NON-COMPETITION AGREEMENT
THIS AGREEMENT, ("Agreement"), is made by and between Biomune Systems,
Inc., a _______ corporation, Optim Nutrition, Inc., a Utah corporation, and ICN
Pharmaceuticals, Inc., ("ICN") a Delaware corporation, on this ____ day
of _________, 2000.
WITNESSETH:
WHEREAS, Optim Nutrition, Inc. ("OPTIM") is a wholly owned subsidiary
of Biomune Systems, Inc. ("BIOMUNE") (collectively the "Promisors") and is
engaged in the development, marketing, sales and distribution of timed release
glucose products for people with hypoglycemia or diabetes, including the product
sold under OPTIM's trademark "NiteBite" (the "Product").
WHEREAS, concurrently herewith, OPTIM and ICN are entering into an
Asset Purchase Agreement transferring certain of OPTIM's assets, properties, and
rights relating to the Product, and ICN desires to ensure that during the course
of this Agreement neither of the Promisors will utilize their special skills,
knowledge, expertise and goodwill to develop, market, sell or distribute the
Product, or any other timed release glucose product for people with hypoglycemia
or diabetes.
NOW THEREFORE, for and in consideration of the Asset Purchase
Agreement, the premises, mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and agreed, and intending to be legally bound, the parties
agree as follows:
ARTICLE I
Confidentiality
1.01 Confidential Information. The Promisors acknowledge that they are
acquainted with data, information, know-how, process parameters, fabrication and
manufacture techniques, technical plans, documentation, customer lists, price
lists, business plans, marketing plans, financial information, and the like, in
whatever form or medium (collectively "Confidential Information"), which:
(a) relate to the Product or other products in the same category
of Products and which (1) have not been disclosed to the
general public or to the trade or industry, and (2) are not
generally known in the public or in the trade or industry; or
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(b) were received by the Promisors from a third party under an
ongoing obligation of confidentiality to the third party.
1.02 Disclosure. Promisors shall not use or disclose (directly or
indirectly) any Confidential Information at any time or in any manner, except
(i) as expressly consented to in writing by ICN, (ii) as directed by a court of
competent jurisdiction after notice to ICN, (iii) in order to comply with a
governmental order or other legal obligation to disclose (in which event ICN
will be first notified and given sufficient opportunity to seek and obtain a
protective order), (iv) with respect to information that is or becomes generally
available to the public in any manner or form through no fault of the Promisors
or their employees, officers or agents, and (v) with respect to information that
is rightfully received from another source who is not under an obligation of
confidentiality or non-use, on a non-confidential basis.
ARTICLE II
Non-Competition and Unfair Competition
In consideration of the transactions contemplated in the Asset Purchase
Agreement, and the mutual covenants contained herein and therein, the Promisors
each agree and acknowledge that a breach of any of the following would
constitute an act of unfair competition against ICN:
2.01 Prohibited Business Activities. For a period of five (5)
years (hereinafter the "Covenant Period"), Promisors shall not engage in any
other business duties or pursuits whatsoever, or directly or indirectly
render any services of a business, commercial or professional nature to any
other person or entity, whether for compensation or otherwise, engaged in any
business competing with the Product (i.e., any timed-release glucose bar or
other product for the nutritional management of diabetes or hypoglycemia),
in the United States, or any other country in the world (hereinafter the
"Covenant Area") or participate in or encourage or assist any other person
or entity in the development, marketing, sale or distribution of the Product
or any other product for the nutritional management of diabetes or hypoglycemia
(including but not limited to timed-release glucose bars) in the Covenant Area,
whether as a director, officer, employee, consultant, adviser, independent
contractor or otherwise.
2.02 Prohibited Ownership Interests. During the Covenant Period,
Promisors shall not hold a legal or beneficial interest in any person or entity
which is engaged in any business competing with the Product, in the Covenant
Area, whether such interest is as an owner, investor, partner, creditor (other
than as a trade creditor in the ordinary course of business), joint venturer or
otherwise; provided however, that nothing in the foregoing shall prevent
Promisors from owning capital stock or other equity interests up to a maximum of
five percent (5%) in any entity with shares or other equity interests registered
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934.
2.03 Prohibited Solicitation. During the Covenant Period, Promisors
shall not solicit, divert or attempt to divert from ICN any customer of the
Product. The foregoing shall not be deemed to apply to any solicitation of
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customers by Promisors relating to products or services other than products
for the nutritional management of diabetes or hypoglycemia (including
timed-release glucose bars).
ARTICLE III
General Provisions
3.01 Reasonableness of Terms. The Promisors agree and acknowledge
that the scope of their sales are worldwide and thus, the Covenant Area
is a reasonable protected territory considering the transactions contemplated in
the Asset Purchase Agreement, and furthermore, that a period of five (5) years
is a reasonable Covenant Period given the purchase price and the type of
business to which this Agreement relates.
3.02 Breach by Promisors. The Promisors acknowledge that their
obligations hereunder are necessary and reasonable to protect the Product, and
expressly agree that monetary damages would be inadequate to compensate ICN for
any breach of any provision set forth herein. Accordingly, the Promisors agree
and acknowledge that any such violation will cause irreparable injury to ICN,
and that in addition to any other remedies that may be available, in law, in
equity, or otherwise, that ICN shall be entitled to obtain injunctive relief
against the threatened breach of this Agreement or the continuation of any such
breach, without the necessity of proving actual damages.
3.03 Waiver. No waiver of any provision of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided in writing. This Agreement may not be superseded,
amended or modified except by written agreement signed by the party against whom
it is to be enforced.
3.04 Notice. All notices and other communications required or
permitted under this Agreement shall be in writing and mailed by certified mail,
faxed with a copy by certified mail or delivered by courier with signature
required for delivery:
(a) If to Promisors, to: Optim Nutrition
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Fax No. (000) 000-0000
Attn: Xxxxx Xxxxxx
(b) If to ICN, to ICN Pharmaceuticals, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
Attn: General Counsel
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All notices that are addressed as provided in this Section 3.04 (1) if delivered
personally against proper receipt or by fax with copy by certified mail shall be
effective upon delivery and (2) if delivered by certified or registered mail
with postage prepaid or by Federal Express or similar Courier service with
courier fees paid by the sender shall be effective upon receipt.
3.05 Assignment. This Agreement and its rights and obligations may
be assigned by ICN to a successor to its rights in the Product, or to its
Affiliates without the prior written consent the Promisors. Otherwise, neither
this Agreement nor any of the rights and obligations of a party hereunder shall
be assigned, delegated, sold, transferred, licensed or otherwise disposed of, by
operation of law or otherwise, to any third party, without the prior written
consent of the other party, and any attempt to do so shall be a material breach
of this Agreement by the attempting party, and shall be void ab initio.
3.06 Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns, and in the case of ICN, its Affiliates. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto (and in the case of ICN, its Affiliates), or their successors
or permitted assigns, any rights or remedies under or by reason of this
Agreement.
3.07 Severability. If any provision of this Agreement is held
invalid or unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect. If any provision is held invalid or
unenforceable with respect to any particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances.
Finally, in the event a court finds any term to be unreasonable and therefore
unenforceable, the parties agree that the court should replace the unreasonable
term with a term that it deems to be reasonable under the circumstances.
3.08 Headings. The section headings contained in this Agreement
are for convenience only and shall not affect the construction or interpretation
of this Agreement.
3.09 Entire Agreement. This Agreement together with the Asset
Purchase Agreement and all attachments thereto contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral or written, with respect to such
matter.
3.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which shall deemed to
be one and the same agreement.
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IN WITNESS WHEREOF, the Promisors and ICN have signed this Agreement on
the day and year first above written.
OPTIM NUTRITION, INC. ICN PHARMACUETICALS, INC.
By: /s/ By: /s/
----------------------------------- ------------------------------
Name: Xxxxx Xxxxxx Name: Xxxx X. XxXxxxxx
--------------------------------- ----------------------------
Title: President Title: EVP Strategic Planning
-------------------------------- ---------------------------
BIOMUNE SYSTEMS, INC.
By: /s/
-----------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: President & CEO
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