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Exhibit 10.1
SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT (this
“Agreement”) is entered into as of November 14,
2007, between Integrated BioPharma, Inc., a Delaware corporation
(“INB”), and InB:Biotechnologies, Inc., a New Jersey
corporation (“Biotech”). Capitalized terms used
herein and not otherwise defined shall have the meanings
ascribed to such terms in Article 6 hereof.
RECITALS
WHEREAS, INB currently owns a majority of the
issued and outstanding common stock of Biotech;
WHEREAS, Biotech is engaged in the specialty
pharmaceutical business and related businesses as described in
the Information Statement that is an exhibit to the Form 10 to
be filed by Biotech with the Securities and Exchange Commission
(the “Biotech Business”);
WHEREAS, the Boards of Director of INB has
determined that it would be appropriate and desirable for INB to
distribute, pro rata, to the holders of its common stock, all of
the shares of Biotech common stock owned by INB (the
“Distribution”);
WHEREAS, subsequent to the Distribution, and as
provided for in this Agreement, Biotech will be an independent
public company (the “Separation”); and
WHEREAS, INB and Biotech intend that the
Separation and the Distribution will qualify as a tax-free
reorganization under Section 355 of the Internal Revenue Code of
1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of the
foregoing and the covenants and agreements set forth below, the
parties hereto agree as follows:
1. SEPARATION
1.1.
Distribution Date . Unless otherwise provided in this
Agreement, or in any agreement to be executed in connection with
this Agreement, the effective time and date of the Distribution,
and each undertaking or agreement in connection therewith shall
be such date as may be fixed by the Board of Directors of INB
following satisfaction of the conditions to the Distribution set
forth in Section 3.9 (the “Distribution Date”).
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1.2. Closing of
Transactions . Unless otherwise provided herein, the closing
of the transactions contemplated in Article 2 shall occur on the
Distribution Date. Executed copies of each of the Ancillary
Agreements and any other agreements or documents executed in
connection with the transaction contemplated hereby, or thereby,
shall be held in escrow by Greenberg Traurig, LLP (the
“Escrow Agent”) for delivery as provided in Section
1.3.
1.3. Exchange
of Secretary’s Certificates . Upon receipt of a
certificate of the Secretary or an Assistant Secretary of INB in
form satisfactory to the Escrow Agent, the Escrow Agent shall
deliver to Biotech on behalf of INB all of the items required to
be delivered by INB hereunder pursuant to Section 2.1 and each
such item shall be deemed to be delivered to Biotech as of the
Distribution Date upon delivery of such certificate. Upon
receipt of a certificate of the Secretary or an Assistant
Secretary of Biotech in form satisfactory to the Escrow Agent,
the Escrow Agent shall deliver to INB on behalf of Biotech all
of the items required to be delivered by Biotech pursuant
to Section 2.2 hereunder and each such item shall be deemed
to be delivered to INB as of the Distribution Date upon
receipt of such certificate.
2. DOCUMENTS TO BE
DELIVERED ON THE DISTRIBUTION DATE
2.1. Documents
to Be Delivered by INB . On the Distribution Date
or such other date as may be established by the board of
directors of INB, or as otherwise agreed by the parties, INB
will deliver to Biotech all of the following items and
agreements, in each case in form and substance customary for a
transaction structured like the Distribution and as mutually
agreed upon by INB and Biotech (collectively, together with
all agreements and documents contemplated by such agreements,
the “Ancillary Agreements”):
(a) A duly executed
Tax Sharing Agreement, in the form attached hereto as Exhibit
1;
(b) A duly executed
Transitional Services Agreement, in the form attached hereto as
Exhibit 2;
(c) A duly executed
Confidentiality and Nondisclosure Agreement, in the form
attached hereto as Exhibit 3;
(d) A duly executed
Indemnification and Insurance Matters Agreement, in the form
attached hereto as Exhibit 4;
(e) Such other
agreements, documents or instruments as the parties may agree
are necessary or desirable in order to achieve the purposes
hereof.
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2.2. Documents
to Be Delivered by Biotech . As of the Distribution
Date, Biotech will deliver to INB each of the Ancillary
Agreements.
3. THE
DISTRIBUTION
3.1. Delivery
of Shares for Distribution . On or prior to the Distribution
Date, INB will deliver to the distribution agent for the
Distribution (the “Distribution Agent”) and the INB
transfer agent, a single stock certificate, endorsed by INB,
representing all of the outstanding shares of common stock of
Biotech then owned by INB. The shares of Biotech common stock
represented by said certificate shall be the shares distributed
to the stockholders of INB, pursuant to the Distribution. INB
shall cause the Distribution Agent to distribute on the
Distribution Date the appropriate number of such shares of
common stock of Biotech to each shareholder of INB as of the
record date of the Distribution to be set by INB, or the
designated transferee or transferees of such
shareholder.
3.2. Shares
Received . Subject to Sections 4.4 and 4.5, each holder of
common stock of INB on the Record Date (or such holder’s
designated transferee or transferees) will be entitled to
receive in the Distribution a number of shares of common stock
of Biotech equal to the number of shares of common stock of INB
held by such holder on the Record Date. The amount of shares
issued and outstanding to the individual shareholders of Biotech
holding such shares prior to the Distribution Date shall not be
increased or reduced by the Distribution.
3.3. Obligation
to Provide Information . Biotech and INB, as the case may
be, will provide to the Distribution Agent all share
certificates and any information required in order to complete
the Distribution on the basis specified above.
3.4.
Information Statement . Prior to the Distribution Date,
INB and Biotech shall prepare and mail, to the holders of common
stock of INB such information concerning Biotech and the
Distribution and such other matters as INB shall reasonably
determine are necessary and as may be required by law. INB and
Biotech will prepare, and Biotech will, to the extent required
under applicable law, file with the Securities and Exchange
Commission any such documentation that INB and Biotech determine
is necessary or desirable to effectuate the Distribution, and
INB and Biotech shall each use its reasonable commercial
efforts to obtain all necessary approvals from the Commission
with respect thereto as soon as practicable.
3.5. Blue
Sky . INB and Biotech shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws
of the United States (and any comparable laws under any foreign
jurisdiction) in connection with the Distribution.
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3.6. Nasdaq
Listing . Biotech shall prepare and file, and shall use
its reasonable commercial efforts to have approved, an
application for the additional listing of the common stock of
Biotech to be distributed in the Distribution on the Nasdaq
Capital Market, or such other national stock exchange as
determined by Biotech’s Board of Directors, subject to
official notice of distribution.
3.7.
Conditions . INB and Biotech shall take all reasonable
steps necessary and appropriate to cause the conditions set
forth in Section 3.9 to be satisfied and to effect the
Distribution on the Distribution Date.
3.8. Sole
Discretion of INB . INB agrees to use commercially
reasonable efforts to complete the Distribution on or before
February 1, 2008. INB shall, in its sole and absolute
discretion, determine the date of the consummation of the
Distribution and all terms of the Distribution, including,
without limitation, the form, structure and terms of any
transaction(s) and/or offering(s) to effect the
Distribution and the timing of and conditions to the
consummation of the Distribution. In addition, INB may at any
time and from time to time until the completion of the
Distribution, modify or change the terms of the Distribution,
including, without limitation, by accelerating or delaying the
timing of the consummation of all or part of the Distribution.
Biotech shall cooperate with INB in all respects to accomplish
the Distribution and shall, at INB’s direction, promptly
take any and all actions necessary or desirable to effect the
Distribution. INB shall select any financial printer,
distribution agent and outside counsel for INB; provided,
however, that nothing herein shall prohibit Biotech from
engaging (at its own expense) its own financial, legal,
accounting and other advisors in connection with the
Distribution.
3.9. Conditions
Precedent to Distribution . The following are conditions
that must take place prior to the consummation of the
Distribution. The conditions are for the sole benefit of INB and
shall not give rise to or create any duty on the part of INB or
the INB Board of Directors to waive or not waive any such
condition.
(a) Form 10
. The Form 10 to be filed by Biotech shall be effective under
the Exchange Act, with no stop order in effect with respect
thereto.
(b) T ax
Opinion . INB shall have obtained an opinion letter from
Greenberg Traurig, LLP in form and substance satisfactory to INB
(in its sole discretion), and such letter shall remain in effect
as of the Distribution Date, to the effect that the distribution
by INB of all of its Biotech stock to the stockholders of INB
should qualify as a tax free transaction under Section 355 of
the Code.
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(c) Government
Approvals . Any material governmental approvals
and consents necessary to consummate the Distribution,
including without limit a declaration by the SEC of the
effectiveness of the registration of the Biotech common stock on
Form 10, shall have been obtained and be in full force and
effect.
(d) Listing
of Biotech Stock . Biotech shall have received
the approval by Nasdaq or a national stock exchange for the
listing of the Biotech common stock on the Nasdaq Capital
Market, or national stock exchange.
(e) No Legal
Restraints . No order, injunction or decree issued
by any court or agency of competent jurisdiction or other
legal restraint or prohibition preventing the consummation
of the Distribution shall be in effect and no other event
outside the control of INB shall have occurred or failed
to occur that prevents the consummation of the
Distribution.
(f) No Material
Adverse Effect . No events or developments other than the
Distribution itself shall have occurred subsequent to the Record
Date that, in the judgment of the Board of Directors of INB,
would result in the Distribution having a material adverse
effect on INB or on the stockholders of INB.
(g) Ancillary
Agreements . Each Ancillary Agreement shall be duly executed
and delivered and be in full force and effect.
(h) Conversion
of Debt to Equity . Simultaneous with the Distribution,
Biotech shall have converted a portion of the debt owed to INB
into equity of Biotech, such that INB shall hold shares of
Common Stock of Biotech representing 6% of the issued and
outstanding shares of Biotech Common Stock subsequent to the
distribution.
4. COVENANTS AND
OTHER MATTERS
4.1. Required
Consent . To preserve the tax free character of the
Distribution, for the two years immediately following the
effective date of the Distribution Date, Biotech may not issue
any additional shares of its common stock in excess of the
shares issued with respect to the Distribution, nor enter into
any agreement, arrangement or understanding with any Person that
contemplates a transaction, which would, singly or in
combination with any other issuance or transaction, result in a
change in 50% or more of the direct or indirect ownership of the
Biotech common stock from said ownership as constituted on the
Distribution Date. If the Biotech Board of Directors, by a
written vote or unanimous consent, determine that such issuance
or transaction is in the best interest of the Biotech
shareholders, the Chairman of Biotech may submit a request for
the consent of the INB Board to effect such issuance or enter
into such transaction. Such request shall be in writing,
addressed to the Chairman of the INB Board of Directors, setting
forth the details of the proposed issuance or transaction, the
benefits accruing to the Biotech shareholders in connection
therewith, and such assurances and security regarding the
possible tax
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liability that could be engendered by the
proposed issuance or transaction. The INB Board may, in its sole
and absolute discretion, by resolution at a meeting duly called
and held or by unanimous written consent, consent to or elect to
withhold their consent to such proposed issuance or transaction.
The requirement under this Section 4.1 to obtain the consent of
the INB Board to any proposed issuance or transaction shall
cease on the second anniversary of the Distribution, and shall
thereafter be of no further force or effect.
4.2. Other
Agreements . INB and Biotech agree to execute or cause to be
executed by the appropriate parties and deliver, as appropriate,
such other agreements, instruments and other documents as
may be necessary or desirable in order to effect the
purposes of this Agreement and the Ancillary Agreements.
4.3. Additional
Transitional Services Agreements . INB and Biotech will
enter into the Transitional Services Agreement covering the
provision of various transitional services by INB for Biotech,
including SEC reporting, internal auditing and financial,
accounting, legal, real estate and such other services Biotech
may wish to obtain from INB. Such services will generally be
provided for a fee that will be approximately equal to the
direct costs and indirect costs of providing such services plus
five percent (5.0%). The transitional services agreement will
generally provide for a term of three years, or less.
4.4. Agreement
for Exchange of Information .
(a)
Generally . Each of INB and Biotech agrees to provide, or
cause to be provided, to each other, at any time before or after
the Distribution Date, as soon as reasonably practicable after
written request therefor, any Information in the possession or
under the control of such party that the requesting party
reasonably needs (i) to comply with reporting, disclosure,
filing or other requirements imposed on the requesting party
(including under applicable securities laws) by a Governmental
Authority having jurisdiction over the requesting party, (ii)
for use in any other judicial, regulatory, administrative or
other proceeding or in order to satisfy audit, accounting,
claims, regulatory, litigation or other similar requirements,
(iii) to comply with its obligations under this Agreement
or any Ancillary Agreement or (iv) in connection with the
ongoing businesses of INB or Biotech, as the case may be;
provided, however, that in the event that any party determines
that any such provision of Information could be commercially
detrimental, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable
measures to permit the compliance with such obligations in a
manner that avoids any such harm or consequence.
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(b) Internal
Accounting Controls; Financial Information . After the
Distribution Date, (i) each party shall maintain in effect at
its own cost and expense adequate systems and controls for its
business to the extent necessary to enable the other party to
satisfy its reporting, accounting, audit and other obligations,
and (ii) each party shall provide, or cause to be provided, to
the other party and its Subsidiaries in such form as such
requesting party shall request, at no charge to the requesting
party, all financial and other data and information as the
requesting party determines necessary or advisable in order to
prepare its financial statements and reports or filings with any
Governmental Authority.
(c) Ownership
of Information . Any Information owned by a party that is
provided to a requesting party pursuant to this Section 4.4
shall be deemed to remain the property of the providing party.
Unless specifically set forth herein, nothing contained in
this Agreement shall be construed as granting or conferring
rights of license or otherwise in any such Information.
(d) Record
Retention . To facilitate the possible exchange of
Information pursuant to this Section 4.4 and other provisions of
this Agreement after the Distribution Date, each party agrees to
use its reasonable commercial efforts to retain all Information
in its respective possession or control on the Distribution Date
substantially in accordance with the policies of INB as in
effect on the Distribution Date. However, except as set forth in
the Tax Sharing Agreement, at any time after the Distribution
Date, each party may amend its respective record retention
policies
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