-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nb7s/kjh/NCo8M3K+tTvV/ZNtXcTy8ylXaRIyDfpZJYIHuP56z5HFeqVpJsQjZFD 9kMrPXWLRPKeoYIAKAfBcg== 0001016504-04-000085.txt : 20041223 0001016504-04-000085.hdr.sgml : 20041223 20041223145041 ACCESSION NUMBER: 0001016504-04-000085 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20041223 DATE AS OF CHANGE: 20041223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED BIOPHARMA INC CENTRAL INDEX KEY: 0001016504 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 133035216 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-121601 FILM NUMBER: 041223896 BUSINESS ADDRESS: STREET 1: 201 ROUTE 22 CITY: HILLSIDE STATE: NJ ZIP: 07205 BUSINESS PHONE: 9739260816 MAIL ADDRESS: STREET 1: 201 ROUTE 22 CITY: HILLSIDE STATE: NJ ZIP: 07205 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED HEALTH TECHNOLOGIES INC DATE OF NAME CHANGE: 20020912 FORMER COMPANY: FORMER CONFORMED NAME: CHEM INTERNATIONAL INC DATE OF NAME CHANGE: 19960716 S-3 1 inbs3_20041222.txt INTEGRATED BIOPHARMA, INC. As filed with the Securities and Exchange Commission on December 23, 2004 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 INTEGRATED BIOPHARMA, INC. (Exact name of Registrant as specified in its charter) Delaware 2834 22-2407475 (State or other jurisdiction of (Primary standard industrial (I.R.S. employer incorporation or organization) Classification code number Identification no.) 225 Long Avenue Hillside, New Jersey 07205 (973) 926-0816 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) E. Gerald Kay Chief Executive Officer Integrated BioPharma, Inc. 225 Long Avenue Hillside, New Jersey 07205 (973) 926-0816 (Address, including zip code, and telephone number including area code, of agent for service) Copies to: Michael L. Pflaum, Esq. Andrew H. Abramowitz, Esq. Greenberg Traurig, LLP 200 Park Avenue New York, New York 10166 Telephone: (212) 801-9200 Telecopier: (212) 801-6400 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| _______ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| ______ If delivery of this prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| ______ CALCULATION OF REGISTRATION FEE Title of Proposed Proposed Maximum Proposed Maximum Amount Each Class Amount to be Offering Aggregate of of Securities Registered Price Per Offering Registration to be Registered (1) Share Price (2) Fee - ---------------- ------------ ---------------- ---------------- ------------ Common Stock, 366,085 $6.93 $2,536,969 $298.60 $0.002 par value per share (1) The number of shares being registered represent the shares of the Registrant's common stock previously issued to the selling stockholders, as well as the maximum number of shares that may be issued to the selling stockholders upon the exercise of warrants to purchase 136,000 shares of the Registrant's common stock. Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this registration statement also registers such additional shares of the Registrant's common stock as may become issuable as a result of stock splits, stock dividends or similar events. (2) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) of the Securities Act. The price per share and aggregate offering price are based upon $6.93, the average of the high and low sales price of the Registrant's common stock on December 21, 2004, as reported on The American Stock Exchange. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ The information contained in this prospectus is not complete and may be changed. These securities may not be sold until the related registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any state where the offer or sale is not permitted. ================================================================================ PROSPECTUS SUBJECT TO COMPLETION, DATED DECEMBER 23, 2004 INTEGRATED BIOPHARMA, INC. 366,085 Shares of Common Stock All of the common stock offered hereby may be sold from time to time by and for the account of the selling stockholders named in this prospectus and the person(s) to whom such stockholders may transfer their shares. The selling stockholders acquired the shares, or will acquire the shares upon the exercise of warrants, all of which were issued or are issuable to the selling stockholders in private placements with us. The methods of sale of the common stock offered by this prospectus are described under the heading "Plan of Distribution" on page 5. Except with respect to the exercise of the outstanding warrants during the exercise period, we will receive none of the proceeds from the sale of any of the common stock to which this prospectus relates. See "Use of Proceeds and Expenses of the Offering" on page 3. Except for brokerage expenses, fees, discounts and commissions, which will all be paid by the selling stockholders, we will pay all expenses incurred in connection with the offering described in this prospectus. The prices at which the selling stockholders may sell the shares of common stock that are part of this offering will be determined by the prevailing market price for the shares at the time the shares are sold, a price related to the prevailing market price, at negotiated prices or prices determined, from time to time by the selling stockholders. See "Plan of Distribution" on page 5. Our common stock is listed on the American Stock Exchange (Symbol: INB). On December 21, 2004, the closing price of the shares was $6.97 per share. Investing in the common stock involves certain risks. See "Risk Factors" on page 1. Neither the SEC nor any state securities commission has approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. The date of this Prospectus is __________, 2005. TABLE OF CONTENTS The Company....................................................................1 Forward-Looking Information....................................................1 Risk Factors...................................................................1 Use Of Proceeds And Expenses Of The Offering...................................3 Selling Stockholders...........................................................4 Plan Of Distribution...........................................................5 Where You Can Find More Information............................................6 Legal Matters..................................................................8 Experts........................................................................8 THE COMPANY Integrated BioPharma, Inc., a Delaware corporation is engaged primarily in manufacturing, marketing and sales of vitamins, nutritional supplements and herbal products, including vitamins sold as single entity supplements, in multi-vitamin combinations and in varying potency levels and in different packaging sizes. We were previously known as Integrated Health Technologies, Inc. and, prior to that, as Chem International, Inc. We are also engaged in other lines of business, including the development and sale of nutritional formulations based on plant-derived minerals through patented hyperaccumulation technology, and the manufacture and distribution of Paclitaxel, which is the primary chemotherapeutic agent in the treatment of breast cancer. We maintain our executive offices at 225 Long Avenue, Hillside, New Jersey 07205. Our telephone number is (973) 926-0816. FORWARD-LOOKING INFORMATION Some of the statements contained in or incorporated by reference in this prospectus discuss our plans and strategies for our respective businesses or state other forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "estimate," "expect," "plan," "intend," "should," "seek," "will," and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them. These forward-looking statements reflect the current views of our management. However, various risks, uncertainties and contingencies could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, these statements, including the following: * our success or failure to implement our business strategies; * our potential inability to raise additional capital; * the approval of our pending atent applications; * our ability to produce Paclitaxel on a commercial scale; and * other factors discussed under the heading "Risk Factors" and elsewhere in this prospectus. We assume no obligation to update any forward-looking statements contained in this prospectus, whether as a result of new information, future events or otherwise. For a discussion of important risks of an investment in our securities, including factors that could cause actual results to differ materially from results referred to in the forward-looking statements, see "Risk Factors" below. You should carefully consider the information set forth under the caption "Risk Factors." In light of these risks, uncertainties and assumptions, the forward-looking events discussed in or incorporated by reference in this prospectus might not occur. RISK FACTORS You should carefully consider the risks described below before deciding whether to invest in shares of our common stock. Any investment in our common stock involves a high degree of risk. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us may also impair our operations and business. If we do not successfully address any of the risks described below, there could be a material adverse effect on our financial condition, operating results and business, and the trading price of our common stock may decline and you may lose all or part of your investment. We cannot assure you that we will successfully address these risks. Over 366,000 of our shares are eligible for sale and their sale or potential to sell may depress the market price of our common stock. Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock. This prospectus covers 366,085 shares of our common stock, which represents 3.0% of the total of 12,565,790 shares issued and outstanding as of December 17, 2004. As additional shares of our common stock become available for resale in the public market pursuant to this registration of shares and future registrations of shares and thereby increase the supply of our common stock, the price of the common stock could decrease as a result. Some or all of the shares of our common stock also may be offered from time to time in the open market pursuant to Rule 144, and these sales may have a depressive effect on the market for our common stock. 103,085 of the 203,085 shares of common stock held by Aloe Commodities 1 International, Inc. included in this prospectus are currently being held in escrow pending the resolution of a trademark infringement action against us for which we will be indemnified by Aloe Commodities. The 100,000 shares of common stock issuable upon exercise of a warrant by Wolfe Axelrod Weinberger Associates LLC are subject to a so-called "lock-up" agreement, which limits open market sales by that warrant holder in any calendar week to the greater of 5,000 shares of our common stock or 12% of the average daily volume of the common stock during the preceding calendar week. In general, a person who has held restricted shares for a period of one year may, upon the filing with the SEC of a notification on Form 144, sell into the market common stock in an amount equal to the greater of 1% of the outstanding shares or the average weekly number of shares sold in the last four weeks prior to such sale. These sales may be repeated once each three months, and any of the restricted shares may be sold by a non-affiliate after they have been held two years. The inability to obtain necessary additional capital in the future on acceptable terms could delay us from executing our business plan or prevent us from doing so entirely. We expect to need additional capital in the future to fund our operations, finance investments in equipment and corporate infrastructure, increase the range of products we offer and respond to competitive pressures and perceived opportunities. Cash flow from operations, and cash on hand may not be sufficient to cover our operating expenses and capital investment needs. We cannot assure you that additional financing will be available on terms acceptable to us, if at all. A failure to obtain additional funding could prevent us from making expenditures that are needed to allow us to grow or maintain our operations. Increases in business can temporarily reduce our working capital due to cash flow lags. If we raise additional funds by selling equity securities, the relative equity ownership of our existing investors could be diluted or the new investors could obtain terms more favorable than previous investors. If we raise additional funds through debt financing, we could incur significant borrowing costs. The failure to obtain additional financing when required could result in us being unable to grow as required to maintain profitable operations. Our revenue would decline significantly if we lose one or more of our most significant customers, which could have a significant adverse impact on us. A significant portion of our revenues are concentrated among one customer, Herbalife International of America, Inc. For the year ended June 30, 2004, Herbalife represented approximately 58% of total revenue. The loss of Herbalife as a customer could have a significant adverse impact on us. We depend on our senior management, the loss of whom would have an adverse effect on us. We presently are dependent upon the executive abilities of our Chairman of the Board, President and Chief Executive Officer, E. Gerald Kay, and our other executive officers. Our business and operations to date chiefly have been implemented under the direction of these individuals, who presently are, and in the future will be, responsible for the implementation of our anticipated plans and programs. While we have obtained key-man life insurance in the amount of $1,000,000 on the life of Mr. Kay, with our company as the named beneficiary, the loss or unavailability of the services of one or more of our principal executives would have an adverse effect on us. Given our present financial condition, we may encounter difficulty in our ability to recruit and ultimately hire any replacement or additional executive officers having similar background, experience and qualifications as those of our current executive officers. There is no assurance that we will remain listed on an active trading market. Although our common stock is quoted on the American Stock Exchange, there can be no assurance that we will, in the future, be able to meet all the requirements for continued quotation on that exchange. In the absence of an active trading market or if our common stock cannot be traded on the American Stock Exchange, our common stock could instead be traded on the OTC Bulletin Board or in the Pink Sheets. In such event, the liquidity and stock price in the secondary market may be adversely affected. In addition, in the event our common stock was delisted, broker-dealers have certain regulatory burdens imposed upon them which may discourage broker-dealers from effecting transactions in our common stock, further limiting the liquidity of our common stock. We may not receive approval for our pending patent applications for nutritional supplements, which could enable our competitors to use similar methods and processes. We are the registered owner of a patent granted for a method of producing nutritional formulations based on plant-derived minerals. We also have five patent applications pending before the U.S. Patent and Trademark Office for methods and processes relating to nutritional supplements containing methylselenocysteine, production of pharmaceutically active proteins in sprouted seedlings, a system for transient express of genes in plants, improved plant transformation and floral transformation. We can give no assurance that we will be granted such patents. To the extent we are not granted such patents, our competitors could more easily produce nutritional supplements similar to ours. 2 We have entered into several transactions with entities controlled by some of our officers and directors, which could pose a conflict of interest. We have entered into several agreements and arrangements described in our SEC public filings incorporated by reference in this prospectus, including the lease of real property from Vitamin Realty Associates, L.L.C., the merger with NuCycle Acquisition Corp., and the acquisition of the Paxis business from Trade Investment Services, LLC, that all involved transactions with entities significantly owned by members of the Kay family, who collectively own a majority of our shares of common stock. Although we believe that these transactions were advantageous to us and were on terms no less favorable to us than could have been obtained from unaffiliated third parties, transactions with related parties can potentially pose a conflict of interest. Our executive officers and directors have majority voting power and may take actions that may not be in the best interest of other stockholders, but in their own interest. Our executive officers and directors beneficially own approximately 71% of our outstanding shares. If these stockholders act together, they may be able to exert significant control over our management and affairs requiring stockholder approval, including approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock. This concentration of ownership may not be in the best interests of all our stockholders. We have a staggered board of directors, which could impede an attempt to acquire us or remove our management. Our board of directors is divided into three classes, each of which serves for a staggered term of three years. This division of our board of directors could have the effect of impeding an attempt to take over our company or change or remove management, since only one class will be elected annually. Thus, only approximately one-third of the existing board of directors could be replaced at any election of directors. Our product liability insurance may be insufficient to cover possible claims against us. In view of the nature of our nutritional supplements business, we are subject to the inherent risk of product liability claims in the event that among other things, the use or ingestion of any of our products results in sickness or injury. We currently maintain product liability insurance under an umbrella policy in the amount of $5 million per occurrence and $5 million in the aggregate, which we deem adequate to cover risks associated with such use. However, there can be no assurance that existing or future insurance coverage will be sufficient to cover any possible product liability risks or that such insurance will continue to be available to us on economically feasible terms. There is no assurance that we will be able to produce Paclitaxel on a commercial scale. Our Paxis Pharmaceuticals, Inc. subsidiary uses botanical materials derived from the yew tree, or taxus baccata, to produce Paclitaxel, a cancer therapy drug. Yew trees are in limited supply. Paxis has formed a joint venture with Chatham Biotec, Ltd. to produce extract and intermediate precursor Paclitaxel from Canadian Taxus trees. We can give no assurance that the joint venture will be successful in producing such Paclitaxel or that we can locate alternate sources of yew trees. USE OF PROCEEDS AND EXPENSES OF THE OFFERING We will not receive any of the proceeds from the sale of the shares offered by the selling stockholders. We will receive a maximum of approximately $650,500 from the exercise of all of the warrants, assuming all of the warrants are exercised for cash and in full, of which there can be no assurance. Any proceeds received by us in connection with the exercise of the warrants will be used for working capital and general corporate purposes. With the exception of any brokerage fees and commission which are the obligation of the selling stockholders, we are responsible for the fees, costs and expenses of this offering which are estimated to be $9,000, inclusive of our legal and accounting fees, printing costs, "blue sky" filing and other miscellaneous fees and expenses. 3 SELLING STOCKHOLDERS The following table sets forth, in the first column, the names of the selling stockholders and the number of shares being registered for sale as of the date of the prospectus and sets forth, in the second column, the number of shares of common stock known by us to be beneficially owned by each of the selling stockholders as of December 17, 2004. None of the selling stockholders has had a material relationship with us within the past three years other than as a result of the ownership of our shares or other securities, except as set forth below. The shares offered by this prospectus may be offered from time to time by the selling stockholders. The third column lists the shares of common stock being offered by this prospectus by the selling stockholders. Because the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus. The selling stockholders may sell all, some or none of their shares in this offering. See "Plan of Distribution." Number of Shares of Number of Shares Beneficial Ownership Common Stock of Common Stock After Offering Selling Stockholder Beneficially Owned to be Sold (Number of Shares) ------------------- ------------------ ---------------- -------------------- Aloe Commodities International, Inc. (1) 203,085 (2) 203,085 (2) 0 Anisfield Investments Ltd. (3) 27,000 27,000 0 Beaufort International Associates Limited (4) 12,000 (5) 12,000 (5) 0 Friendly Capital, LLC (6) 18,000 (5) 18,000 (5) 0 Griffin Securities, Inc. (7) 6,000 (5) 6,000 (5) 0 Wolfe Axelrod Weinberger Associates LLC (8) 100,000 (5) 100,000 (5) 0
- -------------------- (1) L. Scott McKnight serves as Chief Executive Officer of Aloe Commodities International, Inc.. By reason of such relationship, Mr. McKnight may be deemed to share voting and dispositive power over securities held by Aloe. (2) 103,085 of the listed shares of common stock held by Aloe are currently being held in escrow pending the resolution of a trademark infringement action against us for which we will be indemnified by Aloe. (3) Jamie E. Levey serves as President of Anisfield Investments Ltd. By reason of such relationship, Ms. Levey may be deemed to share voting and dispositive power over securities held by Anisfield. (4) Taniver Malik serves as Managing Director of Beaufort International Associates Limited. By reason of such relationship, Mr. Malik may be deemed to share voting and dispositive power over securities held by Beaufort. (5) The listed shares are issuable pursuant to currently exercisable warrants. Because the exercise price of the warrants may be adjusted, the actual number of shares of common stock that may be issued may be more or less than the number of shares being offered by this prospectus. The warrants issued to Beaufort, Friendly Capital, LLC and Griffin Securities, Inc. are exercisable into an aggregate of 36,000 shares of common stock at a current exercise price of $14.00. The warrant issued to Wolfe Axelrod Weinberger Associates LLC are exercisable into an aggregate of 100,000 shares of common stock at a current exercise price of (i) $1.37 for the first 75,000 shares of common stock, and (ii) $1.75 for the remaining 25,000 shares of common stock. (6) Adrian Stecyk serves as Managing Member of Friendly Capital, LLC. By reason of such relationship, Mr. Stecyk may be deemed to have voting and dispositive power over securities held by Friendly Capital. (7) Adrian Stecyk serves as President and Chief Executive Officer of Griffin Securities, Inc. By reason of such relationship, Mr. Stecyk may be deemed to have voting and dispositive power over securities held by Griffin Securities. 4 (8) Stephen D. Axelrod and Donald Weinberger serve as Managing Directors of Wolfe Axelrod Weinberger Associates LLC. By reason of such relationship, Messrs. Axelrod and Weinberger may be deemed to share voting and dispositive power over securities held by Wolfe. PLAN OF DISTRIBUTION We are registering the shares of common stock issued and issuable upon exercise of the warrants to permit the resale of these shares of common stock by the holders of the shares of common stock and the warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock. The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, * on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; * in the over-the-counter market; * in transactions otherwise than on these exchanges or systems or in the over-the-counter market; * through the writing of options, whether such options are listed on an options exchange or otherwise; * ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; * block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; * purchases by a broker-dealer as principal and resale by the broker-dealer for its account; * an exchange distribution in accordance with the rules of the applicable exchange; * privately negotiated transactions; * short sales; * pursuant to Rule 144 under the Securities Act; * broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share; * a combination of any such methods of sale; and * any other method permitted pursuant to applicable law. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in 5 excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares. The selling stockholders may pledge or grant a security interest in some or all of the preferred shares, warrants or shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. The selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part. The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock. We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $9,000 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or "blue sky" laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution. Once sold under the shelf registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates. 6 WHERE YOU CAN FIND MORE INFORMATION We have filed with the SEC a registration statement under the Securities Act of 1933 with respect to the shares of common stock offered by this prospectus on Form S-3. This prospectus is a part of that registration statement. The rules and regulations of the SEC allow us to omit some information included in the registration statement from this document. In addition, we file reports, proxy statements and other information with the SEC under the Securities Exchange Act of 1934, as amended. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. You may read and copy this information at the following location of the SEC: Public Reference Section Room 1024 450 Fifth Street, N.W. Judiciary Plaza Washington D.C. 20549 The SEC maintains an Internet site (http://www.sec.gov) that contains our reports, proxy statements and other information about us and other companies who file electronically with the SEC. Our common stock is traded on the American Stock Exchange. The SEC allows us to "incorporate by reference" information into this document. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this document, except for any information that is superseded by information that is included directly in this document. This document incorporates by reference the documents listed below that we have previously filed with the SEC since the end of our last fiscal year. They contain important information about us and our financial condition. Some of these filings have been amended by later filings, which are also listed. SEC FILINGS DESCRIPTION OR PERIOD/AS OF Annual Report on Form 10-KSB Fiscal Year ended June 30, 2004 (filed with the SEC on September 28, 2004 and amended on November 10, 2004) Quarterly Report on Form 10-QSB Period ended September 30, 2004 (filed with the SEC on November 12, 2004) Current Report on Form 8-K Dated October 12, 2004 relating to the appointment of a new member of the Science Advisory Board of one of our subsidiaries (filed with the SEC on October 12, 2004) Current Report on Form 8-K Dated October 21, 2004 relating to an agreement by one of our subsidiaries to develop a flu vaccine (filed with the SEC on October 22, 2004) Current Report on Form 8-K Dated November 8, 2004 relating to the adoption of a new charter of the Audit Committee (filed with the SEC on November 10, 2004) Current Report on Form 8-K Dated November 12, 2004 relating to the release of financial results (filed with the SEC on November 15, 2004) We incorporate by reference additional documents that we may file with the SEC after the date of this document. These documents include periodic reports, including Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K, as well as proxy statements. We also incorporate by reference our Registration Statement on Form 8-A, filed with the SEC on April 15, 2003, pursuant to which our common stock was registered under Section 12(b) of the Securities Exchange Act of 1934. You can obtain any of the documents incorporated by reference into this document from us, or from the SEC through the SEC's web site at the address provided above. You can also obtain documents incorporated by reference in this document by requesting them in writing or by telephone from us at the following addresses: Integrated BioPharma, Inc. 225 Long Avenue Hillside, New Jersey 07205 Attention: Eric Friedman (973) 926-0816 7 If you request any incorporated documents from us, we will mail them to you by first class mail, or another equally prompt means, within one business day after we receive your request. We have not authorized anyone to give any information or make any representation about us that differs from, or adds to, the information in this document or in our documents that are publicly filed with the SEC. Therefore, if anyone does give you different or additional information, you should not rely on it. If you are in a jurisdiction where it is unlawful to offer to exchange or sell, or to ask for offers to exchange or buy, the securities offered by this document or to ask for proxies, or if you are a person to whom it is unlawful to direct these activities, then the offer presented by this document does not extend to you. The information contained in this document speaks only as of its date unless the information specifically indicates that another date applies. LEGAL MATTERS Certain legal matters with respect to the validity of our common stock will be passed upon for us by Greenberg Traurig, LLP, 200 Park Avenue, New York, NY 10166. EXPERTS Our consolidated financial statements included in our June 30, 2004 Annual Report on Form 10-KSB as of June 30, 2004 and 2003, have been incorporated by reference in this prospectus and in the registration statement of which this prospectus is a part in reliance upon the report of Amper, Politziner & Mattia, P.C., independent auditors, and upon the authority of this firm as experts in accounting and auditing. ================================================================================ 366,085 SHARES INTEGRATED BIOPHARMA, INC. COMMON STOCK --------------- PROSPECTUS --------------- ___________, 2005 ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses payable by us in connection with the offering described in this Registration Statement are as follows: Registration fee.......................... $ 300 Legal fees and expenses................... 5,000 Accounting fees and expenses.............. 5,000 Printing and duplicating expenses......... 500 Miscellaneous expenses.................... 200 -------- Total..................................... $ 9,000 ======== ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law, or the DGCL, generally provides that all directors and officers (as well as other employees and individuals) may be indemnified against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with certain specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation -- a "derivative action"), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard of care is applicable in the case of derivative actions, except that indemnification extends only to expenses (including attorneys' fees) actually and reasonably incurred in connection with defense or settlement of an action and the DGCL requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. Section 145 of the DGCL also provides that the rights conferred thereby are not exclusive of any other right that any person may be entitled to under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, and permits a corporation to advance expenses to or on behalf of a person to be indemnified upon receipt of an undertaking to repay the amounts advanced if it is determined that the person is not entitled to be indemnified. The registrant's certificate of incorporation and bylaws provide that each person who was or is made a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the registrant (or is or was serving at the request of the registrant as a director or officer of another entity), shall be indemnified and held harmless by the registrant against all expenses (including attorneys' fees), judgments, fines and amounts paid or to be paid in settlement actually and reasonably incurred or suffered by such person in connection therewith, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the registrant. The certificate of incorporation and bylaws also provide that the rights conferred thereby are contract rights, that they are not exclusive of any other rights that an officer or director may have or hereafter acquire under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, and that they include the right to be paid by the registrant the expenses incurred in defending any specified action, suit or proceeding in advance of its final disposition provided that, if the DGCL so requires, such payment shall only be made upon delivery to the registrant by the officer or director of an undertaking to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under the bylaws or otherwise. ITEM 16. EXHIBITS. 5.1 Opinion of Greenberg Traurig, LLP as to legality of securities being offered. (1) 10.1 Asset Purchase Agreement, dated as of October 22, 2003, among Integrated BioPharma, Inc., Aloe Commodities International, Inc., and other parties listed therein. (2) 10.2 Registration Rights Agreement, dated as of October 22, 2003, between Integrated BioPharma, Inc. and Aloe Commodities International, Inc. (2) 10.3 Settlement Agreement, dated as of December 20, 2004, between Integrated BioPharma, Inc. and Wolfe Axelrod Weinberger Associates LLC. (1) 10.4 Form of Warrant, issued on December 20, 2004 by Integrated BioPharma, Inc. to Wolfe Axelrod Weinberger Associates LLC. (1) 10.5 Form of Warrant, issued on December 22, 2004 by Integrated BioPharma, Inc. to Beaufort International Associates Limited, Friendly Capital, LLC and Griffin Securities, Inc. (1) 23.1 Consent of Amper, Politziner & Mattia, P.C. (1) 23.2 Consent of Greenberg Traurig, LLP (contained in Exhibit 5.1) (1) Filed herewith. (2) Incorporated by reference to the exhibits to Registrant's Current Report on Form 8-K dated October 22, 2003 and filed with the SEC on November 6, 2003. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected on the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraph (1)(i) and (1)(ii) above do not apply if information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions set forth in response to Item 15, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. I-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Hillside, State of New Jersey on December 23, 2004. INTEGRATED BIOPHARMA, INC. By: /s/ E. Gerald Kay ---------------------- Title: Chairman, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Integrated BioPharma, Inc., hereby severally constitute and appoint E. Gerald Kay and Eric Friedman and each of them (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution, for us and in our stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments) to this Registration Statement and all documents relating thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting to said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or advisable to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all the said attorneys-in-fact and agents, or any of them, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/ E. Gerald Kay Chairman, President and Chief Executive Officer December 23, 2004 - ----------------------------------------------- E. Gerald Kay (Principal Executive Officer) /s/ Eric Friedman Vice President and Chief Financial Officer (Principal December 23, 2004 - ----------------------------------------------- Eric Friedman Accounting and Financial Officer) /s/ Riva Kay Sheppard Director December 23, 2004 - ----------------------------------------------- Riva Kay Sheppard /s/ Christina Kay Director December 23, 2004 - ----------------------------------------------- Christina Kay /s/ Seymour Flug Director December 23, 2004 - ----------------------------------------------- Seymour Flug /s/ Robert B. Kay Director December 23, 2004 - ----------------------------------------------- Robert B. Kay /s/ Glenn Chang Director December 23, 2004 - ----------------------------------------------- Glenn Chang /s/ Zarko Kraljevic Director December 23, 2004 - ----------------------------------------------- Zarko Kraljevic /s/ Robert Canarick Director December 23, 2004 - ----------------------------------------------- Robert Canarick /s/ Carl DeSantis Director December 23, 2004 - ----------------------------------------------- Carl DeSantis
I-3 EX-23 2 exhibit23_1.txt INTEGRATED BIOPHARMA, INC. Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors Integrated BioPharma, Inc.: We consent to the incorporation by reference in this registration statement and related prospectus on Form S-3 of Integrated BioPharma, Inc. of our report dated September 10, 2004, relating to the consolidated balance sheets of Integrated BioPharma, Inc. and its subsidiaries as of June 30, 2004 and 2003, and the related consolidated statements of operations, stockholders' deficit and cash flows for each of the years in the two-year period ended June 30, 2004, which report appears in the June 30, 2004 annual report on Form 10-KSB of Integrated BioPharma, Inc. filed with the Securities and Exchange Commission. We also consent to the reference to our firm under the heading "Experts" in such registration statement. /s/ AMPER, POLITZINER & MATTIA, P.C. Edison, New Jersey December 23, 2004 EX-5 3 exhibit5_1.txt INTEGRATED BIOPHARMA, INC. Exhibit 5.1 December 23, 2004 Board of Directors Integrated BioPharma, Inc. 225 Long Avenue Hillside, New Jersey 07205 Ladies and Gentlemen: At your request, we have examined the Registration Statement on Form S-3 (No. 333-______) filed by Integrated BioPharma, Inc. (the "Company") with the Securities and Exchange Commission (the "Commission") on December 23, 2004, (the "Registration Statement") in connection with the registration under the Securities Act of 1933, as amended, of 366,085 shares (the "Shares") of the common stock, par value $.002 per share (the "Common Stock"), of the Company by various selling stockholders of the Company, as identified in greater detail in the Registration Statement. We have examined such records and documents and have made such examination of law as we considered necessary to form a basis for the opinions set forth herein. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with the originals of all documents submitted to us as copies thereof. Based upon such examination, it is our opinion that the Shares issuable upon conversion of the outstanding and issuable preferred stock and exercise of the outstanding and issuable warrants, when issued, delivered and paid for in accordance with the provisions of the outstanding preferred stock and outstanding warrants, will be validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption "Legal Matters" in the Prospectus. In so doing, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act or under the Rules. Sincerely, GREENBERG TRAURIG, LLP EX-10 4 exhibit10_3.txt EXHIBIT 10.3 - INTEGRATED BIOPHARMA, INC. Exhibit 10.3 SETTLEMENT AGREEMENT This Settlement Agreement, dated as of December 20, 2004 (this "Agreement"), by and between Integrated BioPharma, Inc., a Delaware corporation ("INB"), and Wolfe Axelrod Weinberger Associates LLC, a New York limited liability company ("WA"). RECITALS WHEREAS, INB and WA entered into a Retainer Agreement dated July 18, 2000 (the "Retainer Agreement"); WHEREAS, INB and WA now desire to settle a dispute that has arisen between them regarding the Retainer Agreement that was the subject of an arbitration proceeding (the "Proceeding") brought by WA and described in an Amended Demand for Arbitration and an Amended Statement of Claim, both dated July 2, 2004; and WHEREAS, in connection with INB's and WA's settlement of their dispute, the parties desire to fully document securities that were issued by INB to WA pursuant to the Retainer Agreement, some of the terms of which the parties believe are in need of further clarification and explication. NOW THEREFORE, in consideration of the premises above and the agreements herein contained, and for other good consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Termination of Obligations under Prior Agreements; Discontinuance of Claims. This Agreement is intended to supersede in all respects all prior agreements, understandings, disputes and Claims (as hereinafter defined) between the parties such that (i) all prior agreements between the parties are immediately terminated in their entirety and are of no further force and effect and (ii) this Agreement and the Warrant (as defined below) shall be the only agreements in effect between the parties. This Agreement shall be deemed a stipulation of settlement settling the Proceeding and shall, when "SO ORDERED" by the sole appointed Arbitrator, constitute an arbitration award under Article 75 of the New York Civil Practice Law and Rules and the United States Arbitration Act (9 U.S.C. ss.ss. 1, et seq). The parties consent to such action by the sole arbitrator and agree that no other arbitrators need be appointed or qualified. INB waives any objections to jurisdiction in the Proceeding, and both parties consent to the entry of judgment upon such award by either party. All claims in the Proceeding are hereby finally settled and adjudicated with prejudice to both parties and without costs to either party as against the other. WA hereby represents and warrants that neither it nor its counsel has made any filings with the American Arbitration Association in connection with the Proceeding. Section 2. Mutual Releases. (a) Release and Indemnification by WA. WA hereby absolutely, fully and forever releases, waives, relinquishes, and discharges INB and all of its stockholders, directors, officers, employees and agents and their respective successors, predecessors, assigns, affiliates, heirs, executors and administrators (collectively, the "INB Released Parties"), from any and all Claims (as defined below) whatsoever which WA may have had, presently has or in the future may have against the INB Released Parties which arise, have arisen or may hereinafter arise in whole or in part out of or on account of any matter or thing whatsoever occurring on or before the date hereof other than Claims arising out of a breach of this Agreement. By its execution of this Agreement, WA acknowledges and agrees that this Agreement contains a general release, which shall operate to bar it from pursuing any claims against INB in any forum with respect to Claims within the scope of this Section 2. WA hereby agrees to indemnify and hold harmless each of the INB Released Parties against any Claim (including the payment of attorney's fees and costs actually incurred, whether or not litigation is commenced) within the scope of this Section 2, which is asserted by one or more of WA's equity owners, directors, officers, employees and agents and their respective successors, predecessors, assigns, affiliates, heirs, executors and administrators. (b) Release and Indemnification by INB. INB hereby absolutely, fully and forever releases, waives, relinquishes, and discharges WA and all of its equity owners, directors, officers, employees and agents and their respective successors, predecessors, assigns, affiliates, heirs, executors and administrators (collectively, the "WA Released Parties"), from any and all Claims (as defined below) whatsoever which INB may have had, presently has or in the future may have against the WA Released Parties which arise, have arisen or may hereinafter arise in whole or in part out of or on account of any matter or thing whatsoever occurring on or before the date hereof other than Claims arising out of a breach of this Agreement. By its execution of this Agreement, INB acknowledges and agrees that this Agreement contains a general release, which shall operate to bar it from pursuing any claims against WA in any forum with respect to Claims within the scope of this Section 2. INB hereby agrees to indemnify and hold harmless each of the WA Released Parties against any Claim (including the payment of attorney's fees and costs actually incurred, whether or not litigation is commenced) within the scope of this Section 2, which is asserted by one or more of INB's stockholders, directors, officers, employees and agents and their respective successors, predecessors, assigns, affiliates, heirs, executors and administrators. (c) Claims. As used in this Agreement, the terms "Claim" and "Claims" mean any and all manner of action, causes of action, suits, damages (whether general, special or punitive), debts, dues, liabilities, rights, obligations, covenants, contracts, agreements, costs, expenses, losses, attorneys' fees, liens, indemnities, and demands of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, and whether based on contract, tort, statute or other legal or equitable theory of recovery. (d) No Assignment of Claims by WA. WA represents and warrants to each of the INB Released Parties that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, or encumbered or otherwise created an interest in, any claim intended to be released herein. WA hereby agrees to indemnify and hold harmless each of the INB Released Parties against any Claim (including the payment of attorney's fees and costs actually incurred, whether or not litigation is commenced) within the scope of this Section 2, which is asserted by any person or entity purporting to be any transferee or assignee of such claim. 2 (e) No Assignment of Claims by INB. INB represents and warrants to each of the WA Released Parties that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, or encumbered or otherwise created an interest in, any claim intended to be released herein. INB hereby agrees to indemnify and hold harmless each of the WA Released Parties against any Claim (including the payment of attorney's fees and costs actually incurred, whether or not litigation is commenced) within the scope of this Section 2, which is asserted by any person or entity purporting to be any transferee or assignee of such claim. Section 3. Delivery of Warrant. Concurrently with the execution of this Agreement, INB agrees to execute and deliver to WA a warrant (the "Warrant") to purchase 100,000 shares of INB's common stock, par value $.002 per share (the "Common Stock") in the form attached hereto as Exhibit A. The Warrant is intended to replace and document both the "options" and the "warrants" granted by INB to WA under the Retainer Agreement. The Warrant entitles WA to purchase up to 25,000 shares of Common Stock at an exercise price of $1.75 per share (originally covered by the 2000 warrant grant) and 75,000 shares of Common Stock at an exercise price of $1.37 per share (originally covered by the 2000 option grant), and expires on July 18, 2005 to the extent it is not exercised. Section 4. Registration of Securities. (a) Filing and Effectiveness of Registration Statement. Subject to the other provisions of this Section 4, INB shall file, within 15 days after the date hereof, a registration statement (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), covering the 100,000 shares of Common Stock issuable upon exercise of the Warrant (the "Registrable Shares"). WA acknowledges and agrees that securities other than the Registrable Shares, held by third parties, may be included in the Registration Statement unless the registration thereof delays or can be reasonably expected to delay the effective date of the Registration Statement. INB shall use its commercially reasonable best efforts to (i) have the Registration Statement declared effective by the U.S. Securities and Exchange Commission at the earliest possible date, but no later than within 90 days after the date hereof (the "Effectiveness Deadline"), and (ii) maintain the effectiveness of the Registration Statement until all the Registrable Shares have been sold or are otherwise able to be sold under Rule 144 of the Securities Act. In the event that the Registration Statement is not declared effective by the Effectiveness Deadline, the term of Warrant shall be extended by the number of days equal to the period from the Effectiveness Deadline to the date on which the Registration Statement is declared effective. (b) Expenses. All expenses (other than brokerage fees and applicable transfer taxes) incurred in connection with registrations, filings or qualifications pursuant to this Section 4, including, without limitation, all registration, filing and qualification fees (including, without limitation, registrations or qualifications to allow for the resale of the Registrable Shares under the state securities or blue sky laws as WA reasonably requests), printers' and accounting fees and fees and disbursements of counsel for INB, shall be borne by INB. Further, INB shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any other outside accounting, audit or review costs, liability insurance obtained by INB and the expenses and fees for listing the securities to be registered on the American Stock Exchange pursuant to Section 4(e). 3 (c) Indemnification. Each of INB and WA shall indemnify the other party hereto and their respective officers, directors, employees and agents against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) by the indemnifying party (or a selling stockholder obligated to indemnify the indemnifying party) of a material fact contained in any prospectus or other document (including any related registration statement, notification or the like) incident to any registration of the type described in this Section 4, or any omission (or alleged omission) by the indemnifying party to state in any such document a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such indemnified party for any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action; provided that no party will be eligible for indemnification hereunder to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission based upon written information furnished by such party for use in connection with such registration. (d) Provision of Information by WA. WA shall furnish to INB such information regarding WA and the distribution proposed by it as INB may reasonably request in connection with any registration or offering referred to in this Section 4. WA shall cooperate as reasonably requested by INB in connection with the preparation of the Registration Statement with respect to such registration, and for so long as INB is obligated to file and keep effective such Registration Statement, shall provide to INB, in writing, for use in the Registration Statement, all such information regarding INB and its plan of distribution of the Registrable Shares included in such registration as may be reasonably necessary to enable INB to prepare such Registration Statement, to maintain the currency and effectiveness thereof and otherwise to comply with all applicable requirements of law in connection therewith. (e) Listing on American Stock Exchange. INB shall promptly apply for the listing of the Registrable Securities on the American Stock Exchange. Section 5. Exercise of Warrant. WA, or any permitted transferee of the Warrant or any part thereof, shall exercise the Warrant in accordance with the procedures set forth in the Warrant. Section 6. Lock-Up. (a) Weekly Limit. WA and any other person who becomes an initial beneficial owner of shares of Common Stock upon the exercise in whole or in part of the Warrant (the "Initial Holders") hereby agree not to, directly or indirectly, (i) publicly sell, contract to sell or otherwise transfer any shares of Common Stock beneficially owned by it or (ii) privately sell, contract to sell or otherwise transfer (unless the proposed transferee agrees to be bound by the restrictions on transfer contained herein) any of the shares of Common Stock beneficially owned by it, unless such sale, contract or transfer, together with any such transaction by all other Initial Holders, will not exceed the Weekly Limit. The "Weekly Limit" shall mean, in any calendar week on a non-cumulative basis, the greater of (x) 5,000 shares of Common Stock, or (y) twelve percent (12%) of the average daily volume of the Common Stock during the preceding calendar week; provided, that the Initial Holders shall not be bound by the Weekly Limit in any calendar week in which an executive officer or director of INB sells shares of Common Stock. Each of the Initial Holders shall be jointly and severally liable for breach of this Section 6 by any other Initial Holder, with damages calculated in accordance with subsection (b) below. 4 (b) Liquidated Damages. If any Initial Holder shall breach this Section 6, the parties hereto agree that INB shall be entitled to receive from the Initial Holders, and that the Initial Holders shall pay to INB, as liquidated damages (the "Liquidated Damages Payment"), the Net Gain (as defined below), less income taxes, if any, payable on the Net Gain in connection with the transaction(s) that caused the breach of this Section 6, after giving effect to the Initial Holders' payment of the Liquidated Damages Payment. "Net Gain" shall mean the full amount of proceeds received by the Initial Holders in the transaction(s) that caused the breach of this Section 6, net of (i) related transaction costs and (ii) the exercise price actually paid by the Initial Holders upon the exercise of the Warrant attributable to the shares of Common Stock as to which the breach occurred. It is expressly understood and agreed that in the event of a breach of this Section 6, INB's damages would be impossible to ascertain and that the Liquidated Damages Payment constitutes a fair and reasonable amount of compensation in such event. Section 7. Confidentiality. The fact that a settlement has been reached in the Proceeding and the terms of this Agreement shall not be disclosed by a party to this Agreement to any third party without the prior written consent of the other party to this Agreement, except that the terms of this agreement may be disclosed to (a) regulatory or taxing authorities, (b) INB's or WA's accountants, attorneys, managers or employees; provided, however, that all such accountants, attorneys, managers and employees are first advised that the disclosure is subject to the confidentiality provisions of this Agreement, and (c) transferees or proposed transferees, in order to obtain their agreement to be bound hereby, and (d) any other third party if required by any law, court order, rule or regulation in the opinion of counsel for INB or WA. The terms of this Agreement may also be disclosed by INB or WA in any action or proceeding to enforce the terms of this Agreement. Section 8. Notices. Except as expressly provided otherwise in this Agreement, any notice or other communication required to be given pursuant to this Agreement shall be in writing and shall be either: (i) delivered personally to the party to be notified, (ii) delivered by a reputable international courier service to the party to be notified, or (iii) transmitted by facsimile to the party to be notified, as follows: 5 If to INB: Eric Friedman Vice President and Chief Financial Officer Integrated BioPharma, Inc. 225 Long Avenue Hillside, New Jersey 07205 Facsimile: (973) 926-1735 with copies to: Robert B. Kay, Esq. c/o Gerschel & Co., Inc. 720 Fifth Avenue New York, New York 10019 Facsimile: (212) 246-8331 and Andrew H. Abramowitz, Esq. Greenberg Traurig, LLP 200 Park Avenue New York, New York 10166 Facsimile: (212) 805-5552 If to WA: Stephen D. Axelrod, Managing Member Wolfe Axelrod Weinberger Associates, LLC 317 Madison Avenue--Suite 515 New York, NY 10017 Facsimile: (212) 370-4505 with a copy to: Donald Weinberger, Managing Member Wolfe Axelrod Weinberger Associates, LLC 317 Madison Avenue--Suite 515 New York, NY 10017 Facsimile: (212) 370-4505 and to: Barry J. Bendes, Esq. Wolf, Block, Schorr & Solis-Cohen LLP 250 Park Avenue New York, New York 10177 Facsimile: (212) 986-0604 6 Any such notice shall be deemed to have been given as of the earlier of: (a) the date of actual receipt of such notice, or (b) the third business day after such notice is delivered to an international courier service for next business day delivery to the party to be notified, or (c) the date of the confirmed transmission of any notice by facsimile. Any party to this Agreement may designate a different address or facsimile number to which notices are to be sent to such party by notifying all other parties to this Agreement as to such different address or facsimile number in the manner set forth above in this Section. Counsel for a party may issue notices on behalf of the party. Section 9. Costs and Expenses. Except as provided above, each party hereto will bear its own legal fees and other costs and expenses incurred in connection with the negotiation, execution and consummation of the transactions contemplated hereby. Section 10. Waiver and Amendment. This Agreement and any exhibits hereto may not be changed, waived or modified except by a written instrument signed by the party against which enforcement is sought, which by its terms makes specific reference to this Agreement. Section 11. Governing Law; Jurisdiction. This Agreement and the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflict of laws that might cause the application of any other law. The parties hereto hereby irrevocably agree that any suit, action or other legal proceeding arising out of this Agreement, or any of the transactions contemplated hereby, shall be brought only in the United States District Court located in the Southern District of New York. Each party consents to the jurisdiction of such courts and agrees not to seek to transfer any proceeding out of such Court on the basis of lack of jurisdiction or inconvenient forum. Section 12. Further Assurances. The parties hereto shall execute and deliver such further documents and do such further acts as any party hereto shall reasonably request in order to assure and confirm to the parties hereto the rights hereby created or to facilitate the full performance of the terms of this Agreement and any exhibits hereto. Section 13. Headings. The descriptive headings of the various sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof. Section 14. Survival. All covenants, agreements, undertakings and releases contained in this Agreement and any exhibits hereto shall survive indefinitely. 7 Section 15. Entire Agreement. This Agreement and any exhibits hereto constitute the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties hereto relating to the subject matter hereof. Section 16. Illegality. The illegality or unenforceability of any provisions of this Agreement or any exhibits hereto shall not in any way affect or impair the legality or enforceability of the remaining provisions hereof or thereof. In lieu of any illegal or unenforceable provision hereof or thereof, the parties hereto agree to the substitution of a legal or enforceable provision as similar in terms to such illegal or unenforceable provision as may be possible. Section 17. Counterparts. This Agreement may be executed in as many counterparts as may be deemed necessary or convenient, each of which, when so executed, shall be deemed an original, but all of which shall constitute one and the same agreement. Telephone facsimile transmission or digital transmission of counterpart originally executed documents shall constitute delivery of the originally-executed documents and shall be binding upon the party transmitting the same. [Signature Page Follows] 8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. INTEGRATED BIOPHARMA, INC. By: /s/ Eric Friedman --------------------- Name: Eric Friedman Title: Vice President and Chief Financial Officer WOLFE AXELROD WEINBERGER ASSOCIATES LLC By: /s/ Stephen D. Axelrod -------------------------- Name: Stephen D. Axelrod Title: Managing Director Exhibit A Form of Warrant EX-10 5 exhibit10_5.txt INTEGRATED BIOPHARMA, INC. Exhibit 10.5 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. INTEGRATED BIOPHARMA, INC. WARRANT TO PURCHASE COMMON STOCK Warrant No.: _______ Number of Shares: _________ Date of Issuance: December 22, 2004 ("Issuance Date") Integrated BioPharma, Inc., a Delaware corporation (the "Company"), hereby certifies that, for Ten United States Dollars ($10) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Griffin Securities, Inc., the registered holder hereof or its permitted assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including all Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the "Warrant"), at any time or times on or after the date hereof, but not after 11:59 P.M., New York Time, on the Expiration Date (as defined below), ___________ thousand (_______) fully paid nonassessable shares of Common Stock (as defined below) (the "Warrant Shares"). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15. 1. EXERCISE OF WARRANT. (a) Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder commencing on the date hereof and continuing until the Expiration Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), of the Holder's election to exercise this Warrant and (ii) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise Price") in cash or by wire transfer of immediately available funds. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Promptly following the date on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (the "Exercise Delivery Documents"), the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company's transfer agent (the "Transfer Agent"). On or before the fourth Business Day following the date on which the Company has received all of the Exercise Delivery Documents (the "Share Delivery Date"), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company ("DTC") Fast Automated Securities Transfer Program and that the Common Stock is eligible, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii) above, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable following any exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes, including without limitation, all documentary stamp, transfer or similar taxes, or other incidental expense that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. (b) Exercise Price. For purposes of this Warrant, "Exercise Price" means $14.00, subject to adjustment as provided herein. (c) Company's Failure to Timely Deliver Securities. (i) In addition to any other rights available to a Holder, if the Company fails to deliver or cause to be delivered to the Holder a certificate representing Warrant Shares by the Business Day after the date on which delivery of such certificate is required by this Warrant, and if on or after 2 such Business Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving from the Company (a "Buy-In"), then the Company shall, within three Business Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Price on the Exercise Date. (ii) If the provisions of clause (i) above shall not apply, if the Company shall fail for any reason or for no reason to issue to the Holder within five Business Days of the Exercise Date, a certificate for the number of shares of Common Stock to which the Holder is entitled or to credit the Holder's balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this Warrant, the Company shall pay as additional damages in cash to such Holder on each day after such tenth Business Day that the issuance of such Common Stock is not timely effected an amount equal to 1.0% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Stock on the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the Holder without violating Section 1(a). (iii) If within fifteen (15) Business Days of the Exercise Date, the Company fails to deliver a new Warrant to the Holder for the number of shares of Common Stock to which such Holder is entitled, the Company shall pay as additional damages in cash to such Holder on the day after such fifteenth Business Day that such delivery of such new Warrant is not timely effected an amount equal to 1.0% of the product of (A) the number of shares of Common Stock represented by the portion of this Warrant which is not being exercised and (B) the Closing Sale Price of the Common Stock on the trading day immediately preceding the last possible date which the Company could have issued such Warrant to the holder without violating Section 1(a). (d) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12. (e) Exercise at the Company's Election. The Company shall have the right, in its sole discretion, to require that all, but not less than all, of the outstanding Warrants be exercised (the "Company's Exercise Election") at the applicable Exercise Price; provided that the Conditions to Exercise at the 3 Company's Election (as set forth below) are satisfied as of the Company's Election Exercise Date or waived by the holders of the Warrants then outstanding; provided, however, that the Company may not deliver and effect more than one Company's Exercise Election Notice hereunder. The Company shall exercise its right to Company's Exercise Election by providing each holder of Warrants written notice ("Company's Exercise Election Notice") by facsimile and overnight courier. The date on which each of such holders of the Warrants actually receives the Company's Exercise Election Notice is referred to herein as the "Company's Exercise Election Notice Date." The Company's Exercise Election Notice shall indicate the date selected by the Company for exercise (the "Company's Election Exercise Date"), which date shall be not less than 20 Business Days or more than 60 Business Days after the Company's Exercise Election Notice Date. Subject to the satisfaction of all the conditions of this Section 1(e), on the Company's Election Exercise Date each holder of Warrants to be exercised will be deemed to have submitted an Exercise Notice in accordance with Section 1(a) for all of such holder's Warrants (subject to this Section 1(e)). "Conditions to Exercise At The Company's Election" means the following conditions: (i) satisfaction of the Equity Conditions (as defined in the Company's Certificate of Designations, Preferences and Rights of Series B Redeemable Convertible Preferred Stock (the "Certificate of Designations")) with the term Company's Conversion Election Notice being replaced for purposes hereof by Company's Exercise; Company's Election Conversion Date being replaced for purposes hereof by Company's Election Exercise Date; and Company's Conversion Election Notice Date being replaced for purposes hereof with Company's Exercise Election Notice Date; and (ii) the Weighted Average Price of the Common Stock for each of the twenty (20) consecutive trading days immediately prior to the date of the Company's Exercise Election Notice is at or above $20.00 (subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, reverse stock splits or other similar events). Notwithstanding the above, any holder of Warrants may exercise such Warrants into Common Stock pursuant to Section 1(a) on or prior to the date immediately preceding the Company's Election Exercise Date. 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows: (a) Adjustment upon Issuance of Common Stock. If and whenever on or after the date of issuance of this Warrant, the Company issues or sells, or in accordance with this Section 2(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding Excluded Securities, as defined in the Certificate of Designations) for a consideration per share (the "New Issuance Price") less than a price equal to the Exercise Price in effect (the "Applicable Price") immediately prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the product of (x) the Exercise Price in effect immediately prior to such Dilutive Issuance and (y) the quotient of (1) the sum of (I) the product of the Applicable Price and the number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance and (II) the consideration, if any, received by the Company upon such Dilutive Issuance, divided by (2) the product of (I) the Applicable Price multiplied by (II) the number of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance. Upon each such adjustment of the Exercise Price hereunder, the number of Warrant Shares shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares acquirable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining the adjusted Exercise Price under this Section 2(a), the following shall be applicable: 4 (i) Issuance of Options. If the Company in any manner grants any Options (not including Excluded Securities) and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 2(a)(i), the "lowest price per share for which one share of Common Stock is issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion, exercise or exchange of such Convertible Securities. (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities (not including Excluded Securities) and the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued a nd sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii), the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares shall be made by reason of such issue or sale. (iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options (not including Excluded Securities), the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities (not including Excluded Securities), or the rate at which any Convertible Securities (not including Excluded Securities) are convertible into or exercisable or exchangeable for Common Stock increases or decreases at any time, the Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise Price and the number of Warrant Shares which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in the number of Warrant Shares. 5 (iv) Calculation of Consideration Received. If any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $0.01. If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor. If any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such security on the date of receipt. If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined in good faith by the Company. (v) Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. (b) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any time after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or 6 otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective. (c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2. 3. [Intentionally omitted] 4. ORGANIC CHANGE. Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company's assets to another Person or other transaction, in each case which is effected in such a way that holders of Common Stock are entitled to receive securities or assets with respect to or in exchange for Common Stock is referred to herein as an "Organic Change." Prior to the consummation of any (i) sale of all or substantially all of the Company's assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the Person issuing the securities or providing the assets in such Organic Change (in each case, the "Acquiring Entity") a written agreement to deliver to the Holder in exchange for this Warrant, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Warrant and reasonably satisfactory to the Holder (including, an adjusted exercise price equal to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger or sale). In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, the Holder may elect to treat such Person as the Acquiring Entity for purposes of this Section 4(b). Prior to the consummation of any other Organic Change, the Company shall be required to make appropriate provision to insure that the Holder thereafter will have the right to acquire and 7 receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable and receivable upon the exercise of this Warrant as of the date of such Organic Change (without regard to any limitations on the exercise of this Warrant). 5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) will, so long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the exercise of this Warrant, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Warrant then outstanding. 6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder, of this Warrant shall not be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as a holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company will provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. 7. REISSUANCE OF WARRANTS. (a) Transfer of Warrant. The Holder may transfer this Warrant and the rights hereunder only in accordance with applicable securities laws. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred. 8 (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant. (c) Warrant Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be given. (d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant. 8. NOTICES. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered by registered or certified mail, return receipt requested, or by overnight mail (a) If to the registered Holder, to the address of such Holder as shown on the books of the Company, and (b) If to the Company, to its principal offices at 225 Long Avenue, Hillside, New Jersey 07205 and by facsimile to (973) 926-1735, Attn: Eric Friedman, Chief Financial Officer, with a copy by facsimile to Greenberg Traurig, LLP, facsimile (212) 805-5552, Attn: Andrew H. Abramowitz, Esq., or to such other address as the Company may designate by notice to the Holder. 9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. 10. GOVERNING LAW. This Warrant shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. 9 11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Purchasers and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. 12. DISPUTE RESOLUTION. (a) In the case of a dispute as to the arithmetic calculation of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed arithmetic calculations via facsimile as soon as practicable following of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. The Holder and the Company shall determine the correct arithmetic calculation after such disputed arithmetic calculation is transmitted to such holder. If the Holder and the Company are unable to agree upon correct arithmetic calculation of the Exercise Price or the Warrant Shares, then the Company shall submit via facsimile the disputed calculation to an independent, reputable nationally recognized accounting firm selected jointly by the Company and the Holder. The Company shall cause the accounting firm to perform the calculation and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such accounting firm's determination shall be binding upon all parties absent manifest error. (b) In the case of a dispute as to the determination of fair market value of a security to determine the Exercise Price, the Company shall submit the disputed determination via facsimile as soon as practicable following receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares after such disputed determination is submitted to the Holder, then the Company shall, submit via facsimile the disputed determination of the Exercise Price to an independent, reputable investment bank selected jointly by the Company and the Holder. The Company shall cause the investment bank or the accountant, as the case may be, to perform the determinations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank's determination shall be binding upon all parties absent demonstrable error. (c) The fees and expenses associated with the determinations made by such investment bank or accountant shall be paid by the Company. 13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant or the Letter Agreement dated April 28, 2004 by and between the Company, the Holder and Beaufort International Associates Limited (the "Letter Agreement"), at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 10 14. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, subject to applicable securities laws. 15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings: (a) "Bloomberg" means Bloomberg Financial Markets. (b) "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. (c) "Closing Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market (as defined in the Securities Purchase Agreement), as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period. (d) "Common Stock" means (i) the Company's common stock, par value $.002 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. (e) "Common Stock Deemed Outstanding" means, at any given time, the number of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be outstanding pursuant to Sections 2(a)(i)(A) and 2(a)(i)(B) hereof regardless of whether the Options or Convertible Securities are actually exercisable at such time, but excluding any shares of Common Stock owned or held by or for the account of the Company or issuable upon conversion of the Preferred Shares. 11 (f) "Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Stock. (g) "Expiration Date" means the date five years after the Issuance Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a "Holiday"), the next date that is not a Holiday. (h) "Options" means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. (i) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof. [Signature Page Follows] 12 IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above. INTEGRATED BIOPHARMA, INC. By: ----------------------------------- Name: Title: Exhibit A EXERCISE NOTICE TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT TO PURCHASE COMMON STOCK INTEGRATED BIOPHARMA, INC. The undersigned holder hereby exercises the right to purchase ________________ of the shares of Common Stock ("Warrant Shares") of Integrated BioPharma, Inc., a Delaware corporation (the "Company"), evidenced by the attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 1. Payment of Exercise Price. The holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant. 2. Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. Date: _____________ __, ______ Name of Registered Holder By: - ----------------------------------- Name: Title: EX-10 6 exhibit10_4.txt EXHIBIT 10.4 - INTEGRATED BIOPHARMA, INC. Exhibit 10.4 WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (II) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE COMPANY THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS. Warrant to Purchase 100,000 shares VOID AFTER JULY 18, 2005 WARRANT TO PURCHASE COMMON STOCK OF INTEGRATED BIOPHARMA, INC. Incorporated Under the Laws of the State of Delaware THIS IS TO CERTIFY that WOLFE AXELROD WEINBERGER ASSOCIATES LLC, or its proper assigns (the "Warrantholder"), is entitled, upon the due exercise hereof and subject to the terms and conditions hereof, as to the total number of shares thereafter, until 5:00 p.m. New York time on July 18, 2005, to purchase from Integrated BioPharma, Inc., a Delaware corporation (the "Company"), from time to time, all or any part of One Hundred Thousand (100,000) fully paid and nonassessable shares of common stock, par value $.002 per share, of the Company (the "Common Stock"), but not for fractional shares of Common Stock, and not for less than Five Thousand (5,000) shares of Common Stock at any one time, upon delivery of the Election to Purchase attached hereto as Appendix A and, for the exercise for the remaining balance of such number of such Common Stock, the surrender hereof with the Election to Purchase attached hereto as Appendix A, duly completed and delivered, in accordance with Section 11 of this Warrant, and simultaneous payment therefor by wire transfer of immediately available funds, or good bank or certified check drawn to the order of the Company, at an exercise price of (i) $1.37 for one (1) share of Common Stock for the first Seventy-Five Thousand (75,000) shares of Common Stock, and (ii) $1.75 for one (1) share of Common Stock for the remaining Twenty-Five Thousand (25,000) shares of Common Stock (the "Warrant Exercise Price"). This Warrant is issued pursuant to an agreement dated July 18, 2000 (the "Retainer Agreement") between the Company and the original Warrantholder and is intended to formalize and document the options and warrants granted on July 18, 2000 by the Company to the Warrantholder entitling the Warrantholder to purchase 75,000 shares of Common Stock and an additional 25,000 shares of Common Stock pursuant to the Retainer Agreement. 1. Term. This Warrant is exercisable at the option of the Warrantholder, for a five (5) year period, commencing on the date hereof and may not be exercised after 5:00 p.m., New York time, July 18, 2005 (the "Expiration Date"), at which time this Warrant will become wholly void and all rights evidenced hereby will terminate solely as to the purchase of any shares of Common Stock for which an Election to Purchase has not been delivered to the Company by the Warrantholder or its assigns. 2. Treatment of Partial Exercise of Warrant. If this Warrant is exercised for less than all the shares purchasable upon the exercise hereof, subject to the minimum amount of Five Thousand (5,000) shares of Common Stock per exercise (or the remaining balance of this Warrant, whichever is the lesser), this Warrant shall be deemed to be amended to appropriately decrease the number of shares of Common Stock available for exercise. 3. Issuance of Common Stock Certificates. Upon the exercise of this Warrant and full payment of the applicable Warrant Exercise Price, the Company will cause its transfer agent to issue to the Warrantholder or its designee, within four (4) business days, stock certificates representing the number of shares of Common Stock exercised therefor, in the name of the Warrantholder or in such names as may be directed by the holder. Electronic delivery shall be made to a securities intermediary within such period if so requested by the Warrantholder. 4. Adjustment of Warrant Exercise Price and Number of Shares of Common Stock. In case of any dividend in securities of the Company, stock split, spinoff, reclassification, capital reorganization, or other change of outstanding shares of Common Stock, or in case of any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification, capital reorganization, or other change of outstanding shares of Common Stock), or in case of any sale or conveyance to another corporation of all or substantially all of the property of the Company (other than a sale/leaseback, mortgage, or other financing transaction), or the issuance of any rights to purchase or to receive any securities of the Company or its subsidiaries issued to all holders of Common Stock, the Company shall cause effective provision to be made so that the Warrantholder shall have the right thereafter, by exercising such Warrant, to purchase the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization, or other change, consolidation, merger, sale, or conveyance by a holder of the number of shares of Common Stock that might have been purchased upon exercise of such Warrant immediately prior to such reclassification, capital reorganization, or other change, consolidation, merger, sale, or conveyance. Any such provision shall include provision for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor (if other than the Company) resulting from such consolidation or merger or the corporation purchasing assets or other appropriate corporation or entity shall assume by written instrument the obligation to deliver to the holder of this Warrant such shares of stock, securities, or assets as, in accordance with the foregoing provisions, such holders may be entitled to purchase and the other obligations under this Agreement. The foregoing provisions shall similarly apply to each successive dividend, rights offering, stock split, spinoff, reclassification, capital reorganizations, and other changes of outstanding shares of Common Stock and to successive consolidations, mergers, sales, or conveyances. 2 5. No Stockholder Rights. The Warrantholder shall not have the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of stockholders or as having any rights whatsoever as a stockholder of the Company until such time as it has exercised all or any part of this Warrant. The Warrantholder shall not be entitled to any rights of a stockholder of the Company in respect of any shares purchasable upon the exercise hereof until such shares have been paid for in full, whether or not a certificate has been delivered hereunder. 6. Restrictions on Transfer; Permitted Transferees. This Warrant and the shares of Common Stock issuable upon the exercise hereof (collectively, the "Warrant Securities") are not currently registered upon the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws. The Warrant Securities are subject to restrictions on transferability and resale and may not be transferred or resold, except as set forth below. For so long as the Warrant Securities are not registered under the Securities Act, each certificate representing shares of Common Stock issuable upon the exercise of this Warrant shall bear the following legend (in addition to any legend required under applicable state securities laws and any other applicable agreement): THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (II) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE COMPANY THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS. Subject to the Warrantholder's compliance with the requirements set forth in the above legend, the Warrantholder may transfer all or part of the Warrant Securities to any of the persons listed on Appendix B hereto; provided, however, that any transferee must agree in writing (the "Transferee Consent") to be bound by the terms of the Warrant and of the Settlement Agreement, dated as of December 20, 2004 (the "Settlement Agreement"), between the Company and Wolfe Axelrod Weinberger Associates LLC ("WA"), that are applicable to WA. The Warrantholder shall give prompt written notice to the Company, in accordance with Section 11 of this Warrant, of any such transfer, which notice shall specify the applicable Warrant Exercise Price of the transferred Warrant Securities and shall include a copy of the Transferee Consent. 7. Reservation of Stock Issuable Upon Exercise. The Company has reserved and shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock and other securities deliverable hereunder, solely for the purpose of effecting the issuance of the shares of Common Stock and other securities upon exercise of the Warrant, such number of its shares of Common Stock and other securities as shall from time to time be sufficient to provide for the exercise of this Warrant, and if at any time the number of authorized but unissued shares of Common Stock or other securities shall not be sufficient to provide for the exercise of this Warrant, the Company will, subject to the requirements of applicable state law, take such corporate action as may, in the option of its counsel, be necessary to increase its authorized but unissued shares of Common Stock or other securities to such number of shares of Common Stock and other securities as shall be sufficient for such purposes. 3 8. Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of shares of Common Stock upon the exercise of the Warrants, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction to the nearest whole number of shares of Common Stock or other securities, properties or rights. 9. Loss or Mutilation. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and (in the case of loss, theft or destruction) of indemnity reasonably satisfactory to the Company, and (in the case of mutilation) upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof a new Warrant Certificate of like tenor. 10. Successors. All the covenants and provisions of this Agreement shall be binding upon and inure to the benefit of the Company and the Warrantholder and its respective successors and assigns hereunder. 11. Governing Law; Submission to Jurisdiction. This Warrant issued hereunder shall be deemed to be a contract made under the laws of the State of New York and the Delaware General Corporate Law and for all purposes shall be construed in accordance with the laws of said States, without giving effect to the rules of said State governing the conflicts of laws which might cause the application of any other laws. 12. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered by registered or certified mail, return receipt requested, or by overnight mail (a) If to the registered Warrantholder, to the address of such Warrantholder as shown on the books of the Company, with a copy by facsimile to Wolf, Block, Schorr & Solis-Cohen LLP facsimile (212) 672-1165, Attn: Barry J. Bendes, Esq.; or (b) If to the Company, to its principal offices at 225 Long Avenue, Hillside, New Jersey 07205 and by facsimile to (973) 926-1735, Attn: Eric Friedman, Chief Financial Officer, with a copy by facsimile to Greenberg Traurig, LLP, facsimile (212) 805-5552, Attn: Andrew H. Abramowitz, Esq., or to such other address as the Company may designate by notice to the Warrantholder. 13. Entire Agreement; Modification. This Agreement, together with the Settlement Agreement, contains the entire understanding between the parties hereto with respect to the subject matter hereof and may not be modified or amended, except by a writing duly signed by the party against whom enforcement of the modification or amendment is sought. 4 INTEGRATED BIOPHARMA, INC. By: /s/ E. Gerald Kay --------------------- Name: E. Gerald Kay Title: Chief Executive Officer Dated: As of July 18, 2000 5 Appendix A FORM OF ELECTION TO PURCHASE The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant, to purchase _______ shares of Common Stock at an exercise price of $____ per share of Common Stock In accordance with the terms of the Warrant dated as of _________ issued by Integrated BioPharma, Inc. in favor of ______________, the undersigned requests that a certificate for such securities be registered in the name of ___________ whose address is ____________ and that such Certificate be delivered to _____________________________ whose address is __________________________________________________________. Dated: _________________, ------------------------------------------ Signature (Signature must conform in all respects to name of holder as specified on the face of the Warrant.) ------------------------------------------ (Insert Social Security or Other Identifying Number of Warrantholder) Appendix B PERMITTED TRANSFEREES Stephen Axelrod Donald Weinberger -----END PRIVACY-ENHANCED MESSAGE-----