Document:

Exhibit 10.19

    
      

      

    

    Table
      of Contents

    EXHIBIT
      10.19

    
      

      AMENDED
        AND RESTATED

      LICENSE
        AND PRODUCT SUPPLY AGREEMENT

      

      

      THIS
        AMENDED AND RESTATED LICENSE AND PRODUCT SUPPLY AGREEMENT
        (“Agreement”) is
        made as of the 13th day of October, 2006 (the “Effective Date”), by and between
UNIGEN
        PHARMACEUTICALS, INC.,
        a Delaware
        corporation whose principal place of business is located at 2660 Willamette
        Drive NE, Lacey, WA 98516 (“Licensor”), and SCHIFF
        NUTRITION GROUP, INC.,
        a Utah
        corporation whose principal place of business is located at 2002 South 5070
        West, Salt Lake City, Utah 84104 (together with its subsidiaries
“Licensee”).

      

      WHEREAS,
        Licensor is the
        owner of valuable data, trade secrets, science, technology, information,
        formulas, know-how, patents, trademarks and other intellectual property relating
        to the design and manufacture of a proprietary patented or patent pending
        blend
        of ingredients, Univestin® (as more fully described in Schedule
        A
        hereto, the
“Compound”), which is suitable for use in the manufacture and distribution by
        Licensee of dietary supplements and consumer health products which Licensee
        intends to market for certain joint and musculo-skeletal health or other
        purposes as set forth on Schedule
        B
        hereto, which
        Schedule may be amended from time by mutual written agreement of the parties
        (the “Purposes”);

      

      WHEREAS,
        Licensee
develops,
        manufactures, markets and sells nutritional supplements and consumer health
        products under various brands and through several different channels of
        distribution;

      

      WHEREAS,
        Licensor has
        either received registration or made application for certain trademarks (the
        “Trademarks”) and certain patents (the “Patents”) (the Trademarks and the
        Patents are set forth on Schedule
        C
        hereto and shall
        hereinafter along with any data, trade secrets, science, technology, formulas,
        know-how, intellectual property or other information relating to the Compound
        collectively be referred to as the “Property”);

       

      WHEREAS,
        the parties
        entered into a License and Product Supply Agreement dated as of May 18, 2004
        regarding, among other matters, the grant of an exclusive license for the
        Compound and the Property to Licensee in connection with the manufacturing,
        marketing and sale of joint and musculo-skeletal health related products
        containing the Compound in the food, drug and mass (including club) retail
        channel in the United States, Mexico and Canada; 

      

      WHEREAS,
        Licensee
        desires to obtain from Licensor and Licensor desires to grant to Licensee
        certain exclusive, semi-exclusive or shared rights to use the Compound and
        Property in association with the offering for sale, advertising, promotion,
        manufacturing, packaging, shipping, marketing, sale and distribution of certain
        dietary supplement and other products which contain the Compound as an active
        ingredient (collectively, the “Products”) in the food, drug and mass (including
        club) or other authorized channels of trade as set forth on Schedule
        B
        hereto (the
“Authorized Channels of Trade”) in the United States, Mexico and Canada or the
        other territories as set forth on Schedule
        B
        hereto (the
“Territories”) for the Purposes, as applicable; and

      

      WHEREAS,
        Licensee
        further desires to purchase the Compound from Licensor and Licensor desires
        to
        sell the Compound to Licensee in raw material form in accordance with the
        specifications most recently attached to that certain confirmed purchase
        order
        dated September 26, 2006 (as amended in writing from time to time by mutual
        agreement of the parties, the “Specifications”). Each party agrees that its
        consent to amend the Specifications will not be unreasonably withheld or
        delayed. 

      
        
          
          

        

        
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      NOW,
        THEREFORE,
        in
        consideration of the mutual promises, covenants and conditions contained
        herein,
        the parties hereby agree as follows:

      

      1.  Grant
        of
        License/Rights.
        Subject to the
        terms and conditions of this Agreement, Licensor hereby grants to Licensee
        and
        Licensee accepts a license to use the Compound and Property in connection
        with
        the advertising, promotion, manufacturing, packaging, shipment, distribution
        and
        sale of the Products in the Authorized Channels of Trade in the Territories
        for
        the Purposes as set forth on Schedule
        B
        hereto. The
        scope of the license (i.e. exclusive, semi-exclusive or shared) granted for
        the
        applicable Authorized Channels of Trade, Territories and Purposes, as
        applicable, is set forth on Schedule
        B
        under the
        heading “Scope”. The parties hereby agree that the grant of this license shall
        mean that Licensee is permitted, directly or indirectly, in the applicable
        Authorized Channel of Trade in the applicable Territories to manufacture,
        advertise, promote, package, ship, distribute or sell the Compound, any product
        containing the Compound or any product which incorporates, uses or relies
        on the
        Property, or any reasonable variation thereof for use for any applicable
        Purpose
        as set forth on Schedule
        B
        hereto. Licensor
        understands and agrees that Licensee may outsource the manufacture of the
        Products in whole or in part, and is permitted to sublicense its rights to
        use
        the Property to the extent required to do so. 

      

      2.  Ordering
        Compound; Production Quantities.

      

      (a)  Purchase
        Orders.
        Licensor agrees
        to sell and Licensee agrees to purchase the Compound pursuant to specific
        purchase orders submitted from time to time by Licensee which shall include,
        among other things, the required quantity of the Compound. No purchase order
        is
        binding on Licensee unless and until it is in writing and signed by Licensee's
        authorized representative. Licensor shall provide written confirmation within
        2
        business days of receipt of the purchase order. Each purchase order shall
        be
        deemed to be submitted pursuant to this Agreement and subject to the terms
        and
        conditions therein and herein. In the event of a conflict between the terms
        of
        the purchase order and this Agreement, the terms of this Agreement shall
        apply.
        Each purchase order shall be for a minimum of twenty-five (25) kilograms
        of the
        Compound.

      

      (b)  Forecasts;
        Minimum Lead Times.
        Licensee shall
        provide Licensor with a six (6) month non-binding forecast, updated once
        per
        quarter. Licensee shall provide Licensor with a two (2) month binding minimum
        forecast; provided that Licensee may delay delivery of the Compound purchased.
        Production lead time shall be at least two (2) calendar weeks prior to a
        requested delivery date from the date of the confirmed purchase order, provided,
        however, that Licensor shall use its best efforts to deliver the Compound
        to
        Licensee as soon as possible after receiving the purchase order unless otherwise
        requested by Licensee. Licensee shall have the right to cancel any order
        at no
        charge at any time upon two (2) weeks written notice prior to the requested
        delivery date.

      

      (c)  Scheduling.
        Licensor will
        manufacture the Compound for a particular shipment on a schedule such that
        the
        Compound will be finished and ready for shipment on or immediately before
        the
        shipping date as indicated on the purchase order. The Compound must be shipped
        not later than five (5) days after production and quality testing is completed
        unless otherwise requested by Licensee.

      

      (d)  Inventories.
        Licensor will
        source, purchase and warehouse all raw materials and maintain at all times
        sufficient inventories of ingredients and supplies to meet its obligations
        hereunder. Any expenditure Licensor may make based on projected future sales
        to
        Licensee (including any forecasts by Licensor or Licensee) are Licensor's
        responsibility and at Licensor's own risk. Licensor shall not be entitled
        to
        reimbursement of any production costs or expenses unless specifically authorized
        in writing in advance by Licensee.

       

      
        
          
          

        

        
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      (e)  Timeliness.
        Licensor shall
        manufacture, ship and deliver the Compound in raw material form acceptable
        to
        Licensee, in a timely manner in accordance with the purchase orders submitted
        by
        Licensee. Licensor agrees that all Compound purchased by Licensee shall meet
        the
        Specifications. Licensee shall have forty-five (45) days to inspect the Compound
        in order to determine that the Compound meets the Specifications. If the
        Compound does not meet the Specifications, then such Compound may be rejected
        by
        Licensee at Licensor's expense. If Licensee fails to inspect the Compound
        within
        such 45-day period, then the Compound shall be deemed to be accepted. Licensor
        agrees that it will notify Licensee immediately of any real or anticipated
        delays that could impact the supply of the Compound or the ability of Licensor
        to fulfill its obligations under this Agreement, including, but not limited
        to,
        component supply or labor shortages, or events which involve health, safety,
        building code, or regulatory issues or violations.

      

      (f)  Licensor
        Failure to Supply.
        If Licensor
        fails to supply the Compound in the manner and within the time frames set
        forth
        in this Agreement, or is unable to supply the Compound for any reason, Licensor
        agrees to pay to Licensee the difference between the price Licensee would
        have
        charged its customer for the applicable lost or delayed sales and the product
        cost of goods sold. Licensor will also pay to Licensee any penalties or other
        costs incurred by Licensee in connection with such lost or delayed sale.
        The
        amount of Compound ordered will be counted towards satisfaction of the Annual
        Minimum Purchase Requirement described in Section 9 below. In addition, Licensor
        agrees that if Licensee loses a customer due in whole or in part to such
        delay
        or failure to supply, the parties will make good faith efforts to renegotiate
        the Annual Minimum Purchase Requirement, which shall at a minimum be reduced
        by
        the greater of (i) the amount of sales to the lost customer during the 12
        month
        period (or an annualized amount if sales covered a shorter period) preceding
        the
        failed or delayed delivery and (ii) the amount of sales to the lost customer
        contracted for the 12 month period (or an annualized amount if contracted
        for a
        shorter period) following the failed or delayed delivery.

      

      To
        the extent
        Licensee purchases in excess of 125% of Licensee’s written forecasted purchases
        (as updated in writing) for a given six-month period under 2(b) above, Licensor
        shall have three weeks from the date of requested delivery to correct any
        failure to supply the Compound in the manner and within the time frames set
        forth in this Agreement prior to being required to pay the amounts prescribed
        in
        Section 2(f) above.

      

      3.  Term.
        Unless sooner
        terminated as provided herein, the term of this Agreement shall be for a
        period
        of 5 years (the “Initial Term”) commencing on the Effective Date and continuing
        until the fifth anniversary thereof. 
        This Agreement
        shall automatically be renewed for
        additional
        periods of one (1) year (each, a “Renewal Term” and collectively, the “Renewal
        Terms”) (the Initial Term and the Renewal Term(s), if any, shall hereinafter be
        collectively referred to as the “Term”) unless
        Licensee
        provides Licensor with written notice of its intention not to renew this
        Agreement no less than one hundred eighty (180) days prior to the end of
        the
        existing term.

      

      4.  Permitted
        Uses.

      

      (a)  Subject
        to the
        provisions of Section 5 hereof, the license granted in Section 1 hereof entitles
        Licensee, directly or indirectly, to use the Property in connection with
        the
        advertising, promotion, packaging, manufacturing, shipment, distribution
        and
        sale of the Products in the Territories, including, without limitation,
        letterhead, business cards, invoices and receipts, oral presentations, and
        all
        other documentation and communications to third parties relating to the sale,
        promotion and advertising of the Products. No consents, approvals or
        authorizations shall be required from Licensor in order for Licensee to market
        the Products.

      

      (b)  Licensee
        shall
        cause to appear on all its Products and other materials or media described
        in
        Section 4(a) hereof the appropriate trademark and/or patent notification
        which
        shall be of such size and in such location as shall make them readily
        observable, provided, however, thatLicensee,
        in its
        sole discretion, shall decide which trademarks, including one or more of
        Licensor’s Trademarks, to use in connection with the Products.

      

      
        
          
          

        

        
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      5.  Prohibited
        Uses.

      

      (a)  Licensee
        shall
        use the Property only in the manner, for the approved Purposes and to the
        extent
        provided in this Agreement. It is understood that Licensor shall remain the
        sole
        owner of the Property and that neither the performance of this Agreement
        nor the
        use by Licensee thereof shall confer on Licensee any ownership rights thereto.
        It is understood that Licensee shall remain the sole owner of its trademarks
        and
        the formulas for its Products and that the performance of this Agreement
        shall
        not confer on Licensor any ownership rights thereto.

      

      (b)  Licensee
        shall
        not advertise, promote, manufacture, package, ship, distribute or sell the
        Products outside of the Authorized Channels of Trade or
        Territories.

      

      (c)  Except
        for the
        licenses granted hereunder, Licensee shall not use any trademark, service
        mark
        or business name owned by Licensor whether registered or not, for any purpose
        or
        in any manner whatsoever without the express written consent of
        Licensor.

      

      (d)  During
        the Term
        hereof, neither Licensor nor any of its agents, employees, representatives
        or
        affiliates, shall use or grant any party the right, directly or indirectly,
        to
        use (i) the Property, (ii) the Compound, or (iii) any property which although
        not expressly subject to the Agreement, infringes the Property licensed
        hereunder, in each case in any manner that conflicts with the rights granted
        to
        Licensee under this Agreement. 

      

      (e)  Unless
        the
        clinical proven daily dosage for the Compound decreases or unless approved
        in
        advance by Licensor, Licensee shall not recommend a daily dosage of Compound
        less than the amount set forth on Schedule
        D
        on any of its
        Product labels or packaging.

      

      6.  Developments
        and Improvements.

      

      (a)  If
        during the
        Term hereof, Licensor shall develop or obtain new or derivative rights or
        make
        or acquire any new developments, improvements or modifications to the Property
        or the Compound (the “Licensor’s Improvements”) relating to the Purposes,
        Licensor shall promptly advise Licensee of any and all information concerning
        the Licensor’s Improvements. The Licensor’s Improvements relating to the
        Purposes shall be deemed to be included in the licenses granted herein by
        Licensor to Licensee; provided, however, that the Licensor’s Improvements shall
        be and remain the exclusive property of Licensor.

      

      (b)  If
        during the
        Term hereof, Licensee shall develop or obtain new rights or make or acquire
        any
        new developments, improvements or modifications relating to the Purposes
        to (i)
        the Property or the Compound, all of such improvements shall be owned by
        Licensee; and (ii) the Products, all of such improvements shall be owned
        by
        Licensee. Licensee shall also own all right, title and interest in any
        trademarks and copyrights developed by Licensee for use on the Products.
        Licensee shall not have any ownership rights to the formula for the
        Compound.

      

      (c)  Notwithstanding
        anything to the contrary contained herein, Licensee may, in its sole discretion,
        decide whether or not to use any of the Trademarks on any of the Products
        or
        whether to use another trademark.

      

      7.  Licensee’s
        Obligations.
        Licensee shall
        ensure that the Products, and the sale thereof, materially comply with
        applicable laws and regulations of the United States. Without limiting the
        generality of the foregoing, it shall be the sole responsibility of Licensee
        to
        obtain and maintain all material licenses, permits, authorizations or product
        registrations required by the applicable Territory
        in
        order to sell the Products in such jurisdictions (“Health Registrations”),
        except for all patent and trademark search, application, registration and
        maintenance requirements and fees relating to the Property or the Compound
        which
        shall be the sole responsibility of Licensor. Licensor shall comply with
        all
        reasonable requests for assistance by Licensee in connection with such Health
        Registrations, including, without limitation, the furnishing of documents.
        All
        such Health Registrations of Products obtained by Licensee shall be in the
        name
        of Licensee or its designee and Licensee shall be the sole owner thereof.
        If
        Licensee receives any notice from any such governmental authority raising
        any
        issues concerning the safety, efficacy or quality of any of the Compound,
        Licensee shall immediately notify Licensor in writing. Upon receipt of such
        notification, Licensor shall make all efforts to cure such safety, efficacy
        or
        quality issue(s) as they relate to the Compound as promptly as possible.
        Any
        Health Registrations of the Products that are required in the Territories
        shall
        be at Licensee’s expense.

      

      
        
          
          

        

        
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      8.  Licensor’s
        Obligations.

      

      (a)  At
        Licensee’s
        request, Licensor shall, at its sole expense, provide to Licensee any
        information as to the contents of the Compound or any other information required
        by any governmental authorities in any Territory. Licensor shall provide
        documentation and other information reasonably requested by Licensee in support
        of Licensee’s application, if any, for USP certification of the Products.
        Licensee shall be solely responsible for any USP certification application,
        including the information contained in such application.

      

      (b)  Licensor
        shall be
        responsible for the proper and lawful acquisition, maintenance, storage and
        handling of the ingredients and components of the Compound and all
        Compound-related inventory.

      

      (c)  Licensor
        shall
        manufacture or have manufactured, package, label, supply and deliver the
        Compound in accordance with the highest standards of the nutritional supplement
        industry and in strict compliance with (i) all applicable regulatory
        requirements, and (ii) Licensee’s current “Supplier Shipping & Compliance
        Guide”. Licensor shall deliver to Licensee all documentation necessary to
        adequately document the safety, quality and quantity of all ingredients
        contained therein and the efficacy of the Compound. 

      

      Such
        documentation shall also include, without limitation, a Certificate of Analysis
        which provides qualitative and quantitative confirmation of the active
        ingredient content of the Compound and the accompanying laboratory results
        for
        each and every lot of the Compound. Licensee may rely on the content of the
        Certificate of Analysis for any purposes. Failure to provide Compound of
        suitable quality conforming to the Compound’s Specifications or documentation
        set forth in this Section 8 in support thereof shall be grounds for rejection
        of
        the Compound by the Licensee and a material breach of this Agreement which,
        if
        not cured within sixty (60) days, shall provide Licensee with the right to
        terminate this Agreement. The Property shall not infringe upon or misappropriate
        the intellectual property or other rights of any third party and shall be
        of
        acceptable style, appearance and quality to Licensee.

       

      (d)  Licensor
        shall
        materially comply with applicable laws, regulations, rules and orders applicable
        in the United States, including, without limitation, those of the U.S. Federal
        Food and Drug Administration (the “FDA”) and those relating to the Dietary
        Supplements and Health Education Act of 1994, as amended. The Compound is
        guaranteed by Licensor to be not adulterated or misbranded within the meaning
        of
        the Federal Food, Drug and Cosmetic Act, and not an article which may not,
        under
        such Act, be introduced into interstate commerce. The Compound shall be
        merchantable and fit for the intended use by Licensee and the purchasers
        of the
        Products. Licensor shall promptly notify Licensee if any audit is conducted
        by
        the FDA while any of the Compound is being manufactured. If the FDA pulls
        a
        sample of a lot of the Compound, Licensor shall immediately send a matching
        sample to Licensee. Licensor shall promptly notify Licensee of any customer
        orother
        complaints,
        governmental inquiries, quality issues or product liability issues relating
        to
        the Compound or any of its components.

      

      (e)  Licensor
        shall
        use its best efforts to (i) file all applications for Patents and Trademarks
        in
        the Territories where they have not already been filed; and (ii) prosecute
        all
        pending applications with the appropriate governmental authorities in the
        Territories in order to obtain the issuance of the Patent and Trademark
        registrations contemplated hereunder.

      

      (f)  Licensor
        shall
        use reasonable commercial efforts to promptly provide Licensee the results
        of
        any clinical studies relating to the Compound.

      

      (g)  Licensor
        represents and warrants that it has provided to Licensee all results of each
        clinical study performed on the Compound to date, and that such results have
        not
        been changed, summarized or altered in any way. Licensor further represents
        and
        warrants that, to the best of its knowledge after due inquiry, that the results
        of all clinical studies provided to Licenses are complete and
        accurate.

      

      
        
          
          

        

        
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      9.  Annual
        Minimum
        Purchase Requirement; Exclusivity Fee.

      

      (a)  All
        of the
        Property licensed to Licensee hereunder shall be on a royalty-free
        basis.

      

      (b)  In
        consideration
        for the license granted to Licensee hereunder and in order to maintain the
        exclusive or semi-exclusive rights, as applicable, to the license granted
        hereunder as set forth on Schedule
        B,
        Licensee hereby
        agrees to purchase from Licensor the quantities of Compound (“Annual Minimum
        Purchase Requirement”) set forth in Schedule
        E
        for the years
        indicated thereon.

      

      If
        Licensee fails
        to meet the Annual Minimum Purchase Requirement during any year of the Term,
        Licensee may, at its sole option, agree to pay a penalty fee equal to the
        dollar
        amount that would be required to purchase 40% of the difference between the
        Annual Minimum Purchase Requirement and the amount of the Compound actually
        purchased by the end of the applicable annual period (the “Penalty Fee”) with an
        annual fee cap of $200,000. If Licensee elects to pay the Penalty Fee, the
        Annual Minimum Purchase Requirement shall be deemed satisfied for the applicable
        annual period. If Licensee fails to either meet the Annual Minimum Purchase
        Requirement or pay the Penalty Fee, Licensor’s sole remedy shall be to either
        (i) maintain the license granted hereunder; or (ii) terminate such license
        granted hereunder and grant Licensee a non-exclusive license to use the Compound
        and the Property in the applicable Territories for the applicable Authorized
        Channels of Trade and Purposes; or (iii) terminate this Agreement. Licensee
        shall in no event owe Licensor any monies or other compensation for Licensee’s
        failure to satisfy its Annual Minimum Purchase Requirement if Licensor
        determines to terminate this Agreement. If the parties cannot in good faith
        agree on an Annual Minimum Purchase Requirement for Year 4, Year 5 and/or
        each
        year of the Renewal Term(s), then the Annual Minimum Purchase Requirement
        for
        each such year shall be 110% of the prior year’s Annual Minimum Purchase
        Requirement.

      

      (c)  Licensor
        acknowledges that in consideration for the license granted to Licensee
        hereunder, Licensee paid to Licensor an exclusivity fee as described on
Schedule
        F
        hereto.

      

      10.  Pricing,
        Payment Terms; Shipment, Delivery and Inspection of Goods.

      

      (a)  Basic
        Pricing.
        The price of
        the Compound shall be the price set forth on Schedule
        G
        hereto, which
        price shall cover all costs and charges necessary to be paid by Licensee
        to
        Licensor hereunder. The price for the Compound includes, without limitation,
        Licensor’s cost of complying with all of Licensee’s Specifications including,
        but not limited to, usual packing of good quality so as to sustain (without
        damages) normal motor freight transportation to the point of delivery. The
        freight,crating,
        packaging and all other charges are to be paid by Licensor, and these charges
        shall be expressly identified to Licensee. The price covers all federal,
        state
        and local taxes and duties from which Licensor cannot obtain exemption. The
        amounts of any such taxes or duties are the sole responsibility of Licensor
        and
        shall be separately shown to Licensee. Such taxes and duties shall be paid
        by
        Licensor when due. Licensor represents that the price Licensee pays for the
        Compound is Licensor’s lowest price currently in effect for goods of similar
        quantity and quality. Should any lower price, or any better terms, be quoted
        by
        Licensor to any of its customers for goods of similar quantity or quality,
        prior
        to completion of the delivery of the goods, Licensor will promptly notify
        Licensee and, thereupon, such lower price or better terms will apply to this
        Agreement, provided that the granting of such lower price or better terms
        to
        Licensee would not be in violation of any applicable law. In calculating
        the
        price, Licensor shall take into account all rebates, discounts, charge-backs,
        promotions, credits or other favorable terms or similar arrangements. Licensor
        represents and warrants that, to the best of its knowledge, the prices set
        forth
        herein do not and will not violate any federal, state, county or municipal
        law
        or regulation relative to price discrimination, price-fixing, or price
        stabilization.

      

      
        
          
          

        

        
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      (b)  Price
        Adjustments.
        The price set
        forth on Schedule
        G
        hereto is not
        subject to escalation of any kind or for any reason, except for modifications
        or
        improvements to the Compound which have been requested by Licensee.

      

      (c)  Payment
        Terms;
        Delivery and Acceptance of Goods.
        All Compound
        shall be shipped prepaid ground transportation, FOB Licensee’s designated
        address in the United States. Payment terms shall be net thirty (30) days
        from
        the later of Licensee’s receipt of the Compound and the invoice pertaining to
        such Compound. Licensee shall be entitled to a 2% discount on the price of
        all
        Compound for which Licensee pays within ten (10) business days of the later
        of
        Licensee’s receipt of the Compound and the invoice pertaining to such Compound.
        Late payment is considered a violation of this agreement. All payments shall
        be
        made in U.S. dollars.
        Unless Licensee
        transports the goods with its trucks, the risk of loss or damage of the goods
        shall pass to Licensee at the time goods are actually accepted at the delivery
        address and the entire risk of loss or damage in transit shall be upon the
        Licensor. Licensor bears the risks and all costs of ground transportation
        delivery to the delivery address, including without limitation, import duties,
        taxes and other charges of delivering the goods to the delivery address,
        cleared
        for importation. An acceptance of goods shall not be deemed to occur until
        after
        Licensee has had a minimum of forty-five (45) days to inspect the Compound.
        Acceptance of any part of a commercial unit shall not be deemed to be an
        acceptance of the entire unit. 

      

      (d)  Nonconforming
        Goods.
        Without waiving
        any other rights or remedies available at law or equity, Licensee may reject
        or
        revoke acceptance of goods or any portion thereof which, without limitation,
        are
        (i) not in conformity with Licensee’s quality control standards, (ii) defective,
        (iii) otherwise not in conformity with quantities or descriptions referred
        to in
        this Agreement or made a part hereof, (iv) not in conformity with the
        Specifications under which the goods are to be sold, (v) not in compliance
        with
        any mutually approved sample, or (vi) not in compliance with Licensee’s current
“Supplier Shipping & Compliance Guide” (collectively, “Nonconforming
        Goods”). Licensor shall make no shipment of Nonconforming Goods, whether as an
        accommodation or otherwise, unless first authorized in writing by the Licensee.
        Upon rejection or revocation, Licensee, at its option, may return at Licensor’s
        expense any or all of the goods or require correction or replacement at
        Licensor’s expense within five business days.

      

      (e)  Inspection.
        Licensee shall
        have the option to inspect the goods, including materials used in the
        manufacture or packaging of the goods, and records relating thereto at
        reasonable times and places before, during and after the manufacture or delivery
        of the goods. Licensee reserves the right to inspect any facility in which
        the
        goods are manufactured, packaged or stored and any raw materials, goods in
        process, or finished goods. An inspection or failure to inspect shall not
        relieve Licensor of any responsibility or liability with respect to the goods,
        including material used in themanufacture
        or
        packaging of the goods, nor shall an inspection be interpreted as an acceptance
        of goods by Licensee.

      

      (f)  Failure
        to
        discover Nonconforming Goods.
        Notwithstanding
        the foregoing paragraphs, Licensee’s failure to discover Nonconforming Goods or
        other defects shall not relieve Licensor of its obligations under Section
        17 or
        any other provision of this Agreement or the applicable purchase order or
        limit
        any rights or remedies Licensee may have under applicable law or
        equity.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      11.  Representations
        and Warranties.

      

      (a)  Representations
        and Warranties of Licensor.
        Licensor hereby
        represents and warrants to Licensee that (i) Licensor is the sole owner of
        the
        right, title and interest in and to the Compound and the Property (ii) Licensor
        is entitled to grant the licenses contemplated hereunder to Licensee, (iii)
        the
        Property does not constitute an infringement of any existing intellectual
        property rights when used on the Products; (iv) the Compound is suitable
        for the
        purposes for which it will be used by Licensee; (v) the Compound as delivered
        by
        Licensor to Licensee will be free of defects, will be manufactured in accordance
        with good manufacturing practices and conform to the description of the Compound
        ordered by Licensee; (vi) the Compound as delivered by Licensor to Licensee
        shall continue to be the same qualitative and quantitative formula as the
        Compound tested in any clinical studies; (vii) Licensor has the full power,
        capacity and right to enter into this Agreement, including, but not limited
        to,
        the ability and wherewithal to provide for the manufacture of the Compound
        in
        compliance with the quality and quantity standards contemplated by this
        Agreement; (viii) Licensor has not licensed the Compound or Property or any
        aspect thereof in any manner inconsistent with the licenses granted hereunder;
        (ix) Licensor shall convey good, clear and unencumbered title to the Compound
        supplied; (x) Licensor has not granted any rights relating to the Compound
        or
        the Property to any other person or entity in the Authorized Channels of
        Trade
        in the Territories for the Purposes for which Licensor has granted Licensee
        exclusive rights; (xi) neither the execution and delivery of this Agreement
        nor
        compliance with the obligations of Licensor hereunder, will violate any law
        or
        regulation, or any order or decrees of any court or government instrumentality,
        or will conflict with, or result in the breach of, or constitute a default
        under, any contract, agreement, instrument or judgment to which Licensor
        is a
        party; and (xii) no action, approval or consent, including but not limited
        to,
        any action, approval or consent by any United States federal, state, municipal
        or other governmental agency, commission, board, bureau or instrumentality
        is
        necessary in order to constitute this Agreement as a valid, binding and
        enforceable obligation of Licensor in accordance with its terms.

      

      (b)  Representations
        and Warranties of Licensee.
        Licensee hereby
        represents and warrants to Licensor that (i) it has the full power, capacity
        and
        right to enter into the Agreement; (ii) it knows of no pending or threatened
        action in law or in equity, which adversely affects the rights granted herein;
        (iii) neither the execution and delivery of this Agreement nor compliance
        with
        the obligations of Licensee hereunder will violate any law or regulation,
        or any
        order or decree of any court or governmental instrumentality, or will conflict
        with, or result in breach of, or constitute a default under, any contract,
        agreement instrument or judgment to which Licensee is a party; and (iv) no
        action, approval or consent, including but not limited to, any action, approval
        or consent by any United States federal, state, municipal or other governmental
        agency, commission, board, bureau or instrumentality is necessary in order
        to
        constitute this Agreement as a valid, binding and enforceable obligation
        of
        Licensee in accordance with its terms.

      

      12.  Acknowledgment
        of Ownership of the Property.
        Licensee
        acknowledges Licensor's right, title and interest in and to the Property
        and the
        goodwill associated therewith.
        Licensee shall
        not represent in any manner that it has any ownership right, title or interest
        in the Property other than as set forth in this Agreement.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      13.  Infringement.

      

      (a)  Licensee
        shall
        notify Licensor in the event that Licensee learns of any actual or apparent
        infringement of the Property.

      

      (b)  Licensor
        shall be
        required to take all necessary actions to protect the validity of the Property
        at its sole expense. Such action shall include, but not be limited to, assuming
        responsibility at its expense for the defense of any lawsuit challenging
        or
        affecting the rights to the Property, settling litigation, and/or instituting
        litigation at its expense to protect its rights to the Property. Licensee
        shall
        comply, at Licensor’s expense, with all reasonable requests for assistance in
        connection therewith, including, without limitation, the furnishing of documents
        and having its officers or other persons reasonably designated by Licensor
        appear as witnesses.

      

      14.  Termination.

      

      (a)  In
        addition to
        any other rights of termination contained in this Agreement, this Agreement
        may
        be terminated prior to the expiration of the Term set forth in Section 3
        hereof,
        by either party for the failure by the other party to perform any material
        obligation hereunder, and if a failure to cure such breach shall continue
        for a
        period of ninety (90) days after written notice of default is sent by the
        non-breaching party to the breaching party.

      

      (b)  This
        Agreement
        may be terminated by either party upon written notice if the other party
        files
        or has filed against it a petition under any bankruptcy laws, makes an
        assignment for the benefit of creditors or has a receiver appointed for it
        or
        any of its assets.

      

      15.  Rights
        of
        Parties Upon Expiration or Termination.
        In the event of
        the expiration or termination of this Agreement, Licensee shall have the
        right
        for a period of twelve (12) months from the date of such termination or
        expiration to continue the use of the Property and the Compound in conjunction
        with the advertising and sale of Products in the Territories and allowing
        for
        the continued manufacture of the Products in order for Licensee to effect
        an
        orderly transition with its customers and to sell though its existing inventory
        of Compound, Products and related packaging materials. After such twelve
        (12)
        month period, Licensee shall thereafter cease all use of the Property and
        the
        Compound. Termination or expiration of this Agreement shall not affect the
        indemnification obligations hereunder or any other provisions intended by
        their
        nature to survive the termination or expiration of this Agreement.

      

      16.  Confidentiality.
        The
        Confidentiality Agreement dated July 15, 2002 by and between the Licensor
        and
        the Licensee (the “Confidentiality Agreement”) is and shall remain in full force
        and effect. The parties acknowledge and agree that the existence of this
        Agreement and the terms and conditions hereof shall constitute Confidential
        Information under the Confidentiality Agreement. Licensor acknowledges that
        Licensee may file this Agreement or any portion hereof with the Securities
        and
        Exchange Commission if Licensee in its discretion deems such to be necessary
        or
        advisable. Any such filing will not affect the parties’ obligations of
        confidentiality with respect to Confidential Information not disclosed in
        such a
        filing. 

      

      17.  Indemnification;
        Exclusion of Certain Damages; Insurance.

      

      (a)  Licensor
        agrees
        to indemnify, defend and hold harmless Licensee and its officers, directors,
        agents, employees and affiliates (such persons, together with their successors
        and assigns, are referred to herein as “Indemnified Parties”) from and against
        any claim, demand, action, proceeding or cause of action made or brought
        against
        Licensee or any of its Indemnified Parties by any third party, including,
        without limitation, any damages, settlement payments, penalties, liabilities,
        costs and expenses or any judgment rendered against or incurred by Licensee
        or
        any of its Indemnified Parties in any such action and reasonable attorneys'
        fees
        and expenses incurred byLicensee
        or its
        Indemnified Parties in defending any such claim brought against it or them
        except as otherwise provided below ("Damages"), arising out of or resulting
        from
        (i) this Agreement, including a breach of this Agreement by Licensor; (ii)
        product liability attributable, directly or indirectly, in whole or in part,
        to
        the Compound or (iii) the violation or infringement of any patent, trademark,
        trade dress, copyright or other intellectual property right relating to the
        Compound, the Property or other specifications or materials selected by
        Licensor, provided that none of such occurrences are caused by the negligence
        or
        willful misconduct of Licensee. 

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (b)  Licensee
        agrees
        to indemnify, defend and hold harmless Licensor and its Indemnified Parties
        from
        and against any claim, demand, action or cause of action which is made against
        Licensor or any of its Indemnified Parties by any third party, including,
        without limitation, any damages, settlement payments, penalties, liabilities,
        costs and expenses or any judgment rendered against or incurred by Licensor
        or
        any of its Indemnified Parties in any such action and reasonable attorneys'
        fees
        and expenses incurred by Licensor or its Indemnified Parties in defending
        any
        such claim brought against it or them except as otherwise provided below,
        to the
        extent arising out of or resulting from (i) a breach of this Agreement by
        Licensee, (ii) the improper, labeling (including packaging materials), promotion
        or use of the Products by Licensee or its respective employees or agents
        unless
        such claim results from incorrect information supplied by Licensor for the
        Compound or Property; or (iii) the violation or infringement of any trademark
        or
        trade dress rights relating to the Products (other than those owned by Licensor
        and licensed to Licensee hereunder) or other specifications or materials
        selected by Licensee, provided that none of such occurrences are caused by
        the
        negligence or willful misconduct of Licensor.

      

      (c)  Upon
        the
        occurrence of an event which would give rise to a right of indemnification
        under
        this Agreement, the party claiming the right to indemnification (the
        "Indemnitee") shall give prompt written notice to the other party providing
        reasonable details of the nature of the event and basis of the indemnity
        claim.
        The party obligated to provide the indemnification (the "Indemnitor") shall
        then
        have the right, at its own expense and with counsel of its choice, to defend,
        contest or otherwise protect against any such suit, action, investigation,
        claim
        or proceeding ("Action"). If the Indemnitee reasonably determines that its
        interests are not adequately represented by the Indemnitor’s counsel, Indemnitee
        shall have the right to participate, at the Indemnitor’s expense, in the defense
        thereof with counsel of its choice reasonably acceptable to the Indemnitor.
        In
        any event, the Indemnitee shall also have the right, but not the obligation,
        to
        participate at its own expense in the defense thereof with counsel of its
        choice. The Indemnitee agrees to cooperate to the extent reasonably necessary
        to
        assist the Indemnitor in defending, contesting or otherwise protesting against
        any such Action provided that the reasonable cost in doing so shall be paid
        by
        the Indemnitor. If the Indemnitor fails within fifteen (15) days after receipt
        of such notice to (i) notify the Indemnitee of its intent to defend, or (ii)
        defend, contest or otherwise protect against such Action, or fails to diligently
        continue to provide such defense after undertaking to do so, the Indemnitee
        shall have the right upon five (5) days' prior written notice to the Indemnitor,
        to defend, settle and satisfy any such Action and recover the costs of the
        same
        from the Indemnitor. Any amounts owed by the Indemnitor to the Indemnitee
        may,
        at the Indemnitee’s option, be applied to offset amounts owed by the Indemnitee
        to the Indemnitor pursuant to this Agreement. 

      

      (d)  EACH
        OF LICENSOR
        AND LICENSEE ACKNOWLEDGES THAT, EXCEPT AS EXPLICITLY SET FORTH IN THIS
        AGREEMENT, IN NO EVENT SHALL IT BE LIABLE FOR ANY INDIRECT, SPECIAL,
        CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGE, LOSS OR EXPENSE, INCLUDING,
        WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOODWILL, LOSS OF PROFITS, LOSS OF
        USE,
        LOST TIME AND ANY AND ALL OTHER COMMERCIAL DAMAGES, EVEN IF ADVISED OF THEIR
        POSSIBLE EXISTENCE. The foregoing exclusion of certain damages shall apply
        regardless of the success or effectiveness of other remedies, but shall not
        apply to any indemnification obligations and/or amounts owed pursuant to
        Section
        17(a) and (b) above.

       

      (e)  The
        provisions of
        this Section 17 shall survive the expiration of the Term or any other
        termination of this Agreement.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (f)  The
        parties shall
        each maintain in full force and effect throughout the Term general product
        liability insurance with limits of not less than one million dollars
        ($1,000,000) per occurrence, two million dollars ($2,000,000) in the aggregate.
        Licensor’s insurance shall name Licensee and its affiliates as an additional
        insured, shall have broad form vendor’s coverage, and shall be placed with an
        insurance company which has a most recent rating given by Best’s Key Rating
        Guide of at least a “B” or above, or in such other company as Licensee may
        approve. Each party agrees to promptly deliver certificates or other proof
        of
        said insurance to the other party. Licensor’s insurance required by this
        Agreement shall be primary with respect to any other insurance available
        to
        Licensor and shall contain a waiver of subrogation by Licensor’s insurance
        carrier against Licensee and its insurance carrier with respect to all
        obligations assumed by Licensor pursuant to this Agreement. Each party will
        provide a copy of any contract of insurance required under this Agreement,
        upon
        request from the other party.

      

      18.  Force
        Majeure.
        None of the
        parties shall be liable for any failure to perform or delay in performance
        of
        its obligations hereunder (other than the obligation to pay monies due and
        owing
        for the shipment of Compound under this Agreement) caused by any circumstances
        beyond its reasonable control occurring in any of the countries in the
        applicable Territory, including, but not limited to, fire, earthquake, war,
        civil commotion, any act of central or local government, industrial disputes,
        lockouts and strikes, provided, however, that if the period of default continues
        for more than sixty (60) days, the other party shall be entitled to terminate
        this Agreement forthwith by notice in writing. 

      

      19.  Further
        Assurances.
        The parties
        shall execute such documents and consents and take such other action as may
        be
        necessary to register this Agreement with the appropriate governmental
        authorities of the countries in the Territories.

      

      20.  Amendments.
        The provisions
        of this Agreement may not be amended, supplemented, waived or changed orally,
        but only by a writing signed by both parties and making specific reference
        to
        this Agreement.

      

      21.  Waivers.
        Neither
        Licensor's nor Licensee's failure to enforce any of the provisions of this
        Agreement shall constitute a waiver of its rights to later enforce such terms
        or
        conditions. Any waiver under this Agreement must be in writing signed by
        the
        party to be charged therewith and expressly purporting to constitute such
        a
        waiver. Any such waiver shall be effective only for the specific instance
        and
        circumstance with respect to which it is executed and delivered.

      

      22.  Notices.
        All notices
        under this Agreement shall be in English and shall be (a) in writing; (b)
        given
        by regularly scheduled express courier service, hand-delivered or facsimile
        (confirmed by such airmail, express courier or hand-delivered correspondence);
        and (c) addressed to the parties at the addresses set forth immediately below,
        or to such other address as either party may advise the other in writing
        in
        accordance with the terms hereof:

      

      
        	 	
                if
                  to Licensor:

              	
                     
                  Unigen Pharmaceuticals, Inc.

              

      

      2660
        Willamette
        Drive NE

      Lacey,
        Washington
        98516

      Attention:
        Regan
        Miles,

      President
        and
        CEO

      Facsimile:
        (360)
        413-9135

      

      with
        a copy
        to:

      Unigen
        Pharmaceuticals, Inc.

      2660
        Willamette
        Drive NE

      Lacey,
        Washington
        98516

      Attention:
        Thomas
        J. Hoolihan

      Executive
        Vice
        President and General Counsel

      Facsimile:
        (360)
        413-9135

      

      
        	 	
                if
                  to Licensee:

              	
                     
                  Schiff Nutrition Group, Inc.

              

      

      2002
        South 5070
        West

      Salt
        Lake City,
        UT 84104

      Attn:
        General
        Counsel

      Facsimile:
        (801)
        975-1924

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      Notices
        shall be
        deemed given (i) on the scheduled delivery date, if sent by regularly scheduled
        express courier service; and (ii) when transmitted, if transmitted by facsimile
        and confirmed in one of the manners aforesaid.

      

      23.  Assignments
        And Sub-Licenses.
        Neither
        Licensor nor Licensee shall assign its rights hereunder without the prior
        written consent of the other party hereto, which shall not be unreasonably
        withheld; provided, however, Licensee or Licensor may,
        at any time,
        assign this Agreement without the prior written consent of Licensor to any
        affiliated company, or in the event of a change of ownership or control of
        Licensee, including a sale of substantially all the assets of the Licensee.
        Licensee may sublicense its rights under this Agreement to affiliates of
        Licensee upon the prior written consent of Licensor, such consent not to
        be
        withheld or delayed unreasonably. Licensee
        may
        outsource the manufacture of the Products in whole or in part, and is permitted
        to sublicense its rights under this Agreement to the extent required to do
        so.

      

      24.  Brokers.
        Each of the
        parties represents and warrants that such party has dealt with no broker
        or
        finder in connection with any of the transactions contemplated by this
        Agreement, and, insofar as such party knows, no broker or other person is
        entitled to any commission or finder's fee in connection with any of these
        transactions. The parties each agree to indemnify and hold harmless one another
        against any loss, liability, damage, cost, claim or expense incurred by reason
        of any brokerage commission or finder's fee alleged to be payable because
        of any
        act, omission or statement of the indemnifying party.

      

      25.  Execution;
        Governing Law; Arbitration.

      

      (a)  This
        Agreement
        shall not be binding until it has been executed on behalf of each party by
        a
        duly authorized officer of each party.

      

      (b)  This
        Agreement,
        and any and all disputes arising out of or relating to this Agreement, or
        the
        subject matter, enforceability or breach thereof, shall be governed by, and
        construed and interpreted in accordance with, the laws of the United States
        and
        the State of Washington, without application of any conflicts of laws
        principles, except that the Arbitration provision in Paragraph 26(c) below,
        shall be governed by the Federal Arbitration Act to the extent that it is
        applicable.

      

      (c)  Any
        and all
        controversies, claims or disputes arising out of or relating to this Agreement,
        or the subject matter, enforceability or breach thereof, shall be settled
        and
        determined exclusively
        by final and
        binding arbitration
        administered by
        JAMS under its Streamlined Arbitration Rules and Procedures and shall be
        heard
        in Seattle, Washington. The state or Federal courts of the states of Washington
        and Utah shall have concurrent jurisdiction to issue preliminary injunctive
        or
        other equitable relief in order to enforce the terms of this Agreement. Judgment
        on the award rendered by the arbitrator(s) may be entered in any court having
        jurisdiction over the parties. Each party
        to this
        Agreement waives any objection to personal jurisdiction of the state or Federal
        courts in Seattle, Washington and Salt Lake City, Utah. 

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      (d)  In
        no event shall
        the demand for arbitration be made after the date when institution of legal
        or
        equitable proceedings based on such claim, dispute or other matter in question
        would be barred by the applicable statutes of limitation.

      

      26.  Prevailing
        Party.
The
        prevailing
        party in any arbitration, litigation or other proceeding arising out of or
        relating to this Agreement, or the subject matter, enforceability or breach
        thereof, shall be entitled to recover from the non-prevailing party its costs
        and reasonable attorney’s fees, as determined by the arbitrator(s) or
        court.

      

      27.  Entire
        Agreement.
        This Agreement,
        including the Schedules hereto, the purchase orders, including the
        Specifications (as defined above), submitted by Licensee to Licensor from
        time
        to time and the Confidentiality Agreement represent the entire understanding
        and
        agreement between the parties with respect to the subject matter hereof,
        and
        supersedes all other negotiations, understandings and representations (if
        any)
        made by and between such parties.

       

      28.  Headings.
        Any headings
        used herein are for convenience in reference only and are not a part of this
        Agreement, nor shall they in any way affect the interpretation
        hereof.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF,
        the parties
        have executed this Agreement as of the date first above written.

      

      SCHIFF
        NUTRITION
        GROUP, INC.,

      

      

      By: /s/ 
        Thomas H. Elitharp            

      Name:
        Thomas H.
        Elitharp 

      Title:   
        Executive Vice President - 

       Operations
        and Support Services

      

      

      

      UNIGEN
        PHARMACEUTICALS, INC.,

      

      

      By: /s/ 
        Regan Miles               

      Name:
        Regan Miles

      Title:   
        President and CEO

       

       

      
        
          
          

        

        
          14exv10w1

 

Exhibit 10.1

INFINITY ENERGY RESOURCES, INC.

2006 EQUITY INCENTIVE PLAN

FORM
OF NONQUALIFIED STOCK OPTION AGREEMENT

     This Nonqualified Stock Option Agreement (the “Agreement”), made as of the ___day of ___,
200___, by and between Infinity Energy Resources, Inc., a corporation duly formed and existing under
the laws of Delaware (the “Company”), and ___(the “Participant”).

     WHEREAS, the Company desires to encourage and enable the Participant to acquire a proprietary
interest in the Company through the ownership of the Company’s common stock, par value US$0.0001
per share (the “Common Stock”) pursuant to the terms and conditions of the 2006 Equity Incentive
Plan (the “Plan”) and this Agreement. Such ownership will provide the Participant with a more
direct stake in the future of the Company and encourage the Participant to remain with the Company
and/or its Affiliates, as applicable.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties agree as follows:

     1. DEFINITIONS. For purposes of this Agreement, all capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to them in the Plan.

     2. GRANT OF OPTION. The Company hereby grants to the Participant a Nonqualified Stock
Option (the “Option”) to purchase ___Shares at the exercise price (the “Exercise Price”) of
$  per share, subject to the terms and conditions of this Agreement and the Plan.

     3. OPTION TERM. The Option granted hereby shall expire on ___, 201___(the
“Expiration Date”), unless sooner terminated or modified under the provisions of this Agreement or
the Plan. Except as otherwise set forth herein, the Option may not be exercised after the
Expiration Date.

     4. VESTING. The Option shall vest as follows:

	 	 	 
	No. of Options	 	Vesting Date
	100%

	 	On the one year anniversary of the grant date

 

 

5. EMPLOYMENT TERMINATION: DEATH; DISABILITY; RETIREMENT; CAUSE.

     (a) If the services of the Participant are terminated for any reason other than death,
disability, retirement, Change in Control, or cause (in each case as defined below), the portion of
this Option to purchase Common Stock that is not vested on the date of such termination of service
shall terminate and be forfeited on such date of termination; however, the vested portion of this
Option shall be exercisable by the Participant at any time on or prior to the earlier of (i) the
Expiration Date or (ii) the three month anniversary of the date of such termination of service.
Any portion of this Option not exercised within the period described in the preceding sentence, for
whatever reason, shall terminate.

     (b) In the event of the death or disability (as defined in Section 6(f) of the Plan) of the
Participant, the unvested portion of this Option shall immediately terminate and be forfeited, and
the vested portion of the Option on such date shall be exercisable at any time on or prior to the
12 month anniversary of such date by the beneficiary designated by the Participant for such purpose
(the “Designated Beneficiary”) or if no Designated Beneficiary shall be appointed or if the
Designated Beneficiary shall predecease the Participant, by the Participant’s personal
representatives, heirs or legatees. Any portion of the Option not exercised within the period
described in the preceding sentence, for whatever reason, shall terminate.

     (c) In the event of the retirement of the Participant pursuant to Section 6(e) of the Plan,
this Option shall be exercisable by such Participant at any time on or prior to the earlier of (i)
the stated expiration date of the Option, or (ii) the three month anniversary of the date of such
retirement.

     (d) In the event the service of the Participant is terminated for cause as defined in Section
6(i) of the Plan, this Option (including any vested portion) shall be forfeited as of the date of
termination.

     6. CHANGE IN CONTROL. In the event of a Change in Control, the Company shall give the
Participant notice thereof and this Option, whether or not currently vested and exercisable, shall
become immediately vested and exercisable immediately prior to the effective date of the Change in
Control, and the Board shall have the power and discretion to provide alternatives regarding the
terms and conditions for the exercise of, or modification of, this Option in accordance with the
Plan.

     “Change in Control” as used in this Agreement shall mean the first to occur of the following
events specified in (i), (ii), (iii), (iv), (v) or (vi) (but no event other than the specified
events): (i) any person becomes the beneficial owner, directly or indirectly, of securities of the
Company representing thirty-five percent (35%) or more of the combined voting power of the
Company’s then outstanding voting securities (other than (x) the Company, (y) any subsidiary of the
Company, (z) one or more employee benefit plans maintained by the Company), or (xx) any noteholders
or warrantholders under the Securities Purchase Agreement dated as of January 13, 2005 among
Infinity, Inc., the

2

 

predecessor of the Company, and HFTP Investment L.L.C., AG Domestic Convertibles, L.P. and AG
Offshore Convertibles Ltd., as further amended, supplemented and modified (the “Promethean Purchase
Agreement”)); (ii) any noteholders or warrantholders under the Promethean Purchase Agreement,
whether individually or as a group (as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) become the owner, directly or indirectly, of outstanding
voting securities (including voting securities acquired on conversion of notes or exercise of
warrants) of the Company representing thirty-five percent (35%) or more of the combined voting
power of the Company’s then outstanding voting securities; (iii) three or more Directors of the
Company, whose election or nomination for election is not approved by a majority of the applicable
Incumbent Board, are elected within any single twelve month period to serve on the Board; (iv)
members of the applicable Incumbent Board cease to constitute a majority of the Board; (v) the
consummation of a merger or consolidation of the Company with or into any other corporation or
entity or person, or any other corporate reorganization, in which the stockholders of the Company
immediately prior to such consolidation, merger or reorganization own less than 50% of the
outstanding voting securities of the surviving entity (or its parent) following the consolidation,
merger or reorganization or (vi) the consummation of a sale, lease or other disposition of all or
substantially all of the assets of the Company. For purposes of this Section, the terms “person”
and “beneficial owner” shall have the meanings set forth in Rule 13d-3 of the Exchange Act and in
the regulations promulgated thereunder. For purposes of this paragraph, “Incumbent Board” shall
mean (i) members of the Board of Directors of the Company as of the date hereof, to the extent that
they continue to serve as members of the Board, and (ii) any individual who becomes a member of the
Board after the date hereof, if such individual’s election or nomination for election as a Director
was approved by a vote of at least seventy-five percent (75%) of the then applicable Incumbent
Board.

     7. NON-ASSIGNABILITY. The Option granted hereby and any right arising thereunder
may not be transferred, assigned, pledged or hypothecated (whether by operation of law or
otherwise), except by will or the applicable laws of descent and distribution, and the Option and
any right arising thereunder shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of an Option not
specifically permitted herein or in the Plan shall be null and void and without effect. An Option
may be exercised solely by the Participant during his or her lifetime, or following his or her
death pursuant to Section 5(b) hereof.

     8. MODE OF EXERCISE. The Option may be exercised in whole or in part. Common Stock
purchased upon the exercise of the Option shall be paid for in full at the time of such purchase.
Such payment shall be made in cash or by wire transfer in immediately available funds in either
event denominated in U.S. dollars. Upon receipt of notice of exercise and payment in accordance
with procedures to be established by the Board, the Company or its agent shall deliver to the
person exercising the Option (or his or her designee) a certificate for such Common Stock.

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     9. RECAPITALIZATION. The number of shares of Common Stock covered by this Option and
the exercise price shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock as set forth in the Plan; provided, however, that any fractional
shares resulting from any such adjustment shall be eliminated. The Board may also make any other
changes, including changes in the classes of securities available, to the extent it is deemed
necessary or desirable to preserve the intended benefits of the Plan for the Company and the
Participants in the event of any other reorganization, recapitalization, merger, consolidation,
spin-off, extraordinary dividend or other distribution or similar transaction. Notwithstanding any
other provision of the Plan or this Agreement, the Board may cause the Option granted hereunder to
be canceled in consideration of a cash payment or alternative stock award made to the holder of
such canceled Option equal in value to the fair market value of such canceled Option.

     10. PLAN CONTROLLING. This Agreement is intended to conform in all respects with the
requirements of the Plan. Inconsistencies between the requirements of this Agreement and the Plan
shall be resolved according to the terms of the Plan. The Participant acknowledges receipt of a
copy of the Plan.

     11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have any rights as
a stockholder with respect to any Common Stock subject to the Option prior to the date on which he
is recorded as the holder of such Common Stock on the records of the Company.

     12. WITHHOLDING TAXES. The Company shall have the right to require Participants or
their beneficiaries or legal representatives to remit to the Company an amount sufficient to
satisfy any United States federal, state and local withholding tax requirements, including upon the
grant, vesting or exercise of this Option. Whenever payments under the Plan or this Agreement are
to be made to any Participant in cash, such payments shall be net of any amounts sufficient to
satisfy all applicable taxes, including without limitation, all applicable United States federal,
state and local withholding tax requirements to be withheld or submitted by the Company concerning
such payments. The Board may, in its sole discretion, permit a Participant to satisfy his or her
tax withholding obligation either by (i) surrendering Common Stock owned by the Participant or (ii)
having the Company withhold from Common Stock otherwise deliverable to the Participant. Common
Stock surrendered or withheld shall be valued at its Fair Market Value as of the date on which
income is required to be recognized for income tax purposes.

     13. NO LIABILITY OF BOARD COMMITTEE MEMBERS. No member of the Board or any Committee
or their designees shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the Board or a Committee
nor for any mistake of judgment made in good faith.

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     14. GOVERNING LAW. This Agreement and all rights arising hereunder shall be governed
by, and construed and interpreted in accordance with, the laws of the Delaware.

     NEITHER THE PLAN NOR THIS AGREEMENT SHALL BE CONSTRUED AS GIVING THE PARTICIPANT THE RIGHT TO
BE RETAINED IN THE EMPLOY OR SERVICE OF THE COMPANY OR ANY AFFILIATE THEREOF, NOR SHALL THEY
INTERFERE IN ANY WAY WITH THE RIGHT OF THE COMPANY OR ANY AFFILIATE THEREOF, AS APPLICABLE, TO
TERMINATE THE PARTICIPANT’S EMPLOYMENT OR SERVICE AT ANY TIME WITH OR WITHOUT CAUSE.

* * * * *

     Executed as of the day and year first above written.

	 	 	 	 	 
	 	INFINITY ENERGY RESOURCES, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	PARTICIPANT

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	 	 
	 

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