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THIS FORBEARANCE AGREEMENT (this “ Agreement ”), dated as of October 4, 2011, is entered into by and between Integrated BioPharma, Inc. (the “ Company ”) and Imperium Advisers, LLC, in its capacity as collateral agent (in such capacity, “ Collateral Agent ”) for Investors (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to the (1) Amended and Restated Securities Purchase Agreement, dated as of February 21, 2008, by and between the investors from time to time party thereto (collectively, “ Investors ”) and the Company (as amended, the “Securities Purchase Agreement ”) and (2) other Transaction Documents (as defined in the Securities Purchase Agreement), the Company sold the Notes (as defined in the Securities Purchase Agreement) to Investors and granted to Collateral Agent, for the benefit of Investors, security interests in and liens upon substantially all the Company’s assets, including, without limitation, the Transferred iBio Stock (as defined below);
WHEREAS, as of the date hereof, certain Events of Default have occurred and are continuing under the Transaction Documents including the failure to repay the principal obligations which are due and payable as of the date hereof (the “ Specified Defaults ”); and
WHEREAS, the Company has requested that Collateral Agent forbear from exercising its rights and remedies due to the occurrence of such Specified Defaults, and Collateral Agent is willing to agree to such request subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and the respective agreements, warranties and covenants contained herein, the parties hereto agree, covenant and warrant as follows:
1.1 Additional Definitions . As used herein, the following terms shall have the respective meanings given to them below and the Transaction Documents shall be deemed and are hereby amended to include, in addition to and not in limitation of all other definitions, each of the following definitions:
(a) “ CDS Intercreditor Agreement ” shall mean the Amended and Restated Intercreditor Agreement, dated as of February 21, 2008, by and between CD Financial, LLC and Collateral Agent, on behalf of Investors, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.
(b) “ Forbearance Agreement ” shall mean the Forbearance Agreement, dated as of October 4, 2011, by and between the Company and Collateral Agent, as the same now exists or may hereafter be amended, modified, extended, renewed restated or replaced.
(c) “ Forbearance Termination Date ” shall mean the earlier to occur of (i) December 31, 2011 (ii) the date the Company fails to comply with the covenants, conditions and agreements contained in this Agreement, (iii) the date of the occurrence of any Event of Default other than the Specified Defaults or (iv) the date that the Obligations are paid in full in cash and all other obligations under the Transaction Documents are satisfied.
(d) “ Net Proceeds ” shall mean the aggregate proceeds received by Collateral Agent from any sale or other disposition of the Transferred iBio Stock less all reasonable fees and out of pocket expenses payable in connection with such sale or other disposition, including brokerage fees.
(e) “ Transferred iBio Stock ” shall mean 1,266,706 shares of the common stock of iBio, Inc. represented by Certificate Number IBP 38.
1.2 Interpretation . Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Transaction Documents.
2.1 Acknowledgment of Obligations . The Company hereby acknowledges confirms and agrees that, as of the close of business on September 30, 2011, the aggregate outstanding principal amount of the Notes (including accrued and accreted interest) is $7,805,000 (the “ Unpaid Principal Obligations ”) and that such amount, together with all interest accrued and accruing thereon after September 30, 2011 at the non-default rate, and all fees, costs, expenses and other charges now or hereafter payable by the Company to Investors and Collateral Agent under the Transaction Documents (all of the foregoing collectively referred to as the “ Obligations ”), is unconditionally owing by the Company to Investors and Collateral Agent without offset, defense or counterclaim of any kind, nature or description whatsoever.
2.2 Acknowledgment of Security Interests . The Company hereby acknowledges, confirms and agree that, since February 21, 2008, the Collateral Agent, for itself and the benefit of Investors, has and shall continue to have valid, enforceable and perfected liens upon and security interests in the Collateral, including, without limitation, the Transferred iBio Stock, and all other assets and properties of the Company upon or in which Collateral Agent, for the benefit of Investors, has been granted or holds a lien or security interest.
2.3 Binding Effect of Documents . The Company hereby acknowledges, confirms and agrees that: (a) each of the Transaction Documents to which it is a party has been duly executed and delivered to Investors and/or Collateral Agent by the Company and is in full force and effect as of the date hereof, (b) the agreements and obligations of the Company contained in such Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with the terms thereof, and the Company has no valid defense to the enforcement of such obligations, and (c) Collateral Agent and Investors are and shall be entitled to the rights, remedies and benefits provided for in the Transaction Documents.
3.1 Acknowledgment of Specified Defaults . &nbs