Document:

cdxp_ex101.htm

    EXHIBIT
10.1

    EXTENSION
AND BRIDGE FUNDING AGREEMENT

    

    THIS EXTENSION AND BRIDGE FUNDING
AGREEMENT (this “Agreement”) is entered into on
February 17,
2010 by and among Cordex
Pharma, Inc., a Nevada corporation, f/k/a Duska Therapeutics, Inc., a
Nevada corporation (the “Company”), and the Company’s
subsidiary Duska Scientific Co., a Delaware corporation (such subsidiary,
the “Guarantor”
and together with the Company, the “Debtors”), on the one hand,
and Platinum-Montaur Life
Sciences LLC (“PMLS”), Platinum Long Term Growth VI, LLC (“PLTG”), Firebird
Global Master Fund Ltd. (“FGMF”), Firebird Global Master Fund II Ltd. (“FGMF
II”), ICON Capital Partners, LP (“ICP”), Philip and Debra Sobol Trust (“PDST”)
and BridgePointe Master
Fund Ltd. (“BridgePointe,” together with
PMLS, PLTG, FGMF, FGMF II and PDST, each individually referred to as a “Holder” and collectively as
the “Holders”), on the
other hand.  Capitalized terms not defined in this Agreement shall
have the meanings ascribed to such terms in each of the Securities Purchase
Agreement (as defined below) or in each of the Debentures (as defined
below).

    

    WHEREAS, pursuant to a Note
and Warrant Purchase Agreement dated on or about September 26, 2007 (the “Securities Purchase
Agreement”) by and among the Company and the Holders, the Company issued
to the Holders (a) an aggregate principal amount equal to $5,900,000 of the
Company’s Senior Secured Convertible Promissory Notes Due September 26, 2009,
issued on or about September 26, 2007 (the “Debentures”), (b) short term
warrants to purchase an aggregate of 14,750,000 shares of Common Stock, with a
Date of Issuance of September 26, 2007 and an initial exercise price of $0.50 per share (the
“Short Term Warrants”) and (c) long term
warrants to purchase an aggregate of 14,375,000 shares of Common Stock, with a
Date of Issuance of September 26, 2007 and an initial exercise price of $0.44, per share (the
“Long Term Warrants” and
together with the Short Term Warrants referred to as the “Warrants,” and the Warrants
together with the Debentures, collectively referred to herein as the “Securities”);

     

    WHEREAS, pursuant to a
Guaranty agreement (the “Guaranty”), dated as of
September 26, 2007, by the Guarantor, in favor of the Holders, the Guarantor
guaranteed payment of the Company’s obligations under the Debentures to the
Holders;

     

    WHEREAS, pursuant to the
Amendment to Debentures and Warrants Agreement and Waiver dated as of October
19, 2009 (the “October
Amendment Agreement”), among the Company, the Guarantor and the Holders,
as amended by one or more the Extensions to the Amendment to Debentures and
Warrants Agreement and Waiver, among the Holders, the Company and the Guarantor,
the parties thereto agreed, among other things, to extend the maturity date of
the Debentures to January 8, 2010, and to increase the principal amounts of the
Debentures as set forth on Schedule A thereto;

    

    WHEREAS, pursuant to the
Extension and Bridge Funding Agreement among the Company, the Guarantor and the
Holders, dated as of January 20, 2010 (the “January Amendment Agreement”
and, together with the October Amendment Agreement, the “Amendment Agreements”), the
Company issued secured Bridge Notes (the “January Notes”) to certain of
the Holders and the parties thereto agreed, among other things, to extend the
maturity date of the Debentures to February 28, 2010 and to increase the
principal amounts of the Debentures as set forth on Schedule A
thereto;

    

    
      
        
        

      

      
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    WHEREAS, the Holders have
agreed to subordinate their security interest in the collateral currently
securing the Debentures to the Debtors’ obligations under the Bridge Loan and
Bridge Guaranty (each as defined below); and

    

    WHEREAS, the Company has
requested that the Holders further extend the Maturity Date of the Debentures
and the January Notes, and the Holders have agreed to such extension on the
terms and conditions set forth herein.

    

    NOW THEREFORE, in
consideration of the mutual promises and agreements contained herein, and
intending to be legally bound hereby, the undersigned parties hereby agree as
follows:

    

    Incorporation of Preliminary
Statements. The Recitals set forth above by this reference hereto are
hereby incorporated into this Agreement.

    

    1. Certain
Definitions.  Terms used herein and not defined shall have the
meanings set forth in the Securities Purchase Agreement.

    

    2. Confirmation of Outstanding
Principal Amounts of the Debentures.  The Company and the
Holders acknowledge that the outstanding principal amounts of the respective
Debentures of each Holder, as of immediately prior to this Agreement, is as set
forth in the Schedule
“A” under the heading “Outstanding Principal Amounts.”

    

    3. Amendment to Debentures and
Securities Purchase Agreement.  Each of the Debentures and the
January Notes is hereby amended as follows:

    

    The
“Maturity Date” in the Debentures and the January Notes is hereby redefined to
mean March 31, 2010; provided, that it is understood that interest shall
continue to accrue on the principal amount of the Debentures until paid in full
at the Default Rate set forth therein.

    

    4. Bridge
Funding.  On the date hereof, PMLS, PLTG, FGMF, FGMF II and
BridgePointe (collectively, the “Bridge Lenders”) are advancing
to the Company an aggregate of $50,000 (the “Bridge Loan”), with each
Bridge Lender advancing the sum set forth opposite such Bridge Lender’s name on
Schedule “B”
hereto.  Each Holder hereby consents to the Bridge Loan up to the
specified amount, and waives any right of participation or similar rights with
respect thereto (including pursuant to Section 3.19 of the Purchase Agreement)
and acknowledges and agrees that the Bridge Loan shall not be deemed to be a
“Triggering Issuance” for purposes of the Amendment Agreement.  Each
Bridge Lender shall be issued a Bridge Note, in substantially the form attached
hereto as Exhibit A (collectively, the “Bridge Notes”), to evidence
its portion of the Bridge Loan and the Guarantor is entering into a Guaranty
(the “Bridge Guaranty”)
in favor of the Bridge Lenders guaranteeing repayment of the Bridge Loan to the
Bridge Lenders.  The Debtors’ obligations under the Bridge Loan and
Bridge Guaranty shall be secured by all collateral currently securing the
Debentures; provided, that, the Debtors’ obligations under the Bridge Notes
(together with all costs of collecting such obligations including attorneys’
fees) shall be deemed senior, in payment and security, to their obligations
under the Debentures set forth above but shall be on a parity basis with the
Debtors’ obligations under the January Notes.  The Debtors hereby
ratify and confirm the security interest granted to the Bridge Lenders pursuant
to the Security Agreement and the other Transaction Documents and agree that the
term “Obligations” under the Security Agreement be deemed to mean and include
the obligations under the Bridge Notes and Bridge Guaranty.  It is
understood and agreed that the Bridge Loans (including all amounts payable under
the Bridge Notes) shall, in all events, be paid in full prior to any payment
made in respect of the Debentures.  Each Holder covenants and agrees
to note on the face of each Debenture held by it that such Debenture is subject
to the provisions of this Agreement.  Each Holder hereby consents to
the incurrence by the Debtors of the indebtedness evidenced by the Bridge
Notes.

    

    
      
        
        

      

      
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    5. Agreement and Clarification
Regarding Amended Debentures. It is the intention of the Holders and
the Company that the Rule 144 holding periods for the shares issuable upon
conversion of the Debentures will tack to, and run from, the September 26, 2007
Original Issue Dates of the Debentures and the Company hereby acknowledges such
tacking (the “Hold Period
Tacking”).  If an opinion of counsel is required by the
transfer agent in order to issue unlegended shares upon the conversion of a
Debenture, the Company and its legal counsel agree to accept an opinion of
counsel from Holder’s legal counsel confirming the Hold Period Tacking of such
holding periods regarding the Debentures, in each case as amended hereby (the
“Tacking Opinion”) and,
if required by the transfer agent, also confirming the non-affiliate status of
the Holder (“Affiliate
Opinion”).   Prior to and as a condition to the
effectiveness of this Agreement, the Company shall provide a letter (the “Counsel Acceptance Letter”),
signed by its outside counsel, stating that such counsel agrees to accept a
Tacking Opinion and Affiliate Opinion presented by an attorney reasonably
experienced in securities law as legal counsel for the Holder.

    

     Upon
receipt of a Tacking Opinion and/or Affiliate Opinion from the Holder’s legal
counsel, the Company’s legal counsel shall submit an opinion of counsel to the
transfer agent and the Company which confirms and acknowledges the Tacking
Opinion and the Affiliate Opinion (the “Company Counsel
Opinion”).  At such time as the Holders or transfer agent shall
so require in connection with the conversion of a Debenture, the Company shall
provide the Company Counsel Opinion, signed by Company’s counsel, to the Holder
or the transfer agent (or an updated, or bring-down opinion, if required by the
transfer agent).  The Company agrees not to take a position contrary
to this Section 5 provided that applicable law is not amended after the date
hereof to require the Company to take a contrary position.  In
addition to, and without limiting the rights and obligations of the parties
under the Transaction Documents, the Company agrees to use its best
efforts to take all actions, including, without limitation, use
its best efforts to cause the issuance by its legal counsel of any legal
opinions necessary to issue to the Holders any Debentures and Warrants (and for
the underlying shares issuable upon the conversion or exercise thereof) without
restriction and not containing any restrictive legend without the need for any
action by the Holder, except that the Company may request the applicable holder
to provide a customary Rule 144 representation letter, with such
issuance to otherwise be made in accordance with the terms and conditions of the
applicable Transaction Documents.

    

    6. Amendments.  No
provision of this Agreement may be waived or amended except in a written
instrument signed by the Company and by the Holders then holding at least 80% of
the outstanding principal amount of the Debentures (the “Required Holders”),
provided that there shall be no amendment or waiver of the provisions of this
Agreement related to the senior security interest with respect to the Bridge
Notes except in a written instrument signed by the Company and by each of the
Holders.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.

    

    
      
        
        

      

      
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    7. Capitalization.  The
capitalization of the Company as of the date hereof, immediately following and
accounting for the effectiveness of this Agreement, is as set forth on Schedule “C”, which
Schedule shall also include the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Company as of the date
hereof.

    

    8. Release.  The Debtors hereby
knowingly and voluntarily forever release, acquit and discharge the Holders from
and of any and all claims that the Holders, their affiliates or their agents are
in any way responsible for the past or current condition or deterioration of the
business operations and/or financial condition of the Debtors, and from and of
any and all claims that the Holders breached any agreement to loan money or make
other financial accommodations available to the Debtors or to fund any
operations of the Debtors at any time. The Debtors also hereby knowingly and
voluntarily forever release, acquit and discharge the Holders (and their
affiliates and agents) from and of any and all other claims, damages, losses,
actions, counterclaims, suits, judgments, obligations, liabilities, defenses,
affirmative defenses, setoffs, and demands of any kind or nature whatsoever, in
law or in equity, whether presently known or unknown, which the Debtors may have
had, now have, or which it can, shall or may have for, upon, or by reason of any
matter, course or thing whatsoever relating to, arising out of, based upon, or
in any manner connected with, any transaction, event, circumstance, action,
failure to act, or occurrence of any sort or type, whether known or unknown,
which occurred, existed, was taken, permitted, begun, or otherwise related or
connected to or with any or all of the obligations under Debentures, this
Agreement, any or all of the Transaction Documents, and/or any direct or
indirect action or omission of the Holders related to any or all of the
obligations under Debentures, this Agreement, any or all of the Transaction
Documents.  The Debtors further agree that from and after the date
hereof, it will not assert to any person or entity that any deterioration of the
business operations or financial condition of the Debtors was caused by any
breach or wrongful act of the Holders (and their affiliates or agents) that
occurred prior to the date hereof.

    

    9. Effect on Transaction
Documents. Subject to the
amendments provided herein, all of the terms and conditions of the Transaction
Documents and the Amendment Agreement shall continue in full force and effect
after the execution of this Agreement and shall not be in any way changed,
modified or superseded by the terms set forth herein, including but not limited
to, any other obligations the Company may have to the Holders under the
Transaction Documents and the Amendment Agreement
provided however that references to Securities, Debentures and Notes in the
Transaction Documents shall include such securities, as amended hereby, and the
shares underlying such securities.  Except as expressly set
forth herein, this Agreement shall not be deemed to be a waiver, amendment or
modification of any provisions of the Transaction Documents or of any right,
power or remedy of the Holders, or constitute a waiver of any provision of the
Transaction Documents, or any other document, instrument and/or agreement
executed or delivered in connection therewith, in each case whether arising
before or after the date hereof or as a result of performance hereunder or
thereunder.  The Holders reserve all rights, remedies, powers, or
privileges available under the Transaction Documents and the Amendment
Agreement, at law or otherwise.  This Agreement shall not constitute a
novation or satisfaction and accord of the Transaction Documents or any other
document, instrument and/or agreement executed or delivered in connection
therewith, including, without limitation, the Security Agreement.

    

    
      
        
        

      

      
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    10. Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be delivered as set forth in the applicable
Transaction Document.

    

    11. Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of the Holders. The Company may not assign (except by
merger) its rights or obligations hereunder without the prior written consent of
the Holders.  The Holders may assign their respective rights hereunder
in the manner and to the Persons as permitted under the applicable Transaction
Document.

    

    12. Execution and
Counterparts.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of a
“.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

    

    13. Governing Law and
Venue.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the venue for court actions
shall be determined in accordance with the provisions of the Transaction
Documents.

    

    14. Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

    

    15. Headings.  The
headings in this Agreement are for convenience only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    
      
        
        

      

      
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    16. Closing
Conditions.  Prior to and as a condition to closing of this
Agreement, the Company shall provide to the Holders (i) a certificate, signed by
the president and chief executive officer of the Company, certifying that no new
lawsuits or material changes have occurred in the business of the Company or its
Subsidiaries since the Company’s last 10-Q for the period ended September 30,
2009 other than in connection with this transaction, and (ii) all other
documents required to be delivered by the Company hereunder shall have been
executed and delivered to the Holders.

     

    17. Representations and
Warranties; Corporate Authority.  The Company hereby makes the
representations and warranties set forth below to the Holders that as of the
date of its execution of this Agreement:

    

    (a)           The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder and thereunder.  The execution and
delivery of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Company and no further action is required by such
Company, its board of directors or its stockholders in connection
therewith.  This Agreement has been duly executed by the Company and,
when delivered in accordance with the terms hereof will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

    

    (b)           The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby do not and
will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a material default (or
an event that with notice or lapse of time or both would become a default)
under, result in the creation of any lien upon any of the properties or assets
of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which
the Company is a party or by which any property or asset of the Company is bound
or affected, or (iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected.

    

    (c)           No
consideration has been offered or paid to any person to amend or consent to a
waiver, modification, forbearance or otherwise of any provision of any of the
Transaction Documents.

     

    
      
        
        

      

      
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    (d)           All
of the Company’s warranties and representations contained in this Agreement
shall survive the execution, delivery and acceptance of this Agreement by the
parties hereto.  Except as otherwise set forth on the disclosure
schedule attached hereto as Schedule “D,” the
Company expressly reaffirms that each of the representations and warranties set
forth in the Securities Purchase Agreement continues to be true, accurate and
complete, and the Company hereby remake and incorporate herein by reference each
such representation and warranty as though made on the date of this
Agreement.

    

    18. Amendments and
Waivers.  The Holders hereby waive the Debtors’ failure to make
interest payments when due on February 1, 2010 (it being agreed that such
interest shall be payable on the Maturity Date of the Debentures as extended
hereunder).  No waiver of any default with respect to any provision,
condition or requirement of this Agreement or the other Transaction Documents
shall be deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right.

    

    19. Joint
Preparation.  Each of the parties hereto acknowledges that this
Agreement has been prepared jointly by the parties hereto, and shall not be
strictly construed against either party. Notwithstanding the above, the parties acknowledge that
no Holder has agreed to act with any other Holder for the purposes of acquiring,
holding, voting or disposing of any securities of the Company for purposes of
Section 13(d) of the Exchange Act.

    

    20. Amendments Not Effective
Until All Parties Agree.  The amendments herein shall not be
effective unless and until the Company, its undersigned subsidiaries and all of
the Holders of the Debentures shall have agreed to the terms and conditions
hereunder.

    

    21. Disclosure and Filing of
8-K.  Except with respect to the
material terms and conditions of the transactions contemplated by this
Agreement, the Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Holders or their agents or counsel with any
information that it believes constitutes or might constitute material, nonpublic
information. On or before the second (2nd) Trading Day immediately following the date hereof, the
Company shall file a Current Report on Form 8-K, reasonably acceptable to each
Investor disclosing the material terms of the transaction contemplated hereby,
which shall include this Agreement and all schedules and exhibits hereto as an
attachment thereto.   The
Company represents, warrants and covenants that it will include all necessary
information in the Form 8-K referred to above such that, immediately following
the filing of the Form 8-K referred to above, the Holders will not be in
possession, by receipt from the Company or anyone under the Company’s control,
of any material non-public information pertaining to the Company or any of its
subsidiaries and the Company shall not disclose any material non-public
information pertaining to the Company or any of its subsidiaries to any of the
Holders in the future, including the factual basis of an Event of Default or
Triggering Event under the Debentures, or a breach of this Agreement, and
including any other information or notice that the Company would otherwise be
required to provide to an Holder under the terms of this Agreement or the
Transaction Documents, unless the Holder has first agreed in writing to receive
such information.

     

    
      
        
        

      

      
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    22. INDEPENDENT NATURE OF
HOLDERS’ OBLIGATIONS AND RIGHTS.  THE COMPANY HAS ELECTED TO
PROVIDE ALL HOLDERS WITH THE SAME TERMS AND FORM OF THIS AGREEMENT FOR THE
CONVENIENCE OF THE COMPANY AND NOT BECAUSE IT WAS REQUESTED TO DO SO BY THE
HOLDERS.  THE OBLIGATIONS OF EACH INVESTOR UNDER THIS AGREEMENT, AND
ANY TRANSACTION DOCUMENT ARE SEVERAL AND NOT JOINT WITH THE OBLIGATIONS OF ANY
OTHER HOLDER, AND NO HOLDER SHALL BE RESPONSIBLE IN ANY WAY FOR THE PERFORMANCE
OR NON-PERFORMANCE OF THE OBLIGATIONS OF ANY OTHER INVESTOR UNDER THIS AGREEMENT
OR ANY TRANSACTION DOCUMENT. NOTHING CONTAINED HEREIN OR IN ANY TRANSACTION
DOCUMENT, AND NO ACTION TAKEN BY ANY INVESTOR PURSUANT THERETO, SHALL BE DEEMED
TO CONSTITUTE THE HOLDERS AS A PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE OR
ANY OTHER KIND OF ENTITY, OR CREATE A PRESUMPTION THAT THE HOLDERS ARE IN ANY
WAY ACTING IN CONCERT OR AS A GROUP WITH RESPECT TO SUCH OBLIGATIONS OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE TRANSACTION
DOCUMENTS.  EACH INVESTOR SHALL BE ENTITLED TO INDEPENDENTLY PROTECT
AND ENFORCE ITS RIGHTS, INCLUDING WITHOUT LIMITATION, THE RIGHTS ARISING OUT OF
THIS AGREEMENT OR OUT OF THE OTHER TRANSACTION DOCUMENTS, AND IT SHALL NOT BE
NECESSARY FOR ANY OTHER INVESTOR TO BE JOINED AS AN ADDITIONAL PARTY IN ANY
PROCEEDING FOR SUCH PURPOSE. EACH INVESTOR HAS BEEN REPRESENTED BY ITS OWN
SEPARATE LEGAL COUNSEL IN THEIR REVIEW AND NEGOTIATION OF THIS AGREEMENT AND THE
TRANSACTION DOCUMENTS.

    

      
        
           

        

        
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    IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.

     

    Company:

    

    CORDEX
PHARMA, INC.

    

    By:
_______________________

    Name:
James Kuo, M.D., MBA

    Title:
Chief Executive Officer

    

    Guarantor:

    

    DUSKA
SCIENTIFIC CO.

    

    By:
_______________________

    Name:
James Kuo, M.D., MBA

    Title:
Chief Executive Officer

     

    
      Extension
and Bridge Funding AG_Execution Version (RCP Final 2-17-2010).doc

       

      
        
          
          

        

        
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 Holders:

    

    BRIDGEPOINTE
MASTER FUND LTD.

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
 

    PLATINUM-MONTAUR
LIFE SCIENCES LLC

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
 

    PLATINUM
LONG TERM GROWTH VI, LLC

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
 

    FIREBIRD
GLOBAL MASTER FUND LTD.

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
 

    FIREBIRD
GLOBAL MASTER FUND II LTD.

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
 

    ICON
CAPITAL PARTNERS, LP

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
 

    PHILIP
AND DEBRA SOBOL TRUST

    By:
________________________________

    Name:
______________________________

    Title:
_______________________________

     

    
       

      
        
          
          

        

        
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    Schedule
A

    

    Outstanding
Principal Amounts of the Debentures of Each Holder

    

    
      	 
      	
              Principal
      Amount of Holder's Debenture On Date Of Issuance*

            	
              Default
      Interest Accrued from 4/1/2009 through 6/29/2009

            	
              Total
      Amount of Unpaid Interest Accrued from 6/30/2009 through
      11/1/2009

            	
              Principal
      Amount of Holder’s Debentures as Increased After October 2009
      Amendment

            	
              Principal
      Amount of Holder’s Debentures as of the Date Hereof , Which Accounts for
      the Increase in

              Principal
      Amount  of 2.5% Following the January Amendment
      Agreement

            	
              Holder’s
      Post Closing Pro Rata Portion

            
	
              Platinum
      Montaur Life Sciences

            	
                       
         1,326,923

            	
                                   61,434

            	
                                   48,803

            	
                                   1,802,341

            	
                   1,847,399

            	
              22.5%

            
	
              Platinum
      Long Term Growth VI

            	
                       
         1,326,923

            	
                                   61,434

            	
                                   48,803

            	
                                   1,802,341

            	
                    1,847,399

            	
              22.5%

            
	
              Bridgepointe
      Master Fund Ltd

            	
                    
            1,326,923

            	
                                   61,434

            	
                                   48,803

            	
                                   1,802,341

            	
                     1,847,399

            	
              22.5%

            
	
              Firebird
      Global Master Fund Ltd

            	
                              884,615

            	
                                   40,956

            	
                                   32,535

            	
                                   1,201,560

            	
                     1,231,599

            	
              15.0%

            
	
              Firebird
      Global Master Fund II Ltd

            	
                              884,615

            	
                                   40,956

            	
                                   32,535

            	
                                   1,201,560

            	
                      1,231,599

            	
              15.0%

            
	
              Icon
      Capital Partners LLP

            	
                              100,000

            	
                                     4,630

            	
                                     3,678

            	
                                      135,829

            	
                       
      139,224

            	
              1.7%

            
	
              Philip
      & Debra Sobol Trust

            	
                                50,000

            	
                                     2,315

            	
                                     1,839

            	
                                        67,914

            	
                           69,612

            	
              0.8%

            
	 
      	
                      
          5,900,000

            	
                             
         273,158

            	
                                 216,995

            	
                                   8,013,886

            	
                      8,214,233

            	
              100.0%

            

    

     

    * = Amount does not include
the Bridge Notes issued to the Holders on or about January [19],
2010

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
 

    Schedule
B

     

    
      	
              
Bridge
      Lender

            	
              Outstanding
      Principal Amount of Holder's Debenture at 12/31/07

            	
              %
      of total

            	
              January
      Bridge Loan Principal Amount

            	 
      	
              February
      Bridge Loan Principal Amount

            	 
      
	
              Platinum
      Montaur Life Sciences

            	
              1,326,923

            	
              22.5%

            	
              8,073

            	
              22.7%

            	
              11,538.46

            	
              23.1%

            
	
              Platinum
      Long Term Growth VI

            	
              1,326,923

            	
              22.5%

            	
              8,073

            	
              22.7%

            	
              11,538.46

            	
              23.1%

            
	
              Bridgepointe
      Master Fund Ltd

            	
              1,326,923

            	
              22.5%

            	
              7,073

            	
              22.7%

            	
              11,538.46

            	
              23.1%

            
	
              Firebird
      Global Master Fund Ltd

            	
              884,615

            	
              15.0%

            	
              5,049

            	
              15.1%

            	
              7,692.31

            	
              15.4%

            
	
              Firebird
      Global Master Fund II Ltd

            	
              884,615

            	
              15.0%

            	
              5,049

            	
              15.1%

            	
              7,692.31

            	
              15.4%

            
	
              Icon
      Capital Partners LLP

            	
              100,000

            	
              1.7%

            	
              684

            	
              1.7%

            	
              -

            	
              0.0%

            
	
              Philip
      & Debra Sobol Trust

            	
               50,000

            	
              0.8%

            	
              -

            	
              0.0%

            	
              -

            	
              0.0%

            
	 
      	
              5,900,000

            	
              100.0%

            	
              34,000

            	
              100.0%

            	
              50,000.00

            	
              100.0%

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Schedule
D

    

    Disclosure

     

    
 

    Schedule
D- Exceptions to the Representations and Warranties

     

    Capitalization-
Schedule A and the Company's filings with the SEC  disclose the current
capitalization of the Company and all outstanding options and warrants as
well as commitments and contracts regarding the issuance of securities by the
Company

     

    Material
Adverse Change-The Company's financial condition has changed adversely and it is
in default under the agreement with the note holders as well as its agreements
with Cato and DSM

     

    Indebtedness-Money
is owed to Cato and DSM; Cato is owed $221,081.10; DSM is claiming
$310,825.22.

     

    Disclosure-information
regarding agreements with Ladenburg Thalmann & Co., Inc and WBB Securities,
Inc. has not been disclosed publicly

     

    Material
Agreements-See Material Adverse Change

     

    Absence
of Certain Developments

     

    Changes
in compensation-Dr. Kuo's salary has been suspended; effective 12/31/09, Dr.
Pelleg was furloughed, but was recalled and paid a salary amount less than that
in his contract.

     

    Changes
in Management – Dr. Kuo resigned as CEO effective February 1, 2010; Wayne Lorgus
resigned as CFO effective February 4, 2010; Shepard Goldberg was appointed
CEO

     

    The
company received a letter dated 12/7/09 from DSM’s Legal & Government
Affairs department which provided formal notice of a claim for outstanding
invoices of $310,825.22.

     

    
      
        
        

      

      
        13tit_ex10-2.htm

    EXHIBIT
10.2

    

    

    CONTRACT
NUMBER: 4205

    Cambar
Vendor Number: 4463

    

    

    PURCHASING
AGREEMENT

    

    
      	
              BUYER:

               

               

            	
              SELLER:

            
	
              General
      Nutrition Corporation

              300
      Sixth Avenue

              Pittsburgh,
      PA 15222

              Attention:  Purchasing
      Department

               

            	
              Muscle
      Pharm, LLC

              3390
      Peoria St # 307

              Auros,
      CO 80010

            
	
              Phone:   412/288/2096

            	
              Phone:
      303/564/7432

            
	
              Fax:   412/338/8865

            	
              Fax:  800/490/7165

            
	
              E-mail:  frank-pernice@gnc-hq.com

            	
              E-mail:

            
	
              Contact
      Person:  Frank Pernice

            	
              Contact
      Person:  Leonard Armenta

            

    

    

    In consideration of the mutual promises
and covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, and intending to be legally
bound hereby, Buyer and Seller (individually a “Party” and collectively the
“Parties”) agree as
follows:

    

    SUMMARY OF CERTAIN KEY
TERMS

    

    1.           Supply of
Product.  During this Agreement, (i) Buyer shall purchase from
Seller the products listed on Exhibit 1 (the “Products”) at the prices
listed on Exhibit
1 (the “Prices”)and (ii) Seller shall
sell, fulfill and deliver those Products, all pursuant to this Agreement and
Buyer’s vendor book (the “Vendor Book”), which, among
other requirements, includes Buyer’s standard purchase order (the “Purchase
Order”).  Seller shall also provide the information regarding
the Products requested on Exhibit
1.

    

    2.           Lead
Time.   Unless otherwise stated in a Purchase Order from
Buyer, all delivery transportation
terms of sale will be FOB Destination—FREIGHT COLLECT, unless Buyer’s
transportation department (the “Transportation Department”)
designates FOB Destination—PREPAID (the “Shipment
Terms”).  The Shipment Terms pertain to the cost and delivery
point of shipment of the Products from Seller’s facility located within the
United States of America and shall not affect allocation of the risk of loss,
passage of title, acceptance, payment, or Buyer’s right to return Products,
which are addressed elsewhere in this Agreement. Seller shall contact the
Transportation Department, in accordance with Paragraph B of the
General Terms below, before making any shipping arrangements.  All
Product deliveries will be made by Seller within 3 weeks after Buyer places the
order (the “Lead
Time”).  If Buyer designates that the Transportation Department
will arrange pick up of the Products, then the Lead Time for such shipment is
shortened by one week.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.           Product
Payment.  Buyer shall pay Seller for Products received by
Buyer:

    Pay on
Scan

    Within
ten days after on-scan or entry into the cash register at a
Buyer-owned  store and within ten days after wholesale delivery from
Buyer’s distribution center to Buyer franchisees or unaffiliated
purchasers.

    

    Shrink Allowance for Pay on
Scan Products.  “Shrink” means lost, stolen, or
damaged Product after Acceptance.  "Shrink" does not include concealed
damage discovered after Acceptance while in Buyer's distribution center. For
each unit of Product purchased by Buyer via pay-on-scan only, Seller shall
credit Buyer 1% of the Product purchase price to account for Shrink related to
the Product.  The shrink allowance shall be deducted by Buyer against
each invoice paid to Seller.

    

    4.           Reverse
Logistics.  Seller agrees to the General Nutrition Returns
Agreement (the “Returns
Agreement”) attached as Exhibit
4.

    

    5.           Term.  This
Agreement shall be in effect for one year from the date signed by Buyer (the
“Effective Date”);
thereafter, the Agreement will automatically renew on an annual
basis.  Either Party may terminate this Agreement at any time without
cause on 30 days advanced written notice.

    

    6.           Advertising and
Promotion.  Seller agrees to the total annual advertising
commitment for the Products as set forth on Exhibit 6 (the "Committed
Advertising").  Upon request from Buyer, Seller agrees to provide
Buyer with proof of placements for the Committed Advertising for the months
committed as set forth on Exhibit 6.  In the event that Seller fails
to (a) conduct the Committed Advertising for any committed month or (b) provide
Buyer with proof of placement showing Seller conducted the Committed Advertising
for any committed month, Buyer may discontinue any or all of the Products and
such Product(s) will be subject to the reverse logistics terms set forth in
Exhibit 4.  Seller shall support Buyer's sale of the Products by
Product advertising and promotion as set forth on Exhibit 6.

    

    7.           Customer Return
Pledge.  Seller shall comply with Buyer’s customer return
program as described in the Vendor Book.  All Product returned by
Buyer’s customers will be charged back to Seller at cost plus 18% of such
cost in addition to any inbound freight cost incurred by Buyer. The chargeback
amount, structured to compensate for all expenses incurred by Buyer in carrying
the Product, will be either paid in cash to Buyer or deducted from Seller’s
account when invoice payments are issued.

    

    8.           Insurance.  Seller
shall maintain a comprehensive General/ Products Liability occurrence policy,
$2,000,000 per occurrence/$2,000,000 aggregate for bodily injury, and property
damages with the following coverage; Premises/Operations, Products/Completed
Operations, Contractual Liability and Independent Contractors; or
General/Products Liability claims made policy, $2,000,000 per
occurrence/$2,000,000 aggregate for bodily injury and property damages with the
following coverage:  Premises/Operations, Products/Completed
Operations, Contractual Liability and Independent Contractors.  The
retroactive date of the

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    policy
must be prior to the Effective Date and must be specified on the certificate of
insurance for such policy.  Further details for each policy are
contained in the Vendor Book.  Seller shall name Buyer and Buyer’s
subsidiaries and affiliates as an
additional insured under such coverage as described in the Vendor
Book.  Seller shall deliver to Buyer a certificate of insurance
evidencing the required coverage to Buyer prior to any delivery of
Product.  Seller shall provide Buyer at least 60 days prior written
notice of any cancellation, change, or reduction of such coverage (a “Change in Insurance”) and any
such Change in Insurance shall constitute a material
breach of the Agreement.  In addition, Seller shall provide
indemnification to Buyer and Buyer’s affiliates as more fully described in the
Vendor Book.

    

    9.           Indemnity.  Seller
shall defend, indemnify, and hold Buyer and Buyer’s affiliates and Buyer’s and
Buyer’s affiliates’ franchisees and licensees harmless from and against all
claims, expenses, liabilities, losses, and damage, including reasonable
attorney’s fees, resulting from, or arising in connection with, (i) the failure
of the Products to conform in any respect to the representations and warranties
contained in any part of this Agreement, (ii) the failure of the Products to
meet label claims or Buyer’s quality control standards, (iii) the promotion,
sale, purchase, resale, or use of the Products or any litigation or threatened
litigation based thereon, and (iv) all intellectual property infringement and
misappropriation claims based on the Products.  Such right of
indemnity shall exist in favor of the Buyer even though the negligence, gross
negligence, strict liability, common law or statutory fault of the Buyer, or any
of them, was the sole cause, a producing cause or a concurring cause of the
claim, demand, controversy or cause of action in question.  This
indemnity and defense shall be in addition to other remedies afforded to Buyer
or Buyer’s affiliates at law or in equity.  This indemnity and defense
shall survive acceptance of the Products and payment therefore by
Buyer.  Seller shall assume Buyer’s contractual obligations to defend
and indemnify Buyer’s affiliates and Buyer’s affiliates’ franchisees and
licensees from all claims, expenses, liabilities, losses, and damages, including
reasonable attorney’s fees, resulting from the promotion, sale, purchase,
resale, or use of the Products.

    

    10.           Limitation.  IN
NO EVENT SHALL BUYER BE LIABLE TO SELLER UNDER THIS AGREEMENT (WHETHER IN TORT,
IN STRICT LIABILITY, IN CONTRACT, OR OTHERWISE) FOR ANY (i) INDIRECT,
INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES FOR
LOST PROFITS, EVEN IF BUYER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
OR (ii) AMOUNT THAT EXCEEDS THE AGGREGATE FEES PAID BY BUYER TO SELLER UNDER
THIS AGREEMENT FOR THE IMMEDIATELY PRECEDING SIX MONTHS.  THE
EXISTENCE OF MORE THAN ONE CLAIM WILL NOT ENLARGE OR EXTEND THESE
LIMITS.

    

    11.           Margin
Neutrality.  A Product's margin percentage is calculated by
subtracting the Buyer's Product cost from the Product's retail price and
dividing that result by the Product's retail price.  A margin
percentage is established with the initial sale of the Product at Buyer's
corporate stores.  If Buyer wishes to promote the Product thereafter
by lowering the retail price of the Product, the Seller agrees to lower the cost
of the Product for each unit sold during the promotion such that the Buyer’s
originally calculated margin percentage remains neutral (i.e, the same as it was
before Buyer lowered the retail price).  The difference between the
original Product cost and

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    the
reduced Product cost during the promotion multiplied by the units sold during
the promotion period equal the markdown monies ("Markdown Monies") owed to Buyer
from Seller.  The units of Product sold during the promotion period
will be based on (a) for franchise sales, units sold by Buyer to franchisees and
(b) for corporate sales, units sold at corporate retail stores.  All
promotions will be available to franchise stores.  Solely with regard
to sales of the Product from the Buyer to franchisees, the promotional pricing
for the Product will start two weeks prior to the start date of the promotion in
corporate retail stores and end two weeks prior to the end date of the promotion
in corporate retail stores.  Markdown Monies will be paid by Seller
based on units sold at the end of each month during the
promotion.  Payment will be automatically deducted by Buyer from
Seller’s account via credit memo.  If there is not an open balance to
deduct against, Seller will issue a check payment in full within 30 days of
Buyer's written notification.

    

    

    GENERAL
TERMS

    

    A.           Pricing Terms. Seller guarantees that the Prices are the
lowest currently available.  Should lower prices become applicable for
any of Seller’s customers, the Prices will automatically and immediately become
applicable for Buyer.  Upon request of Buyer, Seller shall confirm in
writing that the Prices are Seller’s lowest offered price.  Seller
shall work continuously on achieving cost savings and improvements in raw
materials, specifications, packaging, and production efficiencies to the benefit
of both Parties and those savings and improvements shall be promptly passed on
to Buyer in the form of lower Prices and improved Products.

    

    B.           Ordering and
Delivery.  The Transportation Department shall determine and
arrange all transportation requirements for FOB Destination—FREIGHT COLLECT
deliveries.  If Seller is to arrange transportation, Seller shall
provide estimates to the Transportation Department for verification of
reasonableness and approval of selected carrier before shipment is made.  Each Purchase Order
received from Buyer shall be confirmed by Seller within 24 hours following receipt to
Buyer’s contact person by fax or electronic confirmation of
receipt.  All Products must be shipped
to the distribution center designated by Buyer.

    

    C.           “Sale or Return”
Purchase.  Seller and Buyer agree that all Products shall be
sold on a “sale or return” basis subject to the terms of this Agreement,
including this Paragraph C and Exhibit 4 of the
Returns Agreement.

    

    D.           Confidentiality.  During
the term of this Agreement and after the expiration or termination of this
Agreement, each Party shall keep confidential, and shall require such Party’s
officers, directors, employees, and agents to keep confidential, all proprietary
information of the other Party, including (i) any information specifically
identified by either Party prior to disclosure as being confidential
information, (ii) plans and data concerning products, prices, marketing, sales,
customers, and (iii) technical or business matters.  Disclosure of
such confidential information shall be made by either Party only to those of
such Party’s employees and agents who have need to know such information in
order to carry on the purposes of this Agreement and who have agreed in writing
to abide by confidentiality requirements at least as restrictive as those set
forth in this Agreement.  Seller shall not disclose the terms of
this

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Agreement
to any person or entity that is not a Party.  A breach or threatened
breach of this Paragraph D by the
receiving Party may cause irreparable harm and injury to the disclosing Party
for which money damages are inadequate.  In the event of such breach
or threatened breach, the disclosing Party shall be entitled to seek injunctive
relief, in addition to all other available remedies, without the requirement of
posting a bond or any other security.

    

    E.           Notices.  All
demands, notices, and other communications to be given under this Agreement by a
Party to the other Party shall be deemed to have been duly given if given in
writing and (i) personally delivered, (ii) sent by nationally recognized
overnight courier, or (iii) sent by mail, certified, postage prepaid with return
receipt requested, in each case, at the address set forth in this Agreement for
such other Party.  Notices delivered personally or by courier shall be
deemed communicated as of actual receipt.  Mailed notices shall be
deemed communicated as of 10:00 a.m. on the third business day after
mailing.  Any Party may change such Party’s address for notice under
this Agreement by giving prior written notice to the other Party of such change
in the manner provided in this Paragraph
E.

    

    F.           Entire Agreement and
Modification.  This Agreement (including the Vendor Book, the
Purchase Order, and all exhibits) contains the entire agreement of the Parties
relating to the subject matter of this Agreement, and the Parties agree that
this Agreement supersedes all prior written or oral agreements, representations,
and warranties relating to the subject matter of this Agreement. In the event of any
conflict between the terms of this Agreement and the Vendor Book, the terms of
this Agreement shall control.  Except for changes to the Vendor Book
made by Buyer, no
modification of this Agreement shall be valid unless made in writing and signed
by the Parties.  The terms contained in Seller’s invoices,
acknowledgments, or other writings are not binding on Buyer and are of no force
or effect.  The individuals signing this Agreement each represents to
the other that such individual has the full right and authority to enter into
this Agreement and to perform the obligations set forth in this Agreement of
such Party.  The terms and conditions of the Vendor Book may, from
time to time, be unilaterally amended by Buyer.  In the event of such
an amendment, Buyer shall send Seller a written notification describing the
amendment via registered mail, postage prepaid, to the address listed above at
least 30 days prior to the amendment’s effective date.  Acceptance by
Seller of a Purchase Order (or any Buyer order) after receiving notice of the
amendment to the Vendor Book shall constitute acceptance by Seller of the
amended terms and conditions of the Vendor Book.  Sections 4, 7, 8, 9, and
10 of this Agreement and Paragraphs C through
F and Paragraphs H and I of
the General Terms shall survive the termination of this Agreement.

    

    G.           Termination.   Either
Party may terminate this Agreement upon notice to the other Party if such other
Party becomes insolvent or bankrupt or files or permits to be filed any petition
in bankruptcy.

    

    H.           Waiver, Assignment, and
Severabililty.  The waiver of a breach of any term or condition
of this Agreement shall not be deemed to constitute the waiver of any further
breach of such term or condition or the waiver of any other term or condition of
this Agreement.  Neither Party shall assign this Agreement or any
right or interest in or to this Agreement, in whole or in part, without the
prior written consent of the other Party, except that Buyer may assign this
Agreement to a purchaser of all or substantially all of Buyer’s
assets.  The invalidity, in whole or

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    in part,
of any provision in this Agreement shall not affect the validity of any other
provision. The
Parties exclude the application of the United Nations Convention on Contracts
for the International Sale of Goods if otherwise applicable. This Agreement shall be
interpreted, construed, and enforced in all respects in accordance with the laws
of the Commonwealth of Pennsylvania.  Venue of any action relating to,
or arising out of, this Agreement shall lie exclusively in the courts located in
Allegheny County, Pennsylvania.  All disputes, claims, and
controversies, whether statutory, contractual, or otherwise, between the Parties
arising under, or relating to, this Agreement shall be governed by the Vendor
Book.

    

    I.           Interpretation.  In
the interpretation of this Agreement, except where the context otherwise
requires, (i) “including” or “include” does not denote or imply any limitation,
(ii) “or” has the inclusive meaning “and/or,” (iii) “and/or” means “or” and is
used for emphasis only, (iv) “$” refers to United States dollars, (v) the
singular includes the plural, and vice versa, and each gender includes each
other gender, (vi) captions or headings are only for reference and are not to be
considered in interpreting this Agreement, (vii) “Section” refers to a section
of this Agreement, unless otherwise stated in this Agreement, (viii) “Exhibit”
refers to an exhibit to this Agreement (which is incorporated by reference),
unless otherwise stated in this Agreement, (ix) “Schedule” refers to a schedule
to this Agreement (which is incorporated by reference), unless otherwise stated
in this Agreement, (x) all references to times are times in Allegheny County,
Pennsylvania, (xi) “day” refers to a calendar day unless expressly identified as
a business day, and (xii) the Vendor Book is incorporated by
reference.

    

    J.           Counterparts.  This
Agreement may be executed simultaneously in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.  Faxed copies of manually executed signature
pages to this Agreement will be fully binding and enforceable without the need
for delivery of the original manually executed signature page.

    

    The Parties have executed this
Agreement on the date first set forth above.

    

    
      	
              BUYER

            	
              SELLER

            
	 
      	 
      
	
              GENERAL
      NUTRITION CORPORATION

            	
              MUSCLE
      PHARM, LLC

            
	 
      	 
      
	
              By:  /s/
      Stephen B. Cherry

            	
              By:  /s/
      Leonard K. Armenta

            
	 
      	 
      
	
              Name:
      Stephen B. Cherry

            	
              Name:
      Leonard K. Armenta

            
	 
      	 
      
	
              Title:  VP
      Purchasing

            	
              Title:  COO

            
	 
      	 
      
	
              Date:  12-18-09

            	
              Date:  12/16/09

            

    

    

    Seller
acknowledges that Seller has received a copy of the Vendor Book incorporated
into this Agreement.

    

    MUSCLE
PHARM, LLC

    

    By:  /s/
Leonard K. Armenta

    Name:  Leonard
K. Armenta

    Title:
COO

    Date:  12/16/09

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXHIBIT
1

    

    LIST
OF PRODUCTS

    

    
      	
              BUYER
      ITEM  NO.

            	
              UPC

              CODE

            	
              DESCRIPTION

            	
              UNIT
      PRICE

              FOB
      DESTINATION PREPAID

            	
              UNIT
      PRICE FOB DESTINATION FREIGHT COLLECT

            	
              OVERALL

              INVENTORY

              TURN
      RATE IN BUYER-OWNED STORES

            	
              BUYER’S

              MINIMUM

              SALES
      IN BUYER-OWNED STORES

            	
              MINIMUM
      ORDER QUANTITY

            
	
              446301

            	 
      	
              Berry
      combat powder 5lb

            	
              $21.90

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446302

            	 
      	
              Battle
      fuel

            	
              $21.90

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446304

            	 
      	
              Chocolate
      combat powder

            	
              $21.90

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446305

            	 
      	
              Chocolate
      Pntbtr combat powder

            	
              $21.90

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446306

            	 
      	
              Fruit
      punch assault

            	
              $21.00

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446307

            	 
      	
              Fruit
      punch recon

            	
              $21.90

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446308

            	 
      	
              Grape
      bullet proof

            	
              $20.98

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446309

            	 
      	
              Orange
      raspberry bullet proof

            	
              $20.98

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446310

            	 
      	
              Raspberry
      lemon assault

            	
              $21.00

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446312

            	 
      	
              Shredded
      matrix

            	
              $19.48

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446317

            	 
      	
              Blue
      raspberry assault

            	
              $21.00

            	 
      	
              NA

            	
              NA

            	
              NA

            
	
              446318

            	 
      	
              Banana
      combat powder

            	
              $21.90

            	 
      	
              NA

            	
              NA

            	
              NA

            

    

    

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    EXHIBIT
4

    

    GENERAL NUTRITION RETURNS
AGREEMENT

    

    Buyer has
a Reverse Logistics Program that allows Buyer to return to Seller for credit (or
for a cash payment at Buyer’s sole option) any and all of the Products purchased
by Buyer under the Purchasing Agreement to which this Returns Agreement (this
“Agreement”) is an
Exhibit (the “Purchasing
Agreement”), any units of any Products that are (i) defective, (ii)
outdated, (iii) discontinued by Buyer (pursuant to the criteria set forth in
this Agreement), or (iv) recalled using a centralized returns
system.  A “recalled product” is a Product or ingredient in a Product
for which a recall has been requested by Seller or any government entity. A “defective product” is
a Product that contains latent defects relating to the quality of the Product or
the Product’s packaging.

    

    Seller
agrees that Buyer’s designated reclamation center (the “Reclamation Center”) shall
process all Products and provide detailed reporting services.  The
Products will be returned to the Reclamation Center.  Buyer reserves
the right to change the Reclamation Center at any time.  All Products
returned via this Agreement to the Reclamation Center shall be held for Seller’s
review for 21 days after notice of return is provided to Seller; at that time if
not reviewed or no decision has been provided to Buyer by Seller, the Product
may be disposed of at the discretion of Buyer.

    

    Retail
and wholesale sales of the Products will be evaluated by Buyer on a rolling
eight week basis as per agreed full distribution to Buyer’s stores, and Buyer
may elect to discontinue any Products and return such Products to Seller if, during such eight
week period, either sales of such Product (i) fall below the minimum sales
threshold in Buyer-owned stores as set forth on Exhibit 1 of the
Purchasing Agreement for such Product (the “Minimum Sales Threshold”) or
(ii) do not meet the minimum overall inventory Turn Rate (as defined below) in
Buyer-owned stores as set forth on Exhibit 1 of the
Purchasing Agreement for such Product (the “Minimum Overall Inventory Turn
Rate”).

    

    A “Turn Rate” means the quotient
of (i) the aggregate of the last eight weeks of Buyer’s cost of the individual
Product sold resulting from retail sales of the individual Product in
Buyer-owned stores divided by (ii) the average cost of the aggregate individual
Product in inventory at Buyer-owned stores and 70% of distribution centers
inventory during the same eight week period. The calculated value of 70% of
distribution centers inventory accounts for Product inventory allocated to
Buyer-owned stores. For clarity purposes, the term “individual Product” in the
preceding sentence refers to one specific Product listed on Exhibit 1 to the
Purchasing Agreement and not all of the Products collectively listed on Exhibit 1 to the
Purchasing Agreement. Seller agrees that any
of the Products previously delivered to Buyer and that are in Buyer’s inventory
prior to execution of this Agreement are subject to the terms of this
Agreement.

    

    Seller
agrees to provide Buyer with a letter of credit to satisfy any amounts Seller
owes Buyer under this Agreement.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Buyer’s objectives under this
Agreement are:

    

    
      	
               
      

            	
              ·

            	
              Fairness
      to all parties

            

    

    
      	
               
      

            	
              ·

            	
              Total
      accountability

            

    

    
      	
               
      

            	
              ·

            	
              Supplier
      designated disposition of products

            

    

    
      	
               
      

            	
              ·

            	
              Thorough,
      accurate, and timely communication with Buyer’s
  suppliers

            

    

    

    Buyer
shall receive a credit (or at Buyer’s option, a cash payment) for each unit of
any Product returned based on Buyer Standard Cost (as defined below) per unit,
plus the accepted factors from the Joint Industry Report (JIR) for handling
returns.  These accepted factors include:

     

    
      	
            	
              ·

            	
                    
                Direct
      Product Cost (“DPC”): $0.085

              

            

      
        	
                 
      

              	
                ·

              	
                      
                  Post
      Damage Handling (“PDH”):
$0.190

                

              

      

      
        	
                 
      

              	
                ·

              	
                      
                  Operations
      Through Scan (“OTS”):
$0.101

                

              

      

      
        	
                 
      

              	
                ·

              	
                      
                  Disposition
      Cost (as selected
below)

                

              

      

       

    

    Please
indicate the method of disposition and corresponding Disposition Cost for the
Products by placing an “X” on the appropriate choice below (if no method of
disposition is chosen by Seller within seven days following the notification to
return Product, the COPT code will apply):

    

    
      	
              CODE

            	
              DESCRIPTION (DISPOSITION
  COST)

            
	 
      	 
      
	
              COPT______

            	
              Scan
      and disposition left up to the discretion of Buyer ($0.020)*

            
	
              DONA_____

            	
              Scan
      and Donate ($0.030)

            
	
              DEST______

            	
              Scan
      and DESTROY ($0.040)*

            
	
              ROPT______

            	
              Scan,
      Hold, Seller Review/Center Option ($0.127)

            
	
              RDON_____

            	
              Scan,
      Hold, Seller Review, DONATE ($0.137)

            
	
              RDES______

            	
              Scan,
      Hold, Seller Review, DESTROY ($0.147)*

            
	
              RTAK______

            	
              Scan,
      Hold, Seller Review, TAKE ($0.174)

            
	
              RSHP______

            	
              Scan,
      Hold, Seller Review, Ship ($0.186)

            
	
              SHBK______

            	
              Scan
      and Ship back to Seller ($0.180)* Open RA#
      Required:_________

            

    

    

    *NON-TOXIC/NON-HAZARDOUS
MATERIAL ONLY

    

    Handling
of hazardous materials (as determined by Buyer) will require Seller to supply
material safety data sheets (“MSDS”) before a Product is
returned.  Fees for hazardous materials will be in addition to the
above costs.  Failure to provide MSDS may result in additional charges
and possible fines, which Seller shall pay in full and as to which Seller shall
fully indemnify Buyer.

    

    With
regard to Product located in Buyer stores in Alaska, Hawaii, and/or Puerto Rico,
in addition to the Disposition Costs set forth above, at Seller’s option, Buyer
will either destroy, at Seller’s expense, all Product at the store level or bill
Seller for all shipping charges associated with sending Product to the
Reclamation Center.  Buyer will provide an estimate of the shipping
charges associated with returning the Products to the Reclamation Center, but
Buyer’s recovery for shipping charges shall not be limited to such estimate but
shall be based on Buyer’s actual cost.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Buyer may
increase any costs set forth in this Agreement 30 days after written
notification of such increase is sent to Seller by Buyer.

    

    Buyer’s
unit count and dollar value determinations so made shall govern unless proved to
be in error by Seller as determined by Buyer.

    

    With
regard to Products that are recalled, all recalled Products shall be returned to
Seller via the SHBK Code (i.e., scanned and shipped
back to Seller) regardless of whether Seller has chosen a different method of
disposition.  An open RA# number must be established with Buyer’s
purchasing department prior to the initiation of a recall.  Pallets
shipped with recalled Products will be billed to Seller at the cost of $6.50 per
pallet.  Itemized pallet charges will also appear on a future
invoice.

    

    All
shipments of Product (i.e., those from Buyer stores
to the Reclamation Center as well as from the Reclamation Center to Seller)
shall be prepaid by Buyer to be reimbursed by Seller as set forth in this
Agreement.  Title and risk of loss to any Products shall revert to
Seller once the Products are removed from Buyer’s stores or warehouse for
delivery to the Reclamation Center.

    

    Explanations
of Phrases and Abbreviations

    

    BUYER STANDARD COST: Buyer’s
cost for the Product charged by Seller plus the freight cost
from  Seller to Buyer warehouses, if paid by Buyer.

    

    JIR REPORT:  In
1989, a Joint Industry Committee conducted a study, measuring the costs of
handling unsaleable products all the way back through the distribution
channel.  Membership on the Committee was drawn from the following
trade organizations: FMI, GMA, NAWGA, NGA, NFBA, and NACDS.  The
resulting JIR Guidelines were issued in the form of recommended good business
practices.

    

    DPC: “Direct Product Cost” is the
cost associated with transporting a Product from Buyer’s distribution centers to
the retail store shelf.

    

    PDH:  “Post Damage Handling” is the
cost of removing a Product from the stores and shipping to the Reclamation
Center.

    

    OTS:  “Operations Through Scan” is
cost of receiving, scanning, and preparing for disposition of Product
and associated costs at the Reclamation Center.

    

    DISPOSITION
COSTS:  Costs associated with the
disposition of the Product, as selected by Seller by code.

    

    CODES: COPT, DONA, DEST, ROPT,
RDON, RDES, RTAK, RSHP, SHBK.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    EXAMPLE of how an item under
Disposition Cost code COPT will be
billed:

    

    
      	
              ITEMS
      STANDARD COST

            	 	$	2.900	 
	
              DPC
      COST

            	 	$	0.085	 
	
              POST
      DAMAGE COST

            	 	$	0.190	 
	
              OTS

            	 	$	0.101	 
	
              DISPOSITION
      COST

            	 	$	0.020	 
	
              TOTAL

            	 	$	3.296	 

    

    

    If Buyer
returns 12 pieces of this item, the credit memo deduction will be: 12 X $3.296 =
$ 39.552.

    

    EXAMPLE of how an item under
Disposition Cost code RSHP will be billed:

     
 

    
      	
              ITEMS
      STANDARD COST

            	 	$	2.900	 
	
              DPC
      COST

            	 	$	0.085	 
	
              POST
      DAMAGE COST

            	 	$	0.190	 
	
              OTS

            	 	$	0.101	 
	
              DISPOSITION
      COST

            	 	$	0.186	 
	
              TOTAL

            	 	$	3.462	 

    

    

    If Buyer
returns 12 pieces of this item, the credit memo deduction will be: 12 X $3.462 =
$41.544.

    

    EXAMPLE of how recalled
Product will be
billed:

    

    
      	
              ITEMS
      STANDARD COST

            	 	$	2.900	 
	
              DPC
      COST

            	 	$	0.085	 
	
              POST
      DAMAGE COST

            	 	$	0.190	 
	
              OTS

            	 	$	0.101	 
	
              DISPOSITION
      COST

            	 	$	0.180	 
	
              TOTAL

            	 	
              $3.456
      + Pallet Charges

            	 

    

     

    If Buyer returns 12 pieces of this
item, the credit memo deduction will be 12 x $3.456 = $41.472 + Pallet
Charges

    

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    EXHIBIT
6

    ADVERTISING
AND PROMOTION

    

    The
Parties agree to the following advertising and promotion commitments as set
forth below:

    

    
      	
              A.

            	
              Seller
      Commitments.

            

    

    

    
      	
               
      

            	
              1.

            	
              Advertising
      Commitment

            

    

    

    

    
      	
              Product:

            	
              Medium:

            	
              Outlet:

            	
              Month(s)
      Committed:

            	
              $
      Committed:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    2.           Media and Promotional
Plan

    ________________________________________________________________

    

    3.           Promotional Money
(“PM”)
Support.

    

    Buyer will charge an extra
10% over the total PM value to cover extra taxes and charges. 

    

    4.           Category
Drives.

    ________________________________________________________________

    

    5.           Franchising
Specific.

     

    6.           Other.

    _________________________________________________________________

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      	
              B.

            	
              Buyers
      Commitments.

            

    

    

    
      	
               
      

            	
              1.

            	
              Initial Plan-O-Gram or
      Shelf Space Commitment.

            

    

    __________________________________________________________________

    

    
      	
               
      

            	
              2.

            	
              Product Introduction,
      Store Commitment.

            

    

    __________________________________________________________________

    

    
      	
               
      

            	
              3.

            	
              Franchising
      Specific.

            

    

    
      	 
      

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        13

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