Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): January 1, 2015

ENCORE BRANDS, INC.

(Exact Name of Registrant as Specified in Charter)

Nevada	5182	26-3597500
(State or Other Jurisdiction	(Primary Standard Industrial	(IRS Employer
of Incorporation)	Classification Code Number)	Identification No.)

2215-B Renaissance Drive

Las Vegas, NV 89119

(310) 699-9937

(Address and telephone number of registrant’s principal executive offices)

________________

(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 (see General Instruction A.2. below):

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

[ ] Soliciting material pursuant to Rule 15a-12 under the Exchange Act (17 CFR 240.15a-12)

[ ] Pre-commencement communications pursuant to Rule 15d-2(b) under the Exchange Act (17 CFR 240.15d-2(b))

[ ] 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

On May 28th, 2014 Encore Brands, Inc. (“Encore Brands”) entered into a material definitive agreement to acquire substantially all of the assets of Firefly Brand Management, LLC (“Firefly Brand Management”) from Cynthia Modders. The agreement provides that Encore Brands will form a new entity, Firefly Consumer Products Group, Inc. (“Firefly Consumer Products”), which will acquire these assets and operate and manage the business.

While the assets in question were encumbered by issues regarding their ownership by Firefly Brand Management, LLC members, Ms. Modders was made President of Firefly Consumer Products and has managed the business until such time as the issues regarding the assets of Firefly Brands Management were resolved.

Established in 2009 by licensing veteran Cynthia Modders, Firefly Brand Management quickly established itself by virtue of the founder’s relationships and expertise as well as that of its partners and affiliates.

By obtaining representation agreements with significant brand owners in the entertainment and consumer products space, Ms. Modders quickly established a full service licensing and brand management firm that continues to attract talent as well as brand owners. With associates across the country able to execute on unique licensing strategies, the company has grown each year both in the brands it represents and in revenue.

The company’s skill sets are a compliment to the mission and strategy of Encore Brands and allow it to acquire a broad base of knowledge, expertise and relationships with which to develop and manage it’s brands.

After the resolution of the issues regarding the ownership of the assets in dispute, beginning January 1, 2015 the assets of Firefly Brands Management were added to the balance sheet of Firefly Consumer Products Group and all revenue generated by those assets, since June 1, 2014, will be recognized on the financials of Firefly Consumer Products Group.

In addition to the purchase of Firefly Brand Management’s assets, the company drew an additional $450,000 on the $5 million revolving credit line provided by TCA Global Credit Master Fund of which proceeds of $423,800 were received by the company. The proceeds from the draw were used to acquire the assets and to operate and manage the business.

The Purchase Agreement has been included as an attachment to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the parties. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Purchase Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Firefly Brand Management, LLC or Encore Brands or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in Encore Brand’s public disclosures.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Effective on December 27, 2013, we entered into a Senior Secured Revolving Credit Facility Agreement (the “Credit Agreement”) dated as of August 31, 2013 with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership. Pursuant to the Agreement, TCA agreed to loan up to $5 million to us for working capital purposes. A total of $750,000 was funded by TCA in connection with the closing and acquisition of Northridge Mills Holdings, Inc. On June 5, 2014 the company drew and additional $450,000 on the credit line for a total of $1,200,000 having been advanced to the company at that time. The outstanding balance on the credit line at the execution of the Firefly purchase agreement in May of 2014 prior to draw number 2 was $461,958.40. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Promissory Note (the “Note”), the repayment of which is secured by a Security Agreement executed by us and our to be wholly-owned subsidiary and additional guarantor, Firefly Consumer Products Group, Inc. Pursuant to the Security Agreement, the repayment of the Note is secured by a security interest in substantially all of our, Firefly Consumer Products Group, Inc and Northridge Mills Holdings, Inc.’s assets in favor of TCA. Draw number 2 in the amount of $450,000 was due and payable along with interest thereon on Dec 5, 2014, and bears interest at the rate of 11% per annum, increasing to 18% per annum upon the occurrence of an event of default. This senior secured facility is able to be extended at the sole discrection of the lender.

Additionally, upon the occurrence of an event of default under the Credit Agreement or the Revolving Note, TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of our common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of our common stock during the five (5) trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion.

We have the right to prepay the Revolving Note, in whole or in part, provided, that we pay TCA an amount equal to the then outstanding amount of the Revolving Note plus a fee of 2.5% for repayments of 80% or more of the total amount of the note within 91 to 180 days following the Closing for making the credit facility available.

We also agreed to pay TCA various fees during the term of the Credit Agreement, including a $1,500 asset monitoring fee (which increases as additional amounts are borrowed under the Credit Agreement) due each quarter that the Credit Agreement is outstanding, a commitment fee of 3% of the revolving loan commitment and 2% of any increase in the amount thereof, and an investment banking fee of $168,750 for draw number 2 payable in three $56,250 payments at 6, 9 and 12 months from the date of closing.

We also paid TCA various due diligence, legal and document review fees in connection with the closing. In total, we paid $26,200 in fees, expenses and closing costs, and netted $423,600 in connection with the execution of draw number 2.

During the term of the Credit Agreement, we are prohibited from incurring any indebtedness (other than in connection with the Credit Agreement or as otherwise approved by TCA).

The foregoing description of the Revolving Credit Facility does not purport to be complete and is subject to, and qualified in its entirety by, the descriptions and complete terms and conditions of the Credit Agreement, a copy of which is attached as exhibit 10.2

Item 9.01 Exhibits

The exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.

Exhibits Description

10.1 Purchase Agreement

Dated May 28, 2014 between the company and Firefly Brands Management, LLC

10.2 Credit Agreement

Dated June 5th 2014 between the company and TCA Global Credit Master Fund LP

SIGNATURE

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

	ENCORE BRANDS, INC.


January 12, 2015	By: /s/ Alex G. McKean
	Alex G. McKean
	Chief Financial Officer

Exhibit 10.1

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT, dated as of May 15, 2014 (this “Agreement”), is by and between Cynthia Modders (the “Seller”) and Encore Brands, Inc., a Nevada corporation (the “Purchaser”).

WITNESSETH:

WHEREAS, the Seller owns 100% of the issued shares (the “Company Shares”) of Firefly Consumer Products Inc., a California corporation (the “Company”); and

WHEREAS, the Company owns and operates a licensing business located in Arnold, California; and

WHEREAS, the Purchaser is a public company whose shares of common stock, par value $0.001 per share (the “Encore Common Stock”), are registered with the Securities and Exchange Commission and quoted for trading on the OTC Markets under the ticker symbol “ENCB”; and

WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, Seventy percent (70%) of the Company Shares on the terms and conditions set forth below; and

WHEREAS, the Seller desires to grant the Purchaser the right and authority to manage the business of the Seller during the period commencing on the date of this Agreement until the closing of the sale of the Company Shares;

NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

SALE AND PURCHASE OF COMPANY SHARES; MANAGEMENT OF COMPANY

1.1 Transfer of Company Shares. Subject to the terms and conditions set forth in this Agreement and in reliance upon the representations and warranties of the Seller and the Purchaser herein set forth, at the Closing as defined below in Section 3.1, the Seller shall sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase from the Seller, by appropriate assignments and other instruments satisfactory to the Purchaser and its counsel, good and marketable title in and to the Company Shares.

1.2 Management Agreement. The parties hereto acknowledge that the consummation of the transactions contemplated hereby will not be completed until the Audited Statements (as defined in Section 6.1) have been prepared and delivered to the Purchaser. It is the Purchaser intention to provide the Company with funding prior to the closing of the sale of the Company Shares and to otherwise take actions that are expected to improve the operations of the Company. Accordingly, concurrently with the execution and delivery of this Agreement, the Company is entering into that certain Management Agreement, a copy of which is attached hereto as Exhibit B (the “Management Agreement”), pursuant to which certain operations and business affairs of the Company will be managed by the Purchaser.

ARTICLE II

PURCHASE PRICE

2.1 Purchase Price. In consideration for the Company Shares, the Purchaser shall pay to the Seller the purchase price (the “Purchase Price”) as follows:

(i) A two-year secured promissory note (the “Note”) in the principal amount of one hundred sixty five hundred thousand dollars ($165,000), the form of which is attached hereto as Exhibit A; eighty two thousand dollars ($82,500) due in twelve months from the date of the transfer of the licenses with the balance due of eighty two thousand dollars ($82,500) on the 24th month.

(ii) One hundred thousand dollars ($100,000) which shall be due upon validation and transfer of the agreed licenses from Firefly Brand Management, LLC to Encore Brands, Inc, upon Sellers resolution with existing partner.

(iii) Fifty Thousand ($50,000) upon execution of the purchase agreement.

Total consideration $315,000.00

ARTICLE III

THE CLOSING

3.1 Time and Place of Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place at the San Fernando offices of Northridge Mills Holdings, Inc., located at 1901 First Street, San Fernando, California 91340 at 10:00 a.m. local time on the third business day after the Seller has delivered to the Purchaser the Companies Financial Statements (as defined in Section 6.1, below) (the “Closing Date”), as such date may be changed upon agreement of the parties hereto.

3.2 Actions at the Closing. At the Closing, the Seller and the Purchaser shall take such action and execute and deliver such agreements and other documents and instruments as necessary or appropriate to effect the transactions contemplated by this Agreement in accordance with its terms and conditions, including, without limitation, the following:

(a) The Purchaser shall deliver to the Seller (i) the duly executed Note, and (ii) a check for fifty thousand dollars $50,000;

(b) The Seller shall procure that written resolutions of the Company be adopted so as to approve:

(i) the transactions contemplated by this Agreement and the execution and delivery by the Company's directors of any documents necessary to transfer the Company Shares;

(ii) the execution, delivery and performance of the Management Agreement;

(iii) the issuance of new share certificates in respect of the Company Shares registered in the name of the Purchaser; and

(iv) the resignation of all of the directors of the Company, effective as of the Closing.

(i) instruments of transfer in respect of the Company Shares duly completed and signed in favor of the Purchaser;

(ii) the resignation of all of the directors of the Company, effective as of the Closing Date.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Purchaser that:

4.1 Title to Company Shares. The Seller is the sole legal and beneficial owners of the Company Shares, and upon consummation of the purchase contemplated herein, the Purchaser will acquire from the Seller good and marketable title to the Company Shares, free and clear of all liens, claims, encumbrances or restrictions (save for the restrictions required by applicable securities laws). No person has any agreement or option or any right capable of becoming an agreement for the purchase of the Company Shares.

4.2 Authority to Execute and Perform Agreements. The Seller has the full right, power and authority to enter into, execute and deliver this Agreement and the Management Agreement, and to transfer, convey and sell to the Purchaser at the Closing the Company Shares.

4.3 Enforceability. This Agreement and the Management Agreement have been duly and validly executed by the Seller and (assuming the due authorization, execution and delivery by the Purchaser), constitute the legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by general equitable principles affecting the enforcement of contracts.

4.4 No Violation. The execution or delivery by the Seller of this Agreement and the Management Agreement does not violate in any respect any applicable law or any judgment, order or decree of any court, and will not result in the creation or imposition of any lien, charge or other encumbrance upon the Company Shares.

4.5 Non-Contravention. Neither the execution and delivery of this Agreement, the Management Agreement or the other agreements contemplated hereby or thereby to be executed by the Seller nor the consummation by the Seller of the transactions contemplated hereby or thereby does or would after the giving of notice or the lapse of time or both, (i) conflict with, result in a breach of, constitute a default under, or violate the constitutional documents of the Company; (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, amend, modify, cancel or refuse to perform under, or require any notice under any agreement, contract, commitment, license, lease, instrument or other arrangement to which any of the Seller or the Company is a party or by which any of them is bound; or (iii) result in the creation of, or give any party the right to create, any lien or other rights or adverse interests upon any right, property or asset of the Company.

4.6 Securities Laws. The Company Shares were issued in full compliance with all applicable laws relating to the issuance or sale of securities, and the Seller has obtained all necessary permits and other authorizations or orders of exemption as may be necessary or appropriate under all applicable laws relating to the issuance or sale of securities with respect to the transactions contemplated herein.

4.7 No Adverse Litigation. The Seller is not a party to any pending litigation which seeks to enjoin or restrict the Seller’s ability to sell or transfer the Company Shares hereunder, nor is any such litigation threatened against the Seller. Furthermore, there is no litigation pending or threatened against the Seller, which, if decided adversely to the Seller, would adversely affect the Seller’s ability to consummate the transactions contemplated herein or the Purchaser’s ownership of the Company Shares.

4.8 Securities Representations.

(a) Should the Seller acquire Encore Common Stock, such acquisition shall be for the Seller’s own account for investment and not with a view to, or for resale in connection with, a distribution of the Encore Common Stock within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). In that regard, Seller understands that (i) the shares of Encore Common Stock have not been registered under the Securities Act or under any state securities laws and are therefore restricted securities; (ii) the Encore Common Stock may not be sold or transferred unless they are registered under the Securities Act or an exemption from such registration is available; and (iii) the Purchaser may place a restrictive legend on the certificate evidencing the Encore Common Stock reflecting these restrictions.

(b) The Seller understands that an investment in the Encore Common Stock involves risk, and Seller has the financial ability to bear the economic risk of this investment in the Encore Common Stock, including a complete loss of such investment.

(c) The Seller has such knowledge and experience in financial and business matters that Seller is capable of evaluating the merits and risks of an investment in the Encore Common Stock.

(d) The Seller agrees not to transfer any of the Encore Common Stock except pursuant to an effective registration statement under the Securities Act or an exemption from registration.

4.9 Representations by Seller with Respect to the Company.

(a) The Company is a corporation, validly existing and in good standing under the laws of California. The Seller has heretofore delivered to the Purchaser true and correct copies of the Company’s organizational documents, including its articles of incorporation, bylaws, and its minute books.

(b) Except as described below, the Company has filed all tax returns and reports which were required to be filed on or prior to the date hereof in respect of all income, withholding, franchise, payroll, excise, property, sales, use, value-added or other taxes or levies, imposts, duties, license and registration fees, charges, assessments or withholdings of any nature whatsoever (together, “Taxes”), and has paid all Taxes (and any related penalties, fines and interest) which have become due pursuant to such returns or reports or pursuant to any assessment which has become payable.

(c) The Company has conducted its business in compliance with all applicable laws, ordinances, rules, regulations, court or administrative orders, decrees, or processes (“Applicable Laws”). The Company has not received any notice of violation or claimed violation of any Applicable Law.

(d) There is no claim, dispute, action, suit, proceeding or investigation pending or, to the knowledge of Seller, threatened, against the Company, or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or before any local, foreign or other governmental authority, board, agency, commission or instrumentality, nor to the knowledge of Seller, is any such claim, dispute, action, suit, proceeding or investigation pending or threatened. There is no outstanding judgment, order, writ, ruling, injunction, stipulation or decree of any court, arbitrator or local, foreign or other governmental authority, board, agency, commission or instrumentality, against the Company. The Company has not received any written or verbal inquiry from any local, foreign or other governmental authority, board, agency, commission or instrumentality concerning the possible violation of any Applicable Law.

4.10 Schedule 4.9 contains an accurate and complete list of all contracts in respect of licenses that the Company holds or has access to, accurate and complete copies of which have been delivered to the Purchaser. All of such contracts included on Schedule 4.9 are valid, binding and enforceable against the parties thereto and their successors.

4.11 The Company’s unaudited balance sheet and profit and loss statement at and for the year ended 2014 and for the three months ended March 31, 2014, in the form able to be delivered to the Purchaser (the “Financial Statements”), are complete and correct, have been prepared from the books and records of the Company and present fairly the financial condition and results of operations of the Company as of the dates thereof and for the periods specified therein. The books of account, financial data, schedules and other records of the Company, including any of the foregoing delivered or made available to Purchaser in connection with the transactions contemplated hereby, have been maintained properly and regularly in accordance with sound business practices and in the course of business of the Company, are accurate and complete in all material respects and there are no material misstatements, mistakes or omissions therein, and there have been no transactions involving the Company that properly should have been reflected therein that have not been accurately and completely reflected. The Company has no obligation or liability except for (i) liabilities disclosed in the Company Financial Statements, and (ii) trade payables and obligations incurred in the ordinary course of business on or after the date of the most recent balance sheet included in the Company Financial Statements, which do not exceed $XX in the aggregate. The Company has no financial obligation to Seller as compensation, reimbursement of expenses, or otherwise.

4.12 The Company has good and transferable title to all of its assets of material value to it whether real, personal, tangible or intangible.

4.13 To the Seller’s knowledge, no executive, key employee, or group of employees has any plans to terminate employment with the Company. The Company is not a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes. The Company has not committed any unfair labor practice (as determined under any law).

4.14 The Company does not maintain any non-qualified deferred compensation plan, qualified defined contribution retirement plan, qualified defined benefit retirement plan or other material fringe benefit plan or program within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974.

4.15 As used in this Agreement, “Environmental, Health and Safety Requirements” means all laws, orders, permits, contracts and programs (including those promulgated or sponsored by industry associations, insurance companies and risk management companies) concerning or relating to public health and safety, worker/occupational health and safety and pollution or protection of the environment, including those relating in any way to noises, radiation or chemicals, toxic or hazardous materials, substances or wastes, each as amended and as now in effect. The Company and each person for whose conduct the Company may be held liable is, and has at all times been, in compliance with all Environmental, Health and Safety Requirements in connection with owning, using, maintaining or operating its business, operations and assets; (b) the location at which the Company currently operates, or had operated, any portion of its business or currently maintains, or had maintained, any of its properties or assets is, and has at all times been, in compliance with all Environmental, Health and Safety Requirements; and (c) there are no pending or threatened allegations by any person that any of the Company’s properties, assets or businesses is or has not been conducted in compliance with all Environmental, Health and Safety Requirements.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Seller that:

5.1 Organization; Authority; Due Authorization. The Purchaser is duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite power, authority and approvals required to enter into, execute and deliver this Agreement, the Management Agreement and the Note and to perform fully its obligations hereunder and thereunder. The Purchaser has taken all actions necessary to authorize it to enter into and perform fully its obligations under this Agreement, the Management Agreement and the Note and to consummate the transactions contemplated herein and therein. This Agreement, the Management Agreement and the Note each are legal, valid and binding obligations of the Purchaser, enforceable in accordance with their respective terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by general equitable principles affecting the enforcement of contracts.

The authorized capital of the Company consists of 75,000,000 shares of common stock, of which 19,214,555 shares have been issued and 14,000,000 are currently registered in the name of the CEO, which shares constitute the Company Shares. The Company Shares are validly issued, fully paid and non-assessable. There is no outstanding voting trust agreement or other contract, agreement, arrangement, option, warrant, call, commitment or other right of any character obligating the Company to issue, sell, redeem or repurchase any of its securities, and there is no outstanding security of any kind convertible into or exchangeable for any shares of the capital stock of the Company. The Company has not granted any person the right to have shares included on a registration statement filed with the US Securities and Exchange Commission or similar authority of any other jurisdiction (i.e. so-called “registration rights”).

5.2 No Violation. The execution and delivery of this Agreement, the Management Agreement and the Note, and the consummation of the transactions contemplated herein or therein will not (a) violate, conflict with, or constitute a default under any contract or other instrument to which the Purchaser is a party or by which it or its property is bound, (b) require the consent of any party to any material contract or other agreement to which the Purchaser is a party or by which it or its property is bound, or (c) violate any laws or orders to which the Purchaser or its property is subject.

5.3 Litigation. There is no claim, dispute, action, suit, proceeding or investigation pending or, to the knowledge of the Purchaser, threatened, against the Purchaser, or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or before any local, foreign or other governmental authority, board, agency, commission or instrumentality, nor to the knowledge of the Purchaser, is any such claim, dispute, action, suit, proceeding or investigation pending or threatened.

ARTICLE VI

COVENANTS

6.1 Preparation of Audited Statements. The Seller shall cause the Purchaser to engage LBB & Associates Ltd., LLP, (“LBB”), the Purchaser’s independent registered public accounting firm, to (i) audit the financial statements prior to closing, and (The Audited Statements shall be prepared in accordance with accounting principles generally accepted in the United States of America and the requirements of Regulation S-K promulgated by the Securities and Exchange Commission, provided that the unaudited interim financial statements shall be prepared pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. All costs related to the preparation of the Audited Statements, including the fees of LBB, shall be borne and paid by the Purchaser. The Seller shall cause the Purchaser to complete the Audited Statements by no later than June 31, 2014. Within three business days of the completion of the Audited Statements, the Seller shall deliver to the Purchaser copies of all necessary financial Statements.

6.2 Further Assurances. Upon the terms and subject to the conditions contained in this Agreement, the parties agree, before and after the Closing, (a) to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, (b) to execute any documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder or thereunder, and (c) to cooperate with each other in connection with the foregoing.

6.3 Conduct of Business. From the date hereof through the Closing Date, the Company will not, except as permitted by this Agreement or the Management Agreement, or as consented to by the Purchaser in writing, take any action inconsistent with this Agreement or the Management Agreement or with the consummation of the transactions contemplated hereby or thereby.

ARTICLE VII

CONDITIONS PRECEDENT TO CLOSING

7.1 Conditions to Seller’ Obligation to Close. The obligation of the Seller to consummate the transactions provided for hereby are subject to the satisfaction, before or on the Closing Date, of each of the conditions set forth below in this Section 7.1, any of which may be waived by the Seller.

(a) Representations, Warranties and Covenants. (i) All representations and warranties of the Purchaser contained in this Agreement shall be true and correct at and as of the date hereof and at and as of the Closing Date, and (ii) the Purchaser shall have performed and satisfied all agreements and covenants required hereby to be performed by it before or on the Closing Date.

(b) No Actions or Court Orders. There shall not be any court decision, order or injunction by any court or other governmental body that makes the purchase and sale of the Company Shares contemplated hereby illegal or otherwise prohibited.

(c) Closing Deliverables. The Purchaser shall have delivered, or caused to be delivered, to the Seller those items set forth in Section 3.2(a) hereof.

7.2 Conditions to the Purchaser’s Obligation to Close. The obligation of the Purchaser to consummate the transactions provided for hereby are subject to the satisfaction, before or on the Closing Date, of each of the conditions set forth below in this Section 7.2, any of which may be waived by the Purchaser.

(a) Representations, Warranties and Covenants. (i) All representations and warranties of the Seller contained in this Agreement shall be true and correct at and as of the date hereof and at and as of the Closing Date, and (ii) the Seller shall have delivered to the Purchaser the Audited Statements and shall have performed and satisfied all agreements and covenants required hereby to be performed by them before or on the Closing Date.

(c) Closing Deliverables. The Seller shall have delivered, or caused to be delivered, to the Purchaser those items set forth in Section 3.2(c) hereof, as well as a copy of the resolutions referred to in Section 3.2(b) hereof.

ARTICLE VIII

INDEMNIFICATION

8.1 Indemnity of the Seller. The Seller shall jointly and severally indemnify, defend and hold harmless the Purchaser from and against, and shall reimburse the Purchaser with respect to, all liabilities, losses, costs and expenses, including, without limitation, reasonable attorneys’ fees and disbursements (collectively the “Losses”) asserted against or incurred by the Purchaser by reason of, arising out of, or in connection with any breach of any representation, warranty or covenant contained in this Agreement made by Seller or in any other document or certificate delivered by Seller pursuant to the provisions of this Agreement or in connection with the transactions contemplated hereby or thereby.

8.2 Indemnity of the Purchaser. The Purchaser shall indemnify, defend and hold harmless the Seller from and against, and shall reimburse the Seller with respect to, all Losses asserted against or incurred by Seller by reason of, arising out of, or in connection with any breach of any representation, warranty or covenant contained in this Agreement or in the Management Agreement or made by the Purchaser or in any other document or certificate delivered by the Purchaser pursuant to the provisions of this Agreement or in connection with the transactions contemplated hereby or thereby.

8.3 Indemnification Procedure. A party (an “Indemnified Party”) seeking indemnification shall give prompt notice to the other party (the “Indemnifying Party”) of any claim for indemnification arising under this Article VIII. The Indemnifying Party shall have the right to assume and to control the defense of any such claim with counsel reasonably acceptable to such Indemnified Party, at the Indemnifying Party’s own cost and expense, including the cost and expense of attorneys’ fees and disbursements in connection with such defense, in which event the Indemnifying Party shall not be obligated to pay the fees and disbursements of separate counsel for such Indemnified Party in such action. In the event, however, that such Indemnified Party’s legal counsel shall determine that defenses may be available to such Indemnified Party that are different from or in addition to those available to the Indemnifying Party, in that there could reasonably be expected to be a conflict of interest if such Indemnifying Party and the Indemnified Party have common counsel in any such proceeding, or if the Indemnified Party has not assumed the defense of the action or proceedings, then such Indemnified Party may employ separate counsel to represent or defend it, and the Indemnifying Party shall pay the reasonable fees and disbursements of counsel for such Indemnified Party. No settlement of any such claim or payment in connection with any such settlement shall be made without the prior consent of the Indemnifying Party, which consent shall not be unreasonably withheld.

8.4 Right of Offset. The parties agree that the Purchaser shall be entitled to offset any claim for indemnity hereunder against the Note.

ARTICLE IX

MISCELLANEOUS

9.1 Publicity. No party to this Agreement shall issue any press release or make any public announcement regarding the transactions contemplated by this Agreement without the prior written approval of the other party.

9.2 Termination Events.

(a) This Agreement may be terminated at any time prior to the Closing:

(i) by the mutual written agreement of the Purchaser and the Seller;

(ii) by (A) the Purchaser or the Seller on or after June 30, 2014 if the Closing shall not have occurred by the close of business on such date, provided that the terminating party may not be in default of any of its obligations hereunder and may not have caused the failure of the transactions contemplated by this Agreement to have occurred on or before such date; or (B) the Purchaser on or after June 30, 2014 if the Seller shall not have delivered the Audited Statements to the Purchaser by that date ;

(iii) by the Purchaser if there is a breach of any representation or warranty set forth in Article IV or Article V or any covenant or agreement to be complied with or performed by the Seller pursuant to the terms of this Agreement;

(iv) by the Purchaser if the Company shall have breached the Management Agreement; or

(v) by the Seller if there is a breach of any representation or warranty set forth in Article VI or of any covenant or agreement to be complied with or performed by the Purchaser pursuant to the terms of this Agreement.

(vi) This agreement may be terminated by Seller if Purchaser fails to provide overhead support of $6250.00 per month for twelve months beginning at the execution of this agreement. Upon termination, all ownership and rights revert back to Seller.

(vii) This agreement may be terminated by Seller if Purchaser fails to secure capital investment of at least $1,000,000.00 USD within twelve months of execution of this agreement. Upon termination, all ownership and rights shall revert back to Seller.

(b) Upon the occurrence of any valid termination event set forth in this Section 9.2, the Purchaser and/or the Seller, as applicable, shall deliver written notice to the non-terminating party. Upon delivery of such notice, (i) this Agreement shall terminate and the transfer of the Company Shares contemplated hereby shall be deemed to have been abandoned without further action by the Purchaser or the Seller, and (ii) the Management Agreement shall automatically terminate.

(c) In the event that this Agreement is validly terminated as provided in this Section 9.2, then each of the parties shall be relieved of their respective duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to the Purchaser or the Seller; provided, however, that nothing in this Section 9.2 shall relieve the Purchaser or the Seller of any liability for any willful breach of this Agreement or the Management Agreement occurring prior to the proper termination of this Agreement.

9.3 Expenses. The Seller and the Purchaser shall each bear his or its own expenses, including attorneys’, accountants’ and other professionals’ fees, incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby.

9.4 Survival of Representations, Warranties and Agreements. All representations, warranties and statements made by a party to this Agreement or in any document or certificate delivered pursuant hereto shall survive the Closing. Each of the parties hereto is executing and carrying out the provisions of this Agreement in reliance upon the representations, warranties, covenants and agreements contained in this Agreement and in the Management Agreement and not upon any investigation which it might have made or any representation, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein or therein.

9.5 Further Assurances. If, at any time after the Closing, the parties shall consider or be advised that any further deeds, assignments or assurances in law or any other things are necessary, desirable or proper to complete the transactions contemplated herein or to vest, perfect or confirm, of record or otherwise, the title to any property or rights of the parties hereto, the parties agree that their proper officers and directors shall execute and deliver all such proper deeds, assignments and assurances in law and do all things necessary, desirable or proper to vest, perfect or confirm title to such property or rights and otherwise to carry out the purpose of this Agreement, and that the proper officers and directors of the parties are fully authorized to take any and all such action.

9.6 Notice. All communications, notices, requests, consents or demands given or required under this Agreement shall be in writing and shall be deemed to have been duly given when delivered to, or received by prepaid registered or certified mail or recognized overnight courier addressed to, or upon receipt of a facsimile sent to, the party for whom intended, as follows, or to such other address or facsimile number as may be furnished by such party by notice in the manner provided herein:


If to the Seller:	Cynthia Modders 742 Mauna Kea Arnold, CA 95223 Fax: ________________
If to the Purchaser:	Encore Brands, Inc. 1525 Montana Ave Suite C Santa Monica, CA 90403p Attention: Gareth West, CEO

9.7 Entire Agreement. This Agreement and any instruments and agreements to be executed pursuant to this Agreement, sets forth the entire understanding of the parties hereto with respect to this Agreement’s subject matter, merges and supersedes all prior and contemporaneous understandings with respect to its subject matter, and may not be waived or modified, in whole or in part, except by a writing signed by each of the parties hereto. No waiver of any provision of this Agreement in any instance shall be deemed to be a waiver of the same or any other provision in any other instance. Failure of any party to enforce any provision of this Agreement shall not be construed as a waiver of its rights under such provision.

9.8 Successors and Assigns. This Agreement shall be binding upon, enforceable against and inure to the benefit of, the parties hereto and their respective heirs, administrators, executors, personal representatives, successors and assigns, and nothing herein is intended to confer any right, remedy or benefit upon any other person. This Agreement may not be assigned by any party hereto except with the prior written consent of the other parties, which consent shall not be unreasonably withheld.

9.9 Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California applicable to agreements made and fully to be performed in such state, without giving effect to any conflicts of law principles thereof.

9.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.11 Construction. Headings contained in this Agreement are for convenience only and shall not be used in the interpretation of this Agreement. References herein to Articles, Sections and Exhibits are to the articles, sections and exhibits, respectively, of this Agreement. As used herein, the singular includes the plural, and the masculine, feminine and neuter gender each includes the others where the context so indicates.

9.12 No Other Representations or Warranties. Except for representations and warranties made by the Seller in this Agreement, the Seller does not make or has not made any representation or warranty to the Purchaser regarding the Company or the transactions contemplated hereby.

9.13 Severability. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, this Agreement shall be interpreted and enforceable as if such provision were severed or limited, but only to the extent necessary to render such provision and this Agreement enforceable.

9.14 Attorneys’ Fees and Costs. In the event of any action at law or in equity between the parties hereto to enforce any of the provisions hereof, the unsuccessful party to such litigation shall pay to the successful party all costs and expenses, including reasonable attorneys’ fees, incurred therein by such successful party; and if such successful party shall recover judgment in any such action or proceeding, such costs, expenses and reasonable attorneys’ fees may be included in and as part of such judgment.

9.15 Forum Selection. Any litigation based hereon, or arising out of, under, or in connection with this Agreement , shall be brought and maintained exclusively in courts located in the County of Los Angeles, California. Each party to this Agreement consents to the jurisdiction over him or it of each of the foregoing courts and agrees that any personal service of process may be made by registered or certified mail to the notice address as set forth in Section 9.6 hereof, and as the same may be changed from time to time as provided therein.

9.16 11.15 Independent Legal Advice. Each of the Seller and Purchaser hereby acknowledges that he/she/it has been afforded the opportunity of receiving independent legal advice concerning this Agreement, and in the event that such Seller has executed this Agreement without the benefit of independent legal advice, she hereby waives the right to receive such independent legal advice.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first set forth above.

SELLER: By: _______________________________ Cynthia Modders	PURCHASER: Encore Brands, Inc. By:__________________________________ Gareth West, CEO

EXHIBIT A

May 21, 2014

PROMISSORY NOTE

PROMISE TO PAY. Encore Brands, Inc., a Nevada corporation ("Purchaser"), hereby promises to pay to Cynthia Modders ("Seller"), in lawful money of the United States of America, the principal amount of One Hundred Sixty Five Thousand Dollars ($165,000) according to the terms and conditions of this promissory note (this “Note”). This Note is the "Note” as defined in that certain Purchase Agreement dated the date hereof by and between Purchaser and Seller (the "Purchase Agreement").

PAYMENTS. At the twelve month anniversary from the date of transfer of the Firefly Brand Management, LLC. Representation Agreements, Eighty Two Thousand Five Hundred Dollars ($82,500) will be due. On the anniversary of the 24th month the final payment of Eighty Two Thousand Five Hundred Dollars ($82,500) will be due. For 24 months interest on the remaining principle will be due after the date of the transferred agreements from Firefly Brand Management, LLC until the outstanding principal amount and accrued interest has been paid in full, no later than the last day of the 24 month (or, if such day is not a business day, the next succeeding business day). Purchaser shall pay all interest that has accrued and is unpaid as of the 21th day of that month.

All Interest Payments shall be applied to accrued and unpaid interest, and all Principal Payments shall be applied to the then outstanding principal balance of this Note. Purchaser may prepay this Note in whole or in part at any time without premium of penalty.

All payments shall be made with immediately available funds by way of: (i) wire transfer or check delivered to 817 9th Street, #1, Santa Monica, California 90403 or such other address within the continental United States that Seller may designate by not less than 20 days prior written notice to Purchaser.

INTEREST RATE. Simple interest shall accrue on the principal amount from time to time outstanding at the rate of five percent (5%) per annum or the maximum interest rate legally allowed, whichever is less. In the event of outstanding or delayed payments, any payments made will be applied first to any accrued unpaid interest; then to principal; then to late charges, if any.

LATE CHARGE. If a payment is more than five business days late Purchaser will be charged one percent (1.00%) of the unpaid portion of the regularly scheduled payment for that particular month as a late fee.

DEFAULT. Purchaser’s failure to make any payment when due under this Note and not cured within ten (10) days of notice to Buyer of such failure or to otherwise comply with the terms and conditions of this Note shall constitute a default (a "Default"). In the event of a Default, Seller shall be entitled to immediately accelerate all amounts due, including interest and late charges under this Note, which entire balance shall be due within fifteen (15) days' notice of the same.

RIGHT OF OFFSET. Purchaser shall have the right to offset any amount it owes Seller pursuant to this Note against any amount that Seller owes or agrees to give consideration to the Purchaser pursuant to Purchase Agreement, including without limitation amounts owed pursuant to Section 8.1 of the Purchase Agreement.

ATTORNEYS’ FEES AND EXPENSES. In the event of a default by Purchaser, Seller is entitled to payment for all reasonable attorneys’ fees and costs incurred in enforcing the terms of this Note.

GOVERNING LAW. This Note shall be governed by laws of the State of California.

NOTICES. All notices, consents, requests, demands and other communications (collectively, “Notices”) given pursuant to this Note shall be in writing, and shall be delivered by personal service, overnight courier by United States first class, registered or certified mail, postage prepaid, addressed to the party at the address set forth on the signature page of this Note. Any Notice, other than a Notice sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section.

PURCHASER

Encore Brands, Inc.

By: ________________________________

Gareth West, Chief Executive Officer

SELLER

________________________________

Cynthia Modders

B-1

Exhibit 10.2

NEITHER THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE TO THE HOLDER UPON CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (Ill) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITES STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

AMENDED AND RESTATED REVOLVING CONVERTIBLE PROMISSORY NOTE

Issuance Date: June [Ÿ], 2014	US$1,200,000

Effective Date: June [Ÿ], 2014

FOR VALUE RECEIVED, ENCORE BRANDS, INC., a corporation incorporated under the laws of the State of Nevada, whose address is 1525 Montana Avenue, Suite C, Santa Monica, California 90403 (the “Borrower”), promises to pay to the order of TCA GLOBAL CREDIT MASTER FUND, LP (hereinafter, together with any holder hereof, “Lender”), whose address is 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, on or before the six (6) month anniversary of the Effective Date or such later date as agreed upon after the date hereof in a signed writing by the Lender (the “Revolving Loan Maturity Date”), the lesser of: (i) One Million Two Hundred Thousand and No/100 United States Dollars (US$1,200,000); or (ii) the aggregate principal amount outstanding under and pursuant to that certain senior secured revolving credit facility agreement, dated as of August 31, 2013 and effective as of December 27, 2013, as amended by amendment no 1. Thereto, dated as of the Effective Date (“Amendment No. 1”), executed by and among the Borrower, as borrower, certain subsidiaries of the Borrower, as joint and several guarantors, and the Lender, as lender (as amended, restated, supplemented or modified from time to time, the “Credit Agreement”), together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) on the aggregate principal amount of all Revolving Loans outstanding from time to time, as provided in the Credit Agreement. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

This revolving convertible promissory note (the “Note”) amends, restates, replaces and supercedes, in its entirely, that certain revolving convertible promissory note, issued as of dated as of August 31, 2013 and effective as of December 27, 2013 (the “Original Note”), issued by the Borrower in favor of the Lender, in the principal amount of Seventy Hundred Fifty Thousand and No/100 United States Dollars (US$750,000). The obligations contained in the Original Note shall be referred to herein as the “Original Obligations”. It is the intention of the Borrower and Lender that while this Note amends, restates, replaces and supersedes the Original Note, in its entirety, it is not in payment or satisfaction of the Original Obligations, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Should there be any conflict between any of the terms of the Original Note, and the terms of this Note, the terms of this Note shall control. This Note is not a novation.

This Note evidences a portion of the aggregate Revolving Loans incurred by Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms and conditions under which the Revolving Loan Maturity Date or any payment hereon may be accelerated.

As of the Effective Date, One Million Two Hundred Thousand and No/100 United States Dollars (US$1,200,000) has been advanced by the Lender to the Borrower, consisting of Seven Hundred Fifty Thousand and No/100 United States Dollars (US$750,000) advanced on December 27, 2013 and Four Hundred Fifty Thousand and No/100 United States Dollars (US$450,000) advanced on the Effective Date.

The holder of this Note is entitled to all of the benefits and security provided for in the Loan Documents, of even date herewith. All Revolving Loans shall be repaid by Borrower, or any person liable for the payment of this Note, on the Revolving Loan Maturity Date, unless payable sooner pursuant to the provisions of the Credit Agreement.

Principal and interest shall be paid to Lender as set forth in the Credit Agreement, or at such other place as the holder of this Note shall designate in writing to Borrower. Each Revolving Loan evidenced hereby and made by Lender, and all payments on account of the principal and interest hereunder shall be recorded on the books and records of Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of Lender, shall be rebuttable presumptive evidence of the principal amount owing hereunder.

This Note is being issued in connection with Amendment No. 1 and is also secured by the Security Agreements and all other Loan Documents. All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Loan Documents which are to be kept and performed by the Borrower or any other Credit Party are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and the Borrower and each Credit Party covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

Except for such notices as may be required under the terms of the Credit Agreement, the Borrower, or any person liable for the payment of this Note, waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the required time of payment or any other indulgence.

Borrower shall be solely responsible for the payment of any and all documentary stamps and other taxes applicable to the full face amount of this Note, but specifically excluding any income or capital gains taxes.

The Revolving Loan evidenced hereby has been made and/or issued and this Note has been delivered at Lender's main office set forth above. This Note shall be governed and construed in accordance with the laws of the State of Nevada, in which state it shall be performed, and shall be binding upon Borrower, or any person liable for the payment of this Note, and its legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note.

Nothing herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require the Borrower, or any person liable for the payment of this Note, to pay interest in an amount or at a rate greater than the highest rate permissible under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of charging a usurious rate of interest. Should any interest or other charges paid by Borrower, or any parties liable for the payments made pursuant to this Note result in the computation or earning of interest in excess of the highest rate permissible under applicable law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in excess of the amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess of the highest rate permissible under applicable law.

THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.

Notwithstanding any provision in this Note or the other Loan Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance of this Note immediately upon receipt of such sums by the Lender, with the same force and effect as though the Borrower had specifically designated such excess sums to be so applied to the reduction of such outstanding principal balance and the Lender had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Lender may, at any time and from time to time, elect, by notice in writing to the Borrower, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the outstanding principal balance. It is the intention of the parties that the Borrower do not intend or expect to pay nor does the Lender intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

At any time and from time to time while this Note is outstanding and upon the occurrence of an Event of Default, this Note may be, at the sole option of the Lender, convertible into shares of the common stock, no par value per share (the “Common Stock”) of Borrower, in accordance with the terms and conditions set forth below.

(a) Voluntary Conversion. At any time while this Note is outstanding and upon the occurrence of an Event of Default, the Lender may, upon the occurrence of an Event of Default or if mutually agreed upon by the parties, convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable hereunder or under the Credit Agreement (such total amount, the “Conversion Amount”) into shares of Common Stock of the Borrower (the “Conversion Shares”) at a price equal to: (i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest daily volume weighted average price of the Borrower's Common Stock during the five (5) Business Days immediately prior to the Conversion Date, which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit A, the “Conversion Notice”) (the denominator) (the “Conversion Price”). The Lender shall submit a Conversion Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.

(b) The Lender's Conversion Limitations. The Borrower shall not affect any conversion of this Note, and the Lender shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Lender, the Lender (together with the Lender's Affiliates and any Persons acting as a group together with the Lender or any of the Lender's Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Lender shall have the right to request that the Borrower provide to the Lender a written statement of the number of outstanding shares of the Borrower's Common Stock as of a requested date . The Borrower shall, within three (3) Business Days of such request, provide Lender with such requested information in a written statement, and the Lender shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership of the Borrower's Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Lender, in whole or in part, upon notice from the Lender to the Borrower to increase such percentage.

For purposes of this Note, the “Beneficial Ownership Limitation” shall be

4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this Section shall apply to a successor holder of this Note. For purposes of this Note, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof.

(c) Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner, to the extent Lender has the right to convert this Note into shares of Common Stock:

(1) To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Lender (the “Conversion Date”), the Lender shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower's transfer agent).

(2) Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the “Conversion Confirmation”) to the Lender indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Lender shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Borrower's transfer agent, and pursuant to the terms of the Credit Agreement, the Borrower's transfer agent shall issue the applicable Conversion Shares to Lender as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), provided that the Borrower's transfer agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) program, and legends are not required under the terms of the Credit Agreement, the Borrower shall, subject to Lender timely providing all information required regarding Lender’s prime broker with DTC, cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Irrevocable Transfer Agent Instructions, the Lender may request the Borrower's transfer agent to) electronically transmit the applicable Conversion Shares to which the Lender shall be entitled by crediting the account of the Lender's prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, and provide proof satisfactory to the Lender of such delivery. In the event that the Borrower's transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Irrevocable Transfer Agent Instructions, the Lender may request the Borrower's transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Lender, or its designees, for the number of Conversion Shares to which the Lender shall be entitled. To effect conversions hereunder, the Lender shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Lender and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Lender, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

(3) The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the Conversion Date.

(4) If in the case of any Conversion Notice, the certificate or certificates required hereunder to be delivered are not delivered to or as directed by the Lender by the date required hereby, the Lender shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Lender any original Note delivered to the Borrower and the Lender shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

(5) The Borrower's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and, unless specified otherwise herein, unconditional, irrespective of any action or inaction by the Lender to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Lender or any other person or entity of any obligation to the Borrower or any violation or alleged violation of law by the Lender or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Lender in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Lender. In the event the Lender of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Lender or anyone associated or affiliated with the Lender has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Lender, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Lender in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Lender to the extent it obtains judgment. In the absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower fails for any reason to deliver to the Lender such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Note, the Borrower shall pay to such Lender, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per Business Day for each Business Day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit a Lender's right to pursue actual damages or declare an Event of Default pursuant to the Credit Agreement, this Note or any agreement securing the indebtedness under this Note for the Borrower's failure to deliver Conversion Shares within the period specified herein and such Lender shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Lender from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Lender from having the Conversion Shares issued directly by the Borrower's transfer agent in accordance with the Irrevocable Transfer Agent Instructions, in the event for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Lender upon exercise of Lender's conversion rights hereunder.

(6) The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Lender hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower, provided that Borrower shall not be responsible for any income, capital gains or similar tax imposed on Lender.

(7) Borrower shall take all action reasonably necessary to at all times have authorized, and reserved for the purpose of issuance, such number of shares of Common Stock as shall be necessary to effect the full conversion of the Note in accordance with its terms (the “Share Reserve”). If at any time the Share Reserve is insufficient to effect the full conversion of the Note then outstanding, Borrower shall increase the Share Reserve accordingly. If Borrower does not have sufficient authorized and unissued shares of Common Stock available to increase the Share Reserve, Borrower shall call and hold a special meeting of the shareholders within forty-five (45) days of such occurrence, or take action by the written consent of the holders of a majority of the outstanding shares of Common Stock, if possible, for the sole purpose of increasing the number of shares authorized to an amount of shares equal to three (3) times the Conversion Shares. Borrower’s management shall recommend to the shareholders to vote in favor of increasing the number of shares of Common Stock authorized.

(d) Adjustments to Conversion Price.

(1) If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 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.

(2) If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower 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 Borrower 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 Borrower effects any 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 (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this Note, the Lender shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one ( 1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Conversion 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 Lender shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Lender a new note consistent with the foregoing provisions and evidencing the Lender's right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring (i) any such successor or surviving entity to comply with the provisions of this Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction or (ii) the satisfaction of all outstanding principal and interest hereunder.

(3) Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Lender a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

(4) If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of 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 Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Lender at its last address as it shall appear upon the Borrower's records, 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 deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.

(e) Make-Whole Rights. Upon liquidation by the Lender of Conversion Shares issued pursuant to a Conversion Notice, provided that the Lender realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the “Realized Amount”), the Borrower shall issue to the Lender additional shares of the Borrower’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Lender (a “Sale Reconciliation”) showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the date upon which the Lender delivers notice (the “Make-Whole Notice”) to the Borrower that such additional shares are requested by the Lender (the “Make-Whole Stock Price”) (such number of additional shares to be issued, the “Make-Whole Shares”). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make- Whole Shares requested, the Borrower shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth herein. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Borrower’s Common Stock. Following the sale of the Make-Whole Shares by the Lender: (i) in the event that the Lender receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Lender shall deliver an additional Make-Whole Notice to the Borrower following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices shall continue until the Conversion Amount has been fully satisfied; (ii) in the event that the Lender received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

[-signature page follows-]

IN WITNESS WHEREOF, the Borrower has executed this Note as of the date set forth above.

		ENCORE BRANDS, INC.



		By:
		Name:	Gareth West
		Title:	Chief Executive Officer

[Signature Page 1 of 2 to Revolving Convertible Promissory Note]

CONSENT AND AGREEMENT

The undersigned, referred to in the foregoing revolving convertible promissory note as a guarantor, hereby consents and agrees to said revolving convertible promissory note and to the payment of the amounts contemplated therein, documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations to be performed by it pursuant to or in connection with said revolving convertible promissory note to the same extent as if the undersigned were a party to said revolving convertible promissory note.

NORTHRIDGE MILLS HOLDINGS, INC.


By:
Name:	Patrick Aroff
Title:	President

FIRELY CONSUMER PRODUCTS INC.


By:
Name:	Cynthia Modders
Title:	President

[Signature Page 2 of 2 to Amended and Restated Revolving Convertible Promissory Note]

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal and/or interest under the Revolving Convertible Promissory Note (the “Note”) Encore Brands, Inc., a corporation incorporated under the laws of the State of Nevada (the “Company”), into shares of common stock, par value $0.001 per share (the “Common Shares”), of the Company in accordance with the conditions of the Note, as of the date written below.

Based solely on information provided by the Company to Holder, the undersigned represents and warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation as specified under the Note.

Conversion Calculations
Effective Date of Conversion:
Principal Amount and/or Interest to be Converted:
Number of Common Shares to be Issued:

	[HOLDER]

	By:

	Name:

	Title:

	Address:

Encore Brands (GM) (USOTC:ENCB)
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