INTEGRATED
BIOPHARMA, INC.
  5.0%
PROMISSORY NOTE
  THIS
5.0% PROMISSORY 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.
 
 Issue
Date:  November 24,
2009                                                                                                                     $300,000.00
  FOR VALUE RECEIVED,MANHATTAN
DRUG COMPANY,a New
York Corporation (the “Company”),
hereby promises to pay to the order of CD FINANCIAL, LLC, a Florida Limited
Liabilty Corporation, or its permitted successors or assigns (the “Holder”),
the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000.00) in same day funds, on or
before November 24, 2010 (the “Maturity
Date”).
 Except as
permitted or required under Sections 4and 5, the
Company shall not have the right to prepay any principal of this
Note.
  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 4of 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; (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; (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; (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 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.
 
  “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 (12%) 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 and such
breach continues for a period of five (5) Business Days following written notice
thereof from the Holder; or
  (iv)           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 5
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 five percent (5.0%), computed on the basis of a
365-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)           Interest
Payments.  The Company shall, upon repayment of principal of
this Note, pay all accrued interest as calculated in accordance with Section 2(a)
above.
  (c)           Payment on Maturity
Date.  The outstanding principal amount of this Note plus all accrued and unpaid
Interest (including default interest (if any)) hereon, plusall other amounts due
hereunder, shall be paid in full on the Maturity Date or earlier as provided in
Section 5.
  (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.
  4.           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, providedsuch date must be at
least two (2) Business Days following the date on which the Acceleration Notice
is delivered to the Company.
 
 
  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:
  Herrick,
Feinstein LLP
 One
Gateway Center
 Newark,
NJ  07102
 Attn:
Daniel A. Swick
 Tel:
(973)-274-2010
 Fax:
(973)-274-6401
  and if to
the Holder,
  CDS Holdings Group LLC
 3299 NW 2nd Avenue
 Boca Raton,
FL  33431
 William Milmoe
 Tel:  (561)
278-1169
 Fax: (561) 278-6930
 
 (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 6(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.
  MANHATTAN
DRUG COMPANY
  By:  /s/
E. Gerald
Kay
 Name:  E
GERALD KAY
 Title:  Chief
Executive Officer