**Exhibit 10.3**

 

**MARKETING AGREEMENT**

 

THIS MARKETING AGREEMENT (“Agreement”) made as of this 9 day of March,2004 between Vaso Active Pharmaceuticals, Inc., Inc. (“VAPH’) with a place ofbusiness at 99 Rosewood Drive, Danvers, Massachusetts, 01923, and M2G Media,Inc. and its Associates, (“M2G”) with a place of business at 6 Capstone,Irvine, CA, 92606.

 

**WITNESSETH**:

 

WHEREAS, M2G is in the business of marketing consumer products throughdirect to consumer television marketing, and;

 

WHEREAS, VAPH has developed an innovative Over-the-Counter painreliever to treat arthritis and muscle and joint pain currently marketed underthe names “Osteon” and “Athlete’s Relief” (the” “Product”);

 

WHEREAS, VAPH wishes to engage M2G to market the Product in the directto consumer marketplace (Further defined to include other direct responsemedia: television, internet, radio, and other direct response media); and willallow M2G to exclusively own its own label and technology name (“Penitron”) forthe products in all markets;

 

NOW, THEREFORE, in consideration of the mutual promises containedherein and other good and valuable consideration, the receipt and sufficiencyof which is hereby acknowledged, the parties agree as follows:

 

**1.****             Marketing andPromotion**

 

1.1           M2G shallhave the right, at its option, to advertise, promote, market, sell andotherwise distribute Product through a direct to consumer television and allother marketing and distribution channels in North America.  In addition, in the event that the minimumsales numbers, defined in paragraph 9.3, are achieved, M2G shall have marketingexclusivity for its label and technology name (“Penitron”) throughout theworld. This right shall be an exclusive right as further defined elsewhere inthis document.  The entire cost of themarketing effort, including promotional programs, shall be born by M2G.

 

1.2           M2G shallhave the right to duplicate, distribute and prepare derivative works of allcopyrighted elements of the Product in all media, now known or hereaftercreated.

 

1.3           M2G shallhave the exclusive right to specify and determine the form and content of allpackaging, invoices, advertising, and all associated promotional andmerchandising materials for sale and marketing of the Product.

 

1.4           Allright, title and interest in and to the entire editorial, visual, audio andgraphic content of all advertisements and promotional materials developed byand for the Product by

 

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M2G with M2G’ s trademark, inconnection with this Agreement shall be and remain the sole property of M2G.  However, all product packaging must containthe following:

 

“This product is formulated using an advanced technology developed byVasoActive Pharmaceuticals” or similar language to be supplied by VAPH.

 

In addition, M2G

 

1.5           ShouldM2G elect to conduct any clinical studies using the Product, or contract withothers to perform any clinical studies using the Product on its behalf suchclinical studies shall be the property of both VAPH and M2G.  VAPH shall have the right on fourteen (14)business days prior notice, to review these studies.  VAPH agrees that it will not use or disclosesuch clinical studies without M2G’s prior written consent, which may not beunreasonably withheld.

 

# **2**.             Product

 

2.1           VAPHrepresents and warrants that:

 

(a)                                  TheProduct shall contain only wholesome, first quality ingredients, which are notin a damaged or degraded condition and which comply in all respects with and/orhave received all required approvals required by applicable governmentalregulations, laws and rules and/or quality assurance standards regardingsafety, efficacy, packaging/labeling and/or content including, withoutlimitation, the Pure Food and Drug Act;

 

(b)                                 TheProduct are effective for their intended purpose and VAPH will promptly replaceor refund the cost of any identified defective or damaged Product (in the caseof damaged Product, so long as VAPH has been notified of such damage within ten(10) business days of M20’ s receipt of such damaged Product and in the case ofdefective Product within ten (10) days of M2G’s actual knowledge that suchProduct are defective), or Product not conforming with applicable laws,regulations, or rules.  This provisiondoes not apply to products shipped by M2G into the retail trade.  Damages and/or returns incurred in the normalcourse of trade shall be M2G’s responsibility;

 

(c)                                  Themanufacture and sale of the Product does not infringe upon any patent;

 

(d)                                 Allinformation provided to M2G by VAPH with respect to the Product is accurate,true and correct and all claims made by VAPH, regarding the Product can besubstantiated.  M2G shall submit for VAPHreview and approval and VAPH will review and approve (as appropriate) theaccuracy of all promotional, marketing and advertising materials submitted byM2G to VAPH.  VAPH shall have noresponsibility for determining whether the contents of such materials conformto legal requirements with respect thereto, it being understood that suchresponsibility shall remain with M2G.

 

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# **3**.             Pricingand Payment Terms

 

3.1           M2G shallpurchase the product from VAPH on a wholesale basis. VAPH will outsourceproduct manufacturing to an independent third party manufacturer that willproduce the product to VAPH’S specifications and protocol. VAPH will beresponsible, in its sole discretion, for choosing the contract manufacturer andall trade secrets, production protocol that is not public domain will remaintrade secrets to VAPH.

 

3.2           M2G’sProduct purchase price per unit shall be $6.00 per unit per unit (FOB Danvers)provided that a marketing rebate of $1.50 per unit shall be provided for thefirst unit purchased by a household. All other units shall be priced at the$6.00 level. A unit is defined as the initial sale to an individual orhousehold of a unit or units packaged comparably to the current Osteonpackaging.

 

3.3           VAPH hasthe right, after year 2 to increase price but only if the raw material costincreases by more than 10%. In that event, VAPHI can raise the price only bythe amount of the cost increase. M2G shall have the right with 14 business dayadvance written notice, to audit VAPH’S books and records to ascertain theproduct cost increase This audit right may be exercised by M2G only once eachcalendar year.

 

3.4           M2Gagrees to the following payment terms: For the first order of 10,000 productunits, VAPH will produce the product and ship to M2G with M20’s payment due net30 days from deliver to M2G. On all orders thereafter, the payment termsconsist of twenty-five (25%) paid on order placement; twenty-five (25%) percentpaid on delivery and fifty (50%) paid within 30 days of delivery.

 

# **4**.             Shipping:Accepting and Filling Orders

 

4.1           VAPHshall fulfill orders issued from M2G within 90 days from order placement.Minimum order size is 10,000 product units. All orders will be shipped vIacommon carrier to M2G’s warehouse under M2G’s shipping carriers. Shipping costsfrom Danvers will be the responsibility of M2G. Further, it is M2G’sresponsibility to ship the Product to its accounts. in the event that VAPHfails to ship Product to M2G within the 90 day order placement period, the costof an expedited shipment (three day air) of the product to M2G shall be borneby VAPH.

 

# **5**.             Authority- Reliance

 

5.1           VAPHrepresents and warrants to M2G as follows:

 

(a)                                  VAPHhas all requisite power and authority to execute, deliver and perform thisAgreement, to grant all rights granted to M2G hereunder, and has dulyauthorized, by all necessary action, the execution and delivery hereof by theofficer or individual whose name is signed on its behalf below.

 

(b)                                 Theexecution and delivery by VAPH of this Agreement and the performance by it ofits obligations hereunder do not and will not conflict with or result in abreach of or a default of any other agreements, instrument, order, law orregulation applicable to VAPH, or by which it may be bound.

 

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(c)                                  VAPHacknowledges that M2G has entered into this Agreement in express reliance uponthe representations and warranties made by M2G in this Agreement.  Should any representation or warranty proveto be false in any material respect, such breach shall constitute grounds fortermination of this Agreement in accordance with Section 7.

 

5.2           By M2G.M2G represents and warrants to VAPH as follows:

 

(a)                                  M2Ghas all requisite power and authority to execute, deliver and perform thisAgreement, and has duly authorized, by all necessary action, the execution anddelivery hereof by the officer or individual whose name is signed on its behalfbelow.

 

(b)                                 M2Gacknowledges that VAPH has entered in this Agreement in express reliance uponthe representations and warranties made by M2G in this Agreement.  Should any representation or warranty proveto be false in any material respect, such breach shall constitute grounds fortermination of this Agreement in accordance with Section 7.

 

(c)                                  Theexecution and delivery by M2G of this Agreement and the performance by it ofits obligations hereunder do not and will not conflict with or result in abreach or default of any other agreement, instrument, order, law or regulationapplicable to M2G or by which it may be bound.

 

# **6**.             Indemnification

 

6.1           ByVAPH.  VAPH shall indemnify, defendand hold harmless M2G and its officers, directors, employees, agents,successors and assigns from and against any and all costs, damages,liabilities, and expenses whatsoever, including, without limitation, damages,judgments, awards, costs and reasonable attorneys’ fees and disbursements whichM2G may incur or become obligated to pay arising out of or resulting from (i)the activities or VAPH pursuant to this Agreement, (ii) the breach by VAPH ofany of its representations, warranties, covenants, obligations or duties underthis Agreement, and (iii) the costs incurred by M2G to enforce this indemnity,provided, however, that VAPH shall not be liable to M2G for consequentialdamages, and, provided, further that VAPH shall not be liable for damagesoccasioned by regulatory interference with the marketing by M2G of the Product.

 

6.2           By M2G.  M2G shall indemnify, defend and hold harmlessVAPH and its officers, directors, employees, agents, successors and assigns,from and against any and all Costs, damages, liabilities, and expenseswhatsoever, including, without limitation, damages, judgments, awards, costsand reasonable attorneys’ fees and disbursements which VAPH may incur or becomeobligated to pay arising out of or resulting from (i) the activities of M2Gpursuant to this Agreement, or (ii) the breach by M20 of any of itsrepresentations, warranties, covenants, obligations, or duties under thisAgreement.

 

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# **7**.             Term —Termination

 

7.1           The termof this Agreement shall commence as of the date hereof continue indefinitely unlessa breach of this contract occurs;

 

7.2           In theevent of a breach of any representation, warranty, covenant, obligation or dutyby a party, and said breach is not cured within thirty (30) days after receiptof written notice thereof; the other party may terminate this Agreement. Suchtermination shall be without prejudice to any rights or remedies at law or inequity, which may be available to the non-breaching party.

 

7.3           Upon thetermination of this Agreement, M2G shall retain indefinitely the rights toprocess those orders for Product that were placed prior to the effective dateof termination and accept those orders from Customers with whom M2G wasnegotiating or whom M2G had solicited prior to the effective date oftermination,. Termination of this Agreement shall not affect the rights of theparties with respect to the intellectual property rights provided herein andthe Indemnities shall survive the termination of this Agreement.

 

# **8**.             FurtherActions.

 

The parties agree to execute such additional documents and to performall such other and further acts as may be necessary or desirable to carry outthe purpose and intent of this Agreement.

 

# **9**.             Exclusivity

 

9.1           M2G shallhave the exclusive rights to market the Product with its own private label andtechnology name for 6 months t in the North American direct television market.Further, M20 shall have exclusive private label and private technologymarketing rights in retail and all other distribution channels. In the eventthat the marketing minimums, defined in paragraph 9.3 are achieved whenestablished after 6 months, the aforementioned rights shall be conveyed on aglobal basis as well.

 

9.2           Productis defined as the menthol based topical analgesic employing VAPH’s PENtoCOREtechnology and currently marketed under the name Osteon and Athlete’s Relief.

 

9.3           M2G shallhave the exclusive rights to the Product in the North American televisiondirect sales marketplace and all other distribution channels (“Territory”), fortheir private label branded product and private named technology for the termof this Agreement, provided, however, that to maintain such exclusivity, M2Gmust achieve a minimal sales volumes in the Territory which will be set by bothparties within 6 months from the date of this contract following the testmarketing period. Said Agreement on future minimums will not be unreasonablywithheld by either party.

 

9.4           Otherthan the right to market Product, which contains VAPH’s patented technology,nothing in this Agreement conveys any right to VAPH’s intellectual property toM2G.

 

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9.5           In theevent that M2G is in compliance with the term of this Agreement and thisAgreement is in full force and effect or extensions thereto, neither VAPH norits licensees will compete with M2G in the direct response media markets withinthe OTC pain category.

 

# **10**.                               Productsto be Developed

 

10.1         VAPH willdevelop additional products using its PENtoCORE technology as requested byM2G.  M2G will submit to VAPH an outlineof the proposed product specifics.  VAPHwill then develop a budget for the development of the new product (includingthe manufacturing estimates and wholesale cost to M2G) which will be submittedto M2G for approval. VAPH’S scientists will begin development when the budgetis approved by M2G and the first installment payment is made.

 

10.2         With anynew Product developed for M2G, M2G will own the world wide rights to marketthat application.  However, anytransdermal intellectual property developed by or through the development workshall remain the property of VAPH. Further, VAPH is not barred from competing in the marketplace with acomparable, though not identical product, provided however, that M2G will alsobe provided with a negotiated exclusivity period.

 

10.3         Themanufacture and pricing of the new application will fall under the terms of anAgreement to be submitted with the budget and pre-approved by M2G.

 

# **11**.                               Miscellaneous

 

11.1         If anyprovision of this Agreement is, or is declared to be, invalid or unenforceable,such invalidity or unenforceability shall not effect either the balance of suchprovisions, to the extent it is not invalid or unenforceable, or the remainingprovisions hereof.

 

11.2         Except forthe further writing and agreements contemplated hereby, this Agreement containsthe entire understanding of the parties with respect to the subject matterhereof and supersedes all prior agreements and understandings between them withrespect to the subject matter hereof No amendment of this Agreement shall beeffective unless embodies in a written instrument executed by all of theparties.

 

11.3         ThisAgreement shall be governed by and construed in accordance with the laws of theCommonwealth of Massachusetts.

 

11.4         The rightsand obligations of the parties under this Agreement shall inure to the benefitof and be binding upon their respective successors and assigns, provided,however, that neither VAPH nor M2G may assign this Agreement or any portionthereof, without the express written consent of the other which consent shallnot be unreasonably withheld. This provision does not pertain to assignmentsmade to subsidiaries of the corporate parties to this Agreement.

 

11.5         Allheadings contained in this Agreement are for convenience and shall not affectthe interpretation or meaning of this Agreement.

 

11.6         The failureof any party hereto at any time to enforce any of the provisions of thisAgreement shall not be deemed or construed to be a waiver of any suchprovision, nor in any

 

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way to effect the validity ofthis Agreement or any provisions hereof or the right of any party hereto tothereafter enforce each and every provision of this Agreement. No waiver of anybreach of any of the provisions of this Agreement shall be effective unless setforth in a written instrument executed by the party against whom or whichenforcement of such a waiver is sought. No waiver of any such breach shall beconstrued or deemed to be a waiver of any other subsequent breach.

 

11.7         M2G shallhave a right of “First Notification” for any new andlor subsequent product VAPHwill launch into the marketplace. Under the right of first notification, VAPHshall notify M20 of any product to be launched and M2G and VAPH will then have15 days to negotiate a deal that is acceptable to both parties. In the eventthat a deal is not reached, VAPH is then free to pursue a deal elsewhere. Bothparties agree to meet within 30 days to do a strategic marketing plan.

 

11.8         M2G may nottransfer the rights of this contract to any other party without the expressedwritten consent of VAPH.

 

11.9         All pressreleases must be pre-approved by the non releasing party prior to                            .

 

11.10       M2G agreesthat it can not market a non VAPH product under the label and technology nameidentified to this contract.

 

11.11       ThisAgreement does not constitute a partnership or joint venture between theparties, nor does it constitute one arty as an agent for the other.  Other than for the product described insection 9.2 hereinabove, M2G has no rights to VAPH intellectual property,patents or other formula and product. Each party shall be responsible for its own employees and all taxreporting and payment associated with the operation of its business.

 

11.12       Neither M2Gnor VAPH or its licensees or assignees may refer to the other in any marketingor advertising, or any other promotional program.  Both parties aagree to be “blind” relative tothe other in their marketing, advertising or promotional programs.

 

IN WITNESS THEREOF, the parties have executed this Agreement as of thedate first above mentioned.

 
|   | **M2G MEDIA, INC.**                   |
|--------|---------------------------------------|
|   |                                  |   |
|   | By:                                   |   |   |
|   |                                  | Name: |
|   |                                  | Title: |
|   |                                  |   |
|   | **VASO ACTIVE PHARMACEUTICALS, INC.** |
|   | ** **                            |
|   | By:                                   |   |   |
|   |                                  | Name: |   |
|   |                                  | Title: |

 

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