Intellectual Property Security Agreement - VITALSTATE INC - 4-15-2005 by VTST-Agreements

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									                                                    EXHIBIT 10.16

                         INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement, dated as of __________, 200__ (this "IP Security Agreement"),
is made by and among Vitalstate Canada Ltd., a Canadian corporation (the "Grantor"), and Scepter Holdings
Inc., a Canadian corporation (the "Secured Party").

                                                      RECITALS

A. The Secured Party has agreed to loan to Vitalstate Inc., a New York corporation ("Vitalstate Parent"), up to
US$6,400,000 pursuant to that certain Loan Agreement, dated as of February 10, 2004 (the "Initial Loan
Agreement"), among Vitalstate Parent, the Grantor, Vitalstate US, Inc., a Florida corporation ("Vitalstate US"),
and the Secured Party, as amended by Amendment No. 1 to Loan Agreement, Guaranty and Security
Agreement, dated as of June 15, 2004 ("Amendment No. 1"), by Amendment No. 2 to Loan Agreement,
Guaranty Security Agreement and Notes, dated as of October 21, 2004 ("Amendment No. 2"), and by
Amendment No. 3 to Loan Agreement, Guaranty, Security Agreement and Notes, dated as of _______, 200_
("Amendment No. 3"), each among Vitalstate Parent, the Grantor, Vitalstate US and the Secured Party. The
Initial Loan Agreement, as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3
(collectively, the "Amendments"), is referred to as the "Loan Agreement."

B. As of the date of this IP Security Agreement, the Secured Party has loaned to Vitalstate Parent an aggregate
of US$_________ pursuant to the Loan Agreement, which loan is evidenced by a series of promissory notes
(the "Notes").

C. Each of Vitalstate US and the Grantor have guaranteed the repayment of the Notes pursuant to a Guaranty,
dated February 10, 2004, made by Vitalstate US and the Grantor in favor of the Secured Party, as amended by
the Amendments (such Guaranty, as amended by the Amendments, is referred to as the "Guaranty"). Each of
Vitalstate Parent, Vitalstate US and the Grantor have granted to the Secured Party a security interest in their
accounts receivable, inventory and certain other assets, as set forth in that certain Security Agreement, dated as
of February 10, 2004, among Vitalstate Parent, Vitalstate US, the Grantor and the Secured Party, as amended
by the Amendments.

D. To secure the Secured Obligations (as defined below), the Grantor has agreed to grant the Secured Party a
security interest in and lien upon the Intellectual Property Collateral (as defined below).

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

1. Grant of Security Interest. The Grantor hereby unconditionally and irrevocably pledges and grants to the
Secured Party a continuing security interest in and continuing first lien upon all of its right, title and interest in and
to its property and assets set forth below (the "Intellectual Property Collateral"):

(a) Copyrights. Any and all U.S. and foreign copyright rights, including copyright applications, copyright
registrations and like protections, in each work or authorship and derivative work thereof, whether published or
unpublished, and whether or not the same also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including, but not limited to, those set forth on Exhibit A attached hereto (collectively, the
"Copyrights");
(b) Patents. Any and all U.S. and foreign patents, patent applications and like protections now or hereafter
existing, including, but not limited to, improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, including, but not limited to, the patents and patent applications set forth on
Exhibit B attached hereto (collectively, the "Patents");

(c) Trademarks. Any and all U.S. and foreign trademark and servicemark rights now or hereafter existing,
whether registered or not, applications to register and registrations of the same, including, but not limited to, those
set forth on Exhibit C attached hereto (collectively, the "Trademarks"), and like protections, including, but not
limited to, common law rights, and the entire goodwill associated therewith and symbolized by such Trademarks;

(d) Claims for Damages. Any and all claims for damages by way of past, present and future infringements of any
of the intellectual property rights identified above, with the right, but not the obligation, to sue for and collect such
damages for said infringement of the intellectual property rights identified above;

(e) Licenses. Any and all licenses or other rights to use any of the Copyrights, Patents or Trademarks (including
any amendments, extension and renewals thereof) and all license fees and royalties arising from such use to the
extent permitted by such license or rights;

(f) Amendments, Extensions and Renewals. Any and all amendments, extensions and renewals of any of the
Copyrights, Patents or Trademarks; and

(g) Proceeds and Products. Any and all proceeds and products of the foregoing, including, but not limited to, all
payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

2. Continuing Security Interest. This IP Security Agreement will create a continuing security interest in the
Intellectual Property Collateral and will
(i) remain in full force and effect until payment or performance in full of the Secured Obligations, (ii) be binding
upon the Grantor and its successors and assigns and (iii) inure to the benefit of the Secured Party and its
successors and assigns.

3. Secured Obligations. This IP Security Agreement is made and the security interests created hereby are granted
to the Secured Party to secure the full and prompt payment or performance of the following (the "Secured
Obligations"): (a) the obligations of the Grantor pursuant to the Loan Agreement and this IP Security Agreement,
(b) the obligations of the Grantor pursuant to the Guaranty, (c) all reasonable costs incurred by the Secured Party
to obtain, preserve, perfect and enforce the liens and security interests created hereby; and (d) any renewals,
continuations, modifications or extensions of any of the foregoing.

                                                            2
4. Authorization and Request. The Grantor authorizes and requests that the Register of Copyrights, the
Commissioner of Patents and Trademarks and any other relevant U.S. or foreign governmental authority record
this IP Security Agreement.

5. Covenants and Warranties. The Grantor represents, warrants, covenants and agrees as follows:

(a) The Grantor is now the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses
granted by the Grantor to third parties in the ordinary course of business.

(b) The Grantor has the requisite power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement have been duly authorized by
all necessary action on the part of the Grantor. The performance of this IP Security Agreement does not conflict
with or result in a breach of any other agreement or contract to which the Grantor is bound and this IP Security
Agreement constitutes a security interest.

(c) During the term of this IP Security Agreement, the Grantor will not transfer or otherwise encumber any
Intellectual Property Collateral, except as set forth in this IP Security Agreement.

(d) To its knowledge, each of the Patents, if any, which has been issued is valid and enforceable, and no part of
the Intellectual Property Collateral has been judged invalid, unenforceable or unprotectable, in whole or in part,
and no claim has been made that any part of the Intellectual Property Collateral violates the rights of any third
party.

(e) The Grantor shall promptly advise the Secured Party in writing of any adverse change in the composition of
the Intellectual Property Collateral or any adverse determination against the Intellectual Property Collateral, as
well as any subsequent ownership right of the Grantor in or to any Copyright, Patent or Trademark.

(f) The Grantor shall, at its own cost and expense, diligently prosecute, file and make (to the extent that it has not
already done so) an application to register with all appropriate offices or agencies any of the Intellectual Property
Collateral created, acquired or held by the Grantor now or in the future.

(g) The Grantor shall (i) protect, defend and maintain the validity and enforceability of the Copyrights, Patents
and Trademarks, (ii) use its best efforts to detect infringements of the Copyrights, Patents and Trademarks and
promptly advise the Secured Party in writing of infringements detected and (iii) not allow any Copyright, Patent or
Trademark to be abandoned, forfeited or dedicated to the public without the written consent of the Secured
Party, which shall not be unreasonably withheld, unless the Grantor determines that reasonable business practices
suggest that abandonment is appropriate.

(h) In the event that the Grantor shall register, seek to register, or apply for or seek issuance of any copyright,
patent or trademark with the United States Copyright Office, the United States Patent and Trademark Office or
any similar office or agency of any foreign country it shall: (i) no later than fifteen (15) business days' after such
registration or the filing of such an application, give notice to the Secured Party of such registration or the filing of
such application and provide the Secured Party with a copy thereof; (ii) promptly upon the delivery by the
Secured Party of a security agreement or such other documents as the Secured Party may reasonably request in
order to maintain and perfect the priority of the Secured Party's security interest in the Copyright, Patent or
Trademark registered, execute the same; and (iii) promptly after such execution, record such security documents
with the United States Copyright Office, the United States Patent and Trademark Office or any similar office or
agency of any foreign country. The Grantor shall promptly provide to the Secured Party a copy of the Copyright,
Patent or Trademark application(s) so filed, together with evidence of the recording of the security documents
necessary for the Secured Party to maintain and perfect the priority of its security interest in such Copyright,
Patent or Trademark.

                                                            3
(i) This IP Security Agreement creates and, in the case of after acquired Intellectual Property Collateral, this IP
Security Agreement will create at the time the Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of the Secured Party a valid and perfected first priority security interest in the Intellectual
Property Collateral in the United States and throughout the world securing the payment and performance of the
Secured Obligations upon making the filings referred to in clause (j) below.

(j) Except for the filing of appropriate UCC financing statements, and the filing with the United States Patent and
Trademark Office (or similar office or agency of the appropriate foreign countries) with respect to the Patents
and Trademarks and the filing with the Register of Copyrights (or similar office or agency of the appropriate
foreign countries) with respect to the Copyrights necessary to perfect the security interests created hereunder, no
authorization, approval or other action by, and no notice to or filing with, any U.S. or foreign governmental
authority or regulatory body is required either (i) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery or performance of this IP Security Agreement by the Grantor in the U.S. or
abroad or (ii) for the perfection in the United States or abroad or the exercise by the Secured Party of its rights
and remedies hereunder.

(k) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of the Grantor
with respect to the Intellectual Property Collateral is accurate and complete in all material respects.

(l) The Grantor shall not enter into any agreement that would impair or conflict with the Grantor's obligations
hereunder without the Secured Party's prior written consent. The Grantor shall not permit the inclusion in any
contract to which it becomes a party of any provision that could or might in any way prevent the creation of a
security interest in the Grantor's rights and interest in any property that would fit within the definition of Intellectual
Property Collateral herein contained and that is acquired under such contract.

(m) Upon any officer of the Grantor obtaining actual knowledge thereof, the Grantor will promptly notify the
Secured Party in writing of any event that adversely affects the value of any Intellectual Property Collateral, the
ability of the Grantor to dispose of any Intellectual Property Collateral of the rights and remedies of the Secured
Party in relation thereto, including the levy of any legal process against any of the Intellectual Property Collateral.

                                                            4
6. The Secured Party's Rights. The Secured Party shall have the right, but not the obligation, to take, at the
Grantor's sole expense, any actions that the Grantor is required under this IP Security Agreement to take but
which the Grantor fails to take, after fifteen (15) business days' notice to the Grantor. The Grantor shall reimburse
and indemnify the Secured Party for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this section 6.

7. Inspection Rights. The Grantor hereby grants to the Secured Party and its employees, representatives and
agents the right to visit, during reasonable hours upon prior reasonable written notice to the Grantor, any of the
Grantor's plants and facilities that manufacture, install or store products (or that have done so during the prior six-
month period) that are sold utilizing any of the Intellectual Property Collateral, and to inspect the products and
quality control records relating thereto upon reasonable written notice to the Grantor and as often as may be
reasonably requested; provided, however, that the Secured Party may not exercise the rights granted to it
pursuant to this Section 7 on more than six (6) occasions in any calendar year.

8. Further Assurances; Attorney in Fact.

(a) On a continuing basis, the Grantor will make, execute, acknowledge and deliver, and file and record in the
proper filing and recording places in the United States and foreign countries, as appropriate, all such instruments,
including appropriate financing and continuation statements and collateral agreements and filings with the United
States Patent and Trademarks Office and the Register of Copyrights, and take all such action as may reasonably
be deemed necessary or advisable, or as requested by the Secured Party, to perfect the Secured Party's security
interest in the Intellectual Property Collateral and otherwise to carry out the intent and purposes of this IP
Security Agreement, or for assuring and confirming to the Secured Party the grant or perfection of a security
interest in all Intellectual Property Collateral.

(b) The Grantor hereby irrevocably appoints the Secured Party as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor, the Secured Party or otherwise,
from time to time in the Secured Party's discretion, upon the Grantor's failure or inability to do so, to take any
action and to execute any instrument which the Secured Party may deem necessary or advisable to accomplish
the purposes of this IP Security Agreement, including:

(i) To modify, in its sole discretion, this IP Security Agreement without first obtaining the Grantor's approval of or
signature to such modification by amending Exhibit A, Exhibit B and Exhibit C hereof, as appropriate, to include
reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by the Grantor after the
execution hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks
in which the Grantor no longer has or claims any right, title or interest; provided, however, that the Secured Party
may not exercise the rights granted to it pursuant to this Section 8(b)(i) unless (A) it shall have given the Grantor
notice of its intent to exercise such rights (which notification must set forth the manner in which the Secured Party
intends to modify Exhibit A, Exhibit B or Exhibit C) and the opportunity to amend such exhibits in the manner
contemplated by such notice and (B) the Grantor has not so modified such exhibits within at least fifteen (15)
calendar days after it received such notice from the Secured Party; and

                                                           5
(ii) To file, in its sole discretion, one or more financing or continuation statements and amendments thereto,
relative to any of the Intellectual Property Collateral without the signature of the Grantor where permitted by law.

9. Events of Default. The occurrence of any of the following shall constitute an "Event of Default" under this IP
Security Agreement:

(a) An event of default occurs under the Loan Agreement; or

(b) The Grantor breaches any warranty or agreement made by the Grantor in this IP Security Agreement and
such warranty or agreement is not capable of being cured by the Grantor or, if such warranty or agreement is
capable of being cured by the Grantor, it is not cured within five (5) business days of such breach.

10. Remedies. Upon the occurrence and continuance of an Event of Default, the Secured Party shall have the
right to exercise all the remedies of a secured party under the Uniform Commercial Code, including, but not
limited to, the right to require the Grantor to assemble the Intellectual Property Collateral and any tangible
property in which the Secured Party has a security interest and to make it available to the Secured Party at a
place designated by the Secured Party. The Secured Party shall have a nonexclusive, royalty free license to use
the Copyrights, Patents and Trademarks to the extent reasonably necessary to permit the Secured Party to
exercise its rights and remedies upon the occurrence of an Event of Default. The Grantor will pay any expenses
(including, but not limited to, reasonable attorney's fees) incurred by the Secured Party in connection with the
exercise of any of the Secured Party's rights hereunder, including, but not limited to, any expense incurred in
disposing of the Intellectual Property Collateral. The cash proceeds received by the Secured Party in respect of
any such sale are to be applied, first, to the payment of any expenses incurred by the Secured Party in connection
with the exercise of any of its rights hereunder and to the payment of expenses that are the responsibility of the
Grantor pursuant to other provisions of this Agreement (to the extent that they are then unpaid), second, to the
payment of the Secured Obligations, and third, the remaining proceeds, if any, are to be paid over to the Grantor.
All of the Secured Party's rights and remedies with respect to the Intellectual Property Collateral shall be
cumulative.

11. Indemnity. The Grantor agrees to defend, indemnify and hold harmless the Secured Party and its owners,
directors, officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by this IP Security Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by the Secured Party as a result of or in any way
arising out of, following or consequential to transactions between the Secured Party and the Grantor, under this
IP Security Agreement or otherwise relating to the Intellectual Property Collateral (including, but not limited to,
reasonable attorneys fees and reasonable expenses), including, but not limited to, all losses or expenses arising
out of any defect or malfunction in any product manufactured, promoted or sold by the Grantor in connection
with any Copyright, Patent or Trademark. Notwithstanding the foregoing, the Grantor shall have no obligations
pursuant to this Section 11 for losses, claims, liabilities, demands or expenses that result solely and directly from
the Secured Party's gross negligence or willful misconduct.

                                                          6
12. Fees and Expenses. The Grantor shall bear all reasonable legal expenses of the Secured Party in connection
with the negotiation, drafting and execution of this IP Security Agreement and all filings contemplated hereby

13. Confidentiality. In handling any information of a confidential nature that comes into its possession pursuant to
the rights granted to it by this IP Security Agreement ("Confidential Information"), the Secured Party shall
exercise the same degree of care that it exercises in respect of its own confidential information. The foregoing
sentence shall not be deemed to prohibit disclosure of Confidential Information (a) to prospective assignees or
transferees of the rights and obligations of the Secured Party under the Loan Agreement and/or the Guaranty, or
(b) as the Secured Party considers appropriate in exercising the remedies provided to it in this IP Security
Agreement.

14. Termination and Reassignment. At such time as the Grantor shall completely satisfy all of the Secured
Obligations, this IP Security Agreement shall terminate and the Secured Party shall execute and deliver to the
Grantor all deed, assignments, and other instruments as may be necessary or proper to reinvest in the Grantor full
title to the property assigned hereunder, subject to any disposition thereof which may have been made by the
Secured Party pursuant hereto.

15. Course of Dealing. No course of dealing, nor any failure to exercise, nor any delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

16. Attorneys' Fees. If any action relating to this IP Security Agreement is brought by either party hereto against
the other party, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.

17. Amendments. Except as contemplated by Section 8(b)(i) hereof, this IP Security Agreement may be
amended only by a written instrument signed by both parties hereto.

18. Counterparts. This IP Security Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute the same instrument.

19. Severability. Each provision of this IP Security Agreement is intended to be severable from every other
provision, and the invalidity or illegality of any provision of this IP Security Agreement shall not affect the validity
or legality of any other provision hereof.

20. Law and Jurisdiction. This IP Security Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard for choice of law provisions.

                                                            7
21. Assignment. Without the consent of the Grantor, the Secured Party may assign or otherwise transfer its rights
and obligations hereunder to any other person or entity in connection with an assignment or other transfer of its
rights and obligations under the Loan Agreement and/or the Guaranty and, in such event, the assignee shall be
entitled, upon notifying the Grantor, to the rights of the Secured Party hereunder and shall be liable for all of the
obligations of the Secured Party hereunder. Without the prior written consent of the Secured Party, the Grantor
may not assign or otherwise transfer any of its rights or obligations hereunder.

[The remainder of the page has intentionally been left blank.]

                                                          8
IN WITNESS WHEREOF, the parties hereto have executed this IP Security Agreement on the day and year
first above written.

            ADDRESS OF GRANTOR:                       GRANTOR:

            3767 boul. Thimens, Suite 268             VITALSTATE CANADA LTD., a Canadian
            Saint-Laurent, Quebec                     corporation
            H4R 1W4

                                                      By:_____________________________
                                                      Name:
                                                      Title:

            ADDRESS OF SECURED PARTY:                 SECURED PARTY:

            170 Midwest Road                          SCEPTER HOLDINGS INC., a Canadian
            Toronto, Ontario M1P 3A9                  corporation

                                                      By:_____________________________
                                                      Name:




Title:

                                                  9
                                        EXHIBIT "A"

                             COPYRIGHTS (U.S. AND FOREIGN)

SCHEDULE A - ISSUED COPYRIGHTS

       COPYRIGHT TITLE AND     REGISTRATION                    DATE OF      OWNER OF
           DESCRIPTION             NUMBER           COUNTRY   ISSUANCE       RECORD
           -----------             ------           -------   --------       ------




SCHEDULE B - PENDING COPYRIGHT APPLICATIONS

       COPYRIGHT TITLE AND      APPLICATION                    DATE OF      OWNER OF
           DESCRIPTION             NUMBER           COUNTRY    FILING        RECORD
           -----------             ------           -------    ------        ------




SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)

        COPYRIGHT                             FIRST DATE        ORIGINAL AUTHOR OR
        TITLE AND            DATE OF              OF          OWNER OF COPYRIGHT (IF
       DESCRIPTION           CREATION         PUBLICATION     DIFFERENT FROM GRANTOR)
       -----------           --------         -----------     -----------------------




                                               10
                                         EXHIBIT "B"

SCHEDULE A - PATENTS (U.S. AND FOREIGN)

              TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS

SCHEDULE B - PATENT APPLICATIONS (U.S. AND FOREIGN)

---------------------------------------------------------------------------------------------------------
Title                                   Number                  Country                         Inventor(
---------------------------------------------------------------------------------------------------------
A Carbohydrate-based Delivery System    10/416,815              U.S.             Michael Farber/Jonathan
for Creatine and Other Bioactive
Ingredients
---------------------------------------------------------------------------------------------------------
Delivery Systems For Functional         PCT/CA03/00411          International    Michael Farber/Jonathan
Ingredients
---------------------------------------------------------------------------------------------------------
Delivery Systems For Functional         10/416,547              U.S.             Michael Farber/Jonathan
Ingredients
---------------------------------------------------------------------------------------------------------
A Starch-Based Delivery System for      10/297,983              U.S.             Michael Farber/Jonathan
Creatine
---------------------------------------------------------------------------------------------------------
Transmucosal Delivery System            PCT/CA03/01034          International    Michael Farber/Jonathan
(Renamed to " Oral Delivery System
Containing a Gel matrix and Liposomes")
---------------------------------------------------------------------------------------------------------
Multi-Phase Delivery System             PCT/CA03/01206          International    Michael Farber/Jonathan
(Renamed to "Multi-phase Oral delivery
System Comprising a Semi-Solid Matrix
Phase")
---------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Title                                      Priority Date                            Status
-------------------------------------------------------------------------------------------------
A Carbohydrate-based Delivery System       September 25, 2001         Filed US May 7, 2003
for Creatine and Other Bioactive
Ingredients
-------------------------------------------------------------------------------------------------
Delivery Systems For Functional            April 16, 2002             Full PCT Filed Mar 23,
Ingredients                                                           2003
-------------------------------------------------------------------------------------------------
Delivery Systems For Functional            April 16, 2002             Filed US May 13, 2003
Ingredients
-------------------------------------------------------------------------------------------------
A Starch-Based Delivery System for         September 25, 2001         Filed US Dec 10, 2002
Creatine
-------------------------------------------------------------------------------------------------
Transmucosal Delivery System               July 19, 2002              Full PCT Filed July 18,
(Renamed to " Oral Delivery System                                    2003
Containing a Gel matrix and Liposomes")
-------------------------------------------------------------------------------------------------
Multi-Phase Delivery System                August 13, 2002            Full PCT Filed Aug 13,
(Renamed to "Multi-phase Oral delivery                                2003
System Comprising a Semi-Solid Matrix
Phase")
-------------------------------------------------------------------------------------------------




                                               11
SCHEDULE C - PROVISIONAL PATENT APPLICATIONS (U.S. AND FOREIGN)

---------------------------------------------------------------------------------------------------------
 Title                              Number              Country          Inventor(s)
---------------------------------------------------------------------------------------------------------
 Delivery System for Non-steroidal 60/550,603           U.S.             Jonathan Farber
 anti-inflammatory drugs (NSAIDs)
---------------------------------------------------------------------------------------------------------
 Delivery Systems for Calcium                           U.S.             Jonathan Farber
---------------------------------------------------------------------------------------------------------
 Delivery Systems for Antacids      60/558,906          U.S.             Jonathan Farber
---------------------------------------------------------------------------------------------------------
 Oral gel delivery system           60/519,664          U.S.             Jonathan Farber
---------------------------------------------------------------------------------------------------------
 Gel Delivery System for Bioactive                      U.S.             Jonathan Farber
 Ingredients
---------------------------------------------------------------------------------------------------------
 Oral gel delivery system for       60/525,596          U.S.             Jonathan Farber
 Functional ingredients
---------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------
 Title                                                    Status
-----------------------------------------------------------------------
 Delivery System for Non-steroidal         US Provisional
 anti-inflammatory drugs (NSAIDs)
-----------------------------------------------------------------------
 Delivery Systems for Calcium              US Provisional
-----------------------------------------------------------------------
 Delivery Systems for Antacids             US Provisional
-----------------------------------------------------------------------
 Oral gel delivery system                  US Provisional
-----------------------------------------------------------------------
 Gel Delivery System for Bioactive         US Provisional
 Ingredients
-----------------------------------------------------------------------
 Oral gel delivery system for              US Provisional
 Functional ingredients
-----------------------------------------------------------------------




                                               12
                                         EXHIBIT "C"

SCHEDULE A - TRADEMARKS (U.S. AND FOREIGN)

---------------------------------------------------------------------------------------------------------
                           Application
 Trademark                     No.      Country  Filing Date                     Status
---------------------------------------------------------------------------------------------------------
 ACTIJUBE                   76421274 U.S.        14-Jun-02    Statement of Use filed
                            1138072    Canada    19-Apr-02    Allowed; Statement of Use due by 19/04/2005
                            2894798    EU        16-Oct-02    Publication complete, registration pending
---------------------------------------------------------------------------------------------------------
 ACTIJUBE and DESIGN        78259876 U.S.        9-Jun-03     Allowed September 21, 2004
                            1179033    Canada    3-Jun-03     Time extension to Nov 4, 2004 - in prosecut
---------------------------------------------------------------------------------------------------------
 ATTACK THE PACK            78259495 U.S.        6-Jun-03     Pub for Opp on 9/14/04; extension to oppose
                                                              filed 10/14/04
---------------------------------------------------------------------------------------------------------
 COMMAND and DESIGN         78262818 U.S.        16-Jun-03    USPTO wrongly abandoned - Filed to reinstat
                                                              Sept 1
---------------------------------------------------------------------------------------------------------
 COMMAND PERFORMANCE        78245226 U.S.        2-May-03     Allowed 11/02/2004
---------------------------------------------------------------------------------------------------------
 EXPANDING YOUR POTENTIAL   78251623 U.S.        19-May-03    Allowed 5/11/2004; Extension of time or
                                                              Statement of Use due 11/11/2004
---------------------------------------------------------------------------------------------------------
 FITKIDS NUTRITION          78259491 U.S.        6-Jun-03     Published for opposition October 7

                                                              Approved for publication on 9/05/2004 but
                                                              not published yet
---------------------------------------------------------------------------------------------------------
 FITKIDS NUTRITION DESIGN   78259487 U.S.        6-Jun-03     Approved for publication October 4, 2004
---------------------------------------------------------------------------------------------------------
 FOUNDATION                 78270251 U.S.        3-Jul-03     Published for opposition on 9/28/2004
---------------------------------------------------------------------------------------------------------
 LIQUID LIGHTNING           78259988 U.S.        9-Jun-03     10/13/2004 - suspension letter mailed
---------------------------------------------------------------------------------------------------------
 LIQUID THUNDER             78259909 U.S.        9-Jun-03     9/2/4/2004 - publication complete
---------------------------------------------------------------------------------------------------------
 PROTEIN SPLASH             78260010 U.S.        9-Jun-03     8/30/2004 - suspension letter mailed
---------------------------------------------------------------------------------------------------------
 PROTEIN WAVE               78260000 U.S.        9-Jun-03     8/30/2004 - suspension letter mailed
---------------------------------------------------------------------------------------------------------
 RIPPED QUICK               78268189 U.S.        27-Jun-03    USPTO wrongly abandoned - Filed to reinstat
                            1175077   Canada     29-Apr-03    8/25/04
                                                              Searched - in prosecution
---------------------------------------------------------------------------------------------------------
 RUSSIAN RED                76421463 U.S.        14-Jun-02    Published for Opposition Sept 7, 2004
                            1217734   Canada     21-May-04    Refile - approved on Oct 27, 2004
                            1136432   Canada     5-Apr-02     In prosecution
                            2878908   EU         10-Apr-02    Publication period completed on 11/02/2004
---------------------------------------------------------------------------------------------------------
TRIM PHYSIQUE               1136431   Canada     5-Apr-02     Searched - in prosecution
---------------------------------------------------------------------------------------------------------




                                               13
---------------------------------------------------------------------------------------------------------
                           Application
 Trademark                     No.      Country  Filing Date                     Status
---------------------------------------------------------------------------------------------------------
VITALSTATE DESIGN           78265094 U.S.        20-Jun-03    Published for opp on Oct. 12, 2004
                            1178654    Canada    29-May-03    In prosecution
---------------------------------------------------------------------------------------------------------
VITALSTATE                  76421450 U.S.        14-Jun-02    Allowed
                            1136430    Canada    5-Apr-02     In prosecution
                            2877702    EU        10-Apr-02    Publication competed on Oct 5, 2004
---------------------------------------------------------------------------------------------------------
WOLVERINES and DESIGN       78259485 U.S.        6-Jun-03     Published for Opposition Sept 21, 2004
---------------------------------------------------------------------------------------------------------




SCHEDULE B - COMMON LAW TRADEMARKS

                                                               OTHER
                           DATE OF FIRST                    COUNTRIES IN
                              USE IN        COUNTRY OF      WHICH MARK IS     OWNER OF
          TRADEMARK          COMMERCE       FIRST USE          IN USE        TRADEMARK
          ---------          --------       ---------          ------        ---------




                                               14
                                                    EXHIBIT 10.16

                         INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement, dated as of __________, 200_ (this "IP Security Agreement"), is
made by and among Vitalstate US, Inc., a Florida corporation (the "Grantor"), and Scepter Holdings Inc., a
Canadian corporation (the "Secured Party").

                                                      RECITALS

A. The Secured Party has agreed to loan to Vitalstate Inc., a New York corporation ("Vitalstate Parent"), up to
US$6,400,000 pursuant to that certain Loan Agreement, dated as of February 10, 2004 (the "Initial Loan
Agreement"), among Vitalstate Parent, Vitalstate Canada Ltd., a Canadian corporation ("Vitalstate Canada"), the
Grantor and the Secured Party, as amended by Amendment No. 1 to Loan Agreement, Guaranty and Security
Agreement, dated as of June 15, 2004 ("Amendment No. 1"), by Amendment No. 2 to Loan Agreement,
Guaranty, Security Agreement and Notes, dated as of October 21, 2004 ("Amendment No. 2"), and by
Amendment No. 3 to Loan Agreement, Guaranty, Security Agreement and Notes, dated as of ________, 200_
("Amendment No. 3"), each among Vitalstate Parent, Vitalstate Canada, the Grantor and the Secured Party. The
Initial Loan Agreement, as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3
(collectively, the "Amendments"), is referred to as the "Loan Agreement."

B. As of the date of this IP Security Agreement, the Secured Party has loaned to Vitalstate Parent an aggregate
of US$_________ pursuant to the Loan Agreement, which loan is evidenced by a series of promissory notes
(the "Notes").

C. Each of Vitalstate Canada and the Grantor have guaranteed the repayment of the Notes pursuant to a
Guaranty, dated February 10, 2004, made by Vitalstate Canada and the Grantor in favor of the Secured Party,
as amended by the Amendments (such Guaranty, as amended by the Amendments, is referred to as the
"Guaranty"). Each of Vitalstate Parent, Vitalstate Canada and the Grantor have granted to the Secured Party a
security interest in their accounts receivable, inventory and certain other assets, as set forth in that certain Security
Agreement, dated as of February 10, 2004, among Vitalstate Parent, Vitalstate Canada, the Grantor and the
Secured Party, as amended by the Amendments.

D. To secure the Secured Obligations (as defined below), the Grantor has agreed to grant the Secured Party a
security interest in and lien upon the Intellectual Property Collateral (as defined below).

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

1. Grant of Security Interest. The Grantor hereby unconditionally and irrevocably pledges and grants to the
Secured Party a continuing security interest in and continuing first lien upon all of its right, title and interest in and
to its property and assets set forth below (the "Intellectual Property Collateral"):

(a) Copyrights. Any and all U.S. and foreign copyright rights, including copyright applications, copyright
registrations and like protections, in each work or authorship and derivative work thereof, whether published or
unpublished, and whether or not the same also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including, but not limited to, those set forth on Exhibit A attached hereto (collectively, the
"Copyrights");
(b) Patents. Any and all U.S. and foreign patents, patent applications and like protections now or hereafter
existing, including, but not limited to, improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, including, but not limited to, the patents and patent applications set forth on
Exhibit B attached hereto (collectively, the "Patents");

(c) Trademarks. Any and all U.S. and foreign trademark and servicemark rights now or hereafter existing,
whether registered or not, applications to register and registrations of the same, including, but not limited to, those
set forth on Exhibit C attached hereto (collectively, the "Trademarks"), and like protections, including, but not
limited to, common law rights, and the entire goodwill associated therewith and symbolized by such Trademarks;

(d) Claims for Damages. Any and all claims for damages by way of past, present and future infringements of any
of the intellectual property rights identified above, with the right, but not the obligation, to sue for and collect such
damages for said infringement of the intellectual property rights identified above;

(e) Licenses. Any and all licenses or other rights to use any of the Copyrights, Patents or Trademarks (including
any amendments, extension and renewals thereof) and all license fees and royalties arising from such use to the
extent permitted by such license or rights;

(f) Amendments, Extensions and Renewals. Any and all amendments, extensions and renewals of any of the
Copyrights, Patents or Trademarks; and

(g) Proceeds and Products. Any and all proceeds and products of the foregoing, including, but not limited to, all
payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

2. Continuing Security Interest. This IP Security Agreement will create a continuing security interest in the
Intellectual Property Collateral and will
(i) remain in full force and effect until payment or performance in full of the Secured Obligations, (ii) be binding
upon the Grantor and its successors and assigns and (iii) inure to the benefit of the Secured Party and its
successors and assigns.

3. Secured Obligations. This IP Security Agreement is made and the security interests created hereby are granted
to the Secured Party to secure the full and prompt payment or performance of the following (the "Secured
Obligations"): (a) the obligations of the Grantor pursuant to the Loan Agreement and this IP Security Agreement,
(b) the obligations of the Grantor pursuant to the Guaranty, (c) all reasonable costs incurred by the Secured Party
to obtain, preserve, perfect and enforce the liens and security interests created hereby; and (d) any renewals,
continuations, modifications or extensions of any of the foregoing.

                                                            2
4. Authorization and Request. The Grantor authorizes and requests that the Register of Copyrights, the
Commissioner of Patents and Trademarks and any other relevant U.S. or foreign governmental authority record
this IP Security Agreement.

5. Covenants and Warranties. The Grantor represents, warrants, covenants and agrees as follows:

(a) The Grantor is now the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses
granted by the Grantor to third parties in the ordinary course of business.

(b) The Grantor has the requisite power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement have been duly authorized by
all necessary action on the part of the Grantor. The performance of this IP Security Agreement does not conflict
with or result in a breach of any other agreement or contract to which the Grantor is bound and this IP Security
Agreement constitutes a security interest.

(c) During the term of this IP Security Agreement, the Grantor will not transfer or otherwise encumber any
Intellectual Property Collateral, except as set forth in this IP Security Agreement.

(d) To its knowledge, each of the Patents, if any, which has been issued is valid and enforceable, and no part of
the Intellectual Property Collateral has been judged invalid, unenforceable or unprotectable, in whole or in part,
and no claim has been made that any part of the Intellectual Property Collateral violates the rights of any third
party.

(e) The Grantor shall promptly advise the Secured Party in writing of any adverse change in the composition of
the Intellectual Property Collateral or any adverse determination against the Intellectual Property Collateral, as
well as any subsequent ownership right of the Grantor in or to any Copyright, Patent or Trademark.

(f) The Grantor shall, at its own cost and expense, diligently prosecute, file and make (to the extent that it has not
already done so) an application to register with all appropriate offices or agencies any of the Intellectual Property
Collateral created, acquired or held by the Grantor now or in the future.

(g) The Grantor shall (i) protect, defend and maintain the validity and enforceability of the Copyrights, Patents
and Trademarks, (ii) use its best efforts to detect infringements of the Copyrights, Patents and Trademarks and
promptly advise the Secured Party in writing of infringements detected and (iii) not allow any Copyright, Patent or
Trademark to be abandoned, forfeited or dedicated to the public without the written consent of the Secured
Party, which shall not be unreasonably withheld, unless the Grantor determines that reasonable business practices
suggest that abandonment is appropriate.

                                                          3
(h) In the event that the Grantor shall register, seek to register, or apply for or seek issuance of any copyright,
patent or trademark with the United States Copyright Office, the United States Patent and Trademark Office or
any similar office or agency of any foreign country it shall: (i) no later than fifteen (15) business days' after such
registration or the filing of such an application, give notice to the Secured Party of such registration or the filing of
such application and provide the Secured Party with a copy thereof; (ii) promptly upon the delivery by the
Secured Party of a security agreement or such other documents as the Secured Party may reasonably request in
order to maintain and perfect the priority of the Secured Party's security interest in the Copyright, Patent or
Trademark registered, execute the same; and (iii) promptly after such execution, record such security documents
with the United States Copyright Office, the United States Patent and Trademark Office or any similar office or
agency of any foreign country. The Grantor shall promptly provide to the Secured Party a copy of the Copyright,
Patent or Trademark application(s) so filed, together with evidence of the recording of the security documents
necessary for the Secured Party to maintain and perfect the priority of its security interest in such Copyright,
Patent or Trademark.

(i) This IP Security Agreement creates and, in the case of after acquired Intellectual Property Collateral, this IP
Security Agreement will create at the time the Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of the Secured Party a valid and perfected first priority security interest in the Intellectual
Property Collateral in the United States and throughout the world securing the payment and performance of the
Secured Obligations upon making the filings referred to in clause (j) below.

(j) Except for the filing of appropriate UCC financing statements, and the filing with the United States Patent and
Trademark Office (or similar office or agency of the appropriate foreign countries) with respect to the Patents
and Trademarks and the filing with the Register of Copyrights (or similar office or agency of the appropriate
foreign countries) with respect to the Copyrights necessary to perfect the security interests created hereunder, no
authorization, approval or other action by, and no notice to or filing with, any U.S. or foreign governmental
authority or regulatory body is required either (i) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery or performance of this IP Security Agreement by the Grantor in the U.S. or
abroad or (ii) for the perfection in the United States or abroad or the exercise by the Secured Party of its rights
and remedies hereunder.

(k) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of the Grantor
with respect to the Intellectual Property Collateral is accurate and complete in all material respects.

(l) The Grantor shall not enter into any agreement that would impair or conflict with the Grantor's obligations
hereunder without the Secured Party's prior written consent. The Grantor shall not permit the inclusion in any
contract to which it becomes a party of any provision that could or might in any way prevent the creation of a
security interest in the Grantor's rights and interest in any property that would fit within the definition of Intellectual
Property Collateral herein contained and that is acquired under such contract.

(m) Upon any officer of the Grantor obtaining actual knowledge thereof, the Grantor will promptly notify the
Secured Party in writing of any event that adversely affects the value of any Intellectual Property Collateral, the
ability of the Grantor to dispose of any Intellectual Property Collateral of the rights and remedies of the Secured
Party in relation thereto, including the levy of any legal process against any of the Intellectual Property Collateral.

                                                            4
6. The Secured Party's Rights. The Secured Party shall have the right, but not the obligation, to take, at the
Grantor's sole expense, any actions that the Grantor is required under this IP Security Agreement to take but
which the Grantor fails to take, after fifteen (15) business days' notice to the Grantor. The Grantor shall reimburse
and indemnify the Secured Party for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this section 6.

7. Inspection Rights. The Grantor hereby grants to the Secured Party and its employees, representatives and
agents the right to visit, during reasonable hours upon prior reasonable written notice to the Grantor, any of the
Grantor's plants and facilities that manufacture, install or store products (or that have done so during the prior six-
month period) that are sold utilizing any of the Intellectual Property Collateral, and to inspect the products and
quality control records relating thereto upon reasonable written notice to the Grantor and as often as may be
reasonably requested; provided, however, that the Secured Party may not exercise the rights granted to it
pursuant to this Section 7 on more than six (6) occasions in any calendar year.

8. Further Assurances; Attorney in Fact.

(a) On a continuing basis, the Grantor will make, execute, acknowledge and deliver, and file and record in the
proper filing and recording places in the United States and foreign countries, as appropriate, all such instruments,
including appropriate financing and continuation statements and collateral agreements and filings with the United
States Patent and Trademarks Office and the Register of Copyrights, and take all such action as may reasonably
be deemed necessary or advisable, or as requested by the Secured Party, to perfect the Secured Party's security
interest in the Intellectual Property Collateral and otherwise to carry out the intent and purposes of this IP
Security Agreement, or for assuring and confirming to the Secured Party the grant or perfection of a security
interest in all Intellectual Property Collateral.

(b) The Grantor hereby irrevocably appoints the Secured Party as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor, the Secured Party or otherwise,
from time to time in the Secured Party's discretion, upon the Grantor's failure or inability to do so, to take any
action and to execute any instrument which the Secured Party may deem necessary or advisable to accomplish
the purposes of this IP Security Agreement, including:

(i) To modify, in its sole discretion, this IP Security Agreement without first obtaining the Grantor's approval of or
signature to such modification by amending Exhibit A, Exhibit B and Exhibit C hereof, as appropriate, to include
reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by the Grantor after the
execution hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks
in which the Grantor no longer has or claims any right, title or interest; provided, however, that the Secured Party
may not exercise the rights granted to it pursuant to this Section 8(b)(i) unless (A) it shall have given the Grantor
notice of its intent to exercise such rights (which notification must set forth the manner in which the Secured Party
intends to modify Exhibit A, Exhibit B or Exhibit C) and the opportunity to amend such exhibits in the manner
contemplated by such notice and (B) the Grantor has not so modified such exhibits within at least fifteen (15)
calendar days after it received such notice from the Secured Party; and

                                                           5
(ii) To file, in its sole discretion, one or more financing or continuation statements and amendments thereto,
relative to any of the Intellectual Property Collateral without the signature of the Grantor where permitted by law.

9. Events of Default. The occurrence of any of the following shall constitute an "Event of Default" under this IP
Security Agreement:

(a) An event of default occurs under the Loan Agreement; or

(b) The Grantor breaches any warranty or agreement made by the Grantor in this IP Security Agreement and
such warranty or agreement is not capable of being cured by the Grantor or, if such warranty or agreement is
capable of being cured by the Grantor, it is not cured within five (5) business days of such breach.

10. Remedies. Upon the occurrence and continuance of an Event of Default, the Secured Party shall have the
right to exercise all the remedies of a secured party under the Uniform Commercial Code, including, but not
limited to, the right to require the Grantor to assemble the Intellectual Property Collateral and any tangible
property in which the Secured Party has a security interest and to make it available to the Secured Party at a
place designated by the Secured Party. The Secured Party shall have a nonexclusive, royalty free license to use
the Copyrights, Patents and Trademarks to the extent reasonably necessary to permit the Secured Party to
exercise its rights and remedies upon the occurrence of an Event of Default. The Grantor will pay any expenses
(including, but not limited to, reasonable attorney's fees) incurred by the Secured Party in connection with the
exercise of any of the Secured Party's rights hereunder, including, but not limited to, any expense incurred in
disposing of the Intellectual Property Collateral. The cash proceeds received by the Secured Party in respect of
any such sale are to be applied, first, to the payment of any expenses incurred by the Secured Party in connection
with the exercise of any of its rights hereunder and to the payment of expenses that are the responsibility of the
Grantor pursuant to other provisions of this Agreement (to the extent that they are then unpaid), second, to the
payment of the Secured Obligations, and third, the remaining proceeds, if any, are to be paid over to the Grantor.
All of the Secured Party's rights and remedies with respect to the Intellectual Property Collateral shall be
cumulative.

11. Indemnity. The Grantor agrees to defend, indemnify and hold harmless the Secured Party and its owners,
directors, officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by this IP Security Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by the Secured Party as a result of or in any way
arising out of, following or consequential to transactions between the Secured Party and the Grantor under this IP
Security Agreement or otherwise relating to the Intellectual Property Collateral (including, but not limited to,
reasonable attorneys fees and reasonable expenses), including, but not limited to, all losses or expenses arising
out of any defect or malfunction in any product manufactured, promoted or sold by the Grantor in connection
with any Copyright, Patent or Trademark. Notwithstanding the foregoing, the Grantor shall have no obligations
pursuant to this Section 11 for losses, claims, liabilities, demands or expenses that result solely and directly from
the Secured Party's gross negligence or willful misconduct.

                                                         6
12. Fees and Expenses. The Grantor shall bear all reasonable legal expenses of the Secured Party in connection
with the negotiation, drafting and execution of this IP Security Agreement and all filings contemplated hereby

13. Confidentiality. In handling any information of a confidential nature that comes into its possession pursuant to
the rights granted to it by this IP Security Agreement ("Confidential Information"), the Secured Party shall
exercise the same degree of care that it exercises in respect of its own confidential information. The foregoing
sentence shall not be deemed to prohibit disclosure of Confidential Information (a) to prospective assignees or
transferees of the rights and obligations of the Secured Party under the Loan Agreement and/or the Guaranty, or
(b) as the Secured Party considers appropriate in exercising the remedies provided to it in this IP Security
Agreement.

14. Termination and Reassignment. At such time as the Grantor shall completely satisfy all of the Secured
Obligations, this IP Security Agreement shall terminate and the Secured Party shall execute and deliver to the
Grantor all deed, assignments, and other instruments as may be necessary or proper to reinvest in the Grantor full
title to the property assigned hereunder, subject to any disposition thereof which may have been made by the
Secured Party pursuant hereto.

15. Course of Dealing. No course of dealing, nor any failure to exercise, nor any delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

16. Attorneys' Fees. If any action relating to this IP Security Agreement is brought by either party hereto against
the other party, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.

17. Amendments. Except as contemplated by Section 8(b)(i) hereof, this IP Security Agreement may be
amended only by a written instrument signed by both parties hereto.

18. Counterparts. This IP Security Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute the same instrument.

19. Severability. Each provision of this IP Security Agreement is intended to be severable from every other
provision, and the invalidity or illegality of any provision of this IP Security Agreement shall not affect the validity
or legality of any other provision hereof.

20. Law and Jurisdiction. This IP Security Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard for choice of law provisions.

                                                            7
21. Assignment. Without the consent of the Grantor, the Secured Party may assign or otherwise transfer its rights
and obligations hereunder to any other person or entity in connection with an assignment or other transfer of its
rights and obligations under the Loan Agreement and/or the Guaranty and, in such event, the assignee shall be
entitled, upon notifying the Grantor, to the rights of the Secured Party hereunder and shall be liable for all of the
obligations of the Secured Party hereunder. Without the prior written consent of the Secured Party, the Grantor
may not assign or otherwise transfer any of its rights or obligations hereunder.

[The remainder of the page has intentionally been left blank.]

                                                          8
IN WITNESS WHEREOF, the parties hereto have executed this IP Security Agreement on the day and year
first above written.

          ADDRESS OF GRANTOR:                         GRANTOR:


          1499 High Ridge Road                        VITALSTATE US, INC., a Florida
          Boynton Beach, Florida 33426                corporation


                                                      By:___________________________________
                                                      Name:




Title:

          ADDRESS OF SECURED PARTY:                   SECURED PARTY:


          170 Midwest Road                            SCEPTER HOLDINGS INC., a Canadian
          Toronto, Ontario M1P 3A9                    corporation


                                                      By:___________________________________
                                                      Name:




Title:

                                                  9
                                        EXHIBIT "A"

                             COPYRIGHTS (U.S. AND FOREIGN)

SCHEDULE A - ISSUED COPYRIGHTS

       COPYRIGHT TITLE AND     REGISTRATION                    DATE OF      OWNER OF
           DESCRIPTION             NUMBER           COUNTRY   ISSUANCE       RECORD
           -----------             ------           -------   --------       ------




SCHEDULE B - PENDING COPYRIGHT APPLICATIONS

       COPYRIGHT TITLE AND      APPLICATION                    DATE OF      OWNER OF
           DESCRIPTION             NUMBER           COUNTRY    FILING        RECORD
           -----------             ------           -------    ------        ------




SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)

        COPYRIGHT                             FIRST DATE        ORIGINAL AUTHOR OR
        TITLE AND            DATE OF              OF          OWNER OF COPYRIGHT (IF
       DESCRIPTION           CREATION         PUBLICATION     DIFFERENT FROM GRANTOR)
       -----------           --------         -----------     -----------------------




                                               10
                                         EXHIBIT "B"

SCHEDULE A - PATENTS (U.S. AND FOREIGN)

              TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS

SCHEDULE B - PATENT APPLICATIONS (U.S. AND FOREIGN)

------------------------------------------------------------------------------------------------------
Title                             Number               Country                   Inventor(s)
------------------------------------------------------------------------------------------------------
A Carbohydrate-based Delivery     10/416,815           U.S.           Michael Farber/Jonathan Farber
System for Creatine and Other
Bioactive Ingredients
------------------------------------------------------------------------------------------------------
Delivery Systems For Functional   PCT/CA03/00411       International Michael Farber/Jonathan Farber
Ingredients
------------------------------------------------------------------------------------------------------
Delivery Systems For Functional   10/416,547           U.S.           Michael Farber/Jonathan Farber
Ingredients
------------------------------------------------------------------------------------------------------
A Starch-Based Delivery System    10/297,983           U.S.           Michael Farber/Jonathan Farber
for Creatine
------------------------------------------------------------------------------------------------------
Transmucosal Delivery System      PCT/CA03/01034       International Michael Farber/Jonathan Farber
(Renamed to " Oral Delivery
System Containing a Gel matrix
and Liposomes")
------------------------------------------------------------------------------------------------------
Multi-Phase Delivery System       PCT/CA03/01206       International Michael Farber/Jonathan Farber
(Renamed to "Multi-phase Oral
delivery System Comprising a
Semi-Solid Matrix Phase")
------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Title                            Priority Date                      Status
--------------------------------------------------------------------------------
A Carbohydrate-based Delivery    September 25, 2001     Filed US May 7, 2003
System for Creatine and Other
Bioactive Ingredients
--------------------------------------------------------------------------------
Delivery Systems For Functional April 16, 2002          Full PCT Filed Mar 23,
Ingredients                                             2003
--------------------------------------------------------------------------------
Delivery Systems For Functional April 16, 2002          Filed US May 13, 2003
Ingredients
--------------------------------------------------------------------------------
A Starch-Based Delivery System   September 25, 2001     Filed US Dec 10, 2002
for Creatine
--------------------------------------------------------------------------------
Transmucosal Delivery System     July 19, 2002          Full PCT Filed July
(Renamed to " Oral Delivery                             18, 2003
System Containing a Gel matrix
and Liposomes")
--------------------------------------------------------------------------------
Multi-Phase Delivery System      August 13, 2002        Full PCT Filed Aug 13,
(Renamed to "Multi-phase Oral                           2003
delivery System Comprising a
Semi-Solid Matrix Phase")
--------------------------------------------------------------------------------




                                              11
SCHEDULE C - PROVISIONAL PATENT APPLICATIONS (U.S. AND FOREIGN)

------------------------------------------------------------------------------------------------------
 Title                   Number    Country        Inventor(s)         Filing Date        Status

------------------------------------------------------------------------------------------------------
 Delivery System for 60/550,603 U.S.        Jonathan Farber         March 5, 2004   US Provisional
 Non-steroidal
 anti-inflammatory
 drugs (NSAIDs)
------------------------------------------------------------------------------------------------------
 Delivery Systems for             U.S.      Jonathan Farber         February 19,    US Provisional
 Calcium                                                            2004
------------------------------------------------------------------------------------------------------
 Delivery Systems for 60/558,906 U.S.       Jonathan Farber         April 1, 2004   US Provisional
 Antacids
------------------------------------------------------------------------------------------------------
 Oral gel delivery    60/519,664 U.S.       Jonathan Farber         November 13,    US Provisional
 system                                                             2003
------------------------------------------------------------------------------------------------------
 Gel Delivery System              U.S.      Jonathan Farber         January 8, 2004 US Provisional
 for Bioactive
 Ingredients
------------------------------------------------------------------------------------------------------
 Oral gel delivery    60/525,596 U.S.       Jonathan Farber         April 26, 2004 US Provisional
 system for
 Functional
 ingredients
------------------------------------------------------------------------------------------------------




                                              12
                                         EXHIBIT "C"

SCHEDULE A - TRADEMARKS (U.S. AND FOREIGN)

---------------------------------------------------------------------------------------------------------
 Trademark                 Application    Country  Filing Date                     Status
                               No.
---------------------------------------------------------------------------------------------------------
 ACTIJUBE                  76421274    U.S.       14-Jun-02    Statement of Use filed
                           1138072     Canada     19-Apr-02    Allowed; Statement of Use due by 19/04/200
                           2894798     EU         16-Oct-02    Publication complete, registration pending
---------------------------------------------------------------------------------------------------------
 ACTIJUBE and DESIGN       78259876    U.S.       9-Jun-03     Allowed September 21, 2004
                           1179033     Canada     3-Jun-03     Time extension to Nov 4, 2004 - in prosecu
---------------------------------------------------------------------------------------------------------
 ATTACK THE PACK           78259495    U.S.       6-Jun-03     Pub for Opp on 9/14/04; extension to oppos
                                                               filed 10/14/04
---------------------------------------------------------------------------------------------------------
 COMMAND and DESIGN        78262818    U.S.       16-Jun-03    USPTO wrongly abandoned - Filed to
                                                               reinstate Sept 1
---------------------------------------------------------------------------------------------------------
 COMMAND PERFORMANCE       78245226    U.S.       2-May-03     Allowed 11/02/2004
---------------------------------------------------------------------------------------------------------
 EXPANDING YOUR POTENTIAL 78251623     U.S.       19-May-03    Allowed 5/11/2004; Extension of time or
                                                               Statement of Use due 11/11/2004
---------------------------------------------------------------------------------------------------------
 FITKIDS NUTRITION         78259491    U.S.       6-Jun-03     Published for opposition October 7

                                                               Approved for publication on 9/05/2004 but
                                                               not published yet
---------------------------------------------------------------------------------------------------------
 FITKIDS NUTRITION DESIGN 78259487     U.S.       6-Jun-03     Approved for publication October 4, 2004
---------------------------------------------------------------------------------------------------------
 FOUNDATION                78270251    U.S.       3-Jul-03     Published for opposition on 9/28/2004
---------------------------------------------------------------------------------------------------------
 LIQUID LIGHTNING          78259988    U.S.       9-Jun-03     10/13/2004 - suspension letter mailed
---------------------------------------------------------------------------------------------------------
 LIQUID THUNDER            78259909    U.S.       9-Jun-03     9/2/4/2004 - publication complete
---------------------------------------------------------------------------------------------------------
 PROTEIN SPLASH            78260010    U.S.       9-Jun-03     8/30/2004 - suspension letter mailed
---------------------------------------------------------------------------------------------------------
 PROTEIN WAVE              78260000    U.S.       9-Jun-03     8/30/2004 - suspension letter mailed
---------------------------------------------------------------------------------------------------------
 RIPPED QUICK              78268189    U.S.       27-Jun-03    USPTO wrongly abandoned - Filed to reinsta
                           1175077     Canada     29-Apr-03    8/25/04
                                                               Searched - in prosecution
---------------------------------------------------------------------------------------------------------
 RUSSIAN RED               76421463    U.S.       14-Jun-02    Published for Opposition Sept 7, 2004
                           1217734     Canada     21-May-04    Refile - approved on Oct 27, 2004
                           1136432     Canada     5-Apr-02     In prosecution
                           2878908     EU         10-Apr-02    Publication period completed on 11/02/2004
---------------------------------------------------------------------------------------------------------




                                               13
---------------------------------------------------------------------------------------------------------
 Trademark               Application    Country  Filing Date                     Status
                             No.
---------------------------------------------------------------------------------------------------------
TRIM PHYSIQUE            1136431     Canada     5-Apr-02     Searched - in prosecution
---------------------------------------------------------------------------------------------------------
VITALSTATE DESIGN        78265094    U.S.       20-Jun-03    Published for opp on Oct. 12, 2004
                         1178654     Canada     29-May-03    In prosecution
---------------------------------------------------------------------------------------------------------
VITALSTATE               76421450    U.S.       14-Jun-02    Allowed
                         1136430     Canada     5-Apr-02     In prosecution
                         2877702     EU         10-Apr-02    Publication competed on Oct 5, 2004
---------------------------------------------------------------------------------------------------------
WOLVERINES and DESIGN    78259485    U.S.       6-Jun-03     Published for Opposition Sept 21, 2004
---------------------------------------------------------------------------------------------------------




SCHEDULE B - COMMON LAW TRADEMARKS

                                                               OTHER
                           DATE OF FIRST                    COUNTRIES IN
                              USE IN        COUNTRY OF      WHICH MARK IS     OWNER OF
          TRADEMARK          COMMERCE       FIRST USE          IN USE        TRADEMARK
          ---------          --------       ---------          ------        ---------




                                               14
                                                    EXHIBIT 10.16

                         INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement, dated as of __________, 200_ (this "IP Security Agreement"), is
made by and among Vitalstate Inc., a New York corporation (the "Grantor"), and Scepter Holdings Inc., a
Canadian corporation (the "Secured Party").

                                                      RECITALS

A. The Secured Party has agreed to loan to the Grantor up to US$6,400,000 pursuant to that certain Loan
Agreement, dated as of February 10, 2004 (the "Initial Loan Agreement"), among the Grantor, Vitalstate Canada
Ltd., a Canadian corporation ("Vitalstate Canada"), Vitalstate US, Inc., a Florida corporation ("Vitalstate US"),
and the Secured Party, as amended by Amendment No. 1 to Loan Agreement, Guaranty and Security
Agreement, dated as of June 15, 2004 ("Amendment No. 1"), by Amendment No. 2 to Loan Agreement,
Guaranty Security Agreement and Notes, dated as of October 21, 2004 ("Amendment No. 2"), and by
Amendment No. 3 to Loan Agreement, Guaranty, Security Agreement and Notes, dated as of _________,
200_ ("Amendment No. 3"), each among the Grantor, Vitalstate Canada, Vitalstate US and the Secured Party.
The Initial Loan Agreement, as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3
(collectively, the "Amendments"), is referred to as the "Loan Agreement."

B. As of the date of this IP Security Agreement, the Secured Party has loaned to the Grantor an aggregate of
US$_________ pursuant to the Loan Agreement, which loan is evidenced by a series of promissory notes (the
"Notes").

C. Each of Vitalstate Canada and Vitalstate US have guaranteed the repayment of the Notes pursuant to a
Guaranty, dated February 10, 2004, made by Vitalstate Canada and Vitalstate US in favor of the Secured Party,
as amended by the Amendments (such Guaranty, as amended by the Amendments, is referred to as the
"Guaranty"). Each of the Grantor, Vitalstate Canada and Vitalstate US have granted to the Secured Party a
security interest in their accounts receivable, inventory and certain other assets, as set forth in that certain Security
Agreement, dated as of February 10, 2004, among the Grantor, Vitalstate Canada, Vitalstate US and the
Secured Party, as amended by the Amendments.

D. To secure the Secured Obligations (as defined below), the Grantor has agreed to grant the Secured Party a
security interest in and lien upon the Intellectual Property Collateral (as defined below).

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

1. Grant of Security Interest. The Grantor hereby unconditionally and irrevocably pledges and grants to the
Secured Party a continuing security interest in and continuing first lien upon all of its right, title and interest in and
to its property and assets set forth below (the "Intellectual Property Collateral"):

(a) Copyrights. Any and all U.S. and foreign copyright rights, including copyright applications, copyright
registrations and like protections, in each work or authorship and derivative work thereof, whether published or
unpublished, and whether or not the same also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including, but not limited to, those set forth on Exhibit A attached hereto (collectively, the
"Copyrights");
(b) Patents. Any and all U.S. and foreign patents, patent applications and like protections now or hereafter
existing, including, but not limited to, improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, including, but not limited to, the patents and patent applications set forth on
Exhibit B attached hereto (collectively, the "Patents");

(c) Trademarks. Any and all U.S. and foreign trademark and servicemark rights now or hereafter existing,
whether registered or not, applications to register and registrations of the same, including, but not limited to, those
set forth on Exhibit C attached hereto (collectively, the "Trademarks"), and like protections, including, but not
limited to, common law rights, and the entire goodwill associated therewith and symbolized by such Trademarks;

(d) Claims for Damages. Any and all claims for damages by way of past, present and future infringements of any
of the intellectual property rights identified above, with the right, but not the obligation, to sue for and collect such
damages for said infringement of the intellectual property rights identified above;

(e) Licenses. Any and all licenses or other rights to use any of the Copyrights, Patents or Trademarks (including
any amendments, extension and renewals thereof) and all license fees and royalties arising from such use to the
extent permitted by such license or rights;

(f) Amendments, Extensions and Renewals. Any and all amendments, extensions and renewals of any of the
Copyrights, Patents or Trademarks; and

(g) Proceeds and Products. Any and all proceeds and products of the foregoing, including, but not limited to, all
payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

2. Continuing Security Interest. This IP Security Agreement will create a continuing security interest in the
Intellectual Property Collateral and will
(i) remain in full force and effect until payment or performance in full of the Secured Obligations, (ii) be binding
upon the Grantor and its successors and assigns and (iii) inure to the benefit of the Secured Party and its
successors and assigns.

3. Secured Obligations. This IP Security Agreement is made and the security interests created hereby are granted
to the Secured Party to secure the full and prompt payment or performance of the following (the "Secured
Obligations"): (a) the obligations of the Grantor pursuant to the Loan Agreement and this IP Security Agreement,
(b) all reasonable costs incurred by the Secured Party to obtain, preserve, perfect and enforce the liens and
security interests created hereby; and (c) any renewals, continuations, modifications or extensions of any of the
foregoing.

                                                            2
4. Authorization and Request. The Grantor authorizes and requests that the Register of Copyrights, the
Commissioner of Patents and Trademarks and any other relevant U.S. or foreign governmental authority record
this IP Security Agreement.

5. Covenants and Warranties. The Grantor represents, warrants, covenants and agrees as follows:

(a) The Grantor is now the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses
granted by the Grantor to third parties in the ordinary course of business.

(b) The Grantor has the requisite power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement have been duly authorized by
all necessary action on the part of the Grantor. The performance of this IP Security Agreement does not conflict
with or result in a breach of any other agreement or contract to which the Grantor is bound and this IP Security
Agreement constitutes a security interest.

(c) During the term of this IP Security Agreement, the Grantor will not transfer or otherwise encumber any
Intellectual Property Collateral, except as set forth in this IP Security Agreement.

(d) To its knowledge, each of the Patents, if any, which has been issued is valid and enforceable, and no part of
the Intellectual Property Collateral has been judged invalid, unenforceable or unprotectable, in whole or in part,
and no claim has been made that any part of the Intellectual Property Collateral violates the rights of any third
party.

(e) The Grantor shall promptly advise the Secured Party in writing of any adverse change in the composition of
the Intellectual Property Collateral or any adverse determination against the Intellectual Property Collateral, as
well as any subsequent ownership right of the Grantor in or to any Copyright, Patent or Trademark.

(f) The Grantor shall, at its own cost and expense, diligently prosecute, file and make (to the extent that it has not
already done so) an application to register with all appropriate offices or agencies any of the Intellectual Property
Collateral created, acquired or held by the Grantor now or in the future.

(g) The Grantor shall (i) protect, defend and maintain the validity and enforceability of the Copyrights, Patents
and Trademarks, (ii) use its best efforts to detect infringements of the Copyrights, Patents and Trademarks and
promptly advise the Secured Party in writing of infringements detected and (iii) not allow any Copyright, Patent or
Trademark to be abandoned, forfeited or dedicated to the public without the written consent of the Secured
Party, which shall not be unreasonably withheld, unless the Grantor determines that reasonable business practices
suggest that abandonment is appropriate.

                                                          3
(h) In the event that the Grantor shall register, seek to register, or apply for or seek issuance of any copyright,
patent or trademark with the United States Copyright Office, the United States Patent and Trademark Office or
any similar office or agency of any foreign country it shall: (i) no later than fifteen (15) business days' after such
registration or the filing of such an application, give notice to the Secured Party of such registration or the filing of
such application and provide the Secured Party with a copy thereof; (ii) promptly upon the delivery by the
Secured Party of a security agreement or such other documents as the Secured Party may reasonably request in
order to maintain and perfect the priority of the Secured Party's security interest in the Copyright, Patent or
Trademark registered, execute the same; and (iii) promptly after such execution, record such security documents
with the United States Copyright Office, the United States Patent and Trademark Office or any similar office or
agency of any foreign country. The Grantor shall promptly provide to the Secured Party a copy of the Copyright,
Patent or Trademark application(s) so filed, together with evidence of the recording of the security documents
necessary for the Secured Party to maintain and perfect the priority of its security interest in such Copyright,
Patent or Trademark.

(i) This IP Security Agreement creates and, in the case of after acquired Intellectual Property Collateral, this IP
Security Agreement will create at the time the Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of the Secured Party a valid and perfected first priority security interest in the Intellectual
Property Collateral in the United States and throughout the world securing the payment and performance of the
Secured Obligations upon making the filings referred to in clause (j) below.

(j) Except for the filing of appropriate UCC financing statements, and the filing with the United States Patent and
Trademark Office (or similar office or agency of the appropriate foreign countries) with respect to the Patents
and Trademarks and the filing with the Register of Copyrights (or similar office or agency of the appropriate
foreign countries) with respect to the Copyrights necessary to perfect the security interests created hereunder, no
authorization, approval or other action by, and no notice to or filing with, any U.S. or foreign governmental
authority or regulatory body is required either (i) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery or performance of this IP Security Agreement by the Grantor in the U.S. or
abroad or (ii) for the perfection in the United States or abroad or the exercise by the Secured Party of its rights
and remedies hereunder.

(k) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of the Grantor
with respect to the Intellectual Property Collateral is accurate and complete in all material respects.

(l) The Grantor shall not enter into any agreement that would impair or conflict with the Grantor's obligations
hereunder without the Secured Party's prior written consent. The Grantor shall not permit the inclusion in any
contract to which it becomes a party of any provision that could or might in any way prevent the creation of a
security interest in the Grantor's rights and interest in any property that would fit within the definition of Intellectual
Property Collateral herein contained and that is acquired under such contract.

(m) Upon any officer of the Grantor obtaining actual knowledge thereof, the Grantor will promptly notify the
Secured Party in writing of any event that adversely affects the value of any Intellectual Property Collateral, the
ability of the Grantor to dispose of any Intellectual Property Collateral of the rights and remedies of the Secured
Party in relation thereto, including the levy of any legal process against any of the Intellectual Property Collateral.

                                                            4
6. The Secured Party's Rights. The Secured Party shall have the right, but not the obligation, to take, at the
Grantor's sole expense, any actions that the Grantor is required under this IP Security Agreement to take but
which the Grantor fails to take, after fifteen (15) business days' notice to the Grantor. The Grantor shall reimburse
and indemnify the Secured Party for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this section 6.

7. Inspection Rights. The Grantor hereby grants to the Secured Party and its employees, representatives and
agents the right to visit, during reasonable hours upon prior reasonable written notice to the Grantor, any of the
Grantor's plants and facilities that manufacture, install or store products (or that have done so during the prior six-
month period) that are sold utilizing any of the Intellectual Property Collateral, and to inspect the products and
quality control records relating thereto upon reasonable written notice to the Grantor and as often as may be
reasonably requested: provided, however, that the Secured Party may not exercise the rights granted to it
pursuant to this Section 7 on more than six (6) occasions in any calendar year.

8. Further Assurances; Attorney in Fact.

(a) On a continuing basis, the Grantor will make, execute, acknowledge and deliver, and file and record in the
proper filing and recording places in the United States and foreign countries, as appropriate, all such instruments,
including appropriate financing and continuation statements and collateral agreements and filings with the United
States Patent and Trademarks Office and the Register of Copyrights, and take all such action as may reasonably
be deemed necessary or advisable, or as requested by the Secured Party, to perfect the Secured Party's security
interest in the Intellectual Property Collateral and otherwise to carry out the intent and purposes of this IP
Security Agreement, or for assuring and confirming to the Secured Party the grant or perfection of a security
interest in all Intellectual Property Collateral.

(b) The Grantor hereby irrevocably appoints the Secured Party as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor, the Secured Party or otherwise,
from time to time in the Secured Party's discretion, upon the Grantor's failure or inability to do so, to take any
action and to execute any instrument which the Secured Party may deem necessary or advisable to accomplish
the purposes of this IP Security Agreement, including:

(i) To modify, in its sole discretion, this IP Security Agreement without first obtaining the Grantor's approval of or
signature to such modification by amending Exhibit A, Exhibit B and Exhibit C hereof, as appropriate, to include
reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by the Grantor after the
execution hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks
in which the Grantor no longer has or claims any right, title or interest; provided, however, that the Secured Party
may not exercise the rights granted to it pursuant to this Section 8(b)(i) unless (A) it shall have given the Grantor
notice of its intent to exercise such rights (which notification must set forth the manner in which the Secured Party
intends to modify Exhibit A, Exhibit B or Exhibit C) and the opportunity to amend such exhibits in the manner
contemplated by such notice and (B) the Grantor has not so modified such exhibits within at least fifteen (15)
days after it received such notice from the Secured Party; and

                                                           5
(ii) To file, in its sole discretion, one or more financing or continuation statements and amendments thereto,
relative to any of the Intellectual Property Collateral without the signature of the Grantor where permitted by law.

9. Events of Default. The occurrence of any of the following shall constitute an "Event of Default" under this IP
Security Agreement:

(a) An event of default occurs under the Loan Agreement; or

(b) The Grantor breaches any warranty or agreement made by the Grantor in this IP Security Agreement and
such warranty or agreement is not capable of being cured by the Grantor or, if such warranty or agreement is
capable of being cured by the Grantor, it is not cured within five (5) business days of such breach.

10. Remedies. Upon the occurrence and continuance of an Event of Default, the Secured Party shall have the
right to exercise all the remedies of a secured party under the Uniform Commercial Code, including, but not
limited to, the right to require the Grantor to assemble the Intellectual Property Collateral and any tangible
property in which the Secured Party has a security interest and to make it available to the Secured Party at a
place designated by the Secured Party. The Secured Party shall have a nonexclusive, royalty free license to use
the Copyrights, Patents and Trademarks to the extent reasonably necessary to permit the Secured Party to
exercise its rights and remedies upon the occurrence of an Event of Default. The Grantor will pay any expenses
(including, but not limited to, reasonable attorney's fees) incurred by the Secured Party in connection with the
exercise of any of the Secured Party's rights hereunder, including, but not limited to, any expense incurred in
disposing of the Intellectual Property Collateral. The cash proceeds received by the Secured Party in respect of
any such sale are to be applied, first, to the payment of any expenses incurred by the Secured Party in connection
with the exercise of any of its rights hereunder and to the payment of expenses that are the responsibility of the
Grantor pursuant to other provisions of this Agreement (to the extent that they are then unpaid), second, to the
payment of the Secured Obligations, and third, the remaining proceeds, if any, are to be paid over to the Grantor.
All of the Secured Party's rights and remedies with respect to the Intellectual Property Collateral shall be
cumulative.

11. Indemnity. The Grantor agrees to defend, indemnify and hold harmless the Secured Party and its owners,
directors, officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by this IP Security Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by the Secured Party as a result of or in any way
arising out of, following or consequential to transactions between the Secured Party and the Grantor, under this
IP Security Agreement or otherwise relating to the Intellectual Property Collateral (including, but not limited to,
reasonable attorneys fees and reasonable expenses), including, but not limited to, all losses or expenses arising
out of any defect or malfunction in any product manufactured, promoted or sold by the Grantor in connection
with any Copyright, Patent or Trademark. Notwithstanding the foregoing, the Grantor shall have no obligations
pursuant to this Section 11 for losses, claims, liabilities, demands or expenses that result solely and directly from
the Secured Party's gross negligence or willful misconduct.

                                                          6
12. Fees and Expenses. The Grantor shall bear all reasonable legal expenses of the Secured Party in connection
with the negotiation, drafting and execution of this IP Security Agreement and all filings contemplated hereby

13. Confidentiality. In handling any information of a confidential nature that comes into its possession pursuant to
the rights granted to it by this IP Security Agreement ("Confidential Information"), the Secured Party shall
exercise the same degree of care that it exercises in respect of its own confidential information. The foregoing
sentence shall not be deemed to prohibit disclosure of Confidential Information (a) to prospective assignees or
transferees of the rights and obligations of the Secured Party under the Loan Agreement and/or the Guaranty, or
(b) as the Secured Party considers appropriate in exercising the remedies provided to it in this IP Security
Agreement.

14. Termination and Reassignment. At such time as the Grantor shall completely satisfy all of the Secured
Obligations, this IP Security Agreement shall terminate and the Secured Party shall execute and deliver to the
Grantor all deed, assignments, and other instruments as may be necessary or proper to reinvest in the Grantor full
title to the property assigned hereunder, subject to any disposition thereof which may have been made by the
Secured Party pursuant hereto.

15. Course of Dealing. No course of dealing, nor any failure to exercise, nor any delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

16. Attorneys' Fees. If any action relating to this IP Security Agreement is brought by either party hereto against
the other party, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.

17. Amendments. Except as contemplated by Section 8(b)(i) hereof, this IP Security Agreement may be
amended only by a written instrument signed by both parties hereto.

18. Counterparts. This IP Security Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute the same instrument.

19. Severability. Each provision of this IP Security Agreement is intended to be severable from every other
provision, and the invalidity or illegality of any provision of this IP Security Agreement shall not affect the validity
or legality of any other provision hereof.

20. Law and Jurisdiction. This IP Security Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard for choice of law provisions.

                                                            7
21. Assignment. Without the consent of the Grantor, the Secured Party may assign or otherwise transfer its rights
and obligations hereunder to any other person or entity in connection with an assignment or other transfer of its
rights and obligations under the Loan Agreement and, in such event, the assignee shall be entitled, upon notifying
the Grantor, to the rights of the Secured Party hereunder and shall be liable for all of the obligations of the
Secured Party hereunder. Without the prior written consent of the Secured Party, the Grantor may not assign or
otherwise transfer any of its rights or obligations hereunder.

[The remainder of the page has intentionally been left blank.]

                                                         8
IN WITNESS WHEREOF, the parties hereto have executed this IP Security Agreement on the day and year
first above written.

         ADDRESS OF GRANTOR:                       GRANTOR:


         1499 High Ridge Road                      VITALSTATE INC., a New York corporation
         Boynton Beach, Florida 33426


                                                   By:___________________________________
                                                   Name:




Title:

          ADDRESS OF SECURED PARTY:                   SECURED PARTY:


          170 Midwest Road                            SCEPTER HOLDINGS INC., a Canadian
          Toronto, Ontario M1P 3A9                    corporation


                                                      By:___________________________________
                                                      Name:




Title:

                                                  9
                                        EXHIBIT "A"

                             COPYRIGHTS (U.S. AND FOREIGN)

SCHEDULE A - ISSUED COPYRIGHTS

       COPYRIGHT TITLE AND     REGISTRATION                    DATE OF      OWNER OF
           DESCRIPTION             NUMBER           COUNTRY   ISSUANCE       RECORD
           -----------             ------           -------   --------       ------




SCHEDULE B - PENDING COPYRIGHT APPLICATIONS

       COPYRIGHT TITLE AND      APPLICATION                    DATE OF      OWNER OF
           DESCRIPTION             NUMBER           COUNTRY    FILING        RECORD
           -----------             ------           -------    ------        ------




SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)

        COPYRIGHT                             FIRST DATE        ORIGINAL AUTHOR OR
        TITLE AND            DATE OF              OF          OWNER OF COPYRIGHT (IF
       DESCRIPTION           CREATION         PUBLICATION     DIFFERENT FROM GRANTOR)
       -----------           --------         -----------     -----------------------




                                               10
                                 EXHIBIT "B"

SCHEDULE A - PATENTS (U.S. AND FOREIGN)

           TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS

SCHEDULE B - PATENT APPLICATIONS (U.S. AND FOREIGN)

           TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS

                                     11
                                      EXHIBIT "C"

SCHEDULE A - TRADEMARKS (U.S. AND FOREIGN)

                                    REGISTRATION   FILING DATE
                                         OR             OR
                                    APPLICATION    REGISTRATION               OWNER OF
        TRADEMARK    COUNTRY           NUMBER          DATE         STATUS     RECORD
        ---------    -------           ------          ----         ------     ------




SCHEDULE B - COMMON LAW TRADEMARKS

                                                       OTHER
                    DATE OF FIRST                   COUNTRIES IN
                       USE IN        COUNTRY OF     WHICH MARK IS            OWNER OF
        TRADEMARK     COMMERCE       FIRST USE         IN USE                TRADEMARK
        ---------     --------       ---------         ------                ---------




                                           12
                                              EXHIBIT 10.17

THIS AGREEMENT IS ENTERED INTO AS OF THE 31st DAY OF AUGUST, 2004.

AMONG: VITALSTATE CANADA LTD., a company duly incorporated according to law, herein represented
by Tom Torolcvei., (hereinafter referred to as "VCanada")

         AND:                 VITALSTATE, INC., a company duly incorporated according to
                              law, herein represented by Tom Torolcvei, (hereinafter
                              referred to as "VUSA")

                              (VCanada and VUSA arc hereinafter collectively referred to as
                              "Vitalstate")

         AND                  LASAR MULTIMEDIA PRODUCTIONS INC., a company duly incorporated
                              according to law, herein represented by James Klein;

                              (hereinafter referred to as the "Consultant")

         A.     WHEREAS the Consultant has valuable expertise and Vitalstate wishes to
                retain the services of the Consultant as described in Schedule 2 hereto;.

         B.     WHEREAS the parties wish to define the terms of their relationship.




NOW THEREFORE, IN CONSIDERATION of the mutual premises and the following covenants, conditions
and agreements, the patties hereby agree as follows:

1. TERM OF AGREEMENT

The term of this Agreement (the "Term") shall commence on September 1st, 2004 and terminate on, June 30th,
2005.

2. SCOPE OF_SERVICES

For the Term, Vitalstate hereby engages the Consultant, who hereby accepts, to provide the services described
in Schedule l hereto (the "Services") in the manner referred to in Schedule 1 hereto.

3. CONSIDERATION

          3.1           In consideration of the performance of the Services by the
                        Consultant, Vitalstate shall pay to the Consultant the aggregate
                        amount of one hundred sixty-eight thousand seven hundred fifty
                        Canadian dollars (CDN$168,750.00), payable by way of ten equal and
                        consecutive monthly installments of sixteen thousand eight hundred
                        seventy-five Canadian dollars (CDN$16,875.00), the first of which
                        shall be payable to the Consultant on September 1st, 2004 and
                        thereafter on, the first of each of the next following nine (9)
                        calendar months. All of the foregoing amounts are exclusive of the
                        applicable federal Goods and Services Taxes and provincial Sales
                        Taxes.
3.2   In addition to the foregoing, throughout the Term, the Consultant's
      representative, namely James Klein, shall have the right to
      participate in the health and dental plan of Vitalstate, without any
      cost. The said health and dental plan shall be consistent with the
      health and dental plan made available to James Klein during his
      employment with Vitalstate.

3.3   For the purposes of this Agreement, VCanada and VUSA are solidarily
      liable between them with respect to all of the obligations of
      Vitalstate .hereunder. Without limiting the generality of the
      foregoing, the obligations of Vitalstate hereunder shall apply to
      each of VCanada and VUSA, solidarily (jointly and severally),
      without the benefit of division, discussion and subrogation,
      including for greater certainty, the provisions o(pound) Article
      1531 of the Civil Code of Quebec or any similar legislation.

4.    INDEPENDENT CONTRACTOR

4.1   The Consultant is as an independent consultant and not an   agent or
      employee of Vitalstate, and the Consultant shall make no
      representation as an agent or employee of Vitalstate. The   Consultant
      shall have no authority to bind Vitalstate or incur other
      obligations on behalf of Vitalstate. The Consultant shall   be
      responsible for all of the Consultant's taxes incurred in   the
      capacity of independent consultant.

5.    GENERAL PROVISIONS

5.1   The preamble and the Schedules attached hereto form an integral part
      of the Agreement.

5.2   Nothing in this Agreement shall grant to any party the right to make
      commitments of any kind for or on behalf of any other party without
      the prior written consent of such other party.

5.3   This Agreement shall be binding upon. and inure to the benefit of
      the parties and their respective successors and permitted assigns
      and shall be read with all changes in number and gender as may be
      required by the context.

5.4   This Agreement shall not be assignable by either of the parties
      without the prior written. consent of the other party and any
      purported assignment not permitted under this Agreement shall be
      void.

5.5   All notices required or permitted to be given hereunder shall be in
      writing and shall be delivered either by personal delivery,
      registered ,mail or by telecopier or other similar form of
      communication and addressed as follows:
       (a) In the case of the Consultant, to:

           LASAR MULTIMEDIA PRODUCTIONS INC.
           4929 Ponsard
           Montreal, Quebec H3W 2A6

       (b) In the ease of Vitalstate, to:

           VITALSTATE CANADA, LTD.
           2191 Hampton Avenue
           Montreal, Quebec H4A 2K5

           Attention: The President

       Any notice, consent or other communication given as aforesaid shall
       be deemed to have been effectively given and received when delivered
       or if sent by telecopy or similar telecommunications device, on the
       business day next following receipt of such transmission and
       following receipt by the sender of such telecopy or similar
       telecommunication of a report printout indicating successful
       transmission, or on the date of its delivery, if delivered by
       registered mail, messenger or courier, provided that if such
       delivery date is not a business day then it shall be deemed to have
       been given and received on the business day next following the date
       of such delivery. An address may be modified by written notice given
       as aforesaid. In the event of interruption, for any reason, of one
       or more of the forms of transmissions listed above, the parties
       shall use a form which is not so interrupted with the intent that
       the addressee receive timely notice of the communication.

5.6    Neither party will issue any press release or other public
       announcement relating to this Agreement or any activities related
       thereto without the prior written consent of the other party, except
       where such announcements are required by law or regulation, in which
       the event the parties will use all reasonable efforts to consult
       with each other and cooperate with respect to the wording of any
       such announcement.

5.7    This Agreement supersedes any and all agreements, either oral or
       written, between the parties hereto with respect to the Services and
       contains all of the covenants and agreements between the parties
       with respect to the rendering of the Services.

5.8    This Agreement shall be governed by and construed in accordance with
       the laws of the Province of Quebec and the laws of Canada applicable
       therein.

5.9    The parties shall keep the existence of this letter and the terms
       contained herein confidential and neither party nor any of its
       directors, officers, employees, agents or representatives, where
       applicable, shall disclose the existence of this letter or any of
       the terns contained herein without the express written consent of
       the other party.

5.10   This Agreement has been drafted in the English language at the
       express request of the parties. Cette convention a ete redigee en
       langue anglaise a la demande explicite des parties.
IN WITNESS WHEREOF, Vitalstate and the Consultant have executed this Agreement, by their duly authorized
representatives, as of the day and year first above written.

                                   VITALSTATE CANADA LTD.

                                              per:
         -------------------------------      ---------------------------------------------
         Witness                              Name: Tom Torokvei


                                              VITALSTATE, INC.

         -------------------------------      ---------------------------------------------
         Witness                              Name: Tom Torokvei


                                              LASAR MULTIMEDIA PRODUCTIONS INC.

         -------------------------------      ---------------------------------------------
         Witness                              Name: James Klein
                                              Title: President
                                                    SCHEDULE 1

                                   TO THE CONSULTANT AGREEMENT

                                                       Among

                                        VITALSTATE CANADA LTD.

                                                         And

                                               VITALSTATE, INC.

                                                         And

                               LASAR MULTIMEDIA PRODUCTIONS INC.

                                                        Dated:

                                                   August 31st, 2004

                                             SCOPE OF SERVICES

The Consultant hereby agrees, during the Term, to provide the following services (collectively the "Services) to
Vitalstate.

A. Functions. The Consultant shall be available to Vitalstate periodically (but no more than 5 hours per week) for
consultation by phone or by telecopier regarding the general business operations of Vitalstate.

In providing the Services, the Consultant shall:

a) conduct all of his business in its own name, pay all expenses whatsoever related to the operation of its office
and the carrying out of activities and be responsible for the acts and expenses of its employees, if any;

b) abide by the reasonable policies, procedures, rules, regulations, guidelines and instructions which are
established or conveyed by Vitalstate, whether orally or in writing, to the Consultant, as the same may be
amended from time to time, at the sole discretion of Vitalstate (the "Policies");

c) always act in a professional and courteous manner and in accordance with all applicable laws, regulations and
other governmental requirements.
         EXHIBIT 21

SUBSIDIARIES OF REGISTRANT

     Vitalstate Canada Ltd.
      Vitalstate US, Inc.
                                                   EXHIBIT 31.1

                                                CERTIFICATIONS

I, Terry Giles, certify that:

1. I have reviewed this annual report on Form 10-KSB of Vitalstate, Inc.

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, fairly present in all material respects the financial condition, results of operations and cash flows of the
small business issuer as of, and for, the periods presented in this annual report;

4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small
business issuer and have;

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;

(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that
occurred during the period covered by this annual report that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small business issuer's auditors and the audit committee of small
business issuer's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weakness in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the small business issuer'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 the small business issuer's internal control over financial reporting.

                Date: April 15, 2005                          /s/ Terry Giles
                                                     -----------------------------------------
                                                     Terry Giles
                                                     Chief Executive Officer
                                                   EXHIBIT 31.2

                                                CERTIFICATIONS

                                             I, Lisa Dalberth, certify that:

1. I have reviewed this annual report on Form 10-KSB of Vitalstate, Inc.

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, fairly present in all material respects the financial condition, results of operations and cash flows of the
small business issuer as of, and for, the periods presented in this annual report;

4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small
business issuer and have;

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this annual report is being prepared;

b. Designed such internal control over financial reporting, or caused such control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;

c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the small business issuer's internal control over financial reporting that
occurred during the period covered by this annual report that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small business issuer's auditors and the audit committee of small
business issuer's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weakness in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the small business issuer'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
the small business issuer's internal control over financial reporting.

                 Date: April 15, 2005                  /s/ Lisa Dalberth
                                                --------------------------------------------
                                                Lisa Dalberth
                                                Chief Financial Officer
                                                  EXHIBIT 32.1

                                      CERTIFICATION PURSUANT TO
                                         18 U.S.C. SECTION 1350,
                                       AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Vitalstate, Inc. (the "Company") on Form 10-KSB for the year ended
December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I,
Terry Giles, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

                                        /s/ Terry Giles
                                        -------------------------------
                                        Name:   Terry Giles
                                        Title: Chief Executive Officer
                                        Date:   April 15, 2005
                                                  EXHIBIT 32.2

                                      CERTIFICATION PURSUANT TO
                                         18 U.S.C. SECTION 1350,
                                       AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Vitalstate, Inc. (the "Company") on Form 10-KSB for the year ended
December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I,
Lisa Dalberth, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

                                        /s/ Lisa Dalberth
                                        -------------------------------
                                        Name:   Lisa Dalberth
                                        Title: Chief Financial Officer
                                        Date:   April 15, 2005

								
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