EXHIBIT 10.2

MASTER AGREEMENT

This Master Agreement (together with all Exhibits and other attachments hereto,
this “Agreement”) is entered into as of May 1, 2009, among P2F Holdings, a
California Corporation (“P2F,” “Purchaser,” or “Licensee”), Adsouth Marketing
LLC, a Delaware limited liability company (“ASM” or “Seller”), Legacy Formulas
LLC, a California limited liability company (“Legacy” or “Licensor”), and
Vertical Branding, Inc., a Delaware corporation (“VBI” or “Licensor”), with
respect to (i) P2F’s purchase from ASM, a wholly owned subsidiary of VBI, of
certain of ASM’s inventory, sales orders and product purchase orders
(collectively, the “Assets”), and (ii) the exclusive license, sublicense or
distributorship rights by Legacy and VBI to P2F of rights to manufacture, market
and sell VBI products in specified distribution channels and territories.  

1.

Asset Transfer.  ASM hereby sells, assigns, transfers and conveys to P2F all of
ASM’s rights, title and interest in and to (a) the inventory attached hereto as
Exhibit A (the “Inventory”), (b) the sales orders included in Exhibit B (the
“Sales Orders”), and (c) the inventory purchase orders listed in Exhibit C (the
“Purchase Orders”).  The Parties shall take any and all necessary and reasonable
actions, and shall otherwise mutually cooperate with respect to, transfer and
vesting of ownership of the Assets in P2F as well as transition to P2F of the
customer accounts listed in the attached Exhibit D (the “Seller Accounts”).   

2.

Purchase Price.  In consideration of Seller’s transfer of the Assets to
Purchaser, (a) Purchaser shall pay to BFI Business Finance, Inc., the amount of
$77,827.90 on the terms set forth below (the “Inventory Payment”), and (b)
Purchaser shall pay to Seller fifty percent (50%) of Purchaser’s Net Profit
(defined below) on sales of Covered Product (defined below) pursuant to sales
orders, including the Sales Orders, received by Purchaser or Seller from the
date hereof until May 31, 2009 (the “Transition Period”), provided that such
amount shall not exceed $1,000,000 (the "Transition Earn-Out").  As used herein,
the following terms shall have the meaning set forth below:

Gross Sales means the total invoiced amount of sales;

Net Profit means Net Sales minus (i) Landed Cost of Goods Sold, (ii) Direct
Costs of Fulfillment, and (iii) Included Selling Expenses;

Net Sales means Gross Sales minus (i) returns, (ii) chargebacks not to exceed
1.0% of Gross Sales, and (iii) either bad debt or receivables factoring
commissions not to exceed 0.5%, as applicable;

Landed Cost means the sum of any of the following, as applicable: (i) first cost
of product from manufacturer (which, for purposes of this Section 2 only, shall
be the amounts reflected on Exhibit F “Royalty Rates”), (ii) freight or shipping
from manufacturer to port or warehouse, (iii) import duties, (iv) miscellaneous
port of entry fees, and (v) inland freight from port to warehouse;

Direct Costs of Fulfillment means actual cost of freight and shipping to
customers and either (i) actual costs of fulfillment for sales orders fulfilled
by third party logistics providers, or (ii) Purchaser’s actual costs of
fulfillment in an amount not to exceed 2% of Net Sales;

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Included Selling Expenses means third-party sales commissions (not to exceed
current rates) and third-party royalties.   

The Inventory Payment shall be made within thirty (30) days of tender of the
Inventory by Seller to Purchaser for pick-up or transfer and Seller’s invoices
thereof. The Transition Earn-Out payments shall be made on Monday following the
week of shipment to third party customers.

3.

License or Distributor Relationships.  Licensor is a licensee or otherwise has
rights with respect to products (“Third Party Products”) under the agreements
set forth in Exhibit E attached hereto (“Third Party License Agreements”).  The
licensors under such Third Party License Agreements are referred to herein as
“Third Party Licensors.”  Licensor also designs, manufactures and distributes
its own products (“Licensor’s Products”) which are also identified in Exhibit E.
Licensor further has certain rights and obligations from and to producers and
spokespeople (“Producers/Talent”) in connection with the sale of Third Party
Products and Licensor’s Products and pursuant to the production and talent
agreements also listed in Exhibit E (the “Production and Talent Agreements”).
Licensor and Licensee hereby agree as follows with respect to Third Party
Products and Licensor’s Products.

 

3.1

General Grant.  

(a)

Licensor hereby grants to Licensee the exclusive right to market and/or
distribute and sell, in the Sales Territory (as defined below) and to the
Accounts (as hereafter defined) Seller’s current portfolio of consumer products
(including Third Party Products and Licensor’s Products) listed on Exhibit F
attached hereto (the “Initial Products”), and such other products as shall be
added to the list from time to time (such added products, along with the Initial
Products, the “Covered Products”), together with the use of all intellectual
property associated with Covered Products (including trademarks, patents,
copyrights, marketing materials and other collateral materials), all on the
terms and conditions set forth in this Agreement and subject, in each instance,
to any limitations to any of the foregoing rights as may exist in the Third
Party License Agreements or Production and Talent Agreements listed in Exhibit
E.  Licensee shall be entitled to market, distribute and/or sell the Covered
Products on a wholesale basis to (i) national and regional mass, specialty,
discount, convenience, drugstore and catalog retailers and chains (including the
Seller Accounts), and any other brick and mortar retailer, including sales by
retailers through their websites provided shipped to retailers on a bulk basis
(Licensee will refer “pick and Pack” orders to Licensor), for resale in the
Sales Territory, and (ii) to TK Max in England and Winters in Canada
(collectively, the “Accounts”); provided that, for the avoidance of doubt, the
Accounts shall not include (x) home shopping channels and networks and (y) any
limitation on the Accounts existing in the Third Party License Agreements.  As
used herein, “Sales Territory” shall mean (i) with respect to Licensor’s
Products, the United States and its territories and possessions, and (ii) with
respect to Third Party Products, the United States, and to the extent permitted
in the Third Party License Agreements, its territories and possessions.

(b)

Licensor hereby grants to Licensee the non-exclusive right to manufacture and
have manufactured anywhere in the world the Covered Products, together with the
use of all intellectual property associated with Covered Products (including
trademarks, patents, copyrights, marketing materials an other collateral
materials) for the purpose of marketing,

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selling and/or distributing such Covered Products pursuant to Section 3.1(a)
above, all on the terms and conditions set forth in this Agreement and subject
to any limitations with respect to the foregoing contained in the Third Party
License Agreements.  

(c)

Exhibit E sets forth for each Third Party License Agreement the relationship
between Licensor and Licensee with respect to such Third Party License Agreement
(i.e., whether as a licensee, sublicense, distributor or otherwise).  Except as
expressly set forth in a writing signed by Licensee, Licensee does not assume
any of Licensor’s obligations or liabilities of Licensor under or in connection
with any of the Third Party License Agreements or Production and Talent
Agreements, but Licensee agrees to, and agrees to cause any of its assigns,
sublicensees, agents or distributors permitted under Section 3.1(d) below, at
all times comply with the terms and conditions of the Third Party License
Agreements relating to Licensee’s rights and obligations under this Agreement
and over which Licensee has control.

(d)

Unless prohibited under the applicable Third Party License Agreement, and
subject to Licensor’s prior approval not to be unreasonably withheld or delayed,
the rights granted to Licensee shall include the right to grant sublicenses or
other rights to manufacture, sell and/or distribute the Covered Product to third
parties; provided, that sales made by third parties shall be subject to the
Royalties as if sold by Licensee; and provided, further that such parties agree
in writing to be bound by the applicable terms and conditions of this Agreement.

(e)

Except as expressly provided otherwise in this Agreement, as between the
Parties, Licensor or its Third Party Licensors shall own and retain all right,
title and interest in and to the Covered Products, including any and all
intellectual property rights therein and thereto.  

3.2

Licensor’s Third Party License Agreements and Production and Talent Agreements.
 

(a)

To the extent the rights granted to Licensee herein arise out of rights conveyed
to Licensor under Third Party License Agreements or Production and Talent
Agreements, Licensor shall continue to comply with each such Third Party License
Agreement and Production and Talent Agreements and shall use commercially
reasonable efforts to renew (or cause the renewal of) all of the terms in such
Third Party License Agreements or Production and Talent Agreements with respect
to the Accounts so as to coincide with the Initial Term (as defined below) or
Renewal Term (as defined below) of this Agreement to the extent possible (unless
Licensee consents in writing that such term need not be renewed).  Licensor
shall provide to Licensee within seven (7) days after the date on which any
periodic royalty is payable to each Third Party Licensor and each Talent proof
that Licensor has paid all royalties and other amounts payable by Licensor to
the Third Party Licensors and Talent/Producers.  Licensor will also provide to
Licensee each month or quarterly (per terms of applicable agreements) copies of
all reports submitted to the Third Party Licensors and reports detailing
Licensor’s sales of Covered Products. Licensor shall immediately provide to
Licensee copies of any notices received by Licensor from any party who is party
to the Third Party License Agreements or Production and Talent Agreements and
shall promptly cure any breaches of such Third Party License Agreements or
Production and Talent Agreements by Licensor.  Licensee shall have the right,

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but not the obligation, to pay on Licensor’s behalf, any unpaid royalties or
other amounts owed to the Third Party Licensors and Talent/Producers and all
such payments, plus a 4% penalty on the amount to be paid, shall be deducted
from the next amounts owed by Licensee to Licensor under this Agreement (or, if
this Agreement expires or is terminated, shall be immediately repaid to Licensee
by Licensor).   Licensee shall notify Licensor in writing in advance of
Licensee’s intent to make such payments on behalf of Licensor and in the event
Licensor notifies Licensee that there exists a bona fide dispute with regard to
such payment, Licensee will refrain from making such payment and Licensee and
Licensor will cooperate in good faith with respect to resolution of such
underlying payment dispute.

(b)

Certain of the Third Party License Agreements require the consent of the Third
Party Licensor or notice to the Third Party Licensor with respect to this
Agreement.  Certain of the Third Party License Agreements also contain
provisions that Licensee does not wish to be (and/or should not be) bound by or
comply with.   

(i)

Within ten (10) days after the date of this Agreement, Licensor shall send
notices of this Agreement to all Third Party Licensors to whom notice must be
sent or Licensee desires to be sent.  Such notice shall be subject to Licensee’s
approval, which shall not be unreasonably withheld or delayed.   

(ii)

Licensee desires that certain Third Party Licensors, as indicated in Exhibit E,
execute documents in favor of Licensee that will provide consent to this
Agreement, clearly limit Licensee’s responsibility and obligations to the Third
Party Licensors under such Third Party License Agreements and other terms (the
“Third Party License Amendments”).   Licensor and Licensee shall work in good
faith to obtain such Third Party License Amendments as soon as reasonably
possible after the execution of this Agreement.  If any Third Party License
Amendment is not executed within thirty (30) days of this Agreement, Licensee
shall have the right to remove from this Agreement the applicable Third Party
Products and any associated rights and/or obligations under this Agreement
relating to such removed Third Party Products, and the Annual Guaranteed Royalty
(as defined below) shall be reduced as set forth in Section 3.4.  

3.3

Advance.

(a)

Licensee shall, upon execution of this Agreement, advance to Licensor the amount
of $1,000,000 as an advance on Licensor Royalties (defined below) payable
pursuant to this Agreement as hereinafter set forth (the “Advance”).  Licensor
agrees to use a portion of the Advance to make payments to certain of Licensor’s
creditors as set forth in Exhibit G (the “Creditor Payments”).  

(b)

Until recouped in full, Licensee shall be entitled to credit against the
Licensor Royalties for the Advance as follows:

(i)

for sales of Covered Products occurring through September 30, 2009, the credit
shall be twenty percent (20%) of the Licensor Royalties payable with respect to
such sales;

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(ii)

for sales of Covered Products occurring after September 30, 2009 but on or
before December 31, 2009, the credit shall be twenty five percent (25%) of the
Licensor Royalties payable with respect to such sales; and

(iii)

for sales of Covered Products occurring after December 31, 2009, the credit
shall be thirty seven and one half percent (37.5%) of the Licensor Royalties
payable with respect to such sales.

3.4

Royalties.  

(a)

Royalty Rates. Licensee shall pay a royalty to Licensor on sales of the Initial
Products according to the rate schedule included in Exhibit F and on any future
Covered Products at a rate to be negotiated in good faith by Licensor and
Licensee (the “Royalty Rates”).  The portion of the Royalties payable hereunder
that arise pursuant to the Third Party License Agreements and the Production and
Talent Agreements shall be based on the same royalty rates (without markup)
applicable to Licensor under such agreements for sales of applicable Covered
Products to the Accounts (the “Pass-Through Royalty Rates”).  The rates
applicable to the portion of the Royalties to be retained by Licensor are
hereafter referred to as the “Licensor Royalty Rates.”

(b)

Licensor Royalties. The portion of the Royalties to be retained by Licensor with
respect to Licensee’s sales of Covered Products shall be calculated by
multiplying Licensee’s Net Sales of a particular Covered Product by the Licensor
Royalty Rate applicable to such product (the “Licensor Royalties”).  Licensor
Royalties shall be paid monthly within twenty five (25) days after the end of
the month in which Licensee ships Covered Product to customers.  Because
Licensee will pay royalties based on shipped Covered Products and not based on
collections from customers, such Licensor Royalty payments shall be reconciled
to Net Sales as necessary and any overpayments or underpayments of Licensor
Royalties shall be reconciled at the end of each calendar quarter and any
overpayments or underpayments shall be repaid by the party who received or made
the overpayment or underpayment.  Any overpayments by Licensee at Licensee’s
option may be deducted from the next Licensor Royalties payable to Licensor.  

(c)

Pass-Through Royalties. The portion of the Royalties to be paid under Third
Party License Agreements and/or Production and Talent Agreements with respect to
Licensee’s sales of Covered Products (the “Pass-Through Royalties”) shall be
calculated on the same basis on which Licensor is required to pay such
Pass-Through Royalties.  Pass-Through Royalties shall be paid by Licensee to
Licensor on the same schedule as Licensor Royalties and Licensor agrees to remit
such amounts to the applicable third-party payee not later than ten (10) days
after receipt of Pass-Through Royalties from Licensee.

(d)

Reporting.  Each payment of Licensor Royalties and Pass-Through Royalties
(collectively, the “Royalties”) shall be accompanied by a report setting forth
in reasonable detail a calculation of the amount of the Royalty being paid and
any offsets and other reconciliations made.  Licensee shall cooperate with
Licensor to provide sufficient information relating to sales of Covered Products
so as to allow Licensor to provide the necessary corresponding reporting
information to the Third Party Licensors or Talent/Producers.  The

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method of payment shall be by check or wire transfer as directed from time to
time in writing by Licensor.  All Royalties shall be paid in U.S. Dollars.  

(e)

Annual Guarantee.  For each year of the Initial Term (as defined below) and
Renewal Term (as defined below) (if there is a Renewal Term), Licensee shall pay
Licensor an annual guaranteed minimum Licensor Royalty (the “Annual Guaranteed
Royalty”).   Subject to reduction as set forth in this Agreement, the Annual
Guaranteed Royalty for the first Contract Year (as defined below) of the Initial
Term shall be $2,800,000 (the “Year 1 Minimum Royalty”) and each subsequent
Contract Year’s Annual Guaranteed Royalty (each subsequent year ending on June
30) shall be equal to eight percent (8%) of eight times (8X) Licensor’s Direct
Response Sales (as defined below) of Covered Products remaining under this
Agreement for the six (6) months prior to the commencement of the next
subsequent Contract Year, provided that the Annual Guaranteed Royalty for the
fourth Contract Year shall not be less than $2,800,000.  As used herein, (i)
“Direct Response Sales” means sales made directly to consumers from television,
internet, print, and radio advertising or any other form of direct response
media excluding, for the avoidance of doubt, shopping networks and channels, but
including shipping and processing charges, (ii) the first “Contract Year” means
initially, the period beginning on the date hereof and ending June 30, 2010, and
each subsequent Contract Year means the subsequent twelve (12) month period
ending on June 30.

(f)

Adjustment of Annual Guarantee in Absence of Third Party License Amendment.  If
any Third Party Product is removed from this Agreement pursuant to Section
3.2(b), the Annual Guaranteed Royalty for the first Contract Year shall be
reduced by the amount set forth in Exhibit H for such Third Party Product.  

(g)

Adjustment of Annual Guarantee for Terminated Third Party License.  If any Third
Party License Agreement is terminated or expires or Licensee’s rights with
respect to such Third Party License Agreement is otherwise terminated other than
pursuant to Section 3.2(b) and other than by any breach of this Agreement by
Licensee (a “Terminated Third Party License”), the Annual Guaranteed Royalty for
the Contract Year in which such event occurs shall be reduced proportionately as
follows:

(i)

determine Licensee’s sales of the Covered Product licensed under such Terminated
Third Party License during the six (6) full month period prior to such
termination and annualize it (i.e., multiply such amount by two (2)); then

(ii)

divide such amount by the total sales of Covered Products during the six (6)
full month period prior to such termination on an annualized basis to determine
the percentage of total sales represented by such Covered Product; then

(iii)

multiply that percentage to the Annual Guaranteed Royalty for such year to
determine the proportionate annual amount by which the Annual Guaranteed Royalty
should be reduced; then

(iv)

multiply that amount by a fraction, the numerator of which is the number of
remaining months in such Contract Year and the denominator of which is 12 to

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determine the proportionate amount of such annual amount applicable to the
remainder of the Contract Year.

(h)

Payment of Annual Guaranteed Royalty.  Should the amount of Licensor Royalties
paid or to be paid by Licensee during any quarter of a Contract Year be less
than (i) twenty-five (25%) of the Annual Guaranteed Royalty, plus (ii) the
amount by which Licensor Royalties paid in each previous quarter of the
applicable License year exceeded twenty-five percent (25%) of the Annual
Guaranteed Royalty, then Licensee shall pay the amount of such shortfall within
fifteen (15) calendar days after the end of such  quarter; provided that, should
this provision result in payment by Licensee of more than the Annual Guaranteed
Royalty, Licensee shall be entitled to deduct such amount from the Licensor
Royalties otherwise payable to Licensor for the last month of any Contract Year.
 For purposes of this Section 3.4(h), the first  quarter shall be deemed to
include the period commencing on the Effective Date and ending on September 30,
2009.

(i)

Maintenance of Third Party License Agreements.  Certain of the Third Party
License Agreements require Licensor to meet minimum periodic thresholds (the
“Minimum 3PLA Thresholds”) in order to maintain certain or any rights under such
agreements (the “Affected Rights”).  If sales of the applicable Third Party
Product by Licensor (other than to the Accounts) and Licensee (to the Accounts)
are not sufficient to meet the Minimum 3PLA Thresholds, then Licensor and
Licensee shall meet and confer to determine whether or not to retain the
Affected Rights and:  

(1)

If Licensor and Licensee both desire to retain such Affected Rights, then
Licensor and Licensee shall jointly make up for any Minimum 3PLA Threshold
shortfall in proportion to the relative sales of such applicable Covered Product
made by Licensor and Licensee during the six month period immediately prior to
the end of the applicable threshold period in question (e.g., if Licensor’s
sales were $100,000 and Licensee’s sales were $50,000, then Licensor shall pay
2/3rds of the applicable shortfall).  

(2)

If only Licensee desires to retain such Affected Rights and Licensor does not,
then Licensee shall pay the shortfall and such Affected Rights shall remain a
part of this Agreement except that Licensee shall be entitled to a credit
against the next Licensor Royalties due with respect to such Covered Product for
the share otherwise payable by Licensor under Clause 1 above and such credit
shall be included for purposes of determining whether the Annual Guaranteed
Royalty has been met.

 

(3)

If only Licensor desires to retain such Affected Rights and Licensee does not,
then (A) Licensor shall pay the royalty shortfall (B) the applicable Covered
Product shall be removed from this Agreement, (C) the Annual Guaranteed Royalty
for such Contract Year shall be reduced in the manner set forth in Section
3.4(g) above, and (D) Licensee shall not market, distribute or sell such Covered
Product or substantially similar product for a period of twelve (12) months
after Licensor pays the shortfall.

(4)

If neither Licensor nor Licensee desire to retain such Affected Rights, then (A)
 the applicable Covered Product shall be removed from this

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Agreement, (B) the Annual Guaranteed Royalty for such Contract Year shall be
reduced in the manner set forth in Section 3.4(g) above and (C) Licensee shall
not market, distribute or sell such Covered Product or any substantially similar
product for a period of six (6) months.  

3.5

Right of First Refusal.

  

(a)

Licensor shall provide to Licensee a right of first refusal to receive rights as
set forth in this Agreement for all new products developed by Licensor or
brought to Licensor by a third party during the term of this Agreement that
Licensor desires to market to Accounts, at a royalty rate to be negotiated by
Licensor and Licensee in good faith on a product by product basis.  Licensor
shall promptly provide notice to Licensee of any such new products and Licensor
and Licensee shall negotiate the terms of such rights, including an amendment to
this Agreement, in good faith during a 45 day period following such notice (the
“Negotiation Period”).  If an agreement cannot be reached during the Negotiation
Period, Licensor shall have the right to exercise such rights itself or grant
such rights to other parties.

(b)

Licensee shall, during the term of this Agreement, refer to Licensor any and all
new product development opportunities, excluding with regard to close-out
product opportunities (“New Products”), and afford Licensor the opportunity,
over a period of sixty (60) days from the date of such referral, to pursue,
negotiate and secure the rights to manufacture, market and/or promote such New
Products.  If such rights are obtained by Licensor, any such New Product shall
be subject to Licensee’s Right of First Refusal under Section 3.5(a) above.  If
Licensor is unsuccessful in obtaining the rights to a New Product, or, within
ten (10) days of the referral of a New Product Licensor has failed to provide
Licensee notice of it intent to pursue such rights, then Licensee shall have the
right to pursue such rights on its own.

3.6

Commercialization.

(a)

Licensee shall use commercially reasonable efforts to market and sell the
Covered Products to the Accounts.  Licensor shall use its commercially
reasonable efforts to obtain from Third Party Licensors the cooperation and
assistance of such Third Party Licensors to the same extent that such
cooperation and assistance is required to be given to Licensor.

(b)

Licensor shall have the right to prior approval (which Licensor shall not
unreasonably withhold or delay) of (i) all Product prototypes and production run
samples proposed to be shipped by Licensee as Covered Products, and (ii)
marketing, packaging and other collateral materials used by Licensee in
connection with its sales of the Products.  Licensor must provide written notice
of any objections under such right of approval within seven (7) days after
submission by Licensee and a detailed description of the changes requested by
Licensor and the reasons therefor.  The failure by Licensor to provide such
written objection within such seven (7) day period shall constitute approval of
the submission by Licensor.  Licensee shall implement reasonable quality
assurance controls and procedures, and take such other commercially reasonable
precautions, to ensure that all Covered Product sourced by or at the direction
of Licensee are in substantial conformity with product samples approved by
Licensor.  

(c)

Licensor shall use commercially reasonable efforts to market and sell the
Covered Products via television, Internet and/or print direct response
advertising, and shall,

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during each Contract Year of the term of this Agreement, (i) develop a minimum
of four (4) new product offerings for which it shall produce and test-market a
short-form television commercial, and (ii) spend a minimum of twenty five
percent (25%) of the amount of Royalties paid to Licensor on advertising media
for direct response product sales.  Licensor shall provide quarterly reports
setting forth in reasonable detail (with backup documentation) Licensor’s
compliance with this Section 3.6(c).

3.7

Records, Inspection and Audit Rights.

(a)

Licensee shall maintain and retain (or cause to be maintained and retained)
complete and accurate records of all manufacturing, purchase orders, quality
assurance records and sales on which any and all royalties contemplated by or
payable under this Agreement are based for a period of at least three (3) years.
  All records required to be kept by Licensee pursuant hereto shall be made
available for inspection by Licensor at Licensor’s expense, during Licensee’s
normal business hours, Monday through Friday, upon ten (10) days prior written
notice. Licensor may cause such records to be audited not more than twice in any
12-month period.  In the event any such audit demonstrates an underpayment of
amounts due hereunder, then Licensee shall pay, within ten (10) business days of
written notice from Licensor, all amounts determined by such audit to be due;
furthermore, if the amount of the underpayment is more than the greater of (i)
five percent (5%) of the amount due for the period of the audit, or (ii)
$10,000, then Licensee shall reimburse Licensor for the cost of the audit within
ten (10) business days of any request from Licensor for such reimbursement.   In
the event any such audit demonstrates an overpayment of royalties due hereunder,
then the amount shall be a credit against any future Licensor Royalties due and
owing until the overpayment is satisfied or immediately repaid upon termination
of this Agreement

 

(b)

Licensor shall maintain and retain (or cause to be maintained and retained)
complete and accurate records of all records related to payment of royalties to
third parties contemplated by and under this Agreement and all expenditures on
direct response advertising for Covered Products for a period of at least three
(3) years.  All records required to be kept by Licensor pursuant hereto shall be
made available for inspection by Licensee at Licensee’s expense, during
Licensor’s normal business hours, Monday through Friday, upon ten (10) days
prior written notice. Licensee may cause such records to be audited not more
than twice in any 12-month period.

4.

Confidentiality.

4.1

Confidential Information.  “Confidential Information” shall mean any and all
information disclosed, furnished, or made available by one Party (the
“Disclosing Party”) to the other Party (the “Receiving Party”), or that is
obtained or derived by the Receiving Party, or any of its affiliates, employees
or agents, relating to the Disclosing Party’s current or future products,
inventions, designs, ideas, know-how, formulas, processes, technologies, assets,
liabilities, financial condition, results of operations, technical information,
customers, suppliers, contracts, practices, procedures, or any other proprietary
information of the Disclosing Party whether in written, oral, electronic or
other form.  

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4.2

Exclusions.  Confidential Information shall not include any information that (a)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the Disclosing Party; (b) becomes publicly known and
made generally available after disclosure by the Disclosing Party to the
Receiving Party through no action or inaction of such Receiving Party; (c) is
already in the possession of the Receiving Party at the time of disclosure by
the Disclosing Party as shown by such Receiving Party’s files and records
immediately prior to the time of disclosure; (d) is obtained by the Receiving
Party from a third party without a breach of such third party’s obligations of
confidentiality; in each case, as shown by documents and other competent
evidence in such Receiving Party’s possession; (e) is independently developed by
the Receiving Party without use of the Disclosing Party’s Confidential
Information; or (f) is required by applicable law to be disclosed by the
Receiving Party, provided that such Receiving Party gives the Disclosing Party
prompt written notice of such requirement prior to such disclosure and
assistance in obtaining an order protecting the information from public
disclosure.

4.3

Non-use and Non-disclosure.  Each Party agrees not to use any Confidential
Information of the other Party for any purpose except in accordance with and in
furtherance of the terms of this Agreement.  Except as otherwise permitted under
this Agreement, each Party agrees not to disclose any Confidential Information
of the other Party to third parties, or to such Party’s employees, except to
those third parties (including sublicensees, distributors, manufacturers and
other parties who are granted rights under this Agreement), employees and
contractors of such Receiving Party who are required to have the information in
order to exercise each Party’s respective rights and perform each Party’s
respective obligations under this Agreement and who are bound by a duty of
confidentiality as set forth in this Section 4.  

4.4

Return/Destruction of Materials.  All documents and other tangible objects
containing or representing Confidential Information which have been disclosed by
a Party to the other Party, and all copies thereof which are in the possession
of the other Party, shall be and remain the property of the Disclosing Party and
shall be promptly destroyed or returned to the Disclosing Party at the request
of the Disclosing Party or within thirty (30) days of the expiration or
termination of this Agreement.

4.5

Specific Performance; Injunctive Relief.  Each Party acknowledges and agrees
that, in the event of a breach or threatened breach of any of the foregoing
provisions of this Section 4, the non-breaching Party will have no adequate
remedy in damages and, accordingly, shall be entitled to seek injunctive,
specific performance or other equitable relief, all without need of bond or
undertaking of any nature; provided, however, no specification of a particular
legal or equitable remedy shall be construed as a waiver, prohibition or
limitation of any legal or equitable remedies in the event of a breach hereof.

5.

Term; Termination.

 

5.1

Term.  Unless earlier terminated as provided below, this Agreement shall have an
initial term ending June 30, 2012 (the “Initial Term”), with a renewal term of
three (3) years (the “Renewal Term”) at Licensee’s option if during the Initial
Term the sales of Covered Products have generated Royalties equal to or greater
than $7,200,000 (the “Renewal Minimum”); provided that, should the Renewal
Minimum not be met, Licensee shall have the opportunity to

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pay the amount by which actual royalties were less than the Renewal Minimum and
to extend the Initial Term into the Renewal Term.

5.2

Termination.

Licensor or Licensee shall have the right to terminate this Agreement upon
written notice to the other if such other Party is in material breach of any
provision of this Agreement and such breach remains uncured for a period of
thirty (30) days following its receipt of written notice from the non-breaching
Party specifying the breach in reasonable detail and demanding its cure.  

5.3

Right to Sell Through.  Licensee shall have the right, for a period of six (6)
months or such other period of time provided in any Third Party License
Agreement if applicable, to sell all remaining inventory of Covered Products
after the termination or expiration of this Agreement, subject to the obligation
to pay Royalties with respect to such sales and provided any such termination
did not arise by reason a breach of this Agreement by Licensee.  Licensor shall
have the option to purchase and pay for all of Licensee’s inventory of Covered
Products at Licensee’s Landed Cost within 30 days of termination.

5.4

Survival.  The following Sections shall survive the termination or expiration of
this Agreement:  3.3(b) and (c),  3.4 (with respect to owed but unpaid
Royalties), 3, 7, 4, 5.3, 6, 7, 8 and 10 and any other provision that expressly
or by its nature survives the termination or expiration of this Agreement.

6.

Representations and Warranties.

6.1

Representations and Warranties of Licensor.  Licensor hereby represents,
warrants and agrees during the term of this Agreement that:

(a)

it has the right, power and authority to enter into and fully discharge its
obligations under this Agreement;

(b)

it has all right to grant all of the rights granted to Licensee under this
Agreement and that no consent of any third party is required for the grant of
such rights by Licensor under this Agreement;

 

(c)

to the best of its knowledge, the Covered Products do not infringe upon the
intellectual property or other rights of any other party or contain any design
or other product defects, and that there are no claims, judgments, settlements,
claims or pending claims or litigation relating to any Covered Products;

(d)

this Agreement has been authorized by all necessary corporate or limited
liability company action and constitutes the legal, valid and binding obligation
of Licensor, enforceable in accordance with its terms, subject to limitations on
enforceability imposed by bankruptcy or similar laws or public policies and
principals of equity;

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(e)

neither this Agreement (or any term hereof) nor the performance of or exercise
of rights under this Agreement, is restricted by, contrary to or in conflict
with, any agreement to which Licensor is a party or by which it is bound;

(f)

all testing and other requirements under the Third Party License Agreements or
Production and Talent Agreements that were required to be completed and accepted
in order for Licensor to have the rights to manufacture, market, distribute
and/or sell the Covered Products subject to such Third Party License Agreements
or Production and Talent Agreements  have been completed and accepted;

(g)

Except with regard to certain payment breaches which shall be cured upon
Licensor’s receipt of the Advance, Licensor is not in material breach of or
default under any of the Third Party License Agreements or Production and Talent
Agreements, and no circumstance or event exists that with the passage of time or
the giving of notice will constitute such a breach or default; and

(h)

to the best of Licensor’s knowledge, none of the other parties to the Third
Party License Agreements or Production and Talent Agreements are in material
breach of or default under any of the Third Party License Agreements or
Production and Talent Agreements, and no circumstance or event exists that with
the passage of time or the giving of notice will constitute such a breach or
default.

6.2

Representations and Warranties of Licensee.  Licensee hereby represents,
warrants and agrees during the term of this Agreement that:

(a)

it has the right, power and authority to enter into and fully discharge its
obligations under this Agreement;

(b)

this Agreement has been authorized by all necessary corporate action and
constitutes the legal, valid and binding obligation of Licensee, enforceable in
accordance with its terms, subject to limitations on enforceability imposed by
bankruptcy or similar laws or public policies and principals of equity; and

(c)

neither this Agreement (or any term hereof) nor the performance of or exercise
of rights under this Agreement, is restricted by, contrary to or in conflict
with, any agreement to which Licensee is a party or by which it is bound.

7.

Indemnification.

7.1

By Licensor.  Licensor shall defend, indemnify and hold harmless the Licensee
and its affiliates and sublicensees and distributors and their respective
officers, directors, shareholders, members, employee, agents and assigns  from
and against any and all any claims, demands, liabilities, losses, damages,
expenses (including without limitation, penalties and interest, reasonable fees
and disbursements of counsel, and court costs), proceedings, judgments,
settlements, actions or causes of action or government inquiries of any kind
(including, without limitation, emotional distress, sickness, personal injury or
death to any person, or damage or

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destruction to, or loss of use of, tangible property) (“Claims”) arising out of,
relating to or in connection with or attributable to:

(a)

any claim that any of the Covered Products or any materials or collateral
provided by Licensor infringes any patent, trade secret, copyright, trademark or
other proprietary right;

(b)

any claim that the Covered Products contain a design defect or that any of the
Inventory contains a design or manufacturing defect;

(c)

the negligence or willful misconduct of Licensor or its officers, directors,
shareholders, members, employee and agents;

(d)

the breach (or any claim that if true would constitute a breach) by Licensor of
any of its representations or warranties under this Agreement or a breach by
Licensor of any Third Party License Agreement or Production and Talent
Agreements (other than breaches resulting from Licensee’s breach under this
Agreement); or

(e)

any claim arising from or in connection with the payment by Licensee of the
Direct Creditor Payments.  

7.2

By Licensee.  Licensee shall defend, indemnify and hold harmless the Licensor
and its affiliates and their respective officers, directors, shareholders,
members, employee, agents and assigns from and against any and all any Claims
arising out of, relating to or in connection with or attributable to:

(a)

the negligence or willful misconduct of Licensee or its officers, directors,
shareholders, members, employee and agents; or

(b)

any claim that any materials or collateral provided by Licensee infringes any
patent, trade secret, copyright, trademark or other proprietary right;

(c)

any claim that the Covered Products manufactured by Licensee contain a
manufacturing defect (other than a manufacturing defect that arises from a
design defect); or

(d)

the breach (or any claim that if true would constitute a breach) by Licensee of
any of its representations or warranties under this Agreement.

7.3

Indemnification Procedures.  The Party seeking indemnification will notify the
other Party promptly in writing of any Claim of which it becomes aware.  The
indemnifying party may designate its counsel of choice to defend such Claim at
the sole expense of the indemnifying party and/or its insurer(s).  The
indemnified party may, at its own expense participate in the defense.  In any
event, (a) the indemnifying party shall keep the indemnified party informed of,
and shall consult with the indemnified party in connection with, the progress of
any investigation, defense or settlement, and (b) the indemnifying party shall
not have any right to, and shall not without the indemnified party’s prior
written consent (which consent will

13

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not be unreasonably withheld or delayed), settle or compromise any claim if such
settlement or compromise (i) would require any admission or acknowledgment of
wrongdoing or culpability by the indemnified party or (ii) provide for any
non-monetary relief to any person or entity to be performed by the indemnified
party.

8.

Insurance.

8.1

Each Party shall at its own expense procure and maintain insurance coverage for
the benefit and protection of the other Parties, which insurance coverage shall
be reasonable and customary for the operation of each party’s business, and
maintained in full force and effect during the term of this Agreement and for
three years thereafter, including the following policies:  

(a)

A Commercial General Liability Insurance Policy with a limit of not less than $3
million per occurrence and $3 million in the aggregate, providing coverage for
bodily injury, personal injury and property damage for the mutual interest of
the Parties, with respect to all operations;

(b)

Product Liability Insurance with a limit of not less than $1 million (for
Licensor) and $2 million (for Licensee) per occurrence and $3 million in the
aggregate;

(c)

An Umbrella or Following Form Excess Liability Insurance policy will be
acceptable to achieve the above required liability limits; and

(d)

Workers’ Compensation Insurance with statutory limits to include Employer’s
Liability with a limit of not less than $1 million; and

8.2

The policies referenced in the foregoing clauses 8.1(a), (b), and (c) shall name
the other Parties and its parent(s), subsidiaries, licensees, successors,
related and affiliated companies, and its officers, directors, employees,
agents, representatives and assigns (collectively, “Affiliated Companies”) as an
additional insured by endorsement and shall contain a Severability of Interest
Clause and a Waiver of Subrogation endorsement in favor of the Affiliated
Companies.  All of the above referenced policies shall be primary insurance. All
insurance companies will have an A.M. Best Guide Rating of at least A:VII or
better.  If requested by Third Party Licensors or Talent/Producers, Licensee and
Licensor shall name such Third Party Licensors and Talent/Producers as
additional insureds.

8.3     Each Party shall deliver to the other Parties upon execution of this
Agreement or within ten (10) days thereafter original Certificates of Insurance
and endorsements evidencing the insurance coverage herein required.    

9.

Intellectual Property Enforcement.

9.1

Infringements.  

(a)

Each Party shall give prompt notice to the other of any infringement, imitation,
illegal use or misuse of the intellectual property licensed under this Agreement
that

14

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comes to such Party’s attention.  The Parties further agree that Licensor shall
have the first option, but not the obligation, to bring an action to terminate
such infringement, imitation, illegal use or misuse and, if Licensor elects to
take action, Licensee shall cooperate fully with Licensor in any such action,
including joining as a party if necessary, provided that all expenses associated
with such action shall be borne by Licensor and Licensor shall be entitled to
all sums recovered in connection with such action, including amounts awarded by
way of judgment, settlement, or compromise.

(b)

If Licensor does not take action within ninety (90) days after receipt of such a
notice of an infringement, imitation, illegal use or misuse as provided above,
Licensee shall have the right, but not the obligation, to commence an action
directed toward restraining or enjoining such infringement, imitation, illegal
use or misuse and, if Licensee elects to take such action, Licensor will
cooperate therewith at Licensee’s expense, including joining as a party, if
necessary.  If Licensee initiates such an action, all legal expenses (including
court costs and attorneys’ fees) shall be borne by Licensee and Licensee shall
be entitled to all sums recovered in connection with such action, including
amounts awarded by way of judgment, settlement, or compromise; provided that any
amounts collected in excess of legal and other costs and expenses shall be
considered sales for which Royalties are due under Section 3.  If Licensee
initiates such an action, Licensor shall have the right to join such action as a
party at its own expense.

10.

General Provisions.

10.1

No Third-Party Rights.  Except as expressly provided herein, this Agreement is
made solely for the benefit of the Parties and does not, and shall not be
construed to grant any rights or remedies to any other person or entity.

10.2

Relationship of Parties.  Each Party hereto shall conduct all of its business in
its own name as an independent contractor.  No joint venture, partnership,
employment, agency or similar arrangement is created between the Parties.
 Neither Party has the right or power to act for or on behalf of the other or to
bind the other in any respect.

10.3

Notices.  Any notice or other communication hereunder must be given in writing
and either (a) delivered in person, (b) transmitted by facsimile or telecopy,
(c) delivered by FedEx or similar commercial delivery service for overnight
delivery, or (d) mailed by certified mail, postage prepaid, return receipt
requested, to the Party to which such notice or communication is to be given at
the address set forth below or at such other address as may be given from time
to time under the terms of this Section 10.3.  Each such notice or other
communication shall be effective (i) if given by facsimile, when transmitted,
(ii) if given by mail, five (5) days after such communication is deposited in
the mail and addressed as aforesaid, (iii) if given by FedEx or similar
commercial delivery service, two (2) business days after such communication is
deposited with such service and addressed as aforesaid, and (iv) if given by any
other means, when actually received.

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To Licensor:

Vertical Branding, Inc.

16000 Ventura Blvd., Suite 301

Encino, CA 91436

Attn: Nancy Duitch, CEO

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

______________________________

_____________________________

Attention: ____________________

To Licensee:

P2F Holdings ____________________________

1760 Apollo Court

Seal Beach, CA 90740____________________________

Attn:

Michael Freede

Lenny Piontak

Jim Kleban

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

Silver & Freedman, APLC

2029 Century Park East, 19th Floor

Los Angeles, California 90067

Attention: Jeffrey Lee, Esq.

10.4

Compliance with Laws.  Each Party shall comply with all applicable laws and
regulations in connection with its activities under this Agreement.

10.5

Governing Law.  This Agreement shall be construed and enforced in accordance
with the laws of the State of California (without reference to the conflict of
law principles thereof) and the United States of America and with generally
accepted principles of commercial law applicable to the type of transactions
contemplated under this Agreement.  The Parties agree that the United Nations
Convention on Contracts for the International Sale of Goods is specifically
excluded from application to this Agreement.  

10.6

Dispute Resolution.  If at any time there is any dispute between the Parties
hereto relating to this Agreement, the Parties shall each designate a senior
officer to meet with the designated senior officer of the other and shall use
their best efforts to settle such dispute.  Except as provided otherwise in this
Section 10.6, if such senior officers fail to settle the dispute

16

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within fourteen (14) days after first conferring or if any Party refuses to so
meet, the Parties agree to submit such dispute or disagreement to arbitration in
Los Angeles, California, pursuant to the applicable rules of the American
Arbitration Association.  Unless the Parties agree otherwise, the arbitration
will be conducted by a single arbitrator selected by the Parties (or, if the
Parties are unable to agree on a single arbitrator, such arbitrator will be
selected by the American Arbitration Association).  The award rendered shall be
final and binding upon both Parties.  Judgment upon the award may be entered in
any court having jurisdiction, or application may be made to such court for
judicial acceptance of the award and/or an order of enforcement as the case may
be.  Both Parties consent to the jurisdiction of such courts and waive any
objection to the venue of such courts.  Nothing in this Section shall preclude
either Party from seeking preliminary injunctive relief, equitable relief or any
other remedy available under this Agreement or applicable law in any court of
competent jurisdiction.

10.7

Attorneys’ Fees.  In any action or proceeding between the Parties hereto with
respect to the subject matter of this Agreement, the prevailing Party shall, in
addition to any other rights and remedies, be entitled to recover its reasonable
costs and expenses (including reasonable attorneys’ fees) incurred in such
action or proceeding.  Each Party shall be responsible for its own attorneys’
fees in connection with the preparation and negotiation of this Agreement and
any contracts or instruments related to the transactions contemplated hereunder.

10.8

Waiver.  No waiver of any provision or consent to any action hereunder shall
constitute a waiver of any other provision or consent to any other action, nor
shall such waiver or consent constitute a continuing waiver or consent or commit
a Party to provide a waiver or consent in the future.

10.9

Severability.  If any provision of this Agreement is determined to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, then to
the extent necessary to make such provision and/or this Agreement legal, valid
or otherwise enforceable, such provision shall be limited, construed or severed
and deleted from this Agreement, and the remaining portion of such provision and
the remaining other provisions hereof shall survive, remain in full force and
effect and continue to be binding, and shall be interpreted to give effect to
the intention of the Parties hereto insofar as that is possible.

10.10

Modification.  Neither this Agreement nor any of its provisions may be amended,
supplemented, modified or waived except by a writing duly executed by both of
the Parties hereto.

10.11

Entire Agreement.  This Agreement constitutes the entire agreement between the
Parties and replaces and supersedes any and all prior and contemporaneous
agreements and understandings, whether oral or written, between the Parties with
respect to the subject matter hereof.

10.12

Assignment.  Neither Party may assign or transfer, by operation of law or
otherwise, this Agreement or any of its rights or obligations hereunder without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that either Party may
assign or transfer this Agreement and its rights and

17

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obligations hereunder, without the consent of the other Party, to any successor
in interest to its business or assets to which this Agreement relates, whether
by merger, sale of assets, sale of stock, consolidation, reorganization or
otherwise.  Notwithstanding the foregoing, neither Party may make a partial
assignment of this Agreement.  Nothing contained in this paragraph or elsewhere
in this Agreement shall restrict or limit the right of Licensee under Section
3.1(d).  Any attempted assignment or transfer of this Agreement not in
accordance with the terms of this Section shall be null and void.  

10.13

Binding Effect.  Subject to the foregoing, this Agreement shall be binding upon
and shall inure to the benefit of the Parties and their respective successors
and permitted assigns.

10.14

Construction.  In this Agreement, whenever the context so requires, the
masculine, feminine or neuter gender, and the singular or plural number or
tense, shall include the others.

10.15

Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall constitute one and the same document.  Signature by facsimile or
electronic transmission shall have the same force and effect as an original
signature.

10.16

Further Assurances.  Each Party shall execute and deliver all such further
documents and instruments and take all such further action as may be reasonably
required or appropriate to carry out the intent and purposes of this Agreement.

10.17

Acknowledgment.  Licensor (the “Bankrupt Party”) acknowledges that if such
Bankrupt Party (as a debtor-in-possession) or a trustee in bankruptcy in a case
under Title 11 of the United States Code (the “Bankruptcy Code”) rejects this
Agreement, Licensee (the “Non-Bankrupt Party”) may elect to retain its rights as
licensee under this Agreement as provided in Section 365(n) of the Bankruptcy
Code.  In accordance with the terms of Section 365(n) of the Bankruptcy Code,
and upon written request of the Non-Bankrupt Party to the Bankrupt Party or the
trustee in bankruptcy, so long as the Non-Bankrupt Party complies fully in all
material respects with its obligations under this Agreement, the Bankrupt Party
or such trustee shall not interfere with the rights of the Non-Bankrupt Party
under this Agreement.  The Parties acknowledge and agree that the Non-Bankrupt
Party’s rights or property under this Agreement shall not constitute property of
any estate created by the filing of any petition by or against the Bankrupt
Party under the Bankruptcy Code.  If, during any such bankruptcy case, the
Non-Bankrupt Party is prevented from the exercise of its rights under this
Agreement, so long as the Non-Bankrupt Party remains in full compliance with its
obligations under this Agreement, the Parties acknowledge and agree that the
Non-Bankrupt Party shall be entitled to specific performance of its rights under
this Agreement.  

[Signatures follow on the next page]

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INTENDING TO BE LEGALLY BOUND, the Parties have caused their duly authorized
representatives to execute this Agreement as of the date first set forth above.

P2F Holdings

By: _________________________

Name: ______________________

Title: _______________________

Adsouth Marketing LLC

By: _________________________

Name: _______________________

Title: ________________________

Vertical Branding, Inc.

By: _________________________

Name: _______________________

Title: ________________________

Legacy Formulas, LLC

By: _________________________

Name: ______________________

Title:________________________

19

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EXHIBIT A

INVENTORY

A-1

--------------------------------------------------------------------------------

EXHIBIT B

SALES ORDERS

B-1

--------------------------------------------------------------------------------

EXHIBIT C

PURCHASE ORDERS

C-1

--------------------------------------------------------------------------------

EXHIBIT D

SELLER ACCOUNTS

D-1

--------------------------------------------------------------------------------

EXHIBIT E

THIRD PARTY AGREEMENTS

E-1

--------------------------------------------------------------------------------

EXHIBIT F

INITIAL PRODUCTS AND ROYALTY RATES

F-1

--------------------------------------------------------------------------------

EXHIBIT G

CREDITOR PAYMENTS

G-1

--------------------------------------------------------------------------------

EXHIBIT H

AMOUNT BY WHICH THE ANNUAL GUARANTEED ROYALTY WILL BE REDUCED IF THIRD PARTY
PRODUCTS ARE REMOVED FROM THIS AGREEMENT

H-1