REGISTRATION RIGHTS AGREEMENT

THIS
  REGISTRATION RIGHTS AGREEMENT(this Agreement), dated
  as of November 10, 2005, by and among SUNSET BRANDS, INC., a Nevada corporation (the
  Company), and IBF Fund Liquidating LLC, a Delaware limited
  liability company (IBF).

WHEREAS:

A.
Pursuant to the terms of an Amended and Restated Acquisition Agreement and Plan
of Merger, dated as of the date hereof, among the Company, USM Acquisition Sub,
Inc., IBF and U.S. Mills, Inc., the Company has issued to IBF a 12% Secured
Convertible Debenture in an original principal amount of $5,000,000 (the
Convertible Debenture) which is convertible into that number of shares of the
Companys common stock, par value $0.001 per share (the Common Stock), pursuant
to the terms thereof (the Conversion Shares) and a warrant to purchase
2,173,913 shares of Common Stock (the Warrant), subject to adjustment as set
forth in the Warrant (the Warrant Shares).

B.
To induce IBF to execute and deliver the Merger Agreement and accept the
Convertible Debenture and Warrant, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations there under, or any similar successor statute (collectively,
the Securities Act), and applicable state securities laws.

NOW,
THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
IBF hereby agrees as follows:

1.
DEFINITIONS.

As
used in this Agreement, the following terms shall have the following meanings:

(a)
Person means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.

(b)
Register, registered and registration refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the Securities Act and
pursuant to Rule 415 under the Securities Act or any successor rule providing
for offering securities on a continuous or delayed basis (Rule 415), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the SEC).

(c)
Registrable Securities means (i) the Conversion Shares, (ii) the
Warrant Shares, and (iii) any shares of Common Stock issued or issuable with
respect to the Conversion Shares or Warrant Shares upon any stock split, stock
dividend,

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recapitalization
or similar event.

(d)
Registration Statement means a registration statement under the
Securities Act which covers the Registrable Securities.

2.
REGISTRATION.

(a)
Subject to the terms and conditions of this Agreement, the Company shall
prepare and file, no later than forty five (45) days from the date hereof (the
Scheduled Filing Deadline), with the SEC a registration statement on
Form S-1 or SB-2 (or, if the Company is then eligible, on Form S-3) under the
Securities Act (the Initial Registration Statement) for the resale by
the IBF of the Registrable Securities, which includes at least 13,513,514
shares of Common Stock to be issued upon conversion of the Convertible
Debenture and 2,173,913 shares of Common Stock to be issued upon conversion of
the Warrants. The Company shall cause the Registration Statement to remain
effective until all of the Registrable Securities have been sold. Prior to the
filing of the Registration Statement with the SEC, the Company shall furnish a
copy of the Initial Registration Statement to IBF for its review and comment.
IBF shall furnish comments on the Initial Registration Statement to the Company
within twenty-four (24) hours of the receipt thereof from the Company.

(b)
Effectiveness of the Initial Registration Statement. The Company shall
use its best efforts (i) to have the Initial Registration Statement declared
effective by the SEC no later one hundred twenty (120) days after the date
hereof (the Scheduled Effective Deadline) and (ii) to insure that the Initial
Registration Statement and any subsequent Registration Statement remains in
effect until all of the Registrable Securities have been sold, subject to the
terms and conditions of this Agreement. It shall be an event of default
hereunder if the Initial Registration Statement is not filed by the Scheduled
Filing Deadline or declared effective by the Scheduled Effective Deadline.

(c)
Failure to File or Obtain Effectiveness of the Registration Statement. In
the event the Registration Statement is not filed by the Scheduled Filing
Deadline or is not declared effective by the SEC on or before the Scheduled
Effective Date, or if after the Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to the Registration
Statement (whether because of a failure to keep the Registration Statement
effective, failure to disclose such information as is necessary for sales to be
made pursuant to the Registration Statement, failure to register sufficient
shares of Common Stock or otherwise then as partial relief for the damages to
any holder of Registrable Securities by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies at law or in equity), the
Company will pay as liquidated damages (the Liquidated Damages) to the
holder, at the holders option, either a cash amount or shares of the Companys
Common Stock within three (3) business days, after demand therefore, equal to
one and one half percent (1.5%) of the liquidated value of the Convertible
Debenture outstanding as Liquidated Damages for each thirty (30) day period
after the Scheduled Filing Deadline or the Scheduled Effective Date as the case
may be.

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(d)
Liquidated Damages. The Company and the IBF acknowledge and agree that
the sums payable under subsection 2(c) above shall constitute liquidated
damages and not penalties and are in addition to all other rights of IBF,
including the right to call a default. The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred is incapable or is
difficult to precisely estimate, (ii) the amounts specified in such subsections
bear a reasonable relationship to, and are not plainly or grossly
disproportionate to, the probable loss likely to be incurred in connection with
any failure by the Company to obtain or maintain the effectiveness of a
Registration Statement, (iii) one of the reasons for the Company and IBF reaching
an agreement as to such amounts was the uncertainty and cost of litigation
regarding the question of actual damages, and (iv) the Company and IBF are
sophisticated business parties and have been represented by sophisticated and
able legal counsel and negotiated this Agreement at arms length.

3.
RELATED OBLIGATIONS.

(a)
The Company shall keep the Registration Statement effective pursuant to
Rule 415 at all times until the date on which IBF shall have sold all the
Registrable Securities covered by such Registration Statement (the
Registration Period), which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.

(b)
The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which
prospectus is to be filed pursuant to Rule 424 promulgated under the Securities
Act, as may be necessary to keep such Registration Statement effective at all
times during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Companys filing a report on Form 10-KSB, Form 10-QSB or Form 8-K
or any analogous report under the Securities Exchange Act of 1934, as amended
(the Exchange Act), the Company shall incorporate such report by reference
into the Registration Statement, if applicable, or shall file such amendments
or supplements with the SEC on the same day on which the Exchange Act report is
filed which created the requirement for the Company to amend or supplement the
Registration Statement.

(c)
The Company shall furnish to IBF, without charge, (i) at least one (1) copy of
such Registration Statement as declared effective by the SEC and any
amendment(s) thereto, including financial statements and schedules, all
documents

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incorporated
therein by reference, all exhibits and each preliminary prospectus, (ii) ten
(10) copies of the final prospectus included in such Registration Statement and
all amendments and supplements thereto (or such other number of copies as IBF
may reasonably request) and (iii) such other documents as IBF may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by IBF.

(d)
The Company shall use its best efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such other
securities or blue sky laws of such jurisdictions in the United States as IBF
reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not
be required in connection therewith or as a condition thereto to (w) make any
change to its articles of incorporation or by-laws, (x) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify IBF of the receipt by the
Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threat of any proceeding for such
purpose.

(e)
As promptly as practicable after becoming aware of such event or development,
the Company shall notify IBF in writing of the happening of any event as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such supplement or amendment to IBF. The Company
shall also promptly notify IBF in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to IBF by facsimile on
the same day of such effectiveness), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Companys reasonable determination
that a post-effective amendment to a Registration Statement would be
appropriate.

(f)
The Company shall use its best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the

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suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
within the United States of America and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify IBF who holds Registrable Securities being sold
of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.

(g)
At the reasonable request of IBF, the Company shall furnish to IBF, on the date
of the effectiveness of the Registration Statement and thereafter from time to
time on such dates as IBF may reasonably request (i) a letter, dated such date,
from the Companys independent certified public accountants in form and
substance as is customarily given by independent certified public accountants
to underwriters in an underwritten public offering, and (ii) an opinion, dated
as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to IBF.

(h)
The Company shall make available for inspection by (i) IBF and (ii) one
(1) firm of accountants or other agents retained by IBF (collectively, the Inspectors)
all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the Records), as shall be
reasonably deemed necessary by each Inspector, and cause the Companys
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree, and
IBF hereby agrees, to hold in strict confidence and shall not make any disclosure
(except to IBF) or use any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the Securities Act, (b) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector and IBF has knowledge. IBF agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential.

(i)
The Company shall hold in confidence and not make any disclosure of information
concerning IBF provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any

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other agreement.
The Company agrees that it shall, upon learning that disclosure of such
information concerning IBF is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
IBF and allow IBF, at IBFs expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

(j)
The Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) the
inclusion for quotation on the National Association of Securities Dealers, Inc.
OTC Bulletin Board for such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(j).

(k)
The Company shall cooperate with IBF and, to the extent applicable, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as IBF may reasonably request and
registered in such names as IBF may request.

(l)
The Company shall use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.

(m)
The Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve (12) month period
beginning not later than the first day of the Companys fiscal quarter next
following the effective date of the Registration Statement.

(n)
The Company shall otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.

(o)
Within two (2) business days after a Registration Statement which covers
Registrable Securities is declared effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to IBF)
confirmation that such Registration Statement has been declared effective by
the SEC in the form attached hereto as Exhibit A.

(p)
The Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by IBF of Registrable Securities pursuant to a
Registration Statement.

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4.
OBLIGATIONS OF IBF.

IBF
agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(f) or the first sentence of 3(e),
IBF will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement(s) covering such Registrable Securities until
IBFs receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or receipt of notice that no supplement or amendment
is required. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended certificates for shares of Common
Stock to a transferee of IBF in connection with any sale of Registrable
Securities with respect to which IBF has entered into a contract for sale prior
to IBFs receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(f) or the first sentence of 3(e) and for which
IBF has not yet settled.

5.
EXPENSES OF REGISTRATION.

All expenses
incurred in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3, including, without limitation, all registration, listing
and qualifications fees, printers, legal and accounting fees shall be paid by
the Company.

6.
INDEMNIFICATION.

With
respect to Registrable Securities which are included in a Registration
Statement under this Agreement:

(a)
To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend IBF, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any, who
controls IBF within the meaning of the Securities Act or the Exchange Act
(each, an Indemnified Person), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys
fees, amounts paid in settlement or expenses, joint or several (collectively, Claims)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (Indemnified Damages), to which any
of them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact
in a Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other blue sky laws of any jurisdiction in which Registrable
Securities are offered (Blue Sky Filing), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any

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final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation there
under relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, Violations). The Company shall reimburse IBF and
each such Indemnified Person promptly as such expenses are incurred and are due
and payable, for any legal fees or disbursements or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (x) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (y) shall not be available to the extent such Claim is
based on a failure of IBF to deliver or to cause to be delivered the prospectus
made available by the Company, if such prospectus was timely made available by
the Company pursuant to Section 3(c); and (z) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by IBF pursuant to Section 9
hereof.

(b)
In connection with a Registration Statement, IBF agrees to hold harmless and
defend, to the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors, each of its officers, employees,
representatives, or agents and each Person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (each an Indemnified
Party), against any Claim or Indemnified Damages to which any of them may
become subject, under the Securities Act, the Exchange Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto, or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under with the statements therein were
made, not misleading; in each case to the extent, and only to the
extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
occurs in reliance upon and in conformity with written information furnished to
the Company by IBF expressly for use in connection with such Registration
Statement (and such information is contained therein); and, subject to Section
6(d), IBF will reimburse any legal or other expenses reasonably incurred by
them in connection with

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investigating
or defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of IBF,
which consent shall not be unreasonably withheld; provided, further, however,
that IBF shall be liable under this Section 6(b) for only that amount of a
Claim or Indemnified Damages as does not exceed the net proceeds to IBF as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall survive
the transfer of the Registrable Securities by IBF pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was corrected and such
new prospectus was delivered to IBF prior to IBFs use of the prospectus to
which the Claim relates.

(c)
Promptly after receipt by an Indemnified Person or Indemnified Party under this
Section 6 of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving a Claim, such Indemnified
Person or Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one (1) counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party,
the representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such proceeding. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of
any action, claim or proceeding effected without its prior written consent;
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to
entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation. Following

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indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not relieve
such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.

(d)
The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

(e)
The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7.
CONTRIBUTION.

To
the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided, however, that: (i)
no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

8.
REPORTS UNDER THE EXHANGE ACT.

With a view to
making available to IBF the benefits of Rule 144 promulgated under the
Securities Act or any similar rule or regulation of the SEC that may at any
time permit IBF to sell securities of the Company to the public without
registration (Rule 144) the Company agrees to:

(a)
make and keep public information available, as those terms are understood and
defined in Rule 144;

(b)
file with the SEC in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act so long as the
Company remains subject to such requirements and the filing of such reports and
other documents as are required by the applicable provisions of Rule 144; and

(c)
furnish to IBF so long as IBF owns Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has complied with

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the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit IBF to sell such securities pursuant
to Rule 144 without registration.

9.
AMENDMENT OF REGISTRATION RIGHTS.

Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and IBF. Any
amendment or waiver effected in accordance with this Section 9 shall be
binding upon IBF and the Company. No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of
any of this Agreement unless the same consideration also is offered to all of
the parties to this Agreement.

10.
MISCELLANEOUS.

(a)
A Person is deemed to be a holder of Registrable Securities whenever such
Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two (2) or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.

(b)
Any notices, consents, waivers or other communications required or permitted to
be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one (1) business day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

|                         |  |                                   
|------------------------ |  | ----------------------------------
|If to the
  Company, to: |  | Sunset
  Brands, Inc.             
|                         |  | 10990
  Wilshire Blvd  Suite 1220
|                         |  | Los Angeles,
  CA 90024           
|                         |  | Attention:     Todd
  Sanders     
|                         |  | Telephone:   (310)
  478-4600     
|                         |  | Facsimile:     (310)
  478-4601   
|                         |  |                                   
|With Copy
  to:          |  | Hodgson Russ
  LLP                
|                         |  | 60 East 42nd
  Street  37th Floor
|                         |  | New York, NY
  10165              

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|                  |  |                                                                   
|----------------- |  | ------------------------------------------------------------------
|                  |  | Attention:      Jeffrey
  A. Rinde, Esq.                          
|                  |  | Telephone:    (212)
  661-3535                                    
|                  |  | Facsimile:      (212)
  972-1677                                  
|                  |  |                                                                   
|If to IBF,
  to:  |  | IBF Fund
  Liquidating LLC                                        
|                  |  | c/o Kaye
  Scholer LLP                                            
|                  |  | 425 Park
  Avenue                                                 
|                  |  | New York,
  New York 10022                                        
|                  |  | Attention:
    Arthur Steinberg, Esq. and Emanuel S. Cherney, Esq.
|                  |  | Facsimile:
    (212) 836-8689                                     
|                  |  |                                                                   
|With a copy
  to: |  | Kaye Scholer
  LLP                                                
|                  |  | 425 Park
  Avenue                                                 
|                  |  | New York,
  New York 10022                                        
|                  |  | Attention:
    Emanuel S. Cherney, Esq.                           
|                  |  | Facsimile:  
  (212) 836-8689                                     

Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the senders facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

(c)
Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

(d)
The laws of the State of New York shall govern all issues concerning the
relative rights of the Company and IBF as its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction
of the Superior Courts of the State of New York, sitting in New York County,
New York and federal courts for the District of New York sitting in New York,
New York, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such

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suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(e)
This Agreement and related documents including the Convertible Debenture and
the Warrant constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement and related documents including the
Convertible Debenture and the Warrant supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

(f)
This Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.

(g)The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

(h)
This Agreement may be executed in identical counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

(i)
Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent and no rules of strict construction will be
applied against any party.

(j)
This Agreement is intended for the benefit of the parties hereto and

---



their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN
WITNESS WHEREOF, the parties have caused this
Registration Rights Agreement to be duly executed as of day and year first
above written.

| |                        | 
| | ---------------------- | 
| | COMPANY:              
| | SUNSET BRANDS, INC.   
| |                        | 
| | By: /s/ Todd Sanders  
| |                        | 
| | Name: Todd Sanders    
| | Title: President & CEO

| |                          | 
| | ------------------------ | 
| | IBF FUND LIQUIDATING LLC
| |                         
| | By: /s/ Arthur Steinberg
| |                          | 
| | Name: Arthur Steinberg  
| | Title: Manager          

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EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESSOF REGISTRATION STATEMENT

Attention:

Re:
     SUNSET
BRANDS, INC.

Ladies and
Gentlemen:

We
are counsel to Sunset Brands, Inc., a Nevada corporation (the Company), and
have represented the Company in connection with that certain Registration
Rights Agreement (the Registration Rights Agreement), dated as of November
__, 2005, by and between the Company and IBF Fund Liquidating LLC pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement) under the
Securities Act of 1933, as amended (the Securities Act). In connection with
the Companys obligations under the Registration Rights Agreement, on ____________
____, the Company filed a Registration Statement on Form ________ (File
No. 333-_____________) (the Registration Statement) with the Securities
and Exchange SEC (the SEC) relating to the Registrable Securities which
names IBF (or its successors or assigns) as a selling stockholder there under.

In
connection with the foregoing, we advise you that a member of the SECs staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the Securities Act at [ENTER TIME OF
EFFECTIVENESS]on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of
a member of the SECs staff, that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Registrable Securities are available for resale
under the Securities Act pursuant to the Registration Statement.

| |                     | 
| | ------------------- | 
| | Very truly
  yours,
| |                     | 
| | [Law Firm]         
| |                     | 
| | By:                 | 
| |                     | 

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