May
      8,
      2007

    


    


    Ms.
      Kathy
      Kordowski

    Vice
      President, Package Engineering & Marketing Services

    Avon
      Products, Inc.

    1251
      Avenue of the Americas

    New
      York,
      N.Y. 10020

    


    Re:  Credit
      Memo

    


    Dear
      Kathy,

    


    Avon
      Products, Inc. (“Avon”) and Versadial, Inc. (“Versadial”, collectively the
“Parties”) are parties to a certain Letter of Agreement dated September 18, 2006
      and clarified by letter dated September 27, 2006 (“LOA”).

    


    As
      contemplated by the LOA, the Parties are entering into a master supply agreement
      (the “Master Supply Agreement”) and purchase order (“PO”) whereby Versadial will
      provide to Avon a 20mm dual chambered dispensing pump (referred to hereafter
      as
      the “Lipmix Package”), with custom blending technology for use in packaging
      color cosmetics with various Avon designed formulas.

    


    As
      Avon
      has given its approval based on the Functionality Test, it has delivered to
      a
      Versadial the $1,700,000 provided for in the LOA and has issued the PO
      contemplated therein, Avon is entitled to recover the entire $1,700,000 (the
      “Credit Amount”) as credits against products purchased from Versadial using the
      Lipmix Package, including items purchased pursuant to the PO, as same may be
      amended or extended, in accordance with the terms and conditions set forth
      below.

    


    Other
      then as a credit against such purchases, Avon shall not be entitled to return
      of
      any portion of the Credit Amount unless there is an Event of Default, described
      below. In such event, Avon shall have the right, in the exercise of its
      discretion, to either recover the outstanding balance of the Credit Amount
      as
      credits, to be negotiated in good faith by the Parties, against other purchases
      from Versadial or to reduce the outstanding balance of the Credit Amount to
      a
      Promissory Note, in the form attached hereto as Exhibit 1, as provided
      below.

     

     


    
      
        
        

      

      
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      Specific
        Terms of this Credit Memo:

      


      
        	
                Credit
                  Amount: 

              	
                US$1,700,000.

              
	 	 
	
                Application
                  of Credit: 

              	
                (a)
                  Commencing with shipments of products, using the Lipmix Package,
                  to Avon
                  following the first six (6) months from date of the first shipment
                  of such
                  products for commercial purposes under the PO, Avon shall be entitled
                  to
                  credit against the purchase price of all products purchased by
                  Avon using
                  the LipMix Package, regardless of product sector, until the entire
                  Credit
                  Amount has been applied;

              
	 	 
	
                 

              	
                (b)
                  The Credit Amount shall be applied at the rate of US$0.075 per
                  piece for
                  all such products purchased by Avon.

              
	 	 
	 	
                (c)
                  such credit is available and shall be applied on an open ended
                  basis,
                  without expiration, until the entire Credit Amount has been
                  applied.

              
	 	 
	
                Default
                  Provisions:

              	
                The
                  occurrence of any of the following events shall be deemed an Event
                  of
                  Default empowering Avon to demand the execution of the Promissory
                  Note
                  described below or to enter into good-faith negotiations for the
                  application of the Credit Amount to other purchases by Avon from
                  Versadial. Failure of Avon to require Versadial’s performance of any of
                  the terms under this Agreement or waiver by Avon of any breach
                  by
                  Versadial of this Agreement shall not prevent subsequent enforcement
                  of
                  such term, nor shall it be deemed a waiver of any subsequent breach
                  hereof.

              
	 	 
	 	
                (i)
                  If Versadial commits or suffers any act of bankruptcy, comes under
                  the
                  control of a receiver, is unable to pay its bills on time, makes
                  an
                  assignment for the benefit of creditors of all or part of its assets,
                  or
                  undergoes liquidation or dissolution, or

              
	 	 
	 	
                (ii)
                  fails to cure any material breach in the provisions of this Credit
                  Memo
                  within ten (10) days after written notice of such breach,
                  or

              
	 	 
	 	
                (iii)
                  fails to cure any material breach in the provisions of the Master
                  Supply
                  Agreement, as provided therein.

              
	 	 
	
                Force
                  Majeure:

              	
                The
                  failure of Versadial to perform its obligations under this Agreement
                  shall
                  be excused if such failure to perform or any delay (not to exceed
                  180
                  days)is caused by matters beyond its reasonable control, such as
                  acts of
                  God; strikes; and civil commotion.

              


      

       

      
        
          
          

        

        
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                Promissory
                  Note:

              	
                In
                  the event that an Event of Default, as described above, remains
                  uncured,
                  Avon shall have the right to demand and Versadial hereby agrees
                  to execute
                  an unsecured promissory note in the form annexed hereto as Exhibit
                  1
                  (“Promissory Note”) for the balance of the Credit Amount still outstanding
                  at the time of such demand (the “Loan Amount”). Where Versadial does not
                  execute such Promissory Note within five (5) business days of request
                  therefore, Avon is hereby appointed attorney-in-fact for Versadial,
                  coupled with an interest, to execute such Promissory Note.
                  

              


      

      
 

      If
        the
        foregoing meets with your understanding, please sign a copy of this credit
        memo
        were provided below and it shall serve as a binding understanding between
        us in
        conjunction with the Master Supply Agreement and PO.

      


      Sincerely,

      Versadial,
        Inc.

      


      


      
        	
                By /s/
                  Geoffrey
                  Donaldson                               
                  

              	 
	
                Geoffrey
                  Donaldson, CEO

              	 
	 	 
	 	
                Agreed
                  to and Accepted this

              
	 	
                8th
                  of May, 2007

              
	 	
                Avon
                  Products, Inc.

              
	 	 
	 	
                By
                  /s/
                  Kathy
                  Kordowski                 
                  

              
	 	
                Kathy
                  Kordowski

              
	 	
                Vice
                  President, Package Engineering & Marketing
                  Services

              


      

      


       


      
        
          
          

        

        
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      EXHIBIT
        1

      


      FORM
        OF

      PROMISSORY
        NOTE

      


       

      
 

      
        	Date: 	Amount:  $______________


      

       

      Versadial,
        Inc. (hereinafter “Maker”) promises to pay to the order of Avon Products, Inc.
        (hereinafter “Holder”), FOR VALUE RECEIVED, the principal sum of______________
        ($________) DOLLARS, together with default interest as provided below if
        applicable (computed on the basis of the actual number of days elapsed and
        a
        year of 365 or 366 days, as the case may be) on the unpaid principal balance
        thereof outstanding from time to time, from and including the date hereof
        until
        such principal balance is repaid in full.

      


      The
        principal and accrued interest (if any) shall be due and payable in lawful
        money
        of the United States of America at such address as the Holder from time to
        time
        may specify by written notice to the Maker 90 days after due Demand has been
        made for payment by Holder.

      


      Where
        Maker has defaulted in its obligation to make payment hereunder, the interest
        rate shall immediately (whether or not Holder has declared a default or
        commenced an action to collect on this note) be fixed at 8% per annum and
        the
        obligation of Maker shall be increased as same applies.

      


      The
        Maker, may, at its option pre-pay this note in whole or in part without premium
        or penalty but with accrued interest, if any.

      


      The
        Holder hereof, at its option, may make extensions of the time for the payment
        of
        the indebtedness or accept a renewal note or notes therefor, all without
        notice
        and the Maker hereby consents to any such extensions or renewals, all without
        notice, and agrees that any such action shall not release it from any liability
        hereunder.

      


      The
        Maker
        waives presentment for payment, demand, protest, notice of dishonor, notice
        of
        non-payment of this note and diligence in the collection thereof, as conditions
        of liability under this note and also hereby waives trial of jury, counterclaim
        or set-off in the event of litigation by Holder to enforce payment of this
        note.

      


      Upon
        default, Holder may take all actions in law and in equity to collect on this
        note and Maker hereby agrees to pay to the Holder hereof such further amount
        as
        shall be sufficient to cover all costs and expenses of collection (not merely
        recoverable costs) including without limitation, reasonable attorney's fees
        for
        all services rendered in that connection. 


      
        
          
          

        

        
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      Any
        action whatsoever brought upon or relating to this Note shall be instituted
        and
        prosecuted in the state courts of New York, county of New York, or the federal
        district court in and for the Southern District of New York, and each party
        waives the right to change the venue and any objection or defense to any
        such
        jurisdiction as an inconvenient forum, or otherwise. The parties hereto further
        consent to accept service of process in any such action or proceeding by
        certified mail, return receipt requested, directed to the addresses for Maker
        and Holder set forth below.

      


      Any
        notice hereunder shall be in writing, shall be signed by the giver, and shall
        be
        sent to the Maker or Holder, as applicable, at the address specified in this
        Note or most recently specified in any written notice to the other party,
        which
        notices shall be sent by certified or registered mail, return receipt requested,
        facsimile to a number provided by such notice, with written confirmation,
        or by
        overnight courier, messenger or other means of personal delivery, and shall
        be
        effec-tive upon delivery.

      


      This
        note
        has been made and delivered in the City, County and State of New York, and
        shall
        be governed by and construed in accordance with the applicable law pertaining
        in
        the State of New York (other than those conflict of law rules that would
        defer
        to the substantive laws of another jurisdiction). Whenever reference is made
        to
        any party, such reference shall be deemed to include the successors, assigns,
        heirs and legal representatives of such party; provided, however, that nothing
        herein shall be deemed to authorize or permit the Maker to assign or delegate
        any of such person's rights or obligations under this note to any other person
        (whether or not an affiliate of such person). Each and every modification
        and
        amendment of this Note shall be in writing and signed by the Maker and the
        Holder. The terms and provisions of this note are intended to be severable.
        This
        note contains the entire agreement of the parties and supersede all other
        representations, warranties, agreements and understandings (oral or otherwise)
        with respect to the matter contained herein and therein.

       

      Versadial,
        Inc. (Maker)

      


      
        	
                By________________________

                Authorized
                  Signator

              	 
	
                 

                Address
                  of Maker

                 

                305
                  Madison Avenue

                Suite
                  4510

                New
                  York NY 10165

              	 


      

      


      
        
          
          

        

        
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