Exhibit 10.1
STOCK PURCHASEAGREEMENT
This STOCKPURCHASEAGREEMENT(the“Agreement”)is made and entered intoasof November 15, 2018,by and between Peiwen Yu, with its offices located at No. 911Bao'an Book City XInqiao Street Central Road,Bao'an District, Shenzhen City, China(the“Purchaser”), and David Koos, Regen BioPharma Inc., Bostonia Partners Inc., Sherman Family Trust, Dunhill Ross Partners Inc. and Bio-Technology Partners Business Trust (each, a “Seller” and collectively, the “Sellers”) with David Koos as Sellers Representative, whose office is located at 4700 Spring Street, Suite 304, La Mesa, California, 91942, a controlling shareholder as well as Chief Executive Officer, Chief Financial Officer and the sole directorof Entest Group, Inc., a Nevada corporation(the“Company”).
W I T N E S S E TH:
WHEREAS,the Sellers are the record and beneficial owners of an aggregate of 23,733,334 shares of common stock, par value $0.001 per share (the “Common Stock”), 667 shares of Series AA preferred stock, 534 shares of Series AAA Preferred Stock and 1,001,533 shares of Non-Voting Convertible Preferred Stock, of the Company, which represent 50.3% of the issued and outstanding shares and currently 94% of the voting power of the Company or 93% of issued and outstanding shares if non-voting preferred were converted into common on November 15, 2018 and 99% of the voting power of the Company.
WHEREAS,the Sellersdesireto sell to the Purchaser, andthePurchaserdesires topurchase from the Seller, the Sharespursuant to the terms ofthisAgreement.
NOW,THEREFORE,ITISAGREED:ARTICLE I
SALE OF THE SHARES
Section1.1Saleof the Shares. Subjectto the terms and conditionsherein stated, and in reliance upon the representations, warranties, covenants and agreements contained in this Agreement, the Sellersagree to sell, assign, transfer, anddeliver to the Purchaser onthe ClosingDate,andthePurchaseragreestopurchasefrom the Sellers onthe ClosingDate,allof the Shares.The certificatesrepresenting the Shares shallbeduly endorsed and assigned to the Purchaser(the“Sale”), with each endorsement accompanied by aMedallion signatureguarantee.
Section1.2Price.On the ClosingDate,Purchaser shallpay toSellertheamountof$325,000 (Three Hundred Twenty-Five Thousand Dollars)(the“Purchase Price”), $25,000 of which shall be continue to be held in the escrow account subsequent to the Closing (as defined herein) pursuant to the terms and conditions set forth in Section 7.3 hereof.The Purchaser and the Sellersacknowledge thatthe Purchase Pricewillbedeliveredto McMurdo Law Group, LLC, as escrow agent(“Escrow Agent”) in accordance with the escrow agreement dated October 3, 2018 by and among the Sellers, Purchaser and Escrow Agent.TheSellershavedeliveredthe Sharesto the Escrow Agent,dulyendorsedfor transfer toPurchaserorhisdesignees.The Escrow Agent shallhold the Purchase Priceupon confirmation toPurchaserthat theclosingdocumentshavebeenreceived.Uponwritten instructionfrom Purchaser, theEscrow Agent shalldisburse thefundsheld in escrow to the Sellers in accordance with the Escrow Agreement in accordance with Section 3 of that Escrow Agreement entered into by and between the Purchaser, the Seller, and McMurdo Law Group, LLC on October 3, 2018 as amended November 15, 2018 (“Escrow Agreement”).
Section1.3Closing.
(a)The closingofthe Salereferred to in Section1.1(the“Closing”) shalltakeplaceonat such date, time and place as shall be determined by the Purchaser and the Sellers. Suchclosingdate ishereinreferred to as the“ClosingDate.”
(b) At the Closing Documents ( as such term is defined in the Escrow Agreement) shall be delivered to the Purchaser and the Purchase Price shall be delivered to the Seller pursuant to the terms and conditions of the Escrow Agreement.
(c) At and at any time after the Closing, the parties shall duly execute, acknowledge and deliver all such further assignments, conveyances, instruments and documents, and shall take such other action consistent with the terms of this Agreement to carry out the transactions contemplated by this Agreement.
(d) All representations, covenants and warranties of the Purchaser and each Seller contained in this Agreement shall be true and correct on and as of the Closing Date with the same effect as though the same had been made on and as of such date.
Section1.4Taxes.All sales, transfer, income,orgain taxes applicabletothe saleof the Shares bytheSellers as contemplated by thisAgreement shallbepaidbytheSellers.
ARTICLEII
REPRESENTATIONSOFSELLER
EachSellerrepresents andwarrants that:
Section2.1Ownershipof the Shares.SuchSelleris thelawfulownerof theShares,free and clearof allsecurityinterests, liens, encumbrances,equities andother charges.SuchSellerfurtherrepresentsthatheor itdoesnotbeneficiallyown anyoptionsorwarrantsorotherrights topurchase securities of the Company.Therearenooutstandingor authorizedoptions,warrants,rights,calls, commitments, conversionrights,rightsof exchangeorotheragreementsof any character, contingentorotherwise,providingforthepurchase,issuanceor saleof anyofthe Shares,or any arrangements that requireorpermit anyof theSharestobevotedbyor atthediscretionof anyoneother thanthe Sellers, andtherearenorestrictionsofanykindonthetransferof anyofthe Sharesother than(a)restrictionson transfer imposedbythe SecuritiesActof1933,asamended (the“SecuritiesAct”) and(b)restrictionson transfer imposedby applicable state securitiesor“blue sky” laws.Thedelivery by suchSellertoPurchaserof theSharespursuant to theprovisionsof thisAgreementwilltransfer to Purchaservalid title thereto,free and clearofany and allEncumbrances. The Shares being transferred hereby have been validly issued, fully paid and are non-assessable.The Shares havenotbeenregisteredwith the Securities and Exchange Commission (“SEC”) and are being sold to the Sellers in transactions exempt from registration.
Section2.2AuthorizationandValidity ofAgreement.Each Sellerhas fullpowerand authorityto execute anddeliverthisAgreement, toperform hisobligationshereunder, and to consummate the transactions contemplatedhereby.ThisAgreementhasbeenduly executed anddeliveredby eachSellerand, assumingthedue executionof thisAgreementby Purchaser, is avalid andbindingobligationof each Seller, enforceable against such Seller in accordance with its terms, except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization, and similar laws affectingthe enforcementofcreditors'rightsgenerally and togeneral equitableprinciples.None of the Sellersisnot aparty to anyagreement,writtenororal,creatingrightsinrespectof anyof theShares in anythirdparty orrelating to thevotingof theShares.
Section2.3No Brokers.Nobrokerageorfinder'sfeesor commissionsareorwillbepayableby the Company to anybroker,financialadvisoror consultant,finder,placementagent, investmentbanker,bankorotherPersonwithrespect to the transactions contemplatedby thisAgreement,and theCompanyhasnot taken anyaction thatwouldcause Purchaser tobe liableforany suchfeesor commissions. Each SelleragreesthatPurchaser shallhavenoobligationwithrespectto anyfeesorwithrespect toany claimsmadebyoronbehalfof any Person,forfeesofthe typecontemplatedby thisSection and eachSeller shall indemnifyandhold the Purchaser and the Companyharmlessfrom anyfees, costsor liabilitiesof anykindincurredby the Purchaser inconnectiontherewith.
Section2.4AccuracyofInformation.Noneoftherepresentations andwarrantiesof any Seller containedherein,or in thedocumentsfurnishedby thempursuanthereto, contains anymaterialmisstatementoffactoromits to state anymaterialfactnecessary tomakethe statementshereinor therein in lightof thecircumstances inwhich theyweremadenotmisleading.
Section 2.5No restriction on the Sale. There is no restriction or limitation on the execution and delivery of this Agreement and the consummation or performance of the transactions contemplated hereby and thereby.
Section 2.6No Other Securities. None of the Sellers owns or controls,directly or indirectly, any securities of the Company other than the Shares.
ARTICLEIII
REPRESENTATIONSOF SELLERSAS ADIRECTOR AND OFFICER OF THE COMPANY OR ENTITIES AFFILIATED THEREOF
Each Seller represents and warrants to the Buyer, as of the date of execution of this Agreement and the Closing Date, as follows:
Section3.1ExistenceandGoodStanding.TheCompany is acorporationdulyorganized,validlyexisting,and in good standingunder thelawsofthe StateofNevadaandhasallrequisite corporatepower and authority toown,lease,andoperate itsproperties and to carryon itsbusiness asnowbeing conducted.
Section3.2CapitalStock.
(a)The Companyhas an authorized capitalization consistingof505,000,000,parvalueof$0.0001per share,of which 500,000,000 shares areCommon Stock and 5,000,000 shares are preferred stock (the “Preferred Stock”). As of the date hereof, [49,170,472] shares of Common Stock, [634] shares of Series AA Preferred Stock, [728,073] shares of Series B Preferred Stock, [534] shares of Series AAA Preferred Stock and [1,001,533] shares of Non-Voting Convertible Preferred Stock are issued andoutstanding.All theoutstanding shares of Common Stock and Preferred Stockhavebeenduly authorized andvalidlyissued and arefullypaidandnon-assessable.Alloftheissued andoutstanding sharesofcapital stockof the Company havebeenoffered, issued and sold by the Company in compliancewith all applicablefederaland state securities laws.No securitiesof the Companyareentitled topreemptiveor similarrights, andnopersonor entity has anyrightoffirstrefusal,preemptiveright,rightofparticipation,or any similarright toparticipate inthe transactions contemplatedhereby.Except as aresultofthepurchase and saleof theShares,there arenooutstandingoptions,warrants, scriptrights to subscribeto, callsor commitmentsofany characterwhatsoeverrelatingto,or securities,rightsorobligations convertible intoor exchangeablefor,orgiving any Person anyright to subscribeforor acquire, any sharesof CommonStock,orcontracts, commitments,understandingsor arrangements bywhich the Companyisormaybecomebound toissue additional sharesof CommonStock,or securitiesorrights convertibleorexchangeable into sharesof CommonStock.The issuance and saleofthe Shareswillnotobligatethe Company to issue sharesof CommonStockorother securitiestoanyPerson(other than the Purchaser) and shallnotresult in arightof anyholder of Company securities to adjust the exercise, conversion, exchangeorresetprice under such securities.
(b)Therearenooutstandingobligations, contingentorotherwise,ofthe Company toredeem,purchaseorotherwiseacquireany capital stockorother securitiesof theCompany.
(c)Therearenoshareholderagreements,votingtrustsorotheragreementsorunderstandingstowhich the Companyorany of theSellers is apartyor bywhich eitherofthemareboundrelating tothevotingof anysharesofthe capital stockofthe Company.
(d)The Shareshave beendulyauthorizedfor issuance,whendeliveredin accordancewith the termsof thisAgreement, and shallbevalidlyissued,fullypaid andnon-assessable and thetransferof said Shares shallnotbe subject to anypreemptiveorother similarright.
Section 3.3Subsidiaries. Entest Biomedical, Inc., a wholly owned subsidiary of the Company. Entest Biomedical, Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of California and has all requisite corporate power and authority to own, lease, and operate its properties and to carry on its business as now being conducted. Other than set forth herein, the Company does not currently own equity interest in any entity.
Section3.4Books and Records.The Company'sbooks and records,financial andotherwise, are in allmaterialrespects complete and correct and areintheofficesofthe Sellers.
Section3.5Litigation.Thereareno(a)actions, suits,or legal, equitable,arbitrative,or administrativeproceedingspending,ortotheknowledgeofthe Sellers, threatenedagainstthe Company,or(b) judgments, injunctions,writs,rulings,orordersby anygovernmentalpersonagainst the Company.Neither the Company,nor anyofficer,key employeeor 5% stockholderof the Company inhis,heror its capacity assuch, is indefaultwithrespect to anyorder,writ,injunction,decree,rulingordecisionof any court, commission,boardor anyothergovernmentagency.TheSEChasnot issued any stoporderorotherorder suspending the effectivenessof anyregistration statementfiledby theCompanyundertheSecurities Exchange Act of 1934, as amended (the “ExchangeAct”)ortheSecuritiesAct.
Section3.6Taxes.There arenoliensfor taxesupon the assetsof the Companyor any of its subsidiariesexceptfor statutoryliensforcurrent taxesnot yetdue andpayableorwhichmaythereafterbepaidwithoutpenaltyor arebeingcontested ingoodfaith. Neither the Company nor any of its subsidiaries has received any notice of audit,isnotundergoing any auditof itstaxreturns,orhasreceived anynoticeofdeficiencyor assessmentfrom anytaxing authoritywithrespect to liabilityfor taxeswhichhasnotbeenfullypaidorfinally settled.Therehavebeennowaiversof statutesof limitationsby theCompanywithrespect to anytaxreturns.TheCompanyhasnotfiled arequestwith theInternalRevenue Serviceforchanges in accountingmethodswithin the lastthree yearswhich changewould affect the accountingfor taxpurposes,directlyor indirectly,of itsbusiness.The Companyhasnot executed an extensionorwaiverof any statuteoflimitationson the assessmentorcollectionof any taxesdue(excluding such statutes thatrelate to years currentlyunder examinationbytheInternal Revenue Serviceorother applicable taxing authorities) that is currently in effect.
Section3.7AccuracyofInformation.Noneoftherepresentations andwarrantiesof theSellers as an officer, director and stockholder of the Company containedherein,orinthedocumentsfurnishedbyhimpursuanthereto, contains anymaterialmisstatementoffactoromits to state anymaterialfactnecessary tomake the statementshereinor therein in lightofthe circumstances inwhich theyweremadenotmisleading.
Section3.8Disclosure.EachSellers confirms thatneitherhenor anyother Person actingonhis behalfhasprovidedthePurchaseror itsagentsor counselwith any information thatconstitutesormight constitutematerial,nonpublic information concerningthe Company.EachSellerunderstands and confirms that the Purchaserwillrelyontheforegoingrepresentations in effecting transactions in securitiesof the Company.Alldisclosureprovided to the Purchaserregarding the Company,itsbusiness and the transactions contemplatedhereby,furnishedbyoronbehalfof eachSellerwithrespect totherepresentations andwarrantiesmade herein are true and correctwithrespect to suchrepresentations andwarranties anddonot contain anyuntrue statementof amaterialfactor omit to state anymaterialfactnecessary inorder tomakethe statementsmade therein,in lightof the circumstancesunderwhich theyweremade,notmisleading.EachSeller acknowledgesandagrees thatthe Purchaser hasnotmade,nor is thePurchasermaking, anyrepresentationsorwarrantieswithrespect to the transactions contemplatedherebyother thanthose specifically setforthherein.
Section3.9NoDisagreementswithAccountants andLawyers.There arenodisagreementsof anykindpresentlyexisting,orreasonably anticipatedby the Company to arise,between the accountants and lawyersformerlyorpresentlyemployedby theCompany.The Company does notowe any fees to itsaccountants and lawyers.
Section3.10No Conflicts.The execution,delivery andperformanceofthisAgreement and the transactions contemplatedherebydonot andwillnot:(i) conflictwithorviolate anyprovisionof the Company’sArticlesofIncorporation,By-lawsorotherorganizationalor charterdocuments,or(ii) conflictwith,or constitute adefault(or anevent thatwithnoticeor lapseof timeorbothwouldbecome adefault)under,orgive toothers anyrightsof termination,amendment, accelerationor cancellation(withorwithoutnotice, lapseof timeorboth)ofanyagreement, creditfacility,debtorother instrument(evidencing a Companydebtorotherwise)orotherunderstanding towhich theCompanyis apartyorbywhich anypropertyor assetof the Companyisboundoraffectedor(iii)resultin aviolationof any law,rule,regulation,order, judgment, injunction,decreeorotherrestrictionof any courtor governmental authority towhich theCompany is subject(includingfederal and state securities laws andregulations),orbywhichanypropertyor assetofthe Company isboundor affected.
Section3.11Filings, Consents andApprovals.NeithertheSellersnorthe Company isrequired toobtain anyconsent,waiver, authorizationororderof, give anynotice to,or make anyfilingorregistrationwith, anycourtorotherfederal, state,localorothergovernmentalauthorityorother Person in connection with the execution, delivery and performance of this Agreement.
Section3.12Compliance.The Company:(i) isnot indefaultunderor inviolationof(andno eventhasoccurred thathasnotbeenwaivedthat,withnoticeorlapseof timeorboth,wouldresultin adefaultby theCompanyunder),norhas the Companyreceivednoticeof a claimthat it is indefaultunderor that it isinviolationof, anyindenture, loanor creditagreementor anyotheragreementorinstrumenttowhich it is apartyorbywhich itor anyof itsproperties isbound(whetherornot suchdefaultorviolationhasbeenwaived),(ii)isnot inviolationof anyorderofany court,arbitratororgovernmentalbodyand(iii) isnot andhasnotbeeninviolationof any statute,ruleorregulationof anygovernmental authority.
Section3.13TransactionswithAffiliates andEmployees.Except asrequired to be setforth inthe SEC Reports,noneoftheofficersordirectorsof the Companyand,to theknowledgeof theSellers, noneof theAffiliates oremployeesof the Company ispresently aparty to any transactionwith the Company(other thanfor services asemployees,officers anddirectors), including any contract,agreementorotherarrangementprovidingfor thefurnishingof servicestoorby,providing forrentalofrealorpersonalproperty toorfrom,orotherwiserequiringpayments toorfrom anyofficer,directoror such employeeor,to theknowledgeofthe Sellers,any entityinwhich anyofficer, director,or any suchemployeehas a substantial interestor is anofficer,director, trusteeorpartner.
Section3.14Assets.The Company does not have or lease any assets.
Section3.15InvestmentCompany/InvestmentAdvisor.Thebusinessof theCompanydoesnotrequire it toberegistered as aninvestmentcompanyor investment advisor; as such terms aredefinedundertheInvestment CompanyAct and theInvestmentAdvisorsActof1940.
Section3.16Regulatory Matters.The Companyhas compliedwithall applicable federal, state and local laws andregulations(“Law”). There is no pending or threatened civil or criminal litigation, written notice of violation, formal administrative proceeding or investigation, inquiry or information request by any federal, state or local governmental entity relating to any Law involving the Company.
Section3.17InformedDecision.EachSeller isawareof theCompany’sbusinessaffairs andfinancial condition andhavereachedan informed andknowledgeabledecisionto sellthe Shares.
Section3.18NoLiabilitiesorDebts.
Other than:
| (a) | _____of Accounts Payable of which $11,261 have been outstanding for a period exceeding four years. Such $11,261 shall be held in Escrow for a period of six months from the date of closing unless Seller shall resolve such liabilities and releases regarding same. |
| (b) | $19,601 of Notes Payable which shall be satisfied pursuant to the Escrow Agreement |
| (c) | $3,078 in accrued expenses |
There areno liabilitiesordebtsoftheCompanyofanykindwhatsoever,whetheraccrued, contingent, absolute,determined,determinableorotherwise as of Closing and there isno existingcondition, situationor setof circumstanceswhich couldreasonablybe expectedtoresult in such a liabilityordebt. The Company is not a guarantor of any indebtedness of any otherperson,firmor corporation.
Section 3.19Employee Matters. The Company currently has one employee, whose employment with the Company shall terminate at Closing. There are no any outstanding employment obligation of the Company of any kind. The Company shall have no obligations whatsoever, for any compensation or other amounts payable to any employee, director, consultant, or independent contractor of the Company, including, but not limited to Bonus, salary, compensation, accrued vacation, fringe, pension or profit sharing benefits or severance paid or payable to any employee, director, consultant or independent contractor of the Company relating to service with or for the Company at any time prior to the Closing Date.
Section 3.20SEC Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company and its consolidated Subsidiaries included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. The financial statements included in the SEC Reports have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the SEC Reports conform in all material aspects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the SEC Reports or to be filed with the Commission as exhibits to the SEC Reports, that have not been so described or filed.
Section 3.21Free-Trading Shares. Of the total issued and outstanding shares of common stock of the Company, [25,571,587] shares of common stock are “restricted securities” under applicable U.S. federal and state securities laws and the remaining [23,526,991] shares are non-restricted securities.
ARTICLEIV
REPRESENTATIONSOFPURCHASER
Purchaserrepresentsandwarrants asfollows:
Section4.1AuthorizationofPurchaser.The Purchaserhasfullpower and authority to execute anddeliver thisAgreement, toperform itsobligationshereunder, and to consummatethe transactions contemplatedhereby.ThisAgreementhasbeenduly executed anddeliveredby the Purchaser and, assumingthedue executionof thisAgreementby eachSeller,willconstitute avalid andbindingobligationof the Purchaser enforceableagainst suchPurchaser in accordancewithitsterms,except to the extentthat enforceabilitymaybe subjecttoapplicablebankruptcy, insolvency,reorganization,and similarlawsaffecting the enforcementof creditors'rightsgenerally and togeneralequitableprinciples.
Section4.2Consents andApprovals;NoViolations.Theexecution anddeliveryof thisAgreementby the Purchaser andthe consummationof the transactions contemplatedhereby(a)willnotviolateany statute,rule,regulation,orderordecreeof anypublicbodyor authoritybywhichthePurchaser isboundorbywhichanyof itspropertiesor assetsarebound,(b)willnotrequire anyfilingwith,orpermit, consentor approvalof,orthe givingof anynotice to, anygovernmentalorregulatorybody,agencyorauthorityonorprior to the Closing Date, and(c)willnotresult in aviolationorbreachof,conflictwith,constitute(withorwithoutduenoticeor lapseof timeorboth) adefault(or giverise to anyrightof termination, cancellation,paymentor acceleration)under,orresult in the creationofanyEncumbranceuponanyof thepropertiesor assetsof thePurchaserunder anyof theterms, conditions,orprovisionsof anynote,bond,mortgage, indenture,license,franchise,permit,agreement, lease,franchiseagreement,or anyotherinstrumentorobligationtowhich the Purchaser is aparty,or by whichitoranyofits propertiesor assetsmaybebound.
Section4.3PurchaseforInvestment.Withregardtothe Sharespurchasedfrom theSellers,the Purchaser and its assigns or designees will acquire the Shares solely for its own account for investmentpurposesonly andnotwith aview towardanyresaleordistribution thereof. Withregard to the Sharespurchasedfrom theSellers, the Purchaseragrees that the Sharesmaynotbe sold,transferred,offeredfor sale,pledged,hypothecated,orotherwisedisposedofwithoutregistrationunder the SecuritiesAct, exceptpursuant to an exemptionfrom suchregistrationavailableunder suchSecuritiesAct, andwithout compliancewith the securities lawsofotherjurisdictions, to the extent applicable. The Purchaser andits assignsordesigneeshas suchknowledgeandexperience infinancial andbusinessmatters thatit iscapableofevaluating themerits andrisksofits purchaseofthe Shares. ThePurchaser confirms that the Company and the Sellershavemade availabletothe Purchaser theopportunity toaskquestionsof the Company and toacquire additionalinformation aboutthe Company'sbusiness andfinancialcondition.
Section4.4AvailableFunds.ThePurchaserwillhaveonthe ClosingDate sufficientfunds toperform allofits obligationsunderthisAgreement, including,withoutlimitation, tomakethepaymentsrequiredhereunderdescribedin Section1.2hereto.
Section4.5Broker'sorFinder'sFees.No agent,broker,firmorotherPersonactingonbehalfof thePurchaser is,orwillbe, entitled to anycommissionorbroker'sorfinder'sfeesfrom anyof thepartieshereto,orfrom any Person controlling, controlled byorunder commoncontrolwithanyof thepartieshereto, in connectionwithanyof thetransactions contemplatedherein.
Section4.6AccuracyofInformation.Noneoftherepresentations andwarrantiesof the Purchaser containedherein,or in thedocumentsfurnishedpursuanthereto, contains anymaterialmisstatementoffactoromitsto state anymaterialfactnecessarytomake the statementshereinor therein inlightof thecircumstances inwhichtheyweremadenotmisleading.
ARTICLE V
CONDITIONSTOSELLER'SOBLIGATIONS
TheSaleof the SharesbytheSellerson the ClosingDate is conditionedupon satisfactionorwaiver, atorprior tothe consummationof the Sale,ofthefollowingconditions:
Section5.1Accuracyof Representations andWarranties.Therepresentations andwarrantiesofthePurchaser containedin thisAgreement shallbetrue and correct inallmaterialrespectson and asof the ClosingDatewiththesameeffect as though suchrepresentations andwarrantieshadbeenmadeon and asof suchdate.
Section5.2PerformanceofAgreements.Each and alloftheagreementsofthePurchaser tobeperformed atorprior to theClosingDatepursuant to the termshereof shallhavebeendulyperformedinallmaterialrespects.
Section5.3NoInjunction.No courtorothergovernmentalbodyorpublicauthority shallhaveissued anorderthat shall thenbeineffectrestrainingorprohibiting the completionof the transactions contemplatedhereby.
Section 5.4Deposit of Purchase Price to Escrow Agent. The Purchaser shall havedeposited the balance of the Purchase Price to the Escrow Agent.
ARTICLEVI
CONDITIONSTOPURCHASER'SOBLIGATIONS
Thepurchaseof theSharesby the Purchaseronthe ClosingDateis conditioneduponthe satisfactionorwaiver, atorpriorto the consummationoftheSale,of thefollowing conditions:
Section6.1Accuracyof Representations andWarranties.Therepresentations andwarrantiesofeachSeller contained inthisAgreement shallbe true andcorrectinallmaterialrespectsonand asoftheClosingDatewith the sameeffect asthough suchrepresentations andwarrantieshavebeenmadeonand asof suchdate(excepttothe extent thatany suchrepresentation andwarrantyis stated inthisAgreementto bemade asof a specificdate, inwhich case suchrepresentation andwarranty shallbe true and correct asof such specifieddate).
Section6.2PerformanceofAgreements.Each and allof theagreementsofSellertobeperformedatorprior to the ClosingDatepursuant to the termshereof shallhavebeendulyperformedinallmaterialrespects.
Section6.3NoInjunction.No courtorothergovernmentbodyorpublic authority shallhaveissued anorderwhich shall thenbe ineffectrestrainingorprohibiting the completionof the transactions contemplatedhereby.
Section 6.4Delivery of Shares to Escrow Agent. The Sellers shall have delivered the Shares to the Escrow Agent with validly signed stock power, medallion guaranteed, together with all documents necessary to effectuate the transfer of the Shares.
ARTICLEVII
CERTAINAGREEMENTS
Section7.1ReasonableBestEfforts.Eachof thepartiesheretoagrees touse itsreasonablebestefforts to takeorcause tobetaken allaction, todoorcause tobedone, and to assist andcooperatewith theotherpartyheretoindoing,all thingsnecessary,proper,or advisable to consummate andmake effective, inthemost expeditiousmannerpracticable,the transactions contemplatedby thisAgreement,including,butnot limited to,(a)theobtainingof allnecessarywaivers,consents, and approvalsfromgovernmentalorregulatory agenciesor authorities and themakingof allnecessaryregistrations andfilingsand thetakingof allreasonable steps asmaybenecessary toobtain any approvalorwaiverfrom,or to avoid any actionorproceedingby, anygovernmentalagencyor authority,(b)theobtainingof allnecessary consents, approvals,orwaiversfrom thirdparties, and(c) thedefendingof any lawsuitsor anyother legalproceedings,whether judicialor administrative, challengingthisAgreementorthe consummationof the transactions contemplatedhereby,including,without limitation, seeking tohave any temporaryrestrainingorder enteredbyany courtoradministrativeauthorityvacatedorreversed.
Section 7.2Board of Directors; Officers. At the Closing, (a) the Board of Directors shall consist of one current director (the “Existing Director”) and one director appointed by Purchaser (the “New Director”), and (b) all officers of the Company shall resign and the Board of Directors shall appoint the designees of Purchaser as the sole officers thereof. Upon compliance by the Company with information statement delivery requirements pursuant to Rule 14f-1 under the Exchange Act, if applicable, the Existing Director shall resign and the vacancy created thereby shall be filled by directors designated by the New Director.
Section 7.3Further SEC Filings.
(a) The Sellers shall take all such further acts as shall be required to permit the Company to file any SEC Reports to be filed at or following the Closing which reflect the business and operations of the Company prior to the Closing, and shall execute and deliver all certifications required to be filed by the Company with respect to financial statements of the Company reflecting in whole or in part the business and operations of the Company prior to the Closing. Each Seller acknowledges that this covenant is a material inducement to the Buyer in entering into the transactions contemplated hereby and in connection herewith.
(b) At closing, $25,000 of the Purchase Price shall remain in the escrow account set up pursuant to the Escrow Agreement until the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2018 is filed with the SEC, at which time the $25,000 shall be released to the Sellers by the Escrow Agent pursuant to the terms and conditions of the Escrow Agreement.
ARTICLEVIII
SURVIVALOF REPRESENTATIONS;INDEMNIFICATION
Section8.1Indemnities.
(a) Each Seller hereby agrees to indemnify and hold harmless the Purchaser from and against any and all damages, claims, losses, or expenses (including reasonable attorneys' fees and expenses) (“Damages”) actually suffered or paid by the Purchaser as a result of the breach of any representation or warranty made by such Seller in this Agreement. To the extent that such Seller's undertakings set forth in this Section 8.1(a) may be unenforceable, such Seller shall contribute the maximum amount that they are permitted to contribute under applicable law to the payment and satisfaction of all Damages incurred by the parties entitled to indemnification hereunder. In the event that Purchaser should raise a claim for damages pursuant to this section 8.1(a), the Sellers shall have a fifteen (15) business day cure period, beginning upon notice received, to cure any such defect to Purchaser's satisfaction.
(b) The Purchaserherebyagrees to indemnifyandholdharmlesstheSellers againstDamages actuallysufferedorpaidby Selleras aresultofthebreachof anyrepresentationorwarrantymadeby thePurchaser in thisAgreement.To the extent that the Purchaser'sundertakings setforthin this Section8.1(b)maybeunenforceable, the Purchaser shall contribute themaximum amount thathe ispermittedtocontributeunder applicable law to thepayment and satisfactionof allDamages incurredby theparties entitledto indemnificationhereunder.
(c)Anypartyseekingindemnificationunder thisArticleVIII(an“IndemnifiedParty”)shallgive eachpartyfromwhom indemnificationisbeing sought(each, an“Indemnifying Party”)noticeof anymatterforwhich suchIndemnified Party is seeking indemnification, statingtheamountof theDamages, ifknown, andmethodof computation thereof,and containing areferencetotheprovisionsof thisAgreement inrespectofwhich suchrightofindemnification isclaimedor arises.TheobligationsofanIndemnifying Partyunder thisArticleVIIIwithrespect toDamagesarisingfrom any claimsofany thirdparty that are subject to theindemnificationprovidedfor in thisArticleVIII(collectively,“Third-Party Claims”) shallbegovernedby and contingentupon thefollowing additional terms and conditions: if anIndemnified Party shallreceive, after the ClosingDate,initialnoticeof anyThird-Party Claim, theIndemnified Party shallgive theIndemnifyingPartynoticeof suchThird-Party Claimwithin such timeframe as isnecessary to allowfor a timelyresponseand in any eventwithin30daysofthereceiptby theIndemnified Partyofsuchnotice;provided,however,thatthefailure toprovide suchtimelynotice shallnotrelease theIndemnifyingPartyfrom anyofitsobligationsunder thisArticleVIII except totheextenttheIndemnifying Party ismateriallyprejudicedby suchfailure.TheIndemnifying Party shallbeentitledto assume and control thedefenseofsuchThird-Party Claim at its expense and through counselof its choice ifitgivesnoticeof its intentiontodo soto theIndemnifiedPartywithin30daysof thereceiptof suchnoticefrom theIndemnified Party;provided,however, that ifthere existsorisreasonably likely to exist a conflictof interest thatwouldmake it inappropriate in the judgmentof theIndemnifiedParty(upon adviceofcounsel)forthe same counsel torepresentboth theIndemnifiedParty and theIndemnifyingParty, then theIndemnifiedPartyshallbeentitled toretainitsown counsel, atthe expenseoftheIndemnifyingParty,providedthat theIndemnifiedParty andsuch counsel shallcontest suchThird-PartyClaims ingoodfaith.In the eventtheIndemnifying Party exercisestheright toundertake any suchdefenseagainstany suchThird-Party Claim asprovided above,theIndemnified Party shallcooperatewith theIndemnifyingPartyin suchdefense andmakeavailable to theIndemnifying Party, at theIndemnifyingParty's expense,allwitnesses,pertinentrecords,materials, and informationin theIndemnified Party'spossessionorunder theIndemnifiedParty's controlrelating thereto as isreasonablyrequiredbytheIndemnifying Party.Similarly, in theevent theIndemnified Partyis,directlyor indirectly,conducting thedefenseagainst any suchThird-Party Claim,theIndemnifyingParty shall cooperatewith theIndemnified Party in suchdefense andmake available to theIndemnified Party,at theIndemnifyingParty's expense, all suchwitnesses,records,materials,and informationintheIndemnifyingParty'spossessionorunder theIndemnifying Party's controlrelatingthereto as isreasonablyrequiredbytheIndemnified Party.TheIndemnifyingParty shallnot,without thewritten consentoftheIndemnifiedParty,(i) settleor compromise anyThird-PartyClaimor consenttothe entryof any judgment thatdoesnot include as anunconditional term thereof thedeliverybythe claimantorplaintiff to theIndemnified Partyof awrittenreleasefrom allliability inrespectof suchThird-Party Claim,or(ii) settleor compromise anyThird-PartyClaim in anymanner thatmayadversely affect theIndemnified Party. Finally,noThird-Party Claim that isbeingdefended ingoodfaithby theIndemnifyingPartyor that isbeingdefendedbytheIndemnifiedParty asprovidedabove in this Section8.1(c) shallbe settledbytheIndemnifiedPartywithout thewritten consentof theIndemnifyingParty.
ARTICLEIXMISCELLANEOUS
Section9.1Expenses.Thepartieshereto shallpayallof theirown expensesrelating to the transactions contemplated bythisAgreement, including,withoutlimitation,thefees and expensesof theirrespective counsel,financial advisors, andaccountants.
Section9.2GoverningLaw; Consentto Jurisdiction.
(a)The interpretation and constructionof thisAgreement, and allmattersrelatinghereto, shallbegovernedby the lawsofthe StateofNew York applicable to contractsmade and tobeperformed entirelywithin the StateofNew York.
(b)Eachof thepartiesagreesthatany legalactionorproceedingwithrespect to this Agreementshall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Eachof thepartiesheretoherebyirrevocablywaives anyobjection that itmaynoworthereafterhave to the layingofvenueofanyof the aforesaid actionsorproceedingsarisingoutofor in connectionwith thisAgreementbrought inthe courtsreferredto in thepreceding sentence.Eachpartyheretohereby consentstoprocessbeingserved in any such actionorproceedingby themailingof a copy thereof to theaddress setforthopposite itsnamebelow andagrees that such serviceuponreceipt shall constitute good and sufficient serviceofprocessornotice thereof.Nothinginthisparagraph shall affector eliminate anyright to serveprocessinanyothermannerpermittedby law.
Section9.3Captions.The articleand sectioncaptionsusedherein areforreferencepurposesonly, and shallnotin anyway affectthe meaningor interpretationof thisAgreement.
Section9.4Notices.Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via e-mail attachment at the email address set forth below at or prior to 5:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via e-mail attachment at the e-mail address as set forth below on a day that is not a business day or later than 5:30 p.m. (New York City time) on any business day, (c) the second (2nd) business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.
if to Purchaser,to:
Peiwen Yu
No. 911Bao'an Book City XInqiao Street Central Road,
Bao'an District, Shenzhen City, China
Email: dennistan1612@gmail.com
With a copy to (which does not constitute notice):
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, NY 10105
Attn: ranslow@egsllp.com
and iftoSeller, to:
David Koos
700 Spring Street, Suite 304,
La Mesa, California, 91942
Email: venturebridge@gmail.com
With a copy to (which does not constitute notice):
[ ]
or suchother addressesornumbers as shallbefurnishedinwritingby any suchpartyinthemannerfor givingnoticeshereunder.
Section9.5Parties in Interest.ThisAgreementmaynotbetransferred, assigned,pledged,orhypothecatedby anypartyhereto,other thanbyoperationoflaw.ThisAgreement shallbebindinguponand shall inure to thebenefitof theparties hereto and theirrespective successors andpermitted assigns.
Section9.6Counterparts.ThisAgreementmay be executedintwoormore counterparts,allofwhich taken together shallconstituteone instrument.
Section 9.7 Entire Agreement. This Agreement, including its exhibits, schedules, andotherdocumentsreferredtoherein thatform aparthereof, contain the entireunderstandingof thepartiesheretowithrespect tothe subjectmatter containedherein andtherein.ThisAgreement supersedes allprioragreementsandunderstandingsbetween thepartieswithrespect to such subjectmatter.
Section9.8Third-Party Beneficiaries.Eachpartyhereto intends that thisAgreement shallnotbenefitor create anyrightor causeof actioninoronbehalfof anypersonother thanthepartieshereto.
* * * * *
INWITNESSWHEREOF,eachof thepartieshas caused thisAgreement to beexecutedby theirrespectiveofficers thereunto duly authorized,all asof the dayand yearfirst abovewritten.
PURCHASER:
/s/Peiwen Yu
Peiwen Yu
SELLERS:
David Koos
Regen BioPharma Inc.
By:/s/David Koos
Name: David Koos
Title: Chairman and CEO
Bostonia Partners Inc.
By:/s/ Timothy G. Foat
Name: Timothy G. Foat
Title: President
Sherman Family Trust
By:/s/ Timothy G. Foat
Name: Timothy G. Foat
Title: Trustee
Dunhill Ross Partners Inc.
By:/s/ Timothy G. Foat
Name: Timothy G. Foat
Title: President
Bio-Technology Partners Business Trust
By:/s/Timothy G. Foat
Name: Timothy G Foat
Title: President
INWITNESSWHEREOF, theundersignedofficer and director of the Company confirms thewarranties andrepresentationsmade inARTICLEIIIaboveasbeing true and correct.
_________________________________________
David Koos
Chief Executive Officer, President and Chairman
AMENDMENT TO ESCROW AGREEMENT
Dated November 15, 2018
WHEREASon October 3, 2018 China International Corporate Management, or its assigns (the "Buyer"), David Koos, as the selling shareholders' representative ("Seller"), the representative of the holders of (i) 23,733,334 restricted shares of common stock, (ii) 667 Series AA preferred stock with super-voting rights, (iii) 534 Series AAA preferred stock with super-voting rights, and (iv) 1,001,533 non-voting convertible preferred stock of Entest Group, Inc. (the "Company"), and McMurdo Law Group, LLC (the "Escrow Agent") entered into the Escrow Agreement (“Agreement”),
WHEREAS,the Seller, the Buyer and the Escrow Agent mutually agree to amend Sections 2 and 3 of the Agreement
It is therefore agreed as follows:
Section 2 of the Agreement shall be and read:
2. 2.1 Deposits to the Escrow Agent. One day after receipt by the Escrow Agent of written notification from both the Buyer and the Seller that binding SPA (s) have been executed, due diligence has been completed, and the Parties are prepared to close the transaction contemplated by the binding SPA (s) the Buyer shall deposit, by Fed Wire Transfer in immediately available funds, an additional $275,000 (the "Additional Deposit", and together with the initial deposit, the "Escrow Amount") to the Bank Account.
2.2 One day after the receipt of the Additional Deposit by the Escrow Agent, the Seller shall deliver (a) medallion guaranteed or notarized stock certificate(s) and irrevocable stock power(s) necessary to complete the Transaction, (b) the resignation of the Company's officers and directors to be effective ten business days after the filing of the Company’s Form 10-K with the United States Securities and Exchange Commission and (c) the appointment of the Buyer' s designee(s) as officer(s) and director(s) to be effective ten business days after the filing of the Company’s Form 10-K for the fiscal year ended 2018 (“10-K”) with the United States Securities and Exchange Commission (the "Documents") to the Escrow Agent.
Section 3 of the Agreement shall be and read:
3. Disbursement of Deposit from the Bank Account.
3.1 In the event the Seller is unable to provide the Documents by November 30, 2018, TIME BEING OF THE ESSENCE, or if the parties hereto fail to complete the Transaction for any reason, the Escrow Amount shall be returned to the Buyer, via the instructions provided by Buyer, and any and all Documents delivered shall be returned to the Seller, via the instructions provided by the Seller. In the event that not all of the Documents have been received by November 30, 2018 the Escrow Agent shall return any and all Documents to the Seller and the Escrow Amount to the Buyer no later than December 1, 2018.
3.2 The Escrow Agent shall deliver by Fed Wire Transfer in immediately available funds one day subsequent to receipt by the Escrow Agent of the Documents :
$277,321 of the Escrow amount to the Seller
$4,551 of the Escrow Amount to Regen Biopharma, Inc. a creditor of the Company
$2600 of the Escrow Amount to David Koos, a creditor of the Company
$ 850 of the Escrow Amount to Dunhill Ross, a creditor of the Company
$11,600 of the Escrow Amount to Blackbriar Partners, a creditor of the Company
3.3 The Escrow Agent shall deliver by Fed Wire Transfer in immediately available funds one subsequent to the filing of the10-K:
$25,000 of the Escrow Amount to the Seller.
3.4 The Escrow Agent shall deliver by Fed Wire Transfer in immediately available funds one subsequent to the effectiveness of the Buyer’s designee(s) as officer(s) and director(s):
$3,078 to the Company
3.5 Upon disbursement of the entire Escrow Amount pursuant to the terms of this Section and the delivery of the Documents to the Buyer, such delivery which is to occur one day subsequent to the disbursement pursuant to 3.2 of this Agreement , the Escrow Agent shall be relieved of further obligations and released from all liability under this Agreement as related to such Escrow Amount. It is expressly agreed and understood that in no event shall the aggregate amount of payments made by the Escrow Agent, pursuant to Article 3, exceed the Escrow Amount.
IN WITNESS WHEREOF, the undersigned have executed this Amendment to the Agreement on November 15, 2018
| | MCMURDO LAW GROUP, INC. MATTHEW MCMURDO, ESQ. |
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| | CHINA INTERNATIONAL CORPORATE MANAGEMENT |
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| | Dennis Tan |
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| | Business Development Director |
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| | Peiwen Yu |
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| | SELLER |
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| | DAVID KOOS (in his capacity as the selling shareholders’ representative) |
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| | By: |
| | Name: David Koos |
| | Selling Shareholder Representative |
