SEPARATION AND DISTRIBUTION AGREEMENT
Exhibit
10.2
THIS
SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”) is entered into as of
April 21, 2009, between Bio Matrix Scientific Group, Inc., a Delaware
corporation (“BMSN”), and Entest BioMedical, Inc., a California corporation
(“Biomed”).
RECITALS
WHEREAS,
BMSN currently owns 100% of the issued and outstanding stock of
Biomed;
WHEREAS,
Biomed is engaged in on research and development in the areas of diabetes,
regenerative medicine and medical devices (the “Biomed Business”);
WHEREAS,
the Boards of Director of BMSN has determined that it would be appropriate and
desirable for BMSN to distribute, pro rata, to the holders of its stock, all of
the shares of Biomed common stock owned by BMSN (the
“Distribution”);
WHEREAS,
subsequent to the Distribution, and as provided for in this Agreement, Biomed
will be an independent company (the “Separation”);
NOW,
THEREFORE, in consideration of the foregoing and the covenants and agreements
set forth below, the parties hereto agree as follows:
1. SEPARATION
1.1. Distribution Date.
Unless otherwise provided in this Agreement, or in any agreement to be executed
in connection with this Agreement, the effective time and date of the
Distribution, and each undertaking or agreement in connection therewith shall be
such date as may be fixed by the Board of Directors of BMSN (the “Distribution
Date”).
2. THE
DISTRIBUTION
2.1. Delivery of Shares for
Distribution. On or prior to the Distribution Date, BMSN will deliver to
the distribution agent for the Distribution (the “Distribution Agent”) and the
BMSN transfer agent, a single stock certificate, endorsed by BMSN, representing
all of the outstanding shares of stock of Biomed then owned by BMSN. The shares
of Biomed stock represented by said certificate shall be the shares distributed
to the stockholders of BMSN pursuant to the Distribution. BMSN shall cause the
Distribution Agent to distribute on the Distribution Date the appropriate number
of such shares of common stock of Biomed to each shareholder of BMSN as of the
record date of the Distribution to be set by BMSN (“Record Date”).
2.2. Shares Received. Each
holder of stock of BMSN on the Record Date will be
entitled to receive in the Distribution a number of shares of stock
of Biomed that would be required to be distributed in order that the
distribution may be considered pro rata to all stockholders of BMSN on the
Record Date. The amount of shares issued and outstanding to any individual
shareholders of Biomed holding such shares prior to the Distribution Date shall
not be increased or reduced by the Distribution.
2.3. Obligation to Provide
Information. Biomed and BMSN, as the case may be, will provide to the
Distribution Agent all share certificates and any information required in order
to complete the Distribution on the basis specified above.
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2.4. Information Statement,
Required Filings. Prior to the Distribution Date, BMSN and Biomed shall
prepare and mail to the holders of stock of BMSN such information concerning
Biomed and the Distribution and such other matters as BMSN shall reasonably
determine are necessary and as may be required by law. BMSN and/or Biomed will
prepare, and Biomed will, to the extent required under applicable law, file with
the Securities and Exchange Commission any such documentation that BMSN and/or
Biomed determine is necessary or desirable to effectuate the
Distribution.
2.5. Securities
Laws. BMSN and Biomed shall take all such actions as may be necessary or
appropriate under applicable securities laws in connection with the
Distribution.
2.6. Conditions. BMSN and
Biomed shall take all reasonable steps necessary and appropriate to cause the
conditions set forth in Section 2.8 to be satisfied and to effect the
Distribution on the Distribution Date.
2.7. Sole Discretion of
BMSN. BMSN agrees to use reasonable efforts to complete the Distribution
on or before July 31, 2009. BMSN shall, in its sole and absolute discretion,
determine the date of the consummation of the Distribution, all terms of the
Distribution, and the timing of and conditions to the consummation of the
Distribution. In addition, BMSN may at any time and from time to time until the
completion of the Distribution, modify or change the terms of the Distribution.
Biomed shall cooperate with BMSN in all respects to accomplish the Distribution
and shall, at BMSN’s direction, promptly take any and all actions necessary or
desirable to effect the Distribution.
2.8. Conditions Precedent to
Distribution. The following are conditions that must take place prior to
the consummation of the Distribution. The conditions are for the sole benefit of
BMSN and shall not give rise to or create any duty on the part of BMSN or the
BMSN Board of Directors to waive or not waive any such condition.
(a) Required Actions. Any
and all required actions shall have been performed in order that the
Distribution shall be in compliance with applicable law.
(b) No Legal Restraints.
No order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Distribution shall be in effect and no other event
outside the control of BMSN shall have occurred or failed to occur that
prevents the consummation of the Distribution.
(c) No Material Adverse
Effect. No events or developments shall have occurred that, in the
judgment of the Board of Directors of BMSN, would result in the Distribution
having a material adverse effect on BMSN or on the stockholders of
BMSN.
2.9. Consistency with Past
Practices. At all times, BMSN and Biomed will conduct the Biomed Business
before the Distribution Date in the ordinary course, consistent with past
practices.
3. MISCELLANEOUS
3.1. Entire Agreement.
This Agreement, constitutes the entire agreement between the parties with
respect to the subject matter hereof and thereof and shall supersede all prior
written and oral and all contemporaneous oral agreements and understandings with
respect to the subject matter hereof and thereof.
3.2. Applicable
Law. The terms and conditions of this Agreement shall be governed by
and construed in accordance with the laws of the State of California. Any action
to enforce this Agreement shall be brought in the state courts located in San
Diego County, State of California.
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3.3. Termination. This
Agreement may be terminated and the Distribution abandoned at any time prior to
the Distribution Date by and in the sole discretion of BMSN without the approval
of Biomed. In the event of termination pursuant to this Section 3.3, no
party shall have any liability of any kind to the other party.
3.4. Notices. Notices,
offers, requests or other communications required or permitted to be given by
either party pursuant to the terms of this Agreement shall be given in writing
to the respective parties to the following addresses:
if to BMSN
:
0000 Xx
Xxxx Xxxx #000
Xx Xxxx XX
00000
If to
Biomed:
Entest
Biomedical, Inc.
0000
xxxxxxxxxx Xxxxxx
Xxxxx
00
Xxx Xxxxx,
XX 00000
or to such
other address as the party to whom notice is given may have previously furnished
to the other in writing as provided herein. Any notice involving
non-performance, termination, or renewal shall be sent by hand delivery,
recognized overnight courier or, within the United States, may also be sent via
certified mail, return receipt requested. All other notices may also be sent by
fax, confirmed by first class mail. All notices shall be deemed to have been
given and received on the earlier of actual delivery or three (3) days from the
date of postmark.
3.5. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but all of which shall constitute one and the same
agreement.
3.6. Binding Effect;
Assignment. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives and
successors, and nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. This Agreement may be enforced separately
by BMSN and Biomed. Neither party may assign this Agreement or any rights or
obligations hereunder, without the prior written consent of the other party, and
any such assignment shall be void; provided, however, that this Agreement may be
assigned to any entity which may acquire 100% of the share capital of Biomed
(“Biomed Acquisition Entity”) provided that (i) the Biomed Acquisition Entity is
formed by BMSN and (ii) all share capital of the Biomed Acquisition Entity is
owned by BMSN.
3.7. Severability. If any
term or other provision of this Agreement is determined by a court,
administrative agency or arbitrator to be invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to either party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible.
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3.8. Amendment. No change
or amendment will be made to this Agreement except by an instrument in writing
signed on behalf of each of the parties to such agreement.
3.9. Authority. Each of
the parties hereto represents to the other that (a) it has the corporate or
other requisite power and authority to execute, deliver and perform this
Agreement, (b) the execution, delivery and performance of this Agreement by
it have been duly authorized by all necessary corporate or other actions,
(c) it has duly and validly executed and delivered this Agreement, and (d)
this Agreement is a legal, valid and binding obligation, enforceable
against it in accordance with its terms.
3.10 Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other
person.
WHEREFORE,
the parties have signed this Separation and Distribution Agreement effective as
of the date first set forth above.
BMSN
By:/s/Xxxxx
X. Xxxx
Chairman
and CEO
Biomed
By:/s/Xxxxx
X. Xxxx
Chairman
and CEO
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