and shall not have been waived in writing by NBI; provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to NBI if its action or failure to act has been a principal cause of or resulted in the failure of the Exchange to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;

 

(c) by JIN, if the Closing shall not have occurred on or before August 31, 2014 or if any of the conditions to the Closing set forth in Section 7.2 shall have become incapable of fulfillment by August 31, 2014 and shall not have been waived in writing by JIN; provided, however, that the right to terminate this Agreement under this Section 9.1(c) shall not be available to JIN if its action or failure to act has been a principal cause of or resulted in the failure of the Exchange to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;

 

(d) by JIN or NBI if any Governmental or judicial Authority shall have issued an injunction, order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting any material portion of the Exchange and such injunction, order, decree, ruling or other action shall have become final and nonappealable;

 

(e) by NBI, in the event that the procedures detailed under Section 1.2(d) shall not have been completed or fully consummated and fewer than 80% in interest of NBI shareholders shall have become a party to the Exchange.

 

	 
	
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Section 9.2 Procedure and Effect of Termination. In the event of termination of this Agreement pursuant to Section 9.1 hereof, written notice thereof shall forthwith be given by the terminating party to the other party, and, except as set forth below, this Agreement shall terminate and be void and have no effect and the Exchange shall be abandoned without any further action by the parties hereto; provided that, if such termination shall result from the failure of a party to perform a covenant, obligation or agreement in this Agreement or from the breach by JIN or NBI of any representation or warranty contained herein, such party shall be fully liable for any and all damages incurred or suffered by the other party as a result of such failure or breach. The provisions of Section 6.3, Section 6.5, Section 9.2, and ARTICLE VIII and ARTICLE X hereof (with the exception of Section 10.5 only) shall survive the termination of this Agreement for any reason whatsoever.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1 Entire Agreement. This Agreement and the Schedules and Exhibits hereto contain the entire agreement between the parties and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

Section 10.2 Amendment and Modifications. This Agreement may not be amended, modified or supplemented except by an instrument or instruments in writing signed by the party against whom enforcement of any such amendment, modification or supplement is sought.

 

Section 10.3 Extensions and Waivers. At any time prior to the Closing, the parties hereto entitled to the benefits of a term or provision may (a) extend the time for the performance of any of the obligations or other acts of the parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered pursuant hereto, or (c) waive compliance with any obligation, covenant, agreement or condition contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument or instruments in writing signed by the party against whom enforcement of any such extension or waiver is sought. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement.

 

	 
	
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Section 10.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided, however, that no party hereto may assign its rights or delegate its obligations under this Agreement without the express prior written consent of the other party hereto. Except as provided in Article VIII, nothing in this Agreement is intended to confer upon any person not a party hereto (and their successors and assigns) any rights, remedies, obligations or liabilities under, or by reason of, this Agreement.

 

Section 10.5 Survival of Representations, Warranties and Covenants. The representations and warranties contained herein shall survive the Closing and shall thereupon terminate two (2) years from the Closing. All covenants and agreements contained herein which by their terms contemplate actions following the Closing shall survive the Closing and remain in full force and effect in accordance with their terms.

 

Section 10.6 Headings; Definitions. The Section and Article headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement. All references to Sections or Articles contained herein mean Sections or Articles of this Agreement unless otherwise stated. All capitalized terms defined herein are equally applicable to both the singular and plural forms of such terms.

 

Section 10.7 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is held to be invalid or unenforceable to any extent, the remainder of this Agreement shall remain in full force and effect and shall be reformed to render the Agreement valid and enforceable while reflecting to the greatest extent permissible the intent of the parties.

 

Section 10.8 Specific Performance. The parties hereto agree that in the event that any party fails to consummate the Exchange in accordance with the terms of this Agreement, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine. It is accordingly agreed that the parties shall be entitled to specific performance in such event, without the necessity of proving the inadequacy of money damages as a remedy, in addition to any other remedy at law or in equity.

 

Section 10.9 Notices. All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax, email or other electronic transmission service to the appropriate address or number as set forth below (or any other address duly notified by a party hereto pursuant to the provisions of this Section 10.9).

 

	 
	
26

	

 

	
If to JIN:

	 
	
Jin-En International Group Holding Company

	 
	
1955 Baring Road

	 
	
Sparks NV 89434

	 
	
Attn: Richard Oravec

	 
	
Phone: 212-924-3548

	 
	
Fax: 413-771-8172

	 
	
Email:  roravec@mac.com

	 
	 	 
	
If to NBI:

	 
	
Nascent Biotech, Inc.

	 
	
1440 NW First Court, Suite B

	 
	
Boca Raton, FL 33432

	 
	 	 
	
If to a Seller:

	 
	 	 
	
Seller’s Name

	 
	
C/O Nascent Biotech, Inc.

	 
	
1440 NW First Court, Suite B

	 
	
Boca Raton, FL 33432

	 

 

	 
	
27

	

 

Section 10.10 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to the conflicts of laws principles.

 

Section 10.11 Consent to Jurisdiction. Any action, suit or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a state or federal court of competent jurisdiction the State of Nevada, and the parties hereto consent to the jurisdiction of such a court.

 

Section 10.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

 

Section 10.13 Certain Definitions. As used herein:

 

(a) "Affiliate" shall have the meanings ascribed to such term in Rule 12b-2 of the Exchange Act;

 

(b) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which federally chartered financial institutions are not open for business in the City of Las Vegas, Nevada;

 

(c) "Confidential Information" shall mean the existence and contents of this Agreement and the Schedules and Exhibits hereto, and all proprietary technical, economic, environmental, operational, financial and/or business information or material of one party which, prior to or following the Closing Date, has been disclosed by NBI, on the one hand, or JIN, on the other hand, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other;

 

(d) "Contract" shall mean any oral, written or implied contracts, agreements, licenses, instruments, indentures leases, powers of attorney, guaranties, surety arrangements or other commitments of any kind;

 

	 
	
28

	

 

(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

 

(f) "GAAP" shall mean generally accepted accounting principles in the United States as in effect on the date or for the period with respect to which such principles are applied;

 

(g) "Governmental Authority" shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any executive official thereof;

 

(h) "Knowledge" shall mean (i) with respect to an individual, knowledge of a particular fact or other matter, if such individual is aware of such fact or other matter, and (ii) with respect to a Person that is not an individual, knowledge of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, knowledge of such fact or other matter;

 

(i) "Lien" shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or proxy, pre-emptive rights, first refusal rights, participation rights, or other title claim or retention agreement, interest or other right or claim of third parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other than this Agreement) to grant or submit to any of the foregoing in the future;

 

(j) "Material Adverse Effect" shall mean any adverse effect on the business, condition (financial or otherwise) or results of operation of the applicable entity;

 

(k) "Material Contract" shall mean any Contract, other than equipment and furniture leases entered into in the ordinary course of business, the liabilities or commitments associated therewith exceed, in the case of NBI, $100,000 individually or $500,000 in the aggregate;

 

(l) "Person" shall mean any individual, corporation, partnership, association, trust or other entity or organization, including a governmental or political subdivision or any agency or institution thereof;

 

(m) "SEC" shall mean the Securities and Exchange Commission;

 

(n) "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder; and

 

(o) "Taxes" shall mean all taxes (whether U.S. federal, state, local or Israeli or other non-U.S.) based upon or measured by income and any other tax whatsoever, including, without limitation, gross receipts, profits, sales, levies, imposts, deductions, charges, rates, duties, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll and social security, employment, excise, stamp duty or property taxes, together with any interest, penalties, charges or fees imposed with respect thereto.

 

(remainder of page left blank intentionally)

 

	 
	
29

	

 

IN WITNESS WHEREOF, each of the parties have caused this Agreement to be signed by their respective officers hereunto duly authorized, all as of the date first written above.

 

 

	 	
JIN-EN INTERNATIONAL GROUP HOLDING COMPANY

	
 

	 		 	
	 	By:	
 /s/ Haijun Huo

	
 

	 	Name:	
 Haijun Huo

	
 

	 	Title:	
 CEO

	
 

	 		 	
	 		 	
	 	
NASCENT BIOTECH, INC.

	
 

	 		 	
	 	By:	
/s/ Mark Glassy

	
 

	 	Name:	
Mark Glassy

	
 

	 	Title:	
 CEO

	
 

 

	 
	
30

	

 

SELLER'S COUNTERPART SIGNATURE PAGE

(Seller's must also complete Schedule III)

 

		
  

	
		
(Print Name of Investor)

	
	 	 	 	 
	 	 	 	 
		By:	 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 
		 	
		
Address

	
			 	
		 	
		
(City, State and Zip Code/Postal Code)

	
			 	
		 	
		
Country

	
		 	 	
		 	
		
For US persons: taxpayer id number

	

  

	 
	
31

	

 

Schedule I

 

Exchange of NBI Shares for JIN Exchange Shares 

 

	
Name of Shareholder

	 	NBI Shares Outstanding on the Closing Date	 	 	JIN Exchange Shares to be Issued at Closing TO NBI Shareholders (assuming all convert)	 
	
SEE ATTACHED

	 		 	 		 
	 	 		 	 		 
	
Total

	 		
7,500,200

	 	 		
7,500,200

	 

  

	 
	
32

	

 

Schedule II

 

Investor Questionnaire

 

Please check the applicable box –

 

The undersigned is an accredited investor by reason of coming within one of the following categories:

 

___ 1.  A natural person whose net worth, either individually or jointly with such person's spouse, at the time of the undersigned's receipt the shares exceeds $1,000,000;

 

___ 2.  A  natural person who had an individual income in excess of $200,000, or joint income with that person's spouse in excess of $300,000, in the two most recent years and reasonably expects to have individual income reaching the same level in the current year;

 

___ 3.  A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act. whether acting in its individual or fiduciary capacity;

 

___ 4.  A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

 

___ 5.  An insurance company as defined in Section 2(13) of the Securities Act:

 

___ 6.  An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;

 

___ 7.  A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

 

___ 8.  A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees. if such plan has total assets in excess of $5,000,000;

 

___ 9.  An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

	 
	
33

	

 

___ 10.  A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

 

___ 11.  An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the shares, with total assets in excess of $5,000,000;

 

___ 12.  An executive officer or director of NBI.

 

___ 13.  A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the shares, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in company; or

 

___ 14. An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this category only, a list of the equity owners of the undersigned, and each such equity owner should complete a copy of this questionnaire.

 

The undersigned has executed this Investor Questionnaire this ____ day of ______, 2014.

 

	 	 	 
	 	
(Print Name of Investor)

	 
	 	 	 	 
	 	 	 	 
		By:		 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 
	 	
Address

	 
	 	 	 	 
	 	 	 
	 	
(City, State and Zip Code/Postal Code)

	 
	 	 	 	 
	 	 	 
	 	
Country

	 
	 	 	 	 
	 	 	 
	 	
For US persons: taxpayer id number

	 

 

 

34EX-10.1

 Exhibit 10.1 

ASSET PURCHASE AND SALE AGREEMENT 

THIS ASSET, PURCHASE AND SALE AGREEMENT (the “Agreement”) is entered into this 31st day of December, 2014 (the
“Effective Date”), by and between BCG Consulting, LLC, a Tennessee limited liability company (“Purchaser”), BANC COMPLIANCE GROUP, INC., a Tennessee corporation (“Seller”) and FRANKLIN FINANCIAL
NETWORK, INC., a Tennessee corporation (“Parent”). 
 W I T N E S S E T H: 

WHEREAS, Seller is in the business of providing bank consulting services (the “Business”); and 

WHEREAS, Purchaser desires to purchase from Seller and Seller desires to sell to Purchaser certain assets owned by Seller and related to the
operation of the Business, and the parties desire to enter into this Agreement for the purpose of effecting such purchase and sale. 
 NOW,
THEREFORE, in consideration of the mutual premises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree
as follows: 
 AGREEMENT 

ARTICLE I 
 SALE AND
PURCHASE OF ASSETS 
 1.1. Sale and Transfer of Assets. Subject to the terms and conditions contained in this Agreement, Seller
hereby sells, assigns, transfers, conveys and delivers to Purchaser, and Purchaser acquires from Seller all of Seller’s right, title and interest in and to all of the following (collectively, the “Purchased Assets”), free and
clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“Encumbrance”): 
 (a) all
customer lists, customer records, correspondence, financial and other business records, goodwill, company name and other intangible assets used in the Business; 

(b) except for Seller’s QuickBooks software license, all software licenses, computer equipment, furniture and other fixed assets used in
the Business (i) at the office located at 256 Seaboard Lane, Suite A-102, Franklin, Tennessee 37067 and/or (ii) by employees of Seller in home offices or other off-site locations, including those assets set forth in Schedule 1.1(b);

 (c) all right of Seller arising under the agreements listed in Schedule 1.1(c); and 

(d) all other assets as set forth in Schedule 1.1(d). 

1.2. Excluded Assets. Notwithstanding the foregoing, the Purchased Assets shall not include the accounts receivable set forth in
Schedule 1.2 (with respect to any client projects completed prior to the Effective Date, the “Retained AR”; and with respect to any client project partially completed as of the Effective Date, the “In-Process
AR”). 
 1.3. Assumption/Non-Assumption of Liabilities. Subject to the terms and conditions set forth herein, Purchaser
shall assume and agree to pay, perform and discharge the liabilities and obligations arising on or after the Effective Date under the Purchased Assets, but only to the extent that such liabilities and obligations do not relate to any breach, default
or violation by Seller on or prior to the Effective Date (collectively, the “Assumed Liabilities”). Other than the Assumed Liabilities, Purchaser shall not assume any liabilities or obligations of Seller of any kind, whether known
or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created. 
 ARTICLE II 

CONSIDERATION 
 In
consideration for the sale, assignment, transfer, conveyance and delivery of the Purchased Assets by Seller to Purchaser, Purchaser shall pay to Seller a purchase price (the “Purchase Price”) equal to One Hundred Sixty-Two Thousand
Nine Hundred Sixty-Four and 25/100 Dollars ($162,964.25), which shall be paid in cash simultaneously with the execution of this Agreement. 

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF SELLER 

Seller represents and warrants to Purchaser that the statements contained in this Article III are true and correct as of the date hereof to
the knowledge of Seller. For purposes of this Article III, “Seller’s knowledge,” “knowledge of Seller” and any similar phrases shall mean the actual or constructive knowledge of any director of Seller. 

3.1. Organization and Authority of Seller; Enforceability. Seller is a corporation duly organized, validly existing and in good
standing under the laws of the state of Tennessee. Seller has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate
action on the part of 

 
Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Purchaser) this
Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms. 

3.2. No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered
hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the charter, bylaws or other organizational documents of Seller; (b) violate or conflict with any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; or (c) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization is required
to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby. 

3.3. Title to Purchased Assets. Seller owns and has good title to the Purchased Assets, free and clear of Encumbrances. 

3.4. Non-foreign Status. Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2.

 3.5. Legal Proceedings. There is no claim, action, suit, proceeding or governmental investigation (“Action”) of
any nature pending or threatened against Seller (a) relating to or affecting the Purchased Assets or the Assumed Liabilities or (b) that challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this
Agreement. 
 3.6. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller. 

3.7. Full Disclosure. No representation or warranty by Seller in this Agreement and no statement contained in the schedules to this
Agreement or any certificate or other document furnished or to be furnished to Purchaser pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained
therein, in light of the circumstances in which they are made, not misleading. The above notwithstanding, Seller shall not be in breach of any representation or warranty made by Seller to the extent that Purchaser had knowledge of any inaccuracies,
misstatements or omissions with respect to such representations and warranties prior to the Effective Date. For purposes of this Agreement, “Purchaser’s knowledge,” “to the knowledge of Purchaser” and any similar phrases
shall mean the actual or constructive knowledge of any member or officer of Purchaser. 

 ARTICLE IV 

REPRESENTATIONS AND WARRANTIES OF PURCHASER 

Purchaser hereby represents and warrants to Seller as follows: 

4.1. Existence and Standing of Purchaser. Purchaser is a limited liability company validly existing and in good standing under the laws
of the State of Tennessee. Purchaser has all requisite power and authority, corporate and otherwise, to own, operate, use and lease its properties and to carry on its business as being conducted. 

4.2. Authority of and Approval by Purchaser. Purchaser has full power, financial ability and authority, to execute, deliver and perform
its obligations under this Agreement. This Agreement has been duly authorized by the Purchaser and no other acts or proceedings on the part of Purchaser are necessary to authorize the execution, delivery and performance by Purchaser of this
Agreement. 
 ARTICLE V 

OTHER COVENANTS AND AGREEMENTS 

5.1. Accounts Receivable. Seller shall not make any collection efforts with respect to any Retained AR for continuing clients of the
Business for a period of sixty (60) days following the Effective Date, and Purchaser shall make commercially reasonable collection efforts on Seller’s behalf with respect to any such Retained AR for such sixty (60) day period. Seller
shall not make any collection efforts with respect to any In-Process AR. Purchaser shall be solely responsible for collection efforts with respect to In-Process AR upon completion of the applicable projects. Purchaser shall remit to Seller any
amounts received with respect to Retained AR and In-Process AR (to the extent of Seller’s share thereof) promptly after receipt. 

5.2. Employees. Purchaser shall make offers of employment to the individuals identified in Schedule 5.2, and Seller shall
cooperate with Purchaser’s efforts to employ such individuals. Except for the individuals identified in Schedule 5.2, all employees of Seller immediately prior to the consummation of the transactions contemplated by this Agreement shall
remain employees of Seller. 
 5.3. Cashless Exercise. Each individual identified in Schedule 5.3 shall be able to execute a
cashless exercise of all fully vested options to purchase Parent common stock held by such individual as set forth in Schedule 5.3, to occur at any time on or before the day that is ninety (90) days after the Effective Date. 

 5.4. Change of Name. Within five (5) business days following the Effective Date,
Seller shall file Articles of Amendment to its Charter, substantially in the form attached as Attachment A, surrendering its use of the name “Banc Compliance Group” so that Purchaser may utilize such name. 

5.5. Non-competition; Non-solicitation. 

(a) For a period of two (2) years commencing on the Closing Date (the “Restricted Period”), each of Seller and Parent
shall not, and shall not permit any of its respective affiliates to, directly or indirectly, (i) engage in or assist others in engaging in any business that is competitive with the Business (the “Restricted Business”) within
the State of Tennessee (the “Territory”); or (ii) have an interest in any person or entity that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder,
member, employee, principal, agent, trustee or consultant. Notwithstanding the foregoing, Seller or Parent may own, directly or indirectly, solely as an investment, securities of any entity if Seller or Parent, as applicable, is not a controlling
person (or entity) of, or a member or members of a group which controls, such entity and does not, directly or indirectly, together with its affiliates, own 5% or more of any class of securities of such entity. 

(b) During the Restricted Period, each of Seller and Parent shall not, and shall not permit any of its respective Affiliates to, directly or
indirectly, hire or solicit any employee of Purchaser or encourage any such employee to leave such employment or hire any such employee who has left such employment, except pursuant to a general solicitation which is not directed specifically to any
such employees; provided, that nothing in this Section 5.5(b) shall prevent Seller or Parent or any of its affiliates from hiring (i) any employee whose employment has been terminated by Purchaser; or (ii) after 180 days from the date
of termination of employment, any employee whose employment has been terminated by the employee. 
 (c) Seller and Parent acknowledge that a
breach or threatened breach of this Section 5.5 would give rise to irreparable harm to Purchaser, for which monetary damages would not be an adequate remedy, and hereby agree that in the event of a breach or a threatened breach by Seller or
Purchaser of any such obligations, Purchaser shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction,
specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond). 

(d) Seller acknowledges that the restrictions contained in this Section 5.5 are reasonable and necessary to protect the legitimate
interests of Purchaser and constitute a material inducement to Purchaser to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 5.5 should ever be
adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable law in any jurisdiction, then any court 

 
is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations
permitted by applicable law. The covenants and provisions contained in this Section 5.5 are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or
render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction. 

5.6. Website and E-mail Hosting. Following the Effective Date, Seller or Parent, as applicable, shall continue to host the e-mail and
website(s) associated with the Business for a transition period to end no later than January 15, 2015. During such transition period, Seller and Parent shall reasonably cooperate with Purchaser and Purchaser’s vendors and other
representatives to transition the hosting of the e-mail and website(s) associated with the Business. 
 5.7. Further Assurances.
Following the Effective Date, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder. 
 ARTICLE VI 

INDEMNIFICATION 
 6.1.
Survival. All representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the closing of the transactions contemplated by this Agreement for a period of twelve (12) months,
provided that (a) rights to indemnification shall continue with respect to any claim brought prior to the expiration of such period until such claim has been resolved in accordance with the terms of this Agreement; and (b) the covenants
set forth in Section 5.5 shall survive the closing of the transactions contemplated by this Agreement for a period of two (2) years. 

6.2. Indemnification by Seller. Seller shall defend, indemnify and hold harmless Purchaser, its affiliates and their respective
members, stockholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys’ fees and disbursements, arising from or relating to: 

(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document to be
delivered hereunder, provided, however, that Purchaser did not have knowledge of such inaccuracy or breach prior to the Effective Date; 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any
document to be delivered hereunder; or 

 (c) any liability or obligation of Seller other than the Assumed Liabilities. 

6.3. Indemnification by Purchaser. Purchaser shall defend, indemnify and hold harmless Seller, its affiliates and their respective
stockholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys’ fees and disbursements, arising from or relating to: 

(a) any inaccuracy in or breach of any of the representations or warranties of Purchaser contained in this Agreement or any document to be
delivered hereunder; 
 (b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Purchaser pursuant to
this Agreement or any document to be delivered hereunder; or 
 (c) any Assumed Liability. 

6.4. Indemnification Procedures. Whenever any claim shall arise for indemnification hereunder, the party entitled to indemnification
(the “Indemnified Party”) shall promptly provide written notice of such claim to the other party (the “Indemnifying Party”). In connection with any claim giving rise to indemnity hereunder resulting from or arising
out of any Action by a person or entity who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of any such
Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including, but not limited to, settling such Action, after giving notice of it to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to
any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld or delayed). 

6.5. Tax Treatment of Indemnification Payments. All indemnification payments made by Seller under this Agreement shall be treated by
the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law. 
 6.6. Cumulative Remedies.
The rights and remedies provided in this Article VI are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise. 

 ARTICLE VII 

MISCELLANEOUS 
 7.1.
Parties in Interest; Assignment. All terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns. No assignment of this
Agreement shall relieve any party of its liabilities and obligations for its performance of the matters herein specified to be performed by it. 

7.2. Notices. All communications and notices hereunder shall be in writing, and shall be deemed to have been duly given if delivered
personally, or five (5) days after being sent by United States registered or certified mail, postage prepaid, or the next business day after being sent by a recognized commercial air courier: 

 

			
	If to Seller or Parent:	  	Franklin Financial Network, Inc.
		  	722 Columbia Avenue
		  	Franklin, Tennessee 37064
		  	Attn: Richard Herrington
		
	with a copy to:	  	Mark L. Miller
		  	Baker, Donelson, Bearman, Caldwell
		  	& Berkowitz, PC
		  	211 Commerce Street, Suite 800
		  	Nashville, Tennessee 37201
		
	If to Purchaser:	  	BCG Consulting, LLC
		  	256 Seaboard Lane, Suite A-102
		  	Franklin, Tennessee 37067
		  	Attn: Connie Edwards
		
	with a copy to:	  	Michael Mills
		  	Harwell Howard Hyne Gabbert & Manner, P.C.
		  	333 Commerce Street, Suite 1500
		  	Nashville, Tennessee 37201

  

 or at such other place as the party addressed may have designated to the other by notice conforming to this
Section 7.2. 
 7.3. Entire Agreement. This Agreement constitutes the entire understanding between the parties with
respect to the subject matter hereof and may not be changed, modified, altered, amended, discharged or terminated, except by a writing signed by both parties. 

7.4. Waiver; Survival. No waiver of any covenant or other provision contained in this Agreement shall be effective against the
waiving party unless such waiver is evidenced by a writing signed by the waiving party. Waiver by a party as provided in this Section shall not be construed as or constitute either a continuing waiver of such covenant or other provision, or a waiver
of any other covenant or provision hereof. The failure of any party at any time to require performance by the other party of any provision or covenant of this Agreement shall in no way affect its right thereafter to enforce the provision or
covenant, or any other provision or covenant. 
 7.5. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee. The parties hereby agree and irrevocably consent that any suit, action or proceeding shall be instituted with respect to this Agreement in the United States District Court for the
Middle District of Tennessee or in such applicable Tennessee state courts sitting in Williamson County, Tennessee, and that venue shall lie exclusively with courts sitting in Williamson County, Tennessee. The parties hereby consent to in personam
jurisdiction of such courts and irrevocably waive any objection and any right of immunity on the ground of venue, the convenience of forum or the jurisdiction of such courts or from the execution of judgments resulting therefrom. 

7.6. Headings. The headings of the articles and sections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part hereof. 
 7.7. Counterparts. This Agreement may be executed by the parties in one or more
counterparts, each of which shall, be deemed an original, but all of which together shall constitute one and the same instrument. 
 7.8.
Expenses. Seller and Purchaser shall each pay and be individually responsible for its respective expenses incurred in connection with this Agreement and the actions contemplated herein. 

7.9. Severability. If any covenant or provision hereof is determined to be void or unenforceable in whole or in part, it shall
not be deemed to affect or impair the validity of any other covenant or provision, each of which is hereby declared to be separate and distinct. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable. If any provision of this Agreement is declared invalid or unenforceable for any reason other than overbreadth, the 

 
offending provision shall be modified so as to maintain the essential benefits of the bargain among the parties hereto to the maximum extent possible, consistent with law and public policy. 

[Signature Page Follows] 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first
above written. 
  

	
	SELLER:
	
	BANC COMPLIANCE GROUP, INC.
	
	 /s/ Kevin Herrington

	Kevin Herrington, Chairman
	
	PURCHASER:
	
	BCG CONSULTING, LLC
	
	 /s/ Constance E. Edwards

	Constance E. Edwards, President
	
	PARENT:
	
	FRANKLIN FINANCIAL NETWORK, INC.
	
	 /s/ Richard E. Herrington

	Richard E. Herrington, President

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