THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH APPLICABLE STATE LAW.

THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER
  AND TO THE EXTENT SET FORTH IN THAT CERTAIN MASTER SUBORDINATION AND INTERCREDITOR
  AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME
  TO TIME, THE SUBORDINATION AGREEMENT), DATED AS OF NOVEMBER
  10, 2005, AMONG SUNSET BRANDS, INC., U.S. MILLS, INC., IBF FUND LIQUIDATING
  LLC, AS SELLER, THE DEBENTURE HOLDER (AS DEFINED THEREIN) AND CAPITALSOURCE
  FINANCE LLC. EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY
  THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

SUNSET BRANDS,
INC.

U.S. MILLS, INC.

Senior
Subordinated Note

|                                    |                  
|----------------------------------- | -----------------
|New York, New York
  U.S.$5,000,000 | November 10, 2005

FOR
VALUE RECEIVED, the undersigned, Sunset Brands, Inc., a Nevada corporation (Sunset)
and U.S. Mills, Inc., a Delaware corporation (US Mills and together with
Sunset, the Debtors), hereby jointly and severally promise to pay to
the order of IBF Fund Liquidating LLC, a Delaware limited liability company (the
holder), or its registered assigns, on November 9, 2008, the principal
amount of Five Million United States Dollars (U.S.$5,000,000) or such part
thereof as then remains unpaid, with interest (computed on the basis of a
365/6-day year and the actual number of days elapsed) on the unpaid principal
amount hereof at a rate equal to 12% per annum from the date hereof, payable in
accordance with the provisions of Section 2.1 hereof, until such principal
amount shall be paid in full.

1. The
Note. All payments of principal, interest and other amounts payable on or
in respect of this Senior Subordinated Note (this Note) or the
indebtedness evidenced hereby shall be made at the address of the holder
specified in the register maintained by Debtors pursuant to the provisions of
Section 5.2 hereof. All payments received in respect of the indebtedness
evidenced by this Note shall, subject to the provisions of the Subordination
Agreement, be applied first to interest hereon accrued to the date of payment, then
to the payment of other amounts (except principal) at the time due and unpaid
hereunder, and finally to the unpaid principal hereof.

If
any payment on this Note becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business Day
and, with respect to any payment of principal, interest thereon shall be
payable during such extension.

---

Debtors
shall pay principal, interest and other amounts under, and in accordance with
the terms of, this Note, free and clear of and without deduction for any and
all present and future taxes, levies, imposts, deductions, charges,
withholdings and all liabilities with respect thereto, excluding taxes measured
by income and franchise taxes.

2. Payment
Provisions. Debtors covenant that so long as this Note is outstanding:

2.1 Interest
Payments. Interest on the unpaid principal amount hereof shall be payable
in arrears monthly on the last Business Day of each calendar month following
the date hereof (each such date hereinafter referred to as a Payment Date),
beginning on November 30, 2005; provided,
however, that (a) during the first year following the date hereof,
the amount of interest payable hereunder shall not be paid in cash but shall
accrue and be added to the principal balance hereof (Paid-in-Kind Interest)
and shall, when so added to principal, be treated for all purposes hereof on
the same terms as all other principal hereof, and (b) following the first
anniversary of the date hereof, Debtors, at their option, may elect to pay up
to 50% of the amount of interest payable on any Payment Date as Paid-In-Kind
Interest, in which event the amount of such Paid-In-Kind Interest will be added
to the principal balance hereof as of such Payment Date as Paid-in-Kind Interest
and any such Paid-in-Kind Interest shall, when so added to principal, be
treated for all purposes hereof on the same terms as all other principal
hereof.

2.2 Payment
at Maturity. On November 9, 2008, unless otherwise required or permitted to
be sooner paid pursuant to the terms hereof and of the Security Agreement,
Debtors will pay to the holder hereof the entire principal amount of this Note
then outstanding, without premium, but together with accrued and unpaid
interest thereon.

2.3 Voluntary
Prepayments. Debtors may at any time or from time to time prepay all or any
part of the outstanding principal amount of this Note, without premium or
penalty, but together with accrued and unpaid interest thereon.

3. Security.
This Note is one of the
Promissory Notes referred to in, and holder is entitled to the rights and
benefits of, that certain Security
Agreement, dated as of the date hereof, among Debtors and IBF Fund Liquidating
LLC (as amended, restated, supplemented or otherwise modified from time to time,
the Security Agreement). This Note is secured by the Collateral
referred to in the Security Agreement.

4. Representations,
Warranties, Covenants and Agreements. The representations, warranties,
covenants and agreements of Debtors set forth in the Security Agreement are
incorporated by reference herein as though originally included herein.

5. Payment,
Registration, Transfer, Exchange and Replacement of this Note.

5.1 Payments.
Debtors will duly and punctually pay the principal of and interest and premium,
if any, on this Note in accordance with the terms hereof. Payments on account
of principal and interest with respect to this Note shall be made by wire
transfer of immediately available funds to the account of the holder appearing
in the register maintained pursuant to Section 5.2 and without the
necessity of any presentment or notation of payment, except upon payment in
full (whether at maturity, on prepayment, upon acceleration or otherwise). The
holder of this Note, before any transfer hereof, shall make a notation thereon
of

the date to which interest has been paid and of all
principal payments theretofore made thereon and shall in writing notify Debtors
of the name, address and wire transfer instructions of the transferee.

5.2 Registration,
Transfer or Exchange of this Note. Debtors shall cause to be kept at their
offices specified pursuant to the provisions hereof a register in which shall
be entered the names, addresses, wire transfer instructions and facsimile
numbers of all holders from time to time of this Note and the particulars of
this Note when held by them and of all transfers of this Note. The Person in
whose name this Note shall be so registered shall be deemed and treated as the
owner hereof for all purposes hereof, and Debtors shall not be affected by any
notice to the contrary. Payment of or on account of the principal of and
premium, if any, and interest on this Note shall be made only to or upon the
order in writing of the holder hereof. For the purpose of any request,
direction or consent hereunder, Debtors may deem and treat the holder of this
Note as the owner hereof without production of this Note. Any holder from time
to time of this Note may at any time and from time to time prior to maturity or
prepayment hereof surrender this Note for transfer or exchange at said office
or agency of Debtors. Within a reasonable time thereafter and without expense
(other than transfer taxes, if any) to such holder, Debtors shall issue in
exchange therefor another Note, dated the date to which interest has been paid
on the surrendered Note, for the same aggregate principal amount as the unpaid
principal amount of the Note so surrendered, having the same maturity and rate
of interest, containing the same provisions and subject to the same terms and
conditions as the Note so surrendered. Such new Note shall be registered in the
name of such Person as the holder of such surrendered Note may designate in
writing, and such exchange shall be made in a manner such that no additional or
lesser amount of principal or interest shall result. Each transferring holder
will pay shipping and insurance charges involved in the exchange or transfer of
this Note.

5.3 Replacement.
Upon receipt of evidence satisfactory to Debtors of the loss, theft,
destruction or mutilation of this Note and, if requested in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement or
security reasonably satisfactory to Debtors in form and amount, or, in the case
of any such mutilation, upon surrender and cancellation of such Note, Debtors
will issue a new Note, of like tenor and amount and dated the date to which the
interest has been paid, in lieu of such lost, stolen, destroyed or mutilated
Note.

6. Definitions.
For purposes of this Note:

Business
Day shall mean any day other than a Saturday or a Sunday or a day on which
commercial banking institutions in New York, New York are authorized or
required by law to be closed.

Collateral
shall have the meaning set forth in the Security Agreement.

Paid-in-Kind
Interest shall have the meaning set forth in Section 2.1 hereof.

Payment
Date shall have the meaning set forth in Section 2.1 hereof.

Person
shall mean any natural individual or any corporation, firm, limited liability
company, unincorporated organization, association, partnership, a trust (inter
vivos or testamentary), an estate of a deceased, insane or incompetent
individual, business trust, joint

stock company, joint venture or other organization,
entity or business, or any governmental authority.

Security
Agreement shall have the meaning set forth in Section 3.

7. Waivers;
Amendments. Amendments to and modifications of this Note may be made,
required consents and approvals may be granted, compliance with any term,
covenant, agreement, condition or other provision set forth herein may be
omitted or waived, either generally or in a particular instance and either
retroactively or prospectively with, but only with, the written consent of
Debtors and the holder.

8. Notices.
All notices and other communications which by any provision of this Note are
required or permitted to be given shall be given in writing and shall be (a)
mailed by first-class or express mail, or by recognized courier service,
postage prepaid, (b) sent by facsimile or other form of rapid transmission,
confirmed by mailing (by first class or express mail, or by recognized courier
service, postage prepaid) written confirmation at substantially the same time
as such rapid transmission, or (c) personally delivered to the receiving party
(which if other than an individual shall be an officer or other responsible
party of the receiving party). All such notices and communications shall be
mailed, sent or delivered as follows: if to the holder hereof, at the address
and/or facsimile number of such holder appearing in the register maintained
pursuant to Section 5.2 hereof, if to Debtors, to 10990 Wilshire
Boulevard, Suite 1220, Los Angeles, California 90024, facsimile number (310)
478-4601; or to such other person(s), facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by
written notice to the other party.

9. Section Headings. The headings contained in this Note are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Note.

10. Governing Law. The validity, interpretation, construction and performance
of this Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to any choice or
conflict of laws provision or rule that would cause the application of domestic
substantive laws of any other jurisdiction.

* * * * *

IN
WITNESS WHEREOF, Debtors has caused this Note to be executed as a sealed
instrument as of the date first above written.

SUNSET BRANDS, INC.By:
    /s/ Todd SandersName:
TODD SANDERSTitle:
PRESIDENT & CEOU.S. MILLS, INC.By:
    /s/ Todd SandersName:
TODD SANDERSTitle:
CEO