MARKETING, DISTRIBUTION, LICENSING
AND SUPPLY AGREEMENT
This MARKETING, DISTRIBUTION, LICENSING AND SUPPLY AGREEMENT
("Agreement") is made and entered into as of the 1st day of September 1998,
("Effective Date") by and between Optim Nutrition, Inc., a Utah corporation
("Licensee") located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and
ML Industries ("Licensor") located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Licensor and Licensee are sometimes referred to singly herein as "Party" and
collectively as "Parties."
WHEREAS, Licensor has developed and owns all right, title and interest
in food bars currently marketed under the name Mountain Lift(tm) and certain
technologies related to such food bars (collectively the "Products");
WHEREAS, Licensor desires to grant exclusive manufacturing, marketing,
distribution and related rights to Licensee on the terms and conditions
hereinafter set forth; and
WHEREAS, Licensee desires to license exclusive manufacturing, marketing
and distribution rights to the Products from Licensor under the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the terms and provisions of this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the execution and delivery thereof, the
parties hereto hereby agree as follows:
1. Definitions: For purposes of this Agreement, the terms hereinafter set
forth shall be defined as follows:
a. "Exclusive" means a covenant on the part of Licensor not to make, use,
distribute, sell or otherwise dispose of the Products and not grant further
licenses with respect to the Products so long as this Agreement is in effect.
b. "Licensed Marks" means those trademarks, trade names, service marks or other
designations listed on Exhibit A hereto, by this reference incorporated in and
made a part of this Agreement.
c. "Licensee" means Optim Nutrition, Inc., a Utah corporation, and any and all
of its Affiliates.
d. "Products" means the food bars further described and specified on Exhibit B
hereto, by this reference incorporated in and made a part hereof, including any
enhancements or modifications thereof, whether developed by Licensee or
Licensor.
e. "Term" has the meaning set forth in Section 3, below.
f. "Transition Period" means the thirty-day period commencing on the Effective
Date.
2. License. Licensee is hereby granted the Exclusive right and license to
manufacture, market, distribute and sell the Products anywhere in the world.
Such Exclusive right is sometimes referred to herein as the License.
3. Term. The Term of this Agreement commences with the Effective Date and
continues, subject to the rights of termination set forth elsewhere in this
Agreement, through September ___, 2008. Licensee, at its sole discretion, may
extend the Term of the Agreement (under the original terms of the Agreement) for
an additional five years by giving written notice to Licensor not fewer than 180
days before this Agreement would otherwise expire.
4. Grant of Option and Right of First Refusal. Licensor hereby grants Licensee
the irrevocable and exclusive right ("Option") to purchase a majority equity
ownership in Licensor. Such Option may be exercised at any time and from time to
time commencing with the date at which aggregate gross sales of the Products
equals or exceeds $2,000,000. In addition, Licensor hereby grants Licensee the
first right of refusal to acquire up to 100% of the remaining equity interests
in Licensor ("Right of First Refusal") at any time during the term of this
Agreement.
5. Licensed Marks. The License granted under this Agreement includes the
Licensee's right, during the Term of this Agreement, to the free and Exclusive
use of the Licensed Marks identified on the attached Exhibit A, including, but
not limited to the Mountain Lift(tm) name and trademark, for the sole purpose of
promoting, marketing, manufacturing, distributing and selling the Products.
6. Fees. In consideration of the grant of the License, Option and Right of First
Refusal, Licensee shall pay Licensor 500,000 shares of the Series F Preferred
Stock of Licensee's parent, Biomune Systems, Inc., a Nevada corporation
("Biomune") and a royalty of 7% of net sales of the Products. The obligation to
pay the royalty will commence on the 30th day following the last day of the
Transition Period. The royalty may be paid in cash, shares of Biomune Common or
Preferred Stock or a combination of stock and cash, as the Parties may hereafter
from time to time agree.
7. Other Assets. In addition to the other rights granted Licensee hereunder, the
Licensor shall give Licensee unrestricted access and use of Licensor's entire
proprietary database for the purpose of promoting, marketing, distributing and
selling the Products during the Term of this Agreement. In addition, Licensor
hereby grants Licensee the unrestricted and Exclusive right to use, modify,
update and maintain the world wide web domain name ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ for the
purpose of marketing, distributing, promoting and selling the Products. Licensor
also grants Licensee the unrestricted and Exclusive right to use of the toll
free number ▇▇▇-▇▇▇-▇▇▇▇, as well as any and all collateral material, existing
software files and documentation for logos, advertisements and packaging for the
Products. Licensor will promptly deliver control of these assets to Licensee
during the Transition Period.
8. Assignment of Certain Assets and Assumption of Certain Liabilities. Licensor
hereby assigns, transfers and conveys to Licensee all of Licensor's rights in
and to inventory and accounts receivable relating to the Products as of the
Effective Date. In consideration of such assignment and transfer, Licensee
agrees to assume Licensor's accounts payable and amounts owing on a line of
credit with a bank, guaranteed by ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") totaling
approximately $225,000, all as of the Effective Date; provided, however, that
the aggregate amount of all such liabilities assumed by Licensee shall not
exceed the value of the accounts receivable and inventory assigned and conveyed
to Licensee under this Section.
9. Consulting Agreement. Licensee hereby agrees to engage ▇▇▇▇▇▇▇ as a
consultant to Licensee for a period of three years from the last day of the
Transition Period and continuing so long as ▇▇▇▇▇▇▇ continues to provide
services to the satisfaction of Licensee ("Consulting Term"). Commencing with
the last day of the Transition Period and so long as ▇▇▇▇▇▇▇ continues to
provide services to the satisfaction of Licensee, Licensee will pay a consulting
fee of $120,000 per year ($10,000 per month) which will be reviewed on a
semi-annual basis. In addition, so long as the services of ▇▇▇▇▇▇▇ continue to
the satisfaction of Licensee, Licensee will pay a $400 per month car allowance
(including auto insurance). During the Consulting Period, Licensee will also pay
▇▇▇▇▇▇▇ a bonus equal to 2% of gross sales of the Products, provided the
Licensee realizes profits from sales of the Products of 3% or more after payment
of the consulting fee and other benefits described herein and the bonus to
▇▇▇▇▇▇▇. The Consulting Term may be extended from year to year following the
initial three-year term if the Parties and ▇▇▇▇▇▇▇ mutually agree to such
extension.
10. Sales Material and Literature. Licensor agrees to furnish to Licensee, free
of charge, all printed material published or distributed by Licensor relating to
the Products. Licensee may at its discretion translate such sales material and
literature and generate its own sales material and literature relating to the
Products.
11. Ownership Warranty. Licensor represents and warrants that it has all
necessary rights in and to all copyrights, patents and other proprietary rights
associated with the Products that are necessary to market, distribute and
license the Products. Licensor has the unrestricted right and authority to enter
into this Agreement and to grant the rights and licenses hereunder with respect
to the Products. The rights granted Licensee hereunder do not infringe upon or
violate the rights of any third party.
12. Copyrights or Patents. Licensor agrees to defend at its expense any suits
against Licensee or its affiliates or customers based upon a claim that any
Product sold under this Agreement infringes any copyright or patent registered
under any copyright or patent law. If a claim arises that any Product sold under
this Agreement infringes any patent, copyright, or design registered under any
jurisdiction, Licensee shall immediately upon receiving notice of any such
claim, notify Licensor of such claim and render any and all assistance as
Licensor may reasonably request for the purpose of defending, settling, or
compromising any such claim. Licensor shall be permitted to defend, settle,
compromise, or otherwise respond to any such claim in whatever manner, in its
discretion, it sees fit and shall have complete charge of such a claim. Licensor
shall not agree to any settlement or compromise under which Licensee shall be
liable to pay any such of money or do or refrain from doing any other act
without the consent in writing of Licensee. Licensee shall not, without the
written consent of Licensor, admit any liability on any claim or agree to any
settlement or compromise or agree to pay any sum of money.
13. Trademarks and Trade Names; Ownership to Remain in Licensor. Licensor shall
remain the owner of the Licensed Marks and Licensee covenants that it will not
dispute or otherwise challenge Licensor's ownership thereof.
14. Assignment. Licensee may not assign any rights or obligations hereunder
without prior written consent of Licensor.
15. Export; Import. Licensee assumes responsibility for complying with
applicable laws and regulations and for obtaining required export and import
authorizations of the Products.
16. Survival of Representations and Warranties and Indemnification for their
Breach. All representations, warranties and covenants of the Parties hereto as
set forth in this Agreement shall be true as of the time of and, together with
the agreements set forth herein, shall survive the Effective Date. The Parties,
jointly and severally, agree that any Party who has breached or breaches any
representation warranty or covenant, shall protect, indemnify and save harmless
any other non-breaching Party or Parties from and against any and all claims,
demands, liabilities, demands, damages, or causes of action of every kind and
character resulting from any breach thereof by the breaching Party.
17. Notices. All notices and requests in connection with this Agreement shall be
given in writing and may be given by registered or certified mail, telegram,
facsimile or other customary means of written communication, addressed as
indicated below or to such other address as the party to receive the notice or
request shall designate by notice to the other party. The effective date of any
notice or request given in connection with this Agreement shall be the date on
which the addressee receives it.
Licensor: ML Industries
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
FAX: (___) ___-____
With a copy (in the event of any notice of termination,
breach, or other matters not in the ordinary conduct of business) to:
Licensee: Optim Nutrition, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (in the event of any notice of termination, breach,
or other matters not in the ordinary conduct of business) to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
DURHAM, EVANS, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
Suite 850 Key Bank Tower
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
18. Waiver. No variation, modification, or waiver of any provision of this
Agreement, or consent to any departure therefrom, shall be of any force or
effect in any event unless confirmed in writing and signed by the parties; and
then such variation, modification, waiver, or consent shall be effective only in
the specific instance, for the purpose and to the extent for which made or
given.
19. Governing Law. This Agreement, including the validity and interpretation
hereof, and any disputes which may arise under, out of or in connection with
this Agreement, shall be governed by the laws of the State of Utah.
20. Independent Contractors. It is expressly agreed that the Parties hereto are
acting hereunder as independent contractors and under no circumstances shall any
of the employees of one party be deemed the employees of the other for any
purpose. This Agreement shall not be construed as authority for either party to
act for the other party in any agency or other capacity or to make commitments
of any kind for the account of, or on behalf of, the other party, except to the
extent, and for the purposes, expressly provided for and set forth herein.
21. Entire Agreement. This Agreement embodies the entire understanding of the
parties as it relates to the sale and purchase of the Products by the parties
and there are no other agreements or understandings between the parties relating
to the subject matter hereof. No amendment or modification of this Agreement
shall be valid or binding upon the parties unless in writing and duly signed by
their respective authorized officers.
22. Interpretation. Unless otherwise provided, all terms shall have the meaning
given them in the ordinary English usage and as customarily used. Words in any
gender shall include both other genders. Whenever the context requires, the
singular shall include the plural, the plural shall include the singular, and
the whole shall include any part thereof.
23. Invalid Provision; Severability. In case any one or more of the provisions
of this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalid, illegal or unenforceable
provision(s) shall be curtailed, limited, construed or eliminated only to the
extent necessary to remove such invalidity, illegality or unenforceability with
respect to the applicable law as it shall then be applied, and the other
provisions of this Agreement shall not be affected thereby.
24. Headings. The section and other headings contained in this Agreement are for
purposes of reference only and shall not limit, expand, or otherwise affect the
construction of any of the provisions of this Agreement.
25. Authorized Execution. The individuals signing below each represent and
warrant (i) that they are authorized to execute this Agreement for and on behalf
of the party for whom they are signing, (ii) that such party shall be bound in
all respects hereby, and (iii) that such execution presents no conflict with any
other agreement of such party. This Agreement shall not be effective unless and
until it has been duly executed by an authorized representative of each Party.
26. Facsimile Signatures. The parties hereto agree that transmission to the
other party of this Agreement with its facsimile signatures shall bind the party
transmitting this Agreement by facsimile in the same manner as if such party's
original signature had been delivered. Without limiting the foregoing, each
party who transmits this Agreement with its facsimile signature covenants to
deliver the original thereof to the other party as soon as possible thereafter.
27. Default and Termination. If either Party defaults or otherwise breaches any
provisions of this Agreement, and fails to cure such default or breach within
thirty (30) days after a written demand for performance by the other Party, or
if either Party suspends business or commits and act amounting to a business
failure, the other Party may, at its option, declare such Party to be in default
and at any time thereafter the non-defaulting Party may exercise one or more of
the following remedies, as it shall elect:
a) Terminate this Agreement by written notice; and/or
b) Proceed by appropriate court action, either at law or in equity, to enforce
performance by the other Party of this Agreement or to recover damages for the
breach thereof.
28. Force Majeure. The failure of any Party hereunder to perform any obligation
otherwise due as a result of governmental action, law, order or regulation, or
as a result of war, act of public enemy, strike or other labor disturbance,
fire, flood, act of God or other causes of like kind beyond the reasonable
control of such Party, shall be excused for so long as said cause exists to the
extent such failure is caused by such an event.
DATED THIS 1st day of September 1998.
MOUNTAIN LIFT INDUSTRIES OPTIM NUTRITION, INC.
By: [signature illegible] By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: President Title: President