8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

———————

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   April 2, 2014

AS SEEN ON TV, INC.
(Exact name of registrant as specified in its charter)
Florida	000-53539	80-0149096
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
14044 Icot Boulevard Clearwater, Florida 33760 (Address of principal executive offices) (Zip Code)   (727) 451-9510 Registrant’s telephone number, including area code

___________________________________________________________

(Former name or former address, if changed since last report)

———————

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry Into a Material Definitive Agreement.

Merger Agreement

On April 2, 2014, As Seen On TV, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Infusion Brands International, Inc., a Nevada corporation (“IBI”), Infusion Brands, Inc. (“Infusion”), a Nevada corporation and a wholly owned subsidiary of IBI, and ASTV Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”). All of the closing conditions included in the Merger Agreement were satisfied on April 2, 2014, and the Merger (as defined below) closed on April 2, 2014. Also on April 2, 2014, in accordance with the Merger Agreement and upon the filing of Articles of Merger pursuant to the requirements of the Nevada Revised Statutes (the “Effective Time”), Merger Sub merged with and into Infusion, with Infusion continuing as the surviving corporation and becoming a direct wholly owned subsidiary of the Company (the “Merger”).

Pursuant to the terms of the Merger Agreement, at the Effective Time, the Company issued to IBI 452,960,490 shares of its common stock in exchange for all of the outstanding shares of Infusion common stock in consideration of the Merger (the “Merger Consideration”). As a result, IBI became the majority shareholder of the Company, owning approximately 85.2% of the Company’s outstanding common stock as of the date of the Merger and 75% of Company’s outstanding common stock on a fully diluted basis. Pursuant to the terms of the Merger Agreement, the Company also agreed to increase the size of its board of directors from 5 to 7, to cause three of its existing directors to resign and to appoint 5 new persons, designated by IBI, to the Company board of directors.

The Merger Agreement contains representations, warranties and covenants of the parties customary for a transaction of this type. In addition, each party’s obligation to consummate the transaction was subject to customary closing conditions, including the condition that all representations and warranties were true and correct on the date of closing and that no material adverse change had occurred. In addition, the Company’s obligation to close was subject to receipt of a fairness opinion and approval of the Merger by the shareholders of IBI.

Under the Merger Agreement, the Company agreed to assume from Infusion all obligations for indebtedness for borrowed money of Infusion outstanding at the closing of the Merger and all agreements relating to that indebtedness. This indebtedness is primarily comprised of a Senior Secured Debenture issued to Vicis Capital Master Fund in the principal amount of $11,000,000, bearing interest at a rate of 6 percent until June 30, 2014, 9 percent from July 1, 2014 until June 30, 2015, and 12 percent from July 1, 2015 until the maturity date of June 30, 2016 (the “Senior Secured Debenture”). The Senior Secured Debenture will be secured by all assets of the Company and guaranteed by each other Credit Party (as defined below), which guaranty will be secured by substantially all of the assets of those other Credit Parties. The Senior Secured Debenture is subject to customary covenants and events of default.

Pursuant to the terms of the Merger Agreement, IBI may require the Company to file a registration statement registering the resale of the shares of the Company’s common stock issued to IBI pursuant to the Merger. The Company has also agreed, at its cost and subject to certain limitations, to maintain the same level of director indemnification and insurance coverage as those in place for Infusion and IBI immediately prior to the Merger.

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

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Note Purchase Agreement

Pursuant to a Senior Note Purchase Agreement dated as of April 3, 2014, by and among the Company, Infusion, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC (collectively, the “Credit Parties”), and MIG7 Infusion, LLC (“MIG7” and such agreement, the “Note Purchase Agreement”) and filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference, the Credit Parties sold to MIG7 a senior secured note having a principal amount of up to $10,000,000 bearing interest at 14 percent and having a maturity date of April 3, 2015 (the “Note”). The Note is subject to automatic extension for an additional 180-day period in the event that the Credit Parties have requested such extension in writing at least 60 days prior to the original maturity date, no event of default under the Note Purchase Agreement is then in existence, and the Company’s consolidated revenues, as determined in accordance with generally accepted accounting principles, and EBITDA for the 12 months immediately preceding the request equal or exceed $39,000,000 and $6,000,000, respectively. During such extension the Note would bear interest at a rate of 15.5 percent. Funding of the amounts borrowed under the Note will be made in two tranches, with the first funding of $7,400,000 occurring on April 3, 2014, and the second funding, which will result in funding of an aggregate gross amount of at least $8,000,000 and no more than $10,000,000 under the Note Purchase Agreement, occurring on or before May 1, 2014. The Note is filed herewith as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

Under the Note Purchase Agreement, MIG7 is entitled to two board observer seats on each Credit Party’s board of directors, and, upon the written request of MIG7, to the nomination of two individuals selected by MIG7 for election to the board of directors of each Credit Party as full voting members of such boards.

Upon the funding of at least $8,000,000 in the aggregate under the Note Purchase Agreement, the Company has agreed to deliver a warrant to purchase five percent of the common stock of the Company on a fully diluted basis to MIG7 Warrant, LLC, an affiliate of MIG7, at any time on or before the maturity date of the Note at an exercise price of $0.001 per share. The form of the warrant is filed herewith as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The Note Purchase Agreement contains a number of covenants restricting, among other things, dividends, liens, redemptions of securities, debt, mergers and acquisitions, asset sales, transactions with affiliates, capital expenditures, and prepayments and modifications of subordinated debt instruments. The Note Purchase Agreement contains customary events of default as well as events of default for failing to achieve certain targets for consolidated revenues and consolidated EBITDA for the 2014 and 2015 calendar years. Among other remedies, upon an event of default MIG7 would be entitled to sweep and retain 65 percent of all cash deposited in the operating account of the Company until all obligations owing to MIG7 are paid in full.

The obligations of the Credit Parties under the Note are secured by substantially all of their respective assets under a Security Agreement between the Credit Parties and MIG7 filed herewith as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference, and the Company has agreed to pledge the stock of all other Credit Parties that are corporations under a Pledge Agreement filed herewith as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.

In connection with the Note Purchase Agreement and the transactions contemplated thereby, the Credit Parties, MIG7, and Vicis Capital Master Fund entered into an intercreditor agreement filed herewith as Exhibit 10.5 to this Current Report on Form 8-K and incorporated herein by reference, pursuant to which MIG7, and Vicis Capital Master Fund agreed among other matters to share priority under and allocation of amounts owing to each of them under the Senior Secured Debenture held by Vicis Capital Master Fund and under the Note.

The foregoing description of the Note Purchase Agreement, the Note, the Warrant, the Security Agreement, the Pledge Agreement, and the Intercreditor Agreement (the “Note Documents”), and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by, the Note Documents, copies of which are filed as Exhibits 10.1, 10.2, 4.1, 10.3, 10.4, and 10.5 to this Current Report on Form 8-K and are incorporated herein by reference.

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Item 2.01

Completion of an Acquisition or Disposition of Assets.

The information provided under Item 1.01 under the caption “Merger Agreement” is incorporated herein by reference.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 3.02

Unregistered Sale of Equity Securities

The Merger Consideration and the Note were issued, and the Warrant will be issued, without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act.

Item 5.01.

Changes in Control of Registrant.

The information provided under Item 1.01 under the caption “Merger Agreement” is incorporated herein by reference.

Item 5.02

Departure of Director or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

On April 2, 2014, in connection with the closing of the Merger described in Item 1.01 under the caption “Merger Agreement,” as contemplated by the Merger Agreement, Kevin Harrington, Randolph Pohlman and Ronald C. Pruett, Jr. resigned from the Company’s board of directors and Robert DeCecco, Shadron Stastney, Dennis Healey, Mary Mather and Allen Clary were appointed to the Company’s board of directors. Following these actions, the Company’s board of directors is now comprised of Kevin A. Richardson, II, Greg Adams, Mr. DeCecco, Mr. Stastney, Mr. Healey, Ms. Mather and Mr. Clary. Prior to his resignation, Mr. Pohlman was a member of the Company’s Audit Committee, Compensation Committee, and Governance and Nominating Committee.

Mr. Stastney is a member in and chief operating officer of Vicis Capital, LLC, the investment advisor to Vicis Capital Master Fund. Vicis Capital Master Fund is the holder of the Senior Secured Debenture described in Item 1.01 under the caption “Merger Agreement.”

Each of Ms. Mather and Messrs. DeCecco, Clary, and Stastney is party to an employment agreement with IBI, each of which was assigned to Infusion in connection with the Merger. The agreements provide for base salaries in the amount of either $185,000 (for Mr. Clary), $260,000 (for Mr. DeCecco), $150,000 (for Ms. Mather), or $175,000 (for Mr. Stastney).Each agreement also provides for ordinary executive benefits and perquisites, and imposes standard non-competition and non-solicitation covenants. The agreements contain a provision which provides that for 360 days following any change in control, the termination or resignation of the employee will be treated as a termination without cause. As such, the employee would be entitled to severance compensation equal to the remaining compensation left for the term of his agreement, and all unvested stock, stock equivalents or stock options would immediately vest in full, free of Company-imposed restrictions."Change in control" means either: (i) any person, entity or group acquires 51% or more of either the outstanding shares of common stock or the combined voting power of the company's outstanding voting securities entitled to vote generally in the election of directors; or (ii) Infusion's shareholders approve a reorganization, merger or consolidation with respect to which persons who were the shareholders of Infusion immediately prior to such event no longer own 51% or great of the outstanding voting securities of Infusion.In connection with the Merger, each such Director has executed an amendment to their employment agreement with Infusion to set the expiration date of the employment agreements at June 15, 2018, and waive for 360 days any right to change in control payments to which they might otherwise be entitled upon resignation or termination for cause following the Merger.

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Item 9.01

Financial Statements and Exhibits.

(a)

Financial statements of businesses acquired

(b)

Pro forma financial information.

The financial statements and pro forma financial information required to be filed under Item 9.01 of this Current Report on Form 8-K will be filed by amendment to this Current Report on Form 8-K no later than 75 days after the Effective Time.

(d)

Exhibits.

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated April 2, 2014, by and among As Seen On TV, Inc., ASTV Merger Sub, Inc., Infusion Brands International, Inc. and Infusion Brands, Inc. (the schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K*)
4.1	Form of Warrant
10.1	Senior Note Purchase Agreement, dated April 3, 2014, by and among As Seen On TV, Inc., Infusion Brands, Inc, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC, and MIG7 Infusion, LLC*
10.2	Senior Secured Promissory Note, dated April 3, 2014, in favor of MIG7 Infusion, LLC
10.3	Security Agreement, dated April 3, 2014, by and among As Seen On TV, Inc., Infusion Brands, Inc, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC, and MIG7 Infusion, LLC*
10.4	Pledge Agreement, dated April 3, 2014, by and among As Seen On TV, Inc., Infusion Brands, Inc, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC, and MIG7 Infusion, LLC
10.5	Intercreditor Agreement , dated April 3, 2014, by and among As Seen On TV, Inc., Infusion Brands, Inc, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC, Vicis Capital Master Fund, and MIG7 Infusion, LLC

———————

*

As Seen on TV, Inc. hereby agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon the request of the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

As Seen On TV, Inc.
By:	/s/ Dennis W. Healey
	Dennis W. Healey
	Chief Financial Officer

Date: April 8, 2014

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EX-2.1

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

AS SEEN ON TV, INC.,

ASTV MERGER SUB, INC.,

INFUSION BRANDS INTERNATIONAL, INC.

AND

INFUSION BRANDS, INC.

April 2, 2014

TABLE OF CONTENTS

Page

ARTICLE I	DEFINITIONS	2
1.1	Definitions	2
1.2	Terms Generally	9
ARTICLE II	THE MERGER	9
2.1	The Merger	9
2.2	Closing	10
2.3	Effective Time	10
2.4	Effects of the Merger	10
2.5	Organizational Documents	10
2.6	Directors and Officers of Surviving Corporation	10
ARTICLE III	EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS	10
3.1	Conversion of Securities	10
3.2	Exchange of Shares	11
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF THE  PARENT AND THE COMPANY	11
4.1	Corporate Existence and Power	11
4.2	Corporate Authorization	12
4.3	Governmental Authorization	12
4.4	Non-Contravention	13
4.5	Capitalization; Subsidiaries	13
4.6	Reports and Financial Statements	14
4.7	Undisclosed Liabilities	15
4.8	Litigation	15
4.9	Taxes	15
4.10	Employee Benefit Plans	17
4.11	Compliance With Laws	19
4.12	Finders’ Fees	19
4.13	Anti-Takeover Provisions	19
4.14	Voting	19
4.15	Contracts	19
4.16	Labor and Employee Matters	21
4.17	Environmental	21
4.18	Property	22
4.19	Intellectual Property; Software	23
4.20	Insurance	24
4.21	Certain Business Practices	24
4.22	Suppliers And Manufacturers; Effect Of Transaction	25
4.23	Ownership of Buyer Common Stock	25

TABLE OF CONTENTS

		Page
4.24	Government Contracts	25
4.25	Books and Records	25
4.26	Sufficiency of Assets	26
4.27	Receivables	26
4.28	Inventories	26
ARTICLE V	REPRESENTATIONS AND WARRANTIES OF BUYER  AND MERGER SUB	27
5.1	Corporate Existence and Power	27
5.2	Corporate Authorization	28
5.3	Governmental Authorization	28
5.4	Non-Contravention	28
5.5	Capitalization	29
5.6	SEC Reports	30
5.7	Undisclosed Liabilities	32
5.8	Litigation	32
5.9	Taxes	32
5.10	Employee Benefit Plans	34
5.11	Compliance With Laws	36
5.12	Finders’ Fees	36
5.13	Opinion of Financial Advisor	36
5.14	Anti-Takeover Provisions	36
5.15	Voting	36
5.16	Contracts	37
5.17	Labor and Employee Matters	37
5.18	Environmental	38
5.19	Property	38
5.20	Intellectual Property; Software	39
5.21	Insurance	40
5.22	Suppliers And Manufacturers; Effect Of Transaction	40
5.23	Merger Sub Operations	41
5.24	Certain Business Practices	41
5.25	Ownership of Company Common Stock	41
5.26	Government Contracts	42
5.27	Minute Books	42
5.28	Sufficiency of Assets	42
5.29	Receivables	42
5.30	Inventories	42
ARTICLE VI	ADDITIONAL AGREEMENTS	43
6.1	Securities Filings; Registration Rights	43
6.2	Access to Information	43
6.3	Director and Officer Liability	43
6.4	Notice of Certain Events	45

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TABLE OF CONTENTS

		Page
6.5	Employee Matters	46
6.6	Tax Matters	46
6.7	Board of Directors of Buyer	46
6.8	Further Assurances	46
ARTICLE VII	CONDITIONS TO THE MERGER	47
7.1	Conditions to the Obligations of Each Party	47
7.2	Conditions to the Obligations of Buyer and Merger Sub	47
7.3	Conditions to the Obligations of the Parent and the Company	48
ARTICLE VIII	MISCELLANEOUS	50
8.1	Notices	50
8.2	Representations and Warranties	51
8.3	Expenses	51
8.4	Amendment	51
8.5	Successors and Assigns	51
8.6	Governing Law	51
8.7	Counterparts; Effectiveness; Third Party Beneficiaries	51
8.8	Severability	52
8.9	Entire Agreement	52
8.10	Remedies	52
8.11	Jurisdiction	52
8.12	Headings	53
8.13	Further Assurances	53
8.14	Authorship	53
8.15	Publicity	53

iii

INDEX OF SCHEDULES AND EXHIBITS

Buyer Disclosure Letter

Company Disclosure Letter

iv

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of April 2, 2014, by and among As Seen on TV, Inc., a Florida corporation (“Buyer”), ASTV Merger Sub, Inc., a Nevada corporation and a direct wholly owned subsidiary of Buyer (“Merger Sub”), Infusion Brands International, Inc., a Nevada corporation (“Parent”), and Infusion Brands, Inc., a Nevada corporation and a direct wholly owned subsidiary of Parent (the “Company”).

RECITALS

WHEREAS, the Buyer and the Parent are parties to that certain Memorandum of Understanding dated as of December 18, 2013, which Memorandum of Understanding contemplates the transactions set forth in this Agreement;

WHEREAS, since the date of such Memorandum of Understanding, the Board of Directors of each of the Buyer and Parent has had the opportunity to further explore strategic alternatives for their respective companies;

WHEREAS, the parties intend that Merger Sub be merged with and into the Company upon the terms set forth herein, with the Company surviving the Merger as a wholly owned subsidiary of Buyer;

WHEREAS, the Board of Directors of each of the Parent and the Company, respectively, has (i) determined that it is in the best interests of the Parent and its stockholders and the Company and its stockholder, respectively, and declared it advisable, to enter into this Agreement, and (ii) approved this Agreement in accordance with the NRS, and the respective stockholders of the Parent and the Company have duly adopted this Agreement prior to the date hereto;

WHEREAS, the Board of Directors of each of Buyer and Merger Sub has approved and declared it advisable for Buyer and Merger Sub to enter into this Agreement; and  

WHEREAS, the parties intend to adopt this Agreement as a plan of reorganization and for the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder; and

WHEREAS, the Parent, Company, Buyer and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with the Merger.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, intending to be legally bound, the parties hereto agree as follows:

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ARTICLE I
DEFINITIONS

1.1

Definitions.  For purposes of this Agreement, the following terms have the respective meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person.  For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the Preamble.

“Articles of Merger” has the meaning set forth in Section 2.3.

“Business Day” means any day other than the days on which banks in New York, New York are required or authorized to close.

“Buyer” has the meaning set forth in the Preamble.

“Buyer Benefit Plan” has the meaning set forth in Section 5.10(a).

“Buyer Common Stock” has the meaning set forth in Section 3.1(b).

“Buyer Convertible Securities” means any stock or other securities of Buyer (other than Buyer Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Buyer Common Stock.

“Buyer Contract” has the meaning set forth in Section 5.16(a).

“Buyer Debt” has the meaning set forth in Section 5.16(c).

“Buyer Disclosure Letter” has the meaning set forth in the preamble to ARTICLE V.

“Buyer Employees” has the meaning set forth in Section 5.10(a).

“Buyer ERISA Affiliate” mean any trade or business, whether or not incorporated, that together with the Buyer or any of its Subsidiaries would be deemed a “single employer” within the meaning of Section 4001(b)(i) of ERISA.

“Buyer Intellectual Property” has the meaning set forth in Section 5.20(a).

“Buyer IP Licenses” has the meaning set forth in Section 5.20(a).

“Buyer Material Adverse Effect” means any Effect that has had, or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, assets, liabilities (contingent or otherwise), results of operations or condition

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(financial or otherwise) of Buyer and Merger Sub, taken as a whole or that prevents or materially delays, or would reasonably be expected to prevent or materially delay, the ability of the Buyer or Merger Sub to perform their obligations under this Agreement or consummate the transactions contemplated by this Agreement; provided, however, that in no event shall any of the following, to the extent occurring after the date hereof, alone or in combination with each other, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, a Buyer Material Adverse Effect, except, in the case of any events described in clauses (B), (C), (D) or (E) below, those events that have, or are reasonably likely to have, a materially disproportionate or unique impact on Buyer or Merger Sub, as compared to other similarly situated participants in the business or industry in which Buyer and Merger Sub operate (and in any such case, only such disproportionate impact shall be taken into account in determining if a Buyer Material Adverse Effect has occurred): (A) any change in the market price or trading volume of the Buyer Common Stock, (B) any change in general economic or business conditions, (C) any change in financial or securities market conditions generally, (D) events resulting from any changes or proposed changes in applicable Laws, political conditions or GAAP standards, interpretations or enforcement thereof, as in effect on the date of this Agreement, in any geographic region in which Buyer and Merger Sub operate (provided that any such event to the extent arising from, or relating to, the failure by Buyer to comply with any change in applicable Laws or GAAP shall not be disregarded under this clause), (E) acts of war, armed hostilities, sabotage or terrorism, or any escalation of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement,  (F) events relating to the announcement or the execution of this Agreement, (G) events resulting from compliance with the terms and conditions of this Agreement or the Memorandum of Understanding by Buyer or Merger Sub, or consented to in writing by the Company or the Parent, (H) events resulting from any breach of this Agreement or the Memorandum of Understanding by the Company or the Parent, or any other actions taken by the Company, the Parent or any of their respective Representatives after the date hereof not permitted by this Agreement or the Memorandum of Understanding or (I) any failure to meet any internal or published projections, forecasts or revenue or earnings predictions for any period (it being understood and agreed that the Effects giving rise or contributing to such failure that are not otherwise excluded from the definition of “Buyer Material Adverse Effect” may be taken into account in determining whether there has been, or is reasonably expected to be, a Buyer Material Adverse Effect).

“Buyer Options” means any rights, warrants or options to subscribe for or purchase shares of Buyer Common Stock or Buyer Convertible Securities.

“Buyer SEC Reports” has the meaning set forth in Section 5.6(a).

“Buyer Securities” has the meaning set forth in Section 5.5(c).

“Closing” has the meaning set forth in Section 2.2.

“Closing Date” has the meaning set forth in Section 2.2.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock Consideration” has the meaning set forth in Section 3.1(b).

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“Company” has the meaning set forth in the Preamble.

“Company Benefit Plan” has the meaning set forth in Section 4.10(a).

“Company Common Stock” has the meaning set forth in Section 3.1(b).

“Company Convertible Securities” means any stock or other securities of the Company (other than Company Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Company Common Stock.

“Company Contracts” has the meaning set forth in Section 4.16(b).

“Company Debt” has the meaning set forth in Section 4.16(b).

“Company Disclosure Letter” has the meaning set forth in the preamble to ARTICLE V.

“Company Employees” has the meaning set forth in Section 4.10(a).

“Company Intellectual Property” has the meaning set forth in Section 4.19(a).

“Company IP Licenses” has the meaning set forth in Section 4.19(a).

“Company Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities of the Company.

“Company SEC Reports” has the meaning set forth in Section 4.6(a).

“Company Securities” has the meaning set forth in Section 4.5(c).

“Company Stockholder Meeting” has the meaning set forth in Section 4.1(b).

“Contract” has the meaning set forth in Section 4.4.

“Copyrights” has the meaning set forth in Section 4.19(a).

“Current Policy” has the meaning set forth in Section 6.3(d).

“DOL” has the meaning set forth in Section 4.10(a).

“Effect” means any change, event, effect, occurrence, condition, fact or state of circumstances.

“Effective Time” has the meaning set forth in Section 2.3.

“Environmental Laws” means all applicable federal, state, local and foreign Laws (including international conventions, protocols and treaties), common law, rules, regulations, orders, decrees, judgments, binding agreements or Environmental Permits issued, promulgated or entered into, by or with any Governmental Authority, relating to pollution, the release of or exposure to Hazardous Materials, natural resources or the protection, investigation or restoration

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of the environment as in effect on the date of this Agreement.  “Environmental Permits” means all permits, licenses, registrations and other governmental authorizations required under applicable Environmental Laws.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“GAAP” means United States generally accepted accounting principles.

“Governmental Authority” means any nation or government or any agency, public or regulatory authority, instrumentality, department, commission, court, arbitrator, ministry, tribunal or board of any nation or government or political subdivision thereof, in each case, whether foreign or domestic and whether national, supranational, federal, provincial, state, regional, local or municipal.

“Hazardous Materials” means (i) any substance that is listed, classified or regulated as hazardous or toxic or a pollutant or contaminant under any Environmental Laws; or (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive material, toxic molds or radon.

“Insurance Amount” has the meaning set forth in Section 6.3(d).

“Intellectual Property” has the meaning set forth in Section 4.19(a).

“IRS” has the meaning set forth in Section 4.10(a).

“Knowledge” means (a)(i) with respect to the Parent or the Company, the actual knowledge of the individuals set forth in Schedule 1.1 of the Company Disclosure Letter after reasonable inquiry and (ii) with respect to Buyer, the actual knowledge of the individuals set forth in Schedule 1.1 of the Buyer Disclosure Letter after reasonable inquiry, (b) in the case of an individual, the actual knowledge of such individual after reasonable inquiry and (c) in the case of any individual described in clauses (a) and (b), the knowledge that each such individual reasonably should possess if he or she has properly discharged his or her duties.  The existence of a document or any information on any electronic database of Parent, Company or Buyer, whether created in connection with the transactions contemplated pursuant to this Agreement or otherwise, shall not be dispositive, or create any presumption, as to whether any individual described in the immediately preceding sentence had knowledge of such document or information for purposes of this definition.

“Law” means applicable statutes, common laws, treaties, rules, ordinances, regulations, codes, licensing requirements, orders, judgments, injunctions, writs, decrees, licenses, settlements, governmental guidelines or interpretations having the force of law or bylaws, in each case, of a Governmental Authority.

“Leased Real Property” has the meaning set forth in Section 4.18(b).

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“Liens” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.

“Material Adverse Effect on the Company” means any Effect that has had, or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, assets, liabilities (contingent or otherwise), results of operations or condition (financial or otherwise) of the Parent or the Company or that prevents or materially delays, or would reasonably be expected to prevent or materially delay, the ability of the Parent or the Company to perform their obligations under this Agreement or consummate the transactions contemplated by this Agreement; provided, however, that in no event shall any of the following, to the extent occurring after the date hereof, alone or in combination with each other, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, a Material Adverse Effect on the Company, except, in the case of any events described in clauses (B), (C), (D) or (E) below, those events that have, or are reasonably likely to have, a materially disproportionate or unique impact on the Parent or the Company, as compared to other similarly situated participants in the business or industry in which the Parent or the Company operate (and in any such case, only such disproportionate impact shall be taken into account in determining if a Material Adverse Effect on the Company has occurred): (A) any change in the market price or trading volume of the Parent Common Stock, (B) any change in general economic or business conditions, (C) any change in financial or securities market conditions generally, (D) events resulting from any changes or proposed changes in applicable Laws, political conditions or GAAP standards, interpretations or enforcement thereof, as in effect on the date of this Agreement, in any geographic region in which the Parent or the Company operates (provided that any such event to the extent arising from, or relating to, the failure by the Company to comply with any change in applicable Laws or GAAP shall not be disregarded under this clause), (E) acts of war, armed hostilities, sabotage or terrorism, or any escalation of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement, (F) events relating to the announcement or the execution of this Agreement, (G) events resulting from compliance with the terms and conditions of this Agreement or the Memorandum of Understanding by the Parent or the Company, or consented to in writing by the Buyer or the Merger Sub, (H) events resulting from any breach of this Agreement or the Memorandum of Understanding by the Buyer, or any other actions taken by the Buyer and the Merger Sub or any of their Representatives after the date hereof not permitted by this Agreement or the Memorandum of Understanding or (I) any failure to meet any internal or published projections, forecasts or revenue or earnings predictions for any period (it being understood and agreed that the Effect giving rise or contributing to such failure that are not otherwise excluded from the definition of “Material Adverse Effect on the Company” may be taken into account in determining whether there has been, or is reasonably expected to be, a Material Adverse Effect on the Company).  

“Material Licenses” has the meaning set forth in Section 4.15(b).

“Materials of Environmental Concern” shall mean any hazardous, acutely hazardous, or toxic substance or waste defined and regulated as such under applicable Environmental Laws, including the federal Comprehensive Environmental Response, Compensation and Liability Act or the federal Resource Conservation and Recovery Act.

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“Memorandum of Understanding” means the Memorandum of Understanding between the Parent and the Buyer dated as of December 18, 2013.

“Merger” has the meaning set forth in Section 2.1.

“Merger Sub” has the meaning set forth in the Preamble.

“Multiemployer Plan” has the meaning set forth in Section 4.10(b).

“NRS” has the meaning set forth in Section 2.1.

“Parent” has the meaning set forth in the Preamble.

“Parent Common Stock” means the shares of common stock, par value $0.00001 per share, of the Parent issued and outstanding immediately prior to the Effective Time.

“Parent Contracts” has the meaning set forth in Section 4.16(c).

“Parent Convertible Securities” means any stock or other securities of Parent (other than Parent Options) directly or indirectly convertible into or exercisable or exchangeable for shares of common stock of Parent.

“Parent ERISA Affiliate” means any trade or business, whether or not incorporated, that together with the Parent or any of its Subsidiaries would be deemed a “single employer” within the meaning of Section 4001(b)(i) of ERISA.

“Parent Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities of the Parent.

“Patents” has the meaning set forth in Section 4.19(a).

“Permits” means any licenses, franchises, permits, certificates, consents, approvals or other similar authorizations of, from or by a Governmental Authority possessed by or granted to or necessary for the ownership of the material assets or conduct of the business of the applicable party.

“Permitted Liens” means (i) Liens for Taxes, assessments and governmental charges or levies not yet due and payable as of the Closing Date or that are being contested in good faith and by appropriate proceedings; (ii) mechanics’, carriers’, workmen’s, repairmen’s, materialmen’s or other Liens or security interests arising or incurred in the ordinary course of business or that are being contested in good faith and by appropriate proceedings; (iii)  pledges or deposits to secure obligations under workers’ compensation Laws or similar legislation or to secure public or statutory obligations; (iv) pledges and deposits to secure the performance of bids, trade contracts, leases, subleases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; and (v) easements, covenants and rights of way (unrecorded and of record) and other similar restrictions of record, and zoning, building and other similar restrictions, in each case that do not adversely affect in any material respect the current use of the applicable property owned, leased, used or

7

held for use by a party or any of its Subsidiaries or any violation of which would not have a material adverse effect, (vi) outbound license agreements and non-disclosure agreements entered into in the ordinary course of business and (vii) Liens described on Schedule 1.1 of the respective Buyer and Company Disclosure Letters.

“Person” means any individual, corporation, company, limited liability company, partnership, association, trust, joint venture or any other entity or organization, including any government or political subdivision or any agency or instrumentality thereof.

“Proceeding” has the meaning set forth in Section 5.8.

“Real Property Lease” has the meaning set forth in Section 4.18(b).

“Representatives” means the officers, directors, employees, consultants, investment bankers, attorneys, accountants, or other agents of a Person.

“Requisite Company Stockholder Vote” means the affirmative vote of the holders of a majority of the voting power of the Company Common Stock.

“Requisite Consents” has the meaning set forth in Section 4.16(c).

“Requisite Parent Stockholder Vote” means the affirmative vote of the holders of a majority of the voting power of the Parent Common Stock.

“Sarbanes-Oxley Act” has the meaning set forth in Section 4.6(a).

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Software” has the meaning set forth in Section 4.19(a).

“Subsidiary,” with respect to any Person, means any other Person of which the first Person (i) owns (either alone or through or together with any other Affiliate), directly or indirectly, securities or other ownership interests having voting power to elect a majority of the board of directors or other persons performing similar functions (or, if there are no such voting interests, more than 50% of the equity interests of the second Person) or (ii) except for any Person set forth on Schedule 1.1 of the Company Disclosure Letter or the Buyer Disclosure Letter, controls the management.

“Surviving Corporation” has the meaning set forth in Section 2.1.

“Tax” means (A) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other comparable assessments, in each case in the nature of a tax, including all income, gross receipts, capital, sales, use, ad valorem, registration, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, windfall profits, real property, personal

8

property, alternative minimum, add-on minimum and estimated taxes, customs, duties, fees, assessments and other charges in the nature of Taxes imposed by any Tax authority or Governmental Authority, (B) all interest, penalties, fines, additions to tax or additional amounts imposed by any Tax authority or Governmental Authority in connection with any item described in clauses (A) or (B), and (C) any amounts in respect of any items described in clauses (A) and/or (B) payable by reason of contract, assumption, transferee liability, operation of Law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under federal, state, local or foreign Law) or otherwise.

“Tax Return” means any return, declaration, report, statement, information statement or other document (whether joint or otherwise), together with all associated schedules, filed or required to be filed with a Governmental Authority with respect to Taxes, including any claims for refunds of Taxes, any information returns and any amendments or supplements of any of the foregoing.

“Trademarks” has the meaning set forth in Section 4.19(a).

“Trade Secrets” has the meaning set forth in Section 4.19(a).

“Transaction Expenses” shall mean all fees, costs and expenses of any brokers, financial advisors, consultants, accountants, attorneys or other professionals engaged by the Company in connection with the structuring, negotiation or consummation of the transactions contemplated by this Agreement.

1.2

Terms Generally.  The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” unless the context expressly provides otherwise.  All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to this Agreement, unless the context requires otherwise.  Unless otherwise expressly defined, terms defined in this Agreement have the same meanings when used in any Exhibit or Schedule hereto, including the Buyer Disclosure Letter or the Company Disclosure Letter.  Unless otherwise specified, the words “this Agreement,” “herein,” “hereof,” “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole (including the Schedules, Exhibits, the Buyer Disclosure Letter, and the Company Disclosure Letter) and not to any particular provision of this Agreement.

ARTICLE II
THE MERGER

2.1

The Merger.  On the terms and subject to the conditions set forth in this Agreement, and in accordance with Chapters 78 and 92A of the Nevada Revised Statutes (the “NRS”), at the Effective Time, Merger Sub will merge with and into the Company (the “Merger”), the separate corporate existence of Merger Sub will cease and the Company will continue its corporate existence under the NRS as the surviving corporation in the Merger (the “Surviving Corporation”).

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2.2

Closing.  Unless otherwise mutually agreed in writing by the Company and Buyer, the closing of the Merger (the “Closing”) will take place at the offices of Quarles & Brady LLP, 411 E. Wisconsin Ave., Milwaukee, Wisconsin, at 10:00 a.m. on the date on which all conditions precedent to Closing have been satisfied, or at such other place, date and time as the Company and Buyer may agree in writing.  The date on which the Closing actually occurs is hereinafter referred to as the “Closing Date.”

2.3

Effective Time.  Subject to the provisions of this Agreement, at the Closing, the parties hereto shall cause the Merger to be consummated by executing and filing a articles of merger (the “Articles of Merger”) with the Secretary of State of the State of Nevada in accordance with the NRS.  The Merger will become effective at such date and time as the Articles of Merger has been duly filed with and accepted for recording by the Secretary of State of the State of Nevada or at such later date or time as may be agreed by the Company and Buyer in writing and specified in the Articles of Merger in accordance with the NRS (the effective time of the Merger being hereinafter referred to as the “Effective Time”).

2.4

Effects of the Merger.  The Merger shall have the effects set forth in this Agreement and the applicable provisions of the NRS.  Without limiting the generality of the foregoing, and subject thereto, from and after the Effective Time, all property, rights, privileges, immunities, powers, franchises, licenses and authority of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions and duties of each of the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.

2.5

Organizational Documents.  At the Effective Time, (a) the articles of incorporation of the Surviving Corporation shall be the articles of incorporation of the Company as in effect immediately prior to the Effective Time, and (b) the bylaws of the Surviving Corporation shall be the bylaws of the Company as in effect immediately prior to the Effective Time, until thereafter amended in accordance with applicable Law.

2.6

Directors and Officers of Surviving Corporation.  The directors of the Merger Sub immediately prior to the Effective Time shall have submitted their resignations to be effective as of the Effective Time, which resignations are a condition of the Merger.  Immediately after the Effective Time, Buyer shall take the necessary action to cause the directors of the Company immediately prior to the Effective Time to be the directors of the Surviving Corporation, each to hold office in accordance with the articles of incorporation and bylaws of the Surviving Corporation.  The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to hold office until the earlier of their resignation or removal.

ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS

3.1

Conversion of Securities.  At the Effective Time, pursuant to this Agreement and by virtue of the Merger and without any action on the part of the Parent, Company, Buyer, Merger Sub or their stockholders:

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(a)

Each share of common stock, par value $0.00001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.

(b)

The shares of common stock, par value $0.00001 per share, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time, other than any Cancelled Shares, shall be converted into the right to receive a number of shares of common stock of Buyer (“Buyer Common Stock”) equal to an aggregate of 452,960,490 shares of the Buyer Common Stock (“Common Stock Consideration”) after surrender of all such shares of Company Common Stock in the manner provided in Section 3.2.  Subject to the other provisions of this ARTICLE III, as of the Effective Time, each such share of Company Common Stock shall, by virtue of the Merger, cease to be outstanding and shall be cancelled, and each certificate representing any such shares and each book entry on the Company’s stock register representing any such shares which are non-certificated shares shall thereafter represent only the right to receive the number of whole shares of Buyer Common Stock into which the shares represented by such certificate or book entry have been converted.

(c)

Company Debt.  The Buyer shall assume the Company’s obligations under the Company Debt and related agreements as of the Closing in accordance with its existing terms.

3.2

Exchange of Shares.  At or as soon as practicable following the Effective Time, Buyer shall issue irrevocable instructions to its transfer agent to transfer for the benefit of the Parent, non-certificated shares of Buyer Common Stock represented by book entry issuable pursuant to Section 3.1(b) in exchange for all of the outstanding shares of Company Common Stock.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE COMPANY

Except as set forth in the disclosure letter (the “Company Disclosure Letter”) delivered to Buyer and Merger Sub by the Company concurrently with entering into this Agreement (it being understood that any information set forth in one section or subsection of the Company Disclosure Letter shall be deemed to apply to and qualify the section or subsection of this Agreement to which it corresponds in number and each other section or subsection of this Agreement to which the relevance of such disclosure is readily apparent on its face), the Parent and the Company hereby jointly and severally represent and warrant to Buyer and Merger Sub that:

4.1

Corporate Existence and Power.  

(a)

Each of the Parent and the Company is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.  The Company has all corporate or similar powers and authority required to (a) own, lease and operate its respective properties and to carry on its business as presently conducted and (b)

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consummate the Merger and the other transactions contemplated hereby and to perform its obligations hereunder.  The Company is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such qualification necessary, except for any failures to be so licensed or qualified that would not reasonably be expected to have a Material Adverse Effect on the Company.  The Company is not in violation of its organizational or governing documents in any respect.

(b)

Schedule 4.1(b) of the Company Disclosure Letter sets forth, as of the date hereof, each Subsidiary of the Company and all other entities in which the Company or any of its Subsidiaries owns, directly or indirectly, any shares of capital stock or equity interests. Each Subsidiary of the Company (i) is duly organized and validly existing as a corporation, limited liability company, partnership, or other entity and is in good standing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and is in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so licensed or qualified and (iii) has all requisite corporate or other power and authority to own or lease its properties, rights and assets and to carry on its business as now conducted, except, in the case of clauses (ii) and (iii), where the failure to be so licensed or qualified to do business or to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

4.2

Corporate Authorization.  Each of the Parent and the Company has the corporate power and authority to execute and deliver this Agreement and to consummate the Merger and the other transactions contemplated hereby and to perform each of its obligations hereunder without further approval of its Board of Directors or stockholders.  The execution, delivery and performance by the Parent and the Company of this Agreement and the consummation by the Parent and the Company of the Merger and the other transactions contemplated hereby have been duly and validly authorized by the Boards of Directors of the Parent and the Company.  The Board of Directors of the Parent and the Company, respectively, at a duly held meeting have (i) determined that it is in the best interests of the Company and its stockholders to enter into this Agreement, and (ii) approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, and the stockholders of the Parent and the Company each have approved the adoption of this Agreement at a meeting called for the purpose of approving and adopting this Agreement (or by duly executed stockholders consents) (such meetings or consents collectively, the “Company Stockholder Meeting”).

4.3

Governmental Authorization.  The execution, delivery and performance by the Parent and the Company of this Agreement and the consummation of the Merger by the Parent and the Company do not require any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Authority, other than (i) the filing of the Articles of Merger; (ii) compliance with the applicable requirements of the Exchange Act; (iii) compliance with any applicable foreign or state securities or blue sky Laws; and (iv) any such consent, approval, authorization, permit, action, filing or notification the failure of which to be made or obtained would not (A) individually or in the aggregate, reasonably be expected to

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have a Material Adverse Effect on the Company or (B) reasonably be expected to prevent or materially delay the consummation of the Merger.

4.4

Non-Contravention.  Assuming compliance with the matters referenced in Section 5.3, the execution, delivery and performance by the Parent and the Company of this Agreement and the consummation by the Parent and the Company of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of the Parent or the Company; (ii) contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Parent, Company, or any of their properties or assets; (iii) require the consent, approval or authorization of, or notice to or filing with any third party with respect to, result in any breach or violation of or constitute a default (or any event which with notice or lapse of time or both would become a default) or result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of any right or obligation of the Parent or the Company, or result in the creation of any Lien on any of the properties or assets of the Parent or the Company under, any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation (each, a “Contract”) to which the Parent or the Company is a party or by which the Parent or Company or their properties or assets are bound, except, in the case of clause (iii) above, as would not (A) individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or (B) reasonably be expected to prevent or materially delay the consummation of the Merger.

4.5

Capitalization; Subsidiaries.

(a)

The authorized capital stock of the Company is set forth on Schedule 4.5(a) of the Company Disclosure Letter.  

(b)

Schedule 4.5(b) of the Company Disclosure Letter sets forth, as of March 31, 2014, with respect to each of the Parent and the Company, the total number of shares of (i) common stock issued and outstanding, (ii) common stock reserved for issuance under any equity plan, (iii) preferred stock issued and outstanding, and (iv) shares reserved for issuance upon conversion or exchange of any Parent Convertible Securities, Company Convertible Securities, Parent Options, and Company Options (collectively, “Company Securities”), and all stock appreciation, phantom stock, and similar rights.  All outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid and non-assessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right.  No Subsidiary of Parent owns any Parent Common Stock or any other equity securities of Parent.

(c)

Except as set forth in Section 4.5(b), there have not been reserved for issuance, and there are no outstanding (i) shares of capital stock or other voting securities of the Parent or Company; (ii) securities of the Parent or Company convertible into or exchangeable for shares of capital stock or voting securities of the Parent or Company; (iii) Parent Options, Company Options, or other rights or options to acquire from the Parent or Company, or obligations of the Parent or Company to issue, any shares of capital stock, voting securities or securities convertible into or exchangeable for shares of

13

capital stock or voting securities of the Parent or Company, as the case may be; or (iv) equity equivalent interests in the ownership or earnings of the Parent or Company.  There are no outstanding obligations of the Parent or Company to repurchase, redeem or otherwise acquire any such securities.  There are no preemptive rights of any kind which obligate the Parent or the Company to issue or deliver any such securities.

(d)

As of the date hereof, the Company has not entered into any commitment, arrangement or agreement, or is otherwise obligated, to contribute capital, loan money or otherwise provide funds or make additional investments in any Person.

(e)

Except for its Subsidiaries, the Parent does not own, directly or indirectly, any capital stock or equity securities of any Person.

(f)

Schedule 4.5(f) of the Company Disclosure Letter sets forth, in respect of each officer and employee of the Company, the aggregate amount of severance payments that are payable or may become payable by the Company to such employee or officer in connection with the Merger under an employment agreement set forth in Schedule 4.10(a) of the Company Disclosure Letter.

4.6

Reports and Financial Statements.

(a)

All forms, reports, statements, certifications and other documents (including all exhibits and other information incorporated therein, amendments and supplements thereto) filed by the Parent and any of its Subsidiaries with the SEC since January 1, 2011 (all such forms, reports, statements, certificates and other documents filed since January 1, 2011, including any amendments thereto, collectively, the “Company SEC Reports”) as of their respective dates complied in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as the case may be, and the applicable rules and regulations promulgated thereunder.

(b)

The unaudited consolidated financial statements of the Company (including any related notes thereto) set forth on Schedule 4.6(b) of the Company Disclosure Letter have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries at the respective dates thereof and the consolidated statements of operations and comprehensive income, cash flows and changes in stockholders’ equity for the periods indicated.  The unaudited consolidated financial statements of the Company (including any related notes thereto) for all interim periods included in the Company SEC Reports or set forth on Schedule 4.6(b), as the case may be, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates thereof and the consolidated statements of operations and comprehensive income and cash flows for the periods indicated (subject to

14

normal and recurring period-end adjustments that have not been and are not expected to be material to the Company and its Subsidiaries taken as a whole).

(c)

Neither Parent nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any Contract or arrangement (including any Contract or arrangement relating to any transaction or relationship between or among the Parent and any of its Subsidiaries, on the one hand, and any Affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand), where the result, purpose or intended effect of such Contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, the Parent or any of its Subsidiaries in the Parent’s consolidated financial statements.

4.7

Undisclosed Liabilities.  Except for (i) those liabilities that are reflected or reserved against on the unaudited consolidated balance sheet of the Parent (including the notes thereto) for the year ended December 31, 2013, (ii) liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2013, that do not exceed $25,000 in the aggregate, (iii) liabilities that have been discharged or paid in full prior to the date that is five Business Days prior to the date of this Agreement in the ordinary course of business consistent with past practice, and (iv) liabilities in respect of the Transaction Expenses (whether absolute, accrued or contingent or otherwise and whether due or to become due), the Company does not have any liabilities, commitments or obligations, asserted or unasserted, known or unknown, absolute or contingent, whether or not accrued, matured or un-matured or otherwise, of a nature required by GAAP to be reflected in a consolidated balance sheet or disclosed in the notes thereto.

4.8

Litigation.  As of the date hereof, neither the Parent nor the Company is a party to any, and there are no pending or, to the Parent or Company’s Knowledge, threatened, Proceedings of any nature against the Parent or Company, in each case that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company.  Neither the Parent nor Company, nor its respective business or properties is subject to or bound by any injunction, order, judgment, decree or regulatory restriction of any Governmental Authority specifically imposed upon the Parent or Company or its properties or assets.

4.9

Taxes.  The representations and warranties contained in this Section 4.9 are the only representations and warranties made by the Parent and the Company in this Agreement with respect to Tax matters.  Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company:

(a)

All Tax Returns required to be filed by or with respect to the Company have been timely filed, and all such Tax Returns are true, correct and complete.  The Company is not currently the beneficiary of any extension of time within which to file any Tax Return.

(b)

The Company (i) has timely paid all Taxes due and payable (whether or not shown to be due on the Tax Returns referred to in this Section 4.9), except for Taxes for which adequate reserves have been established in accordance with GAAP, and (ii) has made adequate provision in the applicable financial statements, in accordance with

15

GAAP, for all Taxes not yet due and payable with respect to taxable periods, or portions thereof, for which no Tax Return has yet been filed.

(c)

As of the date hereof, no audit or other proceeding by any Governmental Authority is pending or, to the Knowledge of the Parent or Company, threatened with respect to any Taxes of the Company.

(d)

There are no Tax sharing agreements (or similar agreements) under which the Company is liable for Taxes of any other Person.

(e)

The Company has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying or intended to qualify for Tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement.

(f)

The Company has not participated in a “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulation Section 1.6011-4(b) or a “listed transaction” within the meaning of Treasury Regulation Section 301.6111-2(b)(2) or any analogous provision of state or local law.

(g)

There are no liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Company.  The Company has complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party and has duly and timely withheld and paid over to the appropriate Governmental Authority all amounts required to be so withheld and paid under all applicable Laws, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

(h)

The Company has delivered or made available to Buyer complete copies of (i) all federal, state, local and foreign income or franchise Tax Returns of the Company relating to the Taxable periods since January 1, 2009 and (ii) any audit report issued within the last three years relating to any Taxes due from or with respect to the Company.

(i)

The Company has never been a member of any consolidated, combined, affiliated or unitary group of corporations for any Tax purposes other than a group of which the Parent is the common parent.

(j)

No Person has granted any extension or waiver of the statute of limitations period applicable to any Tax of the Company, which period (after giving effect to such extension or waiver) has not yet expired.

(k)

The Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

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(l)

The Company has not changed any of its methods of reporting income or deductions for Tax purposes from those employed in the preparation of its Tax Returns for the Tax year ended December 31, 2012.

(m)

To the Knowledge of the Parent and Company, after consulting with its Tax advisors, neither the Parent nor the Company or any of its Affiliates has taken or agreed to take any action which would prevent the Merger from constituting a transaction qualifying as a reorganization under Section 368(a) of the Code.

4.10

Employee Benefit Plans.

(a)

Schedule 4.10(a) of the Company Disclosure Letter sets forth a correct and complete list of all employee benefit plans, programs, policies, agreements or arrangements including, without limitation, any employee benefit plans as defined in Section 3(3) of ERISA, any deferred compensation arrangement, incentive arrangement, bonus arrangement, equity or equity-based arrangement, change in control agreement, retention, severance, health and welfare program, fringe benefit program, employment contract, retention incentive agreement, termination agreement, severance agreement, noncompetition agreement, consulting agreement, confidentiality agreement or other similar plan, agreement or arrangement, whether written or oral, funded or unfunded, or actual or contingent that (A) is maintained by the Parent or any of its Parent ERISA Affiliates for the benefit of any current or former employees, consultants or directors of the Parent or any of its Subsidiaries, or their beneficiaries (collectively, “Company Employees”), or (B) was previously maintained by the Parent or any of its Parent ERISA Affiliates for the benefit of the Company Employees and with respect to which the Parent or any of its Subsidiaries has any liability (each a “Company Benefit Plan”).  The Company has made available to Buyer a correct and complete copy (where applicable) of (1) each Company Benefit Plan (or, where a Company Benefit Plan has not been reduced to writing, a summary of all material terms of such Company Benefit Plan), (2) each trust or funding arrangement prepared in connection with each Company Benefit Plan, (3) the three most recently filed annual reports on Internal Revenue Service (“IRS”) Form 5500 or any other annual report required by applicable Law with respect to each Company Benefit Plan, (4) the most recently received IRS determination letter for each Company Benefit Plan and (5) the most recent summary plan description.  Neither the Parent nor any of its Subsidiaries has any plan or commitment to establish any new Company Benefit Plan or to modify any Company Benefit Plan, except to the extent required by Law.

(b)

None of the Parent or any of Parent ERISA Affiliates has now or at any time within the past six years  contributed to, sponsored, or maintained (i) a pension plan (within the meaning of Section 3(2) of ERISA) subject to Section 412 of the Code or Title IV of ERISA or(ii) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA or the comparable provisions of any other applicable Law) (a “Multiemployer Plan”).

(c)

(i) Each Company Benefit Plan has been maintained and operated in all material respects in compliance with its terms and applicable Law, including ERISA and  

17

the Code (including, without limitation, Section 409A of the Code), (ii) with respect to each Company Benefit Plan, all reports, returns, notices and other documentation that are required to have been filed with or furnished to the IRS, the DOL or any other Governmental Authority, or to the participants or beneficiaries of such Company Benefit Plan have been filed or furnished on a timely basis, and (iii) each Company Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code is so qualified and has received a favorable determination letter from the IRS to the effect that the Company Benefit Plan satisfies the requirements of Section 401(a) of the Code, and there are no facts or circumstances that could reasonably be expected to cause the loss of such qualification or the imposition of any material liability, penalty or Tax under ERISA, the Code or any other applicable Laws.

(d)

With respect to any Company Benefit Plan, (i) no actions, claims or proceedings (other than routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Parent or Company, threatened, and (ii) no administrative investigation, audit or other administrative proceeding by the DOL, the IRS or other Governmental Authority is pending, in progress or, to the Knowledge of the Parent or Company, threatened.

(e)

Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment or benefit becoming due, or increase the amount of any compensation due, to any Company Employee, (ii) increase any benefits otherwise payable under any Company Benefit Plan, or (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; and no such payment or benefit will be characterized as an “excess parachute payment,” as such term is defined in Section 280G of the Code.

(f)

The Company may amend or terminate any Company Benefit Plan (other than an employment agreement or any similar agreement that cannot be terminated without the consent of the other party) at any time without incurring liability thereunder, other than in respect of accrued and vested obligations and medical or welfare claims incurred prior to such amendment or termination.

(g)

All contributions (including all employer contributions and employee salary reduction contributions) or premium payments required to have been made under the terms of any Plan as of the date hereof have been timely made or reflected on the Parent’s consolidated financial statements in accordance with GAAP.

(h)

Except for the continuation coverage requirements under COBRA or other applicable Law, neither the Parent nor its Subsidiaries have any obligations or potential liability for health, life or similar welfare benefits to Company Employees or their respective dependents following termination of employment.

(i)

No Company Benefit Plan is maintained in a jurisdiction outside of the United States or for employees outside of the United States.

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4.11

Compliance With Laws.

(a)

Each of the Parent and the Company is, and at all times since April 1, 2010, has been, in material compliance with all material Laws applicable to the Parent and the Company, respectively and its business and activities.

(b)

As of the date hereof, neither the Parent nor the Company has received written notice from a Governmental Authority that it is a target of, or the subject of, any action, proceeding, suit, investigation or sanction by or on behalf of any Governmental Authority brought pursuant to any Law, nor, to the Knowledge of the Parent or Company, has any such action, proceeding, suit, investigation or sanction been threatened.

(c)

The Company has and maintains in full force and effect, and is in compliance with, all Permits and all orders from Governmental Authorities necessary for the Company to carry on its business as currently conducted, except where the failure to so maintain or be in compliance would not reasonably be expected to result in a Material Adverse Effect on the Company.

4.12

Finders’ Fees.  No agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement based upon Contracts made by or on behalf of the Parent or the Company.

4.13

Anti-Takeover Provisions.  The Board of Directors of the Company has taken and will take all actions necessary to ensure that the restrictions applicable to business combinations contained in the NRS are, and will be, inapplicable to the execution, delivery and performance of this Agreement and to the consummation of the Merger and the other transactions contemplated by this Agreement, and that no other state takeover statute is or will become applicable to the Merger or any of the other transactions contemplated by this Agreement.

4.14

Voting.  The Requisite Parent Stockholder Vote and Requisite Company Stockholder Vote, each of which was successfully obtained prior to the date hereof, is the only vote of the holders of any class or series of the capital stock of the Parent or Company or other Company Security necessary to approve and adopt this Agreement and approve the Merger and the other transactions contemplated thereby.

4.15

Contracts.

(a)

Except as would not result in a Material Adverse Effect on the Company, (i) each Company Contract is valid and binding on the Company or its applicable Subsidiary and in full force and effect, and, to the knowledge of the Company, is valid and binding on the other parties thereto, (ii) the Company and each of its Subsidiaries and, to the knowledge of the Company, each of the other parties thereto, has performed all obligations required to be performed by it to date under each Company Contract and (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, would constitute a breach or default (including the non-payment of fees) on the part of the Company or any of its Subsidiaries or, to the knowledge of the Company, any other party thereto, under any such Company Contract. No party to any Company Contract has

19

given the Company or any of its Subsidiaries written notice of its intention to cancel, terminate, materially change the scope of rights under or fail to renew any Company Contract and neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any other party to any Company Contract, has repudiated in writing any material provision thereof.

(b)

Schedule 4.15(b) of the Company Disclosure Letter sets forth a list as of the date of this Agreement of (i) all agreements or contracts regarding the acquisition of a Person or business, whether in the form of an asset purchase, merger, consolidation or otherwise (including any such agreement or contract that has closed but under which one or more of the parties has executory indemnification, earn-out or other liabilities) to which the Parent or Company is a party, (ii) all credit agreements, indentures, and other agreements related to any indebtedness for borrowed money of the Parent or Company, (iii) all joint venture or other similar agreements to which the Parent or Company is a party, (iv) all material lease agreements to which the Parent or Company is a party, (v) contracts under which the Parent or Company has advanced or loaned any other person any material amounts, (vi) guarantees of any obligations, (vii) contracts or groups of related contracts with the same party or group of parties the performance of which involves annual consideration in excess of $75,000 which are not cancelable by the Parent or Company, as the case may be, on thirty (30) days’ or less notice without premium or penalty, (viii) each supply agreement and each “single source” supply contract pursuant to which goods or materials that are material to the Parent or Company’s business are supplied to the Parent or Company, respectively, from an exclusive source, (ix) each exclusive sales representative or exclusive distribution contract to which the Parent or Company is a party, (x) agreements under which the Parent or Company has granted any person registration rights (including demand and piggy-back registration rights), (xi) all contracts or agreements purporting to restrict or prohibit the Parent or Company from engaging or competing in any business or engaging or competing in any business in any geographic area, (xii) all employment, consulting, retention, severance, change in control, non-competition, termination or indemnification agreements between the Parent or Company and any director or officer of the Parent or Company, respectively, or any other employee earning noncontingent cash compensation in excess of $75,000 per year, (xiii) all labor agreements, collective bargaining agreements or other labor related contracts (including work rules and practices) to which the Parent or Company is a party with respect to any labor union, labor organization, trade union, works council or similar organization or association of employees, (xiv) all licenses, consents to use, non-assertion agreements and coexistence agreements concerning Intellectual Property to which the Company is a party and material software used by the Company other than non-customized software subject to customary “shrink-wrap” or “click-through” type contracts (the “Material Licenses”), (xv) each contract to which the Company is a party with any Governmental Authority, (xvi) any contract which provides for termination, acceleration of payment or other special rights upon the occurrence of a change in control of the Parent or Company and (xvii) all other contracts which are material to the Parent or Company taken as a whole (collectively, the “Company Contracts”).  The indebtedness for borrowed money of the Company (the “Company Debt”) is set forth on Schedule 4.15(b) of the Company Disclosure Letter, and

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the Company Debt in the aggregate does not exceed $11,000,000 in original principal amount.

(c)

Each of the contracts set forth on Schedule 4.15(c) of the Company Disclosure Letter has been assigned by the Parent to the Company and Parent has received all required consents from other parties under all Company Contracts, including, but not limited to those set forth on Schedule 4.15(c) of the Company Disclosure Letter, to assign such contracts.

4.16

Labor and Employee Matters.  With respect to each of the Parent and the Company: (i) there has not been within the six (6) years preceding the Effective Time, and there are not now pending, or to the Parent or Company’s Knowledge threatened, labor or employment controversies, including any Proceeding alleging unlawful harassment, employment discrimination or unfair labor practices; (ii) to the Parent or Company’s Knowledge, no union organizing efforts are underway or threatened as of the date hereof with respect to any Company Employee; (iii) there is, as of the date hereof, no strike, slowdown, work stoppage or lockout underway or, to the Parent or Company’s Knowledge, threatened in writing; and (iv) Company is not a party to a collective bargaining agreement with any labor organization nor is Company currently in labor negotiations with any labor organization.  No “mass layoff,” plant closing or similar event as defined by the Worker Adjustment and Retraining Notification Act (WARN) has occurred with respect to the Parent or Company during the six (6) years preceding the Effective Time.  The Company does not have any liability for any payment to any trust or other fund governed by or maintained on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations of any employee, contractor or other service provider (other than routine payments to be made in the normal course of business consistent with past practice).  Each Person classified as an independent contractor by the Company has satisfied the requirements of applicable Law to be so classified, and the Company has fully and accurately reported such independent contractor’s compensation on IRS Forms 1099 when required to do so.  The Company has not entered into any written agreement, arrangement or understanding restricting its ability to terminate the employment of any Company Employee, for any lawful or no reason, without penalty or liability.  The Company has not, directly or through agents and independent contractors, employed any unauthorized aliens, as defined in 8 U.S.C. Section 1324a(h)(3) and has complied, or caused any such agent or independent contractor, to comply with the employment verification and record-keeping requirements of 8 U.S.C. Section 1324a and 8 C.F.R. Section 274a, as amended.  To the Parent and Company’s Knowledge, the Company is in compliance with the Immigration and Nationality Act and the Immigration Reform and Control Act.

4.17

Environmental.  (i) The Company is in compliance in all material respects with all applicable Environmental Laws, and possesses and complies in all material respects with all applicable Environmental Permits required under such Laws to operate as it presently operates; (ii) there are no Materials of Environmental Concern at any property owned or operated by the Company, under circumstances that are reasonably likely to result in a material liability of the Company under any applicable Environmental Law; (iii) neither the Parent nor any of its Subsidiaries has received any written notification alleging that it is liable for, or request for information pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act or similar state statute, concerning, any release or threatened

21

release of Materials of Environmental Concern at any location except, with respect to any such notification or request for information concerning any such release or threatened release, to the extent such matter has been resolved with the appropriate foreign, federal, state or local regulatory authority or otherwise; and (iv) neither the Parent nor any of its Subsidiaries has received any written claim or complaint, or is subject to any proceeding, relating to material noncompliance with Environmental Laws or any other material liabilities pursuant to Environmental Laws, and no such matter has been threatened in writing to the Knowledge of the Parent or the Company.

4.18

Property.  

(a)

The Company and its Subsidiaries have good, valid and marketable title to all real property owned by them free and clear of all Liens, except Liens for current Taxes not yet due and payable and other standard exceptions commonly found in title policies in the jurisdiction where such real property is located, and such encumbrances and imperfections of title, if any, as do not materially detract from the value of the properties and do not materially interfere with the present or proposed use of such properties or otherwise materially impair such operations. All real property and fixtures used in or relevant to the business, operations or financial condition of the Company and its Subsidiaries are in good condition and repair except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

(b)

Schedule 4.18(b) of the Company Disclosure Letter contains a true and complete list of all real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant or pursuant to other occupancy arrangements) by the Company as of the date of this Agreement (collectively, including the improvements thereon, the “Leased Real Property”) and a true and complete description of all oral Real Property Leases to which the Company is currently a party.  True and complete copies of all agreements under which the Company is the landlord, sublandlord, tenant, subtenant or occupant (each a “Real Property Lease”) that have not been terminated or expired as of the date hereof have been made available to Buyer.

(c)

The Company has a valid leasehold estate in all Leased Real Property free and clear of all Liens, except Permitted Liens.

(d)

Other than the Real Property Leases, none of the Leased Real Properties is subject to any lease, sub-lease, license or other agreement granting to any other Person any right to the use, occupancy or enjoyment of such Leased Real Property or any part thereof.

(e)

Each Real Property Lease is in full force and effect and is valid and enforceable in accordance with its terms, and there is no material default under any Real Property Lease by the Company, and no event has occurred that, with the lapse of time or the giving of notice or both, would constitute a default by the Company thereunder.

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4.19

Intellectual Property; Software.

(a)

As used herein: (i) “Intellectual Property” means all United States and foreign (A) trade names, corporate names, logos, slogans, trade dress, trademarks, service marks, and trademark and service mark registrations and applications therefor and all goodwill associated therewith (“Trademarks”); (B) patents and applications therefor and all reissues, divisions, re-examinations, renewals, extensions, provisionals, substitutions, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries including, without limitation, invention disclosures (“Patents”); (C) copyrights, copyright registrations and applications therefor (“Copyrights”); and (D) trade secrets and other rights in know-how and other proprietary information which derives independent economic value from not being generally known to the public (collectively, “Trade Secrets”); (ii) “Company IP Licenses” means all Contracts (excluding “click-wrap” or “shrink-wrap” agreements or agreements contained in “off-the-shelf” computer programs (whether in source code, object code, or other form), databases, compilations and data, and all documentation, including user manuals and training materials relating to the foregoing (“Software”) or the terms of use or service for any website) pursuant to which the Company has acquired rights in (including usage rights) any Intellectual Property, or licenses and agreements pursuant to which the Company has out-licensed or transferred the right to use any Intellectual Property, including license agreements, settlement agreements and covenants not to sue; and (iii) “Company Intellectual Property” means the Intellectual Property, Company IP Licenses and Software held for use or used in the business of the Company as presently conducted; provided that, with respect to Patents, the Company Intellectual Property includes only those Patents set forth in Schedule 4.19(b) of the Company Disclosure Letter.

(b)

Schedule 4.19(b) of the Company Disclosure Letter sets forth a complete and accurate list of the following items, to the extent included in the Company Intellectual Property owned or exclusively in-licensed by the Company: (i) each Patent, (ii) each Trademark application and registration and (iii) each Copyright registration and application.

(c)

Neither the Parent nor any of its Subsidiaries has misrepresented, or failed to disclose, any facts or circumstances in any application for any Patent or Trademark registration included in the Company Intellectual Property that would constitute fraud with respect to such application.

(d)

To the Knowledge of the Parent and the Company, the Company owns or possesses all licenses or other legal rights to use, sell or license all material Company Intellectual Property in the manner used, sold or licensed in the business of the Company as presently conducted, free and clear of all Liens, other than Permitted Liens.  To the Knowledge of Parent and Company, the Company is the sole owner of each item of material Company Intellectual Property that the Company purports to solely own.

(e)

No Company Intellectual Property is subject to any proceeding or outstanding judgment that restricts and/or conditions in any manner the use, transfer or

23

licensing thereof by the Company or which would reasonably be expected to affect in any material respect the validity, use or enforceability of such Company Intellectual Property.

(f)

To the Knowledge of the Parent and the Company, no Person is infringing, misappropriating, or diluting any Company Intellectual Property.

(g)

All material Trademark registrations and applications for registration, material Patents issued or pending and material Copyright registrations and applications for registration owned by the Company are subsisting, have not lapsed, expired or been abandoned, and, to the Knowledge of the Parent and the Company, are not, as of the date hereof, the subject of any opposition, interference or similar proceeding filed with the United States Patent and Trademark Office or any other intellectual property registry.

(h)

To the Knowledge of the Parent and the Company, the Company Intellectual Property constitutes all the Intellectual Property and Software necessary for the continuing conduct and operation of the Company’s business as conducted and operated by the Company as of the date hereof in all material respects.  Parent has assigned and transferred to the Company all licenses or other legal rights to use, sell or license all material Parent Intellectual Property necessary for the continuing conduct and operation of the Company’s business as conducted and operated by the Company as of the date hereof in all material respects, free and clear of all Liens, other than Permitted Liens.  The Company has not received any written notice within the two (2) year period preceding the date hereof that any of the products or services provided or sold by the Company, or proposed to be provided or sold by the Company, or any method, process or know-how used by the Company, infringes or is alleged to infringe any Intellectual Property of any other Person.

(i)

The Company has secured valid written assignments from all employees and consultants who contributed to the creation or development of Company Intellectual Property of the rights to such contributions that the Company does not already own by operation of Law.

4.20

Insurance.  The Company Disclosure Letter sets forth a list and brief description (including nature of coverage, limits, deductibles, premiums and the loss experience for the past three years with respect to each type of coverage) of all policies of insurance maintained, owned or held by the Company during the past three years.  The Company has complied in all material respects with each such insurance policy to which it is a party.  Each such policy is in full force and effect and will not in any way be affected by or terminate or lapse by reason of the transactions contemplated by this Agreement.

4.21

Certain Business Practices.  None of the Parent, the Company or, to the Knowledge of the Parent or Company, any director, officer, employee or agent of the Parent or Company has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful payments relating to political activity; (ii) made any unlawful payment to any foreign or domestic government official or employee or to any foreign or domestic political party or campaign or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder or the U.K. Bribery Act of 2010, as amended, and any rules

24

or regulations thereunder or any other applicable United States or non-U.S. anti-corruption or anti-bribery laws or regulations; or (iii) made any other unlawful payment.

4.22

Suppliers And Manufacturers; Effect Of Transaction.

(a)

Schedule 4.22 of the Company Disclosure Letter sets forth a true, complete and correct list of each supplier and manufacturer that is the sole supplier or manufacturer of any material product or service to the Parent or Company.  Since April 1, 2012, there has not been: (A) any materially adverse change in the business relationship of the Parent or Company with any supplier or manufacturer named in the Company Disclosure Letter; or (B) any change in any material term (including credit terms) of the sales agreements or related agreements with any supplier or manufacturer named in the Company Disclosure Letter.

(b)

Since April 1, 2012, neither the Parent nor Company has received any written notice of any plan or intention of the Company’s material suppliers, collaborators, distributors, licensors or licensees to cancel or otherwise terminate its relationship with the Company.  Without limiting the generality of the foregoing, since April 1, 2012, neither the Parent nor the Company has received any written notice alleging that it is not in compliance in any material respects with development obligations under any material license agreements.

(c)

To the Knowledge of the Parent and the Company, since April 1, 2012, no creditor, supplier, employee, client, customer or other person having a material business relationship with the Company has informed the Parent or Company in writing that such person intends to materially change its relationship with the Company because of the transactions contemplated by this Agreement or otherwise.

4.23

Ownership of Buyer Common Stock.  Neither the Parent nor Company, immediately prior to entering into this Agreement, beneficially owns (within the meaning of Section 13 of the Exchange Act and the rules and regulations promulgated thereunder) any shares of Buyer Common Stock, and neither the Parent nor the Company is a party, or will prior to the Closing Date become a party, to any Contract, arrangement or understanding (other than this Agreement) for the purpose of acquiring, holding, voting or disposing of any shares of Buyer Common Stock, and neither the Parent nor the Company has within the last three years owned 20% or more of the outstanding shares of Buyer Common Stock.

4.24

Government Contracts.  The Company has not been suspended or debarred from bidding on contracts with any Governmental Authority, and no such suspension or debarment has been initiated or, to the Knowledge of the Parent or Company, threatened.  The consummation of the Merger and other transactions contemplated by this Agreement will not result in any such suspension or debarment of the Company.

4.25

Books and Records.

(a)

The books of account and other records of the Company and its Subsidiaries, all of which have been made available to Buyer, are complete and correct, represent actual, bona fide transactions, and have been maintained in accordance with

25

sound business practices and the requirements of Section 13(b)(2) of the Exchange Act (whether or not the Company or any of its Subsidiaries is subject to that Section).  The Company and its Subsidiaries have implemented and maintain a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(b)

The minute books of the Company and its Subsidiaries contain complete and correct Records of all meetings held of, and actions taken by written consent of, the holders of voting securities, the board of directors or Persons exercising similar authority, and committees of the board of directors or such Persons of the Company or such Subsidiary, and no meeting of any such holders, board of directors, Persons, or committee has been held, and no other action has been taken, for which minutes or other evidence of action have not been prepared and are not contained in such minute books.  Each of the Company and its Subsidiaries has at all times maintained complete and correct Records of all issuances and transfers of its equity securities.  At the Closing, all such minute books and Records will be in the possession of the Company and located at 14044 Icot Boulevard, Clearwater, Florida 33760.

4.26

Sufficiency of Assets.  The assets, tangible and intangible, owned and leased by the Company as of the Effective Date constitute all the assets used in connection with the business of the Parent and its Subsidiaries, on a consolidated basis.  Such assets constitute all the assets necessary for the Company to continue to conduct the business following the Closing as it is being conducted.

4.27

Receivables.  All accounts, notes receivable and other receivables arising out of or relating to the business of the Company and its Subsidiaries, whether or not reflected on the condensed consolidated balance sheet of the Parent and its Subsidiaries as of December 31, 2013, arose in the ordinary course of business are carried at values determined in accordance with GAAP consistently applied, and will be good and collectible in full, except to the extent of any reserve for uncollectible accounts receivable set forth on the condensed consolidated balance sheet of the Parent and its Subsidiaries.  All such receivables are owned by the Company free and clear of all encumbrances and no request or agreement for deduction or discount has been made with respect to any accounts receivable of the Company.  Neither the Parent nor the Company has Knowledge that any of its respective customers has any basis for any deduction, discount or refund in respect of accounts receivable or has otherwise indicated its unwillingness to pay any account receivable.

4.28

Inventories.  All inventories of the Company and its Subsidiaries, whether or not reflected on the condensed consolidated balance sheet of the Parent and its Subsidiaries as of

26

December 31, 2013, consist of a quality and quantity usable and, with respect to finished goods, saleable, in the ordinary course of business of the Company and its Subsidiaries.  Neither the Company nor any of its Subsidiaries is in possession of any goods not owned by the Company or such Subsidiary.  The inventories (other than goods in transit) of each of the Company and its Subsidiaries are located on the premises of the Company.  All inventories are valued at the lower of cost or market value on an average cost basis consistent with past practice used in the preparation of the Parent’s consolidated financial statements.  The reserve for obsolescence with respect to inventories as adjusted for the passage of time, is adequate and calculated consistent with past practice.  Inventories that were purchased after December 31, 2013 were purchased in the ordinary course of business at a cost not exceeding market prices prevailing at the time of purchase for items of similar quality and quantity.  The quantities of each item of inventory are not excessive, but are reasonable for the continued operation of the Company in the ordinary course of business.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
AND MERGER SUB

Except (i) as set forth in the disclosure letter (the “Buyer Disclosure Letter”) delivered to the Company by Buyer concurrently with entering into this Agreement (it being understood that any information set forth in one section or subsection of the Buyer Disclosure Letter shall be deemed to apply to and qualify the section or subsection of this Agreement to which it corresponds in number and each other section or subsection of this Agreement to which the relevance of such disclosure is readily apparent on its face) or (ii) as disclosed in the Buyer SEC Reports (as defined herein) filed prior to the date of this Agreement (other than any forward-looking disclosures set forth in any risk factor section, any disclosures in any section relating to forward-looking statements and any other similar disclosures included therein to the extent they are primarily predictive or forward-looking in nature), Buyer hereby represents and warrants to the Parent and the Company that:

5.1

Corporate Existence and Power.  

(a)

Each of Buyer and Merger Sub is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all corporate power and authority required to (a) own, lease and operate its respective properties and to carry on its business as presently conducted and (b) consummate the Merger and the other transactions contemplated hereby and to perform its obligations hereunder.  The Buyer is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such qualification necessary, except for any failures to be so licensed or qualified that would not reasonably be expected to have a Material Adverse Effect on the Buyer.  The Buyer is not in violation of its organizational or governing documents in any respect.

(b)

Schedule 5.1(b) of the Buyer Disclosure Letter sets forth, as of the date hereof, each Subsidiary of the Buyer and all other entities in which the Buyer or any of its Subsidiaries owns, directly or indirectly, any shares of capital stock or equity interests.

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Each Subsidiary of the Buyer (i) is duly organized and validly existing as a corporation, limited liability company, partnership, or other entity and is in good standing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and is in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so licensed or qualified and (iii) has all requisite corporate or other power and authority to own or lease its properties, rights and assets and to carry on its business as now conducted, except, in the case of clauses (ii) and (iii), where the failure to be so licensed or qualified to do business or to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect.

5.2

Corporate Authorization.  Each of Buyer and Merger Sub has the corporate power and authority to execute and deliver this Agreement and to consummate the Merger and the other transactions contemplated hereby and to perform each of its obligations hereunder.  The execution, delivery and performance by each of Buyer and Merger Sub of this Agreement and the consummation by Buyer and Merger Sub of the Merger and the other transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Buyer and the Board of Directors of Merger Sub.  This Agreement has been duly and validly executed and delivered by Buyer and, assuming the due and valid execution and delivery of the Agreement by the Company, constitutes a legal, valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms.  The Board of Directors of Buyer, at a duly held meeting has (i) determined that it is in the best interests of the Buyer and its stockholders to enter into this Agreement, and (ii) approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger.  No vote of the holders of any class or series of the capital stock of the Buyer or other Buyer Security is necessary to approve and adopt this Agreement and approve the Merger and the other transactions contemplated thereby.

5.3

Governmental Authorization.  The execution, delivery and performance by Buyer and Merger Sub of this Agreement and the consummation by Buyer and Merger Sub of the Merger do not require any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Authority, other than (i) the filing of the Articles of Merger; (ii) compliance with the applicable requirements of the Exchange Act; (iii) compliance with any applicable foreign or state securities or blue sky Laws; and (iv) any such consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not (A) individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect or (B) reasonably be expected to prevent or materially delay the consummation of the Merger.

5.4

Non-Contravention.  Assuming compliance with the matters referenced in Section 4.3, the execution, delivery and performance by Buyer and Merger Sub of this Agreement and the consummation by Buyer and Merger Sub of the Merger and the transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of Buyer and Merger Sub, (ii) contravene, conflict with or constitute a violation of any provision of any Law binding upon or applicable to Buyer or Merger Sub or any of their respective properties or assets or (iii) require the consent, approval, or authorization of,

28

or notice to or filing with any third party with respect to, result in any breach or violation of or constitute a default (or any event which with notice or lapse of time or both would become a default) or result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment, or acceleration of any right or obligation of Buyer or Merger Sub, or result in the creation of any Lien on any of the properties or assets of Buyer or Merger Sub under, any Contract to which Buyer or Merger Sub is a party or by which it or any of its properties or assets are bound except in the case of clause (ii) or (iii) as would not (A) individually or (B) in the aggregate, have or reasonably be expected to have a Buyer Material Adverse Effect or reasonably be expected to prevent or materially delay the consummation of the Merger.

5.5

Capitalization.

(a)

The authorized capital stock of Buyer is set forth on Schedule 5.5(a) of the Buyer Disclosure Letter.  

(b)

Schedule 5.5(b) of the Buyer Disclosure Letter  sets forth, as of March 31, 2014, the issued and outstanding shares of (i) Buyer Common Stock, (ii) shares of preferred stock issued by Buyer, (iii) shares reserved for issuance under any equity plan of Buyer, and (iv) shares reserved for issuance under any Buyer Convertible Securities and Buyer Options (collectively, “Buyer Securities”), and all stock appreciation, phantom stock, and similar rights.  All outstanding shares of Buyer Common Stock are duly authorized, validly issued, fully paid and non-assessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right.  No Subsidiary of Buyer owns any Buyer Common Stock or any other equity securities of Buyer.

(c)

Except as set forth in Section 5.5(b), there have not been reserved for issuance, and there are no outstanding (i) shares of capital stock or other voting securities of Buyer; (ii) securities of Buyer or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of Buyer, other than Buyer Options; (iii) Buyer Options or other rights or options to acquire from Buyer or obligations of Buyer to issue any shares of capital stock, voting securities or securities convertible into or exchangeable for shares of capital stock or voting securities of Buyer; or (iv) equity equivalent interests in the ownership or earnings of Buyer.  There are no outstanding obligations of Buyer to repurchase, redeem or otherwise acquire any Buyer Securities.  There are no preemptive rights of any kind which obligate Buyer to issue or deliver any Buyer Securities.

(d)

As of the date hereof, the Buyer has not entered into any commitment, arrangement or agreement, or is otherwise obligated, to contribute capital, loan money or otherwise provide funds or make additional investments in any Person.

(e)

Except for its Subsidiaries, the Buyer does not own, directly or indirectly, any capital stock or equity securities of any Person.

(f)

Other than the issuance of shares of Buyer Common Stock upon exercise of Buyer Options and as contemplated by this Agreement, from March 31, 2014, to the

29

date of this Agreement, Buyer has not declared or paid any dividend or distribution in respect of any Buyer Securities, and neither Buyer nor any of its Subsidiaries has issued, sold, repurchased, redeemed or otherwise acquired any Buyer Securities, and their respective boards of directors have not authorized any of the foregoing.

(g)

All of the shares of Buyer Common Stock to be issued pursuant to the Merger have been duly authorized by all necessary corporate action and will be, when issued in accordance with this Agreement, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of any Law or regulation, Buyer’s articles of incorporation or bylaws or any agreement to which Buyer is a party or otherwise bound.

(h)

Schedule 5.5(h) of the Buyer Disclosure Letter sets forth, in respect of each officer and employee of the Buyer and its Subsidiaries, the aggregate amount of severance payments that are payable or may become payable by the Buyer or any such Subsidiary to such employee or officer in connection with the Merger under an employment agreement set forth in Schedule 5.10(a) of the Buyer Disclosure Letter.

5.6

SEC Reports.

(a)

Buyer (including, for the purposes of this Section 5.6(a), all predecessor entities) and its Subsidiaries have filed all forms, reports, statements, certifications and other documents (including all exhibits and other information incorporated therein, amendments and supplements thereto) required to be filed by them with the SEC since April 1, 2011 (all such forms, reports, statements, certificates and other documents filed since April 1, 2011, including any amendments thereto, collectively, the “Buyer SEC Reports”) and all Buyer SEC Reports have been filed on a timely basis.  As of their respective dates the Buyer SEC Reports complied, and each of the Buyer SEC Reports filed subsequent to the date of this Agreement will comply, in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, and the applicable rules and regulations promulgated thereunder.  As of the time of filing with the SEC, none of the Buyer SEC Reports so filed or that will be filed subsequent to the date of this Agreement contained or will contain, as the case may be, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b)

The audited consolidated financial statements of Buyer (including any related notes thereto) included in the Buyer SEC Reports have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of Buyer and its Subsidiaries at the respective dates thereof and the consolidated statements of operations and comprehensive income, cash flows and changes in stockholders’ equity for the periods indicated.  The unaudited consolidated financial statements of Buyer (including any related notes thereto) for all interim periods included in the Buyer SEC Reports have been prepared in accordance

30

with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of Buyer and its Subsidiaries as of the respective dates thereof and the consolidated statements of operations and comprehensive income and cash flows for the periods indicated (subject to normal and recurring period-end adjustments that have not been and are not expected to be material to Buyer and its Subsidiaries taken as a whole).

(c)

Neither Buyer nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any Contract or arrangement (including any Contract or arrangement relating to any transaction or relationship between or among Buyer and any of its Subsidiaries, on the one hand, and any Affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand), where the result, purpose or intended effect of such Contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, Buyer or any of its Subsidiaries in Buyer’s published consolidated financial statements.

(d)

Buyer has made available to the Company a complete and correct copy of any amendments or modifications which have not yet been filed (but which Buyer intends to file) with the SEC to agreements, documents or other instruments which previously had been filed by Buyer with the SEC pursuant to the Securities Act or the Exchange Act, and the regulations promulgated thereunder.

(e)

The principal executive officer and principal financial officer of Buyer have made all certifications required by the Sarbanes-Oxley Act and the regulations of the SEC promulgated thereunder, and the statements contained in all such certifications were as of the respective dates made, and are, complete and correct.

(f)

Buyer has (A) designed disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) to ensure that material information relating to Buyer, including its consolidated Subsidiaries, is made known to its principal executive officer and principal financial officer; (B) designed internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP; (C) evaluated the effectiveness of Buyer’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable Buyer SEC Report that is a report on Form 10-K or Form 10-Q or any amendment thereto its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation; and (D) to the extent required by applicable Law, disclosed in such report or amendment any change in Buyer’s internal control over financial reporting that occurred during the period covered by such report or amendment that has materially affected, or is reasonably likely to materially affect, Buyer’s internal control over financial reporting.

(g)

Buyer has disclosed, based on the most recent evaluation of internal control over financial reporting, to Buyer’s auditors and the audit committee of Buyer’s

31

Board of Directors (A) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Buyer’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Buyer’s internal control over financial reporting.  Since April 1, 2010, (i) neither Buyer nor any of its Subsidiaries, nor, to the Knowledge of Buyer, any director, officer, employee, auditor, accountant or representative of Buyer or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Buyer or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Buyer or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing Buyer or any of its Subsidiaries, whether or not employed by Buyer or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by Buyer or any of its Subsidiaries or their respective officers, directors, employees or agents to the Board of Directors of Buyer or any committee thereof or to any director or officer of Buyer.

5.7

Undisclosed Liabilities.  Except (i) for those liabilities that are reflected or reserved against on the consolidated balance sheet of Buyer (including the notes thereto) included in Buyer’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2013, (ii) for liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2013, that do not exceed $25,000 in the aggregate and (iii) for liabilities that have been discharged or paid in full prior to the date that is five (5) Business Days prior to the date of this Agreement in the ordinary course of business consistent with past practice, Buyer does not have any liabilities, commitments or obligations, asserted or unasserted, known or unknown, absolute or contingent, whether or not accrued, matured or un-matured or otherwise, of a nature required by GAAP to be reflected in a consolidated balance sheet or disclosed in the notes thereto.

5.8

Litigation.  As of the date hereof neither Buyer nor any of its Subsidiaries is a party to any, and there are no pending or, to Buyer’s Knowledge, threatened, legal, administrative, arbitral or other material proceedings, claims, actions or governmental or regulatory investigations (a “Proceeding”) of any nature against Buyer or any of its Subsidiaries, in each case that, individually or in the aggregate, would reasonably be expected to have a Buyer Material Adverse Effect.  Neither Buyer, its Subsidiaries, nor any of their respective businesses or properties are subject to or bound by any injunction, order, judgment, decree or regulatory restriction of any Governmental Authority specifically imposed upon Buyer, its Subsidiaries or their respective properties or assets.

5.9

Taxes.  The representations and warranties contained in this Section 5.9 are the only representations and warranties made by Buyer in this Agreement with respect to Tax matters.  Except as would not reasonably be expected, individually or in the aggregate, to have a Buyer Material Adverse Effect:

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(a)

All Tax Returns required to be filed by or with respect to Buyer have been timely filed, and all such Tax Returns are true, correct and complete.  Buyer is not currently the beneficiary of any extension of time within which to file any Tax Return.

(b)

Buyer (i) has timely paid all Taxes due and payable (whether or not shown to be due on the Tax Returns referred to in this Section 5.9), except for Taxes for which adequate reserves have been established in accordance with GAAP, and (ii) has made adequate provision in the applicable financial statements, in accordance with GAAP, for all Taxes not yet due and payable with respect to taxable periods, or portions thereof, for which no Tax Return has yet been filed.

(c)

As of the date hereof, no audit or other proceeding by any Governmental Authority is pending or, to the Knowledge of Buyer, threatened with respect to any Taxes of Buyer.

(d)

Buyer has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying or intended to qualify for Tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement.

(e)

Buyer has not participated in a “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulation Section 1.6011-4(b) or a “listed transaction” within the meaning of Treasury Regulation Section 301.6111-2(b)(2) or any analogous provision of state or local law.

(f)

There are no liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Buyer.  The Buyer has complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party and has duly and timely withheld and paid over to the appropriate Governmental Authority all amounts required to be so withheld and paid under all applicable Laws, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

(g)

The Buyer has delivered or made available to Buyer complete copies of (i) all federal, state, local and foreign income or franchise Tax Returns of the Buyer relating to the Taxable periods since January 1, 2009 and (ii) any audit report issued within the last three years relating to any Taxes due from or with respect to the Buyer.

(h)

The Buyer has never been a member of any consolidated, combined, affiliated or unitary group of corporations for any Tax purposes other than a group of which the Buyer is the common parent.

(i)

No Person has granted any extension or waiver of the statute of limitations period applicable to any Tax of Buyer, which period (after giving effect to such extension or waiver) has not yet expired.  There are no Tax sharing agreements (or similar agreements) under which Buyer is liable for Taxes of any other Person.

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(j)

The Buyer has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(k)

The Buyer has not changed any of its methods of reporting income or deductions for Tax purposes from those employed in the preparation of its Tax Returns for the Tax year ended March 31, 2013.

(l)

To the Knowledge of Buyer, after consulting with its Tax advisors, neither Buyer nor any of its Affiliates has taken or agreed to take any action which would prevent the Merger from constituting a transaction qualifying as a reorganization under Section 368(a) of the Code.

5.10

Employee Benefit Plans.

(a)

Schedule 5.10(a) of the Buyer Disclosure Letter sets forth a correct and complete list of all employee benefit plans, programs, policies, agreements or arrangements including, without limitation, any employee benefit plans as defined in Section 3(3) of ERISA, any deferred compensation arrangement, incentive arrangement, bonus arrangement, equity or equity-based arrangement, change in control agreement, retention, severance, health and welfare program, fringe benefit program, employment contract, retention incentive agreement, termination agreement, severance agreement, noncompetition agreement, consulting agreement, confidentiality agreement or other similar plan, agreement or arrangement, whether written or oral, funded or unfunded, or actual or contingent that (A) is maintained by the Buyer or any of its Buyer ERISA Affiliates for the benefit of any current or former employees, consultants or directors of the Buyer or any of its Subsidiaries, or their beneficiaries (collectively, “Buyer Employees”), or (B) was previously maintained by the Buyer or any of its Buyer ERISA Affiliates for the benefit of the Buyer Employees and with respect to which the Buyer or any of its Subsidiaries has any liability (each a “Buyer Benefit Plan”).  The Buyer has made available to the Parent a correct and complete copy (where applicable) of (1) each Buyer Benefit Plan (or, where a Buyer Benefit Plan has not been reduced to writing, a summary of all material terms of such Buyer Benefit Plan), (2) each trust or funding arrangement prepared in connection with each Buyer Benefit Plan, (3) the three most recently filed annual reports on Internal Revenue Service (“IRS”) Form 5500 or any other annual report required by applicable Law with respect to each Buyer Benefit Plan, (4) the most recently received IRS determination letter for each Buyer Benefit Plan and (5) the most recent summary plan description.  Neither the Buyer nor any of its Subsidiaries has any plan or commitment to establish any new Buyer Benefit Plan or to modify any Buyer Benefit Plan, except to the extent required by Law.

(b)

None of the Buyer or any of Buyer ERISA Affiliates has now or at any time within the past six years  contributed to, sponsored, or maintained (i) a pension plan (within the meaning of Section 3(2) of ERISA) subject to Section 412 of the Code or Title IV of ERISA or(ii) a Multiemployer Plan.

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(c)

(i) Each Buyer Benefit Plan has been maintained and operated in all material respects in compliance with its terms and applicable Law, including ERISA and  the Code (including, without limitation, Section 409A of the Code), (ii) with respect to each Buyer Benefit Plan, all reports, returns, notices and other documentation that are required to have been filed with or furnished to the IRS, the DOL or any other Governmental Authority, or to the participants or beneficiaries of such Buyer Benefit Plan have been filed or furnished on a timely basis, and (iii) each Buyer Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code is so qualified and has received a favorable determination letter from the IRS to the effect that the Buyer Benefit Plan satisfies the requirements of Section 401(a) of the Code, and there are no facts or circumstances that could reasonably be expected to cause the loss of such qualification or the imposition of any material liability, penalty or Tax under ERISA, the Code or any other applicable Laws.

(d)

With respect to any Buyer Benefit Plan, (i) no actions, claims or proceedings (other than routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Buyer or Merger Sub, threatened, and (ii) no administrative investigation, audit or other administrative proceeding by the DOL, the IRS or other Governmental Authority is pending, in progress or, to the Knowledge of the Buyer or Merger Sub, threatened.

(e)

Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment or benefit becoming due, or increase the amount of any compensation due, to any Buyer Employee, (ii) increase any benefits otherwise payable under any Buyer Benefit Plan, or (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; and no such payment or benefit will be characterized as an “excess parachute payment,” as such term is defined in Section 280G of the Code.  

(f)

The Buyer may amend or terminate any Buyer Benefit Plan (other than an employment agreement or any similar agreement that cannot be terminated without the consent of the other party) at any time without incurring liability thereunder, other than in respect of accrued and vested obligations and medical or welfare claims incurred prior to such amendment or termination.

(g)

All contributions (including all employer contributions and employee salary reduction contributions) or premium payments required to have been made under the terms of any Plan as of the date hereof have been timely made or reflected on the Buyer’s consolidated financial statements in accordance with GAAP.

(h)

Except for the continuation coverage requirements under COBRA or other applicable Law, neither the Buyer nor its Subsidiaries have any obligations or potential liability for health, life or similar welfare benefits to Buyer Employees or their respective dependents following termination of employment.

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(i)

No Buyer Benefit Plan is maintained in a jurisdiction outside of the United States or for employees outside of the United States.

5.11

Compliance With Laws.

(a)

The Buyer is, and at all times since April 1, 2010, has been, in material compliance with all material Laws applicable to the Buyer and its business and activities.

(b)

As of the date hereof, the Buyer has not received written notice from a Governmental Authority that it is a target of, or the subject of, any action, proceeding, suit, investigation or sanction by or on behalf of any Governmental Authority brought pursuant to any Law, nor, to the Knowledge of the Buyer, has any such action, proceeding, suit, investigation or sanction been threatened.

(c)

The Buyer has and maintains in full force and effect, and is in compliance with, all Permits and all orders from Governmental Authorities necessary for the Buyer to carry on its business as currently conducted, except where the failure to so maintain or be in compliance would not reasonably be expected to result in a Material Adverse Effect on the Buyer.

5.12

Finders’ Fees.  Except as set forth in Schedule 5.12 of the Buyer Disclosure Letter, no agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee from Buyer in connection with any of the transactions contemplated by this Agreement.

5.13

Opinion of Financial Advisor.  The Board of Directors of Buyer has received the opinion of Cassel Salpeter & Co., LLC (the “Buyer Financial Advisor”), addressed to Buyer’s Board of Directors and dated as of the date of the meeting of Buyer’s Board of Directors at which Buyer’s Board of Directors approved the entry into this Agreement substantially to the effect that, as of the date of such opinion and based upon and subject to the assumptions, qualifications, limitations and other matters considered by the Buyer Financial Advisor in connection with the preparation of such opinion, the Common Stock Consideration to be paid by Buyer in the Merger pursuant to this Agreement was fair, from a financial point of view, to Buyer.  

5.14

Anti-Takeover Provisions.  The Board of Directors of the Buyer has taken and will take all actions necessary to ensure that the restrictions applicable to business combinations contained in Chapter 607 of the Florida Statutes are, and will be, inapplicable to the execution, delivery and performance of this Agreement and to the consummation of the Merger and the other transactions contemplated by this Agreement, and that no other state takeover statute is or will become applicable to the Merger or any of the other transactions contemplated by this Agreement.

5.15

Voting.  There are no voting trusts, proxies or similar agreements, arrangements or commitments to which the Buyer is a party with respect to the voting or registration of any shares of capital stock of the Buyer.  There are no bonds, other debentures, notes or other instruments of indebtedness of the Buyer that have the right to vote, or that are convertible or

36

exchangeable into or exercisable for securities or other rights having the right to vote, on any matters on which stockholders of the Buyer may vote.

5.16

Contracts.  

(a)

The Buyer has filed with the SEC copies of all material contracts (as defined in Item 601(b)(10) of Regulation S-K or required to be disclosed by the Buyer on a Current Report on Form 8-K) that were required to be filed with the Buyer SEC Reports and there is no other contract or agreement that is material to the financial condition or results of operations of the Buyer and its Subsidiaries taken as a whole. Except as could not reasonably be expected to have a Material Adverse Effect on the Buyer, none of the Buyer or any of its Subsidiaries has received any claim of material default under any contract to which it is a party and none of the Buyer or any of its Subsidiaries is in material breach or violation of, or default under, any such contract. Each contract, arrangement, commitment or understanding of the type described in this Section 5.16(a) is referred to herein as a “Buyer Contract”.

(b)

Except as would not result in a Buyer Material Adverse Effect, (i) each Buyer Contract is valid and binding on the Buyer or its applicable Subsidiary and in full force and effect, and, to the knowledge of the Buyer, is valid and binding on the other parties thereto, (ii) the Buyer and each of its Subsidiaries and, to the knowledge of the Buyer, each of the other parties thereto, has performed all obligations required to be performed by it to date under each Buyer Contract and (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, would constitute a breach or default (including the non-payment of fees) on the part of the Buyer or any of its Subsidiaries or, to the knowledge of the Buyer, any other party thereto, under any such Buyer Contract. No party to any Buyer Contract has given the Buyer or any of its Subsidiaries written notice of its intention to cancel, terminate, materially change the scope of rights under or fail to renew any Buyer Contract and neither the Buyer nor any of its Subsidiaries, nor, to the knowledge of the Buyer, any other party to any Buyer Contract, has repudiated in writing any material provision thereof.

(c)

The indebtedness for borrowed money of the Buyer and its Subsidiaries (collectively, the “Buyer Debt”) is set forth on Schedule 5.16(c) of the Buyer Disclosure Letter, and the Buyer Debt in the aggregate does not exceed $3,666,667 in original principal amount.

5.17

Labor and Employee Matters.  With respect to Buyer: (i) there has not been within the six (6) years preceding the Effective Time, and there are not now pending, or to the Buyer’s Knowledge threatened, labor or employment controversies, including any Proceeding alleging unlawful harassment, employment discrimination or unfair labor practices; (ii) to the Buyer’s Knowledge, no union organizing efforts are underway or threatened as of the date hereof with respect to any Buyer Employee; (iii) there is, as of the date hereof, no strike, slowdown, work stoppage or lockout underway or, to the Buyer’s Knowledge, threatened in writing; and (iv) Buyer is not a party to a collective bargaining agreement with any labor organization nor is Buyer currently in labor negotiations with any labor organization.  No “mass layoff,” plant closing or similar event as defined by the Worker Adjustment and Retraining Notification Act

37

(WARN) has occurred with respect to the Buyer during the six (6) years preceding the Effective Time.  The Buyer does not have any liability for any payment to any trust or other fund governed by or maintained on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations of any employee, contractor or other service provider (other than routine payments to be made in the normal course of business consistent with past practice).  Each Person classified as an independent contractor by the Buyer has satisfied the requirements of applicable Law to be so classified, and the Buyer has fully and accurately reported such independent contractor’s compensation on IRS Forms 1099 when required to do so.  The Buyer has not entered into any written agreement, arrangement or understanding restricting its ability to terminate the employment of any Buyer Employee, for any lawful or no reason, without penalty or liability.  The Buyer has not, directly or through agents and independent contractors, employed any unauthorized aliens, as defined in 8 U.S.C. Section 1324a(h)(3) and has complied, or caused any such agent or independent contractor, to comply with the employment verification and record-keeping requirements of 8 U.S.C. Section 1324a and 8 C.F.R. Section 274a, as amended.  To the Buyer’s Knowledge, the Buyer is in compliance with the Immigration and Nationality Act and the Immigration Reform and Control Act.

5.18

Environmental.  (i) Each of Buyer and its Subsidiaries is in compliance in all material respects with all applicable Environmental Laws, and possesses and complies in all material respects with all applicable Environmental Permits required under such Laws to operate as it presently operates; (ii) there are no Materials of Environmental Concern at any property owned or operated by Buyer or any of its Subsidiaries, under circumstances that are reasonably likely to result in a material liability of Buyer under any applicable Environmental Law; (iii) neither Buyer nor any of its Subsidiaries has received any written notification alleging that it is liable for, or request for information pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act or similar state statute, concerning, any release or threatened release of Materials of Environmental Concern at any location except, with respect to any such notification or request for information concerning any such release or threatened release, to the extent such matter has been resolved with the appropriate foreign, federal, state or local regulatory authority or otherwise; and (iv) neither Buyer nor any of its Subsidiaries has received any written claim or complaint, or is subject to any proceeding, relating to material noncompliance with Environmental Laws or any other material liabilities pursuant to Environmental Laws, and no such matter has been threatened in writing to the Knowledge of Buyer.

5.19

Property.  

(a)

The Buyer and its Subsidiaries have good, valid and marketable title to all real property owned by them free and clear of all Liens, except Liens for current Taxes not yet due and payable and other standard exceptions commonly found in title policies in the jurisdiction where such real property is located, and such encumbrances and imperfections of title, if any, as do not materially detract from the value of the properties and do not materially interfere with the present or proposed use of such properties or otherwise materially impair such operations. All real property and fixtures used in or relevant to the business, operations or financial condition of the Buyer and its

38

Subsidiaries are in good condition and repair except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Buyer.

(b)

Schedule 5.19(b) of the Buyer Disclosure Letter contains a true and complete list of all Leased Real Property of Buyer and a true and complete description of all oral Real Property Leases to which the Buyer is currently a party.  True and complete copies of all Real Property Leases of Buyer that have not been terminated or expired as of the date hereof have been made available to Parent.

(c)

The Buyer has a valid leasehold estate in all its Leased Real Property free and clear of all Liens, except Permitted Liens.

(d)

Other than its Real Property Leases, none of Buyer’s Leased Real Properties is subject to any lease, sub-lease, license or other agreement granting to any other Person any right to the use, occupancy or enjoyment of such Leased Real Property or any part thereof.

(e)

Each Real Property Lease of Buyer is in full force and effect and is valid and enforceable in accordance with its terms, and there is no material default under any Real Property Lease by the Buyer, and no event has occurred that, with the lapse of time or the giving of notice or both, would constitute a default by the Buyer thereunder.

5.20

Intellectual Property; Software.

(a)

As used herein: (i) “Buyer IP Licenses” means all Contracts (excluding “click-wrap” or “shrink-wrap” agreements or agreements contained in Software or the terms of use or service for any website) pursuant to which Buyer or any of its Subsidiaries has acquired rights in (including usage rights) any Intellectual Property, or licenses and agreements pursuant to which Buyer or any of its Subsidiaries has out-licensed or transferred the right to use any Intellectual Property, including license agreements, settlement agreements and covenants not to sue; and (ii) “Buyer Intellectual Property” means the material Intellectual Property, Buyer IP Licenses and Software held for use or used in the business of Buyer or any of its Subsidiaries as presently conducted.

(b)

Schedule 5.20(b) of the Buyer Disclosure Letter sets forth a complete and accurate list of the following items, to the extent included in the Buyer Intellectual Property owned or exclusively in-licensed by the Buyer: (i) each Patent, (ii) each Trademark application and registration and (iii) each Copyright registration and application.

(c)

Neither Buyer nor any of its Subsidiaries has misrepresented, or failed to disclose, any facts or circumstances in any application for any Patent or Trademark registration included in the Buyer Intellectual Property that would constitute fraud with respect to such application.

(d)

To the Knowledge of Buyer, the Buyer owns or possesses all licenses or other legal rights to use, sell or license all material Buyer Intellectual Property in the manner used, sold or licensed in the business of the Buyer as presently conducted, free

39

and clear of all Liens, other than Permitted Liens.  To the Knowledge of Buyer, Buyer is the sole owner of each item of material Buyer Intellectual Property that Buyer purports to solely own.

(e)

No Buyer Intellectual Property is subject to any proceeding or outstanding judgment that restricts and/or conditions in any manner the use, transfer or licensing thereof by Buyer or which would reasonably be expected to affect in any material respect the validity, use or enforceability of such Buyer Intellectual Property.

(f)

To the Knowledge of Buyer, no Person is infringing, misappropriating, or diluting any Buyer Intellectual Property.

(g)

All material Trademark registrations and applications for registration, material Patents issued or pending and material Copyright registrations and applications for registration owned by Buyer are subsisting, have not lapsed, expired or been abandoned, and to the Knowledge of Buyer are not, as of the date hereof, the subject of any opposition, interference or similar proceeding filed with the United States Patent and Trademark Office or any other intellectual property registry.

(h)

To the Knowledge of Buyer, the Buyer Intellectual Property constitutes all the Intellectual Property and Software necessary for the continuing conduct and operation of Buyer’s business as conducted and operated by Buyer as of the date hereof in all material respects.  Buyer has not received any material written notice within the two (2) year period preceding the date hereof that any of the products or services provided or sold by Buyer, or proposed to be provided or sold by Buyer, or any method, process or know-how used by Buyer, infringes or is alleged to infringe any Intellectual Property of any other Person.

(i)

The Buyer has secured valid written assignments from all employees and consultants who contributed to the creation or development of Buyer Intellectual Property of the rights to such contributions that the Buyer does not already own by operation of Law.

5.21

Insurance.  The Buyer Disclosure Letter sets forth a list and brief description (including nature of coverage, limits, deductibles, premiums and the loss experience for the past three years with respect to each type of coverage) of all policies of insurance maintained, owned or held by the Buyer during the past three years.  The Buyer has complied in all material respects with each such insurance policy to which it is a party.  Each such policy is in full force and effect and will not in any way be affected by or terminate or lapse by reason of the transactions contemplated by this Agreement.

5.22

Suppliers And Manufacturers; Effect Of Transaction.

(a)

Schedule 5.22(a) of the Buyer Disclosure Letter sets forth a true, complete and correct list of each supplier and manufacturer that is the sole supplier or manufacturer of any material product or service to Buyer or any of its Subsidiaries.  Since April 1, 2012, there has not been: (A) any materially adverse change in the business relationship of Buyer or any of its Subsidiaries with any supplier or manufacturer named in the Buyer

40

Disclosure Letter; or (B) any change in any material term (including credit terms) of the sales agreements or related agreements with any supplier or manufacturer named in the Buyer Disclosure Letter.

(b)

Since April 1, 2012, Buyer has not received any written notice of any plan or intention of Buyer’s or any of its Subsidiaries’ material suppliers, collaborators, distributors, licensors or licensees to cancel or otherwise terminate its relationship with Buyer or such Subsidiary.  Without limiting the generality of the foregoing, since April 1, 2012, neither Buyer nor any of its Subsidiaries has received any written notice alleging that it is not in compliance in any material respects with development obligations under any material license agreements.

(c)

To the Knowledge of Buyer, from April 1, 2012, to the date hereof, no creditor, supplier, employee, client, customer or other person having a material business relationship with Buyer or any of its Subsidiaries informed Buyer or such Subsidiary in writing that such person intends to materially change its relationship with Buyer or such Subsidiary because of the transactions contemplated by this Agreement or otherwise.

5.23

Merger Sub Operations.

(a)

Merger Sub has been formed solely for the purpose of engaging in the transactions contemplated hereby and prior to the Effective Time will have engaged in no other business activities and will have incurred no liabilities or obligations other than as contemplated herein.

(b)

As of the date of this Agreement, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.00001 per share, all of which are validly issued and outstanding.  All of the issued and outstanding capital stock of Merger Sub is, and immediately prior to the Effective Time will be, owned by Buyer.

5.24

Certain Business Practices.  Neither the Buyer nor, to the Knowledge of the Buyer, any director, officer, employee or agent of the Buyer has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful payments relating to political activity; (ii) made any unlawful payment to any foreign or domestic government official or employee or to any foreign or domestic political party or campaign or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder or the U.K. Bribery Act of 2010, as amended, and any rules or regulations thereunder or any other applicable United States or non-U.S. anti-corruption or anti-bribery laws or regulations; or (iii) made any other unlawful payment.

5.25

Ownership of Company Common Stock.  Buyer does not, immediately prior to entering into this Agreement, beneficially own (within the meaning of Section 13 of the Exchange Act and the rules and regulations promulgated thereunder) any shares of Parent Common Stock or Company Common Stock, and Buyer is not a party, or will prior to the Closing Date become a party, to any Contract, arrangement or understanding (other than this Agreement) for the purpose of acquiring, holding, voting or disposing of any shares of Parent Common Stock or Company Common Stock, and Buyer has not within the last three years

41

owned 20% or more of the outstanding shares of Parent Common Stock or Company Common Stock.

5.26

Government Contracts.  The Buyer has not been suspended or debarred from bidding on contracts with any Governmental Authority, and no such suspension or debarment has been initiated or, to the Knowledge of the Buyer, threatened.  The consummation of the Merger and other transactions contemplated by this Agreement will not result in any such suspension or debarment of the Buyer.

5.27

Minute Books.  The minute books of the Buyer and its Subsidiaries contain complete and correct records of all meetings held by, and actions taken by written consent of, the holders of voting securities, the board of directors or Persons exercising similar authority, and committees of the board of directors or such Persons of the Buyer or such Subsidiary, and no meeting of any such holders, board of directors, Persons, or committee has been held, and no other action has been taken, for which minutes or other evidence of action have not been prepared and are not contained in such minute books.  Each of the Buyer and its Subsidiaries has at all times maintained complete and correct Records of all issuances and transfers of its equity securities.  At the Closing, all such minute books and Records will be in the possession of the Buyer and located at 14044 Icot Boulevard, Clearwater, Florida 33760.

5.28

Sufficiency of Assets.  The assets, tangible and intangible, owned and leased by the Buyer and its Subsidiaries, on a consolidated basis, as of the Effective Date constitute all the assets used in connection with the business of the Buyer and its Subsidiaries, on a consolidated basis.  Such assets constitute all the assets necessary for the Buyer and its Subsidiaries to continue to conduct the business following the Closing as it is being conducted.

5.29

Receivables.  All accounts, notes receivable and other receivables arising out of or relating to the business of the Buyer and its Subsidiaries, whether or not reflected on the Buyer’s most recent Balance Sheet included in the Buyer SEC Reports, arose in the ordinary course of business are carried at values determined in accordance with GAAP consistently applied, and will be good and collectible in full, except to the extent of any reserve for uncollectible accounts receivable set forth on the Buyer’s most recent Balance Sheet included in the Buyer SEC Reports.  All such receivables are owned by the Buyer and its Subsidiaries, on a consolidated basis, free and clear of all encumbrances and no request or agreement for deduction or discount has been made with respect to any accounts receivable of the Buyer.  The Buyer does not have any Knowledge that any of its respective customers has any basis for any deduction, discount or refund in respect of accounts receivable or has otherwise indicated its unwillingness to pay any account receivable.

5.30

Inventories.  All inventories of the Buyer and its Subsidiaries, whether or not reflected on the Buyer’s most recent Balance Sheet included in the Buyer SEC Reports, consist of a quality and quantity usable and, with respect to finished goods, saleable, in the ordinary course of business of the Buyer and its Subsidiaries.  Neither the Buyer nor any of its Subsidiaries is in possession of any goods not owned by the Buyer or such Subsidiary.  The inventories (other than goods in transit) of each of the Buyer and its Subsidiaries are located on the premises of the Buyer.  All inventories are valued at the lower of cost or market value on a first-in, first-out basis consistent with past practice used in the preparation of the Buyer’s

42

consolidated financial statements.  The reserve for obsolescence with respect to inventories as adjusted for the passage of time, is adequate and calculated consistent with past practice.  Inventories that were purchased after the December 31, 2013 were purchased in the ordinary course of business at a cost not exceeding market prices prevailing at the time of purchase for items of similar quality and quantity.  The quantities of each item of inventory are not excessive, but are reasonable for the continued operation of the Buyer in the ordinary course of business.

ARTICLE VI
ADDITIONAL AGREEMENTS

6.1

Securities Filings; Registration Rights.  The Parent, Company and Buyer shall make any necessary filings with respect to the Merger under the Securities Act and the Exchange Act and the rules and regulations thereunder.  Provided that the Parent has complied with its obligation set forth in Section 6.8 below, at any time following the Effective Time, Parent may make a written request to the Buyer to register, and the Buyer shall so register at Buyer’s expense (not to include Parent’s selling expenses), pursuant to a registration statement under the Securities Act on Form S-1 (or such other form as may be available to Buyer, including without limitation Form S-4), the resale of all of the shares of Buyer Common Stock issued to Parent pursuant to the Merger and the other transactions contemplated pursuant to this Agreement.  In conjunction with such registration request, Buyer shall indemnify Parent upon commercially standard terms from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys' fees and disbursements) and expenses arising out of or relating to any violation of securities laws or untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus relating thereto, and any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading.  

6.2

Access to Information.  No investigation by any of the parties or their respective Representatives shall affect the representations, warranties, covenants or agreements of the other parties set forth herein.

6.3

Director and Officer Liability.

(a)

Buyer agrees that all rights to exculpation, indemnification and advancement of expenses for acts or omissions occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, now existing in favor of the current or former directors, officers or employees, as the case may be, of the Company as provided in its articles of incorporation or bylaws or other organization documents or in any agreement shall survive the Merger and shall continue in full force and effect.  For a period of three (3) years following the Effective Time, Buyer and the Surviving Corporation shall maintain in effect exculpation, indemnification and advancement of expenses provisions that are no less favorable than those provided in the organizational documents of the Company in effect as of the date hereof or in any indemnification agreements of the Company with any of its directors, officers or employees in effect immediately prior to the Effective Time and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely

43

affect the rights thereunder of any individuals who at the Effective Time were current or former directors, officers or employees of the Company or the Surviving Corporation.

(b)

Each of Parent and Buyer agrees that all rights to exculpation, indemnification and advancement of expenses for acts or omissions occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, now existing in favor of the current or former directors, officers or employees, as the case may be, of each of the Buyer and Merger Sub as provided in the articles of incorporation or bylaws or other organization documents or in any agreement of the Buyer or Merger Sub shall survive the Merger and shall continue in full force and effect.  For a period of three (3) years following the Effective Time, Parent shall cause Buyer and Surviving Corporation to, and Buyer and the Surviving Corporation agree to, maintain in effect exculpation, the indemnification and advancement of expenses provisions that are no less favorable than those provided in the organizational documents of the Buyer and Merger Sub in effect as of the date hereof or in any indemnification agreements of the Buyer and Merger Sub with any of their respective directors, officers or employees in effect immediately prior to the Effective Time and Parent and Buyer shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the Effective Time were current or former directors, officers or employees of Buyer or Merger Sub.

(c)

In addition to and not in limitation of the terms of Section 6.3(a), from and after the Effective Time, Buyer and the Surviving Corporation shall, to the greatest extent permitted by Nevada Law or the Company’s articles of incorporation and bylaws in effect on the date hereof, indemnify and hold harmless (and comply with all of the Company’s existing obligations to advance funds for expenses to) any person who is now, or has been at any time prior to the date of this Agreement, or who becomes prior to the Effective Time, a director or officer of the Company (or any of their respective predecessors) in respect of acts or omissions occurring or alleged to occur prior to or at the Effective Time; provided, that such indemnification shall be subject to any limitation imposed from time to time under applicable Law.

(d)

In addition to and not in limitation of the terms of Section 6.3(a), from and after the Effective Time, Parent and the Surviving Corporation shall, to the greatest extent permitted by Nevada or Florida Law, as the case may be, or the Buyer’s and Merger Sub’s respective articles of incorporation and bylaws in effect on the date hereof, indemnify and hold harmless (and comply with all of the Buyer’s and Merger Sub’s existing obligations to advance funds for expenses to) any person who is now, or has been at any time prior to the date of this Agreement, or who becomes prior to the Effective Time, a director or officer of the Buyer or Merger Sub (or any of their respective predecessors) in respect of acts or omissions occurring or alleged to occur prior to or at the Effective Time; provided, that such indemnification shall be subject to any limitation imposed from time to time under applicable Law.

(e)

For a period of six (6) years after the Effective Time, each of the Buyer, the Surviving Corporation and the Parent (at Buyer’s expense) shall cause to be

44

maintained in effect the current policies of directors’ and officers’ liability insurance maintained by the Company, the Buyer, the Merger Sub, and Parent, as the case may be (or comparable replacement coverage) (with respect to claims arising from facts or events that existed or occurred prior to or at the Effective Time (each a “Current Policy”); provided, however, that in no event shall the Buyer or the Surviving Corporation be required to expend an aggregate annual premium amount in excess of an amount equal to 200% of the aggregate annual premium currently paid by the Buyer, Parent, Merger Sub and the Company under all Current Policies (the “Insurance Amount”); provided, however, that if the aggregate annual premium of such tail policies (or comparable replacement coverage) would exceed the Insurance Amount, each of the Buyer, the Surviving Corporation and the Parent (at Buyer’s expense) shall be obligated to purchase and maintain a tail policy with the greatest coverage available for a cost not exceeding the Insurance Amount, on terms and conditions that are no less favorable to the indemnified parties than the relevant Current Policy.

(f)

This Section 6.3 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, present or former directors or officers of the Buyer, Merger Sub and the Company, respectively, their respective heirs and personal representatives and shall be binding on the Surviving Corporation and its successors and assigns.  In the event that the Surviving Corporation, Buyer, Parent or any of their successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person (including by dissolution), then, and in each such case, proper provision shall be made to cause the successors and assigns of Buyer, the Surviving Corporation or Parent, as the case may be, to assume and honor the obligations set forth in this Section 6.3.  The agreements and covenants contained herein shall not be deemed to be exclusive of any other rights to which any such present or former director or officer is entitled, whether pursuant to Law, contract or otherwise.

6.4

Notice of Certain Events.  From and after the date of this Agreement, each of the Parent and Buyer shall promptly notify each other orally and in writing of (i) any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against or involving or otherwise affecting the Parent, Company or Buyer that relate to the consummation of the transactions contemplated by this Agreement, and (ii) any communication from any Governmental Authority in connection with the transactions contemplated by this Agreement (and the response thereto).  With respect to any of the foregoing, the notifying party shall consult with the other party and its Representatives so as to permit the Parent and Buyer and their respective Representatives to cooperate to take appropriate measures to avoid or mitigate any adverse consequences that may result from any of the foregoing.  Each of the Parent and Buyer shall give the other party the opportunity to participate in the defense or settlement of any litigation against such party and/or its directors relating to the transactions contemplated by this Agreement, and no such settlement shall be agreed to without the other party’s prior written consent, not to be unreasonably withheld or delayed.

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6.5

Employee Matters.  The officers and employees of the Company prior to the Effective Time shall be extended opportunities to serve as Continuing Employees based on typical human resources considerations.

6.6

Tax Matters.

(a)

The Parent, Company, Merger Sub and Buyer have used and shall use their respective reasonable best efforts to (i) cause the Merger to qualify, and have used and shall use their respective reasonable best efforts not to, and not to permit or cause any Affiliate or any Subsidiary to, take any actions or cause any action to be taken which would prevent the Merger from qualifying, as a “reorganization” under Section 368(a) of the Code.

(b)

This Agreement is intended to constitute, and the parties hereto hereby adopt this Agreement as, a “plan of reorganization” within the meaning Treasury Regulation Sections 1.368-2(g) and 1.368-3(a).  The Parent, Company, Merger Sub and Buyer shall report the Merger as a reorganization within the meaning of Section 368(a) of the Code, unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code.

6.7

Board of Directors of Buyer.  Prior to the Effective Time, Buyer has caused, effective immediately following the Effective Time, the number of members of the Board of Directors of Buyer to be fixed at seven (7) and the persons identified on Schedule 6.7 to be appointed to the Board of Directors of Buyer, with five (5) such members designated by the Parent and two (2) such members designated by the Buyer.  Each of those individuals that are serving as members of Buyer’s Board of Directors prior to the Effective Time but who are not identified on such Schedule 6.7 shall have submitted their irrevocable resignation from such Board of Directors.

6.8

Further Assurances.  

(a)

Prior to the Effective Time, Parent shall have caused the assignment and transfer to the Company of (1) all Parent Intellectual Property, (2) Parent Contracts and (3) all other assets of the Parent, tangible or intangible, necessary for the continuing conduct and operation of the Company’s business as conducted and operated by the Company as of the date hereof in all material respects. To the extent that any such assets were not fully assigned prior to the Effective Date, the Parent shall takes such actions and execute such documents as are necessary to effect this Section 6.8.

(b)

Parent agrees and acknowledges that the Buyer will be required to file audited and unaudited interim financial statements for the Company pursuant to Regulation S-X of the Exchange Act within 75 days from the Effective Date.  Parent agrees to use commercially reasonable efforts to assist Buyer in the preparation of such financials statements and to provide Buyer access to all books and records of the Parent to the extent reasonably necessary for the preparation of such financial statements.

46

(c)

No later than two (2) Business Days after the Effective Date, Buyer shall use its best efforts to pay those amounts set forth on Schedule 6.8(c) to the relevant account set forth on Schedule 6.8(c).

ARTICLE VII
CONDITIONS TO THE MERGER

7.1

Conditions to the Obligations of Each Party.  The obligations of the Parent, Company, Merger Sub and Buyer to consummate the Merger are subject to the satisfaction of the following conditions:

(a)

Stockholder Approval.  This Agreement shall have been duly adopted and approved by the Requisite Parent Stockholder Vote and the Requisite Company Stockholder Vote.

(b)

No Injunctions or Restraints; Illegality.  No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect.  There shall not be any action taken, or any Law, rule, regulation or order enacted, entered, enforced or deemed applicable to the Merger, by any Governmental Authority of competent jurisdiction that makes the consummation of the Merger illegal.

7.2

Conditions to the Obligations of Buyer and Merger Sub.  The obligations of Buyer and Merger Sub to consummate and effect the Merger are subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any of which may be waived, in writing, exclusively by Buyer and Merger Sub:

(a)

Representations and Warranties.  

(i)

The representations and warranties of the Parent and the Company set forth herein (other than in Section 4.1 (Corporate Existence and Power), Section 4.2 (Corporate Authorization), Section 4.4 (Non-Contravention), Section 4.5 (Capitalization; Subsidiaries), Section 4.9 (Taxes), Section 4.12 (Finders’ Fees), Section 4.13 (Anti-Takeover Provisions), and Section 4.21 (Certain Business Practices)) shall be true and correct in all respects (disregarding, for this purpose, all qualifications and exceptions contained therein relating to materiality or “Material Adverse Effect”), in each case, both when made and as of the Effective Time as though made on and as of such date (unless any such representation or warranty is expressly made only as of a specific date, in which event such representation and warranty shall be so true and correct as of such specified date), except where the failure of any such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect on the Company.

(ii)

The representations and warranties of the Company set forth in Section 4.1 (Corporate Existence and Power), Section 4.2 (Corporate

47

Authorization), Section 4.4 (Non-Contravention), and Section 4.12 (Finders’ Fees) shall be true and correct in all material respects, (disregarding, for this purpose, all qualifications and exceptions contained therein relating to materiality or “Material Adverse Effect”), in each case, both when made and as of the Effective Time, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date).

(iii)

The representations and warranties of the Company set forth in Section 4.5 (Capitalization; Subsidiaries), Section 4.9 (Taxes), Section 4.13 (Anti-Takeover Provisions), and Section 4.21 (Certain Business Practices) shall be true and correct in all respects (except for de minimis inaccuracies), both when made and as of the Effective Time, as if made at and as of such time.

(b)

Performance of Obligations of the Parent and the Company.  Each of the Parent and Company shall have performed in all material respects all obligations and complied in all material respects with the agreements and covenants required to be performed by or complied with by it prior to the Effective Time hereunder.

(c)

Officer’s Certificate.  Buyer shall have received a certificate signed by a senior officer of the Parent and the Company certifying as to the matters set forth in Sections 7.2(a) and 7.2(b).

(d)

Material Adverse Effect.  No Material Adverse Effect on the Company shall have occurred and be continuing since the date hereof, whether or not resulting from a breach in any representation, warranty, covenant or agreement in this Agreement; and Buyer and Merger Sub shall have received a certificate to such effect from the chief executive officer and chief financial officer of the Parent and the Company.

(e)

No Litigation.  There shall not be any pending or threatened suit, action or Proceeding asserted by any Governmental Authority challenging or seeking to restrain or prohibit the consummation of the Merger or any of the other transactions contemplated by this Agreement, the effect of which restraint or prohibition if obtained would cause the condition set forth in Section 7.1(b) to not be satisfied.

(f)

Certain Consents and Approvals.  All of the consents and approvals identified in Section 7.2(f) of the Company Disclosure Letter shall have been obtained.

(g)

Assumed Debt.  The Company Debt in the aggregate shall not exceed $11,000,000 in original principal amount.

7.3

Conditions to the Obligations of the Parent and the Company.  The obligation of the Parent and the Company to consummate and effect the Merger is subject to the satisfaction at or prior to the Effective Time of each of the following further conditions, any of which may be waived, in writing, exclusively by the Parent and the Company:

(a)

Representations and Warranties.  

48

(i)

The representations and warranties of the Buyer set forth herein (other than in Section 5.1 (Corporate Existence and Power), Section 5.2 (Corporate Authorization), Section 5.4 (Non-Contravention), Section 5.5 (Capitalization; Subsidiaries), Section 5.9 (Taxes), Section 5.12 (Finders’ Fees), Section 5.13 (Opinion of Financial Advisor), Section 5.14 (Anti-Takeover Provisions), and Section 5.24 (Certain Business Practices)) shall be true and correct in all respects (disregarding, for this purpose, all qualifications and exceptions contained therein relating to materiality or “Material Adverse Effect”), in each case, both when made and as of the Effective Time as though made on and as of such date (unless any such representation or warranty is expressly made only as of a specific date, in which event such representation and warranty shall be so true and correct as of such specified date), except where the failure of any such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect on the Buyer.

(ii)

The representations and warranties of the Buyer set forth in Section 5.1 (Corporate Existence and Power), Section 5.2 (Corporate Authorization), Section 5.4 (Non-Contravention), Section 5.12 (Finders’ Fees), and Section 5.13 (Opinion of Financial Advisor) shall be true and correct in all material respects, (disregarding, for this purpose, all qualifications and exceptions contained therein relating to materiality or “Material Adverse Effect”), in each case, both when made and as of the Effective Time, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date).

(iii)

The representations and warranties of the Buyer set forth in Section 5.5 (Capitalization; Subsidiaries), Section 5.9 (Taxes), Section 5.14 (Anti-Takeover Provisions), and Section 5.24 (Certain Business Practices) shall be true and correct in all respects (except for de minimis inaccuracies), both when made and as of the Effective Time, as if made at and as of such time.

(b)

Performance of Obligations of Buyer.  Buyer shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it prior to the Effective Time hereunder.

(c)

Officer’s Certificate.  The Company shall have received a certificate signed by a senior officer of Buyer certifying as to the matters set forth in Sections 7.3(a) and 7.3(b).

(d)

Director Designees.  Buyer shall have complied with its obligations under Section 6.7 with respect to the appointment of the designees to Buyer’s Board of Directors.

(e)

Material Adverse Effect.  No Material Adverse Effect on the Buyer shall have occurred and be continuing since the date hereof, whether or not resulting from a breach in any representation, warranty, covenant or agreement in this Agreement; and

49

Parent and the Company shall have received a certificate to such effect from the chief executive officer and chief financial officer of the Buyer and Merger Sub.

(f)

No Litigation.  There shall not be any pending or threatened suit, action or Proceeding asserted by any Governmental Authority challenging or seeking to restrain or prohibit the consummation of the Merger or any of the other transactions contemplated by this Agreement, the effect of which restraint or prohibition if obtained would cause the condition set forth in Section 7.1(b) to not be satisfied.

(g)

Buyer Debt.  The Buyer Debt shall not exceed $3,666,667 in original principal amount.

ARTICLE VIII
MISCELLANEOUS

8.1

Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given:

if to the Parent or Company, to:

Infusion Brands International, Inc.

14375 Myerlake Circle

Clearwater, Florida 33760

Attention:  Chief Executive Officer

with a copy (which shall not constitute notice) to:

Quarles & Brady LLP

411 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Attention:  Hoyt R. Stastney, Esq.

if to Buyer or Merger Sub, to:

As Seen on TV, Inc.

14044 Icot Boulevard

Clearwater, Florida 33760

Attention:  Chief Executive Officer

with a copy (which shall not constitute notice) to:

Greenberg Traurig, P.A.

401 East Las Olas Boulevard Suite 2000

Fort Lauderdale, Florida 33301

Attention:  Kara L. MacCullough, Esq.

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or such other address or facsimile number as such party may hereafter specify by notice to the other parties hereto.  Each such notice, request or other communication shall be effective (i) if given by telecopier, when such telecopy is transmitted to the facsimile number specified above and electronic confirmation of transmission is received or (ii) if given by any other means, when delivered at the address specified in this Section 8.1.

8.2

Representations and Warranties.  None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time, except for those covenants and agreements contained herein and therein which by their terms apply in whole or in part after the Effective Time and then only to such extent.  Each of the Parent, Company, Merger Sub and Buyer acknowledges and agrees that, except for the representations and warranties expressly set forth in this Agreement (a) no party makes, and has not made, any representations or warranties relating to itself or its businesses or otherwise in connection with the Merger, (b) no person has been authorized by any party to make any representation or warranty relating to itself or its businesses or otherwise in connection with the Merger and, if made, such representation or warranty must not be relied upon as having been authorized by such party, and (c) any estimates, projections, predictions, data, financial information, memoranda, presentations or any other materials or information provided or addressed to any party or any of its Representatives are not and shall not be deemed to be or to include representations or warranties unless any such materials or information are expressly the subject of any representation or warranty set forth in this Agreement.

8.3

Expenses.  Except as otherwise expressly provided in Section 6.3, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

8.4

Amendment.  This Agreement may not be amended except by an instrument in writing signed by the parties hereto.

8.5

Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto (and any purported assignment without such consent shall be void and without effect).

8.6

Governing Law.  This Agreement shall be governed by and construed in accordance with the Laws of the State of Florida (without regard to conflict of Laws principles).

8.7

Counterparts; Effectiveness; Third Party Beneficiaries.  This Agreement may be executed by facsimile or electronic (in .pdf format) signatures and in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective only when actually signed by each party hereto and each such party has received counterparts hereof signed by all of the other parties hereto.  No provision of this Agreement is intended to or shall confer upon any Person other than the parties hereto any rights or remedies hereunder or with respect hereto,

51

except as otherwise expressly provided in Section 6.3 (which is intended to be for the benefit of the persons covered thereby).

8.8

Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by virtue of any Law, or due to any public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect.  The failure of any party to assert any rights or remedies shall not constitute a waiver of such rights or remedies.

8.9

Entire Agreement.  This Agreement (including the exhibits and schedules thereto) constitutes the entire agreement of the parties hereto with respect to its subject matter and supersedes all oral or written prior or contemporaneous agreements and understandings among the parties with respect to such subject matter.

8.10

Remedies.  The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy they may have at law or in equity.

8.11

Jurisdiction.

(a)

In any action or proceeding between any of the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement, each of the parties hereto: (i) irrevocably and unconditionally consents and submits, for itself and its property, to the exclusive personal jurisdiction of a federal court sitting in the Middle District of Florida; (ii) agrees that all claims in respect of such action or proceeding must be commenced, and may be heard and determined, exclusively in the aforementioned court; (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in the aforementioned court; and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in the aforementioned court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8.1.  Nothing in this Agreement shall affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

(b)

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE

52

TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.11.

8.12

Headings.  The headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

8.13

Further Assurances.  Each party will, and will cause its Subsidiaries to, execute and deliver such further documents and instruments and take such further actions as may reasonably be requested by any other party in order to consummate the transactions contemplated by this Agreement and the Merger in accordance with the terms hereof, including but not limited to the agreements set forth in Section 6.8.

8.14

Authorship.  The parties agree that the terms and language of this Agreement were the result of negotiations between the parties and their respective advisors and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any party.  Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation.

8.15

Publicity.  Parent and the Company on the one hand, and Buyer on the other hand, shall consult with each other before issuing any press release or making any public statement with respect to this Agreement, the Merger or the other transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement without the prior consent of the other party, which shall not be unreasonably withheld; provided, however, that a party may, without the prior consent of the other party (but after prior consultation, to the extent practicable in the circumstances) issue such press release or make such public statement as may upon the advice of outside counsel be required by Law or the rules and regulations of the OTCQB or the OTCBB, as the case may be.  Without limiting the preceding sentence, Parent and the Company on the one hand, and Buyer on the other hand, shall cooperate to develop all public announcement materials and make appropriate management available at presentations related to the transactions contemplated by this Agreement as reasonably requested by the other party.  

53

IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Merger to be duly executed by their respective authorized officers as of the day and year first written above.

AS SEEN ON TV, INC.

By:

Its:

ASTV MERGER SUB, INC.

By:

Its:

INFUSION BRANDS INTERNATIONAL, INC.

By:

Its:

INFUSION BRANDS, INC.

By:

Its:

54

55

EX-4.1

EXHIBIT 4.1

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

COMMON STOCK PURCHASE WARRANT

Warrant No.: [_____]

to Purchase Common Stock of
AS SEEN ON TV, INC.

Expires April 3, 2015 (subject to extension as provided herein)

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received and pursuant to the Purchase Agreement (as defined below), MIG7 Warrant, LLC (the “Holder”), a Florida limited liability company and Affiliate of Mallitz Investment Group, a lending institution in the regular business of securitized lending and mezzanine financing, is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after April 3, 2014 (the “Initial Exercise Date”) and on or prior to the close of business on the first (1st) anniversary of the Initial Exercise Date (or, if the maturity date of the Note (as defined in the Purchase Agreement) is extended in accordance with its terms, then the eighteen-month anniversary of the Initial Exercise Date) (the “Termination Date”) but not thereafter, to subscribe for and purchase from AS SEEN ON TV, INC., a Florida corporation (the “Company”), shares (the “Warrant Shares”) constituting 4.99% of the Fully Diluted Shares (as defined below) of common stock, par value $0.0001 per share, of the Company (the “Common Stock”); provided that if the total amount funded pursuant to the Purchase Agreement is less than $10,000,000, the forgoing percentage shall be reduced to a number equal to 4.99% multiplied by the quotient of the aggregate amount actually funded divided by $10,000,000, provided further than in no event shall the percent be less than 4%. For purposes hereof, “Fully Diluted Shares” shall mean, with respect to any date on which this Warrant is exercised, the aggregate of (A) the total number of shares of Common Stock outstanding as of such date of exercise (including for the avoidance of doubt the total number of Common Stock equivalents as of such date to which any stock appreciation rights, phantom stock rights or other rights with

1

equity or profit participation features relates), (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities (as defined below) outstanding as of such date of exercise could be converted or exercised (including for the avoidance of doubt the number of shares of Common Stock into which the Warrants could be exercised), and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all Options (as defined below) outstanding as of such date of exercise.  “Convertible Security” or “Convertible Securities” means any stock or other securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock (including for the avoidance of doubt any stock appreciation rights, phantom stock rights or other rights with equity or profit participation features that are stock equivalents or other-securities equivalents (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or Common Stock equivalents), and “Option” or “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities (including for the avoidance of doubt any rights, warrants or options to acquire any stock appreciation rights, phantom stock rights or other rights with equity or profit participation features).The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).  

Section 1.

Definitions. Capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in that certain Senior Note Purchase Agreement dated effective as of April 3, 2014, by and between the Company and MIG7 Infusion, LLC, a Florida limited liability company and an Affiliate of the Holder (the “Purchase Agreement”), which agreement addresses the debt financing being provided to Company in connection with which this Warrant is being issued.

Section 2.

Exercise.

(a)

Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Notice of Exercise form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company); and, within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable percentage of Fully Diluted Shares of the Company so purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to

2

any Notice of Exercise within two (2) Trading Days of receipt of such notice. THE HOLDER AND ANY ASSIGNEE, BY ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING THE PURCHASE OF A PORTION OF THE WARRANT SHARES HEREUNDER, THE NUMBER OF WARRANT SHARES AVAILABLE FOR PURCHASE HEREUNDER AT ANY GIVEN TIME MAY BE LESS THAN THE AMOUNT STATED ON THE FACE HEREOF.

(b)

Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $0.001 (the “Exercise Price”).

(c)

Mechanics of Exercise.

(i)

Authorization of Warrant Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

(ii)

Delivery of Certificates Upon Exercise. Certificates for Warrant Shares purchased hereunder shall be transmitted by the transfer agent of the Company to the Holder by delivery to the address specified by the Holder in the Notice of Exercise, within five (5) Trading Days from the delivery to the Company of the Notice of Exercise form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(c)(viii) prior to the issuance of such shares, have been paid.

(iii)

Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

(iv)

Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the

3

Warrant Shares pursuant to Section 2(c)(ii) above by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

(v)

Obligation Absolute; Damages. The Company’s obligations to issue and deliver the certificates representing the Warrant Shares upon exercise of the Warrant in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such certificates representing the Warrant Shares. The Company shall issue the certificates representing the Warrant Shares or, if applicable, cash, upon a properly noticed exercise. If the Company fails to deliver to the Holder such certificate or certificates pursuant to Section 2(d) at any time when the Common Stock is listed or quoted on a Trading Market, within five (5) Trading Days of the Warrant Share Delivery Date applicable to such exercise, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of VWAP of the Common Stock, $10 per Trading Day (increasing to $20 per Trading Day after ten (10) Trading Days after the Warrant Share Delivery Date) for each Trading Day after the Warrant Share Delivery Date until such certificates are delivered.

(vi)

In addition to any other rights available to the Holder, if at any time when the Common Stock is listed or quoted on a Trading Market the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or delivered to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For

4

example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.

(vii)

No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

(viii)

Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder or other incidental expense in respect of the issuance of such certificate, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; the assignment shall be subject to Section 4 below, and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

(ix)

Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

(d)

Cashless Exercise. If at any time after the Common Stock is listed or quoted on a Trading Market and that is at least six months from the earlier of (i) date of issuance of this Warrant or (ii) the date of issuance of any security that was given in exchange or replacement for this Warrant, there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder (a “Cashless Exercise Trigger”), then this Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

5

(A) =

the VWAP on the Trading Day immediately preceding the date of such election;

(B)=

the Exercise Price of this Warrant; and

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

Section 3.

Adjustment of Number of Shares Issuable Upon Exercise. The number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3; provided that no such adjustment shall be made to the number of shares so issuable to the extent the effect of the event giving rise to such adjustment has already been included in the determination of the number of Fully Diluted Shares.

(a)

Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity-equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted. Any adjustment made pursuant to this Section 3(b) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

(b)

Pro Rata Distributions. If the Company, at any time prior to the Termination Date, shall distribute to all holders of Common Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock, then in each such case the number of shares issuable hereunder shall be proportionately adjusted by taking into consideration the fraction of which the denominator shall be the VWAP (defined below) determined as of the record date of such issuance, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the board of directors of the Company in good faith. The adjustment shall be described in a statement provided to the Holder. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above. “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)); (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the

6

nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

(c)

Fundamental Transactions. If, at any time while this Warrant is outstanding, there is a Fundamental Transaction (defined below), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3(d) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. “Fundamental Transaction” means one or more related transactions where, directly or indirectly (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reorganization, recapitalization, or reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property; (v) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person; (iv) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate Voting Stock of the Corporation. “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated

7

association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. “Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

(d)

Other Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors in good faith will make an appropriate adjustment in the number of shares issuable hereunder so as to be equitable under the circumstances and otherwise protect the rights of the Holders; provided that no such adjustment will increase the Exercise Price as otherwise determined pursuant to this Section 3.

(e)

Calculations. All calculations under this Section 3 shall be made to the nearest 1/100th of a cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

(f)

Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

(g)

Notice to Holders.

(i)

Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to each Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

(ii)

Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon

8

the Warrant Register of the Company, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (X) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (Y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the ten (10) day period commencing on the date of such notice to the effective date of the event triggering such notice.

Section 4.

Transfer of Warrant.

(a)

Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

(b)

New Warrants, This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

(c)

Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

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(d)

Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act or a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

Section 5.

Miscellaneous.

(a)

Voting Rights as Shareholder Prior to Exercise. Except as otherwise required by law, the Holder shall be entitled to vote on all matters submitted to a vote of the shareholders of the Company and shall have such number of votes equal to the number of shares of Common Stock into which this Warrant is then exercisable pursuant to the provisions hereof, at the record date for the determination of shareholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken or any written consent of shareholders is solicited. Except as otherwise required by law, the Holder and the holders of Common Stock shall vote together as a single class, and not as separate classes.

(b)

Loss, Theft Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

(c)

Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

(d)

Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure

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that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed or quoted.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(e)

Jurisdiction. All questions concerning the construction, validity, enforcement, venue, jurisdiction, and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

(f)

Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

(g)

Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

(h)

Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

(i)

Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

(j)

Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

(k)

Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders

11

from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.

(l)

Amendment. This Warrant may be modified or amended or the provisions hereof waived only with the written consent of the Company and the Holder.

(m)

Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(n)

Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized

Dated: April 3, 2014

AS SEEN ON TV, INC.

By:

Name:

Title:

13

NOTICE OF EXERCISE

TO:

[_______________________]

(1)

The undersigned hereby elects to purchase __________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2)

Payment will be made in lawful money of the United States.

(3)

Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

______________________________

______________________________

______________________________

(4)

Accredited Investor. The undersigned certifies that it is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:

Signature of Authorized Signatory of Investing Entity:

Name of Authorized Signatory:

Title of Authorized Signatory:

Date:

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [____] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________________________ whose address is

____________________________________________________________________________.

____________________________________________________________________________

Dated: _________________, ____

Holder’s Signature:

____________________________________

Holder’s Address:

____________________________________

____________________________________

Signature Guaranteed: ________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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EX-10.1

EXHIBIT 10.1

SENIOR NOTE PURCHASE AGREEMENT

THIS SENIOR NOTE PURCHASE AGREEMENT (this “Agreement”) is made as of April 3, 2014, among AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Credit Parties” and each individually, a “Credit Party”), and MIG7 INFUSION, LLC, a Florida limited liability company (the “Purchaser”).

W I T N E S S E T H:

WHEREAS, the Purchaser is an affiliate of Mallitz Investment Group, a lending institution in the regular business of securitized lending and mezzanine financing; and

WHEREAS, pursuant to the terms and conditions of this Agreement, the Company wishes to undertake a debt financing, and the Purchaser wishes to provide such debt financing;

NOW, THEREFORE, for and in consideration of the sum of $10.00, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.

Definitions and Related Matters.

1.1

Definitions. For the purposes of this Agreement, the following terms have the meanings set forth below (such meanings to be applicable to both the singular and plural forms of the terms defined):

“Account Assignment Agreement” means that certain Account Assignment Agreement by the Credit Parties in favor of the Purchaser pursuant to which the Credit Parties assigns all of their right, title and interest in and to, and grant a valid, first priority security interest in, the Interest Reserve Account and Operating Account to the Purchaser (subject to the terms and conditions set forth therein) and otherwise in form and substance satisfactory to the Purchaser.

“Account Control Agreement” means that certain Deposit Account Control Agreement (Hard Account Agreements) among the Credit Parties, Wells Fargo Bank, N.A. and the Purchaser granting control over the Interest Reserve Account and the Operating Account to the Purchaser (subject to the terms and conditions set forth therein) sufficient to perfect the security interest in the Interest Reserve Account and the Operating Account granted by the Credit Parties in favor of the Purchaser and otherwise in form and substance satisfactory to the Purchaser.

“Affiliate” of a named Person means (i) any Person owning ten percent (10%) or more of the voting stock or rights of the named Person or of which the named Person owns ten percent (10%) or more of such voting stock or rights; (ii) any Person controlling, controlled by,

or under common control with the named Person; (iii) any officer or director of the named Person or any Affiliates of the named Person; and (iv) any family member of the named Person or any Affiliate of the named Person.

“Affiliated Group” means any affiliated group as defined in Section 1504 of the Code that has filed a consolidated return for federal income tax purposes (or any similar group under state, local or foreign law) for a period during which a Credit Party or any of its Subsidiaries was a member.

“ASTV Merger” means the merger of a subsidiary of ASTV with and into Infusion on the terms set forth in Exhibit D.

“Bibby” means Bibby International Trade Finance, Inc., a Florida corporation.

“Bibby Debt” means the indebtedness owed from time to time by Infusion pursuant to that certain Amended and Restated Master Purchase and Sale Agreement dated October 10, 2012, and that certain Purchase Order Purchase and Tripartite Agreement, dated as of January 28, 2011, as amended, each in favor of Bibby in an amount not to exceed $2,500,000.00.

“Business Day” means any day other than a Saturday, Sunday or public holiday under the laws of the State of Florida or other day on which banking institutions are authorized or obligated to close in Sarasota, Florida.

“Capitalized Lease” means a lease under which the obligations of the lessee should, in accordance with GAAP consistently applied, be included in determining total liabilities as shown on the liability side of a balance sheet of the lessee.

“Capitalized Lease Obligations” means the amount of the liability reflecting the aggregate discounted amount of future payments under all Capitalized Leases calculated in accordance with GAAP consistently applied and Statement of Financial Accounting Standards No. 13.

“Change in Control” shall mean the occurrence of one or more of the following events: (a) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of any Credit Party to any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder in effect on the date hereof); (b)  occupation of a majority of the seats (other than vacant seats) on the board of directors of any of Credit Party by Persons who were neither (i) nominated by the current board of directors of such entity or (ii) appointed by directors so nominated, except as may be deemed to occur as a result of changes contemplated by the ASTV Merger or the Ronco Acquisition; (c) ASTV shall cease to own, directly or indirectly, 100% of the outstanding equity interests of any of the other Credit Parties, or (d) ASTV shall cease to own, directly or indirectly, the participation interest acquired pursuant to the Ronco Acquisition (or the secured indebtedness underlying such participation interest).

“Closing Date” means the date of this Agreement.

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“Code” means the Internal Revenue Code of 1986, as amended, and any reference to any particular Code section shall be interpreted to include any revision of or successor to that section regardless of how numbered or classified.

“Collateral” means, collectively, the Interest Reserve Account and all of the assets of each of the Credit Parties, including without limitation the ownership interest in all of the Subsidiaries and all accounts receivable of the Credit Parties, and all other assets, property and interests in property that shall from time to time be pledged or be purported to be pledged as direct or indirect security for the Loans.

“Common Stock” means the common stock, par value $0.0001 per share, of ASTV.

“Consolidated Net Income” means, for any period, the consolidated net after-tax income (or loss) of the Credit Parties and their Subsidiaries for such period determined in accordance with GAAP consistently applied; provided that in determining Consolidated Net Income hereunder, the following items shall be excluded: (i) gains from the sale or disposition of assets outside of the ordinary course of business and extraordinary items (determined in accordance with GAAP consistently applied) and non-recurring gains and gains from discontinued operations, (ii) income of any Person (other than Wholly-Owned Subsidiaries of the Credit Parties) in which the Credit Parties or any of their Subsidiaries has an ownership interest unless received by the Credit Parties or their Subsidiaries in a cash distribution and (iii) income of any Person realized prior to the date it became a Subsidiary of one of the Credit Parties or is merged into or consolidated with the Credit Parties or any of their Subsidiaries or prior to the date such Person’s assets are acquired by the Credit Parties or any of their Subsidiaries.

 “Dividends” means any distribution by a partnership, corporation, limited liability company or other entity with respect to its partnership interests, membership interests, capital stock or other ownership interests whether in cash, securities (including common and preferred ownership interests) or other property.

“EBITDA” means, for any period, the sum of (i) Consolidated Net Income for such period and (ii) only to the extent deducted in the determination of Consolidated Net Income for such period (a) any federal, state, local, foreign or other income or similar taxes for such period, (b) Total Interest Expense for such period and (c) amortization and depreciation, determined on a consolidated basis in accordance with GAAP consistently applied.

“Environmental and Safety Requirements” means all federal, state, local and foreign statutes, regulations, ordinances and similar provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common law, in each case concerning public health and safety, worker health and safety and pollution or protection of the environment (including, without limitation, all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control or cleanup of any hazardous or otherwise regulated materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation), each as amended and as now or hereafter in effect.

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“FarWest Debt” means the indebtedness owed from time to time by Ronco Holdings, Inc. pursuant to that certain ____________ dated __________, 2014.

“Federal Bankruptcy Code” means title 11 of the United States Code.

“GAAP” means generally accepted accounting principles as promulgated by the Financial Accounting Standards Board, as in effect from time to time (subject to the provisions of Section 1.3 hereof).

“Guarantee” means any guarantee of the payment or performance of any Indebtedness or other obligation and any other arrangement whereby credit is extended (or continued) to one obligor on the basis of any promise of another Person, whether that promise is expressed in terms of an obligation to (i) pay the Indebtedness or other liabilities of such obligor, (ii) purchase an obligation owed by such obligor, (iii) purchase goods and services from such obligor pursuant to a take-or-pay contract, (iv) maintain the capital, working capital, solvency or general financial condition of such obligor, or (v) otherwise assure any creditor of such obligor against loss (including by way of an agreement to repurchase or reimburse), whether or not any such arrangement is listed on the balance sheet of such other Person or referred to in a footnote thereto, but shall not include endorsements of items for collection in the ordinary course of business. The amount of any Guarantee shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed or determined amount, the maximum amount guaranteed or supported.

“Indebtedness” means at a particular time, without duplication, (i) any indebtedness for borrowed money or issued in substitution for or exchange of indebtedness for borrowed money, (ii) any indebtedness evidenced by any note, bond, debenture or other debt instrument, (iii) any indebtedness for the deferred purchase price of property or services with respect to which a Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current liabilities incurred in the ordinary course of business which are not more than ninety (90) days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP), (iv) any commitment by which a Person assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit and banker acceptances), (v) any obligations for which a Person is obligated pursuant to a Guarantee, (vi) any obligations under Capitalized Leases with respect to which a Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or with respect to which obligations a Person assures a creditor against loss, (vii) any indebtedness secured by a Lien on a Person’s assets, and (viii) net obligations under hedging arrangements designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.

“Inter-Creditor Agreement” means that certain Intercreditor Agreement among the Credit Parties, the Purchaser and Vicis dated as of the date hereof.

“Knowledge” or “aware” means, in respect of each Credit Parties and its Subsidiaries, the actual knowledge or awareness of the persons set forth on the Definitions Schedule hereto or knowledge or awareness such persons should have after due inquiry.

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“Ronco Acquisition” means the acquisition of Ronco Funding LLC by Infusion on the terms set forth in Exhibit E.

“Liens” means any mortgage, pledge, security interest, encumbrance, lien, charge or other restriction of any kind whatsoever (including any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against a Credit Party or any of its Subsidiaries or Affiliates, any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar statute other than to reflect ownership by a third party of property leased to a Credit Party or any of its Subsidiaries under a lease which is not in the nature of a conditional sale or title retention agreement.

“Loans” shall have the meaning ascribed to such term in the Note.

“Material Adverse Effect” means a materially adverse effect (i) on the financial condition, operating results, assets, liabilities, operations, business or prospects of the Credit Parties and their Subsidiaries taken as a whole, or (ii) the ability of a Credit Party to perform any of its obligations under the Note or any of the other Transaction Documents to which it is a party.

“Maturity Date” has the meaning set forth in the Note.

“MFC Debt” means the indebtedness owed from time to time by Infusion pursuant to that certain Loan and Security Agreement dated as of March 2, 2011 by and between Infusion and Media Funding Corporation, which the Credit Parties hereby represent and warrant is zero as of the date of this Agreement.

“Officer’s Certificate” means a certificate signed by an officer of each Credit Party on behalf of such Credit Party, stating that (i) the officer signing such certificate has made or has caused to be made such investigations as are necessary in order to permit him or her to verify the accuracy of the information set forth in such certificate and (ii) such certificate does not misstate any material fact and does not omit to state any fact necessary to make the certificate not misleading.

“Operating Account” means the account maintained at Wells Fargo Bank, N.A. into which all cash of the Credit Parties is to be deposited, pursuant to the terms of the Account Control Agreement.

“Operating Lease” means for any Person any lease of property which would not be classified as a Capitalized Lease under GAAP consistently applied, other than a lease under which such Person is the lessor.

“Permitted Indebtedness” means:

(i)

the Vicis Debt, the Bibby Debt, the MFC Debt, and the FarWest Debt, existing as of the date hereof, as reduced from time to time by the amount of all payments of principal on the Bibby Debt (which amounts may not be re-borrowed unless consented to by Purchaser),

5

(ii)

any Indebtedness incurred pursuant to the terms of this Agreement or the Note,

(iii)

trade payables incurred in the ordinary course of business;

(iv)

contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business, overdraft protection and netting services of banks;

(v)

contingent Indebtedness arising under performance, surety and other similar bonds issued for the benefit of a Credit Party;

(vi)

guarantees of Indebtedness of a Credit Party otherwise permitted hereunder and guarantees of ordinary course liabilities and leases of a Credit Party;

(vii)

Indebtedness relating to loans from a Credit Party to any of its Subsidiaries;

(viii)

accounts or notes payable arising out of the purchase of merchandise, supplies, equipment, software, computer programs or services in the ordinary course of business;

(ix)

the Subordinated Debt; and

(x)

any refinancing or renewal of any of the foregoing (a “New Loan”); provided, that (a) the maximum principal amount of any New Loan is not in excess of the original principal amount of the Indebtedness being refinanced or renewed, (b) the terms and covenants of such New Loan are not materially more restrictive on a Credit Party or any of its Subsidiaries than those of the existing Indebtedness, (c) such New Loan is secured by Liens on only such property of a Credit Party and its Subsidiaries as was the existing Indebtedness, and (d) Purchaser is notified prior to the consummation of such New Loan and thereafter promptly provided with copies of all of the agreements evidencing and securing such New Loan.

“Permitted Liens” means:

(i)

Liens arising under the Vicis/Bibby Debt Agreements and the agreements relating to the MFC Debt;

(ii)

Liens for taxes, assessments or governmental charges not yet due, or being contested in accordance with the terms hereof, but only if the existence of such Lien would not be reasonably likely to have a Material Adverse Effect;

(iii)

Liens of workmen, materialmen, vendors, suppliers, mechanics, carriers, warehouseman and landlords or other like liens, incurred in the ordinary course of business for sums not then due or being contested in good faith, if an adverse decision in which contest would not materially affect the business of the Company;

(iv)

Liens (a) that constitute purchase money security interests in any property acquired by a Credit Party or any of its Subsidiaries in the ordinary course of business

6

securing Indebtedness so long as such Liens attach only to the property being acquired with the proceeds of such purchase money Indebtedness, and (b) arising in connection with Capitalized Lease Obligations permitted hereunder so long as such Liens only extend to or cover the assets subject to such Capitalized Lease Obligations;

(v)

Liens incurred or deposits made in the ordinary course of business (a) in connection with worker's compensation, social security, unemployment insurance and other like laws, or (b) in connection with sales contracts, leases, statutory obligations, work in progress advances and other similar obligations not incurred in connection with the borrowing of money or the payment of the deferred purchase price of property;

(vi)

reservations, easements, zoning and other land use regulations, title exceptions or encumbrances granted in the ordinary course of business, affecting real property owned by a Credit Party or any of its Subsidiaries; provided that such exceptions do not in the aggregate materially detract from the value of such property or materially interfere with its use in the ordinary conduct of the business of such Credit Party or any of its Subsidiaries;

(vii)

Liens consisting of rights of set-off of a customary nature or banker’s liens or statutory landlord liens and other liens imposed by law on amounts on deposit in accounts of a Credit Party or any of its Subsidiaries, whether arising by contract or operation of law, incurred in the ordinary course of business;

(viii)

any attachment or judgment lien not constituting an Event of Default;

(ix)

Liens incurred or deposits made to secure the performance of bids, tenders, leases, trade contracts (other than Indebtedness), public or statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(x)

 any (a) interest or title of a lessor or sublessor under any lease, (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to, or (c) subordination of the interest of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (b), so long as the holder of such restriction or encumbrance agrees to recognize the rights of such lessee or sublessee under such lease;

(xi)

liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(xii)

such other Liens as the Purchaser may hereafter approve in writing; and

(xiii)

the replacement, extension or renewal of any of the foregoing upon or in the same property theretofore subject or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the indebtedness secured thereby.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated

7

organization, a governmental entity or any department, agency or political subdivision thereof and any other entity.

“Pledge Agreement” means that certain Pledge Agreement by ASTV in favor of the Purchaser pursuant to which ASTV pledges and grants a valid security interest in all of the other Credit Parties (subject to the terms and conditions set forth therein) and otherwise in form and substance satisfactory to the Purchaser.

“Potential Event of Default” means any event or occurrence which with the passage of time or the giving of notice or both would constitute an Event of Default.

“Securities” means the Note, the Warrant and the Warrant Shares (as defined in the Warrant).

“Securities Act” means the Securities Act of 1933, as amended, or any similar federal law then in force.

“Securities and Exchange Commission” means the U.S. Securities and Exchange Commission and any governmental body or agency succeeding to the functions thereof.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force.

“Security Agreement” means that certain Security Agreement by the Credit Parties in favor of the Purchaser pursuant to which the Credit Parties each grants a valid security interest in all of their assets (subject to the terms and conditions set forth therein) and otherwise in form and substance satisfactory to the Purchaser.

“Senior Debt” means indebtedness of the Credit Parties under this Agreement and the Note(s).

“Solvent” means, as to any Person, such Person (i) owns property whose fair saleable value is greater than the amount required to pay all of such Person’s Indebtedness (including contingent debts, discounted by the probability of such debts becoming due and payable), (ii) is able to pay all of its Indebtedness as such Indebtedness matures and (iii) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage.

“Subordinated Debt” means the unsecured Indebtedness owed by the Credit Parties set forth in Subordinated Debt Schedule attached hereto and any unsecured indebtedness incurred after the date hereof that is expressly subordinate to the Note.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the limited liability company, partnership or

8

other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof.

“Tax” or “Taxes” means any federal, state, county, local, foreign or other income, gross receipts, ad valorem, franchise, profits, sales or use, transfer, registration, excise, utility, environmental, communications, real or personal property, capital stock, license, payroll, wage or other withholding, employment, social security, severance, stamp, occupation, alternative or add-on minimum, estimated and other taxes of any kind whatsoever (including deficiencies, penalties, additions to tax, and interest attributable thereto) whether disputed or not.

“Tax Return” means any return, information report or filing with respect to Taxes, including any schedules attached thereto and including any amendment thereof.

“Total Interest Expense” means, with respect to any fiscal period, interest expense as determined for the Credit Parties and their Subsidiaries on a consolidated basis and in accordance with GAAP.

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE Arca, the American Stock Exchange, the New York Stock Exchange, the Nasdaq Global Select Market, Nasdaq Global Market, the Nasdaq Capital Market, or any tier of the over-the-counter (“OTC”) market.

“Transaction Documents” means this Agreement, the Warrant, the Note, the Security Agreement, the Pledge Agreement, the Account Assignment Agreement, Account Control Agreement, the Inter-Creditor Agreement, the UCC-1 Financing Statements and each of the other agreements, documents, instruments and certificates executed pursuant to or in connection with any of the foregoing, but expressly excluding the Vicis/Bibby Debt Agreements.

“UCC-1 Financing Statements” means those UCC-1 Financing Statements naming the Credit Parties as debtors and, in each case, the Purchaser as the secured party, covering all of the assets of the respective Credit Parties in proper form for filing in the organization of jurisdiction of the applicable debtor and otherwise in form and substance satisfactory to the Purchaser.

“Vicis” means Vicis Capital Master Fund, a sub-trust of Vicis Capital Master Series Trust, a unit trust organized and existing under the laws of the Cayman Islands.

“Vicis Debt” means the indebtedness originally owed by Infusion Brands International, Inc.(which indebtedness has been assumed from Infusion Brands International, Inc. by Infusion and from Infusion by ASTV) pursuant to that certain Senior Secured Debenture dated February 7, 2014, in an original principal amount of $11,000,000.00 in favor of Vicis Capital Master Fund, as reduced from time to time by the amount of all permitted payments of principal on such Vicis Debt.

“Vicis Restructuring” means the restructuring of the debt and equity owned by Vicis as specified in Exhibit D.

9

“Vicis/Bibby Debt Agreements” shall mean, collectively, the documents, instruments and agreements governing the Vicis Debt and the Bibby Debt.

“Warrant Shares” shall have the meaning set forth in the Warrant.

“Wholly-Owned Subsidiary” means, with respect to any Person, a Subsidiary of which all of the outstanding equity securities are owned by such Person or another Wholly-Owned Subsidiary of such Person.

1.2

Other Defined Terms. The following terms are defined in this Agreement in the Section set forth below:

Term

Section

“Additional Note(s)”

Section 2.1

“Agreement”

Preamble

“ASTV”

Preamble

“Board”

Section 4.3

“CERCLA”

Section 5.11(v)

“Closing”

Section 2.3

“Credit Party” and “Credit Parties”

Preamble

“Indemnitees”

Section 7.16

“Infusion”

Preamble

“Initial Advance”

Section 2.2

“Closing”

Section 2.3

“Note”

Section 2.1

“Interest Reserve Account”

Section 3.4

“Interest Reserve Holdback”

Section 3.4

“Liabilities”

Section 7.16

“Material Indebtedness”

Section 6.1(viii)

“Maximum Investment Amount”

Section 2.2

“Minimum Investment Amount”

Section 2.2

 “Note”

Section 2.1

“Purchaser”

Preamble

“Required Interest Reserve Amount”

Section 3.4

“Required Interest Reserve Deposit”

Section 3.4

“Warrant”

Section 2.1

1.3

Accounting Principles. The classification, character and amount of all assets, liabilities, capital accounts and reserves and of all items of income and expense to be determined, and any consolidation or other accounting computation to be made, and the interpretation of any definition containing any financial term, pursuant to this Agreement shall be determined and made in accordance with GAAP consistently applied, unless such principles are inconsistent with the express requirements of this Agreement; provided that if because of a change in GAAP after the date of this Agreement a Credit Party would be required to alter a previously utilized accounting principle, method or policy in order to remain in compliance with GAAP, such determination shall continue to be made in accordance with such Credit Party’s previous accounting principles, methods and policies.

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1.4

Other Interpretive Matters. In this Agreement, the Note, and each other Transaction Document to which Purchaser and a Credit Party are parties, unless a clear contrary intention appears: (i) the singular number includes the plural number and vice versa; (ii) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement or such other Transaction Document, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually; (iii) reference to any gender includes each other gender; (iv) reference to any agreement (including this Agreement and the Schedules hereto), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof (and without giving effect to any amendment or modification that would not be permitted in accordance with the terms hereof); (v) reference to any applicable law means such applicable law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any particular provision of any applicable law shall be interpreted to include any revision of or successor to that provision regardless of how numbered or classified; (vi) reference to any Article, Section or Exhibit means such Article or Section hereof or such Exhibit hereto; (vii) “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof; (viii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; (ix) relative to the determining of any period of time, “from” means “from and including” and “to” and “through” means “to and including”; (x) “or”, “either” and “any” are not exclusive; and (xi) references to any Subsidiary of a Person shall be given effect only at such times as such Person has one or more Subsidiaries.

Section 2.

Authorization and Closing.

2.1

Authorization of the Note. The Credit Parties have authorized the issuance and sale to the Purchaser of a 14% Senior Promissory Note in an aggregate principal amount of at least $8,000,000.00 (the “Minimum Investment Amount”) and no more than $10,000,000.00 (the “Maximum Investment Amount”), in the form set forth as Exhibit A attached hereto (the “Note”), and a Warrant to purchase up to 4.99% of the fully diluted shares of Common Stock of ASTV, free of all Liens (the “Warrant”), in the form attached hereto as Exhibit C.

2.2

Purchase and Sale of the Note. At the Closing, the Credit Parties shall sell to the Purchaser and, subject to the terms and conditions set forth herein, the Purchaser shall purchase from the Credit Parties the Note and the Warrant, for an aggregate purchase price equal to at least the Minimum Investment Amount and no greater than the Maximum Investment Amount, payable as follows: (i) on the Closing Date, Purchaser shall fund at least $2,500,000.00 by a wire transfer of immediately available funds in accordance with the Credit Parties’ written instructions (the “Initial Advance”) and (ii) on or prior to May 1, 2014, Purchaser shall fund an amount that, when added to the Initial Advance (net of the fees owed pursuant to Section 3.7), equals or exceeds the Minimum Investment Amount but does not exceed the Maximum Investment Amount, in the discretion of Purchaser based on funds raised by Purchaser from its investors, by a wire transfer of immediately available funds in accordance with the Credit Parties’ written instructions.

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2.3

The Closing. The closing of the Loan (the “Closing”) shall take place at the offices of Shumaker, Loop & Kendrick, LLP on April 3, 2014, or at such other place or on such other date as may be mutually agreeable to the Credit Parties and the Purchaser. At the Closing, the Credit Parties shall deliver to the Purchaser instruments evidencing the Note issued in the name of the Purchaser or its nominee, upon payment of the Initial Advance (net of fees owed pursuant to Section 3.7) by a wire transfer of immediately available funds in accordance with the Credit Parties’ written instructions.  Upon funding of an amount that, when added to the Initial Advance (net of the fees owed pursuant to Section 3.7), equals or exceeds the Minimum Investment Amount but does not exceed the Maximum Investment Amount, ASTV shall deliver to the Purchaser (or an Affiliate of the Purchaser designated by Purchaser) the Warrant.

Section 3.

Conditions of the Purchaser’s Obligation at the Closing. The obligation of the Purchaser to purchase and pay for the Note at the Closing or fund any advances thereunder is subject to the fulfillment of the following conditions to the Purchaser’s satisfaction in its sole discretion:

3.1

Representations, Warranties and Covenants; No Event of Default. The representations and warranties contained in Section 5 hereof shall be true and correct in all material respects on the date hereof and at and as of the Closing and the date of each advance (both immediately prior to and immediately after giving effect to the transactions contemplated by the Transaction Documents) as though then made; provided, however, that any representations and warranties that are qualified by materiality shall be true and correct in all respects, the Credit Parties and their Affiliates shall have performed in all material respects all of the covenants required to be performed by them hereunder and under the other documents, agreements and instruments executed in connection herewith that are to be complied with or performed by them on or prior to the Closing, and there shall not exist any Event of Default or Potential Event of Default.

3.2

Transaction Documents. Each of the Credit Parties shall have executed and delivered to the Purchaser each of the Transaction Documents to which it is a party and each of Credit Parties shall have authorized the Purchaser to file the UCC-1 Financing Statements in the appropriate recording offices. Furthermore, Vicis shall have executed and delivered the Inter-Creditor Agreement to the Purchaser.

3.3

Interest Reserve Account. The Credit Parties shall (unless the Purchaser elects to collect all interest payments in advance as contemplated by this Section 3.3 in lieu of the establishment of an Interest Reserve Account) have established an interest reserve and cash collateral account with Wells Fargo Bank, N.A., or another financial institution reasonably acceptable to Purchaser (the “Interest Reserve Account”), and the Credit Parties shall have granted a first priority lien on and shall have taken all actions requested by Purchaser necessary for the Purchaser to have acquired a duly perfected security interest in the Interest Reserve Account, and all deposits therein and proceeds thereof, in favor of Purchaser. Simultaneous with the funding of each advance of the Loan evidenced by the Note, the Credit Parties shall deposit into the Interest Reserve Account an amount equal to the aggregate interest that will accrue on the principal amount of such advance at the Interest Rate (as defined in the Note) from the date of such advance through and including the Maturity Date (each, a “Required Interest Reserve Deposit,” and collectively, the “Required Interest Reserve Amount”). The Credit Parties shall be

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entitled to fund any Required Interest Reserve Deposit with the proceeds of the related advance under the Note.

The Maturity Date may be extended as provided by the Note. If the Maturity Date is extended in compliance with the Note, then, as further provided in the Note, the Required Interest Reserve Amount shall be recalculated based on the adjusted Maturity Date and Interest Rate (as defined in the Note) (such recalculated amount being referred to herein as the “Additional Reserve”), and the Company shall deposit into the Interest Reserve Account, on or prior to the original Maturity Date, the amount of the Additional Reserve in cash.

In the event that the Credit Parties shall have failed to establish or maintain  the Interest Reserve Account or shall have failed to take any actions requested by Purchaser necessary for the Purchaser to have acquired the duly perfected first priority lien on and security interest in the Interest Reserve Account and the deposits therein and proceeds thereof, as of any date on which the funding or an advance hereunder is made, including the Initial Advance, or if the Purchaser elects to collect all interest payments in advance as contemplated by this paragraph in lieu of the establishment of an Interest Reserve Account, the Purchaser shall be entitled to hold back and refrain from funding an amount equal to the applicable Required Interest Reserve Deposit (each, an “Interest Reserve Holdback”), which Interest Reserve Holdback the Purchaser shall apply to the payment of interest on the Note.  For the avoidance of doubt, in the event that an Interest Reserve Holdback occurs, the full advance, including the Interest Reserve Holdback, shall be deemed to have been funded and interest shall accrue thereon pursuant to the terms of the applicable Note, and the Purchaser shall not be required to pay or be liable for any interest thereon in favor of the Credit Parties.

3.4

Vicis Restructuring and Ronco Acquisition. The Vicis Restructuring, Ronco Acquisition, and ASTV Merger shall have been consummated on the terms set forth in Exhibits C, D, and E.

3.5

Due Diligence Review. Purchaser and its representatives shall have conducted a technical, financial, business and legal due diligence review of any and all documents, instruments, contracts, agreements, materials and other information relating to the Credit Parties, their operating subsidiaries, the business operations thereof, and the Collateral, including without limitation books and records, financial statements and data, and other records and accounts, and in the sole discretion of the Purchaser, the Purchaser shall be satisfied with the results of such review. Such review shall not limit or have any effect whatsoever on the liability of any of the Credit Parties to the Purchaser under this Agreement or otherwise for breach of any representations, warranties, or covenants under this Agreement.

3.6

Closing Fees and Expenses. The Credit Parties shall have: (i) at Closing reimbursed the Purchaser for the fees and expenses as provided in Section 7.1 hereof; (ii) paid to the Purchaser a loan origination fee at the Closing and on the date of funding of any other advances under the Note equal to 3% of the amount so advanced to the Credit Parties by deduction of such amount from the amount advanced; and (iii) paid to the Purchaser a deferred loan origination fee on or before the first anniversary of the Closing in the aggregate amount of 1% of aggregate amount of all advances made to the Credit Parties pursuant to this Agreement (and for the avoidance of doubt each of (i)-(iii) may be paid using the proceeds of the sale of the Note).

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3.7

Opinion of Counsel to Credit Parties. The Purchaser shall have received from counsel to the Credit Parties, opinions which shall be addressed to the Purchaser, dated the date of the Closing, and in form and substance satisfactory to the Purchaser.

3.8

Closing Documents.

(i)

At the Closing, the Credit Parties shall deliver to the Purchaser all of the following documents:

(a)

this Agreement, the Note, and the other Transaction Documents to which they are a party, duly executed by the Credit Parties;

(b)

the Inter-Creditor Agreement, duly executed by Vicis;

(c)

the Account Control Agreement, duly executed by the Credit Parties and Wells Fargo Bank, N.A.;

(d)

certified copies of the resolutions duly adopted by board of directors of each Credit Party authorizing (a) the execution, delivery and performance of each of the Transaction Documents to which it is a party and the issuance and sale of the Note, and (b) the consummation of all other transactions contemplated by the Transaction Documents;

(e)

certified copies of the organizational documents of each Credit Party as in effect at the Closing;

(f)

a certificate of good standing of each Credit Party, dated not more than ten (10) days prior to the date of the Closing, issued by such Credit Party’s state of incorporation/formation/organization; and

(g)

all other documents relating to the transactions contemplated by the Transaction Documents as the Purchaser or its counsel may reasonably request.

(ii)

Upon funding of an amount that, when added to the Initial Advance (net of the fees owed pursuant to Section 3.7), equals or exceeds the Minimum Investment Amount but does not exceed the Maximum Investment Amount, ASTV shall deliver to the Purchaser the Warrant, duly executed by ASTV.

3.9

Proceedings. All corporate and other proceedings taken or required to be taken by the Credit Parties in connection with the transactions contemplated by this Agreement to be consummated at or prior to each Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Purchaser.

3.10

Compliance with Applicable Laws. The purchase of the Note by the Purchaser hereunder shall not be prohibited by any applicable law or governmental rule or regulation and shall not subject the Purchaser to any penalty, liability or, in the Purchaser’s sole judgment, other onerous condition under or pursuant to any applicable law or governmental rule or regulation, and the purchase of the Note by the Purchaser hereunder shall be permitted by laws, rules and

14

regulations of the jurisdictions and governmental authorities and agencies to which the Purchaser is subject.

3.11

No Material Adverse Change. As of each Closing, since the date of the most recent financial statements provided to the Purchaser by the Credit Parties, there shall have been no material adverse change in the financial condition, operating results, assets, liabilities, operations or prospects of the Credit Parties and their Subsidiaries taken as a whole.

3.12

Reserved.

3.13

Insurance Requirements. The Credit Parties and each of their respective Subsidiaries shall have in full force and effect as of each Closing the types and levels of insurance required and/or customarily carried in the sectors and in the locations in which they operate, and at the Closing evidence thereof shall have been provided to the Purchaser.

3.14

Waiver. Any condition specified in this Section 3 may be waived if consented to by the Purchaser; provided that no such waiver shall be effective against the Purchaser unless it is set forth in a writing executed by the Purchaser.

Section 4.

Covenants.

4.1

Financial Statements and Other Information. Each Credit Party shall keep, and cause each of its Subsidiaries to keep, adequate records and books of account with respect to its business activities in which proper entries are made in accordance with GAAP, reflecting all its financial transactions; and cause to be prepared and furnished to the Purchaser each of the following (all to be prepared in accordance with GAAP applied on a consistent basis, unless the Credit Parties’ certified public accountant or auditor concurs in any change therein and such change is disclosed to the Purchasers and is consistent with GAAP):

(i)

as soon as available but in any event within fifteen (15) days after the end of each monthly accounting period in each fiscal year of the Credit Parties (except for a month end for which annual statements are required to be delivered as provided in subsection (iii) of this Section 4.1), unaudited consolidating and consolidated statements of income and cash flows of such Credit Party and each of its respective Subsidiaries for such monthly accounting period and for the period from the beginning of the fiscal year to the end of such month, and unaudited consolidating and consolidated balance sheets of such Credit Party and each of its respective Subsidiaries as of the end of such monthly accounting period, setting forth in each case comparisons to the applicable Credit Party’s annual budget and to the corresponding period in the preceding fiscal year, and all such statements shall be prepared in accordance with GAAP consistently applied, subject to the absence of footnote disclosures and to normal year-end adjustments for recurring accruals, and shall be certified by such Credit Party’s chief financial officer;

(ii)

accompanying the financial statements referred to in subsection (i) of this Section 4.1, (a) an Officer’s Certificate (1) stating that there is no Event of Default or Potential Event of Default in existence or, if any Event of Default or Potential Event of Default exists, specifying the nature and period of existence thereof and what actions the Credit Parties have taken and propose to take with respect thereto, and (2) setting forth in sufficient detail all relevant information relating to any major strategic changes being

15

considered or implemented and (b) a management report, in reasonable detail, signed by the chief financial officer of each Credit Party, describing the operations and financial condition of the Credit Parties for the month and the portion of the fiscal year then ended;

(iii)

as soon as available but in any event within ninety (90) days after the end of each fiscal year of the Credit Parties, accountant audited, consolidating and consolidated statements of income and cash flows of such Credit Party and each of its Subsidiaries and consolidating and consolidated balance sheets of such Credit Party and each of its Subsidiaries, in each case as of the end of such fiscal year, setting forth in each case comparisons to such Credit Party’s preceding fiscal year, all prepared in accordance with GAAP consistently applied, and accompanied by an audit report of an independent accounting firm acceptable to the Purchaser, and a copy of such firm’s annual management letter to the board of directors;

(iv)

promptly upon receipt thereof, any additional reports, management letters or other detailed information concerning significant aspects of a Credit Party’s operations or financial affairs given to a Credit Party by its independent auditors (and not otherwise contained in other materials provided hereunder);

(v)

as soon as available but in any event within thirty (30) days after the filing thereof by each of the Credit Parties, true and complete copies of each federal, state and local Tax Return of such Credit Parties, including all schedules and attachments thereto;

(vi)

at least fifteen (15) days but not more than ninety (90) days prior to the beginning of each fiscal year of the Credit Parties, an annual budget prepared on a monthly basis for each Credit Party and each of its Subsidiaries for such fiscal year (displaying anticipated statements of income and cash flows and balance sheets) and copies of the business plan for such Credit Party (including management’s intentions with regard to anticipated significant business developments or objectives of such Credit Party) for the next fiscal year and projections (prepared on a monthly basis) of (a) the balance sheet at the end of such fiscal year, (b) statements of income and expense and of owners’ equity for such fiscal year, and (c) statements of cash flow for such fiscal year, all of the foregoing to be in reasonable detail and certified by such Credit Party’s chief financial officer as having been prepared in good faith and to the best knowledge and ability of such Credit Party, and promptly upon preparation thereof any other significant budgets prepared by such Credit Party and any revisions of such annual or other budgets or business plans;

(vii)

immediately after the discovery or receipt of notice of any Event of Default or Potential Event of Default, any default under any Transaction Document or any other material agreement to which a Credit Party or any of its Subsidiaries is a party, any investigation, notice, proceeding or adverse determination from any governmental or regulatory authority or agency, any condition or event that has resulted in or could reasonably be expected to result in any material liability under any Environmental and Safety Requirements or any other Material Adverse Effect affecting a Credit Party or any of its Subsidiaries (including the filing of any litigation against a Credit Party or any of its Subsidiaries that could reasonably be expected to result in any material liability to the Credit Party or any of its Subsidiaries), an Officer’s Certificate specifying the nature and

16

period of existence thereof and what actions the Credit Parties and their respective Subsidiaries have taken and propose to take with respect thereto;

(viii)

copies of any compliance certificates, borrowing base certificates and accounts receivable aging reports delivered to Vicis or Bibby, copies of any statements, reports, certificates and any other information delivered to a Credit Party’s equity holders and, at the Purchaser’s request, copies of any other statements, reports, certificates and any other information delivered to Vicis or Bibby, in each case, such copies shall be delivered to the Purchaser at the same time as such information is delivered to Vicis or Bibby; and

(ix)

with reasonable promptness, such other information and financial data concerning any Credit Party and/or and its Subsidiaries that the Purchaser may reasonably request.

Each of the financial statements referred to in subsections (i), and (iii) above shall be true and correct in all material respects as of the dates and for the periods stated therein, subject in the case of the unaudited financial statements to changes resulting from normal year-end adjustments for recurring accruals (none of which would, alone or in the aggregate, have a materially adverse effect on (a) the financial condition, operating results, assets, liabilities, operations, condition (financial or otherwise), business or prospects of the Credit Parties and their Subsidiaries taken as a whole or (b) the ability of the Credit Parties to repay the Note or (c) the ability of a Credit Party to perform any of its obligations under the any of the Transaction Documents).

4.2

Inspection of Property. The Credit Parties shall permit any representatives designated by the Purchaser, upon reasonable notice and during normal business hours, to (i) visit and inspect any of the properties of a Credit Party and its Subsidiaries, (ii) examine the company and financial records of a Credit Party and its Subsidiaries and make copies thereof or extracts therefrom, (iii) meet quarterly with each Credit Party to conduct operating meetings to discuss operational and financial progress and developments and (iv) discuss the affairs, finances and accounts of any such entities with key employees and the independent accountants of a Credit Party and its Subsidiaries; provided, however, that, in the case of clauses (i) and (ii) only, the Purchaser may not exercise such rights more than two (2) times per fiscal year except during periods where an Event of Default has occurred and is continuing, it being agreed that the Purchaser shall not be limited in the exercise of its rights in the case of clause (iii). The presentation of an executed copy of this Agreement by the Purchaser to the Credit Parties’ independent accountants shall constitute the Credit Parties’ permission to their independent accountants to participate in discussions with such Persons.

4.3

Board of Directors. Each Credit Party shall give the Purchaser notice of each meeting of its board of directors (the “Board”) (which shall normally be held at least once each quarter and may be a combined meeting with the directors and equity holders of each Credit Party and its Subsidiaries), and each meeting of a committee thereof, at the same time and in the same manner as notice is given to the Board members, and such Credit Party shall permit two (2) representatives of the Purchaser to attend as an observer all meetings of the Board members and all such meetings of committees thereof. The Purchaser’s representatives shall be entitled to receive all written materials and other information (including copies of meeting minutes) given to the Board members in connection with such meetings at the same time such materials and

17

information are given to the Board members. If a Credit Party proposes to take any action, other than approval of a customer contract in the ordinary course of business, by written consent in lieu of a meeting of the Board members or any committee thereof, such Credit Party shall give written notice thereof to the Purchaser promptly following execution of such consent describing in reasonable detail the nature and substance of such action. The Credit Parties shall pay the reasonable out-of-pocket expenses of the Purchaser’s representatives incurred in connection with attending any such meetings. Notwithstanding anything to the contrary in this Section 4.3, the Purchaser’s representatives shall not be permitted to attend any portion of a Board or committee meeting (i) to the extent that attendance by the Purchaser’s representatives would jeopardize the relevant Credit Party’s ability to assert the attorney-client privilege with respect to matters of material importance to be discussed during such portion of any meeting, or (ii) during which matters relating to this Agreement are to be discussed. Notwithstanding anything to the contrary, upon the written request of the Purchaser, the Credit Parties shall cause the Purchaser’s two (2) representatives  to be nominated for election to each Board of each Credit Party as full voting members of such Boards.

4.4

Affirmative Covenants. So long as any Note remains outstanding, each Credit Party shall, and shall cause each of its Subsidiaries to:

(i)

Cause to be done all things necessary to maintain, preserve and renew its corporate existence, rights, franchises, privileges and qualifications and all material licenses, authorizations and permits necessary to the conduct of its businesses;

(ii)

Maintain and keep its material properties in good repair, working order and condition (ordinary wear and tear excepted), and from time to time make all necessary or desirable repairs, renewals and replacements, so that its businesses may be properly and advantageously conducted at all times;

(iii)

Pay and discharge when payable all material Taxes, assessments and governmental charges imposed upon its properties or upon it or its income or profits (in each case before the same becomes delinquent and before penalties accrue thereon) and all material claims for labor, materials or supplies which if unpaid would by law become a Lien upon any of its property, unless and to the extent that the same are being contested in good faith, diligently and by appropriate proceedings and adequate reserves (as determined in accordance with GAAP consistently applied) have been established on its books with respect thereto and such contest operates to suspend collections of the same;

(iv)

Comply with all applicable laws, rules and regulations of all governmental authorities (including Environmental and Safety Requirements), the violation of which could reasonably be expected to have a Material Adverse Effect;

(v)

Comply with all Environmental and Safety Requirements and all permits, licenses or other authorizations issued thereunder the violation of which could reasonably be expected to have a Material Adverse Effect; respond immediately to any release or threatened release of any hazardous material, substance or waste in a manner which complies with all Environmental and Safety Requirements and reasonably mitigates any risk to human health or the environment; and provide such documents or information, or

18

conduct at its own cost such studies or assessments, relating to matters arising under the Environmental and Safety Requirements as the Purchaser may reasonably request;

(vi)

Apply for and continue in force with good and responsible insurance companies adequate insurance covering risks of such types and covering casualties, risks and contingencies of such types and in such amounts as are (a) required under any agreement or other document to which such Credit Party is a party, and (b) customary for companies of similar size engaged in similar lines of business (but in no event less than amounts as are substantially equivalent to those amounts that were maintained as of the Closing); and

(vii)

Maintain proper books of record and account which present fairly in all material respects its financial condition and results of operations and make provisions on its financial statements for all such proper reserves as in each case are required in accordance with GAAP consistently applied.

4.5

Negative Covenants. So long as any Note remains outstanding, no Credit Party shall take or permit its Subsidiaries to take any of the following actions:

(i)

directly or indirectly declare or pay any Dividends;

(ii)

directly or indirectly repay or prepay any principal of any Subordinated Debt;

(iii)

directly or indirectly make any redemption or purchase of any shares of its capital stock, membership interest or other form of its equity (including any warrants) or directly or indirectly redeem, purchase or make any payments with respect to any equity appreciation rights, phantom stock plans or similar rights or plans;

(iv)

merge or consolidate with any Person (other than the ASTV Merger or a merger or consolidation among Wholly-Owned Subsidiaries or a merger or consolidation of a Wholly-Owned Subsidiary into such Credit Party or of Infusion Brands International, Inc. into a Credit Party);

(v)

liquidate, dissolve or effect a recapitalization or reorganization in any form of transaction or otherwise alter its legal status;

(vi)

except as may be permitted by Section 4.5(iv), acquire any interest in any company or business (whether by a purchase of assets, purchase of stock, merger or otherwise), or enter into any joint venture without the consent of Purchaser, not to be unreasonably withheld;

(vii)

enter into, become subject to, amend, modify or waive any agreement or instrument which by its terms would (under any circumstances) restrict (a) the right of any of its Subsidiaries to make loans or advances or pay dividends to, transfer property to, or repay any Indebtedness owed to, such Credit Party or another Subsidiary of such Credit Party or (b) such Credit Party’s right to perform any of the provisions of any of the Transaction Documents (including provisions relating to the payment of principal and interest on the Note);

19

(viii)

enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any of its or any of its Subsidiaries’ officers, directors, employees, stockholders or Affiliates or with any individual related by blood, marriage or adoption to any such individual or with any entity in which any such Person or individual owns a beneficial interest, except for customary employment arrangements and benefit programs on reasonable terms and except as otherwise expressly contemplated by this Agreement or pursuant to the ASTV Merger or the Ronco Acquisition;

(ix)

establish or acquire (a) any Subsidiaries other than (subject to subsection (viii) above) Wholly-Owned Subsidiaries or (b) any Subsidiaries organized outside of the United States;

(x)

create, incur, assume or suffer to exist any Indebtedness other than Permitted Indebtedness or any Liens other than Permitted Liens;

(xi)

prepay, redeem, purchase, defeat or otherwise satisfy in any manner prior to its maturity any principal or interest on any Indebtedness other than the Bibby Debt, the MFC Debt, the FarWest Debt, and any indebtedness described in subsections (iii)-(viii) of the definition of Permitted Indebtedness or a New Loan relating to such indebtedness,  in each case the ordinary course of business, and the Senior Debt;

(xii)

issue or sell any equity securities, or rights to acquire equity securities, of any of its Subsidiaries to any Person;

(xiii)

undergo a Change in Control;

(xiv)

sell any of its material assets other than in the ordinary course of business;

(xv)

use the proceeds from the sale of the Note or any advances thereunder other than as set forth on the Use of Proceeds Schedule; or

(xvi)

incur any capital expenditure, or agree to incur any capital expenditure, including without limitation any purchase of inventory, other than in the ordinary course of business, it being agreed that, in addition, with regard to the purchase of inventory, the Credit Parties shall not purchase or commit to purchase inventory with a value exceeding $500,000 unless the Credit Parties have received a valid purchase order for a corresponding amount from a creditworthy customer, payable in the ordinary course of business.

4.6

Compliance with Agreements. Each Credit Party shall perform and observe all of its obligations, and shall cause each of its Subsidiaries to perform and observe all of their respective obligations (i) to each holder of the Note and (ii) under each of the other Transaction Documents.

4.7

Use of Proceeds. The Credit Parties shall not, nor shall they permit any of their Subsidiaries to, use any proceeds from the sale of the Note hereunder, directly or indirectly, for the purposes of purchasing or carrying any “margin securities” within the meaning of Regulation U, T or X promulgated by the Board of Governors of the Federal Reserve Board or for the

20

purpose of arranging for the extension of credit secured, directly or indirectly, in whole or in part by collateral that includes any “margin securities.”

4.8

Amendments to Agreements. The Credit Parties shall not amend, modify or waive, or permit any of their respective Subsidiaries to amend, modify or waive, any provision of the Vicis/Bibby Debt Agreements in a manner that adversely affects the rights of Purchaser under any of the Transaction Documents, other than an extension of the maturity date, except with the prior written consent of the Purchaser.

4.9

Interest Reserve Account and Account Control Agreement. The Credit Parties shall (unless the Purchaser elects to collect all interest payments in advance as contemplated by Section 3.3 in lieu of the establishment of an Interest Reserve Account) establish the Interest Reserve Account, subject to an effective Account Control Agreement, on the Closing. The Credit Parties shall at all times until the Loans are indefeasibly repaid in full maintain the Interest Reserve Account and the effectiveness of the Account Control Agreement. In addition, the Credit Parties shall ensure that all documents and instruments required by the Transaction Documents are promptly delivered to the Purchaser, including in the case of the Perfection Certificate required pursuant to the Security Agreement not later than fifteen (15) days after the Closing.

4.10

Subordination Agreements.  The Credit Parties shall use their respective best efforts to deliver to the Purchaser a subordination agreement, in a form reasonably acceptable to Purchaser, executed by each of the holders of the Subordinated Debt.

Section 5.

Representations and Warranties of the Credit Parties. As a material inducement to the Purchaser to enter into this Agreement and purchase and fund advances under the Note hereunder, each Credit Party hereby represents and warrants, jointly and severally, to the Purchaser that except as set forth in a schedule to this Agreement, each of the following statements are true, complete and correct as of the date of this Agreement and will be true, complete and correct in all material respects as of each Closing after giving effect to the transactions contemplated by the Transaction Documents:

5.1

Organization, Company Power and Licenses. Each Credit Party is a corporation duly organized, validly existing and in active status under the laws of its state of incorporation and is qualified to do business in every jurisdiction in which its ownership of property or conduct of business requires it to qualify, except for jurisdictions in which the failure to so qualify has not had and could not have a Material Adverse Effect. Each Credit Party possesses all requisite corporate power and authority and all material licenses, permits and authorizations necessary to own and operate its properties, to carry on its businesses as now conducted and presently proposed to be conducted and to carry out the transactions contemplated by the Transaction Documents. The copies of each Credit Party’s and its Subsidiaries’ organizational documents that have been furnished to the Purchaser’s counsel reflect all amendments made thereto at any time prior to the date of this Agreement and are correct and complete.

5.2

Authorization, No Breach. The execution, delivery and performance of each of the Transaction Documents and all other agreements and instruments contemplated hereby and thereby to which a Credit Party is a party have been duly authorized by such Credit Party. Each of the Transaction Documents and all other agreements and instruments contemplated hereby

21

and thereby to which a Credit Party is a party each constitutes a valid and binding obligation of such Credit Party, enforceable in accordance with its terms. The execution and delivery by each Credit Party of each of the Transaction Documents and all other agreements and instruments contemplated hereby and thereby to which such Credit Party is a party and the fulfillment of and compliance with the respective terms hereof and thereof by such Credit Party, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any Lien upon such Credit Party’s or any of its Subsidiaries’ equity securities or assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to, the organizational documents of such Credit Party or any of its Subsidiaries, or any law, statute, rule or regulation to which such Credit Party or any of its Subsidiaries is subject (including any usury laws applicable to the Note), or any agreement, instrument, order, judgment or decree to which such Credit Party or any of its Subsidiaries is subject (other than under any instrument or agreement evidencing securing or governing Indebtedness to be repaid in full at the Closing). Except as set forth on the attached Restrictions Schedule, no Subsidiary of a Credit Party is subject to any restrictions with respect to making loans or advances or paying dividends to, transferring property to, or repaying any Indebtedness owed to, such Credit Party or another Subsidiary of such Credit Party.

5.3

Capitalization. The authorized capital stock of each Credit Party, the number of shares of such capital stock issued and outstanding, and the number of shares of capital stock reserved for issuance upon the exercise or conversion of all outstanding warrants, stock options, and other securities issued by each of the Credit Parties, as of the date hereof, are set forth in the attached Capitalization Schedule.  All of such outstanding shares have been, or upon issuance will be, validly issued, are fully paid and nonassessable.  Except as disclosed in attached Capitalization Schedule:

(i)

no holder of shares of the capital stock of any of the Credit Parties has any preemptive rights or any other similar rights;

(ii)

there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of any of the Credit Parties or any Subsidiary, or contracts, commitments, understandings or arrangements by which any of the Credit Parties or any Subsidiary is or may become bound to issue additional shares of capital stock of any of the Credit Parties or any Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of any of the Credit Parties or any Subsidiary;

(iii)

there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of any of the Credit Parties or any Subsidiary or by which any of the Credit Parties or any Subsidiary is or may become bound;

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(iv)

there are no financing statements securing obligations filed in connection with any of the Credit Parties or any Subsidiary;

(v)

there are no agreements or arrangements under which any of the Credit Parties or any Subsidiary is obligated to register the sale of any of their securities under the Securities Act;

(vi)

there are no outstanding securities or instruments of any of the Credit Parties or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which any of the Credit Parties or any Subsidiary is or may become bound to redeem a security of the Company or a Subsidiary;

(vii)

there are no securities or instruments containing antidilution or similar provisions that will be triggered by the issuance of the Securities; and

(viii)

none of the Credit Parties have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

5.4

Issuance of Securities.

(i)

The Securities to be issued hereunder are duly authorized and, upon payment and issuance in accordance with the terms hereof, shall be free from all taxes, Liens and charges with respect to the issuance thereof. As of the Closing Date, ASTV has authorized and has reserved free of preemptive rights and other similar contractual rights of stockholders, a number of its authorized but unissued shares of Common Stock equal to one hundred percent (100%) of the aggregate number of shares of Common Stock issuable upon the full exercise of the Warrants.

(ii)

The Warrant Shares, when issued and paid for upon exercise of the Warrant will be validly issued, fully paid and nonassessable and free from all taxes, Liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of the Common Stock.

(iii)

Assuming the accuracy of each of the representations and warranties made by the Purchaser set forth in Section 7.3 hereof (and assuming no change in applicable law and no unlawful distribution of the Securities by the Purchaser or other Persons), the issuance by ASTV to the Purchaser of the Securities is exempt from registration under the Securities Act and ASTV has complied and will comply with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Securities hereunder.

(iv)

The Company understands and acknowledges that its obligation to issue the Warrant Shares is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.

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5.5

 Absence of Undisclosed Liabilities. Except as set forth in the Schedule of Liabilities attached hereto, no Credit Party or any Subsidiary of a Credit Party has any material obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, whether or not known to such Credit Party or any of its Subsidiaries, whether due or to become due and regardless of when asserted) arising out of transactions entered into at or prior to the Closing, or any action or inaction at or prior to the Closing, or any state of facts existing at or prior to the Closing other than: (i) liabilities set forth on the most recent balance sheet of such Credit Party delivered to the Purchaser in accordance with this Agreement (including any notes thereto), and (ii) liabilities and obligations which have arisen after the date of the such balance sheet in the ordinary course of business (none of which is a liability resulting from breach of contract, breach of warranty, tort, infringement, claim or lawsuit).

5.6

No Material Adverse Change. Except as may be deemed to arise as a result of the ASTV Merger or the Ronco Acquisition, since the date of the most recent balance sheet of such Credit Party delivered to the Purchaser in accordance with this Agreement, there has been no material adverse change in the financial condition, operating results, assets, liabilities, operations, business, prospects, employee relations or customer or supplier relations of the Credit Parties or any of their Subsidiaries taken as a whole.

5.7

Tax Matters. Each Credit Party and each of its Subsidiaries has timely filed all Tax Returns which they are required to file under applicable laws and regulations; all such Tax Returns are complete and correct in all material respects and have been prepared in compliance with all applicable laws and regulations in all material respects; each Credit Party and each of its Subsidiaries in all material respects has paid all Taxes due and owing by it (whether or not such Taxes are required to be shown on a Tax Return) and has withheld and paid over to the appropriate taxing authority all Taxes which it is required to withhold from amounts paid or owing to any employee, equity holder, creditor or other third party; no Credit Party or any Subsidiary of a Credit Party has waived any statute of limitations with respect to any Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency since the date of the most recent balance sheet of such Credit Party; no Credit Party or any Subsidiary of a Credit Party has incurred any liability for Taxes other than in the ordinary course of business; the assessment of any additional Taxes for periods for which Tax Returns have been filed by a Credit Party or any of its Subsidiaries shall not exceed the recorded liability therefor on the most recent balance sheet of such Credit Party (excluding any amount recorded which is attributable solely to timing differences between book and Tax income); no foreign, federal, state or local tax audits or administrative or judicial proceedings are pending or being conducted with respect to a Credit Party or any of its Subsidiaries; no information related to Tax matters has been requested by any foreign, federal, state or local taxing authority and no written notice indicating an intent to open an audit or other review has been received by a Credit Party or any of its Subsidiaries from any foreign, federal, state or local taxing authority; and there are no material unresolved questions or claims concerning a Credit Party’s or any of its Subsidiaries’ Tax liability.

5.8

Litigation, etc. Except as set forth on the attached Litigation Schedule, there are no actions, suits, proceedings, orders, investigations or claims pending or, to the best of each Credit Party’s knowledge, threatened against or affecting a Credit Party or any of its Subsidiaries (or to the best of each Credit Party’s knowledge, pending or threatened against or affecting any of the officers, directors or employees of a Credit Party or any of its Subsidiaries with respect to

24

their business or proposed business activities), or pending or threatened by a Credit Party or any of its Subsidiaries against any third party, at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality (including any actions, suits, proceedings or investigations with respect to the transactions contemplated by this Agreement); no Credit Party or Subsidiary of a Credit Party is subject to any arbitration proceedings under collective bargaining agreements or otherwise or, to the best of each Credit Party’s knowledge, any governmental investigations or inquiries (including inquiries as to the qualification to hold or receive any license or permit); and, to the best of each Credit Party’s knowledge, there is no valid basis for any of the foregoing. No Credit Party or any of Subsidiary of a Credit Party is subject to any judgment, order or decree of any court or other governmental agency. To the knowledge of the Credit Parties, there has not been, and there is not pending or threatened in writing, any investigation by the Securities and Exchange Commission involving any of the Credit Parties. The Securities and Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Securities Act.  

5.9

Financial Statements.  Attached as hereto as the Financial Statement Schedule are the Credit Parties’ consolidated balance sheet and statements of operations and cash flows of such Credit Party for each the following fiscal years 2011 and 2012 and unaudited statements for the period ended December 31, 2013 (collectively, the “Financial Statements”).  Such Financial Statements, together with any notes thereto, (1) have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated, except as disclosed therein, (2) are in accordance with the books and records of the Credit Parties and (3) are true and complete and present fairly the financial condition of the Company on a consolidated basis at the date or dates therein indicated and the results of operation for the period or periods therein specified.

5.10

Intellectual Property Rights.  Each of the Credit Parties own or possess the rights to use all patents, trademarks, domain names (whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations which are necessary for the conduct of its business as now conducted (collectively, the “Intellectual Property Rights”) without any conflict with the rights of others, except any failures as, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect.  The Intellectual Property Rights and all intellectual property with respect to which the Credit Parties have applied for registration and for which registration is pending are listed in the Intellectual Property Schedule hereto. None of the Credit Parties has received a written notice that the Intellectual Property Rights used by any of them violates or infringes upon the rights of any Person.  To the knowledge of the Credit Parties, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Credit Parties have taken reasonable measures to protect the value of the Intellectual Property Rights.  

5.11

Securities Filings. The Common Stock currently is reported on the OTC Bulletin Board and is registered pursuant to the Securities Exchange Act, and ASTV has filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission pursuant to the reporting requirements of the Securities Exchange

25

Act (all of the foregoing, including filings incorporated by reference therein, being referred to herein as the “Commission Documents”). Any Form 10-Q and Form 10-K filings made by the Company do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

5.12

Internal Accounting and Disclosure Controls.  ASTV is in compliance in all material respects with the requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof and applicable to it, and any and all rules and regulations promulgated by the Securities and Exchange Commission thereunder that are effective and applicable to it as of the date hereof to the best of its abilities. ASTV maintains a system of internal accounting controls and disclosure controls and procedures that it believes are appropriate given the size and circumstances of ASTV. ASTV maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP.

5.13

Investment Company Status.  ASTV is not, and immediately after receipt of payment for the Securities will not be, an “investment company,” an “affiliated person” of, “promoter” for or “principal underwriter” for, or an entity “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

5.14

OFAC.  Neither the issuance of the Securities to the Purchaser, nor the use of the respective proceeds thereof by ASTV, shall cause ASTV to violate the U.S. Bank Secrecy Act, as amended, and any applicable regulations thereunder or any of the sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) of the United States Department of Treasury, any regulations promulgated thereunder by OFAC or under any affiliated or successor governmental or quasi-governmental office, bureau or agency and any enabling legislation or executive order relating thereto. Without limiting the foregoing, ASTV (i) is not a person whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 200l Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) does not engage in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, or (iii) is not a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other OFAC regulation or executive order.

5.15

Title.  Each of the Credit Parties have good and marketable title to all personal property owned by them which is material to their respective business, in each case free and clear of all Liens other than Permitted Liens. Any real property and facilities held under lease by any of the Credit Parties are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Credit Parties.

5.16

Brokerage. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement and the other Transaction Documents based on any arrangement or agreement binding upon a Credit Party or any of its Subsidiaries. Each Credit Party shall pay, and hold the Purchaser harmless

26

against, any liability, loss or expense (including reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any such claim.

5.17

Governmental Consent, etc. Except for the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws, no permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required in connection with the execution, delivery and performance by any of the Credit Parties of this Agreement, the other Transaction Documents or the other agreements contemplated hereby or thereby, or the consummation by the Credit Parties of any other transactions contemplated hereby or thereby, except as set forth on the attached Consents Schedule.

5.18

Compliance with Laws. No Credit Party or any Subsidiary of a Credit Party has violated any law or any governmental regulation or requirement which violation has had or would reasonably be expected to have a Material Adverse Effect, and no Credit Party or any Subsidiary of a Credit Party has received notice of any such violation.

(i)

No Credit Party or any Subsidiary of a Credit Party is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by any Credit Party or any Subsidiary under), nor has any Credit Party or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound, except such that, individually or in the aggregate, such default(s) and violations(s) would not have or reasonably be expected to have a Material Adverse Effect, (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is in violation of any of the provisions of its certificate or articles of incorporation, bylaws or other organizational or charter documents.

(ii)

The business of each Credit Party and each Subsidiary is presently being conducted in accordance with all applicable foreign, federal, state and local governmental laws, rules, regulations and ordinances (including, without limitation, rules and regulations of each governmental and regulatory agency, self regulatory organization and Trading Market applicable to any of the Credit Parties or any Subsidiary), except such that, individually or in the aggregate, the noncompliance therewith would not have or reasonably be expected to have a Material Adverse Effect.  Each Credit Party and each Subsidiary has all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary for the conduct of its business as now being conducted by it unless the failure to possess such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals, individually or in the aggregate, would not have or reasonably be expected to have a Material Adverse Effect, and the Company has not received any written notice of proceedings relating to the revocation or modification of any of the foregoing.  

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5.19

Environmental and Safety Matters. Except as set forth on the attached Environmental Schedule:

(i)

Each Credit Party and each of its Subsidiaries has complied and is in compliance with all Environmental and Safety Requirements.

(ii)

Without limiting the generality of the foregoing, each Credit Party and each of its Subsidiaries has obtained and complied with, and is in compliance with, all permits, licenses and other authorizations that may be required pursuant to Environmental and Safety Requirements for the occupation of its properties and the operation of its business.

(iii)

No Credit Party or any Subsidiary of a Credit Party has received any written or oral notice, report or other information regarding any actual or alleged violation of Environmental and Safety Requirements, or any liabilities or potential liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations, relating to a Credit Party or any of its Subsidiaries or its properties arising under Environmental and Safety Requirements.

(iv)

None of the following exists at any property owned or operated by a Credit Party or any of its Subsidiaries: (a) underground storage tanks; (b) asbestos-containing material in any form or condition; (c) materials or equipment containing polychlorinated biphenyls; or (d) landfills, surface impoundments, or disposal areas.

(v)

No Credit Party or any Subsidiary of a Credit Party has treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released any substance, including any hazardous substance, or owned or operated any property (and no such property is contaminated by any such substance) in a manner that has given or could give rise to liabilities of a Credit Party or its Subsidiaries, including any liability for response costs, corrective action costs, personal injury, property damage, natural resources damages or attorney fees, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”) or the Solid Waste Disposal Act, as amended or any other Environmental and Safety Requirements.

(vi)

No facts, events or conditions relating to the past or present properties or operations of a Credit Party or any of its Subsidiaries will prevent, hinder or limit continued compliance with Environmental and Safety Requirements, give rise to any investigatory, remedial or corrective obligations pursuant to Environmental and Safety Requirements, or give rise to any other liabilities (whether accrued, absolute, contingent, unliquidated or otherwise) pursuant to Environmental and Safety Requirements, including any relating to onsite or offsite releases or threatened releases of hazardous materials, substances or wastes, personal injury, property damage or natural resources damage.

(vii)

Neither this Agreement nor the consummation of the transactions contemplated by this Agreement will result in any obligations for site investigation or cleanup, or notification to or consent of government agencies or third parties, pursuant to

28

any of the so-called “transaction-triggered” or “responsible property transfer” Environmental and Safety Requirements.

(viii)

No Credit Party or any Subsidiary of a Credit Party has, either expressly or by operation of law, assumed or undertaken any liability, including any obligation for corrective or remedial action, of any other person relating to Environmental and Safety Requirements.

5.20

Affiliated Transactions. Except as set forth on the attached Affiliated Transactions Schedule, no officer, director, employee, equity holder or Affiliate of a Credit Party or any of its Subsidiaries or any individual related by blood, marriage or adoption to any such individual or any entity in which any such Person or individual owns any beneficial interest, is a party to any agreement, contract, commitment, transaction or arrangement with such Credit Party or any of its Subsidiaries or has any material interest in any material property used by such Credit Party or any of its Subsidiaries.

5.21

Solvency, etc. Each Credit Party is solvent on a going concern basis as of the date of this Agreement and shall not become insolvent as a result of the consummation of the transactions contemplated by this Agreement. Each Credit Party is, and after giving effect to the transactions contemplated by this Agreement shall be, able to pay its debts as they become due, and each Credit Party’s property now has, and after giving effect to the transactions contemplated hereby and thereby shall have, a fair salable value greater than the amounts required to pay its debts (including a reasonable estimate of the amount of all contingent liabilities). Each Credit Party has adequate capital to carry on its business, and after giving effect to the transactions contemplated by this Agreement, each Credit Party shall have adequate capital to conduct its business. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Credit Parties.

5.22

Margin Regulations. The proceeds of the Note will be used only for the purposes contemplated hereunder. None of the proceeds of the Note or any advances made thereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the securities purchased under this Agreement to be considered “purpose credit” within the meaning of Regulations G, T, U or X of the Federal Reserve Board. The purchase of the Note will not constitute a violation of such Regulations G, T, U or X.

5.23

Disclosure. Neither this Agreement nor any of the exhibits, schedules, attachments, written statements, documents, certificates or other items prepared or supplied to the Purchaser by or on behalf of a Credit Party with respect to the transactions contemplated hereby contain any untrue statement of a material fact or omit a material fact necessary to make each statement contained herein or therein not misleading. There is no fact which the Credit Parties have not disclosed to the Purchaser in writing (including by way of the Commission Documents) and of which any of their respective officers, directors or executive employees is aware (other than general economic conditions) and which has had or would reasonably be expected to have a Material Adverse Effect.

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5.24

Closing Dates. The representations and warranties of the Credit Parties contained in this Section 5 and elsewhere in this Agreement and all information contained in any exhibit, schedule or attachment hereto or in any certificate or other writing delivered by, or on behalf of, a Credit Party to the Purchaser shall be true and correct in all material respects on the date of each Closing as though then made, both immediately prior to and immediately after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents.

Section 6.

Events of Default.

6.1

Definition. An Event of Default shall be deemed to have occurred, unless waived by or consented to in writing in advance by the Purchaser, if:

(i)

The Credit Parties fail to pay when due and payable (whether at maturity or otherwise) the full amount of any accrued interest or principal payment (together with any applicable premium or other fees due) on the Note;

(ii)

a Credit Party:

(a)

breaches, fails to perform or observe any of the covenants contained in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, or 4.9; or

(b)

breaches, fails to perform or observe any other material provision contained herein or any other Transaction Document including the Note or any other instrument delivered pursuant hereto or thereto and such failure continues uncured for thirty (30) days after the occurrence thereof;

(iii)

any representation, warranty or information contained herein or required to be furnished to any holder of the Note pursuant to this Agreement is materially false or misleading on the date made or furnished;

(iv)

a Credit Party or any of its Subsidiaries makes an assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due; or an order, judgment, decree or injunction is entered adjudicating a Credit Party or any of its Subsidiaries bankrupt or insolvent or requiring the dissolution or split up of a Credit Party or any of its Subsidiaries or preventing a Credit Party or any of its Subsidiaries from conducting all or any part of its business; or any order for relief with respect to a Credit Party or any of its Subsidiaries is entered under the Federal Bankruptcy Code; or a Credit Party or any of its Subsidiaries petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of such Credit Party or any of its Subsidiaries, or of any substantial part of the assets of such Credit Party or any of its Subsidiaries, or commences any proceeding (other than a proceeding for the voluntary liquidation and dissolution of any of its Subsidiaries) relating to such Credit Party or any of its Subsidiaries under any bankruptcy reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar laws of any jurisdiction now or hereafter in effect; or any such petition or application is filed, or any such proceeding is commenced, against a Credit Party or any of its Subsidiaries and either (a) such Credit Party or any such Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein or (b) such petition, application or proceeding is not dismissed within sixty (60) days;

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(v)

a judgment in excess of $3,000,000 is rendered against a Credit Party or any of its Subsidiaries and, within sixty (60) days after entry thereof, such judgment is not discharged in full or execution thereof stayed pending appeal, or within sixty (60) days after the expiration of any such stay, such judgment is not discharged in full;

(vi)

a Credit Party’s or any of its Subsidiaries’ assets are attached, seized, subjected to a writ or distress warrant, or are levied upon, or come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors in connection with any obligations or liabilities of such Credit Party and its Subsidiaries in excess of $1,000,000 in the aggregate;

(vii)

a Credit Party or any of its Subsidiaries defaults in the performance of any obligation if the effect of such default is to cause an amount exceeding $1,000,000 to become due prior to its stated maturity or to permit the holder or holders of such obligation to cause an amount exceeding $1,000,000 to become due prior to its stated maturity;

(viii)

(a) a Credit Party or any of its Subsidiaries defaults in payment when due (after taking into account any applicable grace period) of any amounts (whether upon scheduled payment, required prepayment, required cash collection, acceleration, demand or otherwise) under any indenture, loan agreement or other instrument under which any evidence of Indebtedness of such Credit Party or any of its Subsidiaries exceeding $1,000,000 in principal amount has been or hereafter may be issued, including, without limitation, the Vicis/Bibby Debt Agreements (the “Material Indebtedness”), or (b) any other event shall occur or conditions shall exist with respect to such Material Indebtedness (other than the maturity thereof in accordance with its terms), if the effect of such event or condition is to cause, or to permit the holders thereof to cause, such Material Indebtedness to become immediately due and payable;

(ix)

any of the Vicis Debt or Bibby Debt is declared due and payable prior to its stated maturity by reason of the occurrence of an “Event of Default” under and as defined in the Vicis/Bibby Debt Agreements;

(x)

any of this Agreement, the Note, or any other Transaction Document shall cease to be in full force and effect or declared to be null and void by a court of competent jurisdiction or a Credit Party or any of its Affiliates shall challenge or contest in any action, suit or proceeding the validity or enforceability of any of the Transaction Documents or any of the Collateral suffers a Lien (other than in favor of the Purchaser pursuant to the Transaction Documents) or is otherwise encumbered in favor of any Person other than the Purchaser;

(xi)

the Account Control Agreement or the Inter-Creditor Agreement shall cease to be in full force and effect or declared to be null and void by a court of competent jurisdiction or a Credit Party, Vicis or Wells Fargo Bank, N.A. or any of their Affiliates shall challenge or contest in any action, suit or proceeding the validity or enforceability of any of the Account Control Agreement or the Inter-Creditor Agreement;

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(xii)

a Credit Party or any of its Subsidiaries materially changes the nature of its business;

(xiii)

a Change in Control shall occur;

(xiv)

the Credit Parties’ (which shall include without limitation the revenues of Ronco Holdings, Inc. if at such time the Credit Parties own, directly or indirectly, 100% of the Ronco Secured Debt, as defined in Exhibit E, or a direct interest in 100% of such Ronco Secured Debt) consolidated revenues, as determined in accordance with GAAP, are less than $39,000,000.00 for the year ended December 31, 2014 or $60,000,000.00 for the year ended December 31, 2015; or

(xv)

the Credit Parties’ (which shall include without limitation the EBITDA of Ronco Holdings, Inc. if at such time the Credit Parties own, directly or indirectly, 100% of the Ronco Secured Debt, as defined in Exhibit E, or a direct interest in 100% of such Ronco Secured Debt) consolidated EBITDA is less than $6,000,000.00 for the year ended December 31, 2014 or $11,000,000.00 for the year ended December 31, 2015.

The foregoing shall constitute Events of Default whatever the reason or cause for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

6.2

Consequences of Events of Default.

(i)

If any Event of Default has occurred and continued for a period of thirty (30) days thereafter, then the interest rate on the Note shall increase immediately as described in the Note, unless the Purchaser has waived such Event of Default or such increase in the interest rate. Any increase of the interest rate resulting from the operation of this subparagraph shall terminate as of the close of business on the date on which no Events of Default exist (subject to subsequent increases pursuant to this subparagraph).

(ii)

If an Event of Default of the type described in Section 6.1(iv) has occurred, then the aggregate principal amount of the Note (together with all accrued interest thereon and all other amounts due and payable with respect thereto) shall become immediately due and payable without any action on the part of the holders of the Note, and the Credit Parties shall immediately pay to the holders of the Note all amounts due and payable with respect to the Note.

(iii)

If an Event of Default (other than under Section 6.1(iv)) has occurred and is continuing, then the Purchaser may declare all or any portion of the outstanding principal amount of the Note (together with all accrued interest thereon and all other amounts due and payable with respect thereto) to be immediately due and payable and may demand immediate payment of all or any portion of the outstanding principal amount of the Note (together with all such other amounts then due and payable) owned by such holder or holders. The Credit Parties shall give prompt written notice of any such demand to the other holder or holders of the Note, each of which may demand immediate payment of all or any portion of such holder’s Note. If any holder or holders of the Note demand immediate payment of all or any portion of the Note, the Credit Parties shall

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immediately pay to such holder or holders all amounts due and payable with respect to such Note.

(iv)

If an Event of Default has occurred and is continuing, then the Purchaser for itself and as the agent for the holders of the Note may exercise any one or more of its rights under applicable law.

Section 7.

Miscellaneous.

7.1

Expenses. The Credit Parties shall jointly and severally pay, and hold the Purchaser and all holders of the Note harmless against liability for the payment of, and reimburse on demand as and when incurred from and against, (i) all reasonable costs and expenses incurred by each of them in connection with their due diligence review of the Credit Parties and their Subsidiaries, the preparation, negotiation, execution and interpretation of this Agreement, the Note, the other Transaction Documents and the agreements contemplated hereby and thereby, and the consummation of all of the transactions contemplated hereby and thereby (including all fees and expenses of legal counsel and accountants), which costs and expenses shall be payable at the Closing or, if the Closing does not occur, payable upon demand, provided that such costs and expenses to be so paid and reimbursed and with respect to which the Purchaser and holders of the Note shall be held harmless shall not exceed $75,000.00 in the aggregate, (ii) all reasonable fees and expenses incurred with respect to any amendments or waivers (whether or not the same become effective) under or in respect of each of the Transaction Documents and the other agreements and instruments contemplated hereby and thereby (including all expenses incurred in connection with any proposed merger, sale or recapitalization of a Credit Party), (iii) all recording and filing fees, stamp and other taxes which may be payable in respect of the execution and delivery of this Agreement, and for the reasonable fees and expenses incurred with respect to the interpretation and enforcement of the rights granted under this Agreement, the Note, the other Transaction Documents and the agreements or instruments contemplated hereby and thereby (including costs of collection). Notwithstanding the foregoing, the Credit Parties shall not be liable for any expenses of Purchaser in syndicating the Note(s). If the Credit Parties fail to pay when due any amounts due the Purchaser or fail to comply with any of their obligations pursuant to this Agreement or any other agreement, document or instrument executed or delivered in connection herewith, the Credit Parties shall jointly and severally, upon demand by the Purchaser, pay to the Purchaser such further amounts as shall be sufficient to cover the cost and expense (including, but not limited to attorneys’ fees) incurred by or on behalf of the Purchaser in collecting all such amounts due or in otherwise enforcing the Purchaser’s rights and remedies hereunder. The Credit Parties also agree to jointly and severally pay to the Purchasers all costs and expenses incurred by them, including reasonable compensation to their attorneys for all services rendered, in connection with the occurrence of any Event of Default and enforcement of their rights hereunder.

7.2

Remedies. Each holder of the Note shall have all rights and remedies set forth in this Agreement, the Note, and the other Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract entered into in connection herewith and all of the rights which such holders have under any law. No remedy hereunder or thereunder conferred is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or thereunder or now or hereafter existing at law or in equity or by statute or

33

otherwise. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law.

7.3

Purchaser’s Investment Representations. The Purchaser hereby represents that it is an “accredited investor” (as defined in Regulation D promulgated under the Securities Act), it is acquiring the Note and Warrant purchased hereunder for its own account with the present intention of holding the Note for purposes of investment, and that it has no intention of selling the Note or Warrant in a public distribution in violation of the federal securities laws or any applicable state securities laws; provided that nothing contained herein shall prevent the Purchaser and subsequent holders of the Note or Warrant from transferring such securities in compliance with the provisions of Section 7.7 hereof.  Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Note and Warrant, and has so evaluated the merits and risks of such investment.  Purchaser is able to bear the economic risk of an investment in the Note and Warrant and, at the present time, is able to afford a complete loss of such investment.  Purchaser is not purchasing the Note and Warrant as a result of any advertisement, article, notice or other communication regarding the Note and Warrant published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. Purchaser has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection with the Transaction Documents. Purchaser hereby agrees and acknowledges that Purchaser has had an opportunity to meet with representatives of the Company and to ask questions and receive answers to Purchaser’s satisfaction regarding the Company’s proposed business and the Company’s financial condition in order to assist Purchaser in evaluating the merits and risks of purchasing the Note and Warrant.  All material documents and information pertaining to the Company and the purchase of Note and Warrant hereunder that have been requested by Purchaser have been made available to Purchaser. Purchaser hereby agrees and acknowledges that it has been informed of the following: (i) there are factors relating to the subsequent transfer of any Note and Warrant acquired hereunder that could make the resale of such Note and Warrant difficult; and (ii) there is no guarantee that Purchaser will realize any gain from the purchase of the Note and Warrant.  The purchase of the Note and Warrant involves a high degree of risk and is subject to many uncertainties.  These risks and uncertainties may adversely affect the Company’s business, operating results and financial condition.  In such an event, the trading price for the Common Stock could decline substantially and Purchaser could lose all or part of its investment. Purchaser has full right, power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of Purchaser.  Each Transaction Document to which it is a party has been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of Purchaser, enforceable against it 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

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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.

7.4

Amendments and Waivers. Except as otherwise expressly provided herein, the provisions of this Agreement and the provisions of the Note may be amended and the Credit Parties may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Credit Parties have obtained the written consent of the Purchaser; provided that no such action shall change (i) the rate at which or the manner in which interest accrues on the Note or the time at which such interest becomes payable or (ii) any provision relating to the scheduled payments or prepayments of principal on the Note, without the written consent of the holders of at least 75% of the outstanding principal amount of the Note. If the Credit Parties pay any consideration to any holder of a Note for such holder’s consent to any amendment, modification or waiver hereunder, the Credit Parties shall also pay each other holder granting its consent hereunder equivalent consideration computed on a pro rata basis.

7.5

Survival of Agreement. All covenants, representations and warranties contained in this Agreement, the Note, and/or the other Transaction Documents or made in writing by a Credit Party in connection herewith or therewith shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, regardless of any investigation made by the Purchaser or on its behalf. In addition, the obligations of the Credit Parties in Sections 7.1, 7.16, and 7.17 shall survive the repayment of all amounts payable pursuant to this Agreement and the Note.

7.6

No Setoffs, etc. All payments hereunder and under the Note shall be made by the Credit Parties without setoff, offset, deduction or counterclaim, free and clear of all taxes, levies, imports, duties, fees and charges, and without any withholding, restriction or conditions imposed by any governmental authority.

7.7

Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether or not so expressed; provided that no Credit Party shall assign its rights or delegate its obligations under this Agreement or the Note without the prior written consent of Purchaser; and provided further that the Purchaser may assign or transfer its rights and obligations under the Note and this Agreement to any Person so long as such transfer is made in compliance with applicable federal and state securities laws and so long as such Person does not engage in activities or provide products or services that are directly competitive with the activities, products or services of any of the Credit Parties and their Subsidiaries as of the date of the proposed transfer. In addition and whether or not any express assignment has been made, the provisions of this Agreement which are for the Purchaser’s benefit as a purchaser or holder of the Note are also for the benefit of, and enforceable by, any subsequent holder of such Note that becomes a holder in accordance with this Section 7.7. Except as otherwise expressly provided herein, nothing expressed in or implied from this Agreement, the Note, or any other Transaction Documents is intended to give, or shall be construed to give, any Person, other than the parties hereto and thereto and their permitted successors and assigns, any benefit or legal or equitable right, remedy or claim under or by virtue of this Agreement or any such other document.

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7.8

Aggregation. For purposes of this Agreement, all holdings of the Note by Persons who are Affiliates of each other shall be aggregated for purposes of meeting any threshold tests under this Agreement.

7.9

Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

7.10

Counterparts. This Agreement may be executed in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

7.11

Descriptive Headings; Interpretation. The descriptive headings of this Agreement and the Note are inserted for convenience only and do not constitute a substantive part of this Agreement.

7.12

Governing Law. THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS THEREOF.

7.13

Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, sent to the recipient by reputable overnight courier service (charges prepaid) or mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the Purchaser and to the Credit Parties at the address indicated below:

To one or more of the Credit Parties:

As Seen on TV, Inc.

14044 Icot Boulevard

Clearwater, Florida 33760

Attention: Chief Executive Officer

with a copy to:

Quarles & Brady, LLP

411 East Wisconsin Ave.

Suite 2350

Milwaukee, Wisconsin 53202

Attention: Hoyt R. Stastney

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To the Purchaser:

MIG7 INFUSION, LLC
16311 Baycross Drive
Lakewood Ranch, Florida 34202
Attention: Craig Mallitz

with a copy to:

Shumaker, Loop & Kendrick, LLP
Bank of America Plaza
101 East Kennedy Boulevard, Suite 2800
P.O. Box 172609
Tampa, Florida 33672
Attention: Julio C. Esquivel

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

7.14

Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any party has breached any representation, warranty, or covenant contained herein in any respect or any Event of Default shall occur, the fact that there exists another representation, warranty, or covenant or Event of Default relating to the same subject matter (regardless of the relative levels of specificity) which such party has not breached shall not detract from or mitigate the fact that such party is in breach of the first representation, warranty, or covenant or that the first Event of Default shall have occurred.

7.15

Complete Agreement. This Agreement, the Note, the other Transaction Documents those other documents expressly referred to herein and other documents of even date herewith embody the complete agreement and understanding among the parties and supersede any prior agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

7.16

Indemnification. In consideration of the Purchaser’s execution and delivery of this Agreement and acquiring the Note hereunder and in addition to all of each Credit Party’s other obligations under this Agreement and in addition to all other rights and remedies available at law or in equity, the Credit Parties shall, jointly and severally, defend, protect and indemnify the Purchaser and each other holder of the Note and all of their officers, directors, partners, affiliates, employees, agents, representatives, successors and assigns (including those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”), and save and hold each of them harmless from and against, and pay on behalf of or reimburse such party on demand as and when incurred, any and all actions, causes of action, suits, claims, losses (including diminutions in value and consequential damages), costs, penalties,

37

fees, liabilities and damages and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), including reasonable attorneys’ fees and disbursements, interest and penalties and all amounts paid in investigation, defense or settlement of any of the foregoing and claims relating to any of the foregoing (the “Liabilities”), incurred by the Indemnitees or any of them as a result of, or arising out of, or relating to (a) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Note, (b) the execution, delivery, performance or enforcement of this Agreement and any other instrument, document or agreement executed pursuant hereto by any of the Indemnitees except to the extent any such Liabilities related thereto are caused by the particular Indemnitee’s gross negligence or willful misconduct and except to the extent there is a final determination by a court of competent jurisdiction that Purchaser has materially breached its obligations under this Agreement, or (c) the past, present or future environmental condition of any property owned, operated or used by a Credit Party, any of its Subsidiaries, their predecessors or successors or of any offsite treatment, storage or disposal location associated therewith, including the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, release, or threatened release into, onto or from, any such property or location of any toxic, chemical or hazardous substance, material or waste (including any losses, liabilities, damages, injuries, penalties, fees, costs, expenses or claims asserted or arising under any Environmental and Safety Requirement, regardless of whether caused by, or within the control of, a Credit Party or any of its Subsidiaries). To the extent that the foregoing undertaking by the Credit Parties may be unenforceable for any reason, the Credit Parties shall make the maximum contribution to the payment and satisfaction of each of the Liabilities which is permissible under applicable law.

7.17

Payment Set Aside. To the extent that the Credit Parties make a payment or payments to the Purchaser hereunder or under the Note or the Purchaser enforces its rights or exercises its right of setoff hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Credit Parties, a trustee, receiver or any other Person under any law (including any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

7.18

Jurisdiction and Venue. Each of the parties (i) submits to the jurisdiction of any state or Federal court sitting in Tampa, Florida in any legal suit, action or proceeding arising out of or relating to this Agreement, the Note or any other Transaction Document, (ii) agrees that all claims in respect of the action or proceeding may be heard or determined in any such court, and (iii) agrees not to bring any action or proceeding arising out of or relating to this Agreement, the Note or any other Transaction Document in any other court, except to the extent such proceeding relates to a mortgage over real property in another jurisdiction and such proceeding is required by law to occur in the jurisdiction in which such property is located. Each of the parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto. Any party may make service on any other party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided for the giving

38

of notices in Section 7.13. Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of the Purchaser to bring proceedings against a Credit Party in the courts of any other jurisdiction. The exclusive choice of forum for the Credit Parties set forth in this Section 7.18 shall not be deemed to preclude the enforcement by the Purchaser or any holder of the Note of any judgment obtained in any other forum or the taking by the Purchaser or any holder of the Note of any action to enforce the same in any other appropriate jurisdiction, and the Credit Parties hereby waive the right to collaterally attack any such judgment or action.

7.19

Waiver of Right to Jury Trial. THE CREDIT PARTIES AND EACH HOLDER OF THE NOTE OR NOTES HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR THE NOTE OR NOTES OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF. THE CREDIT PARTIES AGREE THAT THIS SECTION 7.19 IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THE PURCHASER WOULD NOT PURCHASE THE NOTE OR NOTES HEREUNDER IF THIS SECTION 7.19 WERE NOT PART OF THIS AGREEMENT.

7.20

Certain Waivers. The Credit Parties hereby waive diligence, presentment, protest and demand and notice of protest and demand, dishonor and nonpayment of the Note, and expressly agree that the Note, or any payment thereunder, may be extended from time to time and that the holder thereof may accept security for the Note or release security for the Note, all without in any way affecting the liability of the Credit Parties thereunder.

7.21

USA PATRIOT Act. The Purchaser hereby notifies the Credit Parties and their Affiliates that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies the Credit Parties, which information includes the name and address of the Credit Parties and other information that will allow the Purchaser to identify the Credit Parties in accordance with the foregoing act.

Section 8.

Cross-Guaranty of Credit Parties.

8.1

Cross-Guaranty. Each Credit Party hereby agrees that such Credit Party is jointly and severally liable for, and hereby absolutely and unconditionally guarantees to the Purchaser and its respective successors and assigns, the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Indebtedness and other obligations owed or hereafter owing to the Purchaser by the other Credit Parties. Each Credit Party agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, that its obligations under this Section 8 shall not be discharged until payment and performance, in full, of the aforementioned Indebtedness and obligations has occurred, and that its obligations under this Section 8 shall be absolute and unconditional, irrespective of, and unaffected by:

39

(i)

the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Transaction Document or any other agreement, document or instrument to which any Credit Party is or may become a party;

(ii)

the absence of any action to enforce this Agreement (including this Section 8) or any other Transaction Document or the waiver or consent by the Purchaser with respect to any of the provisions thereof;

(iii)

the insolvency of any Credit Party; or

(iv)

any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.

Each Credit Party shall be regarded, and shall be in the same position, as principal debtor with respect to the aforementioned Indebtedness and obligations guaranteed hereunder.

8.2

Waivers by Credit Parties. Each Credit Party expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Purchaser to marshal assets or to proceed in respect of the Indebtedness or obligations guaranteed hereunder against any other Credit Party or any other party, or as a condition to proceeding against, such Credit Party. It is agreed among each Credit Party and each Purchaser that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Transaction Documents and that, but for the provisions of this Section 8 and such waivers, each Purchaser would decline to enter into this Agreement.

8.3

Benefit of Guaranty. Each Credit Party agrees that the provisions of this Section 8 are for the benefit of the Purchaser and its respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Credit Party and the Purchaser, the obligations of such other Credit Party under the Transaction Documents.

8.4

Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or any of the other Transaction Documents, each Credit Party hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor. Each Credit Party acknowledges and agrees that this waiver is intended to benefit Purchaser and shall not limit or otherwise affect such Credit Party’s liability hereunder or the enforceability of this Section 8, and that Purchaser and its successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 8.4.

8.5

Election of Remedies. If, in the exercise of any of its rights and remedies, the Purchaser shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Credit Party or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Credit Party hereby consents to such action by the Purchaser and waives any claim based upon such action, even if such action by the Purchaser shall result in a full or partial loss of any rights of subrogation that a Credit Party might otherwise have had but for such action by the Purchaser. Any election of remedies that results in the denial or impairment of the right of the Purchaser to seek a deficiency judgment

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against any Credit Party shall not impair any other Credit Party’s obligation to pay or perform all Indebtedness and other obligations owed or hereafter owing to the Purchaser.

8.6

Liability Cumulative. The liability of each of the Credit Parties under this Section 8 is in addition to and shall be cumulative with all liabilities of such Credit Party to the Purchaser under this Agreement and the other Transaction Documents to which such Credit Party is a party or in respect of any obligation of the other Credit Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

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IN WITNESS WHEREOF, the parties hereto have executed this Note Purchase Agreement on the date first written above.

CREDIT PARTIES:

INFUSION BRANDS, INC.	AS SEEN ON TV, INC.
By:	By:
Name:	Name:
Title:	Title:
EDIETS.COM, INC.	TV GOODS HOLDING CORPORATION
By:	By:
Name:	Name:
Title:	Title:
TRU HAIR, INC.	RONCO FUNDING, LLC
By:	By:
Name:	Name:
Title:	Title:

PURCHASER:

MIG7 INFUSION, LLC

By: Mallitz Investment Group, LLC

By:
	Craig Mallitz, President

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LIST OF EXHIBITS

Exhibit A – Form of Note

Exhibit B – Form of Warrant

Exhibit C – Description of ASTV Merger

Pursuant to an Agreement and Plan of Merger dated on or about April 1, 2014, ASTV Merger Sub, Inc., a wholly-owned subsidiary of As Seen on TV, Inc. (“ASTV”), will merge with and into Infusion Brands, Inc. (“Infusion”), a wholly owned subsidiary of Infusion Brands International, Inc. (“International”), with Infusion surviving as a wholly owned subsidiary of ASTV. In consideration therefor, International will receive common stock of  ASTV (calculated on a fully diluted basis as of immediately following closing) in an amount sufficient to make it the holder of 75% of the common stock of ASTV. Shares of International will remain outstanding, but because International will have contributed all of its assets and liabilities to Infusion prior to the consummation of the ASTV merger, the sole asset of International will be its 75% ownership interest in ASTV.

Exhibit D – Description of Vicis Restructuring

Pursuant to a Securities Purchase, Exchange and Redemption Agreement dated as of March 6, 2014, by and between Vicis Capital Master Fund (“Vicis”) and Infusion Brands International, Inc. (“International”), Vicis funded an additional $2 million to International (which International used immediately to procure its ownership interest in Ronco Funding LLC) and returned all securities of International owned by Vicis (which included a majority of International's common stock, all of its outstanding shares of Series G Convertible Preferred Stock, warrants to purchase common stock, and certain debt), in exchange for which Vicis received a Senior Secured Debenture issued by International in the original principal amount of $11 million.  Payments under the Senior Secured Debenture are secured by all assets of International pursuant to a security agreement and are guaranteed by Infusion Brands, Inc., which guaranty is supported by a guarantor security agreement securing all assets of Infusion Brands, Inc.  Pursuant to and in furtherance of the ASTV Merger, Infusion Brands, Inc. assumed such Senior Secured Debenture and all obligations of International thereunder prior to the ASTV Merger, and ASTV will assume or has assumed such Senior Secured Debenture and all such obligations from Infusion Brands, Inc. (with Infusion Brands, Inc. continuing as guarantor thereof).

Exhibit E – Description of Ronco Acquisition

Pursuant to an Amended and Restated RFL, Enterprises, and Infusion Agreement dated as of March 6, 2014, by and between Infusion Brands International, Inc., RFL Enterprises LLC, and Ronco Funding LLC, Infusion Brands International, Inc. acquired 100 percent of the membership interests of Ronco Funding LLC from RFL Enterprises LLC.  In consideration thereof, RFL Enterprises LLC received shares of common stock of Infusion Brands International, Inc. equal to 5 percent of Infusion Brands International, Inc. as of the closing thereof.  The sole

assets of Ronco Funding LLC are a participation interest in the secured debt of Ronco Holdings, Inc. (the “Ronco Secured Debt”) and an option to procure the remaining interest in such secured debt for an additional $2,350,000.  In conjunction therewith, Infusion Brands International, Inc. established the 2014 Infusion Stock Incentive Plan, pursuant to which common shares constituting 45 percent of Infusion Brands International, Inc. were issued to the Infusion Stock Ownership Trust, and Infusion Brands International, Inc. acquired the right to designate the majority of the board of directors of Ronco Holdings, Inc.  Pursuant to and in furtherance of the ASTV Merger, all rights of Infusion Brands International, Inc. under the Ronco Agreement were assigned to Infusion Brands, Inc.

LIST OF SCHEDULES

Subordinated Debt Schedule

Use of Proceeds Schedule

Working capital for the execution of the Credit Parties’ business plan, including without limitation media production, marketing and advertising of products and the purchase of inventory for both direct TV and retail sales.

Satisfaction of amounts deposited in the Interest Reserve Account or otherwise paid as interest under the Note, loan origination fees, and other expenses arising under the Transaction Documents

Definitions Schedule

Restrictions Schedule

Schedule of Liabilities

Litigation Schedule

Capitalization Schedule

Financial Statement Schedule

Intellectual Property Schedule

Consents Schedule

Environmental Schedule

Affiliated Transactions Schedule

EX-10.2

EXHIBIT 10.2

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

SENIOR SECURED PROMISSORY NOTE

April 3, 2014  Up to $10,000,000.00

AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Company”), hereby, jointly and severally, unconditionally promise to pay, in lawful money of the United States of America and in immediately available funds, to the order of MIG7 Infusion, LLC, a Florida limited liability company, with an address of 16311 Baycross Drive, Lakewood Ranch, Florida 34202, or its assignee (“Holder”), the principal amount of TEN MILLION DOLLARS AND 00/100 CENTS ($10,000,000.00) or so much thereof as may be disbursed and remain outstanding from time to time hereafter pursuant to and in accordance with that certain Senior Note Purchase Agreement among the Company and the Purchaser, dated on or about the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”). Absent manifest error, the records of Holder shall be conclusive as to amounts borrowed and owed under this Promissory Note (this “Note”).

This Note is secured pursuant to and as described in that certain Security Agreement and Pledge Agreement by and among the Company and the Purchaser dated on or about the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement” and “Pledge Agreement,” respectively).

This Note was issued pursuant to the Note Purchase Agreement, is the Note referred to in the Note Purchase Agreement and is entitled to the benefits and is subject to the terms and conditions of the Note Purchase Agreement and the other Transaction Documents (as defined therein). The Note Purchase Agreement contains terms governing the rights of the Holder of this Note and all provisions of the Note Purchase Agreement are hereby incorporated herein in full

by reference. Except as otherwise indicated herein, capitalized terms used in this Note have the same meanings set forth in the Note Purchase Agreement.

Interest. Subject to the other provision of this Note, interest shall accrue on the unpaid principal balance of this Note, at the rate of fourteen percent (14%) per annum (computed on the basis of a 360-day year and the actual number of days elapsed in a year) (the “Interest Rate”), commencing on April 1, 2014. The Company shall pay the Holder accrued interest on the amount of principal outstanding under this Note from time to time on the fifth (5^th) day of each month until all amounts due hereunder are repaid in full.

Principal. The Company shall pay the principal amount of TEN MILLION DOLLARS AND 00/100 CENTS ($10,000,000.00) (or such lesser principal amount advanced under this Note and then outstanding), together with all accrued and unpaid interest thereon, to the Holder on the Maturity Date. This Note shall mature and become payable in full on April 3, 2015 (the “Maturity Date”).

Extension. The Company may request that the Maturity Date be extended for an additional 180 days by providing a written request to the Holder at least sixty (60) days prior to the original Maturity Date, which request shall automatically be approved if on such date (1) no Event of Default (as defined in the Note Purchase Agreement) is then in existence and (2) the Company’s consolidated revenues, as determined in accordance with GAAP, and EBITDA for the 12 months immediately preceding such date equal or exceed THIRTY NINE MILLION DOLLARS AND 00/100 CENTS ($39,000,000.00) and SIX MILLION DOLLARS AND 00/100 CENTS ($6,000,000.00), respectively (collectively, the “Extension Requirements”). If the Company does not meet the Extension Requirements, the Maturity Date will not be extended without the prior written approval of the Holder. If the Note is so extended, then, notwithstanding anything to the contrary contained herein, the Maturity Date shall be extended until October 2, 2015, the Interest Rate shall be increased to 15.5% effective as of the date of the original Maturity Date, the Required Interest Reserve Amount shall be recalculated based on the adjusted Maturity Date and Interest Rate (the “Additional Reserve”), and the Company shall deposit into the Interest Reserve Account, on or prior to the original Maturity Date, the amount of the Additional Reserve in cash.

Interest Reserve Account. On or before the date hereof, the Company shall have established an interest reserve and cash collateral account with Wells Fargo Bank, N.A. or another financial institution reasonably acceptable to the Holder (the “Interest Reserve Account”), and the Company shall have granted a first priority lien on and duly perfected security interest in the Interest Reserve Account, and all deposits therein and proceeds thereof, in favor of the Holder. Simultaneous with the funding of each advance of the Loan evidenced by this Note, the Company is required to deposit into the Interest Reserve Account an amount equal to the aggregate interest that will accrue on the principal amount of such advance at the Interest Rate from the date of such advance through and including the Maturity Date (each, a “Required Interest Reserve Deposit”, and collectively, the “Required Interest Reserve Amount”). The Company shall be entitled to fund any Required Interest Reserve Deposit with the proceeds of the related advance under this Note. In the event that the Company shall have failed to establish or maintain (i) the Interest Reserve Account or (ii) the duly perfected first priority lien on and security interest in the Interest Reserve Account and the deposits therein and proceeds thereof, as of any date on which the funding or an advance hereunder is made, the Holder shall be entitled to

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hold back and refrain from funding the applicable Required Interest Reserve Deposit (each, an “Interest Reserve Holdback”) until such time as the Interest Reserve Account and the duly perfected lien and security interest are in place to the reasonable satisfaction of the Holder. For the avoidance of doubt, in the event that an Interest Reserve Holdback occurs, the full advance, including the Interest Reserve Holdback, shall be deemed to have been funded and interest shall accrue thereon pursuant to the terms of this Note, and Holder shall not be required to pay or liable for any interest thereon in favor of the Company.

Voluntary Prepayments. The Company may, at any time and from time to time upon thirty (30) days advance written notice to Holder, prepay all or a portion of the principal amount outstanding under this Note, together with all accrued and unpaid interest thereon, the Make Whole Amount, and any and all other obligations due and payable under the Note Purchase Agreement and the other Transaction Documents. With respect to any voluntary prepayments in accordance with this Note, “Make Whole Amount” means, as of any date, an amount equal to the interest that would have accrued on the amount of principal being prepaid from the date of such prepayment through the Maturity Date plus any unpaid fees or other charges then due under this Note or any other Transaction Document, plus a pro rata portion of any unpaid loan origination fees to become due under Section 3.8 of the Note Purchase Agreement.

Events of Default. Upon and during the continuation of an Event of Default (as defined in the Note Purchase Agreement), the unpaid principal balance of the Loan evidenced by this Note may be declared, and immediately shall become, due and payable without demand, notice or legal process of any kind; provided, that upon the occurrence of an Event of Default pursuant to the provisions of Section 6.1(iv) of the Note Purchase Agreement, the unpaid principal balance of the Loan evidenced by this Note shall automatically and immediately become due and payable, without demand, notice or acceleration of any kind whatsoever.

Upon and during the continuation of an Event of Default, to the extent permitted by law, the rate of interest on the unpaid principal shall be increased at the Holder's discretion up to the lesser of (i) 18 percent or (ii) the maximum rate of interest permitted by law (such lesser amount, the “Default Rate”). The provisions herein for a Default Rate shall not be deemed to extend the time for any payment hereunder or to constitute a "grace period" giving the Company or any other Obligor a right to cure any default. At the Holder's option, any accrued and unpaid interest, fees or charges may, for purposes of computing and accruing interest on a daily basis after the due date of this Note or any installment thereof, be deemed to be a part of the principal balance, and interest shall accrue on a daily compounded basis after such date at the Default Rate provided in this Note until the entire outstanding balance of principal and interest is paid in full. The Holder is hereby authorized at any time to set off any charge against any money, instruments, securities, documents, chattel paper, credits, claims, demands, income and any other property, rights and interests of any Obligor which at any time shall come into the possession or custody or under the control of the Holder or any of its agents, affiliates or correspondents, without notice or demand, any and all obligations due hereunder. Additionally, the Holder shall have all rights and remedies available under each of the Transaction Documents, as well as all rights and remedies available at law or in equity. Any judgment rendered on this Note shall bear interest at the Default Rate.

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Place of Payment. Payments of principal of and interest on this Note are to be delivered to the following address:

MIG7 Infusion, LLC

16311 Baycross Drive

Lakewood Ranch, Florida 34202

Attention: Craig Mallitz, President

or to such other address or to the attention of such other person as specified by the Holder by prior written notice to MIG7 Infusion, LLC.

Payments received in respect of this Note at or before 5:00 p.m. Eastern Time on any Business Day shall be deemed received by the Holder on such Business Day. Payments received in respect of this Note on any day that is not a Business Day, or after 5:00 p.m. Eastern Time on any Business Day, shall be deemed received by the Holder on the next succeeding Business Day. Payments received in respect of this Note shall be applied as provided in the Note Purchase Agreement.

The Company shall pay the cost of any revenue, documentary, stamp or other tax now or hereafter required by any applicable law, at any time, to be affixed to this Note or the instruments securing this Note and if any tax shall be imposed with respect to the indebtedness evidenced by this Note or secured by said instruments, the Company shall pay to Holder the amount of any such tax, together with any and all penalties, fines, interest or late fees imposed thereon by the appropriate governmental authority having jurisdiction over the imposition, collection or enforcement of any such tax.

The Company, any indorser, or guarantor hereof or any other party hereto (individually an “Obligor” and collectively “Obligors”) and each of them jointly and severally: (a) waive presentment, demand, protest, notice of demand, notice of intent to accelerate, notice of acceleration of maturity, notice of protest, notice of nonpayment, notice of dishonor, and any other notice required to be given under the law to any Obligor in connection with the delivery, acceptance, performance, default or enforcement of this Note, any endorsement or guaranty of this Note, or any other documents executed in connection with this Note or any other Transaction Document; (b) consent to all delays, extensions, renewals or other modifications of this Note or the other Transaction Documents, or waivers of any term hereof or of the other Transaction Documents, or release or discharge by the Holder of any of Obligors, or release, substitution or exchange of any security for the payment hereof, or the failure to act on the part of the Holder, or any indulgence shown by the Holder (without notice to or further assent from any of Obligors), and agree that no such action, failure to act or failure to exercise any right or remedy by the Holder shall in any way affect or impair the obligations of any Obligors or be construed as a waiver by the Holder of, or otherwise affect, any of the Holder's rights under this Note, under any endorsement or guaranty of this Note or under any of the other Transaction Documents; and (c) agree to pay, on demand, all reasonable costs and expenses of collection or defense of this Note or of any endorsement or guaranty hereof and/or the enforcement or defense of the Holder's rights with respect to, or the administration, supervision, preservation, protection of, or realization upon, any property securing payment hereof, including, without limitation, reasonable attorney's and paralegal's fees, including fees related to any suit, mediation or arbitration proceeding, out of court payment agreement, trial,

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appeal, bankruptcy proceedings or other proceeding, in such amount as may be determined reasonable by any arbitrator or court, whichever is applicable.

Obligors agree to promptly pay, indemnify and hold the Holder harmless from all state and federal taxes of any kind and other liabilities (other than taxes on income realized by the Holder) with respect to or resulting from the execution and/or delivery of this Note or any advances made pursuant to this Note.

The failure at any time of the Holder to exercise any of its options or any other rights hereunder shall not constitute a waiver thereof, nor shall it be a bar to the exercise of any of its options or rights at a later date. All rights and remedies of the Holder shall be cumulative and may be pursued singly, successively or together, at the option of the Holder. The acceptance by the Holder of any partial payment shall not constitute a waiver of any default or of any of the Holder's rights under this Note. No waiver of any of its rights hereunder, and no modification or amendment of this Note, shall be deemed to be made by the Holder unless the same shall be in writing, duly signed on behalf of the Holder; each such waiver shall apply only with respect to the specific instance involved, and shall in no way impair the rights of the Holder or the obligations of any Obligor to the Holder in any other respect at any other time.

THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). Whenever possible each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but in case any provision of or obligation under this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. Whenever in this Note reference is made to Holder or the Company, such reference shall be deemed to include, as applicable, a reference to their respective successors and assigns. The provisions of this Note shall be binding upon the Company and its successors and permitted assigns, and shall inure to the benefit of Holder and its successors and assigns provided, however, that no obligations of the Company or any other Obligor hereunder can be assigned or delegated without prior written consent of the Holder.

In addition to and without limitation of any of the foregoing, this Note shall be deemed to be a Transaction Document and shall otherwise be subject to all of the general terms and conditions contained in Section 7 of the Note Purchase Agreement, mutatis mutandi.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the date first written above.

INFUSION BRANDS, INC.	AS SEEN ON TV, INC.
By:	By:
Name:	Name:
Title:	Title:
EDIETS.COM, INC.	TV GOODS HOLDING CORPORATION
By:	By:
Name:	Name:
Title:	Title:
TRU HAIR, INC.	RONCO FUNDING, LLC
By:	By:
Name:	Name:
Title:	Title:

Signature Page to Senior Subordinated Promissory Note

EX-10.3

EXHIBIT 10.3

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement"), dated as of April 3, 2014, is made by and among AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Debtors”, and individually as a “Debtor”), in favor of MIG7 INFUSION, LLC, a Florida limited liability company (the “Secured Party”).

W I T N E S S E T H:

WHEREAS, pursuant to the terms of that certain Senior Note Purchase Agreement (as amended, modified, restated or supplemented at any time or from time to time, the “Note Purchase Agreement”) dated on or about the date hereof among the Debtors and the Secured Party, the Secured Party has agreed to purchase one or more Notes (as such term is defined in the Note Purchase Agreement) from the Debtors and to fund the loans evidenced thereby, upon and subject to the terms and conditions of the Note Purchase Agreement; and

WHEREAS, it is a condition precedent to the obligations of the Secured Party under the Note Purchase Agreement that the Debtors grant a lien on and duly perfected security interest in their respective assets and property pursuant to this Agreement to secure all obligations of the Debtors under the Note Purchase Agreement, the Notes (as such term is defined in the Note Purchase Agreement) and all other Transaction Documents (as such term is defined in the Note Purchase Agreement) to which any Debtor or any other Obligor (as defined in the Notes) is a party, and the Debtors desire to satisfy such condition precedent.

NOW, THEREFORE, for and in consideration of the sum of $10.00, the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.  Recitals. The foregoing recitals are true and correct and are hereby incorporated into and made a part of this Agreement as if fully set forth herein.

Section 2.  Definitions.  Capitalized or initially capitalized terms used herein which are not otherwise defined herein shall have the respective meanings attributed to said terms as defined in the Note Purchase Agreement.  The following additional terms, when used in this Agreement, shall have the following meanings:

“Account Debtor” shall mean any Person that is obligated under an Account.

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“Accounts” shall mean all “accounts” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights, and, in any event, shall mean and include, without limitation, (a) all accounts receivable, contract rights, book debts, notes, drafts and other obligations or indebtedness owing to any Debtor arising from the sale or lease of goods or other property by any Debtor or the performance of services by any Debtor (including, without limitation, any such obligation which might be characterized as an account, contract right or general intangible under the UCC in effect in any jurisdiction), (b) all of each Debtor’s rights in, to and under all purchase and sales orders for goods, services or other property, and all of each Debtor’s rights to any goods, services or other property represented by any of the foregoing (including returned or repossessed goods and unpaid sellers’ rights of rescission, replevin, reclamation and rights to stoppage in transit), (c) all monies due to or to become due to any Debtor under all contracts for the sale, lease or exchange of goods or other property or the performance of services by any Debtor (whether or not yet earned by performance on the part of such Debtor), and (d) all collateral security and guarantees of any kind given to any Debtor with respect to any of the foregoing.

“Chattel Paper” shall mean all “chattel paper” (as defined in the UCC) owned or acquired by any Debtor or in which any Debtor has or acquires any rights.

"Collateral" shall mean, collectively, all of the following:

(i)

all Accounts;

(ii)

all Chattel Paper;

(iii)

all Deposit Accounts, but specifically excluding Government Receivables Deposit Accounts;

(iv)

all Documents;

(v)

all Equipment;

(vi)

all Fixtures;

(vii)

all General Intangibles;

(viii)

all Instruments;

(ix)

all Inventory;

(x)

all Investment Property;

(xi)

all Software;

(xii)

all money, cash or cash equivalents;

(xiii)

all other goods and personal property, whether tangible or intangible;

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(xiv)

all Supporting Obligations and Letter-of-Credit Rights of any Debtor;

(xv)

all books and records pertaining to any of the Collateral (including, without limitation, credit files, Software, computer programs, printouts and other computer materials and records but excluding customer lists); and

(xvi)

All products and Proceeds of all or any of the Collateral described in clauses (i) through (xv) hereof.

“Copyright License” shall mean any and all rights of any Debtor under any written agreement granting any right to use any Copyright or Copyright registration.

“Copyrights” shall mean all of the following now owned or hereafter acquired by any Debtor or in which any Debtor now has or hereafter acquires any rights: (a) all copyrights and general intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof.

“Deposit Accounts” shall mean all “deposit accounts” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights, or other receipts, of any Debtor covering, evidencing or representing rights or interest in such deposit accounts.

“Documents” shall mean all “documents” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights, or other receipts, of any Debtor covering, evidencing or representing goods.

“Equipment” shall mean all “equipment” (as defined in the UCC) now owned or hereafter acquired by any Debtor and wherever located, and, in any event, shall include without limitation all machinery, furniture, furnishings, processing equipment, conveyors, machine tools, engineering processing equipment, manufacturing equipment, materials handling equipment, trade fixtures, trucks, trailers, forklifts, vehicles, computers and other electronic data processing and other office equipment of any Debtor, and any and all additions, substitutions and replacements of any of the foregoing, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto, all fuel therefor and all manuals, drawings, instructions, warranties and rights with respect thereto.

“Event of Default” shall have the meaning set forth for such term in Section 8 hereof.

“General Intangibles” shall mean all “general intangibles” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights and, in any event, shall include all right, title and interest in or under all payment intangibles, all contracts, all contract rights, all rights to payment, all rights arising under common law, statutes or regulations, all customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications

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therefor and reissues, extensions or renewals thereof, rights in Intellectual Property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary or confidential information, blueprints, drawings, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any Trademark or Trademark License), monies due or recoverable from pension funds, rights to payment and other rights under any royalty or licensing agreements, all infringement claims, all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, deposit, checking and other bank accounts, rights to receive tax refunds and other payments, rights of indemnification, all books and records, correspondence, credit files, invoices, tapes, cards, computer runs, domain names, prospect lists, customer lists and other papers and documents.  

“Instruments” shall mean all “instruments” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights and, in any event, shall include all promissory notes, all certificates of deposit and all letters of credit evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Accounts or other obligations owed to any Debtor.

“Intellectual Property” shall mean all of the following now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights: (a) all Patents, patent rights and patent applications, Copyrights and copyright applications, Trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, applications for registration of trademarks, trade names and service marks, fictitious names registrations and trademark, trade name and service mark registrations, and all derivations thereof; and (b) Patent Licenses, Trademark Licenses, Copyright Licenses and other licenses to use any of the items described in the preceding clause (a), and any other items necessary to conduct or operate the business of each Debtor.

“Inventory” shall mean all “inventory” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights and, in any event, shall include all goods owned or held for sale or lease to any other Persons.

“Investment Property” shall mean all “investment property” (as defined in the UCC) now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights and, in any event, shall include all “certificated securities”, “uncertificated securities”, “security entitlements”, “securities accounts”, “commodity contracts” and “commodity accounts” (as all such terms are defined in the UCC) of each Debtor.

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” (as defined in the UCC), now owned or hereafter acquired by any Debtor, including rights to payment or performance under a letter of credit, whether or not any Debtor, as beneficiary, has demanded or is entitled to demand payment or performance.

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“License” shall mean any Copyright License, Patent License, Trademark License or other license of rights or interests of each Debtor in Intellectual Property.

“Patent License” shall mean any written agreement now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights granting any right with respect to any property, process or other invention on which a Patent is in existence.

“Patents” shall mean all of the following now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any rights: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or any other country, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State or Territory thereof, or any other country; and (b) all reissues, continuations, continuations-in-part and extensions thereof.

“Person” shall mean any natural person, corporation, association, joint venture, partnership, limited liability company, company, association, trust, Governmental Authority or other entity.

“Proceeds” shall mean all “proceeds” (as defined in the UCC) of, and all other profits, rentals or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or realization upon, the Collateral, and, in any event, shall mean and include all claims against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of any Collateral, and any condemnation or requisition payments with respect to any Collateral and the following types of property acquired with cash proceeds:  Accounts, Inventory, General Intangibles, Documents, Instruments and Equipment.

“Secured Obligations” shall mean (i) all Obligations of the Debtors, including without limitation all Indebtedness pursuant to the Note Purchase Agreement and the Notes, (ii) all renewals, extensions, refinancings and modifications thereof, and (iii) all reasonable costs and expenses incurred by the Secured Party in connection with the exercise of its rights and remedies hereunder (including reasonable attorneys’ fees) or under any other Transaction Document.

 “Security Interests” shall mean the security interests granted to the Secured Party pursuant to Section 4, as well as all other security interests created or assigned as additional security for the Secured Obligations pursuant to the provisions of this Agreement.

“Software” shall mean all “software” (as defined in the UCC), now owned or hereafter acquired by any Debtor, including all computer programs and all supporting information provided in connection with a transaction related to any program.

“Supporting Obligations” means all “supporting obligations” (as defined in the UCC), including letters of credit and guaranties issued in support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments, or Investment Property.

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“Trademark License” shall mean any written agreement now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any such rights granting to any Debtor any right to use any Trademark.

“Trademarks” shall mean all of the following now owned or hereafter acquired by any Debtor or in which any Debtor has or acquires any such rights: (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, (ii) all reissues, extensions or renewals thereof and (iii) all goodwill associated with or symbolized by any of the foregoing.

“UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in the state of Florida; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than Florida, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

“United States” or “U.S.” shall mean the United States of America, any of the fifty states thereof, and the District of Columbia.

Section 3.  Representations and Warranties.  Each Debtor represents and warrants, except as set forth on a schedule hereto, to the Secured Party as follows:

(a)

Such Debtor has rights in and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder and has good and marketable title to all of its Collateral, free and clear of any Liens other than Permitted Liens.

(b)

Other than financing statements, security agreements, or other similar or equivalent documents or instruments with respect to Liens constituting Permitted Liens, no financing statement, mortgage security agreement or similar or equivalent document or instrument evidencing a Lien on all or any part of the Collateral is on file or of record in any jurisdiction.  None of the Collateral is in the possession of a Person (other than any Debtor) asserting any claim thereto or security interest therein, except that the Secured Party or its designee may have possession of Collateral as contemplated hereby.

(c)

When the UCC financing statements in appropriate form are filed in the offices specified on Schedule I attached hereto, the Security Interests shall constitute valid and perfected security interests in the Collateral, prior to all other Liens and rights of others therein except for the Liens expressly permitted as Permitted Liens, to the extent that a security interest therein may be perfected by filing pursuant to the UCC, assuming the proper filing and indexing thereof.

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(d)

All Inventory and Equipment is insured in accordance with the requirements of the Note Purchase Agreement.

(e)

None of the Collateral constitutes, or is the Proceeds of, “farm products” (as defined in the UCC).

(f)

Schedule II correctly sets forth each Debtor’s state of organization, taxpayer identification number, organizational identification number and correct legal name indicated on the public record of such Debtor’s jurisdiction of organization which shows such Debtor to be organized.

(g)

The Perfection Certificate, which is attached hereto as Schedule III,  correctly sets forth (i) all names and tradenames that each Debtor has used within the last five (5) years and the names of all Persons that have merged into or been acquired by each Debtor, (ii) the chief executive offices of each Debtor over the last five (5) years, (iii) all other locations in which tangible assets of each Debtor have been located in the last five (5) years, (iv) the name of each bank at which each Debtor maintains Deposit Accounts, the state or other jurisdiction of location of each such bank, and the account numbers for each Deposit Account, (v) all letters of credit under which each Debtor is a beneficiary, (vi) all third parties with possession of any Inventory or Equipment of each Debtor, (vii) all intellectual property owned by each Debtor, (viii) all items of stocks, bonds, debentures, notes and other securities and investment property owned by each Debtor, and (ix)  each Debtor’s mailing address.

(h)

With respect to the Accounts of the Debtors:  (i) to the extent an Account arises out of goods sold and/or services furnished, (A) the goods sold and/or services furnished giving rise to each Account, to the extent applicable, are not subject to any security interest or Lien except the security interest granted to the Secured Party herein and Liens expressly permitted as Permitted Liens under the Note Purchase Agreement, (B) such Account arises out of a bona fide transaction for goods sold and delivered (or in the process of being delivered) by a Debtor or for services actually rendered by a Debtor; (ii) each Account and the papers and documents of the applicable Debtor relating thereto are genuine and in all material respects what they purport to be; (iii) the amount of each Account as shown on the applicable Debtor’s books and records, and on all invoices and statements which may be delivered to the Secured Party with respect thereto, is due and payable to the applicable Debtor and is not in any way contingent (except for contingent Accounts relating to the sale, lease or other disposition of all or substantially all of the assets of a line of business or division of a Debtor); (iv) no Account is subject to set-offs, counterclaims or disputes existing or asserted with respect to any Account that in the aggregate could reasonably be expected to have a Material Adverse Effect, and no Debtor has made any agreement with any Account Debtor for any deduction from any Account except for deductions made in the ordinary course of its business; (v) to Debtor’s knowledge, there has been no development or event in respect of the validity or enforcement of any Account or Accounts or the amount payable thereunder as shown on the applicable Debtor’s books and records and all invoices and statements delivered to the Secured Party with respect thereto, which individually or in the aggregate has had or could be reasonably expected to have a Material Adverse Effect; and (vi) the right to receive payment under each Account is assignable except where the Account Debtor with respect to such Account is the United States government or any State government or any agency, department or instrumentality thereof, to the extent the

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assignment of any such right to payment is prohibited or limited by applicable law, regulations, administrative guidelines or contract.

(i)

With respect to any Inventory, (i) such Inventory is located at one of the Debtor’s locations set forth on the Perfection Certificate (other than Inventory in transit between such locations having an aggregate value not in excess of $10,000), (ii) no Inventory having an aggregate value in excess of $10,000 is now, or shall at any time or times hereafter be stored at any other location without the Secured Party’s prior consent (which shall not be unreasonably withheld), and if the Secured Party gives such consent, such Debtor will concurrently therewith obtain, to the extent required by the Note Purchase Agreement, bailee, landlord and mortgagee agreements, (iii) such Debtor has good title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Secured Party and except for Permitted Liens, (iv) such Inventory is not subject to any material licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, and (v) the completion of manufacture, sale or other disposition of such Inventory by the Secured Party following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Debtor is a party or to which such property is subject.

(j)

Such Debtor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in the Perfection Certificate.  This Agreement is effective to create a valid and continuing Lien on and, upon filing of the Patent Security Agreements (in the form of Exhibit “A” hereto) and the Trademark Security Agreements (in the form of Exhibit “B” hereto) with the United States Patent and Trademark Office and filing of the Copyright Security Agreements (in the form of Exhibit “C”, hereto) with the United States Copyright Office, perfected security interests in favor of the Secured Party in such Debtor’s Patents, Trademarks and Copyrights and such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Debtor.  Upon filing of the Copyright Security Agreements with the United States Copyright Office and filing of the Patent Security Agreements and the Trademark Security Agreements with the United States Patent and Trademark Office and the filing of appropriate financing statements listed on Schedule I hereto, all action necessary or desirable to protect and perfect the Secured Party’s Lien on such Debtor’s Patents, Trademarks or Copyrights shall have been duly taken.  Notwithstanding anything to the contrary contained in this Agreement, the Secured Party shall only require perfection of its security interests in, or other registration with respect to, any Patent, Trademark or Copyright registered, or eligible to be registered, with a country other than the United States or any political subdivision thereof, to the extent that Secured Party determines, in its sole discretion, that such Patent, Trademark or Copyright, and the registration thereof in such other country or political subdivision thereof, is material to the applicable Debtor’s business.

Section 4.  The Security Interests.  In order to secure the full and punctual payment and performance of the Secured Obligations in accordance with the terms of the Note Purchase Agreement, each Debtor hereby pledges, assigns, hypothecates, sets over and conveys to the Secured Party and grants to the Secured Party a continuing security interest in and to, all of its rights in and to all Collateral now or hereafter owned or acquired by such Debtor or in which

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such Debtor now has or hereafter has or acquires any rights, and wherever located.  The Security Interests are granted as security only and shall not subject the Secured Party to, or transfer to the Secured Party, or in any way affect or modify, any obligation or liability of the Debtor with respect to any Collateral or any transaction in connection therewith.

Section 5.  Further Assurances; Covenants.

(k)

General.

(i)

Except as contemplated pursuant to the ASTV Merger and the Ronco Acquisition (as each such term is defined in the Note Purchase Agreement), no Debtor shall change the location of its chief executive office or principal place of business unless it shall have given the Secured Party thirty (30) days’ prior notice thereof, as well as executed and delivered to the Secured Party all financing statements and financing statement amendments which the Secured Party may request in connection therewith.  No Debtor shall change the locations, or establish new locations, where it keeps or holds any of the Collateral or any records relating thereto from the applicable locations described in the Perfection Certificate attached hereto as Schedule III unless such Debtor shall have given the Secured Party thirty (30) days’ prior notice of such change of location. The foregoing covenant shall not apply to any Collateral perfected by recordation of the Secured Party’s Lien on the appropriate certificate of title.

(ii)

No Debtor shall change its name, organizational identification number, identity or jurisdiction or form of organization in any manner unless it shall have given the Secured Party thirty (30) days’ prior written notice thereof, and executed and delivered to the Secured Party all financing statements and financing statement amendments which the Secured Party may reasonably request in connection therewith.  No Debtor shall merge or consolidate into, or transfer any of the Collateral to, any other Person other than another Debtor, other than as permitted by this Agreement and the Note Purchase Agreement.

(iii)

Each Debtor hereby authorizes the Secured Party, its counsel or its representative, at any time and from time to time, to file financing statements and amendments that describe the Collateral covered by such financing statements as “all assets of the Debtor”, “all personal property of the Debtor” or words of similar effect, in such jurisdictions as are necessary or desirable in order to perfect the security interests granted by such Debtor under this Agreement.  Each Debtor will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action

9

(including, without limitation, any filings with the United States Patent and Trademark Office, Copyright or Patent filings and any filings of financing or continuation statements under the UCC) that from time to time may be necessary, or that the Secured Party may request, in order to create, preserve, upgrade in rank (to the extent required hereby), perfect, confirm or validate the Security Interests or to enable the Secured Party to obtain the full benefits of this Agreement, or to enable the Secured Party to exercise and enforce any of its rights, powers and remedies hereunder with respect to any of its Collateral.  Each Debtor hereby authorizes the Secured Party to execute and file financing statements, financing statement amendments or continuation statements on behalf of such Debtor.  Each Debtor agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement.  Debtors shall pay the out-of-pocket costs of, or incidental to, any recording or filing of any financing statements, financing statement amendments or continuation statements necessary in the sole discretion of the Secured Party, to perfect the Secured Party and Secured Parties’ security interest in the Collateral.

(iv)

Except as set forth in the Perfection Certificate attached hereto as Schedule III, no Debtor shall permit any of its tangible assets, including without limitation, its Inventory and Equipment, to be in the possession of any other Person unless pursuant to an agreement in form and substance satisfactory to the Secured Party and (A) such Person has acknowledged that (1) it holds possession of such Inventory, Equipment and other tangible assets, as the case may be, for the Secured Party’s benefit, subject to the Secured Party’s instructions, and (2) such Person does not have a Lien in such Inventory, Equipment or other tangible assets, (B) such Person agrees not to hold such Inventory, Equipment or other tangible assets on behalf of any other Person and (C) such Person agrees that, after the occurrence and during the continuance of an Event of Default and upon request by the Secured Party it will issue and deliver to the Secured Party warehouse receipts, bills of lading or any similar documents relating to such Collateral in the Secured Party’s name and in form and substance acceptable to the Secured Party.

(v)

No Debtor shall (A) sell, transfer, lease, exchange, assign or otherwise dispose of, or grant any option, warrant or other right with respect to, any of its Collateral other than sales of assets expressly permitted under the Note Purchase Agreement; or (B) create, incur or suffer to exist any Lien with respect to any Collateral, except for the Liens constituting Permitted Liens under the Note Purchase Agreement.

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(vi)

Each Debtor will, promptly upon request, provide to the Secured Party all information and evidence it may reasonably request concerning the Collateral, to enable the Secured Party to enforce the provisions of this Agreement.

(vii)

Each Debtor shall take all actions necessary or reasonably requested by the Secured Party in order to maintain the perfected status of the Security Interests.

(viii)

No Debtor shall file any amendment to or termination of a financing statement naming any Debtor as debtor and the Secured Party as secured party, or any correction statement with respect thereto, in any jurisdiction until such time as the Secured Obligations have been satisfied and the Secured Party and the Secured Parties have released their security interests granted hereunder.

(l)

Accounts, Etc.

(i)

Each Debtor shall use all commercially reasonable efforts consistent with prudent business practice to cause to be collected from its Account Debtors, as and when due, any and all amounts owing under or on account of each Account (including, without limitation, Accounts which are delinquent, such Accounts to be collected in accordance with lawful collection procedures) and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account.  The costs and expenses (including, without limitation, reasonable attorneys’ fees actually incurred) of collection of Accounts incurred by such Debtor or the Secured Party shall be borne by the Debtors.

(ii)

Upon the occurrence and during the continuance of any Event of Default, each Debtor shall, at the request and option of the Secured Party, notify Account Debtors and other Persons obligated on the Accounts or any of the Collateral of the security interest of Secured Party in any Account or other Collateral and that payment thereof is to be made directly to the  Secured Party, and may itself, if an Event of Default shall have occurred and be continuing, without notice to or demand upon any Debtor, so notify Account Debtors and other Persons obligated on Collateral.  After the making of such a request or the giving of any such notification, each Debtor shall hold any proceeds of collection of the Accounts and such other Collateral received by such Debtor as trustee for the Secured Party without commingling the same with other funds of such Debtor and shall turn the same over to the Secured Party in the identical form received, together with any necessary endorsements or assignments.  The Secured Party shall apply the

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proceeds of collection of the Accounts and other Collateral received by the Secured Party to the Obligations in accordance with the provisions of the Note Purchase Agreement, such proceeds to be immediately credited after final payment in cash or other immediately available funds of the items giving rise to them.

(iii)

Each Debtor will perform and comply in all material respects with all of its obligations in respect of Accounts, Instruments and General Intangibles.

(iv)

Anything herein to the contrary notwithstanding, each of the Debtors shall remain liable under each of its Accounts, contracts and agreements to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account or the terms of such contract or agreement.  The Secured Party shall not have any obligation or liability under any Account (or any agreement giving rise thereto), contract or agreement by reason of or arising out of this Agreement or the receipt by the Secured Party of any payment relating to such Account, contract or agreement pursuant hereto, nor shall the Secured Party be obligated in any manner to perform any of the obligations of any Debtor under or pursuant to any Account (or any agreement giving rise thereto), contract or agreement, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

(v)

During the continuation of an Event of Default, the Secured Party shall have the right, but not the obligation, to make test verifications of the Accounts in any commercially reasonable manner and through any medium that it reasonably considers advisable, and the Debtors shall furnish all such assistance and information as the Secured Party may reasonably require in connection with such test verifications.  Upon the Secured Party’s reasonable written request and at the expense of the Debtors, the Debtors shall cause their independent public accountants or others reasonably satisfactory to the Secured Party to furnish to the Secured Party reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts.  The Secured Party in its own name or in the name of others may communicate with Account Debtors on the Accounts to verify with them to the

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Secured Party’s reasonable satisfaction the existence, amount and terms of any Accounts.

(m)

Equipment, Etc.  Each Debtor shall, (i) within ten (10) days after a written request by the Secured Party, in the case of Equipment now owned, and (ii) following a request by the Secured Party pursuant to subclause (i) above, within thirty (30) days after acquiring any other Equipment, deliver to the Secured Party, any and all certificates of title, and applications therefor, if any, of such Equipment and shall cause the Secured Party to be named as lienholder on any such certificate of title and applications.  No Debtor shall permit any such items to become a fixture to real estate or an accession to other personal property unless such real estate or personal property is the subject of a fixture filing (as defined in the UCC) creating a perfected Lien in favor of the Secured Party.

(n)

Patents, Trademarks, Etc.  Each Debtor shall notify the Secured Party promptly and in no event more than thirty (30) days after the occurrence of each of the following (i) such Debtor’s  acquisition after the date of this Agreement of any material Intellectual Property and (ii) a Responsible Officer of such Debtor obtaining actual knowledge that any application or registration relating to any Intellectual Property owned by or licensed to such Debtor is reasonably likely to become abandoned or dedicated, or of any material adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Copyright Office, the United States Patent and Trademark Office or any court) regarding such Debtor’s ownership of any material Intellectual Property, its right to register the same, or to keep and maintain the same.  Each Debtor will, contemporaneously herewith, execute and deliver to the Secured Party the Patent Security Agreement, Trademark Security Agreement and Copyright Security Agreement in the forms of Exhibit “A”, Exhibit “B” and Exhibit “C” hereto, respectively, as necessary, and shall execute and deliver to the Secured Party any other document required to acknowledge or register or perfect the Secured Party’s interest in any part of the Intellectual Property which is registered with the United States Copyright Office and/or the United States Patent and Trademark Office or other governmental or quasi-governmental registry now or hereafter existing.  Notwithstanding anything to the contrary contained in this Agreement, the Secured Party shall only require perfection of its security interests in, or other registration with respect to, any Patent, Trademark or Copyright registered, or eligible to be registered, with a country other than the United States or any political subdivision thereof, to the extent that Secured Party determines, in its sole discretion, that such Patent, Trademark or Copyright, and the registration thereof in such other country or political subdivision thereof, is material to the applicable Debtor’s business.

(o)

Deposit Accounts, Chattel Paper, Investment Property and Letters of Credit.  

(i)

No Debtor shall open or maintain any Deposit Accounts other than those listed on the Perfection Certificate attached hereto as Schedule III and such other Deposit Accounts as such Debtor shall open and maintain with the consent of the Secured Party subject to control agreements, in form and substance satisfactory to the

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Secured Party in its sole discretion, executed by such Debtor, the bank at which the deposit account is located and the Secured Party.

(ii)

No Debtor shall become the beneficiary of any Letters of Credit, unless the issuer of the Letter of Credit has consented to the assignment of the proceeds of such Letter of Credit to the Secured Party which consent shall not be unreasonably withheld, such assignment to be in form and substance acceptable to the Secured Party.

(iii)

Each Debtor, at any time and from time to time, will (a) take such steps as the Secured Party may reasonably request from time to time for the Secured Party to obtain “control” of any Investment Property or electronic Chattel Paper, with any agreements establishing control to be in form and substance reasonably satisfactory to the Secured Party, and (b) otherwise to insure the continued perfection and priority of the Secured Party’s security interest in any of the Collateral and of the preservation of its rights therein.  

(p)

Commercial Tort Claims.  If any Debtor shall at any time acquire a “commercial tort claim” (as such term is defined in the UCC) with a claim for damages that could reasonably be expected to be in excess of One Hundred Thousand Dollars ($100,000), such Debtor shall promptly notify the Secured Party thereof in a writing, providing a reasonable description and summary thereof, and shall execute a supplement to this Agreement granting a security interest in such commercial tort claim to the Secured Party.

(q)

Insurance.  Each Debtor shall have its Equipment and Inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Secured Party shall reasonably specify, by reputable and financially viable insurers, in amounts satisfactory to the Secured Party and under policies containing loss payable clauses satisfactory to the Secured Party and otherwise as provided in the Note Purchase Agreement.  Any such insurance policies, or certificates or other evidence thereof satisfactory to the Secured Party, shall be deposited with the Secured Party.  Each Debtor agrees that the Secured Party shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the Equipment or Inventory may be applied to the payment of the Obligations or to the replacement or restoration of the Inventory or Equipment damaged or destroyed, as the Secured Party may elect or direct.  After the occurrence and during the continuance of an Event of Default, the Secured Party shall have the right to file claims under any insurance policies, to receive receipt and give acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies.

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Section 6.  Reporting and Recordkeeping.  Each Debtor covenants and agrees with the Secured Party that from and after the date of this Agreement and until the Secured Obligations have been indefeasibly paid in full in cash:

(r)

Maintenance of Records Generally.  Each Debtor will keep and maintain at its own cost and expense records of its Collateral, complete in all material respects, including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and all other dealings with its Collateral.  For the Secured Party’s further security, each Debtor agrees that the Secured Party shall have a security interest in all of such Debtor’s books and records pertaining to its Collateral and, upon the occurrence and during the continuation of any Event of Default, such Debtor shall deliver and turn over full and complete copies of any such books and records to the Secured Party or to its representatives at any time on demand of the Secured Party.  Upon reasonable notice from the Secured Party, each Debtor shall permit any representative of the Secured Party, to inspect such books and records and will provide photocopies thereof to the Secured Party.

(s)

Special Provisions Regarding Maintenance of Records and Reporting Re: Accounts, Inventory and Equipment.

(i)

Each Debtor shall keep complete and materially accurate records of its Accounts.  Upon the request of the Secured Party, and prior to an Event of Default no more frequently than one time per Fiscal Quarter and without limit after the occurrence and during the continuance of an Event of Default, such Debtor shall deliver to the Secured Party all documents, including, without limitation, repayment histories and present status reports, relating to its Accounts so scheduled and such other matters and information relating to the status of its then existing Accounts as the Secured Party shall reasonably request.

(ii)

In the event any amounts due and owing in excess of One Hundred Thousand ($100,000) in the aggregate are in dispute between any Account Debtor and any Debtor, such Debtor shall provide the Secured Party with written notice thereof promptly after such Debtor’s learning thereof explaining in detail the reason for the dispute, all claims related thereto and the amount in controversy.

(iii)

Each Debtor shall maintain itemized records, accurate in all material respects, itemizing and describing the kind, type, quality, quantity, location and book value of its Inventory and Equipment and shall, upon request by the Secured Party, furnish the Secured Party with a current schedule containing the foregoing information.

(iv)

Each Debtor will promptly upon, but in no event later than ten (10) Business Days after:  

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(A)

Such Debtor’s learning thereof, inform the Secured Party, in writing, of any delay in such Debtor’s performance of any of its obligations to any Account Debtor and of any assertion of any claims, offsets or counterclaims by any Account Debtor and of any allowances, credits or other monies granted by such Debtor to any Account Debtor, in each case involving amounts in excess of One Hundred Thousand ($100,000) in the aggregate for all Accounts of such Account Debtor; and

(B)

Such Debtor’s receipt or learning thereof, furnish to and inform the Secured Party of all material adverse information relating to the financial condition of any Account Debtor with respect to Accounts exceeding One Hundred Thousand ($100,000) in the aggregate; and

(v)

If any Account arises out of a contract with the United States of America or any department, agency, subdivision or instrumentality thereof, or of any state (or department, agency, subdivision or instrumentality thereof) where such state has a state assignment of claims act or other law comparable to the Federal Assignment of Claims Act, such Debtor will take any action required or requested by the Secured Party to give notice of the Secured Party’s security interest in such Accounts under the provisions of the Federal Assignment of Claims Act or any comparable law or act enacted by any state or local governmental authority; and

(vi)

Such Debtor at its expense will cause independent public accountants reasonably satisfactory to the Secured Party to prepare and deliver to the Secured Party at any time and from time to time promptly upon the Secured Party’s request made when any Event of Default exists, the following reports: (A) a reconciliation of all of its Accounts, (B) an aging of all of its Accounts, (C) trial balances, and (D) a test verification of such Accounts.

(t)

Further Identification of Collateral.  Each Debtor will if so requested by the Secured Party furnish to the Secured Party, as often as the Secured Party reasonably requests but in no event more frequently than once per Fiscal Quarter and without limit after the occurrence and during the continuance of an Event of Default, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Party may reasonably request, all in reasonable detail.

(u)

Notices.  In addition to the notices required by Section 6(b) hereof, each Debtor will advise the Secured Party promptly, but in no event later than thirty (30) days after the occurrence thereof, in reasonable detail, (i) of any Lien or claim made or asserted against any of the Collateral that is not expressly permitted by the terms of the Note Purchase Agreement, and (ii) of the occurrence of any other event which would have a material adverse effect on the

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aggregate value of the Collateral or on the validity, perfection or priority of the Security Interests.

Section 7.  General Authority.  Each Debtor hereby irrevocably appoints, so long as any Obligations remain outstanding, the Secured Party its true and lawful attorney, with full power of substitution, in the name of such Debtor, the Secured Party or otherwise, for the sole use and benefit of the Secured Party on its behalf and on behalf of the Secured Parties, but at such Debtor’s expense, to exercise, at any time (subject to the proviso below) all or any of the following powers:

(i)

to file the financing statements, financing statement amendments and continuation statements referred to in Section 5(a)(iii),

(ii)

to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due with respect to any Collateral or by virtue thereof,

(iii)

to settle, compromise, compound, prosecute or defend any action or proceeding with respect to any Collateral,

(iv)

to sell, transfer, assign or otherwise deal in or with the Collateral or the proceeds or avails thereof, as fully and effectually as if the Secured Party were the absolute owner thereof, and

(v)

to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference to the Collateral;

provided, however, that the powers described in clauses (ii), (iii), (iv) and (v) above may be exercised by the Secured Party only if an Event of Default then exists.

Section 8.  Events of Default.  The existence or occurrence of any “Event of Default” as provided under the terms of the Note Purchase Agreement shall constitute an Event of Default under this Agreement.

Section 9.  Remedies upon Event of Default.

(v)

If any Event of Default has occurred and is continuing, the Secured Party may, without further notice, exercise all rights and remedies under this Agreement or any other Transaction Document or that are available to a secured creditor under the UCC or that are otherwise available at law or in equity, at any time, in any order and in any combination, including to collect any and all Secured Obligations from the Debtors, and, in addition, the Secured Party may sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Secured Party may deem satisfactory.  The Secured Party shall give the Debtors not less than ten (10) days’ prior written notice of the time and place of any sale or other intended disposition of Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.  Each Debtor agrees that any such notice constitutes "reasonable

17

notification" within the meaning of Florida Statutes § 679.611 (to the extent such Section or any successor provision under the UCC is applicable).

(w)

The Secured Party may be the purchaser of any or all of the Collateral so sold at any public sale (or, if such Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations or if otherwise permitted under applicable law, at any private sale) and thereafter hold the same, absolutely, free from any right or claim of whatsoever kind.  Each Debtor agrees during an Event of Default which is outstanding and has not been cured to execute and deliver such documents and take such other action as the Secured Party reasonably deems necessary or advisable in order that any such sale may be made in compliance with law.  Upon any such sale the Secured Party shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold.  Each purchaser at any such sale shall hold the Collateral so sold to it absolutely, free from any claim or right of any kind, including any equity or right of redemption of the Debtors.  To the extent permitted by applicable law, each Debtor hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted.  The notice (if any) of such sale shall (1) in case of a public sale, state the time and place fixed for such sale, and (2) in the case of a private sale, state the day after which such sale may be consummated.  Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Secured Party may fix in the notice of such sale.  At any such sale Collateral may be sold in one (1) lot as an entirety or in separate parcels, as the Secured Party may determine.  The Secured Party shall not be obligated to make any such sale pursuant to any such notice.  The Secured Party may, without notice or publication (other than any notices required by this Section 9 or by applicable law), adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned.  In case of any sale of all or any part of the Collateral on credit or for future delivery, such Collateral so sold may be retained by the Secured Party until the selling price is paid by the purchaser thereof, but the Secured Party shall not incur any liability in case of the failure of such purchaser to take up and pay for such Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice.  The Secured Party, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.  The Debtors shall remain liable for any deficiency.

(x)

For the purpose of enforcing any and all rights and remedies under this Agreement, the Secured Party may (i) require any Debtor to, and each Debtor agrees that it will, at the joint and several expense of the Debtors, and upon the request of the Secured Party, forthwith assemble all or any part of its Collateral as directed by the Secured Party and make it available at a place designated by the Secured Party which is, in the Secured Party’s opinion, reasonably convenient to the Secured Party and such Debtor, whether at the premises of such Debtor or otherwise, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any such Collateral is or may be located and, without charge or liability to the Secured Party, seize and remove such Collateral from such premises, (iii) have access to and use such Debtor’s books and records, computers and software (subject to the terms of applicable licenses) relating to the Collateral, and (iv) prior to the disposition of any of the Collateral, store or transfer such Collateral without charge in or by

18

means of any storage or transportation facility owned or leased by such Debtor, process, repair or recondition such Collateral or otherwise prepare it for disposition in any manner and to the extent the Secured Party deems appropriate and, in connection with such preparation and disposition, use without charge any trademark, trade name, copyright, patent or technical process used such Debtor.

(y)

Without limiting the generality of the foregoing, if any Event of Default has occurred and is continuing:

(i)

the Secured Party may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the exclusive right to enforce) against any licensee or sublicensee all rights and remedies of any Debtor in, to and under any Licenses and take or refrain from taking any action under any thereof, and each Debtor hereby releases the Secured Party from, and agrees to hold the Secured Party free and harmless from and against any claims arising out of, any lawful action so taken or omitted to be taken with respect thereto except for the Secured Party’s gross negligence or willful misconduct as determined by a final and nonappealable decision of a court of competent jurisdiction; and

(ii)

upon request by the Secured Party, each Debtor agrees to execute and deliver to the Secured Party powers of attorney, in form and substance reasonably satisfactory to the Secured Party, for the implementation of any lease, assignment, license, sublicense, grant of option, sale or other disposition of any Intellectual Property, in each case subject to the terms of the applicable License.  In the event of any such disposition pursuant to this Section, each Debtor shall supply its know-how and expertise relating to the manufacture and sale of the products bearing Trademarks or the products or services made or rendered in connection with Patents or Copyrights, and its customer lists and other records relating to such Intellectual Property and to the distribution of said products, to the Secured Party.

Section 10.  Limitation on Duty of Secured Party in Respect of Collateral.  Beyond reasonable care in the custody thereof, the Secured Party shall have no duty as to any Collateral of any Debtor in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Secured Party shall be deemed to have exercised reasonable care in the custody of the Collateral of the Debtors in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property, and the Secured Party shall not be liable or responsible for any loss or damage to any of the Debtors’ Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Secured Party in good faith.

19

Section 11.  Application of Proceeds. The proceeds of any sale of, or other realization upon, all or any part of the Collateral of the Debtors shall be applied by the Secured Party in such manner as it shall determine.

Section 12.  Expenses.  In the event that any Debtor fails to comply with the provisions of the Note Purchase Agreement, this Agreement or any other Transaction Document, such that the value of any of its Collateral or the validity, perfection, rank or value of the Security Interests are thereby diminished or potentially diminished or put at risk, the Secured Party may, but shall not be required to, effect such compliance on behalf of such Debtor, and the Debtors shall jointly and severally reimburse the Secured Party for the reasonable and actual costs thereof on demand.  All insurance expenses and all expenses of protecting, storing, warehousing, appraising, insuring, handling, maintaining and shipping such Collateral, any and all excise, stamp, intangibles, transfer, property, sales, and use taxes imposed by any state, federal, or local authority or any other governmental authority on any of such Collateral, or in respect of periodic appraisals and inspections of such Collateral, or in respect of the sale or other disposition thereof, shall be borne and paid by the Debtors jointly and severally; and if the Debtors fail promptly to pay any portion thereof when due, the Secured Party may, at its option, but shall not be required to, pay the same and charge the Debtors’ accounts therefor, and the Debtors agree jointly and severally to reimburse the Secured Party therefor on demand.  All sums so paid or incurred by the Secured Party for any of the foregoing and any and all other sums for which the Debtors may become liable hereunder and all reasonable costs and expenses (including reasonable attorneys’ fees, legal expenses and court costs) incurred by the Secured Party in enforcing or protecting the Security Interests or any of its rights or remedies thereon shall be payable by the Debtors on demand and shall bear interest (after as well as before judgment) until paid at the default rate of interest set forth in the Note Purchase Agreement and shall be additional Secured Obligations hereunder.

Section 13.  Termination of Security Interests; Release of Collateral.  Upon the indefeasible repayment in full of all Secured Obligations or termination of all commitments of the Secured Party under the Note Purchase Agreement, the Security Interests shall terminate and all rights to the Collateral shall revert to the Debtors.  Upon any such termination of the Security Interests or release of such Collateral, the Secured Party will promptly upon the Debtor’s request and contemporaneously with any refinancing of the Obligations, at the expense of the Debtors, execute and deliver to the Debtors such documents as the Debtors shall reasonably request, but without recourse or warranty to the Secured Party, including but not limited to written authorization to file termination statements to evidence the termination of the Security Interests in such Collateral.

Section 14.  Notices.  All notices, requests and other communications to the Debtors or the Secured Party hereunder shall be delivered in the manner required by the Note Purchase Agreement and shall be sufficiently given to the Secured Party or any Debtor if addressed or delivered to them at their respective addresses and telecopier numbers specified in the Note Purchase Agreement.  All such notices and communications shall be deemed to have been duly given at the times set forth in the Note Purchase Agreement.

Section 15.  No Waiver; Remedies Cumulative.  No failure or delay on the part of the Secured Party in exercising any right or remedy hereunder, and no course of dealing between any

20

Debtor on the one hand and the Secured Party or any holder of any Note on the other hand shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy hereunder or any other Transaction Document preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder or thereunder.  The rights and remedies herein and in the other Transaction Documents are cumulative and not exclusive of any rights or remedies which the Secured Party would otherwise have.  No notice to or demand on the Debtors not required hereunder in any case shall entitle any Debtor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Secured Party to any other or further action in any circumstances without notice or demand.

Section 16.  Successors and Assigns.  This Agreement is for the benefit of the Secured Party and its successors and assigns, and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness.  This Agreement shall be binding on the Debtors and their successors and assigns; provided, however, that no Debtor may assign any of its rights or obligations hereunder without the prior written consent of the Secured Party.

Section 17.  Amendments.  No amendment or waiver of any provision of this Agreement, nor consent to any departure by the Debtors herefrom, shall in any event be effective unless the same shall be in writing and signed by the Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 18.  Governing Law; Waiver of Jury Trial.

(z)

THIS AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF FLORIDA, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF PERFECTION AND NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN FLORIDA.  

(aa)

DEBTORS IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR THEMSELVES AND THEIR PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF FLORIDA AND THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH FLORIDA STATE COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SUCH FEDERAL COURT.  EACH DEBTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE

21

JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT SHALL AFFECT ANY RIGHT THAT THE SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AGAINST SUCH DEBTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(bb)

EACH DEBTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING DESCRIBED IN PARAGRAPH (b) OF THIS SECTION AND BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH DEBTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(cc)

EACH DEBTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN THE NOTE PURCHASE AGREEMENT.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER TRANSACTION DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

(dd)

EACH DEBTOR HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING AMONG THE PARTIES HERETO DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH DEBTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT THE SECURED PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 19.  Severability.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable, in whole or in part, in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 20.  Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts (including by telecopy), each of which when so executed and delivered shall be an original, but all of which shall together constitute one (1) and the same instruments.

22

Section 21.  Headings Descriptive.  The headings of the several sections and subsections of this Agreement are for convenience of reference only and shall not be used in the construction or interpretation of this Agreement.  

[Remainder of Page Intentionally Blank]

23

IN WITNESS WHEREOF, the Debtors have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

Debtors:

INFUSION BRANDS, INC.	AS SEEN ON TV, INC.
By:	By:
Name:	Name:
Title:	Title:
EDIETS.COM, INC.	TV GOODS HOLDING CORPORATION
By:	By:
Name:	Name:
Title:	Title:
TRU HAIR, INC.	RONCO FUNDING, LLC
By:	By:
Name:	Name:
Title:	Title:

Secured Party:

MIG7 INFUSION, LLC

By: Mallitz Investment Group, LLC, Manager

By:
	Craig A. Mallitz, President

[Signature Page to Security Agreement]

SCHEDULE I

LIST OF UCC FILING OFFICES

Name of Debtor	State	Office(s)
INFUSION BRANDS, INC.	[____]	[______]
AS SEEN ON TV, INC.	[____]	[______]
EDIETS.COM, INC.	[____]	[______]
TV GOODS HOLDING CORPORATION	[____]	[______]
TRU HAIR, INC.	[____]	[______]
RONCO FUNDING, LLC	[____]	[______]

25

SCHEDULE II

DEBTORS’ NAMES, ORGANIZATION TYPES, JURISDICTION TYPES, TAX IDENTIFICATION NUMBERS AND ORGANIZATION IDENTIFICATION NUMBERS

Debtors Name:	Type:	Jurisdiction:	TIN:	OID:
Infusion Brands, Inc.	Corporation	Nevada	[___________]	[___________]
AS SEEN ON TV, INC.	Corporation	Florida	[___________]	[___________]
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

SCHEDULE III

PERFECTION CERTIFICATE

To induce you, MIG7 INFUSION, LLC (“Lender”) to extend credit to AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Debtors”, and individually as a “Debtor”), pursuant to the terms of that certain Senior Note Purchase Agreement (the “Note Purchase Agreement”) dated as of April 3, 2014, among Lender and the Debtors, with reference to that certain Security Agreement (the “Security Agreement”) dated as of April 3, 2014, among Lender and the Debtors, the Debtors hereby certify to Lender as follows (capitalized or initially capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed to said terms in the Note Purchase Agreement):

A.

IDENTIFICATION MATTERS; LOCATIONS.

1. The full, correct and current name of each Debtor as it appears in such Debtor’s respective organizational documents, the type of organization of each Debtor, each Debtor’s respective jurisdiction of organization, each Debtor’s respective Federal Tax Identification Number (“TIN”) and each Debtor’s State organizational identification number (“OID”) are as follows:

Debtors Name:	Type:	Jurisdiction:	TIN:	OID:
Infusion Brands, Inc.	Corporation	Nevada	[___________]	[___________]
AS SEEN ON TV, INC.	Corporation	Florida	[___________]	[___________]
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

2.

Each Debtor’s jurisdiction(s) of foreign qualification are as follows:

Debtor Name:	Jurisdiction(s) of Foreign Qualification:
Infusion Brands, Inc.
AS SEEN ON TV, INC.
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

3. The following sets forth all other names (including trade names or similar appellations) used by each Debtor, or any other business or organization to which each such Debtor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, now or at any time during the past five years:

Debtor Name:	Additional or Other Name(s):
Infusion Brands, Inc.
AS SEEN ON TV, INC.
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

4. The following sets forth the mailing address, chief executive office address and other chief executive office addresses during the prior five years for each Debtor:

Debtor Name:	Mailing Address (Include County):	Chief Executive Office, if different than Mailing Address (Include County):	Other Chief Executive Office Addresses During Prior Five Years (Include County):
Infusion Brands, Inc.
AS SEEN ON TV, INC.
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

5. Each location in the United States of America at which each Debtor maintains any books, records, inventory, equipment or other assets is listed on Schedule A-5 attached hereto and made a part hereof, including for each such location a street address, an indication of whether the location is owned by the applicable Debtor, leased by the applicable Debtor (and, if so, the name and address of the owner of the location) or operated by a third party, such as a warehouseman or processor (and, if so, the name and address of such third party).

6. The addresses of any locations not specified above where any Debtor has maintained inventory, books, records, equipment or other assets during the five year period preceding the date of this Certificate are set forth on Schedule A-6 attached hereto and made a part hereof.

B.

LEGAL MATTERS.

1.

The officers of each Debtor and their respective titles are:

Debtor Name:	Officer Name(s):	Title(s):
Infusion Brands, Inc.
AS SEEN ON TV, INC.
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

2.

The Directors, Managers or Managing Members, as applicable, of each Debtor are:

Debtor Name:	Director/Manager/Managing Member Name(s):
Infusion Brands, Inc.
AS SEEN ON TV, INC.
EDIETS.COM, INC.
TV GOODS HOLDING CORPORATION
TRU HAIR, INC.
RONCO FUNDING, LLC

3.

Except as set forth on Schedule B-3 attached hereto and made a part hereof, none of the Debtors have any Subsidiaries and none of the Debtors have any Affiliates except for the other Debtors.  Except as set forth on Schedule B-3 attached hereto and made a part hereof, no Debtor is a party to any written agreement with any other Debtors.

4.

Fiscal year end of each Debtor is:  

As Seen on TV, Inc. - March 31

Infusion Brands, Inc. - [December 31^st.]

5.

Each Debtor’s certified public accountant is: [_________________________________].

6.

During the five (5) year period preceding the Closing Date no Debtor has been party to any merger, consolidation, stock acquisition or purchase of all or a substantial portion of the assets of any Person, except as set forth on Schedule B-6 attached hereto and made a part hereof.

C.

SPECIAL COLLATERAL.

1.

All financial institutions at which any Debtor maintains any deposit accounts, investment accounts, securities accounts or similar accounts, together with the account number and a description for each such account, are set forth in detail on Schedule C-1 attached hereto and made a part hereof.

2.

All items of intellectual property (e.g., all United States or foreign patents, patent applications, trademarks, trademark applications, copyrights, copyright applications, service marks, service mark applications, trade names or trade name applications) owned outright by or licensed to any Debtor, together with the registration or application number for each such item of intellectual property (if registered or if an application for registration has been submitted), are set forth in detail  on Schedule C-2 attached hereto and made a part hereof.

3.

All items of stocks, bonds, debentures, notes and other securities and investment property owned by any Debtor are set forth in detail on Schedule C-3 attached hereto and made a part hereof.

4.

All letters of credit which name any Debtor as a beneficiary thereunder are set forth in detail on Schedule C-4 attached hereto and made a part hereof.

5.

All real property owned by any Debtor is described in detail on Schedule C-5 attached hereto and made a part hereof, which includes a street address of the real property owned by each such Debtor and a detailed description of any mortgage, deed of trust, security deed, deed to secure debt, lien or encumbrance against any such parcel including the name of the holder of record of such instrument,  recording information for such instrument, the original principal amount secured by such instrument, the current outstanding principal amount secured by such instrument and whether such instrument secures future advances thereunder.

6.

No Debtor owns any equipment subject to a certificate of title statute (including, without limitation, any motor vehicles, aircraft or vessels), except as set forth on Schedule C-6 attached hereto and made a part hereof.

Lender shall be entitled to rely upon the foregoing in all respects and the undersigned is duly authorized to execute and deliver this Perfection Certificate.

IN WITNESS WHEREOF, the undersigned have executed and delivered this Perfection Certificate as of April 3, 2014.

INFUSION BRANDS, INC.	AS SEEN ON TV, INC.
By:	By:
Name:	Name:
Title:	Title:
EDIETS.COM, INC.	TV GOODS HOLDING CORPORATION
By:	By:
Name:	Name:
Title:	Title:
TRU HAIR, INC.	RONCO FUNDING, LLC
By:	By:
Name:	Name:
Title:	Title:

[Signature Page to Perfect Certificate]

EXHIBIT A

to Security Agreement

PATENT SECURITY AGREEMENT

THIS PATENT SECURITY AGREEMENT (the “Agreement”), dated as of ___________, is made between ___________________, a ____________________ (the “Debtor”), and MIG7 INFUSION, LLC, a Florida limited liability company, as the Secured Party (the “Secured Party”), with reference to that certain Note Purchase Agreement (as amended, restated, modified or supplemented at any time or from time to time, the “Note Purchase Agreement”) dated April 3, 2014, by and among Lender, AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Borrower”).

W I T N E S S E T H :

WHEREAS, in connection with the Note Purchase Agreement, the Debtor has executed and delivered a Security Agreement, dated as of April 3, 2014 (as amended, restated, modified or supplemented at any time or from time to time, the “Security Agreement”);

WHEREAS, pursuant to Section 5(d) of the Security Agreement, the Debtor is required to execute and deliver this Agreement and to grant to the Secured Party a continuing security interest in all of the Patent Collateral (as defined below) to secure all Obligations; and

WHEREAS, the Debtor has duly authorized the execution, delivery and performance of this Agreement;

NOW, THEREFORE, for and in consideration of the sum of $10.00, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor agrees, for the benefit of the Secured Party, as follows:

Section 1.  Recitals.  The foregoing recitals are true and correct and are incorporated herein by reference for all purposes.

Section 2.  Definitions.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

Section 3.  Grant of Security Interest.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Obligations, the Debtor does hereby mortgage, pledge and hypothecate to the Secured Party, and grant to the Secured Party a security interest in, for its benefit and the benefit of the Secured Party, all of the

1

following property (the “Patent Collateral”), whether now owned or hereafter acquired or existing by it:

(a)

all letters patent and applications for letters patent throughout the world, including all patent applications in preparation for filing anywhere in the world and including each patent and patent application referred to in Item A of Schedule I attached hereto;

(b)

all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (a);

(c)

all patent licenses, including each patent license referred to in Item B of Schedule I attached hereto; and

(d)

all proceeds of, and rights associated with, the foregoing (including license royalties and proceeds of infringement suits), the right to sue third parties for past, present or future infringements of any patent or patent application, including any patent or patent application referred to in Item A of Schedule I attached hereto, and for breach or enforcement of any patent license, including any patent license referred to in Item B of Schedule I attached hereto, and all rights corresponding thereto throughout the world.

Section 4.  Security Agreement.  This Agreement has been executed and delivered by the Debtor for the purpose of registering the security interest of the Secured Party in the Patent Collateral with the United States Patent and Trademark Office and corresponding offices in other countries of the world (subject to Sections 3 and 5(d) of the Security Agreement).  The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Secured Party under the Security Agreement.  The Security Agreement (and all rights and remedies of the Secured Party) shall remain in full force and effect in accordance with its terms subject to Section 5 hereof.

Section 5.  Release of Security Interest.  Upon (i) the sale, transfer or other disposition of any Patent Collateral in accordance with the Note Purchase Agreement or (ii) the indefeasible payment in full of the Obligations and the termination of all obligations of the Secured Party to make advances or grant other financial accommodations under the Note Purchase Agreement, the Secured Party shall promptly upon the Debtor’s request and contemporaneously with any refinancing of the Obligations, at the Debtor’s expense, execute and deliver to the Debtor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Patent Collateral which has been granted hereunder.

Section 6.  Acknowledgment.  The Debtor does hereby further acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

Section 7.  Transaction Document, etc.  This Agreement is a Transaction Document executed pursuant to the Note Purchase Agreement and shall (unless otherwise expressly

2

indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Note Purchase Agreement.

Section 8.  Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.  

3

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

Debtor:
[NAME OF DEBTOR]
By:
Name:
Title:
Secured Party:
MIG7 INFUSION, LLC
By:
Name:	Craig Mallitz
Title:	President

4

SCHEDULE I

to Patent Security Agreement

Item A.  Patents

Issued Patents

*Country Patent No. Issue Date Inventor(s) Title

Pending Patent Applications

*Country Serial No. Filing Date Inventor(s) Title

Patent Applications in Preparation

*Country Docket No. Expected
Filing Date Inventor(s) Title

Item B.  Patent Licenses

*Country or
Territory Licensor Licensee Effective
Date Expiration
Date Subject
Matter

———————

^*List items related to the United States first for ease of recordation.  List items related to other countries next, grouped by country and in alphabetical order by country name.

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EXHIBIT B

to Security Agreement

TRADEMARK SECURITY AGREEMENT

THIS TRADEMARK SECURITY AGREEMENT (the “Agreement”), dated as of ___________, is made between ___________________, a ____________________ (the “Debtor”), and MIG7 INFUSION, LLC, a Florida limited liability company, as the Secured Party (the “Secured Party”), with reference to that certain Note Purchase Agreement (as amended, restated, modified or supplemented at any time or from time to time, the “Note Purchase Agreement”) dated April 3, 2014, by and among Lender, AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Borrower”).

W I T N E S S E T H :

WHEREAS, in connection with the Note Purchase Agreement, the Debtor has executed and delivered a Security Agreement, dated as of April 3, 2014 (as amended, restated, modified or supplemented at any time or from time to time, the “Security Agreement”);

WHEREAS, pursuant to Section 5(d) of the Security Agreement, the Debtor is required to execute and deliver this Agreement and to grant to the Secured Party a continuing security interest in all of the Trademark Collateral (as defined below) to secure all Obligations; and

WHEREAS, the Debtor has duly authorized the execution, delivery and performance of this Agreement;

NOW, THEREFORE, for and in consideration of the sum of $10.00, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor agrees, for the benefit of the Secured Party, as follows:

Section 1.  Recitals.  The foregoing recitals are true and correct and are incorporated herein by reference for all purposes.

Section 2.  Definitions.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

Section 3.  Grant of Security Interest.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Obligations, the Debtor does hereby mortgage, pledge and hypothecate to the Secured Party, and grant to the Secured Party a security interest in, for its benefit and the benefit of the Secured Party, all of the following property (the “Trademark Collateral”), whether now owned or hereafter acquired or existing by it:

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(a)

all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos, other source of business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of a like nature (all of the foregoing items in this clause (a) being collectively called a “Trademark”), now existing anywhere in the world or hereafter adopted or acquired, whether currently in use or not, all registrations and recordings thereof and all applications in connection therewith, whether pending or in preparation for filing, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States of America or any State thereof or any foreign country, including those referred to in Item A of Schedule I attached hereto;

(b)

all Trademark licenses, including each Trademark license referred to in Item B of Schedule I attached hereto;

(c)

all reissues, extensions or renewals of any of the items described in clause (a) and (b);

(d)

all of the goodwill of the business connected with the use of, and symbolized by the items described in, clauses (a) and (b); and

(e)

all proceeds of, and rights associated with, the foregoing, including any claim by the Debtor against third parties for past, present or future infringement or dilution of any Trademark, Trademark registration or Trademark license, including any Trademark, Trademark registration or Trademark license referred to in Item A and Item B of Schedule I attached hereto, or for any injury to the goodwill associated with the use of any such Trademark or for breach or enforcement of any Trademark license.

Section 4.  Security Agreement.  This Agreement has been executed and delivered by the Debtor for the purpose of registering the security interest of the Secured Party in the Trademark Collateral with the United States Patent and Trademark Office and corresponding offices in other countries of the world (subject to Sections 3 and 5(d) of the Security Agreement).  The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Secured Party under the Security Agreement.  The Security Agreement (and all rights and remedies of the Secured Party) shall remain in full force and effect in accordance with its terms subject to Section 5 hereof.

Section 5.  Release of Security Interest.  Upon (i) the sale, transfer or other disposition of any Trademark Collateral in accordance with the Note Purchase Agreement or (ii) the indefeasible payment in full of the Obligations and the termination of all obligations of the Secured Party to make advances or grant other financial accommodations under the Note Purchase Agreement, the Secured Party shall promptly upon the Debtor’s request and contemporaneously with any refinancing of the Obligations, at the Debtor’s expense, execute and deliver to the Debtor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Trademark Collateral which has been granted hereunder.

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Section 6.  Acknowledgment.  The Debtor does hereby further acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

Section 7.  Transaction Document, etc.  This Agreement is a Transaction Document executed pursuant to the Note Purchase Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Note Purchase Agreement.

Section 8.  Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

Debtor:
[NAME OF DEBTOR]
By:
Name:
Title:
Secured Party:
MIG7 INFUSION, LLC
By:
Name:	Craig Mallitz
Title:	President

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SCHEDULE I

to Trademark Security Agreement

Item A.  Trademarks

Registered Trademarks

*Country Trademark Registration No. Registration Date

Pending Trademark Applications

*Country Trademark Serial No. Filing Date

Trademark Applications in Preparation

*Country Trademark Docket No. Expected Filing Date Products/
Services

Item B.  Trademark Licenses

*Country or
Territory Trademark Licensor Licensee Effective
Date Expiration
Date

* List items related to the United States first for ease of recordation.  List items related to other countries next, grouped by country and in alphabetical order by country name.

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EXHIBIT C

to Security Agreement

COPYRIGHT SECURITY AGREEMENT

THIS COPYRIGHT SECURITY AGREEMENT (the “Agreement”), dated as of ___________, is made between ___________________, a ____________________ (the “Debtor”), and MIG7 INFUSION, LLC, a Florida limited liability company, as the Secured Party (the “Secured Party”), with reference to that certain Note Purchase Agreement (as amended, restated, modified or supplemented at any time or from time to time, the “Note Purchase Agreement”) dated April 3, 2014, by and among Lender, AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), TRU HAIR, INC., a Florida corporation (“Tru Hair”), and RONCO FUNDING, LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Borrower”).

W I T N E S S E T H :

WHEREAS, in connection with the Note Purchase Agreement, the Debtor has executed and delivered a Security Agreement, dated as of April 3, 2014 (as amended, restated, modified or supplemented at any time or from time to time, the “Security Agreement”);

WHEREAS, pursuant to Section 5(d) of the Security Agreement, the Debtor is required to execute and deliver this Agreement and to grant to the Secured Party a continuing security interest in all of the Copyright Collateral (as defined below) to secure all Obligations; and

WHEREAS, the Debtor has duly authorized the execution, delivery and performance of this Agreement;

NOW, THEREFORE, for and in consideration of the sum of $10.00, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor agrees, for the benefit of the Secured Party, as follows:

Section 1.  Recitals.  The foregoing recitals are true and correct and are incorporated herein by reference for all purposes.

Section 2.  Definitions.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

Section 3.  Grant of Security Interest.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Obligations, the Debtor does hereby mortgage, pledge and hypothecate to the Secured Party, and grant to the Secured Party a security interest in, for its benefit and the benefit of the Secured Party, all of the

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following property (the “Copyright Collateral”), whether now owned or hereafter acquired or existing by it, being all copyrights (including all copyrights for semi-conductor chip product mask works) of the Debtor, whether statutory or common law, registered or unregistered, now or hereafter in force throughout the world including all of the Debtor’s right, title and interest in and to all copyrights registered in the United States Copyright Office or anywhere else in the world and also including the copyrights referred to in Item A of Schedule I attached hereto, and all applications for registration thereof, whether pending or in preparation, all copyright licenses, including each copyright license referred to in Item B of Schedule I attached hereto, the right to sue for past, present and future infringements of any thereof, all rights corresponding thereto throughout the world, all extensions and renewals of any thereof and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

Section 4.  Security Agreement.  This Agreement has been executed and delivered by the Debtor for the purpose of registering the security interest of the Secured Party in the Copyright Collateral with the United States Copyright Office and corresponding offices in other countries of the world (subject to Sections 3 and 5(d) of the Security Agreement).  The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Secured Party under the Security Agreement.  The Security Agreement (and all rights and remedies of the Secured Party) shall remain in full force and effect in accordance with its terms subject to Section 5 hereof.

Section 5.  Release of Security Interest.  Upon (i) the sale, transfer or other disposition of any Copyright Collateral in accordance with the Note Purchase Agreement or (ii) the indefeasible payment in full of the Obligations and the termination of all obligations of the Secured Party to make advances or grant other financial accommodations under the Note Purchase Agreement, the Secured Party shall promptly upon the Debtor’s request and contemporaneously with any refinancing of the Obligations, at the Debtor’s expense, execute and deliver to the Debtor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Copyright Collateral which has been granted hereunder.

Section 6.  Acknowledgment.  The Debtor does hereby further acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

Section 7.  Transaction Document, etc.  This Agreement is a Transaction Document executed pursuant to the Note Purchase Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Note Purchase Agreement.

Section 8.  Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

Debtor:
[NAME OF DEBTOR]
By:
Name:
Title:
Secured Party:
MIG7 INFUSION, LLC
By:
Name:	Craig Mallitz
Title:	President

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EX-10.4

EXHIBIT 10.4

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (the "Agreement") is made and entered into this 3rd day of April, 2014, by AS SEEN ON TV, INC., a Florida corporation (“Pledgor"), having an address of 14044 Icot Boulevard, Clearwater, Florida 33760, in favor of MIG7 INFUSION, LLC, a Florida limited liability company (“Lender”), having an address for the purposes hereof of 16311 Baycross Drive, Lakewood Ranch, Florida 34202.

1.  Grant of Security Interest.  Pledgor hereby irrevocably and unconditionally pledges and grants a security interest in, a lien upon and the right of set-off against, and collaterally assigns and transfers to Lender all property referred to in Exhibit “A” attached hereto and incorporated herein, as hereafter amended or supplemented from time to time (the “Collateral”). The parties hereto expressly agree that all rights, assets and property at any time held in or credited to any securities account constituting Collateral shall be treated as financial assets as defined in the Uniform Commercial Code as in effect in the State of Florida (the “UCC”).

2.  Indebtedness.

(a) The Collateral secures and will secure the Indebtedness of Pledgor, Infusion Brands, Inc., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV Goods”), and TRU HAIR, INC., a Florida corporation (“Tru Hair” and collectively with Pledgor, Infusion, eDiets, and TV Goods, the “Borrower”) to Lender.  Each person or entity obligated under any Indebtedness is sometimes referred to in this Agreement as a “Debtor.”

(b) "Indebtedness" means:

(i) all obligations and liabilities to Lender, now or hereafter existing or incurred whether absolute or contingent and arising under that certain Senior Note Purchase Agreement, dated April 3, 2014, as amended, supplemented, increased, extended or otherwise modified from time to time thereafter (the “Note Purchase Agreement”) or any other Transaction Document (as defined therein);

(ii) all debts, obligations or liabilities to Lender, now or hereafter existing or incurred whether absolute or contingent, arising under the Notes (as defined in the Note Purchase Agreement), and all other instruments, documents and agreements of every kind and nature now or hereafter executed or delivered in connection with the Notes and the Loans (as defined in the Note Purchase Agreement) evidenced thereby (including all renewals, increases, extensions, restatements and replacements thereof and amendments and modifications of any of the foregoing);

(iii) all obligations and liabilities of Pledgor to Lender hereunder; and

(iv)  all costs, attorneys’ fees and expenses incurred by Lender in connection with the collection or enforcement of any of the above.

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3.  Pledgor's Covenants, Representations And Warranties.  Pledgor covenants, represents and warrants that unless compliance is waived by Lender in writing:

(a)  Pledgor is the legal and beneficial owner of all the Collateral free and clear of any and all liens, encumbrances, or interests of any third parties other than the security interest of Lender and that arising under the Vicis Debt, the Bibby Debt, and the MFC Debt (as each such term is defined in the Note Purchase Agreement), and will keep the Collateral free of all other liens, claims, security interests and encumbrances of any kind or nature, whether voluntary or involuntary, except the security interest of Lender.

(b)  Pledgor shall, at Pledgor’s expense, take all actions necessary or advisable from time to time to maintain the priority and perfection of the security interest of Lender in the Collateral and shall not take any actions that would alter, impair or eliminate said priority or perfection.

(c)  Pledgor agrees to pay prior to delinquency all taxes, charges, liens and assessments against the Collateral, and upon the failure of Pledgor to do so, Lender at its option may pay any of them and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same.

(d)  If any of the Collateral is margin stock as defined in Regulation U promulgated by the Board of Governors of the Federal Reserve System of the United States (“FRB”), Pledgor will provide Lender a properly executed Form U-1 Purpose Statement. Lender and Pledgor will comply with the requirements and restrictions imposed by Regulation U.

(e)  Pledgor’s exact legal name is correctly set forth on the signature page hereof. Pledgor will notify Lender in writing at least thirty (30) days prior to any change in Pledgor's name or identity.

(f)  Pledgor's chief executive office is, and has been for the four (4) month period preceding the date hereof (or, if less, the entire period of the existence of Pledgor) located, in the state specified on the signature page hereof.  Pledgor is an organization of the type and (if an unregistered entity), is incorporated in or organized under the laws of the state specified on such signature page.  Pledgor shall give Lender at least thirty (30) days notice before changing the location of its residence or its chief executive office, type of organization, business structure or state of incorporation or organization.

4.  Representations, Warranties and Covenants Regarding Equity Securities Collateral.  Pledgor hereby represents, warrants and covenants the following with respect to any equity securities comprising any or all of the Collateral (the "Equity Securities") and covenants and agrees to promptly notify Lender in writing in the event that any of the foregoing representations and warranties is no longer true and correct:

(a)  The Equity Securities have been duly authorized and validly issued and are fully paid and non-assessable.

(b)  There are no restrictions on the pledge of the Equity Securities by Pledgor to Lender (other than required consents that have been obtained by Pledgor on or before the date hereof) nor on the sale of the Equity Securities by Pledgor or Lender (whether

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pursuant to securities laws or regulations or any shareholder, lock-up or other similar agreement or insider trading rules of the issuer); provided that the Equity Securities have not been registered under the Securities Act of 1933, as amended.

5.  Lender Appointed Attorney-In-Fact.  Pledgor authorizes and irrevocably appoints Lender as Pledgor's true and lawful attorney-in-fact with full power of substitution to take any action and execute or otherwise authenticate any record or other documentation that Lender considers necessary or advisable to accomplish the purposes of this Agreement, including but not limited to, the following actions: (a) to endorse, receive, accept and collect all checks, drafts, other payment orders and instruments representing or included in the Collateral or representing any payment, dividend or distribution relating to any Collateral or to take any other action to enforce, collect or compromise any of the Collateral; (b) to transfer any Collateral (including converting physical certificates to book-entry holdings) into the name of Lender or its nominee or any broker-dealer (which may be an affiliate of Lender) and to execute any control agreement covering any Collateral on Pledgor's behalf and as attorney-in-fact for Pledgor in order to perfect Lender's continuing security interest in the Collateral and in order to provide Lender with control of the Collateral, and Pledgor's signature on this Agreement or other authentication of this Agreement shall constitute an irrevocable direction by Pledgor to any bank, custodian, broker dealer, any other securities intermediary or commodity intermediary holding any Collateral or any issuer of any letters of credit to comply with any instructions or entitlement orders, of Lender without further consent of Pledgor; (c) to participate in any recapitalization, reclassification, reorganization, consolidation, redemption, stock split, merger or liquidation of any issuer of securities which constitute Collateral, and in connection therewith Lender may deposit or surrender control of the Collateral, accept money or other property in exchange for the Collateral, and take such action as it deems proper in connection therewith, and any money or property received on account of or in exchange for the Collateral shall be applied to the Indebtedness or held by Lender thereafter as Collateral pursuant to the provisions hereof; (d)  to exercise any right, privilege or option pertaining to any Collateral, but Lender has no obligation to do so; (e) to file any claims, take any actions or institute any proceedings which Lender determines to be necessary or appropriate to collect or preserve the Collateral or to enforce Lender's rights with respect to the Collateral; (f) to execute in the name or otherwise authenticate on behalf of Pledgor any record reasonably believed necessary or appropriate by Lender for compliance with laws, rules or regulations applicable to any Collateral, or in connection with exercising Lender's rights under this Agreement; (g) to file any financing statement relating to this Agreement electronically, and Lender's transmission of Pledgor's signature on and authentication of the financing statement shall constitute Pledgor's signature on and authentication of the financing statement; (h) to make any compromise or settlement it deems desirable or proper with reference to the Collateral; (i) to do and take any and all actions with respect to the Collateral and to perform any of Pledgor's obligations under this Agreement; and (j) to execute any documentation reasonably believed necessary by Lender for compliance with Rule 144 or any other restrictions, laws, rules or regulations applicable to any Collateral hereunder that constitutes restricted or control securities under the securities laws.  The foregoing appointments are irrevocable and coupled with an interest and shall survive the death or disability of Pledgor and shall not be revoked without Lender’s written consent.  To the extent permitted by law, Pledgor hereby ratifies all said attorney-in-fact shall lawfully do by virtue hereof.

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6.  Voting Rights.

(a)  So long as no Event of Default shall have occurred and is continuing and Lender has not delivered the notice specified in Section 6(b), Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement or any document or agreement executed in connection herewith.

(b)  Upon the occurrence and during the continuance of an Event of Default, at the option of Lender exercised in a writing sent to Pledgor, all rights of Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a) shall cease, and Lender shall thereupon have the sole right to exercise such voting and other consensual rights.

7.  Events of Default; Remedies.  If an Event of Default (as defined in the Note Purchase Agreement)  occurs, in addition to any rights that Lender may have under any of the other Transaction Documents, Lender may do any one or more of the following:

(i)  Intentionally omitted.

(ii)  Exercise as to any or all of the Collateral all the rights, powers and remedies of an owner.

(iii)  Enforce the security interest given hereunder pursuant to the UCC and any other applicable law.

(iv)  Sell all or any part of the Collateral at public or private sale in accordance with the UCC, without advertisement, in such manner and order as Lender may elect.  Lender may purchase the Collateral for its own account at any such sale. Lender shall give Pledgor such notice of any public or private sale as may be required by the UCC, provided that to the extent notice of any such sale is required by the UCC, Pledgor agrees that at least ten (10) days’ notice to Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and provided further that, if Lender fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC.  Pledgor acknowledges that Collateral may be sold at a loss to Pledgor, and that, in such event, Lender shall have no liability or responsibility to Pledgor for such loss.  Pledgor further acknowledges that a private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that no such private sale shall, to the extent permitted by applicable law, be deemed not to be "commercially reasonable" solely as a result of such prices and other sale terms.  Upon any such sale, Lender shall have the right to deliver, assign and transfer to the buyer thereof the Collateral so sold.  Each buyer at any such sale shall hold the Collateral so sold absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal that Pledgor has or may have under any law now existing or hereafter adopted.

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Without limiting any other rights and remedies available to Lender, Pledgor expressly acknowledges and agrees that with respect to Collateral consisting of notes, bonds or other securities  which are not sold on a recognized market, Lender shall be deemed to have conducted a commercially reasonable sale of such Collateral if (a) such sale is conducted by any nationally recognized broker-dealer (including any affiliate of Lender), investment banker or any other method common in the securities industry, and (b) if the purchaser is Lender or any affiliate of Lender, the sale price received by Lender in connection with such sale is reasonably supported by quotations received from one or more other nationally recognized broker-dealers, investment bankers or other financial institutions.

(v)  Enforce the security interest of Lender in any deposit account which is part of the Collateral by applying such account to the Indebtedness.

(vi) Exercise any other remedy provided under this Agreement or by any applicable law.

(vii)  Comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and such compliance will not be considered to affect adversely the commercial reasonableness of any sale or other disposition of the Collateral.

(viii)  Sell the Collateral without giving any warranties as to the Collateral.  Lender may specifically disclaim any warranties of title or the like.  This procedure will not be considered to affect adversely the commercial reasonableness of any sale or other disposition of the Collateral.

8.  Right to Cure; Limitation on Lender's Duties.  If Pledgor fails to perform any agreement contained herein, Lender may perform or cause performance of such agreement and the expenses of Lender incurred in connection therewith shall be payable by Pledgor or Debtor under Section 13.  Any powers conferred on Lender hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Lender shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.  Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Lender accords its own property, it being understood that Lender shall not have any responsibility for (a) ascertaining, exercising or taking other action or giving Pledgor notice with respect to subscription rights, calls, conversions, exchanges, maturities, lenders or other matters relative to any Collateral, whether or not Lender has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against any parties with respect to any Collateral.  Lender shall not be liable for any loss to the Collateral resulting from acts of God, war, civil commotion, fire, earthquake, or other disaster or for any other loss or damage to the Collateral except to the extent such loss is determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from Lender's gross negligence or willful misconduct.

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9.  Waivers.  Lender shall be under no duty or obligation whatsoever and Pledgor waives any right to require Lender to (i) make or give any presentment, demands for performances, notices of nonperformance, protests, notices of protest or notices of dishonor in connection with any obligations or evidences of indebtedness held by Lender as Collateral, or in connection with any obligation or evidences of indebtedness which constitute in whole or in part the Indebtedness, (ii) proceed against any person or entity, (iii) proceed against or exhaust any collateral, or (iv) pursue any other remedy in Lender's power; and Pledgor waives any defense arising by reason of any disability or other defense of Debtor or any other person, or by reason of the cessation from any cause whatsoever of the liability of Debtor or any other person.  Until the Indebtedness is paid in full, Pledgor waives any right of subrogation, reimbursement, indemnification, and contribution (contractual, statutory or otherwise), including without limitation any claim or right of subrogation under the Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute, arising from the existence or performance of this Agreement, and Pledgor waives any right to enforce any remedy which Lender now has or may hereafter have against Debtor or against any other person and waives any benefit of and any right to participate in any Collateral or security whatsoever now or hereafter held by Lender.  If Pledgor is not also a Debtor with respect to a specified Indebtedness, such Pledgor authorizes Lender without notice or demand and without affecting Pledgor's liability hereunder, from time to time to:  (i) renew, extend, accelerate or otherwise change the time for payment of or otherwise change the terms of the Indebtedness or any part thereof, including increase or decrease of the rate of interest thereon; (ii) take and hold security, other than the Collateral, for the payment of the Indebtedness or any part thereof, and exchange, enforce, waive and release the Collateral or any part thereof or any such other security; and (iii) release or substitute Debtor or any one or more of them, or any of the endorsers or guarantors of the Indebtedness or any part thereof, or any other parties thereto.  Pledgor agrees that it is solely responsible for keeping itself informed as to the financial condition of Debtor and of all circumstances which bear upon the risk of nonpayment or the risk of a margin call or liquidation of the Collateral.

10.  Transfer, Delivery and Return of Collateral.

(a)  Pledgor shall immediately deliver or cause to be delivered to Lender (or the Securities Intermediary, if any) (i) any certificates or instruments now or hereafter representing or evidencing Collateral and such certificates and instruments shall be in suitable form for transfer without restriction or stop order by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank in form and substance satisfactory to Lender, and (ii) in the same form as received (with any necessary endorsement), all dividends and other distributions paid or payable in cash in respect of any Collateral and any such amounts, if received by Pledgor, shall be received in trust for the benefit of Lender and be segregated from the other property or funds of Pledgor.

(b)  Lender may at any time deliver the Collateral or any part thereof to Pledgor and the receipt by Pledgor shall be a complete and full acquittance for the Collateral so delivered, and Lender shall thereafter be discharged from any liability or responsibility therefor.

(c) Upon the transfer of all or any part of the Indebtedness, Lender may transfer all or any part of the Collateral and shall be fully discharged thereafter from all liability and responsibility with respect to such Collateral so transferred, and the transferee shall be vested with all the rights and powers of Lender hereunder with respect to such

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Collateral so transferred; but with respect to any Collateral not so transferred Lender shall retain all rights and powers hereby given.  Pledgor agrees that Lender may disclose to any prospective purchaser or transferee and any purchaser or transferee of all or part of the Indebtedness any and all information in Lender’s possession concerning Pledgor, this Agreement and the Collateral, provided that such purchaser or transferee shall have executed a confidentiality agreement reasonably acceptable to Debtor prior thereto preventing the further dissemination of such information.

11.  Continuing Agreement and Powers.

(a)  This is a continuing Agreement and all the rights, powers and remedies hereunder shall, unless otherwise limited herein, apply to all past, present and future Indebtedness of Debtor or any one or more of them to Lender, including that arising under successive transactions which shall either continue the Indebtedness, increase or decrease it, or from time to time create new Indebtedness after all or any prior Indebtedness has been satisfied, and notwithstanding the death, incapacity, cessation of business, dissolution or bankruptcy of Debtor or any one or more of them, or any other event or proceeding affecting Debtor or any one or more of them.

(b) Until all Indebtedness shall have been paid in full and Lender shall have no obligation to extend credit to any Debtor, the power of sale and all other rights, powers and remedies granted to Lender hereunder shall continue to exist and may be exercised by Lender at the time specified hereunder.

12.  Securities Intermediary.  If permitted by Lender, some or all of the Collateral may be held at a broker or other securities intermediary (the "Securities Intermediary").  Pledgor shall pay to the Securities Intermediary any charges or costs imposed by the Securities Intermediary specifically relating to such Collateral.  Pledgor at no time shall request that the Securities Intermediary release any Collateral to Pledgor, except as expressly permitted by Lender.  Lender may require that Pledgor obtain a control agreement, signed by the Securities Intermediary, in form and substance acceptable to Lender.  Lender may, at any time but in accordance with the terms of this Agreement and any control agreement, require the Securities Intermediary to do any or all of the following: (a) disburse any or all of the Collateral to Lender; (b) allow Lender (and not Pledgor) to exercise any rights relating to the Collateral; (c) sell some or all of the Collateral and remit the sales proceeds (less the Securities Intermediary's normal sales charge) to Lender; and (d) buy and sell Collateral only upon the instructions of Lender (and not Pledgor).  If Lender assigns or transfers its rights under this Agreement and Lender is the Securities Intermediary for any or all of the Collateral, Pledgor agrees that Lender, in such capacity, is irrevocably directed by Pledgor to comply with instructions or entitlement orders with respect to such Collateral originated by any assignee or transferee of this Agreement without further consent of Pledgor.

13.  Costs.  All advances, charges, costs and expenses, including reasonable attorneys' fees, incurred or paid by Lender in enforcing any right, power or remedy conferred by this Agreement, and including the charges and expenses of any Securities Intermediary specifically relating thereto, shall become a part of the Indebtedness secured hereunder and shall be paid to Lender by Debtor and Pledgor immediately and without demand, with interest thereon at an annual rate equal to the highest rate of interest of any Indebtedness secured by this Agreement (or, if there is no such interest rate, at the maximum interest rate permitted by law for interest on judgments).  

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14.  Notices. Unless otherwise provided or agreed to herein or required by law, notice and communications provided for in this Agreement shall be in writing and shall be mailed (certified or registered mail), telecopied or delivered to Pledgor to the address or facsimile number for notices set forth for Pledgor on the signature page hereof or at such other address or facsimile number as shall be designated by Pledgor in a written notice to Lender at the address for notices set forth on the signature page of this Agreement for Lender.  Notices and other communications sent by (a) certified or registered mail shall be deemed delivered on the earlier of actual receipt or on the fourth business day after deposit in the U.S. mail, postage prepaid, (b) overnight courier shall be deemed delivered on the next business day after deposit with the overnight courier, and (c) facsimile shall be deemed delivered when transmitted.

15.  Indemnity.  Pledgor shall indemnify, hold harmless and defend Lender and its directors, officers, agents and employees, from and against any and all claims, actions, obligations, liabilities and expenses, including defense costs, investigative fees and costs, and legal fees and damages arising from their execution of or performance under this Agreement or any control agreement executed by Lender in connection with the Collateral, except to the extent that such claim, action, obligation, liability or expense is determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such indemnified person. This indemnification shall survive the termination of this Agreement.

16.  Miscellaneous.

(a)  This Agreement (i) may be waived, altered, modified or amended only by an instrument in writing, duly executed by the party or parties sought to be charged or bound thereby, and (ii) may be executed in any number of identical counterparts, each of which shall be deemed an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.  Any waiver, express or implied, of any provision hereof and any delay or failure by Lender to enforce any provision shall not preclude Lender from enforcing any such provision thereafter.

(b)  Pledgor hereby irrevocably authorizes Lender to file one or more financing statements describing all or part of the Collateral, and continuation statements, or amendments thereto, relative to all or part of the Collateral as authorized by applicable law.  Such financing statements, continuation statements and amendments will contain any other information required by the UCC for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including whether Pledgor is an organization, the type of organization and any organizational identification number issued to Pledgor.  Pledgor agrees to furnish any such information to Lender promptly upon request.  Pledgor also ratifies its authorization for Lender to have filed any initial financing statement or amendments thereto filed prior to the date hereof.

(c)  From time to time, Pledgor and Debtor shall, at the request of Lender, execute such other agreements, documents or instruments or take any other actions in connection with this Agreement as Lender may reasonably deem necessary to evidence or perfect the security interests granted herein, to maintain the priority of the security interests, or to effectuate the rights granted to Lender herein, but their failure to do so shall not limit or affect any security interest or any other rights of Lender in and to the Collateral.  Pledgor will execute and deliver to Lender any stock powers, instructions to any securities

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intermediary, issuer or transfer agent, proxies, or any other documents of transfer that Lender requests in order to perfect, obtain control or otherwise protect Lender's security interest in the Collateral or to effect Lender's rights under this Agreement.  Such powers or documents may be executed in blank or completed prior to execution, as requested by Lender.  

(d)  This Agreement shall be governed by and construed according to internal laws of the State of Florida, to the jurisdiction of which the parties hereto submit, except as otherwise required by mandatory provisions of law and except to the extent that remedies are governed by the laws of any other jurisdiction.

(e)  Any term used or defined in the UCC and not defined herein has the meaning given to the term in the UCC, when used in this Agreement.

(f)  This Agreement shall benefit Lender's successors and assigns and shall bind Pledgor's successors and assigns, except that Pledgor may not assign its rights and obligations under this Agreement.  This Agreement shall bind all parties who become bound as a Debtor with respect to the Indebtedness.  

(g)  All rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by law.  Any single or partial exercise of any right or remedy shall not preclude the further exercise of any other right or remedy.

(h)  In all cases where more than one party executes this Agreement, all words used herein in the singular shall be deemed to have been used in the plural where the context and construction so require, and all obligations and undertakings hereunder of such parties are joint and several.

(i)  The illegality, invalidity or unenforceability of any provision of this Agreement shall not in any way affect or impair the legality, validity or enforceability of the remaining provisions of this Agreement.

(j)  This Agreement and any other documents executed or delivered in connection herewith constitute the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understandings with respect to this transaction.

17.  Final Agreement.  By signing this document each party represents and agrees that:  (a) this document represents the final agreement between the parties with respect to the subject matter hereof, (b) this document supersedes any commitment letter, term sheet, or other written outline of terms and conditions relating to the subject matter hereof, unless such commitment letter, term sheet, or other written outline of terms and conditions expressly provides to the contrary, (c) there are no unwritten oral agreements between the parties, and (d) this document may not be contradicted by evidence of any prior, contemporaneous, or subsequent oral agreements or understandings of the parties.

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

PLEDGOR:

AS SEEN ON TV, INC.

By:

Name:

Title:

Lender:
MIG7 INFUSION, LLC
By:	Mallitz Investment Group, LLC, Manager
	By:
		Craig A. Mallitz, President

Address for Notices to Pledgor:

14044 Icot Boulevard

Clearwater, Florida 33760

Address for Notices to Lender:

16311 Baycross Drive

Lakewood Ranch, Florida 34202

(Signature Page to Pledge Agreement)

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Exhibit A to Pledge Agreement

Description of Collateral

All shares of capital stock of Infusion Brands, Inc., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a __________ corporation (“eDiets”), TV GOODS HOLDING CORPORATION, a __________ corporation (“TV Goods”), and TRU HAIR, INC., a __________ corporation (“Tru Hair” and collectively with ASTV, Infusion, eDiets, and TV Goods, the “Credit Parties” and each individually, a “Credit Party”),

owned by Pledgor, which shares represent 100% of the issued and outstanding capital stock of such Subsidiaries (the “Pledged Stock”).

All present and future income, proceeds, earnings, increases, and substitutions from or for the Pledged Stock of every kind and nature, including without limitation all payments, interest, profits, distributions, benefits, rights, options, warrants, dividends, stock dividends, stock splits, stock rights, regulatory dividends, subscriptions, monies, claims for money due and to become due, proceeds of any insurance on the Pledged Stock, stock of different par value or no par value issued in substitution or exchange for the Pledged Stock, and all other property Pledgor is entitled to receive on account of such Pledged Stock, including accounts, documents, instruments, chattel paper, and general intangibles.

For the purposes of this Exhibit, if there is more than one Pledgor, the term "Pledgor" shall include any one or more of the Pledgors.

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EX-10.5

EXHIBIT 10.5

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT (the “Agreement”) is entered into effective as of April 3, 2014, by and among VICIS CAPITAL MASTER FUND (“Vicis”), a sub-trust of Vicis Capital Master Series Trust, a unit trust organized and existing under the laws of the Cayman Islands, MIG7 INFUSION, LLC, a Florida limited liability company (“MIG7”) and AS SEEN ON TV, INC., a Florida corporation (“ASTV”), INFUSION BRANDS, INC., a Nevada corporation (“Infusion”), EDIETS.COM, INC., a Delaware corporation (“EDIETS”), TV GOODS HOLDING CORPORATION, a Florida corporation (“TV GOODS”), TRU HAIR, INC., a Florida corporation (“TRU HAIR”), AND RONCO FUNDING LLC, a Delaware limited liability company (“RFL” and collectively with ASTV, Infusion, eDiets, TV Goods and Tru Hair, the “Credit Parties” and each individually, a “Credit Party”). Vicis and MIG7 are sometimes each referred to herein as a “Lender” and jointly as the “Lenders.”

W I T N E S S E T H:

WHEREAS, reference is made to the Securities Purchase, Exchange and Redemption Agreement dated as of March 6, 2014 (as amended, modified, supplemented or restated and in effect from time to time, the “Vicis Exchange Agreement”) by and among Infusion Brands International, Inc. (“International”) and Vicis, pursuant to which Vicis agreed to extend credit to International (the “Vicis Loan”) on the terms and subject to the conditions specified in the Vicis Exchange Agreement, as evidenced by the Senior Secured Debenture dated March 6, 2014, in an original principal amount of $11,000,000.00 in favor of Vicis Capital Master Fund, related thereto (the “Vicis Debenture”).

WHEREAS, all of International’s obligations under the Vicis Loan Documents (as defined below) were assumed from International by Infusion, and all of such obligations of Infusion were or will be assumed by ASTV, with Infusion continuing as a guarantor thereof;

WHEREAS, the Credit Parties’ obligations under the Vicis Loan Documents are secured or may in the future be secured by all of the assets of the Credit Parties (the “Collateral”) pursuant to a Third Amended and Restated Security Agreement by and between Vicis and International (as assumed from International by Infusion and as assumed from Infusion by ASTV), the Vicis Security Agreement (as defined below), and security agreements that may be entered into from time to time with the other Credit Parties;

WHEREAS, ASTV’s obligations under the Vicis Exchange Agreement, the Vicis Debenture and the documents related thereto are guaranteed by Infusion pursuant to a Third Amended and Restated Guaranty Agreement (the “Vicis Guaranty Agreement”) and secured by, among other things, a first-priority security interest in substantially all of the now existing and hereafter acquired assets of Infusion  pursuant to a Third Amended and Restated Guarantor Security Agreement (the “Vicis Security Agreement”);

WHEREAS, reference is also made to the Senior Note Purchase Agreement dated effective as of April 2, 2014  (as amended, modified, supplemented or restated and in effect from time to time, the “MIG7 Note Purchase Agreement”) by and among the Credit Parties and MIG7, pursuant to which MIG7 has agreed to extend credit to the Credit Parties (the “MIG7 Loan”) on the terms and subject to the conditions specified in the MIG7 Note Purchase Agreement, which loan is evidenced by a Senior Secured Promissory Note in the original principal amount of up to $10,000,000.00 in favor of MIG7 (the “MIG7 Note”);

WHEREAS, the Credit Parties’ obligations under the MIG7 Note Purchase Agreement and MIG7 Note and the documents related thereto are secured by all of the assets of the Credit Parties pursuant to (1) a Security Agreement executed by the Credit Parties in favor of MIG7 (the “MIG7 Security Agreement”

and along with the Vicis Security Agreement, the “Security Agreements”), (2) an Account Control Agreement executed by the Credit Parties in favor of MIG7 (the “MIG7 Account Control Agreement”), pursuant to which MIG7 is granted a security interest in the Interest Reserve Account and Operating Account, as defined in the MIG7 Account Control Agreement (collectively, the “Accounts”), and (3) a Pledge Agreement executed by ASTV in favor of MIG7, pursuant to which the ASTV pledges 100% of its ownership interest in certain Subsidiaries, as defined in the MIG7 Note Purchase Agreement (the “Pledge Agreement”); and

WHEREAS, the Lenders desire to agree upon the priority of their respective security interests in the Collateral as provided herein;

NOW, THEREFORE, for and in consideration of the sum of $10.00, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lenders agree as follows:

1.

Recitals. The foregoing recitals are true and correct and are hereby incorporated by reference for all purposes as if fully set forth herein.

2.

Security Interests in Collateral. The parties hereto acknowledge and agree that the Vicis Loan and the MIG7 Loan are secured by the Collateral and each Lender hereby consents to, and acknowledges the existence of, the other Lender’s security interest in and to the same Collateral. The parties hereto further agree as follows:

a.

MIG7’s Security Interest in Controlled MIG7 Collateral. Vicis also acknowledges and agrees that the MIG7 Loan is secured by certain collateral constituting Collateral pursuant to the MIG7 Account Control Agreement, including without limitation the Accounts (collectively, the “Controlled MIG7 Collateral”), and Vicis hereby consents to, and acknowledges the existence of, MIG7’s first priority security interest in and to such Controlled MIG7 Collateral and the method of perfecting such Controlled MIG7 Collateral. Without limiting the foregoing, Vicis acknowledges and agrees that MIG7 and the Credit Parties have entered into the MIG7 Account Control Agreement, granting MIG7 a first priority interest in the Accounts, and the parties hereto agree that (i) MIG7 is entitled to distribute and retain all of the funds in the Interest Reserve Account and (ii) from and after an Event of Default arising under the MIG7 Note Purchase Agreement, MIG7 is entitled to sweep and retain sixty five percent (65%) of all cash deposited in the Operating Account until all of the MIG7 Obligations (as defined below) are paid in full.

b.

Default of Vicis Loan. Lenders agree that, notwithstanding the timing of filing of any financing statement or priority with respect to the Collateral, by either of the Lenders, the priorities of the security interests arising under the Security Agreements shall, with respect to all Collateral other than Controlled MIG7 Collateral (which shall be governed in accordance with Section 2(a) hereof), be equal (50/50) and in pari passu one to the other and that, with respect to such Collateral (other than Controlled MIG7 Collateral), each Lender shall share and be equal (50/50) in priority and rights with the other, neither shall have priority of payment over or be subordinate to the other and the proceeds of any foreclosure or Enforcement Action on or against any of such Collateral shall be shared (i) if less than $9,500,000 in original principal amount has been funded pursuant to the MIG7 Note Purchase Agreement, on a pro rata basis in accordance with the respective original principal amounts of the Vicis Debenture and the MIG7 Note, or (ii) if $9,500,000 or more in original principal amount has been funded pursuant to the MIG7 Note Purchase Agreement, on an equal (50/50) basis, and in either of (i) or (ii) the non-enforcing Lender shall be entitled to an accounting of any such proceeds.

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c.

Insolvency Proceedings. In the event of any proceeding in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each case whether under the bankruptcy code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law, involving a Credit Party (each an “Insolvency Proceeding”): (i) each Lender shall share and be equal in priority and rights with the other, neither shall have priority of payment over or be subordinate to the other; (ii) each Lender shall share any Distributions (as defined below) (x) if less than $9,500,000 in original principal amount has been funded pursuant to the MIG7 Note Purchase Agreement, on a pro rata basis in accordance with the respective original principal amounts of the Vicis Debenture and the MIG7 Note, or (y) if $9,500,000 or more in original principal amount has been funded pursuant to the MIG7 Note Purchase Agreement, equally (50/50); and (iii) each Lender agrees not to initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, validity, perfection or priority of any portion of Infusion’s obligations to the other Lender or any liens and Security Interests securing any portion of Infusion’s obligations to the other Lender.

3.

Remedy Standstill.

Notwithstanding anything to the contrary in the Vicis Exchange Agreement, Vicis Debenture, Vicis Guaranty Agreement, Vicis Security Agreement or any other agreement, instrument or document related thereto (the “Vicis Loan Documents”), Vicis hereby agrees that an Event of Default arising under the MIG7 Loan Documents (as defined below) shall not trigger an Event of Default under the Vicis Loan Documents, and Vicis hereby waives any Event of Default arising under any of the Vicis Loan Documents that would otherwise have been triggered by an Event of Default under the MIG Loan Documents. Furthermore, during the period commencing on the date hereof and ending on the first anniversary of the Maturity Date (as defined in the MIG7 Note, which Vicis acknowledges and agrees may be extended pursuant to the MIG7 Note) of the MIG7 Loan (the “Standstill Period”), MIG7 shall have the exclusive right to manage, perform and enforce (or not enforce) the terms of the MIG7 Note Purchase Agreement, the MIG7 Note and all of other instruments, certificates, agreements and documents related thereto, including without limitation the Pledge Agreement and Account Control Agreement (collectively, the “MIG7 Loan Documents”), and to exercise and enforce all privileges and rights thereunder in such order and manner as it may determine in its sole discretion, including, without limitation, the exclusive right to take or retake control or possession of any Collateral and the MIG7 Other Collateral and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate any Collateral or the MIG7 Other Collateral. During the Standstill Period, Vicis shall not, without the prior written consent of MIG7, take any Enforcement Action (as defined below) with respect to any Vicis Obligations (as defined below) or the Collateral or the MIG7 Other Collateral. Any Distributions or other proceeds of any Enforcement Action obtained by Vicis in violation of the this Agreement shall be held in trust by it for the benefit of MIG7 and promptly paid or delivered to MIG7 in the form received until all MIG7 Obligations (as defined below) have been paid in full. Vicis hereby waives any and all rights to affect the method or challenge the appropriateness of any action by MIG7 with respect to management, performance and enforcement of the MIG7 Obligations and the enforcement and exercise of all privileges, rights and remedies during the Standstill Period. MIG7 shall not have any liability to Vicis in respect of Vicis’s failure to obtain repayment in full of the Vicis Obligations. Notwithstanding the foregoing, Vicis may take any Enforcement Action with respect to any Vicis Obligations and the Collateral after the expiration of the Standstill Period; provided, that Vicis delivers written notice to MIG7 of Vicis’s intention to exercise such rights, which notice may only be delivered following the occurrence of and during the continuation of an Event of Default (as defined in the Vicis Exchange Agreement) of the Vicis Loan; provided, further, that, notwithstanding the foregoing, in no event shall Vicis exercise or continue to exercise any such rights or remedies if, notwithstanding the expiration of the Standstill Period (a) MIG7 shall have commenced and be diligently pursuing the exercise of any Enforcement Action with respect to any of the Collateral, or (b) the acceleration of the Vicis Obligations shall be rescinded in accordance with the terms of Vicis Exchange Agreement or Vicis Debenture.

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4.

Notice of Default. The Credit Parties agree to provide MIG7 notice in the event that Vicis declares there to be an Event of Default (as defined in the Vicis Exchange Agreement) within 3 business days of receiving notice of such default from Vicis. The Credit Parties agree to provide Vicis notice in the event that MIG7 declares there to be an Event of Default (as defined in the MIG7 Note Purchase Agreement) within 3 business days of receiving notice of such default from MIG7.

5.

Successors and Assigns.

a.

This Intercreditor Agreement shall be binding upon each party hereto and its successors and assigns and shall inure to the benefit of each party hereto and its successors, participants and assigns.

b.

Each Lender reserves the right to grant participations in, or otherwise sell, assign, transfer or negotiate all or any part of, or any interest in, the Vicis Loan or the MIG7 Loan, and its rights in the Collateral securing same; provided, that, no Lender shall be obligated to give any notices to or otherwise in any manner deal directly with any participant in the Vicis Loan or MIG7 Loan, as the case may be, and no participant shall be entitled to any rights or benefits under this Intercreditor Agreement except through the Lender with which it is a participant.  Notwithstanding anything herein contained, neither Lender shall: (A) be repaid either the Vicis Loan or MIG7 Loan by any Credit Party, except as provided under this Intercreditor Agreement or with the prior written consent of the other Lender, or (B) assign any interest in the Vicis Loan or MIG7 Loan or any of the Vicis Loan Documents or MIG7 Loan Documents without the prior written consent of the other Lender, not to be unreasonably withheld.  In the case of an assignment or transfer, the assignee or transferee acquiring any interest in the Vicis Loan or the MIG7 Loan, as the case may be, shall execute and deliver to each of the Lenders a written acknowledgement of receipt of a copy of this Intercreditor Agreement and the written agreement by such person to be bound by the terms of this Intercreditor Agreement.  In connection with any assignment or transfer of any or all of the Vicis Loan or the MIG7 Loan, as the case may be, or any or all rights of any Lender in the property of any Credit Party (other than pursuant to a participation), each Lender agrees to execute and deliver an agreement containing terms substantially identical to those contained herein in favor of any such assignee or transferee.  In addition, each Lender will execute and deliver an agreement containing terms substantially identical to those contained herein in favor of any third person who succeeds to or refinances, replaces or substitutes for any or all of financing of such Credit Party, whether such successor or replacement financing occurs by transfer, assignment, “takeout” or any other means or vehicle provided same does not constitute a breach of any Agreement with such Lender.

6.

Certain Definitions. The following terms shall have the following meanings in this Agreement.

a.

“Distribution” means, with respect to any indebtedness, obligation or security (a) any payment or distribution by any Person of cash, securities or other property, by set-off or otherwise, on account of such indebtedness, obligation or security or (b) any redemption, purchase or other acquisition of such indebtedness, obligation or security by any Person.

b.

“Enforcement Action” means (a) to take from or for the account of any Person, by set-off or in any other manner, the whole or any part of any monies which may now or hereafter be owing by any such Person with respect to such obligations; (b) to sue for payment of, or to initiate or participate with others in any suit, action or proceeding against any Person to (i) enforce payment of, or to collect the whole or any part of, such obligations or (ii) commence judicial enforcement of any of the rights and remedies with respect to the Vicis Obligations or

4

the MIG7 Obligations, as the case may be; (c) to accelerate the Vicis Loan or the MIG7 Loan, as the case may be; (d) to cause the Credit Parties to honor any redemption or mandatory prepayment obligation with respect to the Vicis Obligations or the MIG7 Obligations, as the case may be; (e) to notify the account debtors or to directly collect accounts receivable or other payment rights of any of the Credit Parties; or (f) to take any action under the provisions of any state or federal law, including, without limitation, the UCC, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell the Collateral or any Controlled MIG7 Collateral.

c.

“MIG7 Obligations” means the obligations to MIG7 under the MIG7 Loan Documents.

d.

“Person” means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, governmental authority or other entity.

e.

“Vicis Obligations” means the obligations to Vicis under the Vicis Loan Documents.

7.

No Third Party Beneficiaries. This Agreement and the terms and provisions hereof are solely for the benefit of MIG7 and Vicis, and shall not benefit in any way any other Person, including but not limited to, ASTV or any other parties to the documents effecting the Vicis Obligations or the MIG7 Obligations. Nothing under this Agreement is intended to affect, limit, or in any way diminish the Security Interests which MIG7 and Vicis may have in the Collateral. The Lenders specifically reserve any and all of their respective secured rights and remedies with respect to the Collateral, and with respect to ASTV and any borrowers under or guarantors of the MIG7 Loan and the Vicis Loan.

8.

Rights are Independent of Time of Attachment or Perfection. Other than the Security Interest granted to MIG7 under the MIG7 Account Control Agreement, the Lenders agree that their respective security rights and priorities set forth in this Agreement shall exist and be enforceable independent of the time or order of attachment or perfection of their respective Security Interests, or the time or order of filing UCC financing statements with respect to the Collateral. Each Lender, nevertheless, agrees to make such filings and recordings in the public records to evidence the subordinations and priorities made herein as the other Lender may reasonably request.

9.

Termination, Rescission or Modification. The subordinations, agreements, and priorities set forth in this Agreement shall remain in full force and effect regardless of whether either Lender in the future seeks to rescind, amend, terminate or reform its respective agreements with ASTV. Any termination, rescission, modification or reformation of this Agreement must be in writing and executed by the parties hereto.

10.

Remedies. In the event of the commencement of foreclosure, or similar action by either of the Lenders with respect to the Collateral which secures their respective loans, the Lenders agree to cooperate with each other in the exercise of their respective default rights and remedies.

11.

Waiver of Marshalling. Each Lender hereby waives any right to require the other Lender to marshal any security or Collateral, or otherwise compel the other party to seek recourse against or satisfaction of the indebtedness owed to it from one source before seeking recourse or satisfaction from another source.

12.

Relation of Lenders. This Agreement is entered into solely for the purposes set forth in the Recitals above, and, except as is expressly provided otherwise herein, neither Lender assumes any responsibility to the other Lender to advise such other Lender of information known regarding the financial condition of ASTV, or regarding any Collateral, or of any other circumstances bearing upon the risk of nonpayment. Each Lender shall be responsible for managing its relations with ASTV, and neither Lender

5

shall be deemed the agent of the other Lender for any purpose. Each of the Lenders may alter, amend, supplement, release, discharge or otherwise modify any terms of the documents evidencing and embodying their respective loans to ASTV without notice to the other.

13.

Notices. Any notice required or permitted in connection with this Agreement shall be in writing and shall be made by facsimile, e-mail, or hand delivered, by Federal Express, or by other similar overnight delivery service, or by certified mail, return receipt requested, postage prepaid, addressed to MIG7, Vicis or ASTV at the appropriate address set forth below, or to such other address as may be hereafter specified by written notice by MIG7, Vicis or ASTV. All notices shall be considered given as of the date of transmission or hand delivery, or one (1) calendar day after delivery to Federal Express or similar overnight delivery service, or two (2) calendar days after the date of mailing, independent of the date of mail delivery or whether mail delivery is ever in fact accomplished, as the case may be. Notices shall be sent to:

MIG7:

MIG7 INFUSION, LLC
16311 Baycross Drive
Lakewood Ranch, Florida 34202
Attention: Craig Mallitz

with a copy to:

Shumaker, Loop & Kendrick, LLP
Bank of America Plaza
101 East Kennedy Boulevard, Suite 2800
P.O. Box 172609
Tampa, Florida 33672
Attention: Julio C. Esquivel

Vicis:

Vicis Capital Master Fund

445 Park Avenue, Suite 1043

New York, NY 10022

Attn: Shad Stastney

Phone: (212) 909-4600

Fax: (212) 909-4601

with a copy to:

Hoyt R. Stastney, Esq.

Quarles & Brady LLP

411 East Wisconsin Avenue

Milwaukee, WI 53202

Phone: (414) 277-5143

Fax: (414) 978-8968

ASTV or Infusion:

As Seen on TV, Inc.

14044 Icot Boulevard

Clearwater, Florida 33760

Attention: Chief Executive Officer

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with a copy to:

Hoyt R. Stastney, Esq.

Quarles & Brady LLP

411 East Wisconsin Avenue

Milwaukee, WI 53202

Phone: (414) 277-5143

Fax: (414) 978-8968

14.

Copies of Loan Documents. ASTV agrees to provide each Lender with copies of the loan documents which evidence or embody their respective loans and any future amendments thereto. The provisions of this Agreement are intended by the parties to control any conflicting provisions, including, without limitation, any covenants prohibiting further borrowing or encumbrances of collateral, which are contained in any loan documents by or on behalf of ASTV with either of the Lenders. Each of the Lenders consents to the making of the various loans described herein and to the granting by ASTV to the other Lender of the Security Interests which are the subject of this Agreement.

15.

Effective Date. This Agreement shall be effective as of the date on which it is designated as being executed, independent of the actual date the parties execute this Agreement.

16.

Section Titles. The section titles contained in this Agreement are for convenience only and are without substantive meaning or content of any kind, and shall not be considered part of this Agreement.

17.

Governing Law. This Agreement shall be governed and construed under the laws of the State of Florida, irrespective of the conflict of law principles of that state.

18.

Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. Delivery of an executed counterpart of the signature page to this Agreement by facsimile or electronic transmission (in .pdf format) shall be effective as delivery of a manually executed counterpart of this Agreement, and any party delivering such an executed counterpart of the signature page to this Agreement by facsimile or electronic transmission to any other party shall thereafter also promptly deliver a manually executed counterpart of this Agreement to such other party, provided that the failure to deliver such manually executed counterpart shall not affect the validity, enforceability or binding effect of this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day, month and year first written above.

INFUSION BRANDS, INC.	AS SEEN ON TV, INC.
By:	By:
Name:	Name:
Title:	Title:
EDIETS.COM, INC.	TV GOODS HOLDING CORPORATION
By:	By:
Name:	Name:
Title:	Title:
TRU HAIR, INC.	RONCO FUNDING, LLC
By:	By:
Name:	Name:
Title:	Title:

MIG7 INFUSION, LLC			VICIS CAPITAL MASTER FUND
By: Mallitz Investment Group, LLC, Manager			By: Vicis Capital, LLC, its investment advisor
			By:
	By:		Name:
		Craig A. Mallitz, President
			Title:

Signature page to Intercreditor Agreement

8