Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT, dated as of February 21, 2008 (this “ Agreement ”), is by and between INTEGRATED BIOPHARMA, INC. , a Delaware corporation (the “ Company ”), and IMPERIUM MASTER FUND, LTD., a Cayman Islands company (“ Imperium ”).
 

A.     The Company wishes to sell to Imperium , and Imperium wishes to purchase from the Company, upon the terms and subject to the conditions set forth in this Agreement, (i) an 8% Senior Secured Note having a principal amount of $7,000,000 in the form attached hereto as Exhibit A (the “ Note ”), (ii) 200,000 shares of the Company’s common stock, par value $0.002 per share (the “ Common Stock ”), and (iii) 3,000 shares of the Company’s Series C Convertible Preferred Stock, having a stated value of $1,000 per share (the “ Series C Preferred Stock ”), which series shall be designated pursuant to the Certificate of Designation in the form attached hereto as Exhibit B ( the “ Certificate of Designation ”).

B.     The Series C Preferred Stock shall (i) be convertible into shares of Common Stock, (ii) accrue dividends at a rate of 10% per annum, payable in additional shares of Series C Preferred Stock, and (iii) mature on February 1, 2013 and be redeemed in shares of Common Stock. The Note, the shares of Common Stock and Series C Preferred Stock to be purchased by Imperium hereunder, and the additional shares of Common Stock and Series C Preferred Stock issuable hereunder or under the Certificate of Designation, are collectively referred to herein as the “ Securities ” .

C.      The Company has agreed to effect the registration of the shares of Common Stock issuable upon the conversion or maturity date of the Series C Preferred Stock for resale by the holders thereof under the Securities Act of 1933 (as amended, and the rules and regulations promulgated thereunder, the “ Securities Act ”), pursuant to a Registration Rights Agreement in the form attached hereto as Exhibit C (the “ Registration Rights Agreement ”).

D.     The sale of the Securities by the Company to Imperium, and any issuance of the additional Securities, will be effected in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“ Regulation D ”), as promulgated by the Securities and Exchange Commission ( the “ Commission ” ) under the Securities Act.

E.     The Company’s obligations hereunder and under the Note and the other transaction documents contemplated hereby will be guaranteed by each of the Company’s subsidiaries pursuant to a Guarantee in the form attached hereto as Exhibit D (the “ Guarantee ”) and secured by the assets of the Company and the Company’s subsidiaries pursuant to a Security Agreement in the form attached hereto as Exhibit E (the “ Security Agreement ”).

      In consideration of the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, t he Company and Imperium hereby agree as follows:

1.      TERMINOLOGY AND USAGE .
 

1. 1       Definitions . When used herein, the terms below shall have the respective meanings indicated:
     

“ Affiliate ” means, as to any Person (the “ subject Person ”), any other Person (a) that directly or indirectly through one or more intermediaries controls or is controlled by, or is under direct or indirect common control with, the subject Person, (b) that directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting equity of the subject Person, or (c) ten percent (10%) or more of the voting equity of which is directly or indirectly beneficially owned or held by the subject Person. For the purposes of this definition, “ control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, through representation on such Person’s board of directors or other management committee or group, by contract or otherwise.

“ Allocation Amount ” has the meaning specified in Section 5.5 of this Agreement.

“ Biotech Spin-Off ” has the meaning specified in Section 5.12 of this Agreement.

“ Biotech Subsidiary ” means InB:Biotechnologies, Inc., a New Jersey corporation.

“ Board of Directors ” means the Company’s board of directors.

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which the Principal Market is closed or on which banks in the City of New York are required or authorized by law to be closed.

“ Cap Amount ” means 19.99% of the aggregate number of shares of Common Stock outstanding immediately prior to the Closing (subject to adjustment upon a stock split, stock dividend, recapitalization, reorganization, reclassification or other event that subdivides all of the outstanding shares of Common Stock).

“ CDS ” means CD Financial, LLC, a Florida limited liability company.

“ CDS Debt ” has the meaning specified in Section 2.2.10 of this Agreement.

“ Certificate of Designation ” has the meaning specified in the recitals of this Agreement.

“ Closing ” and “ Closing Date ” have the respective meanings specified in Section 2.1 of this Agreement.

“ Commission ” has the meaning specified in the recitals to this Agreement.

“ Common Stock ” has the meaning specified in the recitals to this Agreement.

“ Company Subsidiary ” means a Subsidiary of the Company.

“ Debt ” means, as to any Person at any time: (a) all indebtedness, liabilities and obligations of such Person for borrowed money; (b) all indebtedness, liabilities and obligations of such Person to pay the deferred purchase price of Property or services, except trade accounts payable of such Person arising in the ordinary course of business that are not past due by more than 90 days; (c) all capital lease obligations of such Person; (d) all Debt of others guaranteed by such Person; (e) all indebtedness, liabilities and obligations secured by a Lien (other than a Permitted Lien) existing on Property owned by such Person, whether or not the indebtedness, liabilities or obligations secured thereby have been assumed by such Person or are non-recourse to such Person; (f) all reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments; and (g) all liabilities and obligations of such Person to redeem or retire shares of capital stock of such Person.

“ Disclosure Documents ” means all SEC Documents filed with the Commission at least three (3) Business Days prior to the Execution Date and the unaudited Financial Statements (including the notes thereon) as of and for the period ending December 31, 2007 delivered to Imperium pursuant to this Agreement.

          
“ Effective Date ” has the meaning specified in the Registration Rights Agreement.
 
“ Embargoed Person ” has the meaning specified in Section 4.29 of this Agreement.
 
“ Environmental Law ” means any federal, state, provincial, local or foreign law, statute, code or ordinance, principle of common law, rule or regulation, as well as any permit, order, decree, judgment or injunction issued, promulgated, approved or entered thereunder, relating to pollution or the protection, cleanup or restoration of the environment or natural resources, or to the public health or safety, or otherwise governing the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling, discharge or disposal of hazardous materials.
 
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Execution Date ” means the date of this Agreement.

“ GAAP ” means generally accepted accounting principles, applied on a consistent basis, as set forth in (i) opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements of the Financial Accounting Standards Board and (iii) interpretations of the Commission and the staff of the Commission. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period.

“ Governmental Authority ” means any nation or government, any state, provincial or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any stock exchange, securities market or self-regulatory organization.
 
“ Governmental Requirement ” means any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, license or other directive or requirement of any federal, state, county, municipal, parish, provincial or other Governmental Authority or any department, commission, board, court, agency or any other instrumentality of any of them.

“ Guarantee ” has the meaning specified in the recitals of this Agreement.

“ Holder ” shall initially mean Imperium, provided that any Person that subsequently holds any Securities shall also be deemed a Holder.

“ Holder Party ” has the meaning specified in Section 5 .10 of this Agreement.
 
“ Intellectual Property ” means any U.S. or foreign patents, patent rights, patent applications, trademarks, trade names, service marks, brand names, logos and other trade designations (including unregistered names and marks), trademark and service mark registrations and applications, copyrights and copyright registrations and applications, inventions, invention disclosures, protected formulae, formulations, processes, methods, trade secrets, computer software, computer programs and source codes, manufacturing research and similar technical information, engineering know-how, customer and supplier information, assembly and test data drawings or royalty rights.

“ Issuance Event ” has the meaning specified in Section 5 .7 of this Agreement.

“ Key Employee ” has the meaning specified in Section 4.16 of this Agreement.

“ Lien ” means, with respect to any Property, any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, tax lien, financing statement, pledge, charge, or other lien, charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such Property (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).

“ Material Adverse Effect ” means an effect that is material and adverse t o (i) the consolidated business, properties, assets, operations, results of operations, financial condition, credit worthiness or prospects of the Company and the Company Subsidiaries taken as a whole, (ii) the ability of the Company or any material Company Subsidiary to perform its obligations under this Agreement or the other Transaction Documents or (iii) the rights and benefits to which a Holder is entitled under this Agreement, the Note, the Certificate of Designation and the other Transaction Documents.

“ Material Contracts ” means, as to the Company and the Company Subsidiaries, any agreement required pursuant to Item 601 of Regulation S-B or Item 601 of Regulation S-K, as applicable, promulgated under the Securities Act to be filed as an exhibit to any report, schedule, registration statement or definitive proxy statement filed or required to be filed by the Company with the Commission under the Exchange Act or any rule or regulation promulgated thereunder, and any and all amendments, modifications, supplements, renewals or restatements thereof.

“ Note ” has the meaning specified in the recitals of this Agreement.

“ Pension Plan ” means an employee benefit plan (as defined in ERISA) maintained by the Company for employees of the Company or any of its Affiliates.

“ Permitted Debt ” means the following: (a) Debt disclosed on Schedule 1.1(i) hereto; and (b) Debt consisting of capitalized lease obligations and purchase money indebtedness incurred in connection with acquisition of capital assets and obligations under sale-leaseback or similar arrangements provided in each case that such obligations are not secured by Liens on any assets of the Company or the Company Subsidiaries other than the assets so leased.

“ Permitted Liens ” means each of the following:

(a)     Liens disclosed on Schedule 1.1(ii) hereto;

(b)     encumbrances consisting of easements, rights-of-way, zoning restrictions or other restrictions on the use of real Property or imperfections to title that do not (individually or in the aggregate) materially impair the ability of the Company or any Company Subsidiary to use such Property in its businesses, and none of which is violated in any material respect by existing or proposed structures or land use;
 
(c)     Liens for taxes, assessments or other governmental charges (including without limitation in connection with workers’ compensation and unemployment insurance) that are not delinquent or which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject to such Liens, and for which adequate reserves (as determined in accordance with GAAP) have been established; and

(d)     Liens of mechanics, materialmen, warehousemen, carriers, landlords or other similar statutory Liens securing obligations that are not yet due and are incurred in the ordinary course of business or which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject to such Liens, for which adequate reserves (as determined in accordance with GAAP) have been established.

“ Person ” means any individual, corporation, trust, association, company, partnership, joint venture, limited liability company, joint stock company, Governmental Authority or other entity.

“ Principal Market ” means the principal exchange, market or quotation system on which the Common Stock is listed, traded or quoted.

“ Property ” means property and/or assets of all kinds, whether real, personal or mixed, tangible or intangible (including, without limitation, all rights relating thereto).

“ Pro Rata Share ” means, with respect to a Holder, the ratio determined by dividing (i) the principal amount of the Registrable Securities purchased hereunder by such Holder at the Closing by (ii) the aggregate principal amount of all Registrable Securities purchased hereunder by all of the Holders at the Closing.

“ Purchase Price ” has the meaning specified in Section 2.1 .

“ Registrable Securities ” has the meaning specified in the Registration Rights Agreement.
 
“ Registration Rights Agreement ” has the meaning specified in the recitals to this Agreement.

“ Registration Statement ” has the meaning specified in the Registration Rights Agreement.

“ Regulation D ” has the meaning specified in the recitals to this Agreement.

“ Restricted Payment ” means (a) any dividend or other distribution (whether in cash, Property or obligations), direct or indirect, on account of (or the setting apart of money for a sinking or other analogous fund for the benefit of) any shares of any class of capital stock of the Company or the Company Subsidiaries now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to all of the holders of that class; (b) any redemption, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of the Company or any of its Affiliates now or hereafter outstanding, except the Securities; (c) any prepayment of principal of, premium, if any, or interest on, or any redemption, conversion, exchange, purchase, retirement, sinking fund or defeasance of, any Debt (whether upon acceleration of such Debt or otherwise); (d) any loan, advance or payment to any officer, director or stockholder of the Company or any of its Affiliates, exclusive of reasonable compensation and reimbursements paid to officers or directors in the ordinary course of business; and (e) any repayment of the CDS Debt prior to the Termination Date.

“ Rule 144 ” means Rule 144 under the Securities Act or any successor provision.

“ SEC Documents ” means all reports, schedules, registration statements and definitive proxy statements filed by the Company with the Commission.

“ Securities ” has the meaning specified in the recitals of this Agreement.

“ Securities Act ” has the meaning specified in the recitals of this Agreement.

“ Security Agreement ” has the meaning specified in the recitals of this Agreement.

“ Series C Preferred Stock ” has the meaning specified in the recitals of this Agreement.

“ Stockholder Cap Approval ” means the affirmative vote by the holders of a majority of the votes cast (including a majority of the votes cast by each class entitled to vote as a separate class) at a meeting of the Company’s stockholders approving the issuance of Common Stock in excess of the Cap Amount.

“ Subsidiary ” means, with respect to any Person, any corporation or other entity of which at least a majority of the outstanding shares of stock or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors (or Persons performing similar functions) of such corporation or entity (regardless of whether or not at the time, in the case of a corporation, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.

“ Termination Date ” means the first date on which the Note has been repaid in full.

“ Trading Day ” means any day on which shares of Common Stock are purchased and sold on the Principal Market.

“ Transaction Documents ” means (i) this Agreement, (ii) the Securities, (iii) the Certificate of Designation, (iv) the Registration Rights Agreement, (v) the Guarantee, (vi) the Security Agreement, and (v ii ) all other agreements, documents and other instruments executed and delivered by or on behalf of the Company , any Company Subsidiary or any of their respective officers on or after the Closing in connection with this Agreement.
 
“ Transfer Agent ” has the meaning specified in Section 3.5 of this Agreement.

1. 2       Other Definitional Provisions . All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of similar import contained in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.

2 .       PURCHASE AND SALE OF THE NOTE AND THE SHARES .

2. 1       Purchase Price; Closing . Upon the terms and subject to the satisfaction or waiver of the conditions set forth in Sections 2.2 and 2.3 , the Company agrees to sell and Imperium agrees to purchase the Note, 200,000 shares of Common Stock and 3,000 shares of Series C Preferred Stock for an aggregate purchase price of $9,836,666.67 (the “ Purchase Price ”). The closing of such purchase and sale is hereinafter referred to as the “ Closing ”, and the date on which the Closing occurs is hereinafter referred to as the “ Closing Date ”. The Closing will be deemed to occur at the offices of Mazzeo Song & Bradham LLP, 708 Third Avenue, 19 ^th Floor, New York, New York 10017, when each of the conditions to the Closing described in Sections 2.2 and 2.3 has been satisfied or waived as specified therein .

2.2      Conditions to Imperium’s Obligations at the Closing . Imperium’s obligations to effect the Closing, including, without limitation, its obligation to purchase the Securities at the Closing, are conditioned upon the fulfillment (or waiver by Imperium in its sole and absolute discretion) of each of the following events as of the Closing Date, and the Company shall use commercially reasonable efforts to cause each of such conditions to be satisfied:

2.2.1     the representations and warranties of the Company set forth in this Agreement and in the other Transaction Documents shall be true and correct in all material respects as of such date as if made on such date (except that to the extent that any such representation or warranty relates to a particular date, such representation or warranty shall be true and correct in all material respects as of that particular date);

2.2.2     the Company shall have complied with or performed in all material respects all of the agreements, obligations and conditions set forth in this Agreement and in the other Transaction Documents that are required to be complied with or performed by the Company on or before the Closing;

2.2.3     the Company shall have delivered to Imperium a certificate, signed by the Secretary of the Company and each Company Subsidiary, certifying true, complete and accurate copies of (i) the constituent organizational documents of each such entity, each as amended through the Closing Date, and (ii) the resolutions passed by the board of directors or similar governing body of each such entity authorizing the execution, delivery and performance of the Transaction Documents to which such entity is a party;

2.2.4     [Intentionally Omitted]

2.2.5     the Company shall have delivered to Imperium copies of (i) the executed Note, (ii) the executed signature pages of the Company and Company Subsidiaries to each of the other Transaction Documents to which they are a party, and (iii) the certificates representing all of the stock, notes and other securities required to be pledged by the Company and the Company Subsidiaries under the Security Agreement ( provided that to the extent the Company is unable to deliver all such certificates at Closing, the Company shall be required to deliver all remaining certificates in accordance with Section 5.13 );

2.2.6     the Company’s counsel shall have confirmed that it has in its possession the originals of each of the documents specified in Section 2.2.5 , and such counsel shall have confirmed that all such originals will be delivered to Imperium or its counsel no later than the Business Day immediately following the Closing Date;

2.2.7     the Certificate of Designation shall have been accepted for filing by the Secretary of State of the State of Delaware and shall be in full force and effect;

2.2.8     the Company shall have delivered to Imperium a legal opinion of its outside counsel covering the matters set forth on Exhibit F hereto and such opinion shall be in form and substance reasonably satisfactory to Imperium;

2.2.9     the Company shall have delivered to Imperium a payoff letter from Amalgamated Bank stating (i) the aggregate amount owed by the Company and the Company Subsidiaries to Amalgamated Bank as of the date of such letter, (ii) the per diem interest amount accruing on and after the date of such letter, (iii) the wiring instructions for payment, (iv) that all liens held by Amalgamated Bank on the assets of the Company and the Company Subsidiaries will terminate upon the payment of such payoff amount, and (v) upon the payment of such payoff amount, the Company and Imperium shall be authorized to file UCC-3 terminations terminating the UCC financing statements filed by Amalgamated Bank against the Company and Company Subsidiaries;

          
2.2.10     the Company shall have contemporaneously with the Closing consummated its contemplated financing with CDS consisting of (i) $4,500,000 of debt (the “ CDS Debt ”), which will be subordinated to the Note, shall not be repaid while any of the Note is outstanding, and shall be on such other terms and conditions satisfactory to Imperium, and (ii) 3,000 shares of Series C Preferred Stock, and CDS and Imperium shall have entered into an intercreditor and voting agreement pursuant to which CDS will have subordinated its liens on the assets of the Company and Company Subsidiaries to the liens held by Imperium and agreed to vote its shares of Series C Preferred Stock consistent with Imperium;

2.2.11     the Company shall have delivered to Imperium the Company’s unaudited financial statements for the quarter ending December 31, 2007, and such financial statements shall not be, in Imperium’s reasonable judgment, materially different from the projections for such quarter previously provided by the Company to Imperium;

2.2.14     t here shall be no injunction, restraining order or decree of any nature of any court or Governmental Authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction Documents; and

2.2.15     the expenses payable by the Company to Imperium and described in Section 6.10 shall have been netted out of the Purchase Price payable by Imperium.

2.3       Conditions to Company’s Obligations at the Closing. The Company’s obligations to effect the Closing with Imperium are conditioned upon the fulfillment (or waiver by the Company in its sole and absolute discretion) of each of the following events as of the Closing Date:
 

2.3. 1       the representations and warranties of Imperium set forth in this Agreement and in the other Transaction Documents to which it is a party shall be true and correct in all material respects as of such date as if made on such date (except that to the extent that any such representation or warranty relates to a particular date, such representation or warranty shall be true and correct in all material respects as of that date);

2.3. 2       Imperium shall have complied with or performed all of the agreements, obligations and conditions set forth in this Agreement that are required to be complied with or performed by Imperium on or before the Closing;

2.3.3     t here shall be no injunction, restraining order or decree of any nature of any court or Governmental Authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction Documents;

2.3.4 Imperium shall have executed each Transaction Document to which it is a party and shall have delivered the same to the Company; and

2.3.5 Imperium shall have wire transferred to the Company’s account, in immediately available funds, an aggregate amount equal to $10,000,000 (net of the expenses payable by the Company with respect to the Closing under Section 6.10 ).

3.       REPRESENTATIONS AND WARRANTIES OF IMPERIUM .
 

      Imperium hereby represents and warrants to the Company and agrees with the Company that, as of the Execution Date:

3. 1       Authorization; Enforceability . Imperium is duly and validly organized, validly existing and in good standing under the laws of the Cayman Islands with the requisite corporate power and authority to purchase the Securities to be purchased by it hereunder and to execute and deliver this Agreement and the other Transaction Documents to which it is a party. This Agreement constitutes, and upon execution and delivery thereof, each other Transaction Document to which Imperium is a party will constitute, Imperium’s valid and legally binding obligation, enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) general principles of equity.

3. 2       Accredited Investor . Imperium (i) is an “accredited investor” as that term is defined in Rule 501 of Regulation D, (ii) was not formed or organized for the specific purpose of making an investment in the Company, and (iii) is acquiring the Securities solely for its own account and not with a present view to the public resale or distribution of all or any part thereof, except pursuant to sales that are registered under, or exempt from the registration requirements of, the Securities Act and/or sales registered under the Securities Act; provided, however, that in making such representation, Imperium does not agree to hold the Securities for any minimum or specific term and reserves the right to sell, transfer or otherwise dispose of the Securities at any time in accordance with the provisions of this Agreement and with federal and state securities laws applicable to such sale, transfer or disposition. Imperium can bear the economic risk of a total loss of its investment in the Securities and has such knowledge and experience in business and financial matters so as to enable it to understand the risks of and form an investment decision with respect to its investment in the Securities.
 

3. 3       Information . The Company has, prior to the Execution Date, provided Imperium with information regarding the business, operations and financial condition of the Company and has, prior to the Execution Date, granted to Imperium the opportunity to ask questions of and receive answers from representatives of the Company, its officers, directors, employees and agents concerning the Company in order for Imperium to make an informed decision with respect to its investment in the Securities. Neither such information nor any other investigation conducted by Imperium or any of its representatives shall modify, amend or otherwise affect Imperium’s right to rely on the Company’s representations and warranties contained in this Agreement.

3. 4       Limitations on Disposition . Imperium acknowledges that, except as provided in the Registration Rights Agreement, the Securities have not been and are not being registered under the Securities Act and may not be transferred or resold without registration under the Securities Act or unless pursuant to an exemption therefrom.

3. 5       Legend . Imperium understands that the certificates representing the Common Stock and Series C Preferred Stock may bear at issuance a restrictive legend in substantially the following form:
 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and may not be offered for sale or sold unless a registration statement under the Securities Act and applicable state securities laws shall have become effective with respect thereto, or an exemption from registration under the Securities Act and applicable state securities laws is available in connection with such offer or sale. These securities [and the securities issuable hereunder] (i) may be pledged or hypothecated in connection with a bona fide margin account or other financing secured by such securities or (ii) may be transferred or assigned to an affiliate of the holder hereof without the necessity of an opinion of counsel or the consent of the issuer hereof.”

Notwithstanding the foregoing, it is agreed that, as long as (A) the resale or transfer (including, without limitation, a pledge) of any of the Securities is registered pursuant to an effective registration statement, (B) such Securities have been sold pursuant to Rule 144, subject to receipt by the Company of customary documentation reasonably acceptable to the Company in connection therewith, or (C) such Securities are eligible for resale under Rule 144(k) or any successor provision, such Securities shall be issued without any legend or other restrictive language and, with respect to Securities upon which such legend is stamped, the Company shall issue new certificates without such legend to the holder upon request. The Company shall execute and deliver written instructions to the transfer agent for its Common Stock (the “ Transfer Agent ”) as may be necessary to satisfy any request by a Holder for removal of such legends no later than the close of business on the third (3 ^rd ) Business Day following the receipt of the request from a Holder to the extent such legends may be removed in accordance with this Section 3.5 .
 

3.6      Reliance on Exemptions . Imperium understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations and warranties of Imperium set forth in this Section 3 in order to determine the availability of such exemptions and the eligibility of Imperium to acquire the Securities. Imperium acknowledges that it did not purchase the Securities based upon any advertisement in any publication of general circulation. Imperium is relying on the representations, acknowledgements and agreements made by the Company in Section 4 and elsewhere in this Agreement in making investing, trading and/or other decisions concerning the Company’s securities.

3.7      Non-Affiliate Status; Common Stock Ownership . Imperium is not an Affiliate of the Company and is not acting in association or concert with any other Person in regard to its purchase of the Securities or otherwise in respect of the Company. Imperium ’s investment in the Securities is not for the purpose of acquiring, directly or indirectly, control of, and it has no intent to acquire or exercise control of, the Company or to influence the decisions or policies of the Board of Directors.
3.8       Fees . Imperium has not agreed to pay any compensation or other fee, cost or related expenditure to any underwriter, broker, agent or other representative in connection with the transactions contemplated hereby.

3.9 No Conflicts . The execution and performance of this Agreement and the other Transaction Documents to which Imperium is a party do not conflict in any material respect with any agreement to which Imperium is a party or is bound, any court order or judgment applicable to Imperium , or the constituent documents of Imperium .

3.10      No Governmental Review . Imperium understands that no U.S. federal or state agency or any other Governmental Authority has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of an investment in the Securities nor have such authorities passed upon the accuracy of any information provided to Imperium or made any findings or determinations as to the merits of the offering of the Securities.

4.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY . The Company hereby represents and warrants to each Holder and agrees with such Holder that, as of the Execution Date:
 

4. 1       Organization, Good Standing and Qualification . Each of the Company and Company Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite power and authority to carry on its business as now conducted. Each of the Company and Company Subsidiaries is duly qualified to transact business and is in good standing in each jurisdiction in which it conducts business except where the failure so to qualify has not had or would not reasonably be expected to have a Material Adverse Effect.

4. 2       Authorization; Consents . The Company has the requisite corporate power and authority to enter into and perform its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities to Imperium in accordance wi th the terms hereof and thereof. All corporate action on the part of the Company necessary for the authorization, execution and delivery of, and the performance by the Company of its obligations under, the Transaction Documents to which the Company is a party has been taken, and no further consent or authorization of any Person (including, without limitation, any of the Company’s directors or shareholders or any Governmental Authority (other than such approval as may be required under the Securities Act and applicable state laws in respect of the Registration Rights Agreement) is required under any organizational document, Material Contract, Governmental Requirement or otherwise. The Board of Directors has determined that the sale and issuance of the Securities, and the consummation of the transactions contemplated hereby and by the other Transaction Documents, are in the best interests of the Company.

4. 3       Enforcement . This Agreement has been and, at or prior to the Closing, each other Transaction Document required to be delivered by the Company at the Closing will be, duly executed and delivered by the Company. This Agreement constitutes and, upon the execution and delivery thereof by the Company, each other Transaction Documents will constitute, the valid and legally binding obligation of the Company, enforceable against the Company in accordance with their respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) general principles of equity.
 
4. 4       Disclosure Documents; Agreements; Financial Statements; Other Information . The Company is subject to the reporting requirements of the Exchange Act and, except as described on Schedule 4.4 , the Company has filed with the Commission all SEC Documents that the Company was required to file with the Commission on or after December 31, 2006. The Company is not aware of any event occurring or expected to occur on or prior to the Closing Date (other than the transactions effected hereby) that would require the filing of, or with respect to which the Company intends to file, a Form 8-K after the Closing. Each SEC Document filed on or after December 31, 2006, as of the date of the filing thereof with the Commission (or if amended or superseded by a filing prior to the Execution Date, then on the date of such amending or superseding filing), complied in all material respects with the requirements of the Securities Act or Exchange Act, as applicable, and, as of the date of such filing (or if amended or superseded by a filing prior to the Execution Date, then on the date of such filing), such SEC Document (including all exhibits and schedules thereto and documents incorporated by reference therein) did not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All documents required to be filed as exhibits to the SEC Documents filed on or after

December 31, 2006 have been filed as required. Except as set forth in the Disclosure Documents, the Company has no liabilities, contingent or otherwise, other than liabilities incurred in the ordinary course of business which, individually or in the aggregate, are not material to the consolidated business or financial condition of the Company and the Company Subsidiaries. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto. Such financial statements have been prepared in accordance with GAAP consistently applied at the times and during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end adjustments). The Company will prepare the financial statements to be included in any reports, schedules, registration statements and definitive proxy statements that the Company is required to file or files with the Commission after the date hereof in accordance with GAAP (except in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements).
 
4. 5       Capitalization ; Subsidiaries; Outstanding Debt .
 
(a)     The capitalization of the Company, including its authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company’s stock option plans and agreements, the number of shares issuable and reserved for issuance pursuant to securities (other than the Securities) payable in, exercisable for, or convertible into or exchangeable for any shares of Common Stock is set forth on Schedule 4.5(a) . All outstanding shares of capital stock of the Company have been, or upon issuance will be, validly issued, fully paid and non-assessable.

(b)     All of the Company Subsidiaries are disclosed on Schedule 4.5(b) . Each of the Company Subsidiaries that is indicated as being “active” on Schedule 4.5(b) operates the business set forth opposite its name on Schedule 4.5(b) . None of the Company Subsidiaries that is indicated as being “inactive” on Schedule 4.5(b) has any assets or operations of any kind. Except as disclosed on Schedule 4.5(b) , the Company or a wholly-owned Company Subsidiary owns all of the capital stock of each Company Subsidiary, which capital stock is validly issued, fully paid and non-assessable, and no shares of the capital stock of the Company or any Company Subsidiary are subject to preemptive rights or any other similar rights of the shareholders of the Company or any such Company Subsidiary or any Liens created by or through the Company or any such Company Subsidiary.

(c)     Except as disclosed on Schedule 4.5(c) or as contemplated herein, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company or any Company Subsidiary, or arrangements by which the Company or any Company Subsidiary is or may become bound to issue additional shares of capital stock of the Company or any Company Subsidiary (whether pursuant to anti-dilution, “reset” or other similar provisions) .

(d)      Schedule 4.5(d) identifies each individual item of Debt of the Company and/or any Company Subsidiary currently outstanding in excess of $25,000 as of the date hereof.

4. 6       Due Authorization; Valid Issuance . The Securities are duly authorized and, when issued, sold and delivered in accordance with the terms of this Agreement, will be duly and validly issued, free and clear of any Liens imposed by or through the Company. Assuming the accuracy of Imperium’s representations contained herein, the issuance and sale of the Securities under this Agreement will be effected in compliance with all applicable federal and state securities laws.
     
4. 7       Form S-3 . The Company is eligible to register the Registrable Securities for resale in a secondary offering by each Holder on a registration statement on Form S-3 under the Securities Act. To the Company’s knowledge, a s of the date hereof and as of the Closing Date, there exist no facts or circumstances (including, without limitation, any required approvals or waivers of any circumstances that may delay or prevent the obtaining of accountant’s consents) that could reasonably be expected to prohibit or delay the preparation, filing or effectiveness of such registration statement on Form S-3.

4.8      No Conflict . Neither the Company nor any Company Subsidiary is in violation of any provisions of its certificate or articles of incorporation, bylaws or any other organizational document. Neither the Company nor any Company Subsidiary is in violation of or in default (and no event has occurred which, with notice or lapse of time or both, would constitute a default) under any provision of any instrument or contract to which it is a party or by which it or any of its Property is bound, or in violation of any provision of any Governmental Requirement applicable to the Company or any Company Subsidiary, except for any violation or default that has not had or would not reasonably be expected to have a Material Adverse Effect. The (i) execution, delivery

and performance of this Agreement and the other Transaction Documents and (ii) consummation of the transactions contemplated hereby and thereby will not result in any violation of any provisions of the Company’s certificate of incorporation, bylaws or any other organizational document or in a default under any provision of any material instrument or contract to which the Company or any Company Subsidiary is a party or by which it or any of its Property is bound, or in violation of any provision of any Governmental Requirement applicable to the Company or be in conflict with or constitute, with or without the passage of time and giving of notice, a default under any such instrument or contract or the triggering of any preemptive or anti-dilution rights (including, without limitation, pursuant to any “reset” or similar provisions) or rights of first refusal or first offer , or any other rights that would allow or permit the holders of the Company’s securities or any other Person to purchase shares of Common Stock or other securities of the Company or any Company Subsidiary (whether pursuant to a shareholder rights plan provision or otherwise) .
 
4.9      Financial Condition; Taxes; Litigation .
 

4.9.1     The financial condition of each of the Company and Company Subsidiaries is, in all material respects, as described in the Disclosure Documents, except for changes in the ordinary course of business and normal year-end adjustments that are not, in the aggregate, materially adverse to the consolidated business or financial condition of the Company and the Company Subsidiaries. There has been no (i) material adverse change to the business, operations, properties, financial condition, prospects or results of operations of the Company and any Company Subsidiary since the date of the Company’s most recent financial statements contained in the Disclosure Documents or (ii) change by the Company in its accounting principles, policies and methods except as required by changes in GAAP.

4.9.2     Each of the Company and Company Subsidiaries has prepared in good faith and duly and timely filed all tax returns required to be filed by it and such returns are complete and accurate in all material respects and each of the Company and Company Subsidiaries has paid all taxes required to have been paid by it, except for taxes which it reasonably disputes in good faith or the failure of which to pay has not had or would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Company Subsidiary has any liability with respect to taxes that accrued on or before the date of the most recent balance sheet of the Company included in the Disclosure Documents in excess of the amounts accrued with respect thereto that are reflected on such balance sheet.

4.9.3     Except for sales tax audits undertaken by state taxing authorities in the ordinary course of business, neither the Company nor any Company Subsidiary is the subject of any pending or, to the Company’s knowledge, threatened inquiry, investigation or administrative or legal proceeding by any Governmental Authority.
 
4.9.4 There is no material claim, litigation or administrative proceeding pending, or, to the Company’s knowledge, threatened or contemplated, against the Company or any Company Subsidiary, or against any officer, director or employee of the Company or any such Company Subsidiary in connection with such Person’s employment therewith. Neither the Company nor any Company Subsidiary is a party to or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or Governmental Authority which has had or would reasonably be expected to have a Material Adverse Effect.
 
4.10       Manipulation of Price . The Company has not, and to its knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities.

4.11      Intellectual Property .

(a)     Each of the Company and Company Subsidiaries owns, free and clear of claims or rights of any other Person, with full right to use, sell, license, sublicense, dispose of, and bring actions for infringement of, or, to the knowledge of the Company, has acquired licenses or other rights to use, all Intellectual Property necessary for the conduct of its business as presently conducted (other than with respect to software which is generally commercially available and not used or incorporated into the Company’s or such Company Subsidiary’s products and open source software which may be subject to one or more “general public” licenses). All works that are used or incorporated into the Company’s or any Company Subsidiary’s services, products or services or products actively under development and which is proprietary to the Company or such Company Subsidiary was developed by or for the Company or a Company Subsidiary by the current or former employees, consultants or independent contractors of the Company or a Company Subsidiary or purchased or licensed by the Company or a Company Subsidiary.

(b)     The business of each of the Company and Company Subsidiaries as presently conducted and the production, marketing, licensing, use and servicing of any products or services of each of the Company and Company Subsidiaries do not, to the knowledge of the Company, infringe or conflict with any patent, trademark, copyright, or trade secret rights of any third parties or any other Intellectual Property of any third parties in any material respect. Neither the Company nor any Company Subsidiary has received written notice from any third party asserting that any Intellectual Property owned or licensed by the Company or a Company Subsidiary, or which the Company or any Company Subsidiary otherwise has the right to use, is invalid or unenforceable by the Company or such Company Subsidiary and, to the Company’s knowledge, there is no valid basis for any such claim (whether or not pending or threatened).

(c)     No claim is pending or, to the Company’s knowledge, threatened against the Company or any Company Subsidiary nor has the Company or any Company Subsidiary received any written notice or other written claim from any Person asserting that the Company’s or any Company Subsidiary’s present or contemplated activities infringe or may infringe in any material respect any Intellectual Property of such Person, and the Company is not aware of any infringement by any other Person of any material rights of the Company or any Company under any Intellectual Property Rights.

(d)     All licenses or other agreements under which the Company or any Company Subsidiary is granted Intellectual Property (excluding licenses to use software utilized in the Company’s or such Company Subsidiary’s internal operations and which is generally commercially available) are in full force and effect and, to the Company’s knowledge, there is no material default by any party thereto. The Company has no reason to believe that the licensors under such licenses and other agreements do not have and did not have all requisite power and authority to grant the rights to the Intellectual Property purported to be granted thereby.

(e)     All licenses or other agreements under which the Company or any Company Subsidiary has granted rights to Intellectual Property to others (including all end-user agreements) are in full force and effect, there has been no material default by the Company or any Company Subsidiary thereunder and, to the Company’s knowledge, there is no material default of any provision thereof relating to Intellectual Property by any other party thereto.

(f)     Each of the Company and Company Subsidiaries has taken all steps required in accordance with commercially reasonable business practice to establish and preserve their ownership in their owned Intellectual Property and to keep confidential all material technical information developed by or belonging to the Company or such Company which has not been patented or copyrighted. To the Company’s knowledge, neither the Company nor any Company Subsidiary is making any unlawful use of any Intellectual Property of any other Person, including, without limitation, any former employer of any past or present employees of the Company or any Company Subsidiary. To the Company’s knowledge, neither the Company, any Company Subsidiary nor any of their respective employees has any agreements or arrangements with former employers of such employees relating to any Intellectual Property of such employers, which materially interfere or conflict with the performance of such employee’s duties for the Company or any Company Subsidiary or result in any former employers of such employees having any rights in, or claims on, the Company’s or any Company Subsidiary’s Intellectual Property. Each current employee of each of the Company and Company Subsidiaries who has access to material Intellectual Property has executed agreements regarding confidentiality, proprietary information and assignment of inventions and copyrights to the Company or such Company Subsidiary, as the case may be, each independent contractor or consultant of each of the Company and Company Subsidiaries has executed agreements regarding confidentiality and proprietary information, and neither the Company nor any Company Subsidiary has received written notice that any employee, consultant or independent contractor is in violation of any agreement or in breach of any agreement or arrangement with former or present employers relating to proprietary information or assignment of inventions. Without limiting the foregoing: (i) each of the Company and Company Subsidiaries has taken reasonable security measures to guard against unauthorized disclosure or use of any of its Intellectual Property that is confidential or proprietary; and (ii) except as to certain former employees of AgroLabs, Inc. against whom claims are being made, the Company has no reason to believe that any Person (including, without

limitation, any former employee or consultant of the Company or any Company Subsidiary) has unauthorized possession of any of its Intellectual Property, or any part thereof, or that any Person has obtained unauthorized access to any of its Intellectual Property. Each of the Company and Company Subsidiaries has complied in all material respects with its respective obligations pursuant to all agreements relating to Intellectual Property rights that are the subject of licenses granted by third parties, except for any non-compliance that has not had or would not reasonably be expected to have a Material Adverse Effect.

4.12      Registration Rights; Rights of Participation . Except as set forth on Schedule 4.12 , the Company has not granted or agreed to grant to any Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other Governmental Authority which has not been satisfied in full or waived on or prior to the date hereof and no Person, including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties, has any right of first refusal, preemptive right, right of participation, anti-dilutive right or any similar right to participate in, or to receive securities or other assets of the Company solely as a result of the transactions contemplated by this Agreement or the other Transaction Documents.
 
4.13      Solicitation; Other Issuances of Securities . Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf, (i) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities, or (ii) has, directly or indirectly, made any offers or sales of any security or the right to purchase any security, or solicited any offers to buy any security or any such right, under circumstances that would require registration of the Securities under the Securities Act.

4.14      Fees . Except as set forth on Schedule 4.14 , the Company is not obligated to pay any brokers, finders or financial advisory fees or commissions to any underwriter, broker, agent or other representative in connection with the transactions contemplated hereby. The Company will indemnify and hold harmless each Holder from and against any claim by any Person alleging that such Holder is obligated to pay any such compensation, fee, cost or related expenditure in connection with the transactions contemplated hereby.
 
4.15      Foreign Corrupt Practices . Neither the Company, any Company Subsidiary nor, to the knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf of the Company or any Company Subsidiary, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee, or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
 
4.16      Key Employees . The “executive officers” (as defined in Rule 501(f) of the Securities Act) of each of the Company and Company Subsidiaries (each, a “ Key Employee ”) is currently serving in the capacity described in the Disclosure Documents. The Company has no knowledge of any fact or circumstance (including, without limitation, (i) the terms of any agreement to which such person is a party or any litigation in which such person is or may become involved and (ii) any illness or medical condition that could reasonably be expected to result in the disability or incapacity of such person) that would limit or prevent any such person from serving in such capacity on a full-time basis in the reasonably foreseeable future, or of any intention on the part of any such person to limit or terminate his or her employment with the Company or any Company Subsidiary. No Key Employee has borrowed money pursuant to a currently outstanding loan that is secured by Common Stock or any right or option to receive Common Stock.

4.17      Labor Matters . There is no strike, labor dispute or union organization activities pending or, to the knowledge of the Company, threatened between the Company or any Company Subsidiary and their respective employees. No employees of the Company or any Company Subsidiary belong to any union or collective bargaining unit. Each of the Company and Company Subsidiaries has complied in all material respects with all applicable federal and state equal opportunity and other laws related to employment.

4.18      Environment . Neither the Company nor any Company Subsidiary has any liabilities under any Environmental Law, nor, to the Company's knowledge, do any factors exist that are reasonably likely to give rise to any such liability, affecting any of the properties owned or leased by the Company or any Company Subsidiary, in each case other than liabilities that have not had and would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Company Subsidiary has violated any Environmental Law applicable to it now or previously in effect, other than any violation that has not had and would not reasonably be expected to have a Material Adverse Effect.

4.19      ERISA . Neither the Company nor any Company Subsidiary maintains or contributes to, or has any obligation under, any Pension Plan. Each of the Company and Company Subsidiaries is in compliance in all material respects with the presently applicable provisions of ERISA and the United States Internal Revenue Code of 1986, as amended, with respect to each Pension Plan except in any such case for any such matters that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Material Adverse Effect.

4.20      Insurance . The Company maintains insurance for itself and each Company Subsidiary in such amounts and covering such losses and risks as are reasonably sufficient and customary in the businesses in which the Company and each such Company Subsidiary are engaged. As of the date hereof and as of the Closing Date, n o notice of cancellation has been received for any of such policies and the Company is in compliance in all material respects with all of the terms and conditions thereof. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue to conduct its business as currently conducted without a significant increase in cost. Without limiting the generality of the foregoing, the Company maintains Director’s and Officer’s insurance in an amount not less than $5 million for each covered occurrence.

4.21       Property . Each of the Company and Company Subsidiaries has good and marketable title to all real and personal Property owned by it, in each case free and clear of all Liens, other than the Permitted Liens. Any Property held under lease by the Company or a Company Subsidiary is held by it under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made or proposed to be made of such Property by the Company or such Company Subsidiary.

4.22       Regulatory Permits . Each of the Company and Company Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its business, except where the failure to have any such certificate, authorization or permit would not have a Material Adverse Effect , and neither the Company nor any Company Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

4.23      Investment Company . Neither the Company nor any Company Subsidiary is and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof, will become an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the Investment Company Act of 1940, as amended.

4.24      U.S. Real Property Holding Corporation . The Company is not, nor has ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended.

4.25      Off Balance Sheet Arrangements . There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect.

4.26      Money Laundering . The operations of the Company and the Company Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder, and no action, suit or proceeding by or before any Governmental Authority involving the Company or any of the Company Subsidiaries with respect to such Governmental Requirements is pending or, to the knowledge of the Company, threatened.

4.27      Transfer Taxes . No stock transfer or other taxes (other than income taxes) are required to be paid in connection with the issuance and sale of any of the Securities, other than such taxes for which the Company has established appropriate reserves and intends to pay in full on or before the Closing.

4.28      Sarbanes-Oxley Act; Internal Controls and Procedures . To the Company’s knowledge, the Company is in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof. The Company maintains internal accounting controls, policies and procedures, and such books and records as are reasonably designed to provide reasonable assurance that (i) all transactions to which the Company or any Company Subsidiary is a party or by which its properties are bound are effected by a duly authorized employee or agent of the Company, supervised by and acting within the scope of the authority granted by the Company’s senior management; (ii) the recorded accounting of the Company’s consolidated assets is compared with existing assets at regular intervals; and (iii) all transactions to which the Company or any Company Subsidiary is a party, or by which its properties are bound, are recorded (and such records maintained) in accordance with all Governmental Requirements and as may be necessary or appropriate to ensure that the financial statements of the Company are prepared in accordance with GAAP.

4.29      Embargoed Person . None of the funds or other assets of the Company or any Company Subsidiary shall constitute property of, or shall be beneficially owned, directly or indirectly, by any Person subject to trade restrictions under United States law, including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. , the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. , and any Executive Orders or regulations promulgated under any such United States laws (each, an “ Embargoed Person ”), with the result that the investments evidenced by the Securities are or would be in violation of any Governmental Requirements. No Embargoed Person shall have any interest of any nature whatsoever in the Company or any Company Subsidiary with the result that the investments evidenced by the Securities are or would be in violation of any Governmental Requirements. None of the funds or other assets of the Company or any Company Subsidiary shall be derived from any unlawful activity with the result that the investments evidenced by the Securities are or would be in violation of any Governmental Requirements.

4.30      Transactions with Interested Persons . Except with respect to the contemplated financing with CDS referred to in Section 2.2.10 above, no officer, director or employee of the Company or any Company Subsidiary is or has made any arrangements with the Company or any Company Subsidiary to become a party to any transaction with the Company or any Company Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

4.31      Customers and Suppliers . The relationships of each of the Company and Company Subsidiaries with its customers and suppliers are maintained on commercially reasonable terms. To the Company’s knowledge, no customer or supplier of the Company or a Company Subsidiary has any plan or intention to terminate its agreement with the Company or such Company Subsidiary, which termination would reasonably be expected to have a Material Adverse Effect.

4.32      Accountants . The Company’s accountants, who the Company expects will render their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2008, are, to the Company’s knowledge, independent accountants as required by the Securities Act.

4.33      Solvency . (i) The fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing Debt; and (ii) the expected cash flows of the Company for future periods, together with the proceeds the Company would receive upon liquidation of its assets and the proceeds from expected debt or equity offerings, after taking into account all anticipated uses of such amounts, would be sufficient to pay all Debt when such Debt is required to be paid. The Company has no knowledge of any facts or circumstances which lead it to believe that it will be required to file for reorganization or liquidation under bankruptcy or reorganization laws of any jurisdiction, and has no present intention to so file.

4.34      Disclosure . The representations, warranties and written statements contained in this Agreement and the other Transaction Documents and in the certificates, exhibits and schedules delivered by the Company to Imperium pursuant to this Agreement and the other Transaction Documents and in connection with Imperium’s due diligence investigation of the Company, do not contain any untrue statement of a material fact, and do not omit to state a material fact required to be stated therein or necessary in order to make such representations, warranties or statements not misleading in light of the circumstances under which they were made. Neither the Company nor any Person acting on its behalf or at its direction has provided Imperium with material non-public information other than the terms of the transactions contemplated hereby. Following the issuance of a press release in accordance with Section 5.1(c) , to the Company’s knowledge, Imperium will not possess any material non-public information concerning the Company that was provided to Imperium by the Company or its agents or representatives. The Company acknowledges that Imperium is relying on the representations, acknowledgments and agreements made by the Company in this Section 4.34 and elsewhere in this Agreement in making trading and other decisions concerning the Company’s securities.

5.       COVENANTS AND AGREEMENTS .
 

5.1      Filings and Public Disclosure by the Company . The Company shall:
(a)     file a Form D with respect to the Securities issued at the Closing as and when required under Regulation D and provide a copy thereof to Imperium promptly after such filing;
(b)     at or prior to the Closing, take such action as the Company reasonably determines upon the advice of counsel is necessary to qualify the Securities for sale under applicable state or “blue-sky” laws or obtain an exemption therefrom, and shall promptly provide evidence of any such action to Imperium at Imperium’s request; and

(c)     (i) on or prior to 8:30 a.m. (eastern time) on the Business Day following the Execution Date , issue a press release disclosing the material terms of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, and (ii) on or prior to 5:00 p.m. (eastern time) on the Business Day following the Execution Date, file with the Commission a Current Report on Form 8-K disclosing the material terms of and including as exhibits this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby; provided, however , that Imperium shall have a reasonable opportunity to review and comment on any such press release or Form 8-K prior to the issuance or filing thereof; and provided, further , that if the Company fails to issue a press release disclosing the material terms of this Agreement and the other Transaction Documents within the time frames described herein, any Holder may issue a press release disclosing such information without any notice to or consent by the Company. Thereafter, the Company shall timely file any filings and notices required by the Commission or applicable law with respect to the transactions contemplated hereby.

5.2      Use of Proceeds . The Company shall use the proceeds from the sale of the Securities (i) first to repay all amounts outstanding under the Amalgamated Bank credit facilities, and (ii) second for working capital and general corporate purposes.
5.3      Certain Affirmative Covenants of the Company . The Company agrees that, during the period beginning on the Execution Date and ending on the Termination Date, the Company shall, and shall cause each Company Subsidiary to:

(a)     maintain its corporate existence in good standing;

(b)      comply with all Governmental Requirements applicable to the operation of its business, except for instances of noncompliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
 
(c)     comply with all agreements, documents and instruments binding on it or affecting its Properties or business, including, without limitation, all Material Contracts, except for instances of noncompliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(d)     provide each Holder with copies of all materials sent to its shareholders at the same time as such materials are delivered to such shareholders;
(e)     timely file with the Commission all reports required to be filed pursuant to the Exchange Act and refrain from terminating its status as an issuer required by the Exchange Act to file reports thereunder even if the Exchange Act or the rules or regulations thereunder would permit such termination (and otherwise make and keep public information available, as those terms are understood and defined in Rule 144) ;

(f)     [Intentionally Omitted]

(g)     ensure that the Common Stock is at all times listed or quoted on the Nasdaq Global Market, the New York Stock Exchange, the American Stock Exchange, or such other exchange or quotation service reasonably satisfactory to the Holder (or if there is more than one Holder, the Holders holding a majority of the Series C Preferred Stock held by all Holders); and

(h)     maintain commercially reasonable insurance coverage (including D&O insurance) for each of the Company and Company Subsidiaries.

5.4      Certain Negative Covenants of the Company . The Company agrees that, during the period beginning on the Execution Date and ending on the Termination Date, the Company shall not, and shall cause each Company Subsidiary not to:

(a)     enter into any transaction or arrangement with any Affiliate, employee, officer, director or shareholder of the Company or Company Subsidiary, unless such transaction is effectuated on an arms’ length basis and approved by the independent directors of the Company or such Company Subsidiary, as the case may be;
 

(b)      incur (or permit to exist) any Debt (other than Permitted Debt);

(c)     grant, establish or maintain any Lien on any of its Property other than Permitted Liens;

(d)     make any Restricted Payments other than Restricted Payments made by a Company Subsidiary to the Company;

(e)     make any offers or sales of any security or solicit any offers to buy any security, which will be integrated with the sale of the Securities in a manner which would require the registration of any of the Securities under the Securities Act or require stockholder approval under the rules and regulations of the Principal Market;

(f)     dispose of all or any part of its Property unless (i) such disposition is in the ordinary course of business and for fair market value, and (ii) such Property is not material to the Company’s or any Company Subsidiary’s business, operations or financial condition or performance; or

(g)      consent to or implement any termination, amendment, modification, supplement or waiver of the certificate or articles of incorporation, articles of organization, bylaws, regulations or other constituent documents of the Company or any Company Subsidiary which would reasonably be expected to adversely affect the rights of any Holder under the Transaction Documents.
 

5.5      Limitation on Issuance of Common Stock . Each Holder acknowledges and agrees that the aggregate number of shares of Common Stock that may be issued by the Company pursuant to this Agreement and the Securities may not at any time exceed the Cap Amount without the Stockholder Cap Approval and that the Company shall have no obligation to issue shares of Common Stock pursuant to this Agreement or the Securities in excess of the Cap Amount unless either (x) the Stockholder Cap Approval has been obtained or (y) the Company has obtained a written opinion from outside counsel that such approval is not required, which opinion shall be reasonably satisfactory to the Holders holding a majority of the shares of Series C Preferred Stock held by all Holders . In furtherance of the limitation set forth in the immediately preceding sentence, at any time following the Closing Date, the aggregate number of shares of Common Stock that such Holder may receive upon the conversion of such Holder’s shares of Series C Preferred Stock may not exceed the product of (A) the Cap Amount and (B) such Holder’s Pro Rata Share (the “ Allocation Amount ”). In the event that a Holder shall sell or otherwise transfer any of such Holder’s shares of Series C Preferred Stock, each transferee shall be allocated a pro rata portion of such transferor’s Allocation Amount. Any portion of the Allocation Amount allocated to any Holder or other Person which no longer holds any shares of Series C Preferred Stock shall be reallocated to the remaining Holders pro rata based on the number of the

Registrable Securities held by such Holders at such time. In the event that, as a result of this Section 5.5 , the Company is prohibited from issuing any shares of Common Stock to a Holder electing to convert its shares of Series C Preferred Stock, the Company shall, upon such Holder’s request, pay such Holder not later than two Business Days after such request an amount of cash equal to the product of (1) the number of shares of Common Stock that the Company is prohibited from issuing multiplied by (2) the VWAP (as defined in the Certificate of Designation) as of the Trading Day immediately preceding the date on which such Holder delivered the applicable conversion notice, and upon timely payment of the foregoing amount, the Company shall be deemed relieved of its obligation under the Certificate of Designation to deliver such shares of Common Stock.

5.6      Stockholder Cap Approval . The Company shall obtain the Stockholder Cap Approval as promptly as practicable after the date hereof but in no event later than 60 days after the Closing Date.
 
5.7      Issuance of Additional Shares of Common Stock . The Company shall issue and deliver to Imperium, for no additional consideration, 200,000 shares of Common Stock (such number of shares to be proportionately adjusted for stock splits, reverse stock splits, stock dividends and similar events occurring after the date hereof) upon the occurrence of either of the following events (i) on the nine month anniversary of the Closing Date, the Note has not been prepaid in full and Imperium has determined, in its reasonable judgment, and notified the Company in writing, that the Company has not taken significant actions towards consummating a financing, the proceeds of which would be used to prepay the Note in full, or (ii) the Note has not been prepaid in full prior to the one year anniversary of the Closing Date (either such event, an “ Issuance Event ”). Upon the occurrence of an Issuance Event, the Company shall deliver to Imperium a certificate representing

the shares of Common Stock required to be delivered under this Section 5.7 no later than three Business Days following the occurrence of such Issuance Event. If at the time of an Issuance Event, the Note has been subdivided into two or more Notes, then the shares of Common Stock to be delivered under this Section 5.7 shall be allocated among the Holders on a pro rata basis in proportion to the amount of principal outstanding on each such Holder’s Note as of such Issuance Event as compared to the aggregate principal amount outstanding on all of the Notes as of such Issuance Event.
     
5.8      Use of Holder’s Name . Except as may be required by applicable law and/or this Agreement, the Company shall not use, directly or indirectly, any Holder’s name or the name of any of its Affiliates in any advertisement, announcement, press release or other similar communication unless it has received the prior written consent of such Holder for the specific use contemplated or as otherwise required by applicable law or regulation.
 
5.9      Disclosure of Non-Public Information . The Company agrees that it will not at any time following the Execution Date disclose material non-public information to any Holder without first obtaining such Holder’s prior written consent confirming that such Holder is willing to receive material non-public information at such time.

5.10      Indemnification of Holders . The Company will indemnify and hold each Holder and its directors, managers, officers, shareholders, members, partners, employees and agents (each, a “ Holder Party ”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Holder Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or by the Company or any Company Subsidiary in the other Transaction Documents or (b) any action instituted against a Holder, or any of its Affiliates, by any shareholder of the Company who is not an Affiliate of such Holder, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Holder’s representation, warranties or covenants under the Transaction Documents or any agreements or understandings such Holder may have with any such shareholder or any violations by such Holder or any such Affiliate of state or federal securities laws or any conduct by such Holder or any such Affiliate which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Agreement, such Holder Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Holder Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Holder Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time following such Holder Party’s written request that it do so, to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Holder Party. The Company will not be liable to any Holder Party under this Agreement (i) for any settlement by a Holder Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent, that a loss, claim, damage or liability is attributable to such Holder Party’s wrongful actions or omissions, or gross negligence or to such Holder Party’s breach of any of the representations, warranties, covenants or agreements made by such Holder Party in this Agreement or in the other Transaction Documents.

5.11      Limitations on Disposition by Holder . No Holder shall sell, transfer, assign or dispose of any Securities, unless:

(a)     there is then in effect an effective registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

(b)     such Holder has notified the Company in writing of any such disposition, and furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such Securities under the Securities Act; provided, however , that no such opinion of counsel will be required (A) if the sale, transfer, assignment or disposition is made to an Affiliate of such Holder, (B) if the sale, transfer, assignment or disposition is made pursuant to Rule 144 and such Holder provides the Company with evidence reasonably satisfactory to the Company that the proposed transaction satisfies the requirements of Rule 144, (C) if such Securities are eligible for resale under Rule 144(k) or any successor provision or (D) if in connection with a bona fide pledge or hypothecation of any Securities under a margin arrangement with a broker-dealer or other financial institution or the sale of any such Securities by such broker-dealer or other financial institution following such Holder’s default under such margin arrangement.

5.12      Biotech Spin-Off . Notwithstanding any provision in this Agreement or the other Transaction Documents to the contrary, the Company shall be permitted to effectuate the Biotech Spin-Off. As used herein, “ Biotech Spin-Off ” means the pro rata distribution by the Company to its shareholders of a dividend consisting of more than ninety (90%) of the outstanding

common stock of the Biotech Subsidiary. If the Biotech Spin-Off is not consummated on or prior to the ninetieth (90 ^th ) day following the Closing, then the Company shall cause the Biotech Subsidiary to execute and deliver assumptions to the Security Agreement and Guarantee; provided, however , that if the Biotech Spin-Off occurs thereafter, the Holder shall release, or shall cause to be released, all of its Liens on the assets of the Biotech Subsidiary in connection with the Biotech Spin-Off.

5.12      Post-Closing Deliverables . The Company acknowledges and agrees that as promptly as practicable following the Closing, but in no event later than five Business Days following the Closing, the Company shall deliver the following items to Imperium: (i) the executed original stock certificate representing the 3,000 shares of Series C Preferred Stock purchased by Imperium at Closing, (ii) the executed original stock certificate representing the 200 shares of Common Stock purchased by Imperium at Closing, and (iii) all certificates representing all of the stock, notes and other securities required to be pledged by the Company and the Company Subsidiaries under the Security Agreement that were not delivered at Closing.

6.       MISCELLANEOUS .

6.1      Survival; Severability . The representations, warranties, covenants and indemnities made by the parties herein and in the other Transaction Documents shall survive the Closing notwithstanding any due diligence investigation made by or on behalf of the party seeking to rely thereon. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the parties.

6.2      Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. A Holder may assign its rights and obligations hereunder in connection with any private sale or transfer of the Securities, as long as, as a condition precedent to such transfer, the transferee executes an acknowledgment agreeing to be bound by the applicable provisions of this Agreement, in which case the term “Holder” shall be deemed to refer to such transferee as though such transferee were an original signatory hereto, and such assignment complies with applicable Governmental Requirements. The Company may not assign its rights or obligations under this Agreement.
 
6.3      No Reliance . Each party acknowledges that (i) it has such knowledge in business and financial matters as to be fully capable of evaluating this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, (ii) it is not relying on any advice or representation of any other party in connection with entering into this Agreement, the other Transaction Documents or such transactions (other than the representations made in this Agreement or the other Transaction Documents), (iii) it has not received from any other party any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of entering into this Agreement or the other Transaction Documents or the performance of its obligations hereunder and thereunder, and (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and has entered into this Agreement and the other Transaction Documents based on its own independent judgment and, if applicable, on the advice of such advisors, and not on any view (whether written or oral) expressed by any other party.

6.4       Independent Nature of Holders’ Obligations and Rights . The obligations of each Holder hereunder are several and not joint with the obligations of the other Holders hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. The Company acknowledges and agrees that nothing contained herein or in any other Transaction Document, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or a “group” as described in Section 13(d) of the Exchange Act, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder has been represented by its own separate counsel in connection with the transactions contemplated hereby, shall be entitled to protect and enforce its rights, including, without limitation, rights arising out of this Agreement or the other Transaction Documents, individually, and shall not be required to join any other Holder as an additional party in any proceeding for such purpose.
 
6.5      Injunctive Relief . The Company acknowledges and agrees that a breach by it of its obligations hereunder will cause irreparable harm to each Holder and that the remedy or remedies at law for any such breach will be inadequate and agrees, in the event of any such breach, in addition to all other available remedies, such Holder shall be entitled to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss or the posting of any bond.
 
6.6      Governing Law; Jurisdiction; Waiver of Jury Trial .

(a)     This Agreement shall be governed by and construed under the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or any other Transaction Document or in connection herewith or therewith or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
 

(b)     EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES AND AGREES THAT ANY DISPUTE OR CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY

ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.6(b) .

6.7      Counterparts; Facsimile . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Any executed signature page delivered by facsimile or e-mail transmission shall be binding to the same extent as an original executed signature page, with regard to any agreement subject to the terms hereof or any amendment thereto.
 
6.8      Headings . The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

6.9      Notices . Any notice, demand or request required or permitted to be given by the Company or the Holder pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:
 

           If to the Company :
     

           Integrated BioPharma, Inc.
          225 Long Avenue

           Hillside, New Jersey 07205
          Attn: Chief Executive Officer
          Tel: (973) 926-0816
          Fax: (973) 926-1735

           With a copy (which shall not constitute notice) to:

           Greenberg Traurig, LLP
          200 Park Avenue
          New York, New York 10023
          Attn: Andrew H. Abramowitz
          Tel: (212) 801-9200

Fax: (212) 801-6400

and if to any Holder, to such address for such Holder as shall appear on such Holder’s signature page hereto, or as shall be designated by such Holder in writing to the Company in accordance with this Section 6.9 .

6.10      Expenses . The Company and Imperium shall pay all costs and expenses that it incurs in connection with the negotiation, execution, delivery and performance of this Agreement or the other Transaction Documents; provided, however , that the Company shall, at the Closing, pay Imperium an amount of $75,000 in immediately available funds as reimbursement for its out-of-pocket expenses (including, without limitation, legal fees and expenses) incurred or to be incurred by it in connection with its due diligence investigation of the Company and the negotiation, preparation, execution, delivery and performance of this Agreement and the other Transaction Documents. At the Closing, the amount due for such fees and expenses may be netted out of the Purchase Price payable by Imperium .
 
6.11      Entire Agreement; Amendments . This Agreement and the other Transaction Documents constitute the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and (i) while the Note is outstanding, by the Holders h olding a majority of the outstanding principal of the Note, and (ii) if the Note is no longer outstanding, by the Holders holding a majority of the shares of Series C Preferred Stock held by all Holders . Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

      [ Signature Pages to Follow ]

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

INTEGRATED BIOPHARMA, INC.
 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT, dated as of February 21, 2008 (this “ Agreement ”), is by and between INTEGRATED BIOPHARMA, INC., a Delaware corporation (the “ Company ”), and IMPERIUM MASTER FUND, LTD., a Cayman Islands company (“ Imperium ”).
 
     The Company has agreed, on the terms and subject to the conditions set forth in the Securities Purchase Agreement, dated as of the date hereof (the “ Securities Purchase Agreement ”), between the Company and Imperium, to issue and sell to Imperium shares of the Company’s Common Stock, par value $0.02 per share (the “ Common Stock ”), and shares of the Company’s Series C Convertible Preferred Stock (the “ Series C Preferred Stock ”), which are convertible into shares of Common Stock.

     In order to induce Imperium to enter into the Securities Purchase Agreement, the Company has agreed to provide certain registration rights with respect to the resale of the shares of Common Stock that are issuable to Imperium under the Securities Purchase Agreement or upon the conversion or maturity date of the Series C Preferred Stock.
 

     In consideration of Imperium entering into the Securities Purchase Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

     1.      DEFINITIONS .

(a)      Defined Terms . When used herein, the terms below shall have the respective meanings indicated:

“ Common Stock ” has the meaning set forth in the recitals to this Agreement.

“ Company ” has the meaning set forth in the preamble to this Agreement.

“ Conversion Price ” has the meaning given to such term in the Certificate.

“ Effective Date ” means the date on which the Registration Statement is declared effective by the Commission.

“ Filing Date ” means the date on which the Registration Statement is filed with the Commission.

“ Filing Deadline ” means thirty (30) days from the Closing Date.

“ Holder ” means any Person owning or having the right to acquire any Registrable Securities.

“ Imperium ” has the meaning set forth in the preamble to this Agreement.

“ Market Price ” has the meaning given to such term in the Certificate of Designation.

“ Registrable Securities ” means (i) all of the shares of Common Stock (x) held by the Holders, (y) that are issuable to the Holders under the Securities Purchase Agreement, and (z) that are issuable to the Holders upon the conversion or maturity date of the Series C Preferred Stock, and (ii) all shares of capital stock issued or issuable from time to time (with any adjustments) in replacement of, in exchange for or otherwise in respect of such shares of Common Stock.

“ Registration Deadline ” means ninety (90) days after the Closing Date.

“ Registration Default Payment Amount ” means the greater of (x) $60,000 and (y) two percent (2.0%) of the product of the Market Price determined as of the date on which such Registration Default Payment Amount is due multiplied by the aggregate number of Registrable Securities.

“ Registration Period ” has the meaning set forth in Section 2(f) of this Agreement.

“ Registration Statement ” means a registration statement or statements prepared in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act (“ Rule 415 ”) or any successor rule providing for the offering of securities on a continuous or delayed basis.

“ Securities Purchase Agreement ” has the meaning set forth in the recitals to this Agreement.

(b)      Terms Defined in Securities Purchase Agreement . Any capitalized term used but not defined herein has the meaning specified in the Securities Purchase Agreement.

(c)      Usage . All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement.

2.      REGISTRATION .
 
(a)      Filing of Registration Statement . On or before the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement on Form S-3 as a “shelf” registration statement under Rule 415 covering the resale of the sum of (i) the shares of Common Stock issued under the Securities Purchase Agreement at Closing, plus (ii) the additional shares of Common Stock issuable under Section 5.6 of the Securities Purchase Agreement, plus (iii) one hundred twenty-five percent (125%) of the number of shares of Common Stock that would then be issuable if all of the Series C Preferred Stock were converted at the Conversion Price then in effect. Such Registration Statement shall state, to the extent permitted by Rule 416 under the Securities Act, that it also covers such indeterminate number of additional shares of Common Stock as may become issuable in order to prevent dilution resulting from stock splits, stock dividends or similar events.

     
(b)      Effectiveness . The Company shall use its best efforts to cause the Registration Statement to become effective as soon as practicable following the filing thereof, but in no event later than the Registration Deadline. The Company shall respond promptly to any and all comments made by the staff of the Commission with respect to a Registration Statement, and shall submit to the Commission, within three (3) Business Days after the Company learns that no review of such Registration Statement will be made by the staff of the Commission or that the staff of the Commission has no further comments on such Registration Statement, as the case may be, a request for acceleration of the effectiveness of such Registration Statement as soon as possible after the submission of such request.
 
(c)      Registration Default . If (i) the Registration Statement is not filed on or before the Filing Deadline or declared effective by the Commission on or before the Registration Deadline, (ii) after a Registration Statement has been declared effective by the Commission, sales of Registrable Securities (other than such Registrable Securities as are then freely saleable pursuant to Rule 144(k)) cannot be made by a Holder under a Registration Statement for any reason not within the exclusive control of such Holder or (iii) an amendment or supplement to a Registration Statement, or a new registration statement, required to be filed pursuant to the terms of Section 3(i) , is not filed on or before the date required thereby (each of the foregoing clauses (i) , (ii) and (iii) being referred to herein as a “ Registration Default ”), the Company shall pay each Holder an amount of cash equal to such Holder’s pro rata share (based on the number of Registrable Securities then held by or issuable to such Holder) of the Registration Default Payment Amount and, for each thirty (30) day period thereafter that such Registration Default remains uncured, an additional cash payment equal the Registration Default Payment Amount ( pro rated for any period of less than thirty (30) days). The first payment required to be made by the Company under this Section 2(c) shall be made within five (5) Business Days following the date on which a Registration Default first occurs and subsequent payments shall be made on the earlier of (A) the last day of each thirty (30) day period in which such Registration Default is continuing and (B) the date on which such Registration Default is cured (or, if any such day is not a Business Day, on the Business Day immediately following such day). Any such payment shall be in addition to any other remedies available to each Holder at law or in equity, whether pursuant to the terms hereof or otherwise.

(d)      Allocation of Registered Shares . The initial number of the Registrable Securities included in any Registration Statement and each increase in the number thereof included therein shall be allocated pro rata among the Holders (based on the number of Registrable Securities then held by or issuable to each Holder) at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the Commission. In the event that a Holder sells or otherwise transfers any of such Holder’s Registrable Securities, each transferee shall be allocated the portion of the then remaining number of Registrable Securities included in such Registration Statement and allocable to such Holder.

(e)      Registration of Other Securities . During the period beginning on the date hereof and ending on the Effective Date, the Company shall refrain from filing any registration statement (other than (i) a Registration Statement filed hereunder or (ii) a registration statement on Form S-8 with respect to stock option plans and agreements and stock plans currently in effect and disclosed in the Securities Purchase Agreement or the schedules thereto). In no event shall the Company include any securities other than Registrable Securities on any Registration Statement filed by the Company on behalf of the Holders pursuant to the terms hereof; provided, however , the Company may include the shares of Common Stock into which the Series C Preferred Stock and Convertible Debt held beneficially by CD Financial, LLC may be converted as well as any shares of Common Stock held beneficially by CD Financial, LLC pursuant to the provisions of Section 5.7 of that certain Securities Purchase Agreement, dated as of February 19, 2009, by and between CD Financial, LLC and the Company.

(f)      Registration Period . The Company will maintain the effectiveness of each Registration Statement filed pursuant to this Agreement until the earlier to occur of (i) the date on which all of the Registrable Securities eligible for resale thereunder have been publicly sold pursuant to the Registration Statement or Rule 144, and (ii) the date on which all of the Registrable Securities remaining to be sold under such Registration Statement (in the reasonable opinion of counsel to the Company) may be immediately sold to the public under Rule 144(k) under the Securities Act or any successor provision (the period beginning on the Registration Deadline and ending on the earliest to occur of clause (i) or (ii) above being referred to herein as the “ Registration Period ”) or until such later date as the Company shall determine.

3.      ADDITIONAL COVENANTS OF THE COMPANY .

     In addition to performing its obligations hereunder, including, without limitation, those pursuant to Section 2 above, the Company shall, with respect to each Registration Statement:

(a)     prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities Act or to maintain the effectiveness of such Registration Statement during the Registration Period, or as may be reasonably requested by a Holder in order to incorporate information concerning such Holder or such Holder’s intended method of distribution;
 

(b)     as soon as practicable following the Closing, take all steps necessary and otherwise use its best efforts to secure the listing on the Principal Market of the Registrable Securities, and at any Holder’s request, provide such Holder with reasonable evidence thereof;

(c)     so long as a Registration Statement is effective covering the resale of the applicable Registrable Securities owned by a Holder, furnish to each Holder such number of copies of the prospectus included in such Registration Statement, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as such Holder may reasonably request in order to facilitate the disposition of such Holder’s Registrable Securities;

(d)     use commercially reasonable efforts to register or qualify the Registrable Securities under the securities or “blue sky” laws of such jurisdictions within the United States as shall be reasonably requested from time to time by a Holder, and do any and all other acts or things which may reasonably be necessary or advisable to enable such Holder to consummate the public sale or other disposition of the Registrable Securities in such jurisdictions; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction;
 
(e)     notify each Holder immediately after becoming aware of the occurrence of any event (but shall not, without the prior written consent of such Holder, disclose to such Holder any facts or circumstances constituting material non-public information) as a result of which the prospectus included in such Registration Statement, as then in effect, contains an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and as promptly as practicable prepare and file with the Commission and furnish to each Holder a reasonable number of copies of a supplement or an amendment to such prospectus as may be necessary so that such prospectus does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(f)     use commercially reasonable efforts to prevent the issuance of any stop order or other order suspending the effectiveness of such Registration Statement and, if such an order is issued, to use commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible time and to notify each Holder in writing of the issuance of such order and the resolution thereof;
 
(g)     furnish to each Holder, on the date that such Registration Statement, or any successor registration statement, becomes effective, a letter, dated such date, signed by outside counsel to the Company and addressed to such Holder, confirming such effectiveness and, to the knowledge of such counsel, the absence of any stop order;

(h)     permit counsel for each Holder to review such Registration Statement and all amendments and supplements thereto, and any comments made by the staff of the Commission and the Company’s responses thereto, within three (3) Business Days prior to the filing thereof with the Commission (or, in the case of comments made by the staff of the Commission, within a reasonable period of time following the receipt thereof by the Company); and

(i)     subject to Section 2(f) , in the event that, at any time, the number of shares available under the Registration Statement is insufficient to cover the sum of (i) the shares of Common Stock issued under the Securities Purchase Agreement at Closing, plus (ii) the additional shares of Common Stock issuable under Section 5.6 of the Securities Purchase Agreement, plus (iii) one hundred twenty five percent (125%) of the number of shares of Common Stock that would then be issuable if all of the Series C Preferred Stock were converted at the Conversion Price then in effect, the Company shall promptly amend such Registration Statement or file a new registration statement, in

any event as soon as practicable, but not later than the tenth (10 ^th ) day following notice from a Holder of the occurrence of such event, so that such Registration Statement or such new registration statement, or both, covers no less than the sum of (i) the shares of Common Stock issued under the Securities Purchase Agreement at Closing, plus (ii) the additional shares of Common Stock issuable under Section 5.6 of the Securities Purchase Agreement, plus (iii) one hundred fifty percent (150%) of the number of shares of Common Stock that would then be issuable if all of the Series C Preferred Stock were converted at the Conversion Price then in effect. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. Any Registration Statement filed pursuant to this Section 3(i) shall state that, to the extent permitted by Rule 416 under the Securities Act, such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable in order to prevent dilution resulting from stock splits, stock dividends or similar events. Unless and until such amendment or new Registration Statement becomes effective, each Holder shall have the rights described in Section 2(c) .
 
4.      OBLIGATIONS OF EACH HOLDER .

     In connection with the registration of Registrable Securities pursuant to a Registration Statement, each Holder shall:

(a)     within three (3) Business Days after receipt of written request from the Company, furnish to the Company in writing such information regarding itself and the intended method of disposition of such Registrable Securities as the Company shall reasonably request in order to effect the registration thereof;
 
(b)     upon receipt of any notice from the Company of the happening of any event of the kind described in Sections 3(e) or 3(f) , immediately discontinue any sale or other disposition of such Registrable Securities pursuant to such Registration Statement until the filing of an amendment or supplement as described in such Section 3(e) or withdrawal of the stop order referred to in such Section 3(f) , and use commercially reasonable efforts to maintain the confidentiality of such notice and its contents;
 
(c)     to the extent required by applicable law, deliver a prospectus to the purchaser of such Registrable Securities;
 
(d)     promptly notify the Company when it has sold all of the Registrable Securities beneficially owned by it; and
 

(e)     notify the Company in the event that any information supplied by such Holder in writing for inclusion in such Registration Statement or related prospectus contains an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make such information not misleading in light of the circumstances then existing.

5.      INDEMNIFICATION .

     In the event that any Registrable Securities are included in a Registration Statement under this Agreement:

(a)     The Company shall indemnify and hold harmless each Holder, the officers, directors, employees, agents and representatives of such Holder, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, liabilities or reasonable out-of-pocket expenses (whether joint or several) (collectively, including reasonable legal expenses or other expenses reasonably incurred in connection with investigating or defending same, “ Losses ”), insofar as any such Losses arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement under which such Registrable Securities were registered, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Subject to the provisions of Section 5(c) , the Company will reimburse such Holder, and each such officer, director, employee, agent, representative or controlling person, for any reasonable legal expenses or other out-of-pocket expenses (promptly as such expenses are incurred) by any such entity or person in connection with investigating or defending any Loss; provided, however , that the foregoing indemnity shall not apply to amounts paid in settlement of any Loss if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be obligated to indemnify any person for any Loss to the extent that such Loss arises out of or is based upon (i) any omission to state a material fact required to be stated therein or necessary to make statements therein not misleading that conforms in all material respects to written information furnished by such person expressly for use in such Registration Statement or (ii) a failure of such person to deliver or cause to be delivered the final prospectus contained in the Registration Statement and made available by the Company, if such delivery is required by applicable law.

(b)     Each Holder who is named in such Registration Statement as a selling shareholder, acting severally and not jointly, shall indemnify and hold harmless the Company, the officers, directors, employees, agents and representatives of the Company, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any Losses insofar as any such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact stated therein or any omission to state a material fact required to be stated therein or necessary to make statements therein not misleading that conforms in all material respects to written information furnished by such person expressly for use in such Registration Statement. Subject to the provisions of Section 5(c) , such Holder will reimburse any reasonable legal or other expenses (promptly as such expenses are incurred) by the Company and any such officer, director, employee, agent, representative, or controlling person, in connection with investigating or defending any such Loss; provided, however , that the foregoing indemnity shall not apply to amounts paid in settlement of any such Loss if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided, further , that, in no event shall any indemnity under this Section 5(b) exceed the amount of the net proceeds resulting from the sale of Registrable Securities by such Holder under such Registration Statement.
 
(c)     Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including any governmental action or proceeding), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 5 , promptly deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and to assume the defense thereof with counsel selected by the indemnifying party and reasonably acceptable to the indemnified party; provided, however , that an indemnified party shall have the right to retain its own counsel, with the reasonably incurred fees and expenses of such counsel to be

paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate under applicable standards of professional conduct due to actual or potential conflicting interests between such indemnified party and any other party represented by such counsel in such action or proceeding. The failure by an indemnified party to notify the indemnifying party within a reasonable time following the commencement of any action or proceeding of which the indemnified party is aware, to the extent materially prejudicial to such indemnifying party’s ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5 with respect to such action or proceeding, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5 or with respect to any other action or proceeding.
 
(d)     In the event that the indemnity provided in Sections 5(a) or 5(b) is unavailable or insufficient to hold harmless an indemnified party for any reason, the Company and each Holder agree, severally and not jointly, to contribute to the aggregate Losses to which the Company or such Holder (or its respective officers, directors, employees, agents, representatives or controlling persons), may be subject in such proportion as is appropriate to reflect the relative fault of the Company and such Holder in connection with the statements or omissions which resulted in such Losses; provided, however , that in no case shall such Holder be responsible for any amount in excess of the net proceeds resulting from the sale of Registrable Securities under the Registration Statement. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or by such Holder. The Company and each Holder agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 5(d) , no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this Section 5 , each person who controls a Holder within the meaning of either the Securities Act or the Exchange Act and each officer, director, employee, agent or representative of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer, director, employee, agent or representative of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this Section 5(d) .

(e)     The obligations of the Company and each Holder under this Section 5 shall survive the completion of any offering or sale of Registrable Securities pursuant to a Registration Statement under this Agreement, or otherwise.
 

6.      RULE 144 SALES .
 

     With a view to making available to each Holder the benefits of Rule 144 and any other similar rule or regulation of the Commission that may at any time permit such Holder to sell securities of the Company to the public without registration, the Company agrees to furnish to such Holder, so long as such Holder owns any Registrable Securities, promptly upon written request (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144 and the Exchange Act, (ii) to the extent not publicly available through the Commission’s EDGAR database, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the Commission, and (iii) such other information as may be reasonably requested by such Holder in connection with such Holder’s compliance with any rule or regulation of the Commission which permits the selling of any such securities without registration.
 
7.       MISCELLANEOUS .
 
(a)      Expenses of Registration . Except as otherwise provided in the Securities Purchase Agreement, all reasonable expenses, other than underwriting discounts and commissions and fees and expenses of counsel and other advisors to each Holder, incurred in connection with the registrations, filings or qualifications described herein, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, the fees and disbursements of counsel for the Company, and the fees and disbursements incurred in connection with the letter described in Section 3(g) , shall be borne by the Company.

(b)      Amendment; Waiver . Except as expressly provided herein, neither this Agreement nor any term hereof may be amended or waived except pursuant to a written instrument executed by the Company and the Holders of at least a majority of the Registrable Securities then held by or issuable to all Holders. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
 

(c)      Notices . Any notice, demand or request required or permitted to be given by the Company or a Holder pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

If to the Company :

Integrated BioPharma, Inc.
225 Long Avenue

Hillside, New Jersey 07205
Attn: Chief Executive Officer
Tel: (973) 926-0816
Fax: (973) 926-1735

With a copy (which shall not constitute notice) to:

Greenberg Traurig, LLP
200 Park Avenue
New York, New York 10023
Attn: Andrew H. Abramowitz
Tel: (212) 801-9200

Fax: (212) 801-6400

and if to a Holder, to such address for the Holder as provided by such Holder under the Securities Purchase Agreement, or as shall be designated by the Holder in writing to the other parties hereto in accordance with this Section 7(c) .

(d)      Assignment . Upon the transfer of any Registrable Securities by a Holder, the rights of such Holder hereunder with respect to such securities so transferred shall be assigned automatically to the transferee thereof, and such transferee shall thereupon be deemed to be a “Holder” for purposes of this Agreement, as long as: (i) the Company is, within a reasonable period of time following such transfer, furnished with written notice of the name and address of such transferee, (ii) the transferee agrees in writing with the Company to be bound by all of the provisions hereof, and (iii) such transfer is made in accordance with the applicable law and the requirements of the Securities Purchase Agreement.
(e)      Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall be deemed one and the same instrument. Any executed signature page delivered by facsimile or e-mail transmission shall be binding to the same extent as an original executed signature page, with regard to any agreement subject to the terms hereof or any amendment thereto.

(f)      Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York.

(g)      Holder of Record . A person is deemed to be a Holder whenever such person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the record owner of such Registrable Securities.

(h)      Entire Agreement . This Agreement and the other Transaction Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof, superseding all prior agreements and understandings, whether written or oral, between or among the parties hereto.

(i)      Headings . The headings in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

(j)      Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

[Signature Page to Follow]

     IN WITNESS WHEREOF, the undersigned have executed this Registration Rights Agreement as of the date first-above written.

INTEGRATED BIOPHARMA, INC.
 

By: /s/ E. Gerald Kay

E. Gerald Kay
Chief Executive Officer
 

IMPERIUM MASTER FUND, LTD.
 

By: /s/ Maurice Hryshko

Maurice Hryshko, Esq.
General Counsel
 

Exhibit 10.3

INTEGRATED BIOPHARMA, INC.

8% SENIOR SECURED NOTE

THIS 8% SENIOR SECURED NOTE (THIS “NOTE”) DOES NOT REQUIRE PHYSICAL SURRENDER HEREOF IN ORDER TO EFFECT A PARTIAL PAYMENT HEREOF. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT SHOWN BELOW.

     FOR VALUE RECEIVED, INTEGRATED BIOPHARMA, INC., a Delaware corporation (the “ Company ”), hereby promises to pay to the order of IMPERIUM MASTER FUND, LTD., or its permitted successors or assigns (the “ Holder ”), the sum of SEVEN MILLION DOLLARS ($7,000,000.00) in same day funds, on or before February 21, 2009 (the “ Maturity Date ”).

Except as permitted or required under Sections 3 and 4 , the Company shall not have the right to prepay any principal of this Note.

The Company has issued this Note pursuant to a Securities Purchase Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “ Securities Purchase Agreement ”), between the Company and the Holder.

The Company’s obligations under this Note, including, without limitation, its obligation to make payments of principal and interest hereon, are guaranteed by the Company’s subsidiaries and secured by the assets and properties of the Company and the Company’s subsidiaries.

The following terms shall apply to this Note:

1.      DEFINITIONS .

(a)      Defined Terms . When used herein, the terms below shall have the respective meanings indicated:

“ Acceleration Notice ” has the meaning set forth in Section 3 of this Note.

“ Change of Control ” means the existence, occurrence, public announcement or entering into an agreement contemplating of any of the following: (a) the sale, conveyance or disposition of all or substantially all of the assets of the Company to any Person, (b) the sale, conveyance or disposition of all or substantially all of the assets of any Company Subsidiary to a Person other than the Company or another Company Subsidiary that is a party to the Security Documents; (c) the effectuation of a transaction or series of transactions in which more than fifty percent (50%) of the equity or voting power of the Company is disposed of; (d) the effectuation of a transaction or series of transactions in which any of the equity or voting power of any Company Subsidiary is disposed to a Person other than the Company or another Company Subsidiary that is a party to the Security Documents; (e) the consolidation, merger or other business combination of the Company with or into any other entity, immediately following which the prior stockholders of the Company fail to own, directly or indirectly, at least fifty percent (50%) of the surviving entity; (f) the consolidation, merger or other business combination of any Company Subsidiary with or into any other entity other than the Company or another Company Subsidiary that is a party to the Security Documents; (g) a transaction or series of transactions in which any Person or group (other than pursuant to an agreement between current affiliates of the Company) acquires more than fifty percent (50%) of the equity or voting power of the Company; (h) a transaction or series of transactions in which any Person or group (other than the Company or a Company Subsidiary that is a party to the Security Documents) acquires any of the voting equity of a Company Subsidiary; and (i) the Continuing Directors do not at any time constitute at least a majority of the Board of Directors of the Company. Notwithstanding the foregoing, the Biotech Spin-Off shall not constitute a Change of Control.

“ Continuing Director ” means, at any date, a member of the Board of Directors (i) who was a member of such board on the Execution Date or (ii) who was nominated or elected by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board of Directors was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or such lesser number comprising a majority of a nominating committee if authority for such nominations or elections has been delegated to a nominating committee whose authority and composition have been approved by at least a majority of the directors who were Continuing Directors at the time such committee was formed.

“ Default Interest Rate ” means the lower of eighteen (18%) per annum and the maximum rate permitted by applicable Governmental Requirements.

“ Event of Default ” means the occurrence of any of the following events:
(i)     a Liquidation Event occurs or is publicly announced;

(ii)     the Company fails to make any payment of principal or interest on this Note as and when due, and such payment remains unpaid for two (2) Business Days following such due date;

(iii)     other than a breach described in clause (ii) above, the Company or any Company Subsidiary breaches or provides notice of its intent to breach any material term or condition of this Note or any other Transaction Document (including, without limitation, a Registration Default (as defined in the Registration Rights Agreement)); and such breach continues for a period of five (5) Business Days following written notice thereof from the Holder;
(iv)     any representation or warranty made by the Company or any Company Subsidiary in any of the Transaction Documents was inaccurate or misleading in any material respect as of the date such representation or warranty was made; or
(v)     a default occurs or is declared, or any amounts are accelerated, under or with respect to any instrument that evidences Debt of the Company or any Company Subsidiary in a principal amount exceeding $50,000.

“ Interest ” has the meaning set forth in Section 2(a) of this Note.

“ Issue Date ” means the date of this Note as set forth on the first page of this Note.

“ Liquidation Event ” means where (i) the Company or any Company Subsidiary shall make a general assignment for the benefit of creditors or consent to the appointment of a receiver, liquidator, custodian, or similar official of all or substantially all of its properties, or any such official is placed in control of such properties, or the Company or any Company Subsidiary shall commence any action or proceeding or take advantage of or file under any federal or state insolvency statute, including, without limitation, the United States Bankruptcy Code, seeking to have an order for relief entered with respect to it or seeking adjudication as a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, administration, a voluntary arrangement, or other relief with respect to it or its debts; or (ii) there shall be commenced against the Company or any Company Subsidiary any action or proceeding of the nature referred to in clause (i) above or seeking issuance of a warrant of attachment, execution, distraint, or similar process against all or any substantial part of its property, which results in the entry of an order for relief which remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there is initiated the dissolution or other winding up of the Company or any material Company Subsidiary, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy proceedings; or (iv) there is initiated any assignment for the benefit of creditors or any marshalling of the material assets or material liabilities of the Company or any Company Subsidiary.

“ Maturity Date ” has the meaning set forth in the preamble of this Note.

“ Prepayment Notice ” has the meaning set forth in Section 4 of this Note.

“ Securities Purchase Agreement ” has the meaning set forth in the preamble of this Note.

(b)      Terms Defined in Securities Purchase Agreement . Any capitalized term used but not defined herein has the meaning specified in the Securities Purchase Agreement.

(c)      Usage . All definitions contained in this Note are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of similar import refer to this Note as a whole and not to any particular provision of this Note.

2.      PAYMENT OF PRINCIPAL AND INTEREST .
 

(a)      Interest . This Note shall bear interest on the unpaid principal amount hereof (“ Interest ”) at an annual rate equal to eight percent (8%), computed on the basis of a 360-day year and calculated using the actual number of days elapsed since and including the Issue Date or the date on which Interest was most recently paid, as the case may be (but excluding the day on which the unpaid principal amount hereof is paid in full). Interest shall be paid in accordance with Section 2(b) .
 
(b)      Monthly Interest Payments . The Company shall, on the first Business Day of each calendar month, commencing with March 3, 2008, pay the Holder an amount equal to the accrued and unpaid Interest (including default interest (if any)) on this Note up to but not including the date of such payment.

(c)      Payment on Maturity Date . The outstanding principal amount of this Note plus all accrued and unpaid Interest (including default interest (if any)) hereon, plus all other amounts due hereunder, shall be paid in full on the Maturity Date.

(d)      Default Interest . Any amount of principal or Interest that is not paid as and when due in accordance with this Note shall bear interest at the Default Interest Rate, compounded monthly, until paid.
 

(e)      Payment in Cash . All payments of principal and Interest (including default interest (if any)) on this Note shall be paid in cash by wire transfer of immediately available funds.
 

3.      EVENTS OF DEFAULT; CHANGE OF CONTROL .

In the event that an Event of Default or a Change of Control occurs, the Holder shall have the right, upon written notice to the Company (an “ Acceleration Notice ”), to (i) accelerate the payment of all unpaid principal and accrued and unpaid Interest (including default interest (if any)) on this Note, and (ii) receive from the Company an amount equal to the sum of all of the amounts described in the preceding clause (i) in same day funds on the payment date specified in the Acceleration Notice, provided such date must be at least two (2) Business Days following the date on which the Acceleration Notice is delivered to the Company.

4.      OPTIONAL PREPAYMENT .

The Company shall have the right at any time, upon not less than 5 days’ written notice to the Holder (a “ Prepayment Notice ”), to prepay all but not less than all of the unpaid principal and accrued and unpaid Interest (including default interest (if any)) on this Note. In order to effectuate such prepayment, the Company shall be obligated to pay the Holder an amount equal to all of the amounts described in the preceding sentence in same day funds on the payment date (the “ Prepayment Date ”) specified in the Prepayment Notice, provided such date must be at least thirty (30) days following the date on which the Prepayment Notice is delivered to the Holder. Notwithstanding the foregoing, if the Holder delivers an Acceleration Notice at any time prior to the Prepayment Date, then the provisions of Section 3 shall apply and control.

5.       MISCELLANEOUS .
(a)      Failure to Exercise Rights not Waiver . No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof. All rights and remedies of the Holder hereunder are cumulative and not exclusive of any rights or remedies otherwise available. In the event that the Company does not pay any amount under this Note when such amount becomes due, the Company shall bear all costs incurred by the Holder in collecting such amount, including without limitation reasonable legal fees and expenses.

(b)      Notices . Any notice, demand or request required or permitted to be given by the Company or the Holder pursuant to the terms of this Note shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

               If to the Company :
 
               Integrated BioPharma, Inc.

225 Long Avenue

Hillside, New Jersey 07205
Attn: Chief Executive Officer
Tel: (973) 926-0816
Fax: (973) 926-1735

               with a copy (which shall not constitute notice) to:
 
                Greenberg Traurig, LLP
               200 Park Avenue
               New York, New York 10023
               Attn: Andrew H. Abramowitz
               Tel: (212) 801-9200
               Fax: (212) 801-6400

and if to the Holder, to such address for the Holder as shall appear on the signature page of the Securities Purchase Agreement executed by the Holder, or as shall be designated by the Holder in writing to the other parties hereto in accordance this Section 5(b) .

(c)       Amendments and Waivers . No amendment to this Note may be made or given except pursuant to a written instrument executed by the Company and by the Holder. No waiver of any provision of this Note may be made except pursuant to a written instrument executed by the party against whom such waiver is sought to be enforced. Any waiver given pursuant hereto shall be effective only in the specific instance and for the specific purpose for which given.

(d)       Transfer of Note . The Holder may sell, transfer or otherwise dispose of all or any part of this Note (including without limitation pursuant to a pledge) to any Person as long as such sale, transfer or disposition is in compliance with applicable Governmental Requirements, and is otherwise made in accordance with the applicable provisions of the Securities Purchase Agreement. From and after the date of any such sale, transfer or disposition, the transferee hereof shall be deemed to be the holder of a Note in the principal amount acquired by such transferee, and the Company shall, as promptly as practicable, issue and deliver to such transferee a new Note identical in all respects to this Note, in the name of such transferee, against surrender of this Note or as otherwise specified in Section 5(e) of this Note. The Company shall be entitled to treat the original Holder as the holder of this entire Note unless and until it receives written notice of the sale, transfer or disposition hereof.
 

(e)       Lost or Stolen Note . Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Note, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of the Note, if mutilated, the Company shall execute and deliver to the Holder a new Note identical in all respects to this Note.
(f)       Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York.

(g)      Successors and Assigns . The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors (whether by merger or otherwise) and permitted assigns of the Company and the Holder. The Company may not assign its rights or obligations under this Note except as specifically required or permitted pursuant to the terms hereof.

(h)      Usury . This Note is subject to the express condition that at no time shall the Company be obligated or required to pay interest hereunder at a rate which could subject the Holder to either civil or criminal liability as a result of being in excess of the maximum interest rate which the Company is permitted by applicable law to contract or agree to pay.  If by the terms of this Note, the Company is at any time required or obligated to pay interest hereunder at a rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of this Note. 

[Signature Page to Follow]

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by its duly authorized officer on the date first above written.
 

INTEGRATED BIOPHARMA, INC.
 

By: /s/ E. Gerald Kay

Name: E. Gerald Kay
Title: Chief Executive Officer

Exhibit 10.4

SECURITY AGREEMENT

THIS SECURITY AGREEMENT, dated as of February 21, 2008 (this “ Agreement ”), is by and among Integrated BioPharma, Inc., a Delaware corporation (the “ Company ”), and each of the direct or indirect subsidiaries of the Company (whether now or hereafter existing, such subsidiaries , the “ Subsidiaries ” and, collectively with the Company, the “ Debtors ”), and Imperium Advisers, LLC, in its capacity as collateral agent (in such capacity, the “ Collateral Agent ”), for the benefit of Imperium Master Fund, Ltd. (“ Imperium ” and collectively with its successors and permitted assigns, the “ Holders ”), as holder of the 8% Senior Secured Note (as amended, restated, modified or supplemented from time to time, the “ Note ”) issued by the Company as of the date hereof, pursuant to the Securities Purchase Agreement, dated as of the date hereof (as amended, restated, modified or supplemented from time to time, the “ Securities Purchase Agreement ”), by and between the Company and Imperium. The Holders and the Collateral Agent are sometimes collectively referred to herein as the “ Secured Parties ”.

W I T N E S S E T H:

WHEREAS, it is a condition to the obligation of Imperium to enter into the transactions contemplated by the Securities Purchase Agreement that the Debtors execute and deliver to the Collateral Agent for the benefit of the Holders this Agreement; and

     WHEREAS, the Company and each Debtor that is a subsidiary of the Company will directly or indirectly benefit from the extension of credit to the Company represented by the issuance of the Note and the other transactions contemplated by the Securities Purchase Agreement.
 

NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.       DEFINITIONS .

(a)      Terms Defined in the Uniform Commercial Code . Terms used herein that are defined in Article 9 of the UCC but not otherwise defined in this Agreement (such as “ account ”, “ chattel paper ”, “ commercial tort claim ”, “ deposit account ”, “ document ”, “ equipment ”, “ fixtures ”, “ general intangibles ”, “ goods ”, “ instruments ”, “ inventory ”, “ investment property ”, “ letter-of-credit rights ”, “ proceeds ” and “ supporting obligations ”) shall have the respective meanings given such terms in Article 9 of the UCC.

(b)      Defined Terms . The following terms shall apply to this Agreement:
 
“ Collateral ” means the collateral in which the Secured Parties are granted a security interest by this Agreement and which shall include all present and after-acquired personal property of the Debtors, including the following personal property presently owned or hereafter acquired by the Debtors , wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities:

(i)     All goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefore, all parts therefore, and all substitutes for any of the foregoing and all other items used and useful in connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

(ii)      All contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests, stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, trademarks, service marks, trade styles, trade names, patents, patent applications, copyrights, Intellectual Property and income tax refunds;

(iii)      All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage in transit;

(iv)      All documents, letter-of-credit rights, instruments and chattel paper;

(v)     All commercial tort claims;

(vi)     All deposit accounts and all cash (whether or not deposited in such deposit accounts);

(vii)     All investment property;

(viii)     All supporting obligations;

(ix)     All files, records, books of account, business papers, and computer programs; and

(x)     All products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

“ Event of Default ” means the occurrence of either of the following: (i) an Event of Default (as defined in the Note); or (ii) any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by a Debtor, or a proceeding shall be commenced by a Debtor, or by any Governmental Authority having jurisdiction over a Debtor, seeking to establish the invalidity or unenforceability thereof, or a Debtor shall deny that such Debtor has any liability or obligation purported to be created under this Agreement.

“ Intellectual Property ” means the collective reference to all existing rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith; (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof; (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto; (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof; (v) all rights to obtain any reissues, renewals or extensions of the foregoing; (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

“ Obligations ” means all of the Debtors’ obligations under the Note and the Debtor’s obligations to pay the Registration Default Payment Amount (as defined in the Registration Rights Agreement) if, as and when required under Section 2(c) of the Registration Rights Agreement, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not

from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term “ Obligations ” shall include (i) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time to time under or in connection with the Note and the payment of the Registration Default Payment Amounts (if any); and (ii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.
 
“ Organizational Documents ” means with respect to an entity, the documents by which such entity was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such entity (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

“ Pledged Securities ” means all investment property and general intangibles respecting ownership and/or other equity interests in each Subsidiary, including, without limitation, the shares of capital stock and the other equity interests listed on Schedule I (as the same may be modified from time to time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests of any other Subsidiary of any Debtor obtained in the future, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect of, or exchanged for, any of the foregoing, and all rights arising under or in connection with the foregoing, including, but not limited to, all dividends, interest and cash.

“ Transaction Documents ” means this Agreement, the Note, the Guarantee, the Registration Rights Agreement and the other agreements, instruments or other documents delivered by or on behalf of any of the Debtors in furtherance of any of the foregoing documents.
 
“ UCC ” means the Uniform Commercial Code of the State of New York and or any other applicable laws of the United States or any state or other political subdivision thereof, which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense so that the term “ Collateral ” will be construed in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.
 
(c)      Terms Defined in the Securities Purchase Agreement . Any capitalized term used but not defined herein has the meaning specified in the Securities Purchase Agreement.
 
(d)      Usage . All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “ hereof ”, “ herein ” and “ hereunder ” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement.

2.       GRANT OF SECURITY INTEREST .
 

As an inducement for the Secured Parties to enter into the transactions contemplated by the Securities Purchase Agreement and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Collateral Agent, for the benefit of each Secured Party pari passu with each of the other Secured Parties , a continuing security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (the “ Security Interest ”). Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided, however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

3.      DELIVERY OF CERTAIN COLLATERAL .
 

Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties (a) any and all certificates and other instruments representing or evidencing the Pledged Securities; and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together with all necessary endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to the Collateral Agent, for the benefit of the Secured Parties, or have previously delivered to the Secured Parties , a true and correct copy of each Organizational Document governing any of the Pledged Securities.

4.       REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE DEBTORS .

Each Debtor represents and warrants to, and covenants and agrees with, the Collateral Agent, for the benefit of the Secured Parties , as follows:

4.1      Good Standing; Due Authorization; Enforceability.

(a)     Each Debtor is duly organized and in good standing in the jurisdiction of its formation. Each Debtor shall at all times preserve and keep in full force and effect its valid existence and good standing and any rights and franchises material to its business.

(b)     Each Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required by such Debtor. This Agreement has been duly executed and delivered by each Debtor.

(c)     This Agreement constitutes the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity.

4.2      No Conflicts .       The execution, delivery and performance of this Agreement by the Debtors do not (i) violate any of the provisions of any Organizational Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to any Debtor; or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor’s debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound or affected. No consent (including, without limitation, from stockholders or creditors of any Debtor) is required for any Debtor to enter into and perform its obligations hereunder.

4.3      Debtor Information; Validity, Perfection and Maintenance of Security Interests .

(a)     All of the information set forth on Schedule II are true, correct and complete in all respects. No Debtor shall change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least thirty (30) days’ prior written notice to the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected Security Interest granted and evidenced by this Agreement.

(b)      This Agreement creates in favor of the Collateral Agent for the benefit of the Secured Parties a valid security interest in the Collateral, securing the payment and performance of the Obligations. Upon filing of UCC-1 financing statements with the secretary of state’s office of the state in which such Debtor is organized (collectively, the “ Financing Statements ”), and payment of the applicable filing fees, all security interests created hereunder in any Collateral owned by such Debtor which may be perfected by filing UCC-1 financing statements shall have been duly perfected. Except as provided herein, no consent of any third parties and no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority is required for (i) the execution, delivery and performance of this Agreement; (ii) the creation or perfection of the Security Interests created hereunder in the Collateral; or (iii) the enforcement of the rights of the Secured Parties hereunder.

(c)     Each Debtor hereby authorizes the Secured Parties, or any of them, to file the Financing Statements and any other financing statements or other similar filings under the UCC with respect to the Security Interest with the proper filing and recording agencies in any jurisdiction deemed proper by them. The Debtors shall, at the Debtors’ sole cost and expense, promptly execute and/or deliver to the Secured Parties such further deeds, mortgages, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as the Secured Parties may from time to time request and may in their sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security agreement and assignment with respect to the Debtors’ Intellectual Property in which the Secured Parties have been granted a security interest hereunder, substantially in a form acceptable to the Secured Parties.

(d)     The Debtors shall at all times maintain the Security Interest provided for hereunder as valid and perfected security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 12 . The Debtors hereby agree to defend the same against the claims of any and all Persons. The Debtors shall obtain and furnish to the Secured Parties from time to time, upon demand, such releases and/or subordinations of claims and Liens which may be required to maintain the priority of the Security Interest hereunder.

4.4      Collateral .

(a)     The Debtors are the sole owner of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear of any Liens (other than Permitted Liens), and are fully authorized to grant the Security Interest. Except as otherwise disclosed in the Securities Purchase Agreement, there has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened before any Governmental Authority.

(b)     The Debtors shall keep and preserve their equipment, inventory and other tangible Collateral in good condition, repair and order, ordinary wear and tear excepted. Each Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral consistent with past practices.

(c)      The Debtors shall not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral except as otherwise permitted or required under the Securities Purchase Agreement or any other Transaction Document. The Debtors shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

(d)     So long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement).     

(e)      The capital stock and other equity interests listed on Schedule I represent all of the capital stock and other equity interests of the Company Subsidiaries, and represent all capital stock and other equity interests owned, directly or indirectly, by the Debtors. All of the Pledged Securities are validly issued, fully paid and nonassessable, and the Debtors are the legal and beneficial owner of the Pledged Securities, free and clear of any Lien except for Permitted Liens. The ownership and other equity interests in partnerships and limited liability companies (if any) included in the Pledged Securities by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held in a securities account or by any financial intermediary. Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and the other Transaction Documents.
 
(f)     Each Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of any substantial change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value of the Collateral or on the Secured Parties’ security interest therein. Upon not less than five Business Days’ prior notice, each Debtor shall permit the Secured Parties and their representatives and agents to inspect the Collateral at any time during normal business hours, and to make copies of records pertaining to the Collateral as may be requested by a Secured Party from time to time.

(g)     All information heretofore or herein supplied to the Secured Parties by or on behalf of the Debtors with respect to the Collateral is accurate and complete in all material respects as of the date furnished.

4.5      Insurance . Each Debtor shall maintain with financially sound and reputable insurers, insurance as required under the Securities Purchase Agreement. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy to certify to the Secured Parties that (a) the Secured Parties will be named as lender loss payee and additional insured under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer will promptly notify the Secured Parties and such cancellation or change shall not be effective as to the Secured Parties for at least thirty (30) days after receipt by the Secured Parties of such notice, unless the effect of such change is to extend or increase coverage under the policy; and (c) the Secured Parties will have the right (but no obligation) at their election to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default exists and if the proceeds arising out of any claim or series of related claims do not exceed $50,000, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor; provided, however , that payments received by any Debtor after an Event of Default occurs and is continuing or in excess of $50,000 for any occurrence or series of related occurrences shall be paid to the Secured Parties, on a pari passu basis with each of the other Secured Parties, and, if received by such Debtor, shall be held in trust for and immediately paid over to the Secured Parties unless otherwise directed in writing by the Secured Parties. Copies of such policies or the related certificates, in each case, naming the Secured Parties as lender loss payee and additional insured shall be delivered to the Secured Parties at least annually and at the time any new policy of insurance is issued.

4.6      Additional Debtors . If a Debtor creates or acquires any new Subsidiary, then such Debtor shall cause such new Subsidiary to become party to this Agreement for all purposes of this Agreement by executing and delivering an Assumption Agreement in the form of Annex A hereto.

5.      DUTY TO HOLD IN TRUST .
 
5.1      Cash and Payment Obligations . Upon the occurrence and during the continuation of an Event of Default, if requested to do so by the Collateral Agent in writing, each Debtor shall, upon receipt of any revenue, income, dividend, interest or other sums subject to the Security Interest, whether payable pursuant to the Note or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for and on behalf of and for the benefit of the Secured Parties, and shall forthwith endorse and transfer any such sums or instruments, or both (to the extent permitted by law), to the Collateral Agent for distribution to the Secured Parties on a pro rata basis for application to the satisfaction of the Obligations.
 
5.2      Securities and Other Assets . If a Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants, rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification or increase or reduction of capital, or issued in connection with any reorganization of any of its Subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties; (ii) hold the same in trust on behalf of and for the benefit of the Secured Parties; and (iii) deliver any and all certificates or instruments evidencing the same to the Collateral Agent, for the benefit of the Secured Parties, on or before the close of business on the fifth Business Day following the receipt thereof by such Debtor, in the exact form received together with all requisite necessary endorsements, to be held by the Collateral Agent subject to the terms of this Agreement as Collateral.

6.      RIGHTS AND REMEDIES UPON DEFAULT .
 
6.1      Scope of Rights and Remedies . Upon the occurrence and during the continuation of any Event of Default, the Collateral Agent, for the benefit of the Secured Parties, acting through any agent appointed by it for such purpose, shall have the right to exercise all of the remedies conferred hereunder and under the other Transaction Documents, and the Collateral Agent, for the benefit of the Secured Parties, shall have all the rights and remedies of a secured party under the UCC. Without limiting any of the foregoing, the Collateral Agent shall have the following rights and powers:
 
(a)     The Collateral Agent shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any Person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and the Debtors shall assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at the Debtors’ premises or elsewhere, and make available to the Collateral Agent, without rent, all of the Debtors’ premises and facilities for the purpose of the Collateral Agent taking possession of, removing or putting the Collateral in saleable or disposable form.
 
(b)     Upon reasonable notice to the Debtors by the Collateral Agent, all rights of the Debtors to exercise the voting and other consensual rights which it would otherwise be entitled to exercise and all rights of the Debtors to receive the dividends and interest which it would otherwise be authorized to receive and retain, shall cease. Upon such reasonable notice, the Collateral Agent shall have the right to receive any interest, cash dividends or other payments on the Collateral and, at the option of the Collateral Agent, to exercise in the Collateral Agent’s discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, the Collateral Agent shall have the right (but not the obligation) to exercise all rights with respect to the Collateral as if it were the sole and absolute owner thereof, including, without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other readjustment concerning or involving the Collateral or a Debtor or any of its Subsidiaries.

(c)     The Collateral Agent shall have the right to operate the business of the Debtors using the Collateral and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Collateral Agent may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to the Debtors or right of redemption of the Debtors, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Collateral Agent may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived and released.
 
(d)     The Collateral Agent shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts to make payments directly to the Collateral Agent and to enforce the Debtors’ rights against such account debtors and obligors.
 
(e)     The Collateral Agent may (but is not obligated to) direct any financial intermediary or any other Person holding any investment property to transfer the same to the Collateral Agent or its designee.

(f)     The Collateral Agent may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United States Patent and Trademark Office and/or Copyright Office into the name of the Collateral Agent or any designee or any purchaser of any Collateral.

6.2      Disposition of Collateral . The Collateral Agent may comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. The Collateral Agent may sell the Collateral without giving any warranties and may specifically disclaim such warranties. If the Collateral Agent sells any of the Collateral on credit, the Debtors will only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Collateral Agent’s rights and remedies hereunder, including, without limitation, its right following and during the continuation of an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.
 
6.3      License to Use Intellectual Property . For the purpose of enabling the Collateral Agent to further exercise rights and remedies under this Section 6 or elsewhere provided by agreement or applicable law, each Debtor hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense following and during the continuation of an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

7.       APPLICATIONS OF PROCEEDS .
 

The proceeds of any such sale, lease or other disposition of the Collateral hereunder shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Collateral Agent and Secured Parties in enforcing their rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations pro rata among the Secured Parties, and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the Debtors any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest thereon, at an interest rate equal to the Default Interest Rate, and the reasonable fees of any attorneys employed by the Collateral Agent and the Secured Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands against the Collateral Agent and the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence or willful misconduct of the Collateral Agent or the Secured Parties as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.

8 .      SECURITIES LAW PROVISION .
 

Each Debtor recognizes that the Collateral Agent may be limited in its ability to effect a sale to the public of all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act or other federal or state securities laws (collectively, the “ Securities Laws ”), and may be compelled to resort to one or more sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorable than if the Pledged Securities were sold to the public, and that the Secured Parties have no obligation to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public under the Securities Laws. Each Debtor shall cooperate with the Collateral Agent in its attempt to satisfy any requirements under the Securities Laws (including, without limitation, registration thereunder if requested by the Collateral Agent) applicable to the sale of the Pledged Securities by the Collateral Agent .

9.       COSTS AND EXPENSES .
 

Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing required hereunder, including, without limitation, any financing statements pursuant to the UCC, continuation statements, partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Parties. The Debtors shall also pay all other claims and charges which in the reasonable opinion of the Secured Parties might prejudice, imperil or otherwise affect the Collateral or the Security Interest therein. The Debtors will also, upon demand, pay to the Collateral Agent, for the benefit of the Secured Parties , the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Parties may incur in connection with (i) the enforcement of this Agreement or any other Transaction Document; or (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral. Until so paid, any fees payable hereunder shall be added to the amount payable under the Note and shall bear interest at the Default Interest Rate.

10.       RESPONSIBILITY FOR COLLATERAL .
 

The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason. The Collateral Agent agrees to act in accordance with commercially reasonable standards and the UCC. Without limiting the generality of the foregoing, (a) no Secured Party (i) has any duty (either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the Collateral for sale; and (b) each Debtor shall remain obligated and liable under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder. No Secured Party shall have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by any Secured Party of any payment relating to any of the Collateral, nor shall any Secured Party be obligated in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by any Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to any Secured Party or to which it may be entitled at any time or times.

11.       SECURITY INTEREST ABSOLUTE .
 

All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of any of the Transaction Documents; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of any of the Transaction Documents (other than any agreement signed by the Secured Parties specifically releasing such obligations); (c) any exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations; (d) any action by any of the Secured Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Parties shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Collateral Agent for the benefit of any Secured Party hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, each Debtor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Each Debtor waives all right to require any Secured Party to proceed against any other Person or to apply any Collateral which the Collateral Agent or any Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy. Each Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

12.      TERM OF AGREEMENT .
 

This Agreement and the Security Interest shall terminate on the date on which all Obligations have been indefeasibly paid or otherwise satisfied in full; provided, however , that all indemnities of the Debtors contained in this Agreement shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.

13.       POWER OF ATTORNEY .
 

Each Debtor authorizes the Collateral Agent , and does hereby make, constitute and appoint the Collateral Agent and its officers, agents, successors or assigns with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the various Secured Parties or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Parties; (ii) sign and endorse any financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) pay or discharge taxes, Liens (other than Permitted Liens), or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) transfer any Intellectual Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Collateral Agent , and at the expense of the Debtors, at any time, or from time to time, execute and deliver any and all documents and instruments and do all acts and things which the Collateral Agent deems necessary to protect, preserve and realize upon the Collateral and the Security Interest granted therein in order to effect the intent of this Agreement and the other Transaction Documents all as fully and effectually as the Debtors might or could do. Each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue of the foregoing sentence. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational Documents or other documents or agreements to which any Debtor or any of the Pledged Securities is subject or to which any Debtor is a party. Without limiting the generality of the foregoing, after the occurrence and during the continuance of an Event of Default, the Collateral Agent is specifically authorized to execute and file any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United States Patent and Trademark Office and the United States Copyright Office. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.

14.       OTHER SECURITY .
 

To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then the Collateral Agent shall have the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Parties’ rights and remedies hereunder.

15.      COLLATERAL AGENT .
 
15.1      Appointment, Resignation and Removal . The Secured Parties hereby appoint Imperium Advisers, LLC to act as the Collateral Agent for purposes of exercising any and all rights and remedies of the Secured Parties hereunder. Any Person serving as the Collateral Agent may resign as Collateral Agent hereunder at any time by giving written notice thereof to each Holder, and such resignation shall become effective upon the effectiveness of the appointment of a successor agent in accordance with Section 15.2 . Any Person serving as Collateral Agent may be removed at any time or from time to time by the affirmative vote of the Holders holding a majority of the outstanding principal of the Note, and such removal shall become effective upon the effectiveness of the appointment of a successor agent in accordance with Section 15.2 .

15.2      Successor Agent . Upon the resignation or removal of a Collateral Agent, a successor agent may (or, in the case of removal, shall) be appointed by the Holders holding a majority of the outstanding principal of the Note, and such appointment shall become effective upon such successor agent accepting such appointment in writing. If no successor agent shall have been so appointed by the Holders within thirty (30) days after receipt of a resignation notice from the Collateral Agent, then the Collateral Agent shall have the right to appoint a successor agent in its sole and absolute discretion, and such successor agent shall commence serving as the Collateral Agent hereunder upon such successor agent’s acceptance of such appointment in writing.

15.3      Exculpation; Limitation and Delegation of Duties . Neither the Collateral Agent nor any of its directors, officers, partners, agents, representatives, advisors or employees (collectively, the “ Collateral Agent Parties ”) shall be liable to any Holder for any action taken or omitted to be taken by any of them hereunder, except for their own gross negligence or willful misconduct. None of Collateral Agent Parties shall be responsible for, or have any duty to ascertain the veracity, performance or satisfaction of, any representation, warranty, covenant, agreement or condition made or contained in this Agreement or any other Transaction Document . The Collateral Agent may undertake any of its duties as Collateral Agent hereunder by or through employees, agents and attorneys-in-fact and shall not be liable to any Holder for the negligence or misconduct of any such agents or attorneys-in-fact selected in good faith by the Collateral Agent.

15.4      Indemnification by Holders . The Holders hereby indemnify each of the Collateral Agent Parties for any losses, obligations, damages, penalties, actions, judgments, suits, costs, expenses, disbursements and other liabilities of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in any way relating to or arising out of the Collateral Agent’s performance of its obligations under this Agreement, except for (i) those costs that are actually reimbursed by the Debtors under this Agreement; and (ii) liabilities directly attributable to the gross negligence or willful misconduct of any Collateral Agent Party. The payment of any indemnification obligation hereunder shall be made by each Holder on a pro rata basis, based on the principal amount of the Note then owned by such Holder as compared to the aggregate principal amount of the Note then outstanding.

16.      INDEMNIFICATION .
 

The Debtors shall jointly and severally indemnify, reimburse and hold harmless the Secured Parties and their respective partners, members, shareholders, officers, directors, employees and agents (collectively, “ Indemnitees ”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses which result from the gross negligence or willful misconduct of such Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification provision in the other Transaction Documents.

17.      MISCELLANEOUS .
 
17.1      Severability . In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided, however, that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the parties.

17.2      Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. A Holder may assign its rights hereunder in connection with any private sale or transfer of its Note in accordance with the terms thereof and of the other Transaction Documents, as long as, as a condition precedent to such transfer, the transferee executes an acknowledgment agreeing to be bound by the applicable provisions of this Agreement, in which case the term “Holder” shall be deemed to refer to such transferee as though such transferee were an original signatory hereto. No Debtor may assign its rights or obligations under this Agreement.
 
17.3      Injunctive Relief . Each Debtor acknowledges and agrees that a breach by it of its obligations hereunder will cause irreparable harm to each Secured Party and that the remedy or remedies at law for any such breach will be inadequate and agrees, in the event of any such breach, in addition to all other available remedies, such Secured Party shall be entitled to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss or the posting of any bond.
 
17.4      Governing Law; Jurisdiction . This Agreement shall be governed by and construed under the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

17.5      Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Any executed signature page delivered by facsimile or e-mail transmission shall be binding to the same extent as an original executed signature page, with regard to any agreement subject to the terms hereof or any amendment thereto.
 
17.6      Headings . The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
17.7      Notices . Any notice, demand or request required or permitted to be given by any Debtor, Collateral Agent or a Holder pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day; (ii) on the next Business Day after timely delivery to an overnight courier; and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

          If to any Debtor :

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

          With a copy (which shall not constitute notice) to:

          Greenberg Traurig, LLP
          200 Park Avenue
          New York, New York 10023
          Attn: Andrew H. Abramowitz
          Tel: (212) 801-9200

Fax: (212) 801-6400

If to the Collateral Agent or any Secured Party :

Imperium Advisers, LLC
153 East 53rd Street
29th Floor
New York, NY 10022
Attn:     Maurice Hryshko, Esq.
Tel:      (212) 433-1360
Fax:     (212) 433-1361

or as shall otherwise be designated by such party in writing to the other parties hereto in accordance with this Section 17.7 .

17.8      Entire Agreement; Amendments . This Agreement and the other Transaction Documents constitute the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. No (i) amendment to this Agreement or (ii) waiver of any agreement or other obligation of a Debtor under this Agreement may be made or given except pursuant to a written instrument executed by the Debtors, the Collateral Agent and the Holders h olding a majority of the outstanding principal of the Note . Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed as of the day and year first above written.
 

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed as of the day and year first above written.
 

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed as of the day and year first above written.
 

Exhibit 10.5

SUBSIDIARY GUARANTEE

     THIS SUBSIDIARY GUARANTEE, dated as of February 21, 2008 (this “ Guarantee ”), is by and among each of the undersigned subsidiaries (together with any other entity that may become an additional guarantor hereunder, the “ Guarantors ”) of Integrated BioPharma, Inc., a Delaware corporation (the “ Company ”), and Imperium Advisers, LLC, in its capacity as collateral agent (in such capacity, the “ Collateral Agent ”), for the benefit of Imperium Master Fund, Ltd. (“ Imperium ” and collectively with their permitted successors and assigns, the “ Holders ”) of the 8% Senior Secured Note (as amended, restated, supplemented or otherwise modified from time to time, the “ Note ”) issued as of the date hereof, pursuant to the Securities Purchase Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “ Securities Purchase Agreement ”), by and between the Company and Imperium. Capitalized terms used herein and not otherwise defined shall have the respective meanings specified in the Securities Purchase Agreement. The Holders and the Collateral Agent are sometimes collectively referred to herein as the “ Secured Parties ”.

W I T N E S S E T H:

WHEREAS, it is a condition to the obligation of Imperium to enter into the transactions contemplated by the Securities Purchase Agreement that the Guarantors execute and deliver to the Collateral Agent for the benefit of the Holders this Guarantee; and

     WHEREAS, each Guarantor, as a Subsidiary of the Company, will directly or indirectly benefit from the extension of credit to the Company represented by the issuance of the Note and the other transactions contemplated by the Transaction Documents.

NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.      GUARANTEE .
 
1.1      Guarantee of Obligations .

(a)     Each Guarantor hereby, jointly and severally, unconditionally and irrevocably, guarantees to each Secured Party and its lawful successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Company and each other Guarantor when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and undertakings of the Company and the Guarantors of whatever nature, monetary or otherwise, under this Guarantee and the Note, and the Company’s obligations to pay the Registration Default Payment Amount (as defined in the Registration Rights Agreement) if, as and when required under Section 2(c) of the Registration Rights Agreement, together with all reasonable attorneys’ fees, disbursements and all other costs and expenses of collection incurred by Holders or the Collateral Agent in enforcing any of such obligations and/or this Guarantee (collectively, the “ Obligations ”). This Guarantee shall remain in full force and effect until all the Obligations and the obligations of each Guarantor under this Guarantee shall have been satisfied by payment and performance in full. Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the Obligations.

(b)     Anything herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Transaction Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting the rights of creditors generally (after giving effect to the right of contribution established in Section 1.3 of this Guarantee).

1.2      Guarantee Absolute and Unconditional . Each Guarantor understands and agrees that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to (a) the validity or enforceability of any of the Transaction Documents, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Secured Parties, (b) any defense, set-off or counterclaim (other than a defense of payment or performance or fraud or misconduct by the Secured Parties) which may at any time be available to or be asserted by the Company or any other Person against the Secured Parties, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Company or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Company for the Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any other instance.
 
1.3      Right of Contribution . Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 1.4 of this Guarantee. The provisions of this Section 1.3 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties, and each Guarantor shall remain liable to the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

1.4      No Subrogation . Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Secured Parties, no Guarantor shall be entitled to be subrogated to any of the rights of the Secured Parties against the Company or any other Guarantor or any collateral security or guarantee or right of offset held by the Secured Parties for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Secured Parties by the Company and the Guarantors on account of the Obligations are paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the benefit of the Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Secured Parties may determine.

1.5      Modification of Guaranteed Obligations . Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Obligations made by the Secured Parties may be rescinded by the Secured Parties and any of the Obligations continued, and the Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Secured Parties, and the Transaction Documents may be amended, modified, supplemented or terminated, in whole or in part, as the Secured Parties may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Secured Parties for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. The Secured Parties shall have no obligation to protect, secure, perfect or insure any Lien at any time held by them as security for the Obligations or for this Guarantee or any property subject thereto.

1.6      Waiver . Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Secured Parties upon the guarantees contained in this Section 1 or acceptance of the guarantees contained in this Section 1 . The Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantees contained in this Section 1 . All dealings between the Company and any of the Guarantors, on the one hand, and the Secured Parties, on the other hand, shall be conclusively presumed to have been had or consummated in reliance upon the guarantees contained in this Section 1 . Each Guarantor waives, to the extent permitted by law, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Company or any of the Guarantors with respect to the Obligations.

1.7 Enforcement of Guarantee .
 
(a)     When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Collateral Agent, acting on behalf of each Holder, may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as the Collateral Agent, acting on behalf of the Holders, may have against the Company, any other Guarantor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Collateral Agent, acting on behalf of the Holders, to make any such demand, to pursue such other rights or remedies or to collect any payments from the Company, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Company, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Secured Parties against any Guarantor. For the purposes hereof, “ demand ” shall include the commencement and continuance of any legal proceedings.

(b)      Expenses; Indemnification .
 
(i)     Each Guarantor agrees to pay, or reimburse the Collateral Agent, acting on behalf of the Holders, all of the Collateral Agent’s costs and expenses incurred in collecting against such Guarantor under this Guarantee or otherwise enforcing or preserving any rights under this Guarantee and the other Transaction Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Collateral Agent.

(ii)      Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the enforcement, performance and administration of this Guarantee.
 
(iii)     Notwithstanding anything to the contrary in this Agreement, with respect to any defaulted non-monetary Obligations the specific performance of which by the Guarantors is not reasonably possible (e.g., the issuance of the Company’s Common Stock), the Guarantors shall only be liable for making the Secured Parties whole on a monetary basis for the Company’s failure to perform such Obligations in accordance with the Transaction Documents.
 
1.8      Right to Set-Off . Each Guarantor hereby irrevocably authorizes the Collateral Agent, acting on behalf of the Holders, at any time and from time to time while an Event of Default (as defined in the Note) under any of the Transaction Documents shall have occurred and be continuing, without notice to such Guarantor or any other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits, credits, indebtedness or

claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by a Secured Party to or for the credit or the account of such Guarantor, or any part thereof in such amounts as the Collateral Agent may elect, against and on account of the obligations and liabilities of such Guarantor to the Secured Parties hereunder in any currency arising hereunder or under the Security Agreement as the Collateral Agent may elect, whether or not a Secured Party has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Collateral Agent shall notify such Guarantor promptly of any such set-off and the application made by the Collateral Agent of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Secured Party under this Section 1.8 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent, acting on behalf of the Holders, may have.

1.9      Payments . In addition to the terms of the guaranty set forth in Section 1.1 , and in no manner imposing any limitation on such terms, it is expressly understood and agreed that, if, at any time, any of the Obligations are declared to be immediately due and payable by a Guarantor, then the Guarantors shall, upon ten (10) Business Days’ notice, pay to the Collateral Agent, acting on behalf of the Holders, the entire amount of such Obligations as has been declared due and payable to the Secured Parties. Payment by the Guarantors shall be made to the Collateral Agent in immediately available Federal funds to an account designated by the Collateral Agent or at the address set forth herein for the giving of notice to the Collateral Agent or at any other address that may be specified in writing from time to time by the Collateral Agent, and shall be credited and applied to the Obligations.

1.10      Release . Subject to Section 2 , each Guarantor will be released from all liability hereunder concurrently with the repayment and performance in full of the Obligations. No payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the Holders or the Collateral Agent from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations) shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment , remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations are paid and performed in full.
 
2.      REINSTATEMENT .
 

The guarantees contained in Section 1 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Holders or the Collateral Agent upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Company or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

3.      REPRESENTATIONS AND WARRANTIES .
 

Each Guarantor hereby represents and warrants to the Secured Parties as of the date hereof as follows:

3.1      Organization and Qualification . Each Guarantor is duly organized, validly existing and in good standing under the laws of its formation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Each Guarantor is duly qualified to do business and is in good standing as a foreign corporation or limited liability company in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate, (x) adversely affect the legality, validity or enforceability of any of this Guarantee in any material respect, (y) have a material adverse effect on the results of operations, assets, prospects, or financial condition of the Guarantor or (z) adversely impair in any material respect the Guarantor’s ability to perform fully on a timely basis its obligations under this Guarantee (a “ Material Adverse Effect ”).

3.2       Authorization; Enforcement . Each Guarantor has the requisite corporate or other power and authority to enter into and to consummate the transactions contemplated by this Guarantee, and otherwise to carry out its obligations hereunder. The execution and delivery of this Guarantee by each Guarantor and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Guarantor, and no further consent or authorization of the Guarantor, its board of directors (or Persons performing similar functions), shareholders or members, or to its knowledge, any governmental authority or organization, or any other person or entity is required in connection therewith. This Guarantee has been duly executed and delivered by each Guarantor and constitutes the valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

3.3      No Conflicts . The execution, delivery and performance of this Guarantee by each Guarantor and the consummation by each Guarantor of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of its certificate of incorporation, by-laws or any other governing document or (ii) conflict with, constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Guarantor is a party or by which it or any of its asset or properties are bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which such Guarantor is subject (including Federal and state securities laws and regulations), or by which any of its properties or assets are bound or affected. The business of each Guarantor is not being conducted in violation of any law, ordinance or regulation of any governmental authority, except for violations which, individually or in the aggregate, do not have a Material Adverse Effect.

3.4      Securities Purchase Agreement . The representations and warranties of the Company set forth in the Securities Purchase Agreement as they relate to each Guarantor, each of which is hereby incorporated herein by reference, are true and correct as of the date hereof, and the Secured Parties shall be entitled to rely on each of them as if they were fully set forth herein, provided , that each reference in each such representation and warranty to the Company’s knowledge shall, for the purposes of this Section 3.4 , be deemed to be a reference to such Guarantor’s knowledge.

3.5      Independence of Parties . The Secured Parties have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee or any of the other Transaction Documents; the relationship between the Guarantors, on the one hand, and the Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and no joint venture is created hereby or by the other Transaction Documents or otherwise exists by virtue of the transactions contemplated hereby among the Guarantors and the Secured Parties.
 
3.6      Counsel . Each Guarantor has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents to which it is a party.
 
4.      COVENANTS .
 
4.1      Further Assurances . Each Guarantor covenants and agrees with the Collateral Agent, on behalf of each Holder, that, from and after the date of this Guarantee until the Obligations shall have been paid in full, such Guarantor shall (i) take, and/or shall refrain from taking, as the case may be, such commercially reasonable action that is necessary to be taken or not taken, as the case may be, so that no Event of Default (as defined in the Note) is caused by the failure to take such action or to refrain from taking such action by such Guarantor and (ii) execute and deliver to the Collateral Agent, from time to time, any additional instruments or documents which are reasonably necessary to cause this Guarantee to be, become or remain valid and effective in accordance with its terms.

4.2      Additional Guarantors . If the Company or a Guarantor creates or acquires any new Subsidiary, then the Company or such Guarantor shall cause such new Subsidiary to become party to this Guarantee for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of Annex A hereto.
 
5.      MISCELLANEOUS .
 
5.1      Severability . In the event that any provision of this Guarantee becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Guarantee shall continue in full force and effect without said provision; provided that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Guarantee to the parties.

5.2      Successors and Assigns . The terms and conditions of this Guarantee shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Guarantee, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Guarantee, except as expressly provided in this Guarantee. A Holder may assign its rights hereunder in connection with any valid private sale or transfer of the Note in accordance with the terms thereof and of the other Transaction Documents, as long as, as a condition precedent to such transfer, the transferee executes an acknowledgement agreeing to be bound by the applicable provisions of this Guarantee, in which case the term “Holder” shall be deemed to refer to such transferee as though such transferee were an original party hereto. No Guarantor may assign its rights or obligations under this Guarantee.

5.3      Injunctive Relief . Each Guarantor acknowledges and agrees that a breach by it of its obligations hereunder will cause irreparable harm to each Secured Party and that the remedy or remedies at law for any such breach will be inadequate and agrees, in the event of any such breach, in addition to all other available remedies, the Collateral Agent, acting on behalf of the Holders, shall be entitled to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss or the posting of any bond.
 
5.4      Governing Law; Jurisdiction . This Guarantee shall be governed by and construed under the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Guarantee and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
 
5.5      Counterparts . This Guarantee may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Any executed signature page delivered by facsimile or e-mail transmission shall be binding to the same extent as an original executed signature page, with regard to any agreement subject to the terms hereof or any amendment thereto.

5.6      Headings . The headings used in this Guarantee are used for convenience only and are not to be considered in construing or interpreting this Guarantee.
 
5.7      Notices . Any notice, demand or request required or permitted to be given by a Guarantor, the Collateral Agent or a Holder pursuant to the terms of this Guarantee shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

          If to a Guarantor :
 
          c/o Integrated BioPharma, Inc.

          225 Long Avenue

          Hillside, New Jersey 07205
          Attn: Chief Executive Officer
          Tel: (973) 926-0816
          Fax: (973) 926-1735

          With a copy (which shall not constitute notice) to:

          Greenberg Traurig, LLP
          200 Park Avenue
          New York, New York 10023
          Attn: Andrew H. Abramowitz
          Tel: (212) 801-9200
          Fax: (212) 801-6400
          

and if to any Holder, to such address for such party as shall appear on the signature page of the Securities Purchase Agreement executed by such party, or, as to any Guarantor, the Collateral Agent or any Holder, as shall be designated by such party in writing to the other parties hereto in accordance with this Section 5.7 .

5.8      Entire Agreement; Amendments . This Guarantee and the other Transaction Documents constitute the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. No (i) amendment to this Guarantee or (ii) waiver of any agreement or other obligation of the Guarantors under this Guarantee may be made or given except pursuant to a written instrument executed by the Guarantors, the Collateral Agent and the Holders holding a majority of the outstanding principal of the Note. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

[SIGNATURE PAGE FOLLOWS]

     IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.
 

     IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

Acknowledged and Agreed :
 

INTEGRATED BIOPHARMA, INC.
 

By: /s/ E. Gerald Kay

E. Gerald Kay
Chief Executive Officer

 

     IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.
 
 
IMPERIUM ADVISERS, LLC, AS COLLATERAL AGENT
 

By: /s/ Maurice Hryshko

Maurice Hryshko, Esq.
General Counsel

IMPERIUM MASTER FUND, LTD., AS HOLDER
 

By: /s/ Maurice Hryshko

Maurice Hryshko, Esq.
General Counsel

Exhibit 10.6

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT, dated as of February 21, 2008 (this “ Agreement ”), is by and between CD Financial, LLC (“ CDS ”) and Imperium Master Fund, Ltd. (“ Imperium Master Fund ”).

W I T N E S S E T H:
 

WHEREAS, pursuant to a Securities Purchase Agreement, dated as of the date hereof (the “ Imperium Purchase Agreement ”), by and between Integrated BioPharma, Inc., a Delaware corporation (the “ Company ”), and Imperium Master Fund, the Company has, among other things, sold and issued to Imperium Master Fund shares of its Series C Convertible Preferred Stock (the “ Series C Preferred Stock ”) and an 8% Senior Secured Note (the “ Imperium Note ”);

WHEREAS, the Company’s obligations to repay the Imperium Note and to make certain default payments (if any) under the Registration Rights Agreement, dated as of the date hereof (the “ Imperium Registration Rights Agreement ”), by and between the Company and Imperium Master Fund, are secured by the assets of the Company and its subsidiaries pursuant to a Security Agreement, dated as of the date hereof (the “ Imperium Security Agreement ”), by and among the Company, its subsidiaries and Imperium Advisers, LLC, a Delaware limited liability company (“ Imperium Advisers ” and, together with Imperium Master Fund, “ Imperium ”), in its capacity as agent for Imperium Master Fund;

WHEREAS, pursuant to a Securities Purchase Agreement, dated as of the date hereof (the “ CDS Purchase Agreement ”), by and between the Company and CDS, the Company has, among other things, sold and issued to CDS shares of Series C Preferred Stock and a Convertible Note (the “ CDS Note ”);

WHEREAS, the Company’s obligations to repay the CDS Note and to make certain default payments (if any) under the Registration Rights Agreement, dated as of the date hereof (the “ CDS Registration Rights Agreement ”), by and between the Company and CDS, are secured by the assets of the Company and its subsidiaries pursuant to a Security Agreement, dated as of the date hereof (the “ CDS Security Agreement ”), by and among the Company, its subsidiaries and CDS; and

WHEREAS, CDS and Imperium desire to enter into this Agreement to (i) confirm the relative priority of the security interests of CDS and Imperium, in the assets and properties of the Company and its subsidiaries, and (ii) provide for the orderly sharing among them, in accordance with such priorities, of proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof.

NOW THEREFORE, in consideration of the mutual benefits accruing to CDS and Imperium hereunder and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

As used in this Agreement, the following terms shall have the meanings ascribed to them below:

1.28      “Waiting Period” shall have the meaning set forth in Section 2.6(b) of this Agreement.

All terms defined in the Uniform Commercial Code as in effect in the State of New York, unless otherwise defined herein shall have the meanings set forth therein. All references to any term in the plural shall include the singular and all references to any term in the singular shall include the plural.

          If to CDS :

CD Financial, LLC
3299 NW Second Avenue
Boca Raton, Florida 33431
Attn: William H. Milmoe, Manager
Tel: 561-278-1169
Fax: 561-278-6930

          With a copy (which shall not constitute notice) to:

Charles Muller, Esq.
Muller & Lebebsburger
7385 Galloway Road
Suite 200
Miami, Florida 33173

or as shall otherwise be designated by such party in writing to the other parties hereto in accordance with this Section 3.8 .
 

[Remainder of Page Intentionally Blank]

IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to be duly executed as of the day and year first above written.

ACKNOWLEDGEMENT

Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.

Each of the undersigned agrees that any Secured Creditor holding Collateral does so as bailee (under the UCC) for each other Secured Creditor which has a Lien on such Collateral and is hereby authorized to and may turn over to the other Secured Creditor upon request therefor any such Collateral, after all obligations and indebtedness of each of the undersigned to the bailee Secured Creditor have been fully paid and performed.

Each of the undersigned acknowledges and agrees that: (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by any of Secured Creditors under Section 2.7 ), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the opinion of either of CDS or Imperium to effectuate

	INTEGRATED BIOPHARMA, INC.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	InB:MANHATTAN Drug Company, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	Scientific Sports Nutrition, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	Vitamin Factory, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	AgroLabs, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	The Organic Beverage Company , INC.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	IHT Health Products, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	IHT Properties, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	InB:Paxis Pharmaceuticals, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer
	InB:Hauser Pharmaceutical Services, Inc.
	By: /s/ E. Gerald Kay
	E. Gerald Kay
	Chief Executive Officer

Exhibit 10.7

SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT, dated as of February 21, 2008 (this “ Agreement ”), is by and between INTEGRATED BIOPHARMA, INC. , a Delaware corporation (the “ Company ”), and CD FINANCIAL, LLC, a Florida limited liability company (“ Investor ”).
 

A.     The Company wishes to sell to Investor , and Investor wishes to purchase from the Company, upon the terms and subject to the conditions set forth in this Agreement, (i) an 9.5% Convertible Senior Secured Note having a principal amount of $4,500,000 in the form attached hereto as Exhibit A (the “ Note ”), and (ii) 3,000 shares of the Company’s Series C Convertible Preferred Stock, having a stated value of $1,000 per share (the “ Series C Preferred Stock ”), which series shall be designated pursuant to the Certificate of Designation in the form attached hereto as Exhibit B ( the “ Certificate of Designation ”).
 
B.     The Series C Preferred Stock shall (i) be convertible into shares of the Company’s common stock, par value $.002 per share (“ Common Stock ”), (ii) accrue dividends at a rate of 10% per annum, payable in additional shares of Series C Preferred Stock, and (iii) mature on February 1, 2013 and be redeemed in shares of Common Stock. The Note, the shares of Common Stock and Series C Preferred Stock to be purchased by Investor hereunder, and the additional shares of Common Stock and Series C Preferred Stock issuable hereunder or under the Certificate of Designation, are collectively referred to herein as the “ Securities ” .

C.      The Company has agreed to effect the registration of the shares of Common Stock issuable upon the conversion or maturity date of the Series C Preferred Stock and the Note or otherwise issuable pursuant to this Agreement for resale by the holders thereof under the Securities Act of 1933 (as amended, and the rules and regulations promulgated thereunder, the “ Securities Act ”), pursuant to a Registration Rights Agreement in the form attached hereto as Exhibit C (the “ Registration Rights Agreement ”).

D.     The sale of the Securities by the Company to Investor, and any issuance of the additional Securities, will be effected in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“ Regulation D ”), as promulgated by the Securities and Exchange Commission ( the “ Commission ” ) under the Securities Act.

E.     The Company’s obligations hereunder and under the Note and the other transaction documents contemplated hereby will be guaranteed by each of the Company’s subsidiaries pursuant to a Guarantee in the form attached hereto as Exhibit D (the “ Guarantee ”) and secured by the assets of the Company and the Company’s subsidiaries pursuant to a Security Agreement in the form attached hereto as Exhibit E (the “ Security Agreement ”).

      In consideration of the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, t he Company and Investor hereby agree as follows:

1.      TERMINOLOGY AND USAGE .
 

1. 1       Definitions . When used herein, the terms below shall have the respective meanings indicated:

“ Affiliate ” means, as to any Person (the “ subject Person ”), any other Person (a) that directly or indirectly through one or more intermediaries controls or is controlled by, or is under direct or indirect common control with, the subject Person, (b) that directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting equity of the subject Person, or (c) ten percent (10%) or more of the voting equity of which is directly or indirectly beneficially owned or held by the subject Person. For the purposes of this definition, “ control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, through representation on such Person’s board of directors or other management committee or group, by contract or otherwise.
“ Allocation Amount ” has the meaning specified in Section 5.5 of this Agreement.
“ Biotech Spin-Off ” has the meaning specified in Section 5.12 of this Agreement.
“ Biotech Subsidiary ” means InB:Biotechnologies, Inc., a New Jersey corporation.
“ Board of Directors ” means the Company’s board of directors.
“ Business Day ” means any day other than a Saturday, a Sunday or a day on which the Principal Market is closed or on which banks in the City of New York are required or authorized by law to be closed.
“ Cap Amount ” means 19.99% of the aggregate number of shares of Common Stock outstanding immediately prior to the Closing (subject to adjustment upon a stock split, stock dividend, recapitalization, reorganization, reclassification or other event that subdivides all of the outstanding shares of Common Stock).

“ Certificate of Designation ” has the meaning specified in the recitals of this Agreement.
“ Closing ” and “ Closing Date ” have the respective meanings specified in Section 2.1 of this Agreement.
“ Commission ” has the meaning specified in the recitals to this Agreement.
“ Common Stock ” has the meaning specified in the recitals to this Agreement.

“ Company Subsidiary ” means a Subsidiary of the Company.

“ Debt ” means, as to any Person at any time: (a) all indebtedness, liabilities and obligations of such Person for borrowed money; (b) all indebtedness, liabilities and obligations of such Person to pay the deferred purchase price of Property or services, except trade accounts payable of such Person arising in the ordinary course of business that are not past due by more than 90 days; (c) all capital lease obligations of such Person; (d) all Debt of others guaranteed by such Person; (e) all indebtedness, liabilities and obligations secured by a Lien (other than a Permitted Lien) existing on Property owned by such Person, whether or not the indebtedness, liabilities or obligations secured thereby have been assumed by such Person or are non-recourse to such Person; (f) all reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments; and (g) all liabilities and obligations of such Person to redeem or retire shares of capital stock of such Person.

“ Disclosure Documents ” means all SEC Documents filed with the Commission at least three (3) Business Days prior to the Execution Date and the unaudited Financial Statements (including the notes thereon) as of and for the period ending December 31, 2007 delivered to Investor pursuant to this Agreement.

“ Effective Date ” has the meaning specified in the Registration Rights Agreement.
“ Embargoed Person ” has the meaning specified in Section 4.29 of this Agreement.
“ Environmental Law ” means any federal, state, provincial, local or foreign law, statute, code or ordinance, principle of common law, rule or regulation, as well as any permit, order, decree, judgment or injunction issued, promulgated, approved or entered thereunder, relating to pollution or the protection, cleanup or restoration of the environment or natural resources, or to the public health or safety, or otherwise governing the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling, discharge or disposal of hazardous materials.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“ Execution Date ” means the date of this Agreement.
“ GAAP ” means generally accepted accounting principles, applied on a consistent basis, as set forth in (i) opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements of the Financial Accounting Standards Board and (iii) interpretations of the Commission and the staff of the Commission. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period.

“ Governmental Authority ” means any nation or government, any state, provincial or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any stock exchange, securities market or self-regulatory organization.
“ Governmental Requirement ” means any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, license or other directive or requirement of any federal, state, county, municipal, parish, provincial or other Governmental Authority or any department, commission, board, court, agency or any other instrumentality of any of them.

“ Guarantee ” has the meaning specified in the recitals of this Agreement.

“ Holder ” shall initially mean Investor, provided that any Person that subsequently holds any Securities shall also be deemed a Holder.

“ Holder Party ” has the meaning specified in Section 5 .10 of this Agreement.

“ Intellectual Property ” means any U.S. or foreign patents, patent rights, patent applications, trademarks, trade names, service marks, brand names, logos and other trade designations (including unregistered names and marks), trademark and service mark registrations and applications, copyrights and copyright registrations and applications, inventions, invention disclosures, protected formulae, formulations, processes, methods, trade secrets, computer software, computer programs and source codes, manufacturing research and similar technical information, engineering know-how, customer and supplier information, assembly and test data drawings or royalty rights.

“ Issuance Event ” has the meaning specified in Section 5 .7 of this Agreement.
“ Key Employee ” has the meaning specified in Section 4.16 of this Agreement.
“ Lien ” means, with respect to any Property, any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, tax lien, financing statement, pledge, charge, or other lien, charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such Property (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).