Exhibit 10.19

EMPLOYMENT AGREEMENT

THIS AGREEMENT dated February 11, 2003 between Integrated Health Technologies, Inc., a Delaware corporation, with offices at 201 Route 22, Hillside, New Jersey 07205, ("Corporation"), and Lance J. Baller ("Employee").

WHEREAS, the Corporation is in the business of manufacturing, marketing and selling vitamins and nutritional supplements; and

WHEREAS, Corporation desires to employ Employee, and Employee desires to be so employed, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises and the terms and conditions hereinafter set forth, the parties agree as follows:

1. Employment. The Corporation agrees to employ the Employee, and the Employee agrees to be so employed by the Corporation, in the capacity of Vice President of Corporate Development and Communications. Effective February 24, 2003 (the "Commencement Date") and shall continue until December 31, 2004 (the "Expiration Date") or the earlier termination of this Agreement in accordance with Section 5 below (the thereafter until termination of your employment.

2. Duties. Employee will have responsibility for all acquisitions, corporate development, and communications. And will report directly to the Chief Executive Officer of the Corporation (the "CEO") or the Chairman of the Board. During the term of your employment, the employee will be expected to be a full time employee of the corporation, and the employee will not engage or participate in any business that is competitive with the business of the corporation. The Employee will also serve on the advisory board to the board of directors, employee stock option committee and will be present and available at all board meetings for advice. The Employee will also be expected to comply with and be bound by the Corporation's operating policies, procedures and practices adopted by the Corporation and in effect from time to time during the term of your employment.

3. Compensation:

(a) Salary. Employee initial annual base salary retroactive to the Commencement Date will be $100,000. Your annual base salary will be payable in accordance with the Corporation normal payroll practices with such payroll deductions and withholdings as are required by law. Your base salary will be reviewed on an annual basis by the Compensation Committee of the Board of Directors of Corporation (the "Board") and may be increased (but not decreased) from time to time, in the discretion of the Compensation Committee of the Board Employee's.

(b) Stock Compensation. Employee shall be entitled to participate in the Corporation's qualified and non qualified stock option plans ("Plans") during each full year during the term of this Agreement (the "Stock Compensation") on a basis commensurate with his salary and considering the amount of stock awarded to other management employees.

(c) Benefits. During each contract year of the term of this Agreement, Employee shall receive such other benefits as are available to other senior executives of the Corporation.

(d) Office. During the term of this agreement the Corporation will reimburse the employee for his cost of an office in Denver, Colorado not to exceed $2,000 per month.

(e) Expenses. The Corporation will reimburse the actual and reasonable costs of your travel expenses between the Corporation's offices and on all business related trips. If all or any portion of the amounts payable to you or on your behalf under this Section (e) become or otherwise are subject to federal or state income taxes, the Corporation shall pay to the employee an amount necessary to place the employee in the same after-tax position as you would have been in had no such taxes been imposed. The determination of the amount of any such tax indemnity shall be made by the independent accounting firm employed by the Corporation, which amount shall be increased or decreased to reflect the results of any final determination by taxing authorities in any administrative or judicial action, and shall include any expenses reasonably incurred by the employee in defending same. The amount payable pursuant to this paragraph shall be increased to the extent necessary to pay any interest and penalties determined to be due, and shall be grossed up for the income tax due on the aggregate reimbursement. Amounts due shall be paid within ten (10) days after demand by you.

(f) Signing Bonus. The employee is entitled to a signing bonus of $15,000 at the signing of this contract.

5. Termination During Employment Term. Your employment with the Corporation will be at will and may be terminated by the employee or by the Corporation at any time for any reason as follows:

(a) The employee may terminate your employment upon written notice to the Board at any time following an event constituting "Good Reason" (as defined below), if following such event, the event constituting Good Reason is not cured by the corporation within 10 days after your notice to the Board requesting that such event be cured (an "Involuntary Termination");

(b) the employee may terminate your employment upon written notice to the Board at any time in your discretion without Good Reason ("Voluntary Termination");

(c) The Corporation may terminate your employment upon written notice to you at any time following a determination by the Board that there is "Cause" (as defined below) for such termination ("Termination for Cause");

(d) The Corporation may terminate your employment upon written notice to you at any time in the sole discretion of the Board without a determination that there is Cause for such termination ("Termination without Cause");

(e) Your employment will automatically terminate upon your death or upon your disability as determined by the Board ("Termination for Death or Disability"); provided that "disability" will mean your complete inability to perform your job responsibilities for a period of 120 consecutive days or 120 days in the aggregate in any 12-month period.

6. Definitions. As used in this agreement, the following terms have the following meanings:

(a) "Good Reason" means the occurrence of any of the following conditions, without your written consent:
(i) your no longer serving as Vice President of the Corporation or its ultimate parent corporation and reporting to the CEO or Chairman of the Corporation or such ultimate parent, as the case may be; (ii) any material breach of this letter agreement by the Corporation, including any reduction in your cash compensation or reimbursements; or (iii) Corporation's requiring you to be based at any office or location more than 60 miles from Boulder, Colorado or corporation's current headquarters in Hillside, New Jersey.

(b) "Cause" means:

(i) the willful engaging by you in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Corporation. For purposes of this provision, no act or failure to act, on the part of you, shall be considered "willful" unless it is done, or omitted to be done, by you in bad faith without reasonable belief that your action or omission was in the best interests of the Corporation. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Corporation shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Corporation.

7. Separation Benefits. Upon termination of your employment with the Corporation for any reason, you will receive payment for all unpaid salary and vacation accrued to the date of your termination of employment; any bonus that has been earned but not paid; and your benefits will be continued under the Corporation's then existing benefit plans and policies for so long as provided under the terms of such plans and policies or as required by applicable law. In addition, the following provisions will apply depending on the basis of your termination of employment:

(a} In the event of your Voluntary Termination or Termination for Cause, the employee will not be entitled to any cash severance benefits (except the amounts as set forth above)

(b) In the event of your Involuntary Termination, Termination for Death or Disability, or Termination without Cause, subject to your execution (or the execution by your executor or personal representative in the case of your death) of the acknowledgement, you will be entitled to a severance payment equal to the sum of the length left on your employment agreement

(c) No payments due you under this letter agreement will be subject to mitigation or offset.

8. Indemnification Agreement. Upon your commencement of employment with the Corporation, the Corporation will enter into its standard form of indemnification agreement for officers and directors to indemnify you against certain liabilities you may incur as a Vice President of the Corporation.

9. Restrictive Covenants.

(a) Proprietary Property. Employee acknowledges that in the course of his employment with the Corporation, the Corporation will provide Employee with, or access to, memoranda, files, records, trade secrets and other proprietary information and property of the Corporation, including information regarding the Corporation and operations, market structures, processes, data, programs, inventions, techniques, marketing plans, strategies, forecasts, new products, systems, financial information, budgets, projections, licenses, prices, costs, and customer supplier lists (collectively the "Proprietary Property") as is necessary or desirable to assist Employee in the performance of his employment duties hereunder. Employee acknowledges that the Proprietary Property, and all information and intellectual property and other data developed by trademarks, copyrights, ideas, creations, and properties (also hereafter included in the term "Proprietary Property"), is the sole and exclusive property of the Corporation, to the extent not available to the public at large. Employee shall have no right, title or interest of any kind or nature in the Proprietary Property or any proceeds thereof. Employee covenants and agrees that he shall not directly or indirectly, during the term of this Agreement or thereafter, communicate or divulge to, or use for the benefit of himself or any other person or entity without the prior written consent of its owner, any Proprietary Property or any information in any way relating to the Proprietary Property. The Proprietary Property shall remain the sole and exclusive property of the Corporation, as the case may be, and upon termination of this Agreement, Employee shall immediately thereupon return all Proprietary Property in his possession or control to the Corporation.

(b) Employment and Post-Employment Restriction. Employee hereby covenants and agrees that during the term of his employment hereunder, and for a period of one
(1) year after the date of any termination of his employment with the Corporation in the event he is terminated for Cause or voluntarily leaves prior to the end of the Employment Term, he shall not, directly or indirectly, be engaged in any other commercial activities or pursuits whatsoever which may in any way be in competition with or in any conflict with the business affairs of the Corporation in any market or geographic area in which the Corporation is then doing business. Employee further covenants and agrees that for one (1) year after the date of termination of his employment hereunder (for any reason) he shall not, directly or indirectly, pursue any party that was a customer of the Corporation on the date of that termination for the purpose of soliciting and/or providing to any of those customers any products, goods, or services of the nature and type sold by the Corporation. For purposes of the preceding sentence- a "customer" of the Corporation includes (a) any person which the Corporation has actually contacted for the purpose of obtaining an order for its products, goods or services and which the Corporation, at the time of Employee's termination, is still pursuing by regular contacts with such person, and (b) any person specifically identified by the Corporation in any of its marketing or strategic plans as a target for solicitation of orders for the Corporation's products, goods or services, and with respect to which person the Corporation, has, as of the time of Employee's termination, expended substantial time, effort and financial resources.

(c) Remedies. Employee hereby acknowledges that his services under this Agreement are unique and extraordinary and that irreparable injury may result to the Corporation in the event of a breach of the terms and conditions of this Agreement to be performed or observed by him, which may be difficult to ascertain, and that the award of damages may not be adequate relief to the Corporation. Employee, therefore, agrees that in the event of his breach of any of the terms or conditions of this Agreement to be performed or observed by him, the Corporation shall have the right, in addition to all other remedies available in the event of a breach of this Agreement, to injunctive or other equitable relief against Employee.

(d) Severability. If at the time of the enforcement of subparagraphs (a), (b) or
(c) above a court shall hold that the period or scope of the provisions thereof are unreasonable under the circumstances then existing, the parties hereby agree that the maximum period or scope.

10. Notices. All notices required or permitted to be given under this Agreement shall be given by certified mail, return receipt requested, to the parties at the addresses set forth at the beginning of the Employee Agreement or to such other addresses as either may designate in writing to the other party.

11. Gverning Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New Jersey.

12. Entire contract. This Agreement constitutes the entire understanding and agreement between the Corporation and Employee with regard to the subject matter set forth herein. There are no other agreements, conditions or representations, oral or written, express or implied, with regard hereto. This Agreement may be amended only in a writing signed by both parties.

13. Non-waiver. A delay or failure by either party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.

14. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

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

16. Modification. No modification, amendment or waiver of the provisions of this Agreement shall be effective unless in writing specifically referring hereto and signed by all parties.

17. Assignability and Binding Effect. Employee shall not assign any of his rights or delegate the performance of any of his obligations hereunder without the prior written consent of the Board of Directors. However, the Corporation may assign any of its rights and delegate the performance of any of its obligations hereunder to any of its successors, assigns or successors-in-interest. Subject to the provisions of the preceding sentences, all the terms of this Agreement shall be binding upon and shall inure to the benefit of the parties and their legal representatives, heirs, successors and assigns.

18. Survival of Covenants. The covenants and other provisions of this Agreement shall survive the termination of Emplqyee's employment pursuant to this Agreement.

IN WITNESS WHEREOF the Corporation and the Employee have signed this Agreement.

By: /s/ Seymour Flug                                          February 18, 2003
    ----------------
Name: Seymour Flug
Title: President
INTEGRATED HEALTH TECHNOLOGIES, INC. (a Delaware corporation)

By: /s/ E. Gerald Kay
    -----------------
Name: E. Gerald Kay
Title: Chairman of the Board
INTEGRATED HEALTH TECHNOLOGIES, INC. (a Delaware corporation)

Accepted:

By: /s/ Lance J. Baller                                        February 20, 2003
    -------------------
Name: Lance J. Baller
Employee

Exhibit 10.20

EXECUTION COPY

INTEGRATED BIOPHARMA, INC.

SUBSCRIPTION AGREEMENT

June 25, 2003

Integrated BioPharma, Inc.
225 Long Avenue
Hillside, New Jersey 07205
Attention: Mr. E. Gerald Kay, Chief Executive Officer

Dear Mr. E. Gerald Kay:

1. Subscription for Series A Preferred and Warrants. The undersigned (the "Investor") hereby offers to purchase Series A Convertible Preferred Stock (the "Series A Preferred") of the stock of Integrated BioPharma, Inc., a Delaware corporation (the "Company") and warrants for the Company's common stock (the "Warrants"), on the terms and conditions set forth herein. The Investor understands that the Company will rely on the Investor's representations and warranties herein in accepting or rejecting the Investor's subscription to purchase the Series A Preferred and Warrants. This Subscription Agreement (this "Agreement") is being submitted to the Company by the Investor prior to the making of any offer to sell or the sale of any Series A Preferred or any Warrants by the Company. This Agreement relates to an offering of Series A Preferred and Warrants in the Company until terminated by the Company in its sole discretion (the "Offering"). The Series A Preferred and Warrants will be offered to accredited investors pursuant to one or more exemptions from registration under Regulation D promulgated under the Securities Act of 1933, as amended (the "Act").

THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY A SECURITY. The Investor is supplying the information set forth herein to the Company, in order to induce the Company to make an offer to sell and a sale of the Series A Preferred and Warrants to the Investor. Such information will be relied on by the Company to determine if the Investor satisfies the requirements for investing in the Offering. Such information will be kept confidential by the Company, and the Company or any agent of the Company, except with regard to the access requirements of governmental authorities having jurisdiction and as otherwise provided in Section 5 below.

2. Offering. The Offering will be comprised of Series A Preferred Stock of the Company in an amount up to $20,000,000 and Warrants. The Company can give no assurances that it will be able to raise such amounts. A copy of the proposed Certificate of Designation of the Series A Preferred Stock setting forth the rights of such Series A Preferred is attached hereto as Exhibit A. The Company, in its sole discretion, may terminate the Offering at any time for any reason. With respect to the Offering, the Company intends to rely on the exemption from registration under the Act pursuant to Rule 506 of Regulation D promulgated thereunder, among any other available exemptions. During the Offering, the purchase price per share of Series A Preferred will be $1,000 per share. The exercise price per share of the Warrants will be $5.40 per share.

The Investor hereby subscribes for shares of Series A Preferred and Warrants pursuant to this Agreement equal to the total purchase price as indicated by the Investor on the signature page of this Agreement.
Simultaneously with this Agreement the Investor is delivering to the Company via wire transfer of immediately available funds or via a check made payable to "Integrated BioPharma, Inc." (or such other confirmation of good funds as acceptable to the Company) in an amount equal to the total purchase price of the Series A Preferred and Warrants being subscribed for herein.

3. Acceptance or Rejection. The acceptance of the Company, in its sole and independent discretion, shall be required for the subscription set forth herein or any other subscription in the Offering to be a binding obligation of the Company. Consequently, the Company in its sole and independent discretion may reject the subscription contained herein or any other subscription in the Offering. Specifically, the Investor agrees that the Company (i) may in its sole and independent discretion accept or reject any subscription in the Offering, including without limitation, this Agreement, in whole or in part, and regardless of reason, and (ii) shall have no obligation to accept subscriptions in the order received. Any subscription that is rejected by the Company will be marked "Void" and returned along with any unnegotiated check or the cash proceeds from any negotiated check, without interest or other income, promptly thereafter.

The Company's acceptance shall be deemed consummated upon the execution of this Agreement by the Company's authorized representative(s) in the space provided on the last page hereof, and the return of this Agreement, as fully executed, or a copy thereof, to the Investor. A subscription shall be of no force or effect unless accepted by the Company as described above. In the event that a subscription is accepted in writing by the Company as described above, and the Company has received good funds from the Investor, the Investor shall be deemed a holder of Series A Preferred and Warrants of the Company.

4. Representations and Warranties. The Investor represents and warrants as follows, with knowledge that the Company and its representatives will rely on such representations and warranties in accepting or rejecting the subscription for the Interest(s) contained herein:

(a) The Investor (i) has received and thoroughly read and evaluated the accompanying Certificate of Designation ("Certificate") of the Series A Preferred concerning the Company and the Offering. The Investor has neither received nor relied upon any other offering literature or oral communications.

(b) The Investor has such knowledge and experience in financial matters and investments that the Investor is capable of evaluating the merits and risks of the Investor's investment in the Company and the Offering.

(c) The Investor is acquiring the Series A Preferred and Warrants for the Investor's own account for investment purposes only and not for distribution or resale to others.

(d) The Investor's individual net worth as of the date hereof exceeds $1,000,000;

(e) EXCEPT AS EXPRESSLY PROVIDED BELOW, THE INVESTOR WILL NOT SELL, PLEDGE OR OTHERWISE TRANSFER ANY OF THE SERIES A PREFERRED OR WARRANTS, IN WHOLE OR IN PART, ACQUIRED BY THE INVESTOR WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, UNLESS SUCH SERIES A PREFERRED OR WARRANTS ARE REGISTERED UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, OR UNLESS AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE. The Investor further understands that the Company has made no representation that it will register the Series A Preferred or Warrants or make available any exemption from registration requirements under the Act or applicable state securities laws, and the Company has no obligation to do so. Additionally, the Series A Preferred or Warrants may not be sold or disposed of without the submission of a written legal opinion in form and substance satisfactory to the Company and its counsel that such sale or disposition is exempt from federal and state registration requirements.

(f) The Investor recognizes that an investment in the Company involves substantial risk. The Investor has read the Certificate and understands all of the risks related to the purchase of the Series A Preferred and the Warrants. The Investor understands that investment in the Series A Preferred and the Warrants is speculative and that the Investor could lose his entire investment in the Series A Preferred or in the Warrants. The Investor represents and warrants that he can sustain such an entire loss.

(g) The Investor's overall commitment to investments that are not marketable is not disproportionate to the Investor's net worth, and the Investor has no need for liquidity in the Investor's investment in the Company in that the Investor has other sources of income or funds to provide for the Investor's current needs and possible contingencies.

(h) The Investor's legal residence is as set forth on the signature page hereto.

(i) The answers provided by the Investor herein, as well as all other information that the Investor has provided to the Company, the Company or its representative(s), either directly or indirectly, concerning the Investor's financial position and knowledge of financial and business matters, are correct and complete as of the date hereof and as of the date of delivery of this Agreement to the Company.

5. Backup Withholding. The Investor certifies under penalties of perjury that (i) the Investor's taxpayer identification number (social security number for an individual Investor) as set forth on the signature page hereof is correct; (ii) the Investor's home address (in the case of an individual) or office address (in the case of an entity) as set forth on the signature page hereof is correct; and (iii) the Investor is not subject to backup withholding either because the Investor has not been notified by the Internal Revenue Service ("IRS") that it is subject to backup withholding as a result of a failure to report all interest or dividends, or because it has been notified by the IRS that it is no longer subject to backup withholding. If the Investor is subject to backup withholding, the Investor should cross through clause (iii) and check the following box:

6. Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by the internal laws of the State of Delaware without reference to its choice of law provisions.

7. Indemnification. The Investor hereby indemnifies and holds harmless the Company and its representative(s) and each of their respective officers, directors, owners and affiliates from and against any liabilities, damages, and expenses, including reasonable attorneys' fees, arising out of or in connection with any misrepresentation or breach of warranty made by the Investor herein.

8. Additional Information. The Investor agrees to furnish such additional information as the Company or its representative(s) requests. Further, the Investor authorizes the Company or any authorized agent/representative of the Company to contact any banker, accountant, lawyer or other person or entity to verify any of the information contained herein.

9. Arbitration. Any dispute, controversy, contest, claim or other matter arising out of or in connection with this Agreement or the interpretation or enforcement hereof shall be settled by binding arbitration held in Newark, New Jersey in accordance with the NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "nasd") RULES OF ARBITRATION, IF ALLOWED BY THE NASD, OR IF DISALLOWED
BY THE NASD, BY THE Commercial Arbitration Rules of the American Arbitration Association (the "AAA Rules"). The arbitration shall be conducted by a single arbitrator mutually chosen by the COMPANY and the Investor from among candidates selected in accordance with the AAA Rules. The cost of such arbitration (excluding expenses of legal counsel and witness fees) shall be borne by the parties equally, and each party shall bear the expenses of its own legal counsel and witnesses. Any final award or determination of the arbitrator shall be in writing setting forth the factual and legal grounds for the award or determination. Any award or determination rendered by such arbitrator shall be enforceable in any court having jurisdiction over the parties. Each party shall maintain the confidentiality of any such arbitration proceeding, except as may be reasonably necessary to effectively represent itself in such arbitration proceeding, to enforce the awards or determinations of the arbitrator, or as otherwise required by law or judicial or administrative order or decree. The foregoing shall not be interpreted as a waiver of any of the Investor's rights under federal or applicable state securities laws.

10. Entire Agreement. This Agreement contains the entire agreement between the parties hereto and supersedes all prior and contemporaneous understandings and agreements of the parties whether oral or written, regarding the within contained subject matter. The provisions of this Agreement may not be modified or waived except in writing and the representations, warranties and covenants contained herein shall survive the closing of the purchase of the Series A Preferred and the Warrants by the Investor and any investigation at any time made by any person.

[THE NEXT PAGE IS THE SIGNATURE PAGE.]

SIGNATURE PAGE FOR INDIVIDUAL INVESTORS

If applicable, the Investor hereby authorizes its selling agent to remit funds held in the Investor's account with the selling agent in an amount equal to the purchase price of the Series A Preferred being purchased to the Company prior to closing of the Offering.

IN WITNESS WHEREOF, the Investor has hereby executed this Agreement on June 25, 2003. When signing as attorney, executor, administrator or guardian, please give title as such.

Carl DeSantis                                        /s/ Carl DeSantis
Please Print Your Name Above                         Please Sign Your Name Above

                                                     --------------------
Please Print Your Address:                           Social Security Number

Total Number of Shares of Series A Preferred:        9,500 shares

Total Purchase Price for Series A Preferred:                  $9,500,000

Total Number of Warrants:                            175,000

Total Purchase Price for the Warrants:                        [$______]

ACCEPTANCE BY
INTEGRATED BIOPHARMA, INC.

In reliance upon the foregoing Subscription Agreement, and the representations, warranties and covenants contained therein, this Subscription Agreement and the subscription therein are accepted on behalf of the Integrated BioPharma, Inc. by its Chief Executive Officer.

INTEGRATED BIOPHARMA, INC.
a Delaware corporation

Date: June 25, 2003                 By:     /s/ E. Gerald Kay
                                            Name:    E. Gerald Kay
                         Title: Chief Executive Officer

Exhibit A. Certificate of Designation of the Series A Convertible Preferred Stock

CERTIFICATE OF DESIGNATION OF SERIES
AND DETERMINATION OF RIGHTS AND
PREFERENCES OF SERIES A CONVERTIBLE
PREFERRED STOCK OF INTEGRATED BIOPHARMA, INC.

Integrated BioPharma, Inc., a Delaware corporation (the "Company"), acting pursuant to ss. 151 of the General Corporation Law of Delaware, does hereby submit the following Certificate of Designation of Series and Determination of Rights and Preferences of its Convertible Preferred Stock, Series A.

FIRST: The name of the Company is Integrated BioPharma, Inc.

SECOND: By unanimous consent of the Board of Directors of the Company dated June 25, 2003, the following
resolutions were duly adopted:

WHEREAS the Restated Certificate of Incorporation of the Company (as amended, the "Certificate of Incorporation") authorizes Preferred Stock consisting of 1,000,000 shares, par value $0.002 per share, issuable from time to time in one or more series; and

WHEREAS the Board of Directors of the Company is authorized, subject to limitations prescribed by law and by the provisions of Article Fifth of the Company's Certificate of Incorporation to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such series; and

WHEREAS it is the desire of the Board of Directors to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of the shares of such new series;

NOW, THEREFORE, BE IT RESOLVED that pursuant to Article Fifth of the Certificate of Incorporation there is hereby established a new series of 20,000 shares of Series A Convertible Preferred Stock of the Company (the "Series A Preferred Stock") to have the designation, rights, preferences, powers, restrictions and limitations set forth in a supplement of Article Fifth as follows:

1. Designation and Number of Shares. The series will be known as the "Series A Preferred Stock" and will be a series consisting of 20,000 shares of the authorized but unissued preferred stock of the Company.

2. Dividends. On each of July 1, 2004, July 1, 2005, and July 1, 2006, the holders of the Series A Preferred Stock shall be entitled to receive, out of funds legally available therefor, in preference to the payment of dividends to any holders of Common Stock, a dividend, payable in cash or in kind at the option of the Company, equal to $40 per share of Series A Preferred Stock, when and as declared by the Board of Directors of the Company. After June 30, 2006, dividends will no longer accrue.

3. Liquidation Preference.

(a) Preference. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of the Series A Preferred Stock shall be entitled to receive prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of Common Stock of the Company, an amount equal to (A) $1,000 per share of Series A Preferred Stock held by such holder, plus (B) a further amount equal to any dividends declared or accrued but unpaid on such shares. If, upon such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to the stockholders of the Company are insufficient to provide for the payment of the full aforesaid preferential amount, such assets as are so available shall be distributed among the holders of the Series A Preferred Stock in proportion to the relative aggregate liquidation preferences of the preferred stock so held. All amounts per share set forth in this subparagraph 3(a) shall be appropriately adjusted for any stock splits, stock combinations, stock dividends or similar recapitalizations.

(b) Noncash Distributions. If any of the assets of the Company are to be distributed other than in cash under this paragraph 3 or for any purpose, then the Board of Directors of the Company shall promptly engage independent competent appraisers to determine the value of the assets to be distributed to the holders of preferred stock or Common Stock. The Company shall, upon receipt of such appraiser's valuation, give prompt written notice to each holder of shares of preferred stock or Common Stock of the appraiser's valuation.

(c) Consolidation or Merger. A consolidation or merger of the Company with or into any other corporation or corporations or a sale of all or substantially all of the assets of the Company, shall be deemed to be a liquidation, dissolution or winding up within the meaning of this paragraph 3. The provisions of this subparagraph 3(c) shall not apply to any consolidation or merger following which the holders of a majority or more of the capital stock of the resulting or surviving entity, based on voting power in the election of directors, are persons or entities who were stockholders of the Company immediately prior to such consolidation or merger.

4. Voting Rights.

(a) General Voting Rights. The holder of each share of Series A Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which each share of Series A Preferred Stock could be converted on the record date for the vote or written consent of stockholders and, except as otherwise required by law, shall have voting rights and powers equal to the voting rights and powers of the Common Stock. The holder of each share of Series A Preferred Stock shall be entitled to notice of any stockholders' meeting in accordance with the Bylaws of the Company and, except as provided in paragraph 4(b) below with respect to the election of directors by the separate class vote of the holders of Series A Preferred Stock, shall vote with holders of the Common Stock upon all other matters submitted to a vote of stockholders, except those matters required to be submitted to a class or series vote pursuant to paragraph 6 or by law. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares of Common Stock into which shares of preferred stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half rounded upward to one).

(b) Voting for the Election of Directors. As long as at least 10,000 shares of Series A Preferred Stock remain outstanding, the holders of such shares of Series A Preferred Stock (voting as a separate class) shall be entitled to elect one (1) director of the Company at any election of directors.

5. Conversion. The Series A Preferred Stock shall be convertible into Common Stock, as follows:

(a) Right to Convert. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at the office of the Company at any time after the date of issuance of such share through June 30, 2006. Each share of Series A Preferred Stock shall be convertible into the number of shares of Common Stock which results from dividing $1,000 by the conversion price per share in effect at the time of conversion. The conversion price per share of Series A Preferred Stock ("Conversion Price") shall be (x) $8 through June 30, 2004, (y) $12 from July 1, 2004 through June 30, 2005, and
(z) $16 from and after July 1, 2005. The Conversion Price shall be subject to adjustment as hereinafter provided.

(b) Automatic Conversion. Each share of Series A Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Conversion Price immediately prior to the closing of (i) a public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering a firm commitment underwritten offering of the Company's Common Stock with aggregate gross proceeds to the Company, at the public offering price, of at least $5 million, and a price per share not less than the then effective Conversion Price (a "Qualified Offering"); or
(ii) upon the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred Stock to convert all of the outstanding shares of Series A Preferred Stock into Common Stock of the Company. A Qualified Offering and a shareholder vote described in subparagraph (ii) are hereinafter referred to as "Automatic Conversion Events".

(c) Mechanics of Conversion. Before any holder of Series A Preferred Stock shall be entitled to convert the same into shares of Common Stock as provided in paragraph 5(a), such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company and shall give written notice to the Company at such office that he elects to convert the same. The Company shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series A Preferred Stock a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series A Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

In the event of an Automatic Conversion Event pursuant to paragraph 5(b), the outstanding shares of Series A Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such automatic conversion unless the certificates evidencing such shares of Series A Preferred Stock are either delivered to the Company as provided above, or the holder notifies the Company that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification in the case of a lost certificate, issue and deliver at such office to such holder of Series A Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock. Such conversion shall be deemed to have been made immediately prior to and shall be contingent upon the Automatic Conversion Event, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

(d) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the Conversion Price in effect at the time of conversion.

(e) Adjustment of Conversion Price. The Conversion Price of the Series A Preferred Stock shall be subject to adjustment from time to time as follows:

(i) If the Company shall issue any Common Stock or other securities of the Company convertible into or exchangeable for Common Stock (other than "Excluded Stock," as defined below, or stock dividends, subdivisions, split-ups, combinations or dividends, which such events are covered by subparagraphs 5(e)(iii), (iv), and (v)), for a consideration per share less than the Conversion Price for the Series A Preferred Stock as in effect immediately prior to the issuance of such Common Stock (or other securities convertible into or exchangeable for Common Stock), then the Conversion Price for such series shall forthwith be decreased immediately after such issuance to a price equal to the quotient obtained by dividing:

(A) an amount equal to the sum of: (x) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued pursuant to subdivision (3) of this subparagraph (i)) immediately prior to such issuance multiplied by the Conversion Price in effect immediately prior to such issuance plus (y) the consideration received by the Company upon such issuance, by

(B) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued pursuant to subdivision (3) of this subparagraph (i)) immediately after the issuance of such Common Stock (or other securities convertible into or exchangeable for Common Stock).

For purposes of making any such calculation pursuant to this subparagraph (i), the shares of Common Stock issuable upon conversion of the outstanding shares of Series A Preferred Stock, together with any other shares of Common Stock deemed issued and outstanding pursuant to subdivision (3) of this subparagraph (i), shall be deemed issued and outstanding at all times. For the purposes of this subparagraph (i), the following provisions shall also be applicable:

(1) In the case of the issuance of Common Stock for cash, the consideration received therefor shall be deemed to be the amount of cash paid therefor without deducting any discounts or commissions paid or incurred by the Company in connection with the issuance and sale thereof.

(2) In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board of Directors of the Company.

(3) In the case of the issuance of (i) options to purchase or rights to subscribe for Common Stock (other than Excluded Stock), (ii) securities by their terms convertible or exchangeable for Common Stock (other than Excluded Stock), or (iii) options to purchase or rights to subscribe for such convertible or exchangeable securities:

a. the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for Common Stock shall be deemed to be issuable for a consideration equal to the consideration (determined in the manner provided in subdivisions (1) and (2) above), if any, received by the Company upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the Common Stock covered thereby;

b. the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities, or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof, shall be deemed to be issuable for a consideration equal to the consideration received by the Company for any such securities and related options or rights, plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subdivisions (1) and (2) above);

c. the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof, shall be deemed to have been issued at the time such options or rights or securities were issued;

d. on any change in the number of shares of Common Stock deliverable upon exercise of any such options or rights or conversion of or exchange for such convertible or exchangeable securities, or on any change in the minimum purchase price of such options, rights or securities, other than a change resulting from any antidilution provisions of such options, rights or securities, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have obtained had the adjustment (and any subsequent adjustments) made upon (x) the issuance of such options, rights or securities not exercised, converted or exchanged prior to such change, as the case may be, been made upon the basis of such change or (y) the options or rights related to such securities not converted or exchanged prior to such change, as the case may be, been made upon the basis of such change; and

e. on the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have obtained had the adjustment (and any subsequent adjustments) made upon the issuance of such options, rights, convertible or exchangeable securities or options or rights related to such convertible or exchangeable securities, as the case may be, been made upon the basis of the issuance of only the number of shares of Common Stock actually issued upon the exercise of such options or rights, upon the conversion or exchange of such convertible or exchangeable securities or upon the exercise of the options or rights related to such convertible or exchangeable securities, as the case maybe.

(ii) "Excluded Stock" shall mean:

(A) the Series A Preferred Stock;

(B) all shares of Common Stock into which shares of the Series A Preferred Stock are convertible;

(C) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company by merger, purchase of substantially all of the assets or other reorganization whereby the Company will own more than fifty percent (50%) of the voting power of such business entity or business segment of any such entity;

(D) securities issued in connection with any borrowing, direct or indirect, from financial institutions or other persons by the Company, including any type of loan or payment evidenced by any type of debt instrument;

(E) securities issued to employees, consultants , officers, directors or other advisors of the Company pursuant to any stock option, stock purchase or stock bonus plan, agreement or arrangement approved by the Board of Directors of the Company;

(F) securities issued in connection with obtaining lease financing, whether issued to a lender, lessor, guarantor or other person approved by the Board of Directors of the Company;

(G) securities issued to leasing companies, landlords, lenders an other providers of goods and services to the Company and approved by the Board of Directors of the Company;

(H) securities issued in a public offering pursuant to a registration statement under the Securities Act of 1933, as amended;

(I) securities issued in connection with strategic transactions involving the Company and other entities, including (1) joint ventures, manufacturing, marketing or distribution arrangements, and (2) technology license, transfer or development arrangements; provided that such strategic transactions and the issuance of securities in connection therewith has been approved by the Board of Directors of the Company; and

(J) any right, option or warrant to acquire any security convertible into the securities described in subparagraphs (A) through (I) above.

(iii) If the number of shares of Common Stock outstanding at any time after the date hereof is increased by a stock dividend payable in shares of Common Stock (other than dividends payable pursuant to the Series A Preferred Stock) or by a subdivision or split-up of shares of Common Stock, then, on the date such payment is made or such change is effective, the Conversion Price shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of the Series A Preferred Stock shall be increased in proportion to such increase of outstanding shares.

(iv) If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, on the effective date of such combination, the Conversion Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of the Series A Preferred Stock shall be decreased in proportion to such decrease in outstanding shares.

(v) In case the Company shall declare a cash dividend upon its Common Stock payable otherwise than out of retained earnings or shall distribute to holders of its Common Stock shares of its capital stock (other than Common Stock), stock or other securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights (excluding options to purchase and rights to subscribe for Common Stock or other securities of the Company convertible into or exchangeable for Common Stock), then, in such case, the holders of shares of Series A Preferred Stock shall, concurrent with the distribution to holders of Common Stock, receive a like distribution based upon the number of shares of Common Stock into which such Series A Preferred Stock is then convertible.

(vi) in case, at any time after the date hereof, of any capital reorganization, or any reclassification of the stock of the Company (other than a change in par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or the consolidation or merger of the Company with or into another person (other than a consolidation or merger in which the Company is the continuing entity and which does not result in any change in the Common Stock), or of the sale or other disposition of all or substantially all of the properties and assets of the Company as an entirety to any other person, the shares of Series A Preferred Stock shall, if such event is not deemed a liquidation for purposes of subparagraph 2(c), after such reorganization, reclassification, consolidation, merger, sale or other disposition, be convertible into the kind and number of shares of stock or other securities or property of the Company or of the entity resulting from such consolidation or surviving such merger or to which such properties and assets shall have been sold or otherwise disposed to which such holder would have been entitled if immediately prior to such reorganization, reclassification, consolidation, merger, sale or other disposition he had converted his shares of Series A Preferred Stock into Common Stock. The provisions of this subparagraph (vi) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions.

(vii) All calculations under this paragraph 5 shall be made to the nearest cent or to the nearest one hundredth (1/100) of a share, as the case may be.

(f) Minimal Adjustments. No adjustment in a Conversion Price need be made if such adjustment would result in a change in a Conversion Price of less than $0.01. Any adjustment of less than $0.01 which is not made shall be carried forward and shall be made at the time of and together with any subsequent adjustment which, on a cumulative basis, amounts to an adjustment of $0.01 or more in a Conversion Price.

(g) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of a Conversion Price pursuant to this paragraph 5, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon written request at any time of any holder of Series A Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) the Conversion Price at the time in effect for the Series A Preferred Stock held, and (iii) the number of shares of Common Stock and the amount if any, of other property which at the time would be received upon the conversion of the Series A Preferred Stock.

(h) Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, the Company shall mail to each holder of Series A Preferred Stock at least ten (10) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

(i) Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Series A Preferred Stock such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

(j) Notices. Any notice required by the provisions of this paragraph 5 to be given to the holder of shares of the Series A Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his latest address appearing on the books of the Company.

6. Protective Provisions.

(a) Approval of Preferred Stock. So long as any shares of the Series A Preferred Stock shall be outstanding, the Company shall not, without obtaining the affirmative vote (by vote or written consent, as provided by law) of holders of at least a majority of the outstanding shares of Series A Preferred Stock:

(i) alter or change the rights, preferences or privileges of the Series A Preferred Stock; or

(ii) create (by reclassification or otherwise) any new class or series of shares having rights preferences or privileges senior to the Series A Preferred Stock; or

(iii) redeem or repurchase any shares of Common Stock (other than pursuant to equity incentive agreements with service providers giving the Company the right to repurchase shares upon the termination of services); or

(iv) amend or waive any provision of the Company's Certificate of Incorporation or Bylaws relative to the Series A Preferred Stock.

[Remainder of page left blank intentionally]

IN WITNESS WHEREOF, the Company has caused this Certificate to be executed by its President and attested to by its Secretary this 25th day of June, 2003.

INTEGRATED BIOPHARMA, INC.

                                            By:  /s/ E. Gerald Kay
                                                 Name: E. Gerald Kay
                                                 Title:  Chief Executive Officer

ATTEST:



/s/ Eleanor DiMartino
Name: Eleanor DiMartino
Title:  Secretary

Exhibit 10.21

EXECUTION COPY

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") dated as of June 25, 2003, by and between INTEGRATED BIOPHARMA, INC., a Delaware corporation (the "Company") and the investor listed below (the "Investor").

WHEREAS, the Company has commenced a private offering of shares of Series A Convertible Preferred Stock (the "Series A Preferred") up to $20,000,000 and warrants ("Warrants") for 175,000 shares of the Company's common stock (the "Offering");

WHEREAS, the Company has entered into a certain Subscription Agreement with the Investor dated the date hereof pursuant to which the Investor has subscribed for 9,500 shares of Series A Preferred for a purchase price of $9,500,000, a copy of which Subscription Agreement is attached hereto as Exhibit A and the Warrants;

WHEREAS, the Company and the Investor desire to enter into this Agreement to provide for certain registration rights of Investor as a holder of the Series A Preferred and the Warrants;

WHEREAS, unless otherwise provided in this Agreement, capitalized terms used herein shall have the meanings set forth in Section 10 hereof.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, the parties agree as follows:

1. Registration Rights.

(a) Requests for Registration. After January 1, 2004, the Holder of Registrable Securities will be entitled to request registration under the Securities Act of all or any part of the Registrable Securities on Form S-1 (or any successor to such form) (a "Demand Registration") provided that the Company shall not be obligated to effect more than one (1) registration of the Registrable Securities, whether by demand registration, piggy-back registration or otherwise. The Company shall use its best efforts to cause such Registrable Securities to be registered under the Securities Act; provided that the Company shall have the right to delay such registration under certain circumstances for one period not in excess of one hundred twenty (120) days in any twelve (12) month period and shall not be obligated to effect a registration: (i) during the one hundred eighty (180) day period commencing on the date of the Company's next public offering; or (ii) if the Company delivers notice to the Holders within thirty (30) days of any registration request of its intent to file a registration statement for such initial public offering within ninety (90) days. Within ten (10) days after receipt of any such request, the Company will give written notice of such requested registration to any other Holders of Registrable Securities. The Company will include in such registration all Registrable Securities with respect to which it has received written requests for inclusion therein within thirty (30) days after receipt of the Company's notice subject to the limitations set forth herein. The Company shall cause its management to cooperate fully and to use its best efforts to support the registration of the Registrable Securities and the sale of the Registrable Securities pursuant to such registration as promptly as is practicable. Such cooperation shall include, but not be limited to, management's attendance and reasonable presentations in respect of the Company at road shows with respect to the offering of Registrable Securities.

(b) Right to Piggyback. The Holders shall be entitled to "piggy-back" registration rights whenever the Company proposes to register any of its securities under the Securities Act or on any demand registrations of any other investors and the registration form to be used may be used for the registration and contemplated disposition of Registrable Securities (a "Piggyback Registration"). This Piggyback Registration right shall be subject to the right of the Company and its underwriters to reduce the number of shares proposed to be registered pro rata in view of market conditions. If the number of shares of the Investor and any other investors, as applicable, are to be so reduced, then no party shall sell shares in such registration other than the Company or the Investor, if any, invoking the demand registration. In any such registration the shares to be sold by the Investor shall not be reduced below 30% of the total amount of securities included in such registration. No investor or stockholder of the Company shall be granted piggyback registration rights which would reduce the number of shares includable by the Holders of the Registrable Securities in such registration without the consent of the Holders of at least two-thirds of the Registrable Securities. In the case of any such proposed registration, the Company will give prompt written notice to all the Holders of Registrable Securities. The Company will include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within thirty (30) days after the receipt of the Company's notice subject to the limitations set forth above.

(c) Expenses. The Company shall bear the Registration Expenses of all such Demand or Piggyback Registrations.

(d) Other Restrictions. The Company hereby agrees that if it has previously filed a registration statement with respect to Registrable Securities pursuant to Section 1(a) or Section 1(b) and if such previous registration has not been withdrawn or abandoned, the Company will not file or cause to be effected any other registration of any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act except on Form S-8 or any other similar form for employee benefit plans, whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least three (3) months has elapsed from the effective date of such previous registration or, if sooner, until all Registrable Securities included in such previous registration have been sold.
(e) Transfer of Registration Rights. The Demand and Piggyback Registration Rights provided in Section 1(a) and Section 1(b) of this Agreement may be transferred together with the Registrable Securities to (i) any partner or retired partner of any Holder which is a partnership; (ii) any member or former member of any Holder which is a limited liability company; (iii) any family member or trust for the benefit of any individual holder, or (iv) any transferee that satisfies the criteria to be a Major Investor (as defined herein); provided the Company is given written notice thereof.

(f) Lock-Up Period. The Investor agrees that in the event of an underwritten offering of the Company's common stock, if the underwriter requires that the Company's officers, directors and holders of at least one (1%) percent of the Company's common stock to agree to a Lock-Up Period (as defined herein), then the Investor shall agree not to sell its shares of Registrable Securities for a period not to exceed one hundred and eighty (180) days following the effective date of the Company's public offering (the "Lock-Up Period").

2. Registration Procedures. Whenever the Holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to Section 1(a) or Section 1(b) of this Agreement, the Company shall use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:

(i) prepare and file with the Commission a registration statement with respect to such Registrable Securities, which registration statement will state that the Holders of Registrable Securities covered thereby may sell such Registrable Securities either under such registration statement or, at any Holder's proper request, pursuant to Rule 144 (or any successor rule under the Securities Act), and use its best efforts to cause such registration statement to become effective;

(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

(iii) furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;

(iv) use its best efforts to register or qualify, if applicable, such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (B) subject itself to taxation in any such jurisdiction, or (C) consent to general service of process in any such jurisdiction);

(v) within one (1) business day of its occurrence, notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any fact necessary to make the statements therein not misleading, and, at the request of any such seller, the Company will promptly prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

(vi) cause all such Registrable Securities to be listed on each securities exchange or market on which similar securities issued by the Company are then listed;

(vii) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

(viii) make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; and

(ix) furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to Section 1(a) or Section 1(b), if the method of distribution is by means of an underwriting, on the date that the shares of Registrable Securities are delivered to the underwriters for sale pursuant to such registration, or if such Registrable Securities are not being sold through underwriters, on the date that the registration statement with respect to such shares of Registrable Securities becomes effective, (A) a signed opinion, dated such date, of the independent legal counsel representing the Company for the purpose of such registration, addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the Holders making such request, as to such matters as such underwriters or the Holders holding a majority of the Registrable Securities included in such registration, as the case may be, may reasonably request; and (B) letters dated such date and the date the offering is priced from the independent certified public accountants of the Company, addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the Holders making such request (x) stating that they are independent certified public accountants within the meaning of the Act and that, in the opinion of such accountants, the financial statements and other financial data of the Company included in the Registration Statement or the prospectus, or any amendment or supplement thereto, comply as to form in all material respects with the applicable accounting requirements of the Act and (y) covering such other financial matters (including information as to the period ending not more than five business days prior to the date of such letters) with respect to the registration in respect of which such letter is being given as such underwriters or the Holders holding a majority of the Registrable Securities included in such registration, as the case may be, may reasonably request and as would be customary in such a transaction.
3. Right of Participation. In the event the Company proposes to offer the New Securities to any person, the Investor and any Holders who purchase at least one thousand (1,000) shares of Series A Preferred (a "Major Investor") shall have the right to purchase a pro rata portion of such New Securities, with such pro rata portion to be determined based on the ratio of the number of shares of the Investor's Registrable Securities over the number of shares of the Company's issued and outstanding common stock ("Right of Participation"). Any New Securities not subscribed for by an eligible investor may be reallocated among other eligible investors. Such Right of Participation shall terminate upon a Qualified Offering (and shall not include a Qualified Offering). If the Investor does not notify the Company of its intention to participate within fifteen (15) days of the Company's notice of the offering of New Securities, the Right of Participation shall lapse for such offering of New Securities.
4. Indemnification.
(a) The Company will indemnify each Holder, each Holder's officers, directors, employees, agents, members and partners, and each Person controlling, controlled by or under common control with such Holder, with respect to which registration, qualification or compliance of such Holder's securities has been effected pursuant to this Agreement, and each underwriter, if any, and each Person who controls any underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof), joint or several, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document (including any related registration statement notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Holder, each Holder's officers, directors, employees, agents, members and partners, and each Person controlling each such Holder, each such underwriter and each Person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable to a Holder in any such case to the extent that any such claim, loss, damage, liability or action arises out of or is based on any untrue statement or omission of material fact based upon written information furnished to the Company by such Holder or underwriter and stated to be specifically for use therein.
(b) Each Holder and Requesting Stockholder will severally, not jointly, if Registrable Securities held by it are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of the Company's directors and officers and each underwriter, if any, of the Company's securities covered by such registration statement, each Person who controls the Company or such underwriter within the meaning of the Securities Act and the rules and regulations thereunder, each other Holder, Requesting Stockholder or any other holder of securities included in the offering and each of their respective officers, directors, employees, agents, members and partners, and each Person controlling such other Holder, Requesting Stockholder and any other holders of securities included in the offering, against all claims, losses, damages and liabilities (or actions in respect thereof), joint or several, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, its officers and directors, each underwriter, each Person controlling the Company or such underwriter, each other Holder and Requesting Stockholders, their officers, directors, employees, agents, members, partners and control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder or Requesting Stockholder and stated to be specifically for use therein; provided, however, that the obligations of each such Holder and Requesting Stockholder hereunder shall be limited to an amount equal to the net proceeds (after deduction of underwriting discounts and selling commissions, if any) received by each such Holder or Requesting Stockholder of securities sold as contemplated herein. (c) Each party entitled to indemnification under this Section 4 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless such failure has had a material adverse effect on such claim. The parties to this Agreement reserve any rights to claim under this Agreement for damages actually incurred by reason of any failure of the Indemnified Party to give prompt notice of a claim. To the extent counsel for the Indemnifying Party shall in such counsel's reasonable judgment, have a conflict in representing an Indemnified Party in conjunction with the Indemnifying Party or other Indemnified Parties, such Indemnified Party shall be entitled to separate counsel at the expense of the Indemnifying Party subject to the approval of such counsel by the Indemnified Party (whose approval shall not be unreasonably withheld). No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and any litigation resulting therefrom.

5. Restrictive Legend. Each certificate representing the Series A Preferred Stock or any Shares or other securities issued in respect thereof, upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event shall be stamped or otherwise imprinted with a legend in the following form (in addition to any legend required under applicable state securities laws and any other applicable agreement(s)):

"THIS SERIES A PREFERRED STOCK CERTIFICATE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH SERIES A PREFERRED STOCK CERTIFICATE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH SERIES A PREFERRED STOCK CERTIFICATE MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS."

6. Information by the Holders and Requesting Stockholders. Each Holder of Registrable Securities, and each Requesting Stockholder holding securities included in any registration, shall furnish to the Company such information regarding such Holder or Requesting Stockholder and the distribution proposed by such Holder or Requesting Stockholder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement.

7. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may permit the sale of the Restricted Securities to the public without registration, the Company agrees to:

(a) make and keep public information available as those terms are understood and defined and interpreted in and under Rule 144 under the Securities Act ("Rule 144"), at all times from and after the date hereof;

(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

(c) so long as the Holders own any Restricted Securities, furnish to the Holders forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as any Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing any Holder to sell any such securities without registration.

8. Participation in Underwritten Registrations. Subject to the right of any Holder or Holders to withdraw any request for registration, no Person may participate in any underwritten registration hereunder unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable and customary questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

9. Selection of Underwriters. If any Demand Registration is an underwritten offering, the Holders of sixty and two-thirds percent (66 2/3%) of the Registrable Securities included in such registration in the event of any other registration shall have the right to select the investment banking firm to be lead manager of the offering, subject to the approval of the Company (which approval will not be unreasonably withheld). If any registration other than a Demand Registration is an underwritten offering, the Company will have the right to select the investment banking firm to be lead manager of the offering.

10. Definitions. As used herein, the following terms have the following meanings:

"Act" means the Securities Act of 1933, as amended.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Holders" means the Investors or any Person to whom an Investor or transferee(s) of an Investor has assigned, transferred or otherwise conveyed the Securities or the Shares.

"New Securities" means any capital stock of the Company whether now authorized or not, and rights, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, convertible into capital stock; exclusive of the following: (i) securities purchased under the Subscription Agreement; (ii) securities issued upon conversion of the Series A Preferred; (iii) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company by merger, purchase of substantially all the assets or other reorganization whereby the Company will own more than fifty percent (50%) of the voting power of such business entity or business segment of any such entity; (iv) securities issued in connection with any borrowings, direct or indirect, from financial institutions or other persons by the Company, whether or not presently authorized, including any type of loan or payment evidenced by any type of debt instrument; (v) securities issued to employees, consultants, officers, directors or advisors of the Company pursuant to any stock option, stock purchase or stock bonus plan, agreement or arrangement approved by the Board of Directors; (vi) securities issued in connection with obtaining lease financing, whether issued to a lender, lessor, guarantor or other person and approved by the Board of Directors; (vii) securities issued to leasing companies, landlords, lenders and other providers of goods and services to the Company and approved by the Board of Directors; (viii) securities issued in a public offering pursuant to a registration under the Securities Act; (ix) securities issued in connection with any stock split, stock dividend or recapitalization of the Company; (x) securities issued in connection with strategic transactions involving the Company and other entities, including (A) joint ventures, manufacturing, marketing or distribution arrangements or (B) technology license, transfer or development arrangements; provided that such strategic transactions and the issuance of shares therein, have been approved by the Company's Board of Directors; and (xi) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (i) through (x) above.

"Qualified Offering" means a public offering of shares of the common stock of the Company by the Company at a per share price not less than the conversion price per each share of Series A Preferred for that year (as adjusted for stock splits, dividends, subdivision, combination, reorganization, reclassification or similar events) and for a total offering of not less than $5 million (before deduction of underwriters commissions and expenses).

"Person" means any individual, corporation, limited liability company, partnership, association, trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"Registrable Securities" means any Shares issued or issuable upon the exercise or conversion of the Securities (including any Securities that may be issued as interest with respect to any Security) or in respect of the Shares issued or issuable upon the exercise or conversion of any Securities upon any stock split, stock dividend, recapitalization or similar event and the shares of the Company's common stock underlying the Warrants.

"Registration Expenses" means, exclusive of underwriting discounts and commissions, all expenses incurred by the Company in compliance with Section 1 of this Agreement, including without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel of the Company, blue sky fees and expenses, and reasonable fees and disbursements of one special counsel of the Investor not to exceed $25,000.

"Restricted Securities" means the securities of the Company required to bear or bearing the legend set forth in Section 5 of this Agreement.

"Requesting Stockholders" means holders of securities of the Company entitled to have securities included in any registration pursuant to Section 1(b) and who shall request such inclusion.

"Securities Act" means the Securities Act of 1933, as amended.

"Shares" means the shares of common stock which may be issued upon the exercise of all or a portion of the Securities. The term Shares does not include any other shares of common stock or other capital stock of the Company.

11. Remedies. Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

12. Term. The term of this Agreement shall commence on the date hereof (the "Effective Date") and shall continue in full force and effect until the fifth anniversary of the Effective Date whereupon the term of this Agreement shall expire.

13. Amendments and Waivers. The provisions of this Agreement may be amended or waived only upon the prior written consent of the Company and the Holders of sixty and two-thirds percent (66 2/3%) of the Registrable Securities.

14. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Investor or Holder upon any breach or default of the Company under this Agreement shall impair any such right, power or remedy of such Holder or Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence, therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any Investor or Holder of any provisions or conditions of this Agreement must be, made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

15. Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of the Holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent holder of Registrable Securities. The registration rights provided in this Agreement may be transferred without restriction and shall inure to and be enforceable by any and all Holders of Registrable Securities, including, without limitation, any successors, assigns, transferees, heirs, executors and administrators of the Investors.

16. Severability. Unless otherwise expressly provided herein, each Investor's or Holders rights and obligations hereunder are several rights and obligations, not rights and obligations jointly held with any other person. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

17. Counterparts; Facsimile Transmission. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement. Each party to this Agreement agrees that it will be bound by its own facsimile signature and that it accepts the facsimile signature of each other party to this Agreement.

18. Descriptive Headings. The titles of the articles, sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

19. Governing Law. This Agreement and the rights of the parties hereunder shall be governed in all respects by the laws of the State of Delaware wherein the terms of this Agreement were negotiated, excluding to the greatest extent permitted by law any rule of law that would cause the application of the laws of any jurisdiction other than the State of Delaware.

20. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, sent to the recipient by reputable overnight courier service (charges prepaid) or 48 hours after deposited in the United States mail, certified or registered to the recipient by postage prepaid or by facsimile. Such notices, demands and other communications shall be sent to the Investor and to the Company at the address of its corporate headquarters set forth below or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party.

To the Company:

Integrated BioPharma, Inc.
225 Long Avenue
New Jersey, 07205
Attention: Chief Executive Officer Tel: 973-926-0816
Fax: 973-926-1735

To Carl DeSantis:

[THIS SPACE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

COMPANY

INTEGRATED BIOPHARMA, INC.

By: /s/ E. Gerald Kay
Name:    E. Gerald Kay
Title:   Chief Executive Officer


By:  /s/ Carl DeSantis
Name: Carl DeSantis

Exhibit 10.22

REVOLVING LOAN AND SECURITY AGREEMENT

This Revolving Loan and Security Agreement ("Agreement") among COMMERCE BANK, N.A., having offices at 701 Route 70 East, Cherry Hill NJ 08034 ("Lender"); INTEGRATED BIOPHARMA, INC., a Delaware Corporation,
MANHATTAN DRUG COMPANY, INC., a New York Corporation, IHT HEALTH PRODUCTS,
INC., a Delaware Corporation, INTEGRATED HEALTH IDEAS, INC., a New Jersey Corporation (f/k/a Manhattan International, Inc., a New Jersey corporation), IHT PROPERTIES CORP., a Delaware corporation, NUCYCLE THERAPY, INC., a New Jersey corporation, VITAMIN FACTORY, INC., a Delaware Corporation (jointly and severally "Borrower") all having an address at 201 US Highway 22, Hillside, New Jersey, 07205; and E. GERALD KAY, residing at 3 Isabella Place, Glen Rock, New Jersey, 07452 ("Guarantor") is effective on June 11, 2003.

STATEMENTS

A. The Borrower has requested financial accommodation(s) from Lender.

B. Lender is willing to render the requested financial accommodation(s) to the Borrower in connection with the Borrower's business and on certain terms and conditions.

C. To secure the financial accommodation(s), the Borrower is willing, among other things, to grant a first priority security interest to Lender in certain assets of the Borrower.

NOW, THEREFORE, in consideration of the promises, covenants and understandings set forth in this Agreement and the benefits to be received from the performance of such promises, covenants and understandings, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

DEFINITIONS

"Accounts" - as defined in Exhibit A

"Advance Limit" - as defined in Section 1.1(b)

"Affiliate" - as defined in Section 7.12

"Chattel Paper" - as defined in Exhibit A

"Collateral" - as defined in Article 4

"Commercial Tort Claims" - as defined in Exhibit A

"Debt" - as defined in Article 3

"Debt Service Coverage Ratio" - as defined in Section 7.16

"Default" - as defined in Section 9.1

"Delivered Financials" - as defined in Section 5.4(a)

"Deposit Accounts" - as defined in Exhibit A

"Environmental Laws" - as defined in Section 5.15(c)

"Equipment" - as defined in Exhibit A

"ERISA" - as defined in Section 5.10

"GAAP" - as defined in Section 5.4(a)

"General Intangibles" - as defined in Exhibit A

"Goods" - as defined in Exhibit A

"Instruments" - as defined in Exhibit A

"Inventory" - as defined in Exhibit A

"Investment Property" - as defined in Exhibit A

"Letter of Credit Rights" - as defined in Exhibit A

"Operating Documents" - as defined in Section 5.1(c)

"OSHA" - as defined in Section 5.11

"Participant" - as defined in Section 2.4(b)

"Plan" - as defined in Section 5.10

"Prime Rate" - as defined in Section 1.2(e)

"Revolving Loan" - as defined in Section 1.1(a)

"Tangible Net Worth" - as defined in Section 7.15

AGREEMENTS

ARTICLE 1. THE REVOLVING LOAN

Section 1.1 The Revolving Loan

1.1(a) Lender agrees to provide, pursuant to the terms of this Agreement and in the absence of an event of Default, at one time or from time to time, at the request of the Borrower, loans to the Borrower in an aggregate amount up to but not in excess of the Borrower's Advance Limit on a revolving loan basis (the "Revolving Loan") during the term of this Agreement. The Revolving Loan is to be payable in full on the earlier of (i) June 10, 2005, as provided in this Agreement, or (ii) upon a Default as provided in this Agreement. The Borrower has the right to prepay such Revolving Loan without penalty.

1.1(b) The term "Advance Limit" means the loans or advances which Lender may make to the Borrower pursuant to this Agreement which are not in the aggregate at any time outstanding to exceed One Million Dollars ($1,000,000.00).

1.1(c) Without limiting any other rights, terms, conditions or remedies of Lender, all loans, advances or financial accommodations made or otherwise available to Borrower is subject to Lender's continuing right, in its sole and absolute discretion, to withhold from Borrower a reserve, and to increase and decrease such reserve from time to time, if and to the extent that, in Lender's sole judgment, such reserve is necessary to protect the interests of Lender against possible non-payment of Accounts, for any reason, by account debtors, possible non-payment by Borrower of any indebtedness owed to, or liens held by, third parties, or to protect the interests of Lender against the possible adverse effect of any state of facts which does or would, with or without notice or passage of time, or both, constitute a Default hereunder.

Section 1.2 Interest Rate and Other Provisions Relating to The Revolving Loan

1.2(a) Interest accrues on the Revolving Loan at Lender's floating Prime Rate (as that term is defined in this Agreement).

1.2(b) Each change in the floating interest rate is to take effect simultaneously with a corresponding change in the Prime Rate without notice to Borrower. Interest is to be calculated on a daily basis with each day representing 1/360th of a year.

1.2 (c) The Revolving Loan is to be evidenced by promissory note(s) (the "Note") in the form required by Lender.

1.2(d) In the event of Default (as defined in this Agreement), interest accrues on the Revolving Loan and the Debt (as defined in this Agreement) at a rate equal to five (5%) percent above the interest rate otherwise payable hereunder. Borrower acknowledges that: (i) such additional rate is a material inducement to Lender to make the Revolving Loan; (ii) Lender would not have made the Revolving Loan in the absence of the agreement of the Borrower to pay such default rate; (iii) such additional rate represents compensation for increased risk to Lender that the Revolving Loan will not be repaid; and (iv) such rate is not a penalty and represents a reasonable estimate of (a) the cost to Lender in allocating its resources (both personnel and financial) to the ongoing review, monitoring, administration and collection of the Revolving Loan and (b) compensation to Lender for losses that are difficult to ascertain.

1.2(e) The Prime Rate means the fluctuating Prime Rate of interest published in the Wall Street Journal (or its successors and assigns) from time to time. The Prime Rate is established for the convenience of Lender. It is not necessarily Lender's lowest rate. In the event that there should be a change in the Prime Rate, such change shall be effective on the date of such change without notice to Borrower or any Guarantor, endorser or surety. Any such change will not effect or alter any other term or conditions of any promissory note or this Agreement.

1.2(f) Interest on the Revolving Loan is payable by the Borrower each month beginning on the first banking day of Lender in the month following the effective date of this Agreement, unless otherwise provided herein or in the Note. Lender may, at its sole and absolute discretion, charge unpaid interest or principal to any checking or other account of the Borrower or Guarantor, deduct unpaid interest or principal from any future advance to the Borrower, or apply any proceeds received by Lender to the payment of unpaid interest or principal. Any failure or delay by Lender in submitting an invoice(s) for interest payments does not discharge or relieve the Borrower of the obligation to render timely payments. Borrower is to maintain its main operating accounts with Lender and is to maintain sufficient balances therein at all times to enable Lender to directly charge all sums due to Lender.

1.2(g) In no event is the interest rate or other charges of this Agreement to exceed the highest rate permissible under law. If any provision of this Agreement or any other instrument executed in connection thereto be construed or held to permit the collection of or to require the payment of any amount of interest in excess of that permitted by applicable law, the provisions of this paragraph control and override any contrary or inconsistent provision of this Agreement or instrument. The intention of the parties is to conform strictly to the applicable laws relating to maximum rates of interest. This Agreement and each other instrument evidencing or relating to the Debt are to be held subject to reduction or rebate as to any amount paid by or on behalf of the Borrower in violation of any such law.

1.2(h) The Borrower is to, during each twelve (12) month period of time following the date of this Agreement, pay to Lender the full unpaid principal balance of the Revolving Loan and refrain from requesting Advances on account of the Revolving Loan for a period of at least thirty (30) consecutive days.

Section 1.3 Monthly Statement

Once each month Lender may render a statement of account to the Borrower reflecting the current status of the Revolving Loan. Such statement is to be deemed an accounting and an authenticated record within the meaning of the Uniform Commercial Code. If any statement indicates that the outstanding balance of the Revolving Loan exceeds the Advance Limit, the Borrower must immediately pay the excess balance to Lender. Such excess is not to be construed as a commitment or obligation of Lender to make advances in excess of the Advance Limit. Each statement of account is to be considered correct, accepted by the Borrower and conclusively binding upon the Borrower, unless the Borrower gives notice to Lender to the contrary in writing within ten (10) banking days after the sending of the statement by Lender. If the Borrower disputes the accuracy of Lender's statement, the Borrower's notice is to specify in detail the basis of the dispute. If the Borrower requests an accounting more frequently than once per six (6) month period, Lender may charge the Borrower for the cost of each additional accounting.

Section 1.4 Method of Advances

Advances under the Revolving Loan may be made through telephone requests from the Borrower from an individual purporting to be an authorized representative of the Borrower or other written notification means acceptable to Lender, by deposit of the amount requested pursuant to this Agreement in such controlled account(s) which the Borrower is to maintain at designated branches of Lender or as may be indicated in writing by the Borrower with the written consent of Lender. All such telephone requests, means of notification and writings are to be deemed conclusively binding upon the Borrower. In the event Lender honors a check of the Borrower resulting in the Borrower's checking account being deemed overdrawn, Lender is to be deemed to have made an advance to the Borrower in the amount overdrawn on the Lender's banking day immediately preceding the day on which the Borrower's check is tendered to Lender for collection (even if that amount is in excess of the Advance Limit). Notwithstanding, Lender has no obligation to honor any overdraft of the Borrower.

Section 1.5 Reimbursement of Increased Cost to Lender

If any law, regulation or guideline, or change in any law, regulation or guideline or in the interpretation thereof, or any order or ruling by any regulatory body, court or other governmental authority, or compliance by the Lender with any request or directive (whether or not having the force of law) of any such regulatory body, court or authority, imposes, modifies, or deems applicable to Lender any reserve, capital, special deposit or other requirement or condition in respect of the Debt, which results in an increased cost or reduced benefit to Lender (as determined by reasonable allocation of the aggregate of such increased costs or reduced benefits to Lender resulting from such event), then Borrower is to pay to Lender from time to time upon demand additional amounts sufficient to compensate Lender for such increased costs or reduced benefits, together with interest on each such amount from a date ten
(10) days after the date of such demand until payment in full thereof at the highest interest rate then applicable to any of the Debt. A certificate setting forth in reasonable detail such increased cost incurred or reduced benefit realized by Lender as a result of any such event is to be conclusive as to the amount thereof, absent manifest error.

Section 1.6 Conditions Precedent to the Revolving Loan

The obligation of Lender to make the Revolving Loan and the discretion by Lender to make any advances pursuant to this Agreement is further subject to the following conditions:

1.6(a) Such assurances (including certificates from representatives of the Borrower or Guarantor) that Lender requires that the representations and warranties of the Borrower and Guarantor set forth in this Agreement or relating to this Agreement are true, accurate and complete;

1.6(b) Such assurances (including certificates from representatives of the Borrower or Guarantor) that Lender requires that the proceeds of the Revolving Loan are to be utilized by the Borrower for the purposes set forth in this Agreement;

1.6(c) Such assurances (including certificates from representatives of the Borrower or Guarantor) that Lender requires that no event of Default defined in this Agreement or other documents relating to this Agreement exists, continues to exist, or would exist but for the lapse of time or notice; and

1.6(d) Such other terms and conditions, delivery of documents, guarantees, searches, origination fee, opinions of counsel or other matters that Lender may require, including those set forth in any conditional commitment made to the Borrower by Lender relating to the Revolving Loan, all in form and substance satisfactory to Lender.

ARTICLE 2. ADDITIONAL OBLIGATIONS OF THE BORROWER AND GUARANTOR

Section 2.1 Existing Obligations

The Borrower and Guarantor agree to pay and perform, when due, all other debts, liabilities and duties of every kind and character now existing to Lender regardless of whether such debts, liabilities and duties may be direct, indirect, or the result of any derivative transaction, primary or secondary, joint or several, fixed or contingent (regardless of form, existence of collateral therefor, whether guaranteed, or subject to a participation agreement).

Section 2.2 Future Advances

The Borrower and Guarantor agree to pay and perform, when due, future advances, loans, debts, liabilities and duties to Lender whether direct or indirect, primary or secondary, joint or several, fixed or contingent whether or not relating to this Agreement or the Revolving Loan (regardless of form, existence of collateral therefor, whether guaranteed, or subject to a participation agreement).

Section 2.3 Expenses in Preserving Interests of Lender

The Borrower and Guarantor agree to pay on demand, such advances made by Lender to or for the account of the Borrower or Guarantor, including advances for insurance, repairs to any Collateral, taxes, and such costs incurred by Lender (in its discretion and regardless as to whether any such advance increases the unpaid balance of the Revolving Loan or the Debt) in the discharge of any lien, security interest, encumbrance, lease, pledge or assignment.

Section 2.4 Obligations to Lender Affiliates or Participants

2.4(a) The Borrower and Guarantor agree to pay and perform, when due, all other debts, liabilities and duties of every kind and character to any Affiliate or participants of Lender, whether such debts, liabilities and duties exist now or may exist in the future, and regardless of whether such debts, liabilities and duties may be direct or indirect, primary or secondary, joint or several, fixed or contingent (regardless of form, existence of collateral therefor, whether guaranteed, or subject to a participation agreement).

2.4(b) The Borrower and Guarantor acknowledge that in the regular course of commercial banking business Lender may at any time and from time to time transfer or sell participating interest(s) in the Revolving Loan to other financial institutions (each such transferee or purchaser of a participating interest, a "Participant"). Each Participant may exercise all rights to payment (including without limitation rights of set-off) with respect to the interests held by it as determined by Lender provided that Borrower is not required to pay more than the amount which it would have been required to pay to Lender had Lender retained such interest. Borrower hereby grants to any Participant a continuing security interest in any deposits, moneys or other property actually or constructively held by such Participant as security for the Participant's interest in the Revolving Loan.

Section 2.5 Expenses in Realizing Upon Security Interest

The Borrower and Guarantor agree to pay, on demand, all costs and expenses, including reasonable attorneys fees of both outside and in-house counsel, incurred by Lender to preserve, collect, protect, foreclose, sell, or otherwise realize upon its security interest in the Collateral identified in this Agreement or in any other security agreement executed by the Borrower or Guarantor of the Revolving Loan or other obligation of the Borrower or Guarantor to Lender.

Section 2.6 Expenses in Enforcing and Defending Rights

The Borrower and Guarantor agree to pay, on demand, all costs and expenses, including reasonable attorneys fees of both outside and in-house counsel, incurred by Lender in the prosecution or defense of any action or proceeding relating to the subject matter of this Agreement or other agreement or instrument executed by the Borrower or Guarantor.

Section 2.7 Costs of Lender

The Borrower and Guarantor agree to pay, on demand, to Lender all costs and expenses incurred by Lender in the preparation, execution and administration of this Agreement or other agreements including, but not limited to, reasonable attorneys fees, consultant and other professional fees, search fees and other out-of-pocket expenses.

ARTICLE 3. THE DEBT

For purposes of this Agreement, the term "Debt" is defined as the Revolving Loan and those additional obligations of the Borrower and Guarantor defined in Article 1 and Article 2 of this Agreement.

ARTICLE 4. SECURITY INTEREST

To secure the payment and performance by the Borrower and Guarantor of the Debt to Lender, the Borrower hereby pledges, sets over, assigns, delivers and grants a first priority security interest to Lender in all Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Equipment, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit Rights and all other Collateral more particularly described in Exhibit A annexed hereto and incorporated herein, in the guaranty of the Guarantor and in the insurance for the benefit of Lender described in Section 6.13 of this Agreement and in the Mortgage between Lender and IHT PROPERTIES CORP. of even date herewith as to real property located at 201 US Highway 22, Hillside (Block 1108, Lot 47), Union County, New Jersey ("Mortgage"). The Borrower and Guarantor hereby pledge, set over, assign, deliver and grant such additional security interests set forth in such other security agreements and control agreements delivered in connection with this Agreement. The security interest pledged, set over, assigned and granted by the Borrower and Guarantor to Lender is to be a first and only priority security interest pursuant to applicable law (unless otherwise provided on Schedule 1 annexed hereto or in the other security or control agreements delivered) and the Borrower and Guarantor are to take all such action to create and perfect such security interest as Lender may require. The foregoing is, collectively, the "Collateral."

ARTICLE 5. REPRESENTATIONS AND WARRANTIES TO LENDER

In order to induce Lender to execute this Agreement, the Borrower, for itself, its subsidiaries (if any) and the Guarantor (collectively, "they", "them" or "their") make the following representations and warranties:

Section 5.1 Organization and Standing

5.1(a) The Borrower consists of duly organized, validly existing registered organizations organized in good standing under the laws of the state of their incorporation. The spelling and identification of the Borrower in this Agreement is accurate in all respects and consistent with the Borrower's registration. They are duly licensed or qualified to do business in each jurisdiction in which qualification is required by law, and they are in good standing in all such jurisdictions. They have full power and authority to own their properties and to carry on business in all jurisdictions where they are doing business. All leases relating to the use by them of properties or assets are in full force and effect.

5.1(b) They possess all licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, to conduct their respective business substantially as now conducted and as presently proposed to be conducted, and are not in violation of rights of others with respect to any of the foregoing.

5.1(c) Lender has been provided with true copies of the filed Certificates of Incorporation, shareholder agreements (if any), resolutions, with respect to the Debt, bylaws and any amendments thereto (collectively and where applicable "Operating Documents") as the same are still in full force and effect. Lender may rely on the accuracy and integrity of the Operating Documents. Borrower has the authority to execute this Agreement and perform the undertakings set forth herein.

5.1(d) There has been no Certificate of Cancellation or Certificate of Dissolution filed on behalf of the Borrower nor has the Borrower been de facto dissolved by any event such as the death, retirement, resignation, expulsion, bankruptcy or dissolution of any shareholder or any other event which would cause the dissolution of Borrower pursuant to applicable law.

5.1(e) The individual(s) executing this Agreement on behalf of the Borrower are authorized as officers to do so and to bind and obligate the Borrower pursuant to the terms hereof.

5.1(f) To the extent that the provisions of this Agreement are inconsistent with the provisions of the Operating Documents, the provisions of this Agreement will control.

Section 5.2 Power

5.2(a) They have the power to execute, deliver and carry out this Agreement, and such other related documents and instruments executed by them. Borrower's governing boards have duly authorized and approved the terms of this Agreement and all related actions. No other action, whether by resolution, governmental entity, or otherwise, is necessary for the consummation of the transactions contemplated by this Agreement. Their performance hereunder does not and will not constitute a breach or default of any agreement or law to which they are subject.

5.2(b) This Agreement and the documents relating thereto, upon execution and delivery, will constitute their legal, valid and binding agreements enforceable in accordance with their terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or similar laws relating to or affecting the rights of creditors generally and general principles of equity.

Section 5.3 Litigation

There are no judgments, lawsuits, judicial proceedings, investigations or complaints pending or threatened against them relating to any aspect of their business or properties, including but not limited to environmental protection. They are not in default with respect to any judgment, order, injunction or assessment issued by any court or any governmental agency relating to any aspect of their business or properties or relating to their ability to consummate the transactions contemplated by this Agreement.

Section 5.4 Financial Statements and Solvency

5.4(a) Prior to the execution of this Agreement, the Borrower has delivered to Lender its financial statements (the "Delivered Financials") requested by Lender. The Delivered Financials are accurate and complete, have been prepared in accordance with generally accepted accounting principles consistently applied ("GAAP"), and fairly and accurately present the assets, liabilities, results of operations and capital as at the dates thereof. The Delivered Financials reflect or provide for all fixed and contingent claims against debts and liabilities as of the dates thereof. There has not been any material change of financial condition between the date of the most recent of the Delivered Financials and the date of this Agreement. No fact or condition exists, is contemplated or threatened which may cause any such change at any time in the future.

5.4(b) Except as shown on the Delivered Financials, the Borrower has no other liabilities as of the date hereof which would materially or adversely affect its financial condition.

5.4(c) All books and records of account are accurate, complete and properly reflect all transactions purported to be documented thereby.

5.4(d) Borrower's assets, at a fair valuation, exceed Borrower's liabilities (including, without limitation, contingent liabilities). Borrower is paying its debts as they become due, and Borrower has capital and assets sufficient to carry on its business.

Section 5.5 Compliance with Law

5.5 (a) They are in compliance in all material respects with all laws, governmental rules and regulations applicable to their business and properties, including those relating to environmental protection.

5.5(b) They are in compliance with all requirements of the Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., including, but not limited to, those regulations promulgated by the Architectural and Transportation Barrier Compliance Board at 36 CFR 1191 et seq., and by the Department of Justice at 28 CFR 36 et seq.

Section 5.6 No Adverse Restrictions

They are not subject to any provision in their Operating Documents, any contract, mortgage, lease, judgment, court order, rule or regulation, which would materially and adversely affect their business and properties, the results of their operations or their ability to fulfill any obligations in this Agreement or in any document relating thereto. No contract, instrument, understanding, judgment, statute, court order, rule or regulation to which they are a party or by which they are bound has been or will be violated or breached by the execution and performance of this Agreement.

Section 5.7 Taxes and Tax Returns

5.7(a) They have filed all tax returns which were required to be filed as of the date of this Agreement.

5.7(b) The provisions for taxes shown in the Delivered Financials are sufficient to satisfy all taxes due and all assessments received for all periods ended on or prior to the dates thereof, without consideration as to whether Borrower is a Subchapter S corporation for Federal income tax purposes.

5.7(c) As of the date of this Agreement, no taxes are due from Borrower and no tax liabilities have been assessed or proposed against Borrower which either remain unpaid or are not otherwise provided for in the Delivered Financials.

5.7(d) They are not aware of any basis upon which any assessment for a material amount of additional taxes can be made against them.

5.7(e) They have not signed any extension agreement with the Internal Revenue Service or any governmental authority or given any waiver of a statute of limitations with respect to the payment of taxes.

5.7(f) The results of any governmental examination or audit of tax returns are properly reflected in the Delivered Financials.

5.7(g) All taxes which they are required by law to withhold or collect (the "Withholding Taxes") have been duly withheld and collected. To the extent required, they have paid over the Withholding Taxes to the proper governmental authorities on a timely basis or have reflected them as a liability in the Delivered Financials.

Section 5.8 Title to Collateral

The Borrower has good and marketable title to all of its tangible and intangible assets subject only to those liens, encumbrances, security interests, assignments, pledges, mortgages or leases set forth on the Delivered Financials. The Borrower has good and marketable title and rights to the Collateral except for the security interest granted to Lender by the Borrower, or except as provided on Schedule 1 or in the other security and control agreements delivered in connection with this Agreement. The Borrower has the right and power to grant the security interests in and to the Collateral provided by or referred to in this Agreement. Except as herein provided, none of the Collateral is or is about to become subject to any other assignment, mortgage, pledge, lien, security interest, lease or encumbrance by virtue of the execution or performance of this Agreement.

Section 5.9 Use of Proceeds of the Revolving Loan

5.9(a) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System. The proceeds of the Revolving Loan are not intended by the Borrower to be used to purchase or carry any margin stock or to reduce or retire any indebtedness incurred for such purpose. If requested by Lender, the Borrower has furnished to Lender statements in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U to the foregoing effect.

5.9(b) The Borrower is a "United States person(s)" and does not intend to apply the proceeds of the Revolving Loan directly or indirectly to the "acquisition" of "stock" of a "foreign issuer" or "debt obligation" of a "foreign obligor", as such terms are defined in the United States Interest Equalization Tax Act, or to take or permit any other action which would subject Lender to the tax imposed by said Act.

5.9(c) The Borrower is not an "investment company", or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company", as such terms are defined in the Investment Company Act of 1940. The application of the proceeds and repayment thereof of the Revolving Loan by the Borrower and the performance of the transactions contemplated by this Agreement will not violate any provision of said Act, or any rule, regulation or order issued by the Securities and Exchange Commission thereunder.

5.9(d) The Revolving Loan has been requested by Borrower for working capital purposes.

Section 5.10 ERISA.

Borrower is in compliance in all material respects with the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the related provisions of the Internal Revenue Code, and with all regulations and published interpretations issued thereunder by the United States Treasury Department, the United States Department of Labor and the Pension Benefit Guaranty Corporation ("PBGC").Neither a reportable event as defined in
Section 4043 of ERISA, nor a prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code, has occurred and is continuing with respect to any employee benefit plan subject to ERISA established or maintained, or to which contributions have been or may be made, by Borrower or by any trade or business (whether or not incorporated) which together with Borrower would be treated as a single employer under Section 4001 of ERISA (any such trade or business being referred to as an "ERISA Affiliate," and any such employee benefit plan being referred to as a "Plan"). No notice of intention to terminate a Plan has been filed nor has any Plan been terminated; the PBGC has not instituted proceedings to terminate, or to appoint a trustee to administer, any Plan, nor do circumstances exist that constitute grounds for any such proceedings; and neither Borrower nor any ERISA Affiliate has completely or partially withdrawn from any multiemployer Plan described in Section 4001(a) (3) of ERISA. Borrower and each ERISA Affiliate has met the minimum funding standards under ERISA with respect to each of its Plans; no Plan of Borrower or of any ERISA Affiliate has an accumulated funding deficiency or waived funding deficiency within the meaning of ERISA; and no material liability to the PBGC under ERISA has been incurred by Borrower or any ERISA Affiliate.

Section 5.11. OSHA

Borrower has duly complied with, and its facilities, business, leaseholds, equipment and other property are in compliance in all material respects with, the provisions of the federal Occupational Safety and Health Act ("OSHA") and all rules and regulations thereunder and all similar state and local laws, rules and regulations; and there are no outstanding citations, notices or orders of non-compliance issued to Borrower or relating to its facilities, business, leaseholds, equipment or other property under any such law, rule or regulation.

Section 5.12 Inventory

The Inventory of the Borrower consists of items of a quality and quantity usable or saleable in the ordinary course of its business and is in compliance with the Fair Labor Standards Act. The value of obsolete items, items below standard quality and items in the process of repair have been written down to realizable market value, or adequate reserves have been provided. The value of Inventory reflected on the Delivered Financials is set at the lower of cost or market in accordance with GAAP.

Section 5.13 Accounts

The most recent list of Accounts of the Borrower delivered to Lender is complete, and contains an accurate aging. All of the Accounts are collectible, are subject to no counterclaims or setoffs of any nature whatsoever, and require no further action to constitute such accounts as due and owing by the account debtors. None of the Accounts includes any conditional sales, consignments or sales on any basis other than that of an absolute sale in the ordinary and usual course of business, except as otherwise noted. No agreement has been made under which any deductions or discounts may be claimed except regular discounts in the usual course of business.

Section 5.14 No Consents or Approvals Needed

Under the state of the applicable law at the time of the signing of this Agreement, no approval, consent, authorization, or notice by or to any party, including a governmental entity, is required in connection with this Agreement and the consummation of the transactions and matters covered by this Agreement.

Section 5.15 Environmental Compliance

5.15(a) None of the Collateral or real or personal property owned or occupied by them in the State of New Jersey has ever been used by previous owners or operators to refine, produce, store, handle, transfer, process or transport hazardous substances, hazardous wastes, pollutants or other related substances as those terms are defined by New Jersey or federal law. They have not nor do they intend to use any of their Collateral or real or personal property owned or occupied by them in the State of New Jersey for the purpose of refining, producing, storing, handling, transferring, processing or transporting such hazardous substances, hazardous wastes, pollutants or other related substances.

5.l5(b) No friable asbestos or any substance containing asbestos deemed hazardous by federal or state regulations has been installed in the Collateral.

5.15(c) Neither they nor the Collateral or real or personal property owned or occupied by them in the State of New Jersey are in violation of or subject to any existing, pending, or, to their best knowledge, threatened investigation or inquiry or to any remedial obligations under any federal or state laws pertaining to health or the environment, including, but not limited to the Industrial Site Recovery Act f/k/a the Environmental Cleanup Responsibility Act ("ISRA") (N.J.S.A.13:1K-6 et seq., as amended), the Spill Compensation and Control Act (N.J.S.A.58:10 23.11 as amended), the Hazardous and Solid Waste Amendments of 1984 Pub. L98-616 (42 U.S.C. 699 et. seq., as amended); a certain statute adopted by New Jersey for registration of underground storage tanks (N.J.S.A.58:10-21 et seq.,), the Resource Conservation and Recovery Act (42 U.S.C. 6901 et. seq., as amended) and the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. 9601 et seq., as amended); (all such federal, state, county, municipal or other laws, ordinances or regulations are hereinafter collectively referred to as the "Environmental Laws").

5.15(d) They have not obtained and are not required to obtain any permits, licenses or similar authorizations to construct, occupy, operate or use any buildings, improvements, fixtures and equipment by reason of any Environmental Laws.

5.15(e) None of the Collateral or real or personal property owned or occupied by them in the State of New Jersey has, is now or is intended to be used as a major storage facility or for the operation of a hazardous substance or waste disposal facility as those terms are defined by any Environmental Laws.

5.15(f) No lien or claim has been attached to or made against them, any revenues, the Collateral or any real or personal property owned or occupied by them in the State of New Jersey by the State of New Jersey or the federal government for damages or cleanup and removal costs, as those terms are defined by any Environmental Laws arising from an intentional or unintentional act or omission of them or any previous owner or operator of their real or personal property resulting in the releasing, spilling, pumping, pouring, emitting, emptying, discharging or dumping of hazardous substances, hazardous wastes, pollutants or other related substances as those terms are defined by any Environmental Laws.

5.15(g) Neither they nor any occupant has taken any intentional or unintentional act or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging or dumping of hazardous substances, hazardous wastes, pollutants or related substances as those terms are defined by any Environmental Laws.

5.15(h) They have conducted (and will, upon reasonable request by Lender, conduct) a complete and thorough on site inspection of all real property owned or occupied by them, including, but not limited to a geohydrological survey of soil and sub-surface conditions to determine the presence of hazardous substances, hazardous wastes, pollutants or related substances as those terms are defined by any Environmental Laws and have found no evidence of such presence.

5.15(i) They have required that the seller of any real property acquired (either directly or indirectly, by such means as a stock transaction, for example) by them on or after January l, 1984 and all occupants of all real property owned by them since January 1, 1984 comply with the provisions of ISRA and have provided evidence of such compliance to Lender. They have otherwise complied with ISRA, will not take or fail to take such action which would render its representations or covenants made in this section to be untrue or incapable of performance, and have and will provide evidence of such compliance to Lender.

Section 5.16 Identification of the Borrower

5.16(a) Schedule 2 annexed hereto sets forth a complete and accurate list of all names by which the Borrower is known or under which the Borrower is conducting business, including, without limitation, its fictitious names, alternate names and trade names. Schedule 2 sets forth all of the federal tax identification numbers of the Borrower and its organizational numbers (if any) assigned by the states of incorporation.

5.16(b) Schedule 2 annexed hereto sets forth a complete and accurate list of all offices and locations at which the Borrower conducts any of its business or operations, the locations of all Collateral and records relating to Collateral and the Borrower's chief executive office, if any.

5.16(c) The Borrower has not, within the six (6) year period immediately preceding the effective date of this Agreement, changed its name, been the survivor of a merger or consolidation, or acquired all or substantially all of the assets of any person or entity except as otherwise set forth in Schedule 2.

5.16(d) All of the issued and outstanding capital stock or other ownership interests of the Borrower is owned and registered as otherwise disclosed in writing by or on behalf of the Borrower.

5.16(e) Schedule 2 annexed hereto sets forth the Standard Industrial Classification Codes applicable to the properties and operations of Borrower.

Section 5.17 Duration and Effect of Representations and Warranties

5.17(a) The representations and warranties made to Lender in this Article 5 are to be true, accurate and complete for the duration of the term of this Agreement.

5.17(b) None of the representations, warranties or statements made to Lender in this Agreement or in connection with this Agreement contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made not misleading.

ARTICLE 6. COVENANTS TO LENDER

In order to induce Lender to execute this Agreement, the Borrower, for itself, its subsidiaries (if any) and the Guarantor (collectively, "they", "them", or "their") make the following affirmative covenants:

Section 6.1 Payment of Debt

They are to pay all of their obligations, including the Debt to Lender, when due in accordance with such documents evidencing or documenting such obligations including but not limited to, this Agreement.

Section 6.2 Change of Financial Conditions

Any and all future substantial and material adverse changes in their financial condition are to be immediately brought to the attention of Lender.

Section 6.3 Litigation

They are to immediately notify Lender if any judgments, lawsuits, losses, claims, judicial proceedings, investigations, complaints, notices, or citations including but not limited to, those relating to occupational health, safety, or environmental protection, are pending or threatened against the Borrower in an amount claimed of $100,000 or more, individually or in the aggregate.

Section 6.4 Organization and Standing

Borrower is to continue to be duly licensed or qualified to do business in each jurisdiction in which qualification is required by law, and to continue to be in good standing and to preserve legal existence.

Section 6.5 Compliance with Law

They are to comply in all material respects with all laws, governmental rules and regulations applicable to their business and properties, including, but not limited to, ERISA, OSHA and Environmental Laws.

Section 6.6 Taxes

They are to make due and timely payment of all Federal, State and local taxes and assessments required by law and to execute and deliver to Lender, on demand, appropriate certificates attesting to the payment or deposit of any such taxes or assessments.

Section 6.7 Reports

They are to provide to Lender, (for Lender, Participant, or governmental authority having jurisdiction) in form and substance satisfactory to Lender:

6.7(a) As soon as available, but in no event later than one hundred twenty (120) days after the end of each fiscal year of each Borrower, a consolidated and consolidating balance sheet as of the end of such year and statements of income, cash flows and changes in equity for such year (all in reasonable detail and with all notes and supporting schedules), prepared on an audited basis by an independent certified public accountant satisfactory to Lender, and attested to by the President of each Borrower, as presenting fairly Borrower's financial condition as of the dates and for the periods indicated and as having been prepared in accordance with GAAP, except as may be otherwise disclosed in such financial statements or the notes thereto, together with certified copies of current state and federal income tax returns of the Borrower (and any other entity in which Borrower has an ownership interest), and accompanied by an accountant's reliance letter acknowledging Lender's reliance upon such balance sheet and financial information and Borrower's current 10K filings with the Securities & Exchange Commission.

6.7(b) As soon as available, but in no event later than forty-five (45) days after the end of the first, second and third quarterly fiscal periods of Borrower, a consolidated and consolidating balance sheet as of the end of such period and statements of income, cash flows and changes in equity for such period commencing at the end of the previous fiscal year and ending with the end of such period (all in reasonable detail and with all notes and supporting schedules), prepared by the Borrower, and attested to by the President of each Borrower, as presenting fairly Borrower's financial condition as of the dates and for the periods indicated and as having been prepared in accordance with GAAP, except as may be otherwise disclosed in such financial statements or the notes thereto, together with Borrower's current 10Q filings with the Securities & Exchange Commission. .
6.7(c) On or before the tenth (10th) day of each quarter, a detailed aging report setting forth the amount due and owing on Accounts on the Borrower's books as of the close of the preceding quarter, together with a reconciliation report satisfactory to Lender showing all sales, collections, payments and adjustments to Accounts, together with a current list of names and addresses of all account debtors on the Borrower's books as of the close of the preceding quarter.

6.7(d) As soon as available, but in no event later than forty-five (45) days after the end of each quarterly fiscal period of Borrower, a detailed aging report setting forth the amount due and owing on the Borrower's accounts payable on the Borrower's books as of the close of the preceding quarter, together with a reconciliation report satisfactory to Lender showing all purchases, payments and adjustments to accounts payable on the Borrower's books as of the close of the preceding quarter.

6.7(e) Immediately, notice, in such form acceptable to Lender, stating such information and attaching such pertinent documentation as to any and all claims, citations, demands, notices or events, the occurrence of which would make any representation, warranty or covenant of them to be untrue or incapable of performance.

6.7(f)Upon demand:

(A) Certificates of insurance and loss payable endorsements for all policies of insurance to be maintained pursuant to this Agreement;

(B) An estoppel certificate executed by an authorized representative of them indicating that there then exists no event of default and no event which, with the giving of notice or lapse of time, or both, would constitute an event of default under any material agreement to which they are a party;

(C) All original and other documents evidencing right to payment or evidencing Accounts, including but not limited to invoices, original orders, shipping and delivery receipts; and

(D) All information received by the Borrower affecting the financial status or condition of any account debtor.

6.7(g) From time to time and at the time of each advance, such information as Lender may reasonably request, including financial projections, cash flow analysis and information otherwise to be submitted in accordance with this Section.

6.7(h) Promptly after preparation or receipt:

(A) Copies of all reports, including annual reports, and notices which the Borrower and its subsidiaries file with or receive under ERISA, OSHA or any occupational safety, pension or retirement, or Environmental Laws;

(B) Copies of any statement or report furnished to any other party pursuant to the terms of any indenture, loan, or credit or similar agreement and not otherwise required to be furnished to Lender pursuant to this Agreement; and

(C) Copies of all proxy statements, financial statements, and reports which the Borrower and its subsidiaries send to stockholders or owners, and copies of all regular, periodic, and special reports, and all registration statements which they file or receive with any national securities exchange or regulatory agency.

6.7(i) Guarantor is to provide to Lender financial statements, in such form required by Lender, on an annual basis, within 90 days of calendar year end, together with certified copies of Guarantor's current federal income tax returns when filed.

Section 6.8 Access to Records and Property

At any time and from time to time, upon reasonable written request by Lender, delivered at least five (5) business days in advance (which request is not required following a Default), they are to give any representatives of Lender or independent contractor selected by Lender access during normal business hours (and after Default at any time) to examine, audit, copy or make extracts from, any and all books, records and documents in their possession relating to their affairs and the Collateral, and to inspect any of their properties wherever located. In the event that during the term of this Agreement or any extension thereof, Lender deems it necessary to obtain a current appraisal of any Collateral, Lender may engage the services of an appraiser in providing the current appraisal which expense is to be paid by Borrower upon demand by Lender.

Section 6.9 Additional Collateral

The Borrower is to extend the security interest granted to Lender by this Agreement to such additional collateral as Lender may demand, or pay such amount to Lender as Lender may reasonably request, in the event of any loss, destruction or material diminution in the value of the Collateral. The additional collateral is to become part of the Collateral and subject to the terms and conditions of this Agreement.

Section 6.10 Preservation of Title to Collateral

They are to immediately notify Lender of any material loss or damage to, or any occurrence which would adversely affect the security interest of Lender in and to the Collateral. The Collateral is to be free and clear of all assignments, mortgages, pledges, liens, security interests, leases, or encumbrances, except as provided on Schedule 1. The Borrower is to continue to maintain good and marketable title to the Collateral, as the case may be, except as provided in this Agreement, at the sole expense of the Borrower.

Section 6.11 Financial Records and Location of Collateral

They are to maintain true, accurate and complete books, records, and accounts of their business affairs in accordance with GAAP. The Borrower is to keep accurate records of the Collateral, which records are at all times to be physically located at the address of the Borrower set forth on Schedule 2. All tangible Collateral is to be physically located at the address of the Borrower set forth on Schedule 2, unless otherwise agreed by Lender and documented to the satisfaction of Lender.

Section 6.12 Condition of Buildings and Collateral

All Collateral is to be used solely by the Borrower in connection with its business. The Borrower is to maintain the Collateral and they are to maintain their buildings, plants, improvements and structures in good condition, repair and in compliance with all zoning laws, ordinances, and regulations of governmental authorities having jurisdiction.

Section 6.13 Insurance

6.13(a) The Borrower (and its subsidiaries, if any) is to maintain in full force and effect on the Collateral (and on all of its other assets, if requested by Lender), the following insurance:

(i) Comprehensive general public liability insurance in an amount not less than $3,000,000.00 in the aggregate and $1,000,000.00 per occurrence.

(ii) "All-Risk" coverage policy of fire, pilferage, theft, burglary, loss in transit, title and extended coverage hazard insurance (together with vandalism and malicious mischief endorsements) in an aggregate amount not less than 100% of the agreed upon full insurable replacement value of the Collateral;

(iii) If the Collateral is required to be insured pursuant to the Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of 1968, and the regulations promulgated thereunder, flood insurance in an amount not less than the outstanding principal balance of the Revolving Loan or the maximum limit of coverage available, whichever amount is less;

(iv) Business interruption and/or loss of rental insurance sufficient to pay, during the period of interruption or loss, normal operating expenses in connection with the Collateral;

(v) Boiler and machinery insurance covering vessels, air tanks, boilers, machinery, pressure piping, heating, air conditioning and elevator equipment in such amounts as Lender requires from time to time, provided that such equipment is part of the Collateral; and

(vi) Title insurance coverage in the form of a standard ALTA Mortgage title insurance policy insuring the Mortgage as a first lien, in the principal amount of the Advance Limit.

(b) Each insurance policy required under this Section 6.13 is to be written by insurance companies authorized or licensed to do business in New Jersey having an Alfred M. Best Company, Inc. rating of A+ or higher and a financial size category of not less than VII, and is to be on such forms and written by such companies as reasonably approved by Lender.

(c) Each insurance policy required under this Section 6.13 providing insurance against loss or damage to property is to be written or endorsed so as to (i) contain a New Jersey standard mortgagee, secured party, or loss payee endorsement, as the case may be, or its equivalent, and (ii) make all losses payable directly to the Lender, without contribution.

(d) Each insurance policy required under this Section 6.13 providing public liability coverage is to be written and endorsed so as to name the Lender as an additional insured, as its interest may appear.

(e) Each insurance policy required under this Section 6.13 is to contain a provision to the effect that such policy is not to be canceled, altered or in any way limited in coverage or reduced in amount unless the Lender is notified in writing at least thirty (30) days prior to such change. At least thirty
(30) days prior to the expiration of any such policy, the Borrower is to furnish evidence satisfactory to the Lender that such policy has been renewed or replaced or is no longer required by this Section.

(f) Each insurance policy required under this Section 6.13 (except flood insurance written under the federal flood insurance program) is to contain an endorsement by the insurer that any loss is to be payable to Lender, as its interest may appear, in accordance with the terms of such policy notwithstanding any act or negligence or breach of any warranty of or by the Borrower which might otherwise result in forfeiture of said insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim, deduction or subrogation against the Borrower (so as not to interfere with Lender's rights).

(g) In the event of loss or damage to the Collateral, the proceeds of any insurance provided hereunder is to be applied as set forth in Section 6.13(k); except that if there is a public liability claim, the proceeds of any insurance provided hereunder is to be applied toward extinguishing or satisfying the liability and expense incurred in connection therewith.

(h) The Borrower is not to take out any separate or additional insurance with respect to the Collateral which is contributing in the event of loss unless it is properly compatible with all of the requirements of this Section.

(i) Borrower is to pay the premiums on the policies therefor as they become payable, and is to deliver to Lender such policies, with standard clauses in favor of Lender attached.

(j) Each insurance policy required under this Section 6.13 is to be written and endorsed to provide that the intentional actions of Borrower are not to affect the insurable interest of Lender or prevent payment of the proceeds of the policy to Lender.

(k) Lender is entitled to receive all insurance proceeds, and, at its option, to apply the same on account of the Debt and/or to reimburse Borrower for the cost of the replacement or repair of the Collateral.

(l) In no event is Lender required either to (i) ascertain the existence of or examine any insurance policy, or (ii) advise Borrower in the event such insurance coverage does not comply with the requirements of this Agreement.

Section 6.14 Payment of Proceeds

Upon receipt of any or all proceeds of the Collateral, the Borrower is to pay such proceeds directly to Lender upon demand.

Section 6.15 Further Assurances

They are to execute and/or hereby consent to the execution and filing by Lender of such further instruments and documents, including Uniform Commercial Code financing statements, as may be required by Lender in order to render effective the terms and conditions of this Agreement. Any such Uniform Commercial Code financing statements are to be filed in such locations as Lender may require, at Borrower's sole expense. If requested, the Borrower is to provide Lender with satisfactory evidence of such filing(s) prior to any advance under the Revolving Loan. The Borrower is to provide Lender with satisfactory evidence that any common law or statutory liens affecting any of the Collateral, including, but not limited to landlords lien or materialman's lien, have been subordinated in favor of Lender's security interest or adequate reserves established in the discretion of Lender prior to any advance under the Revolving Loan. The Borrower is to provide Lender with true copies of all documents (negotiable or non-negotiable) which evidence bailments together with evidence that all bailees have acknowledged that they hold Collateral for the benefit of Lender if required by Lender. Borrower is to execute, re-execute, cause any Guarantor or other third party(ies) involved in the loan transaction to execute and/or re-execute and to deliver to Lender or its legal counsel as may be deemed appropriate, any document or instrument signed in connection with the Debt which was incorrectly drafted and/or signed, as well as any document or instrument which should have been signed at or prior to the closing of the Debt, but which was not so signed and delivered. Borrower is to comply with any written request by Lender within ten (10) days after receipt by Borrower of such request. Failure by Borrower to so comply is, at the option of Lender, upon notice to Borrower, an event of Default.

Section 6.16 Identification of Collateral

If requested by Lender, the Borrower is to cause each unit of Collateral as applicable, and to the extent reasonably practicable, to be kept numbered and identified in order to protect the security interest of Lender in and to such Collateral.

Section 6.17 Delivery of Documents

If any of the Accounts are evidenced by notes, trade acceptances or instruments or documents, or if any Inventory is covered by documents of title or chattel paper, Borrower is to immediately endorse and deliver them to Lender in trust for Lender upon demand. The Borrower is to waive protest regardless of the form of the endorsement. If the Borrower fails to endorse any instrument or document, Lender is authorized to endorse it on behalf of the Borrower. Lender may establish reserves subject to Borrower's compliance with this Section.

Section 6.18 Government Contracts

If any of the Collateral arises out of contracts with the United States, or any of its departments, agencies or instrumentalities, the Borrower is to notify Lender and execute any necessary instruments or documents requested by Lender in order to insure that all monies due or to become due under such contracts are to be made payable to Lender and that proper notice of such assignment is given under applicable Federal law.

Section 6.19 Trademarks, Patents and Copyrights

If any of the Collateral consists of trademarks, patents or copyrights, the Borrower is to:

(a) comply with all applicable federal and state law regulating the maintenance and quality;

(b) execute such documents and take such other actions necessary to extend the Collateral to any newly issued trademarks, patents or copyrights;

(c) maintain the exclusive right to use the trademarks, patents and copyrights;

(d) execute such documents to permanently assign to Lender all of the Borrower's rights to the trademarks, patents and copyrights in the event of a Default. Among other things, the Borrower consents to the execution of the Assignments (if attached hereto as Exhibit "B") by Lender following a Default.

Section 6.20. Fees.

Borrower is to pay Lender a commitment fee of $10,000.00 on or before the date hereof. This fee is non-refundable.

Section 6.20 Duration of Covenants

The covenants made in this Article 6 are to be true, accurate and complete as of the effective date of this Agreement and are to be true, accurate and complete for the duration of the term of this Agreement.

ARTICLE 7. COVENANTS TO LENDER
REGARDING PROHIBITED TRANSACTIONS

In order to induce Lender to execute this Agreement, the Borrower, for itself, its subsidiaries (if any) and the Guarantor (collectively, "they", "their" or "them") make the following negative covenants:

Section 7.1 Merger or Consolidation

Except for the transactions described in Schedule 7.1, the Borrower is not to merge with, consolidate with, or acquire any assets of any other corporation, partnership, or entity except for the purchase of assets in the ordinary course of business, nor acquire all or substantially all of the assets or stock of any other corporation, partnership, or entity without the prior written consent of Lender.

Section 7.2 Sale of Assets

Other than the sale or lease of Inventory in the ordinary course of business, the Borrower is not to sell, transfer or encumber any of its property or assets without the prior written consent of Lender.

Section 7.3 Other Liens

The Borrower is not to incur, create or permit to exist any mortgage, assignment, pledge, hypothecation, security interest, lien or other encumbrance on any of its property or assets, whether now owned or hereafter acquired, except (a) liens for taxes not delinquent; (b) those liens in favor of Lender created by this Agreement and related documents; (c) those liens set forth on Schedule 1 annexed hereto; (d) those liens, such as carrier, warehousemen, unemployment or retirement liens arising by operation of law in the ordinary course of business if subordinated on terms acceptable to Lender or reserves established to the satisfaction of Lender; and (e) easements, rights-of-way, restrictions and other similar encumbrances which, in the aggregate, do not materially interfere with the use or occupation of those properties or assets.

Section 7.4 Other Liabilities

The Borrower is not to incur, create, assume or permit to exist any indebtedness or liability on account of either borrowed money, the deferred purchase price of property, or the lease of assets or property for the conduct of business, except (a) the Debt to Lender; (b) indebtedness subordinated to payment of the Debt on terms approved by Lender in writing; (c) those liabilities set forth on Schedule 1 or otherwise permitted by this Agreement; or (d) those leases already in effect as of the effective date of this Agreement as disclosed in the Delivered Financials.

Section 7.5 Dividends and Capital Distributions

The Borrower is not to declare or pay any dividends or other distributions on its capital stock or ownership interests, nor effect any distribution, redemption or other acquisition of any of its capital stock or other ownership interests except (if the Borrower is an "S" Corporation for federal income tax purposes) distributions to shareholders during a given fiscal year in an amount no greater than such shareholders' federal income tax expenditures arising from such shareholder status without the prior written consent of Lender.

Section 7.6 Guaranties

The Borrower is not to assume, guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm or entity except (a) by the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; or (b) contingent obligations under letters of credit in the ordinary course of business for the purchase of merchandise for resale.

Section 7.7 Loans or Investments

They are not to make any advances or loans to the Borrower's officers, directors or employees or any entity; except that the Borrower is permitted to make advances or loans to its employees in an amount not to exceed $5,000 per employee and provided that not more than $100,000 is outstanding in the aggregate at any time; and, except further that Integrated Biopharma, Inc. is permitted to make loans to any or all of the other entities constituting the Borrower provided that such loans are subordinated on such terms and conditions required by Lender.

Section 7.8 Impairment of Title to Collateral

The Borrower is not to sell, conditionally sell, sell on approval, consign, lease, encumber, transfer, remove from its premises set forth on Schedule 2 or otherwise dispose of any Collateral (other than Inventory in the ordinary course of business or other than Accounts for collection, without recourse, in the ordinary course of business) without the prior written consent of Lender. The Borrower is not to transfer or create Chattel Paper without placing a legend thereon indicating Lender's security interest. In the event of such prior written consent by Lender, the Borrower is to promptly deliver the proceeds or other value received by the Borrower to Lender to reduce the amount of the Debt applied in the discretion of Lender.

Section 7.9 No Future Adverse Restrictions

The Borrower is not to change its status as a registered organization, its Operating Documents, the nature of its business, or execute any contract, mortgage, lease or other agreement which could be unduly burdensome or materially and adversely affect its business and properties, the results of its operations, or its ability to perform according to this Agreement or related documents.

Section 7.10 Settlements

The Borrower is not to compromise, settle or adjust any claims in a material amount relating to any of the Collateral, without the prior written consent of Lender.

Section 7.11 Change of Location or Name

They are not to change the place where their books and records are maintained, change their name, change their location as the term is now or hereafter defined in the Uniform Commercial Code, change the nature of their business in any material respect, or transact business under any other name without the prior written consent of Lender. Within four (4) months of any permitted change, the Borrower is to authenticate or otherwise cooperate in any action deemed necessary by Lender to maintain its rights and security interests as provided in this Agreement.

Section 7.12 Affiliates

Except as disclosed on Schedule 7.12, they are not to enter into or be a party to any transaction with any Affiliate (defined as any business, person, corporation, partnership or entity affiliated by common ownership or interest, or familial lineage, and their successors and assigns) except in the ordinary course of and pursuant to the reasonable requirements of business and upon fair and reasonable terms which are fully disclosed to Lender and are not less favorable to any of them than would be obtained in an arms length transaction.

Section 7.13 Change of Accounting Practices.

The Borrower is not to change its present accounting principles or practices in any material respect, except as may be required by changes in GAAP.

Section 7.14. Inconsistent Agreement.

The Borrower is not to enter into any agreement containing any provision that would be violated by the performance of Borrower's obligations under this Agreement or under any document delivered or to be delivered by it in connection therewith.

Section 7.15. Tangible Net Worth.

The Borrower is not to cause or permit Tangible Net Worth, on a consolidated basis, to be less than (a) $8,000,000 for fiscal year ending June 30, 2003 and (b) $9,000,000 for fiscal year ending June 30, 2004. The term Tangible Net Worth is defined as the difference between (a) the sum of (i) the par value (or value stated on the books of Borrower) of the capital stock of all classes of Borrower, plus (or minus in the case of a deficit) (ii) the amount of Borrower's surplus, whether capital or earned, less (b) the sum of treasury stock, unamortized debt discount and expense, good will, trademarks, trade names, patents, deferred charges, leasehold improvements and other intangible assets, and any write-up of the value of any assets, all determined in accordance with GAAP.

Section 7.16 Debt Service Coverage Ratio

The Borrower is not to cause or permit its Debt Service Coverage Ratio to be less than 1.30:1 as of the time of any determination thereof. Debt Service Coverage Ratio is defined as the ratio of Cash Flow for the prior 12 month period to principal and interest on all debt that was scheduled to be paid during that 12 month period. Cash Flow is defined as net income after taxes plus depreciation, amortization and interest expense, minus distributions or loans to shareholders.

Section 7.17 No Violations of Environmental Statutes

They are not to cause or permit to exist a releasing, spilling, leaking, pumping, emitting, pouring, emptying, discharging, or dumping of a hazardous substance, hazardous wastes, pollutants or related substances as those terms are defined by any Environmental Laws, whether or not resulting in a lien or claim being attached or made against them for damages or cleanup costs by the State of New Jersey or the Federal government. Borrower is not to manufacture or distribute ephedra-based products.

Section 7.18 Violation of Representations, Warranties and Covenants

They are not to take any action or omit to take any action which could render any of their representations, warranties or covenants to be untrue or incapable of performance.

Section 7.19 Duration of Covenants Regarding Prohibited Transactions

The covenants made in this Article 7 are to remain in effect for the duration of the term of this Agreement.

ARTICLE 8. MISCELLANEOUS RIGHTS AND DUTIES OF LENDER

Section 8.1 Charges Against Credit Balances

At any time prior to or following Default, Lender, without notice, in its sole and absolute discretion, may charge, setoff and withdraw from any credit balance, Collateral or property which Borrower or Guarantor may then have with Lender or any Affiliate, any amount(s) which become due to Lender or which are otherwise expended or advanced by Lender under this Agreement.

Section 8.2 Collections; Modification of Terms

At any time following Default, Lender, without notice, in its sole and absolute discretion, may demand, sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for, or make any compromises it deems desirable, or otherwise modify the terms or rights of the Borrower with respect to any of the Collateral without notice and without otherwise discharging or affecting the Debt.

Section 8.3 Notification of Account Debtors

At any time prior to or following Default, Lender, in its sole and absolute discretion, may require the Borrower to notify and obtain the acknowledgment of any account debtor or bailee of Lender's security interest in the Collateral. At any time prior to or following Default, Lender may, in its sole and absolute discretion, without notice: (1) notify any account debtors on any of the Accounts to make payment directly to Lender, and/or enforce the Borrower's rights of every type and nature as against any such account debtors or collateral which secures their obligations to Borrower; or (2) endorse all items of payment or Collateral received by Lender which are payable to the Borrower. In the event that Lender elects to foreclose a mortgage securing any such account debtors' obligations to Borrower, Lender may record a copy or abstract of this Agreement and an affidavit of default in the public records where such mortgage is recorded. Until such time as Lender elects to exercise these rights, the Borrower is to act upon and protect the Collateral under the restrictions and terms of this Agreement only.

Section 8.4 Uniform Commercial Code

At all times prior to and following Default, Lender is entitled to all the rights and remedies of a secured party under the Uniform Commercial Code as now or hereafter enacted in New Jersey and any other jurisdiction where Collateral is located.

Section 8.5 Preservation of Collateral

At any time prior to and following Default, Lender, without notice, in its sole and absolute discretion, may take any and all action which, in its sole and absolute discretion, is necessary and proper to preserve the Collateral, or Lender's interests under this Agreement, including without limitation, those duties of the Borrower imposed by this Agreement. Any sums so expended by Lender are to be secured by the Collateral and added to the Debt. Such sums (including reasonable attorneys' fees) are to be payable on demand with interest at the highest interest rate set forth in this Agreement until repaid by Borrower. Lender may also demand that escrow accounts be established to fund anticipated future expenditures.

Section 8.6 Mails

Following Default, Lender, without notice, in its sole and absolute discretion, is authorized to (and the Borrower is to, upon request of Lender) notify the postal authorities to deliver all of the Borrower's mail, correspondence or parcels to Lender at such address as Lender may direct.

Section 8.7 Test Verifications

At any time prior to and following Default, Lender, without notice, in its sole and absolute discretion, may, in its name or in the name of others, make test verifications of any and all Accounts in any manner and through any medium Lender considers advisable with or without the assistance of the Borrower.

Section 8.8 Power of Attorney

Lender is hereby irrevocably appointed and authenticated by Borrower as its lawful attorney and agent in fact to file, authenticate or execute financing statements and other documents and agreements as Lender may deem necessary for the purpose of perfecting any security interests, mortgages or liens under any applicable law. The Borrower hereby grants a power of attorney to Lender to endorse the Borrower's name on checks, notes, acceptances, drafts and any other documents or instruments requiring the Borrower's endorsement, to change the address where the Borrower's mail should be sent and to open all mail and to do such other acts and things necessary to effectuate the purposes of this Agreement when so permitted by the terms of this Agreement. All acts by Lender or its designee are hereby ratified and approved, and neither Lender, nor its designee, is to be liable for any acts of omission or commission, or for any error of judgment or mistake unless the result of gross negligence or willful misconduct. The powers of attorney granted to Lender in this Agreement are coupled with an interest and are irrevocable during the term of this Agreement. Whenever Lender deems it desirable that any legal action be instituted with respect to any Collateral or that any other extraordinary action be taken in an attempt to effectuate collection of any Collateral, Lender may reassign the item in question to the Borrower (without recourse to Lender) and require the Borrower to proceed with such legal or other action, at the Borrower's sole liability, cost and expense, in which event all amounts collected by the Borrower on such items are to, nevertheless, be treated as proceeds of Collateral.

ARTICLE 9. DEFAULT

Section 9.1 Definition of Default

The Borrower is in default and the Debt becomes immediately due and payable, without notice, at the option of Lender upon the occurrence of any or all of the following events, circumstances or determinations ("Default") which are set forth for purposes of illustration and as a supplement, and not a limitation, to Lender's right to demand payment of the Debt if otherwise provided in any note or instrument evidencing the Debt:

9.1(a) Upon the failure of the Borrower or the Guarantor to pay, when due, all or any part of Debt as set forth in any instrument, document, or agreement evidencing the Debt executed between the Borrower and Lender.

9.1(b) Upon the failure of the Borrower or the Guarantor to observe or perform any other covenant, term or condition required by this Agreement or by any other instrument, document or agreement related thereto as executed among the Borrower or Guarantor and Lender either (i) within ten (10) days of the date due or (ii) within 30 days after Lender sends notice to Borrower of Borrower's failure to comply with
Section 7.15 hereof and Borrower's failure to cure same to Lender's satisfaction within such 30 day period.

9.1(c) Upon the occurrence of any event of default as defined with reference to any other obligation or indebtedness of the Borrower or Guarantor in an amount greater than $50,000 to any third parties so that the holder of such obligation or indebtedness declares or has the right to declare such obligation or indebtedness due prior to its date of maturity.

9.1(d) Upon any breach of representation or warranty under this Agreement in any material respect by the Borrower or Guarantor, or if any such representation or warranty is no longer true or capable of performance.

9.1(e) Upon the submission to Lender of any materially false or fraudulent statement by the Borrower or Guarantor, whether or not in connection with this Agreement.

9.1(f) Upon any adverse and material change in the condition or affairs, financial or otherwise, of the Borrower or Guarantor which, in the opinion of Lender, materially impairs the interests of Lender.

9.1(g) Upon either the death, retirement, permanent disability or discontinuance of services of E. Gerald Kay, a principal and Chief Executive Officer of the Borrower or the termination, suspension, dissolution, or the liquidation of any material business conducted by the Borrower.

9.1(h) Upon the commencement, by, against or as to the Borrower or Guarantor, of any insolvency proceedings, bankruptcy proceedings, reorganization proceedings, assignment for the benefit of creditors, or proceedings of like character, or the appointment of a receiver, custodian or trustee as to any or all assets; in the event of any involuntary proceeding, if it has not been dismissed within forty-five (45) days of the institution thereof.

9.1(i) Upon the occurrence of any event of default otherwise defined in any separate instrument, document, or agreement existing now or in the future executed by or among the Borrower or Guarantor and Lender, any Participant, or their Affiliate.

9.1(j) Upon the entry of any judgment against the Borrower or Guarantor which remains unpaid, undischarged, unsatisfied, unbonded or undismissed following thirty (30) days after entry.

9.1(k) Upon the event that any or all of the assets of the Borrower or Guarantor, including, but not limited to the Collateral, are attached, distrained, levied upon or made subject to any lien not discharged or removed following thirty
(30) days after attachment.

9.1(l) Upon the event of any material (as determined by Lender in its sole and absolute discretion) diminution in the value of any Equipment or any other fixed assets constituting a part of the Collateral after Lender sends notice to Borrower thereof and Borrower's failure to cure such diminution to Lender's satisfaction within 30 days following the sending of such notice. .
9.1(m) Upon the event of any loss, repossession, reclamation, damage, theft, condemnation or destruction to any asset(s) of the Borrower or Guarantor whether or not covered by insurance after Lender sends notice to Borrower thereof and Borrower's failure to cure same to Lender's satisfaction within 30 days following the sending of such notice.

9.1(n) Upon the event that less than 30% of the ownership interests of the Borrower is owned directly or indirectly by Guarantor.

9.1(o) Upon the event that any indorser or Guarantor is determined, or seeks to determine that it is to be no longer liable for its obligations as contemplated by this Agreement or related documents.

9.1(p) Upon the death of Guarantor.

9.1(q) Upon any investigation undertaken by any governmental entity or if any indictment, charge or proceeding is filed or commenced, whether criminal or civil, pursuant to Federal or State law against Borrower or Guarantor for which forfeiture of any of the property or assets of Borrower or Guarantor of the Debt is a penalty.

9.1(r) Upon the event that Borrower takes any material action to authorize its liquidation or dissolution, except that a liquidation or dissolution of Vitamin Factory, Inc. is not an event of Default if the net proceeds of which are distributed to the remaining entities constituting the Borrower.

9.1(s) Upon the event that Borrower (a) becomes unable or fails to pay its debts generally as they become due, (b) admits in writing its inability to pay its debts, or (c) proposes or makes a composition agreement with creditors, a general assignment for the benefit of creditors, or a bulk sale.

9.1(t) In the event that, with respect to any Plan (as defined in Section 5.10 of this Agreement), there occurs or exists any of the events or conditions described in the following clauses
(a) through (h) and such event or condition, together with all like events or conditions, could in the reasonable opinion of Lender subject the Borrower to any tax, penalty or other liability that might, singly or in the aggregate, have a material adverse effect on the financial condition or the properties or operations of Borrower:(a) a reportable event as defined in Section 4043 of ERISA, (b) a prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code, (c) termination of the Plan or filing of notice of intention to terminate, (d) institution by the Pension Benefit Guaranty Corporation of proceedings to terminate, or to appoint a trustee to administer, the Plan, or circumstances that constitute grounds for any such proceedings, (e) complete or partial withdrawal from a multiemployer Plan, or the reorganization, insolvency or termination of a multiemployer Plan, (f) an accumulated funding deficiency within the meaning of ERISA, (g) violation of the reporting, disclosure or fiduciary responsibility requirements of ERISA or the Internal Revenue Code, or (h) any act or condition which could result in direct, indirect or contingent liability to any Plan or the Pension Benefit Guaranty Corporation; or

9.1(u) Upon the termination of Borrower's contract, as amended, with Herbalife International of America, Inc., or upon an event of default as defined therein.

ARTICLE 10. REMEDIES OF LENDER UPON DEFAULT

Section 10.1 Rights of Lender

Upon the occurrence of any event constituting Default, Lender (or any Participant) has the right, without notice:

10.1(a) Collection - To institute legal or deficiency proceedings or otherwise enforce its rights to collect the Debt against the Borrower or Guarantor of the Debt, all of which becomes immediately payable. If a judgment is entered in favor of Lender, the lien of the judgment relates back to the earliest date of perfection of the Lender's security interests hereunder.

10.1(b) Set Off - To charge, setoff and withdraw from any credit balance which the Borrower or Guarantor may then have with Lender, Participant, or with any Affiliate thereof, such amounts as may be necessary to satisfy the Debt.

10.1(c) Existing Commitments - To terminate and cancel any existing commitment to the Borrower or Guarantor for a line of credit, loan, or balance of the Revolving Loan.

10.1(d) Assembly of Collateral - With or without judicial process, (i) to seize the Collateral or to require the Borrower to assemble the Collateral or (ii) to render the Collateral unusable without need for Lender to post a bond or security or (iii) to make the Collateral available at a Lender designated place for sale, lease, license or other disposition by Lender (and if such disposition is to Lender, at a public execution unless the Collateral is that customarily sold on a recognized market or the subject of widely distributed standard price quotations) to satisfy the Debt without any right of Borrower or Guarantor to adjourn such disposition. Any such sale, lease, license or other disposition may be made of the Collateral in its present condition or following any commercially reasonable preparation or processing at the expense of Borrower.

10.1(e) Tax Notification - To sign the name of Borrower upon any local, state or federal agency information release form including, but not limited to, Tax Information Authorization Form 8821 of the Internal Revenue Service;

10.1(f) Cumulative Rights - To exercise all rights and remedies set forth in this Agreement or otherwise provided by law or other agreement (whether or not referred to in this Agreement) on a cumulative or simultaneous basis and in any order selected by Lender; or

10.1(g) Rights of Transferee - A transferee who purchases, leases, licenses or otherwise receives the benefits of a disposition of Collateral after Default takes free of all Borrower's rights and the rights of any subordinate security interest or lien. A transferee is entitled to the recording of a transfer statement to document public notice of such disposition.

Section 10.2 Application of Proceeds of Disposition of Collateral

The proceeds of any sale, lease, license or other disposition of the Collateral are to be applied to satisfy the following items in the following order:

10.2(a) First, to Lender's expenses in preserving its interests and rights hereunder, to expenses incurred by Lender in realizing upon security interests created or referred to herein, and expenses of Lender in enforcing and defending its rights as set forth in Article 2 and Article 8 of this Agreement.

10.2(b) Second, to the Debt as defined in this Agreement.

10.2(c) Third, any excess or amounts remaining are to be paid to any subordinate security interest or lien if the holder thereof supplies proof of its interest or lien and if the holder thereof makes an authenticated demand therefor before distribution and any balance thereafter is to be paid to Borrower unless Lender determines that reserves are warranted to implement the indemnification provisions of this Agreement.

Section 10.3 Redemption of Collateral

In the event that the Borrower may elect to redeem any or all of the Collateral prior to the sale, lease, license or other disposition by Lender, the Borrower is to pay to Lender, in full, the Revolving Loan and that additional part of the Debt that Lender requires.

Section 10.4 Notice of Disposition of Collateral

If the Collateral is perishable, threatens to decline speedily in value, or is of a type customarily sold on a recognized market, Lender need not give notice of any intended disposition of the Collateral. In all other cases, Lender is to give authenticated reasonable notice to Borrower and any other party entitled thereto under applicable law of the time and place of a public sale, lease, license or other disposition of the Collateral. Authenticated notice is presumed to be reasonable (a) if given ten (10) days prior to such disposition unless a shorter period is warranted under the circumstances, (b) if sent to the chief executive office and, if none, to the address of the Borrower set forth on Schedule 2 annexed hereto in accordance with Section 11.5 hereof and (c) if it contains a statement of the Collateral and its intended disposition, the time and place of disposition and a statement that the Borrower is entitled to an accounting of such disposition. Lender may disclaim any warranties that may apply to any sale, lease, license or other disposition of the Collateral.

Section 10.5 Marshaling of Assets

Lender has no obligation whatsoever to proceed first against any of the Collateral or any Guarantor before proceeding against any other of the Collateral, other Guarantor or other collateral for the Debt. It is expressly understood and agreed that all of the Collateral stands as equal security for the Debt and that Lender has the right to proceed against or dispose of any/or all of the Collateral or other collateral in any order as Lender, in its sole discretion, determines.

ARTICLE 11. MISCELLANEOUS PROVISIONS

Section 11.1 Binding Effect

This Agreement is binding upon, inures to the benefit of and is enforceable by the heirs, personal representatives, successors and assigns of the parties, any Affiliate or Participant. This Agreement is not assignable by the Borrower or Guarantor without the prior written consent of Lender.

Section 11.2 Non Waiver

Neither a course of dealing, nor a failure or delay on the part of Lender, or its successors and assigns, in the exercise of any right, power, or privilege is to operate as a waiver. A partial exercise of any right, power, or privilege by Lender is not to preclude any further right, power, or privilege, nor be deemed a waiver. Any waiver or modification to this Agreement or any other document, instrument, or agreement executed by the Borrower or Guarantor, is to be in a writing executed by Lender and them. Any written modification signed by Lender and them is to be deemed part of this Agreement.

Section 11.3 Non Liability of Lender

Lender has no duty to preserve or protect the Collateral, to preserve the rights of the Borrower or Guarantor against other parties, or to sell, lease, or otherwise dispose of any or all of the Collateral, or its proceeds, or in any priority, unless it elects to do so as provided in this Agreement. This Section is to be deemed an express waiver of the defense of impairment of Collateral.

Section 11.4 Disclaimer by Lender on Documents

Lender is not to be deemed to assume any liability or responsibility to the Borrower or any other party for the correctness, the validity, or the genuineness of any instruments or documents that may be executed in connection with this Agreement, or for the existence, character, quantity, quality, condition, value, or delivery of any Collateral purporting to be represented by any such documents. Lender, by accepting the security interest in the Collateral, or by releasing any Collateral to the Borrower, is not to be deemed to have assumed any obligation or liability to any supplier or debtor of the Borrower. The Borrower is to indemnify and hold Lender harmless with respect to any claim or proceeding arising out of such matters.

Section 11.5 Notices and Banking Days

11.5(a) Each demand, notice or other communication by Lender to the Borrower or by the Borrower to Lender is to be sent by certified mail, postage prepaid, return receipt requested, or recognized courier service for which a receipt is available.

11.5(b) Notices to Lender are to be directed to the following address:

COMMERCE BANK, N.A
1701 Route 70 East
Cherry Hill NJ 08034

11.5(c) Notices to the Borrower are to be directed to the following address:

INTEGRATED BIOPHARMA, INC.
MANHATTAN DRUG COMPANY, INC.
IHT HEALTH PRODUCTS, INC.
INTEGRATED HEALTH IDEAS, INC.
IHT PROPERTIES CORP
NUCYCLE THERAPY, INC.
VITAMIN FACTORY, INC.

For all of the above entities:

To: 225 Long Avenue, Building #15 Hillside, N J 07205 Att: Chief Executive Officer Tel: 973-926-0816 Fax: 973-926-1735

With a copy to:

St. John & Wayne, L.LC. Two Penn Plaza East Newark NJ 07105 Att: William P. Oberdorf, Esq. Tel:

973-491-3358 Fax: 973-491-3407

A notice to the Borrower is presumed to be received by Guarantor.

11.5(d) A banking day is any day that Lender designates or otherwise conducts business. A payment or duty which becomes due on a day not designated by Lender as a banking day automatically becomes due on the next day that is designated by Lender as a banking day.

Section 11.6 Captions

The captions and titles appearing in this Agreement are inserted solely for the convenience of the parties and do not in any way define, limit or describe the terms and conditions of this Agreement.

Section 11.7 Entire Agreement

There are no understandings, agreements, representations, warranties or covenants, express or implied, which are not specified herein, or in the other written instruments, documents, or agreements referred to in this Agreement. All prior oral understandings, negotiations, or agreements are deemed to be superseded by the terms of this Agreement and such other written instruments, documents or agreements referred to in this Agreement.

Section 11.8 Severability

In the event that any portion of this Agreement is deemed unenforceable by a court of competent jurisdiction, such provision declared to be unenforceable is to be deemed to have been omitted from this Agreement, and all such remaining terms and conditions of this Agreement are to continue in full force and effect.

Section 11.9 Joint and Several Liability

The terms and conditions of this Agreement are jointly and severally binding upon all parties identified as the Borrower and Guarantor. Each Borrower is jointly and severally liable without regard to which entity receives or has received the proceeds of the Revolving Loan and advances made hereunder. Each such entity hereby acknowledges that it expects to derive economic advantage from each loan or advance made. Each Borrower hereby acknowledges and agrees that part or all of the proceeds for any given advance hereunder are transferred to such Borrower on an on-going basis, depending upon the relative needs of each Borrower at such time as the proceeds of such an advance are necessary to satisfy obligations of that Borrower arising in the ordinary course of the Borrower's business. Each Borrower further acknowledges and agrees that: (i) it conducts similar business operations and (ii) each Borrower's primary source of financing its operations is the proceeds received from the advances hereunder and from the business so financed.

Section 11.10 Applicable Law and Consent to Jurisdiction

This Agreement is to be interpreted and enforced in accordance with the laws of the State of New Jersey (without regard to the conflicts of law rules of New Jersey) except that the law of the State where the Borrower is located governs perfection and priority claims to the Collateral (except as otherwise provided in the Uniform Commercial Code). Borrower and Guarantor hereby irrevocably consent to the jurisdiction of the Courts of the State of New Jersey and to the jurisdiction of the United States District Court for the District of New Jersey, for the purpose of any suit, action or other proceeding arising out of or relating to this Agreement or the Debt, or the subject matter hereof or thereof. Borrower and Guarantor hereby waive, and agree not to assert in any such suit, action or proceeding any claim that they are not personally subject to such jurisdiction, or any right to remove an action brought in State to Federal Court, or any claim that such suit, action or proceeding is in an inconvenient forum or that the venue thereof is improper. Borrower and Guarantor hereby consent that they may be served with process by the notification procedure set forth in this Agreement.

Section 11.11 Consents

The Borrower and its subsidiaries (if any), and the Guarantor consent:

11.11(a)To any extension, postponement of time of payment, indulgence or to any substitution, exchange or release of Collateral.

11.11(b)To any addition to or release of any party or persons primarily or secondarily liable, or acceptance of partial payments on any Accounts or instruments and the settlement, comprising or adjustment thereof.

Section 11.12. Waiver of Liability

Lender is not liable due to any action or failure to act by Lender relating to this Agreement or the Debt except as a result of Lender's gross negligence or willful misconduct. This provision shall survive the termination or expiration of this Agreement or payment of the Debt.

SECTION 11.13 WAIVE JURY TRIAL

THE BORROWER, FOR ITSELF, ITS SUBSIDIARIES (IF ANY) AND THE GUARANTOR AND LENDER HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT OR THE DEBT AS AN INDUCEMENT TO THE EXECUTION OF THIS AGREEMENT.

Section 11.14. Execution in Counterparts.

This Agreement may be executed in any number of counterparts, each of which when so executed is deemed to be an original and all of which taken together constitute but one and the same agreement.

ARTICLE 12. INDEMNIFICATION

As part of the Debt, Borrower and Guarantor agree to and hereby indemnify and hold Lender harmless from and against, and to reimburse Lender with respect to any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including consequential damages, reasonable attorneys' fees and court costs) of any and every kind or character, known or unknown, fixed or contingent, asserted against or incurred by Lender at any time and from time to time by reason of or arising out of:

(a) the breach of any representation, warranty or covenant of Borrower or Guarantor set forth in this Agreement;

(b) the failure of Borrower or Guarantor to perform any obligation herein required to be performed by Borrower or Guarantor; or

(c) the ownership, construction, occupancy, operation, use and maintenance of the Collateral.

This covenant survives the date on which the Debt is paid and performed in full and notwithstanding whether Borrower or Guarantor has been released and discharged or whether Lender becomes the owner of the Collateral.

ARTICLE 13. TERM

This Agreement is to remain in effect for so long as the Debt remains unpaid.

ARTICLE 14. TERMINATION OF AGREEMENT IN ABSENCE OF DEFAULT

Section 14.1. Termination by Lender.

This Agreement terminates, insofar as it relates to the Revolving Loan, two years from the date hereof. At the termination date: (a) all provisions for additional advances under this Agreement terminate, (b) the principal and interest of the Revolving Loan becomes immediately due and payable, and all other Debt becomes immediately due and payable, all without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by Borrower, and (c) Lender is entitled to exercise forthwith (to the extent and in such order as Lender may elect, in its sole discretion) any or all of the rights and remedies referred to in this Agreement as available following Default for the collection of such amounts.

Section 14.2. Termination By Borrower.

14.2(a) In the absence of a Default, Borrower may terminate this Agreement only upon:

(i) giving sixty (60) days' prior written notice to Lender of the intended termination date; and

(ii) paying to Lender in full the principal and interest of the Revolving Loan, and all other Debt.

Section 14.3. Effect on Advance Limit

Upon the giving of notice of termination pursuant to this Section, the Advance Limit thereafter will not increase in excess of the principal balance of the Revolving Loan at the time of such notice.

Section 14.4. Mutual Release.

Upon full and final payment and performance of the Revolving Loan and all other Debt, Borrower, Guarantor and Lender thereupon automatically each are fully, finally and forever released and discharged from any and all claims, liabilities and obligations, whether in contract or tort, arising out of or relating in any way to this Agreement, the Revolving Loan, or any act or omission relating to any of the foregoing or to any of the Collateral, except as otherwise provided herein.

ARTICLE 15. CROSS DEFAULT/CROSS COLLATERAL

All other existing and future agreements between or among Lender, any Participant and/or any Affiliate, Borrower and/or any Affiliate, Guarantor and/or any Affiliate are hereby amended so that a Default under this Agreement is a default under such other agreements and a default under such other agreements is a Default under this Agreement. Any collateral pledged under such other agreements between Lender or Participant and/or Affiliate and the Borrower and/or any Affiliate, Guarantor and/or any Affiliate secures the Debt under this Agreement and the Collateral under this Agreement secures any and all obligations under such other agreements.

ARTICLE 16. FURTHER ACKNOWLEDGMENTS OF BORROWER AND LENDER

Section 16.1. Representation by Counsel.

Borrower, Guarantor and Lender acknowledge and agree that they
(i) have independently reviewed and approved each and every provision of this Agreement, including the Exhibits and schedules attached hereto, the Guaranty of Guarantor and any and all other documents and items as they or their counsel have deemed appropriate, and (ii) have entered into this Agreement, the Guaranty, and have executed the closing documents voluntarily, without duress or coercion, and have done all of the above with the advice of their legal counsel.

Section 16.2. Waiver of Objection.

Borrower, Guarantor and the Lender acknowledge and agree that, to the extent deemed necessary by them or their counsel, they and their counsel have independently reviewed, investigated and/or have full knowledge of all aspects of the transaction and the basis for the transaction contemplated by this Agreement and/or have chosen not to so review and investigate (in which case, Borrower and Guarantor acknowledge and agree that they have knowingly and upon the advice of counsel waived any claim or defense based on any fact or any aspect of the transaction that any investigation would have disclosed), including without limitation:

(i) the risks and benefits of the various waivers of rights contained in this Agreement, including but not limited to, the waiver of the right to a jury trial;

(ii) the adequacy of the consideration being transferred under this Agreement, including the adequacy of the consideration for the Mutual Release as set forth in Section 14.4 hereof.

Section 16.3. No Reliance Upon Lender.

Borrower and Guarantor acknowledge and agree that they have made their own investigation or elected not to make such investigation as to all matters deemed material to this transaction and have not relied on any statement of fact or opinion, disclosure or non-disclosure of the Lender, and have not been induced by the Lender in any way, except for the consideration recited herein, in entering into this Agreement and executing the closing documents contemplated hereby, and further acknowledge that the Lender has not made any warranties or representations of any kind in connection with this transaction except as specifically set forth herein or in the documents executed in conjunction with this Agreement, and Borrower and Guarantor are not relying on any such representations or warranties.

Section 16.4. All Material Matters Reviewed

Borrower and Guarantor acknowledge and agree that, after careful consideration, they do not deem any matter not reviewed or investigated by them to be material to this Agreement and the transactions contemplated hereby.

IN WITNESS WHEREOF, the Borrower, Guarantor and Lender have executed this Agreement.

Attest/Witness: INTEGRATED BIOPHARMA, INC. A Delaware Corporation

/s/ Eleanor DiMartino                                By:      /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                             Print Name:  ERIC FRIEDMAN
Title:     Secretary                                 Title: Vice President

Signatures continued...............

.... continuation of signatures to Revolving Loan and Security Agreement

Attest/Witness:                                     MANHATTAN DRUG COMPANY, INC.
                                                    A New York Corporation

/s/ Eleanor DiMartino                               By: /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                            Print Name:  ERIC FRIEDMAN
Title:     Secretary                                Title: Vice President


Attest/Witness:                                     IHT HEALTH PRODUCTS, INC.
                                                    A  Delaware Corporation

/s/ Eleanor DiMartino                               By: /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                            Print Name:  ERIC FRIEDMAN
Title:     Secretary                                Title:Vice President



Attest/Witness:                                    INTEGRATED HEALTH IDEAS, INC.
                                                   A  New Jersey Corporation

/s/ Eleanor DiMartino                              By: /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                           Print Name:  ERIC FRIEDMAN
Title:     Secretary                               Title: Vice President


Attest/Witness:                                      IHT PROPERTIES CORP.
                                                     A  Delaware Corporation

/s/ Eleanor DiMartino                                By: /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                             Print Name:  ERIC FRIEDMAN
Title:     Secretary                                 Title: Vice President


Attest/Witness:                                      NUCYCLE THERAPY, INC.
                                                     A  New Jersey Corporation

/s/ Eleanor DiMartino                                By: /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                             Print Name:  ERIC FRIEDMAN
Title:     Secretary                                 Title: Vice President


Attest/Witness:                                      VITAMIN FACTORY, INC.
                                                     A  Delaware Corporation

/s/ Eleanor DiMartino                                By: /s/ Eric Friedman
Name:  ELEANOR DiMARTINO                             Print Name:  ERIC FRIEDMAN
Title:     Secretary                                 Title: Vice President

Signatures continued...............
.... continuation of signatures to Revolving Loan and Security Agreement

Witness:

/s/ Eleanor DiMartino                                          /s/ E. Gerald Kay
Print Name:                                                    E.  GERALD KAY
                                                               Guarantor

COMMERCE BANK, N.A.

By: /s/ Christopher C. Arabia
Print Name: Christopher C. Arabia
Title:  Assistant Vice President

SCHEDULE 1

Other Liens

UCC Financing Statement (Manhattan Drug Co., Inc.) in favor of The Chase Manhattan Bank, filed with the NJ Department of the Treasury on July 31, 2000 as to leased equipment

Schedule 2. Identification of the Borrower Names of the Borrower
1. Integrated BioPharma, Inc., a Delaware corporation (f/k/a Integrated Health Technologies, Inc., a Delaware corporation) 2. Manhattan Drug Company, Inc., a New York corporation 3. IHT Health Products, Inc., a Delaware corporation 4. Integrated Health Ideas, Inc., a New Jersey corporation (f/k/a Manhattan International, Inc., a New Jersey corporation)
5. IHT Properties Corp., a Delaware corporation 6. NuCycle Therapy, Inc., a New Jersey corporation 7. Vitamin Factory, Inc., a Delaware corporation

Federal Tax Identification Numbers and State Organizational Numbers of the Borrower

Entity                              State   Federal ID Number   Organizational Number     SIC #
------                              -----   -----------------   ---------------------     -----
Integrated BioPharma, Inc.          DE       # 22-2407475              # 2538924          2834
Manhattan Drug Company, Inc.        NY       # 11-2000871              n/a                2834
IHT Health Products, Inc.           DE       # 22-3749214              # 3275322          2834
Integrated Health Ideas, Inc.       NJ       # 22-3197169              # 0100529400       2834
IHT Properties Corp.                DE       # 22-3768013              # 3289320          2834
NuCycle Therapy, Inc.               NJ       # 22-3239507              # 0100549621       2834
Vitamin Factory, Inc.               DE       # 22-2436074              # 0945245          2834

List of offices, locations, and locations of Collateral 201 US Highway 22, Hillside, New Jersey 07205 (factory) The following entities are located therein:
- Manhattan Drug Company, Inc.
- Integrated Health Ideas, Inc.
- NuCycle Therapy, Inc.

225 Long Avenue, Building #15, Hillside, New Jersey 07205 (executive offices) The following entities are located therein: - Integrated BioPharma, Inc.
- Manhattan Drug Company, Inc.
- IHT Health Products, Inc.
- Integrated Health Ideas, Inc.
- NuCycle Therapy, Inc.
- Vitamin Factory, Inc.

Integrated BioPharma, Inc.
- Integrated Health Technologies, Inc., a Delaware corporation, changed its name to Integrated BioPharma, Inc., a Delaware corporation, effective January 29, 2003.
- Integrated Health Technologies, Inc., a Delaware corporation, previously changed its name from Chem International, Inc., a Delaware corporation, effective December 19, 2000.
- Chem International, Inc., a New York corporation, previously merged with and into Chem International, Inc., a Delaware corporation, effective February 2, 1996.

IHT Properties Corp.
Morristown Holding Company, a Delaware corporation, previously merged with and into IHT Properties Corp., a Delaware corporation, effective December 29, 2000.

Schedule 7.1

Integrated BioPharma, Inc. (f/k/a Integrated Health Technologies, Inc.) (the "Company") and Trade Investment Services, L.L.C., a Delaware limited liability company ("TIS") entered into an agreement dated as of February 1, 2003 (the "Paxis Purchase Agreement") pursuant to which the Company agreed to purchase from TIS all of its interests in TisorEx, Inc. (to be renamed Paxis Pharmaceuticals, Inc. or "Paxis"), a Delaware corporation, which consists of fifty percent (50%) of the equity of Paxis, in exchange for $500,000 payable at closing and twenty-five percent (25%) of the after-tax profits of Paxis until TIS has received an additional $49,500,000 (the "Paxis Acquisition"). The Paxis Acquisition is subject to the completion of satisfactory due diligence and certain conditions of closing, including: (i) if requested by Paxis, the Company to provide a $7,000,000 loan to Paxis (the "Paxis Financing") at a nine (9%) percent rate of interest, with such Paxis Financing to be repaid from free cash flow of Paxis prior to any distributions to the Company's stockholders and to mature on the second anniversary of such financing; and (ii) the Company to receive equity in Paxis equal to one-third of the shares outstanding of Paxis after such issuance.

E. Gerald Kay, the Chairman of the Board of the Company and beneficial owner of approximately fifty percent (50%) of the stock of the Company (or, approximately sixty-two percent (62%) if family trusts of which he is a trustee are attributed to him), is the owner of one-third (1/3) of the equity of TIS. Robert Kay, the brother of E. Gerald Kay, is also the owner of one-third (1/3) of the equity of TIS. Carl DeSantis, the father of Dean DeSantis who is a director of the Company, is the owner of one-third (1/3) of the equity of TIS.

Schedule 7.12

Integrated BioPharma, Inc. (f/k/a Integrated Health Technologies, Inc.) (the "Company") and Trade Investment Services, L.L.C., a Delaware limited liability company ("TIS") entered into an agreement dated as of February 1, 2003 (the "Paxis Purchase Agreement") pursuant to which the Company agreed to purchase from TIS all of its interests in TisorEx, Inc. (to be renamed Paxis Pharmaceuticals, Inc. or "Paxis"), a Delaware corporation, which consists of fifty percent (50%) of the equity of Paxis, in exchange for $500,000 payable at closing and twenty-five percent (25%) of the after-tax profits of Paxis until TIS has received an additional $49,500,000 (the "Paxis Acquisition"). The Paxis Acquisition is subject to the completion of satisfactory due diligence and certain conditions of closing, including: (i) if requested by Paxis, the Company to provide a $7,000,000 loan to Paxis (the "Paxis Financing") at a nine (9%) percent rate of interest, with such Paxis Financing to be repaid from free cash flow of Paxis prior to any distributions to the Company's stockholders and to mature on the second anniversary of such financing; and (ii) the Company to receive equity in Paxis equal to one-third of the shares outstanding of Paxis after such issuance.

E. Gerald Kay, the Chairman of the Board of the Company and beneficial owner of approximately fifty percent (50%) of the stock of the Company (or, approximately sixty-two percent (62%) if family trusts of which he is a trustee are attributed to him), is the owner of one-third (1/3) of the equity of TIS. Robert Kay, the brother of E. Gerald Kay, is also the owner of one-third (1/3) of the equity of TIS. Carl DeSantis, the father of Dean DeSantis who is a director of the Company, is the owner of one-third (1/3) of the equity of TIS.

EXHIBIT A

(i) "Accounts", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all accounts and any and all obligations of any kind at any time due and/or owing to the Borrower and all rights of the Borrower to receive payment or any other consideration, whether or not earned by performance, including without limitation, invoices, contract rights, Accounts, and all other debts, obligations and liabilities for property sold, leased, licensed, assigned or disposed of, for services rendered, for a policy of insurance issued or to be issued, for a secondary obligation, arising out of a credit card or for health-care insurance receivable, in whatever form, owing to Borrower from any person, firm, governmental authority, corporation or any other entity, all security therefor, all of which whether now existing or hereafter acquired.

(ii) "Chattel Paper", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all chattel paper and records that evidence both a monetary obligation and a security interest or lease in specific goods and software used in the goods, a lease of specific goods or a lease of specific goods and license of software used in the goods, including electronic chattel paper or whatever form, owing to Borrower or in which the Borrower has an interest, all of which whether now existing or hereafter acquired.

(iii) "Commercial Tort Claims", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all claims arising in tort in the course of the Borrower's business more specifically described on the attachment hereto (if any), all of which whether now existing or hereafter acquired.

(iv) "Deposit Accounts", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all deposit accounts, whether demand, time, savings, passbook or similar accounts maintained by the Borrower at any bank, all of which whether now existing or hereafter acquired.

(v) "Equipment", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all equipment, machinery, furniture and all other related goods, all replacements, repairs, modifications, alterations, additions, controls and operating accessories therefor, all substitutions and replacements therefor, all accessions and additions thereto of the Borrower, all of which whether now existing or hereafter acquired.

(vi) "General Intangibles," which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all general intangibles and payment intangibles and any and all personal property, choses-in-action, and things in action, leases, income tax refunds, copyrights, licenses, rights, patents, patent rights, franchise rights, distributorship rights, trademarks, tradenames, service marks, trademark rights, formulae, customer lists and goodwill of the Borrower, all of which whether now existing or hereafter acquired.

(vii) "Goods," which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all goods, fixtures, manufactured homes and embedded computer programs and all things and property of the Borrower which are not otherwise defined in this Exhibit A, all of which whether now existing or hereafter acquired.

(viii) "Instruments", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all instruments, negotiable instruments or other writings that evidence a right of the Borrower to payment of a monetary obligation that is transferrable in the ordinary course of the Borrower's business with any necessary endorsement or assignment, all of which whether now existing or hereafter acquired.

(ix) "Inventory", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all inventory and all goods, merchandise or other personal property held by the Borrower for sale or lease or under a contract of service or to be furnished under labels and other devices, names or marks affixed thereto for purposes of selling or identification, and all right, title and interest of the Borrower therein and thereto, all raw materials, packaging and shipping materials, work or goods in process or materials and supplies of every nature used, consumed or to be consumed in the Borrower's business, all of which whether now existing or hereafter acquired.

(x) "Investment Property", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all of the Borrower's certificated or uncertificated securities, security entitlements, securities accounts, commodity contracts or commodity accounts whether now existing or hereafter acquired.

(xi) "Letter of Credit Rights", which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all of the Borrower's rights to payment or performance under a letter of credit whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance whether now existing or hereafter acquired.

(xii) All promissory notes, documents, software and supporting obligations (and security interests and liens securing them) of the Borrower as now and hereafter defined in the Uniform Commercial Code whether now existing or hereafter acquired.

(xiii) As to all of the foregoing (i) through (xii) inclusive, all cash proceeds, non-cash proceeds and products thereof, additions and accessions thereto, replacements and substitutions therefor.

STATE OF )
COUNTY OF )ss:

BE IT REMEMBERED, that on this 9th day of June, 2003, before me, the subscriber, personally came and appeared ERIC FRIEDMAN and ELEANOR DiMARTINO to me known, who I am satisfied are, and who, being by me duly sworn, did depose and say that they are the indicated officers of each of the corporations described in and which executed the foregoing instrument and that each signed the same as said officer; and I have first made known to them the contents thereof, they did further depose, say and acknowledge that they signed said instrument as said officers of said corporations, that they know the seals of said corporations, that the seals affixed to said instrument are such corporate seals and that they sealed the same and affixed said seals and delivered said instrument as the voluntary act and deed of said corporations, made by virtue of authority and by order of and from their Boards of Directors, and that they signed their names thereto by like order.

/s/ Pora L. Arias
Pora L. Arias
Notary Public of New Jersey

Bank of America

PROMISSORY NOTE

PRINCIPAL AMOUNT: $4,500,000.00 Date of Note: August 6, 2003

PROMISE TO PAY. Integrated BloPharma, Inc. ("Borrower") promises to Pay to Bank of America, N.A. ("lender"), or order, in lawful money of the United States of America, the principal amount of Four Million Five Hundred Thousand & 00/100 Dollars ($4,500,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on September 4, 2004. In addition. Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning September 4. 2003 with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid Interest, then to principal, and any remaining amount to any unpaid collection costs and late charges. The annual interest rate for this Note Is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the "Wall Street Journal LIBOR Rate" which is a fluctuating rate of interest equal to the 1 month London interbank offered rate as published in the "Money Rates" section of The Wall Street Journal on the immediately preceding business day as adjusted from time to time in lender's sole discretion for then applicable reserve requirements, deposit insurance assessment rates and other regulatory costs (the "Index"). The Index is not necessarily the lowest rate charged by lender on its loans. If the Index becomes unavailable during the term of this loan, lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each date of such change in the Index. Borrower understands that lender may make loans based on other rates as well. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 1.250 percentage points, over the Index. NOTICE: Under no circumstances will the effective rate of interest on this Note be more than the maximum rate allowed by applicable law.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender, All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Bank of America, N.A., NC1-014-13-04, P,O. Box 30120 Charlotte, NC 28254-3693,

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 4.000% of the unpaid portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 7.250 percentage points over the Index, if and to the extent that the increase does not cause the interest rate to exceed the maximum rate permitted by applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note:

Payment Defalult. Borrower fails to make any payment when due under this Note.

Other Default. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.

False Statement. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Event Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender the amount of these costs and expenses, which includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of any County, State of Florida.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender In good faith believes Itself insecure.

PRE BILLING. If the Borrower and Lender elect to use pre-billing calculation, for each payment date (the "Due Date") the amount of each payment debit will be determined as follows: On the 'Billing Date" Lender will prepare and mail to Borrower an invoice of the amounts that will be due on that Due Date ("Billed Amount"). (The "Billing Date" will be a date that is a specified number of calendar days prior to the Due Date, which number of days will be mutually agreed from time to time by Lender and Borrower.) The calculation of the Billed Amount will be made on the assumption that no new extensions of credit or payments will be made between the Billing Date and the Due Date, and that there will be no changes in the applicable interest rate. On the Due Date Lender will debit the Designated Account for the Billed Amount, regardless of the actual amount due on that date ("Accrued Amount"). If the Due Date does not fall on a Business Day, Lender shall debit the Designated Account on the first Business Day following the Due Date. For purposes of this Agreement, "Business Day" means a day other than Saturday, Sunday or other day on which commercial banks are authorized to close or are in fact closed in the state where the Lender's lending office is located. If the Billed Amount debited to the Designated Account differs from the Accrued Amount, the difference will be treated as follows: If the Billed Amount is 'less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the underpayment, Borrower will not be in default by reason of any such underpayment. If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the overpayment. Regardless of any such difference, interest will continue to accrue based on the actual amount of principal outstanding without compounding. Lender will not pay interest on any overpayment.

AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct from Borrower's account numbered the amount of any loan payment. If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate Automatic Payments.

COUNTERPARTS. This Note may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

ASSIGNMENT. Lender may sell or offer to sell this Note, together with any and all documents guaranteeing, securing or executed in connection with this Note, to one or more assignees without notice to or consent of Borrower. Lender is hereby authorized to share any information it has pertaining to the loan evidenced by this Note, including without limitation credit information on the undersigned, any of its principals, or any guarantors of this Note, to any such assignee or prospective assignee,

ADDITIONAL DEFAULTS. Each of the following shall constitute an additional event of default ("Event of Default") under this Note:

Event of Default Under Related Documents. A default or additional event of default occurs under the terms of any promissory note, guaranty, pledge agreement, security agreement or other agreement or instrument executed by Borrower or any guarantor, pledgor, accommodation party or other obligor in connection with or relating to this Note.

Judgment. The entry of a judgment against any Borrower or guarantor, pledgor, accommodation party or other obligor which Lender deems to be of a material nature, in Lender's sole discretion.

Revocation or Termination of Trust. If any Borrower, grantor, guarantor, pledgor, accommodation party or other obligor on the indebtedness evidenced hereby or any of the related documents is a trust or the trustee(s) of a trust, such trust is revoked or otherwise terminated or all or a substantial part of such trust's assets are distributed or otherwise disposed of, or in the case of a revocable trust, the grantor of such trust dies.

Adverse Change of Obligor. A material adverse change occurs in the financial condition of any guarantor, pledgor, accommodation party or other obligor, as determined by Lender in its sale discretion.

Resignatlon/Withdrawal, The resignation or withdrawal of any partner or a material owner of Borrower or any guarantor, pledgor, accommodation party or other obligor, or any substantial change in the present executive or management personnel of Borrower, any guarantor, pledgor, accommodation party or other obligor as determined by Lender in its sole discretion.

Credltor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any assets of Borrower and/or any guarantor, pledgor, accommodation party or other obligor. This includes a garnishment of: (1) any of Borrower's accounts, including deposit accounts, with Lender and/or (2) any account, including deposit accounts, with Lender of any guarantor, pledgor, accommodation party or other obligor. However, this Event of Default shall not apply if there is a good faith dispute by such Borrower and/or guarantor, pledgor, accommodation party or other obligor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if such Borrower and/or guarantor, pledgor, accommodation party or other obligor gives Lender written notice of the creditor of forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

ARBITRATION. (a) This paragraph concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to controversies or claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or modifications); or
(ii) any document related to this agreement (collectively a "Claim"). For the purposes of this arbitration provision only, the term "parties" shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this agreement.

b) At the request of any party to this agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U. S, Code) (the "Act"). The Act will apply even though this agreement provides that it is governed by the law of a specified state,

(c) Arbitration proceedings will be determined in accordance with the Act, the applicable rules and procedures for the arbitration of disputes of JAMS or any successor thereof ("JAMS"), and the terms of this paragraph. In the event of any inconsistency, the terms of this paragraph shall control.

(d) The arbitration shall be administered by JAMS and conducted, unless otherwise required by law, in any U. S. state where real or tangible personal property collateral for this credit is located or if there is no such collateral, in the state specified in the governing law section of this agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed $5,000,000, upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within 90 days of the demand for arbitration and close within 90 days of commencement and the award of the arbitrator(s) shall be issued within 30 days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional 60 days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed and enforced.

(e) The arbitrator(s) will have the authority to decide whether any Claim is barred by the statute of limitations and, if so, to dismiss the arbitration on that basis. For purposes of the application of the statute of limitations, the service on JAMS under applicable JAMS rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitratable shall be determined by the arbitrator(s). The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this agreement.

(f) This paragraph does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or nonjudicial foreclosure against any real or personal property collateral;
(iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ of possession or appointment of a receiver, or additional or supplementary remedies.

(g) The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to arbitration.

FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
(A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

GOVERNING LAW. This Document will be governed by and interpreted in accordance with federal law and the laws of the State of Florida.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Borrower does not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively referred to herein as "charge or collect", any amount in the nature of interest or in the nature of a fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect more for this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Florida (as applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first to reduce the principal balance of this loan, and when the principal has been paid in full, be refunded to Borrower. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them, Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties, also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER:

INTEGRATED BIOPHARMA, INC.

By: /s/ E. Gerald Kay
E. Gerald Kay
Chairman of Integrated BioPharma, Inc.

Exhibit 10.24

[FORM OF WARRANT AGREEMENT RE: CARL DESANTIS]

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 No. __ Warrant to Purchase 175,000 shares

VOID AFTER JUNE 30, 2007

WARRANT TO PURCHASE
COMMON STOCK
OF
INTEGRATED BIOPHARMA, INC.
(f/k/a Integrated Health Technologies, Inc.)

Incorporated Under the Laws of the State of Delaware

THIS IS TO CERTIFY that CARL DESANTIS (the "Warrantholder"), or its proper assigns, 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 Jersey time on June 30, 2003, to purchase from Integrated BioPharma, Inc., a Delaware corporation (the "Company"), all or any part of One Hundred Seventy-Five Thousand (175,000) 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, upon surrender hereof with the Election to Purchase attached hereto as Appendix A, duly completed, at the principal office of the Company, and simultaneous payment therefor in cash or by certified or bank check payable to the order of the Company, at an exercise price of $5.40 for one (1) share of Common Stock (the "Warrant Exercise Price").

1. Term. This Warrant is exercisable, in whole or in part, at the option of the Warrantholder, for a four (4) year period, commencing one (1) year after the date hereof and may not be exercised after 5:00 p.m., New Jersey time, June 30, 2007 (the "Expiration Date"), at which time this Warrant will become wholly void and all rights evidenced hereby will terminate.

2. Warrant Exchange. If this Warrant is exercised for less than all the shares purchasable upon the exercise hereof, the holder shall be entitled to receive a new Warrant of like tenor of or the purchase in the aggregate of the number of shares in respect of which this Warrant shall not have been exercised.

3. Issuance of Common Stock Certificates. Upon the exercise of this Warrant, the Company will issue to the Warrantholder 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.

4. Adjustment of Warrant Exercise Price and Number of Shares of Common Stock. In case of any 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), 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 Paragraph 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 successive reclassification, capital reorganizations, and other changes of outstanding shares of Common Stock and to successive consolidations, mergers, sales, or conveyances.

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. The holder of this Warrant 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 and issued to such holder.

6. Restrictions on Transfer. This Warrant and the shares of Common Stock issuable upon the exercise hereof (collectively, the "Warrant Securities") are not 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 permitted under the Securities Act and applicable state securities laws. 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.

7. Reservation of Stock Issuable Upon Exercise. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the issuance of the Shares upon exercise of the Warrant, such number of its shares of Common Stock 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 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 to such number of shares of Common Stock as shall be sufficient for such purposes.

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. 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 their respective successors. and assigns hereunder.

10. Governing Law: Submission to Jurisdiction. This Warrant issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be construed in accordance with the laws of said State without giving effect to the rules of said State governing the conflicts of laws.

The Company and the Warrantholder, by accepting this Warrant hereby agree that any action, proceeding or claim against it or them arising out of, or relating in any way to, this Warrant shall be brought and enforced in the courts of the State of New Jersey or United States federal court sitting in New Jersey and irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive. The Company and the Warrantholder hereby irrevocably waive any objection to such exclusive jurisdiction or inconvenient forum. Any process or summons to be served upon any of the Company and the Warrantholder (at the option of the party bringing such action, proceeding or claim)may be served by transmitting a copy thereof, by registered or certified mail, return receipt requested, postage paid, addressed to the Company at its principal office and to the Warrantholder at its address appearing in the records of the Company. Such mailing shall be deemed personal service and shall be legal and binding upon the party so served in any action, proceeding or claim. The Company and the Warrantholder agree that the prevailing party(ies) all of its/their reasonable legal costs and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.

11. 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 of the Warrant, to the address of such Holder as shown on the books of the Company; or

(b) If to the Company, to its principal offices at 225 Long Avenue, Hillside, New Jersey 07205 or to such other address as the Company may designate by notice to the Holder.

12. Entire Agreement; Modification. This 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.

INTEGRATED BIOPHARMA, INC.

                         By:/s/ E. Gerald Kay
                         Name: E. Gerald Kay
                         Title: Chief Executive Officer

Dated: June 30, 2003

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.

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 Holder)