Software License Agreement

SOFTWARE LICENSE AGREEMENT


This License Agreement (the "Agreement") is entered into and effective as of November 10, 2000 (the "Effective Date") by and between Natural Alternatives International, Inc., a Delaware corporation with its principal place of business at 1185 Linda Vista Drive, San Marcos, California 92069 ("Licensee"), on the one hand, and FitnessAge Incorporated, a Nevada corporation with its principal place of business at 4250 Executive Square, Suite 101, La Jolla, CA 92037 ("Licensor"), on the other.


WHEREAS, Licensor owns and/or controls certain computer programs (the "Program" as defined below), along with certain related proprietary trade secrets, trademarks, patents, patent applications and other technological know-how, relating to the Program, all of which, including, without limitation, the Program, is collectively known herein as the Licensed Property;


WHEREAS, Licensor and Licensee have previously formed an LLC known as Custom Nutrition, LLC, which has, inter alia, received a license to and used the Licensed Property to assist in the exploitation of Licensee's products;


WHEREAS, Licensor is currently indebted to Licensee in an amount in excess of $750,000, the promissory notes for which became due and payable on November 10, 2000 (the "Loan Obligation"); and


WHEREAS, Licensor and Licensee have agreed in writing to extend the due date of the Loan Obligation in exchange for additional securitization thereof, including, without limitation, this Software License Agreement and a Security Agreement of even date herewith.


NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged by each of the parties hereto, it is agreed as follows:


1. License: Licensor hereby grants to Licensee a perpetual, irrevocable, non-exclusive, royalty-free, worldwide license to use display, modify, sub-license, commercialize, and otherwise exploit the Licensed Property, subject to the terms and conditions hereinafter set forth (the "License"), and specifically excluding the rights licensed by Licensor to Custom Nutrition, LLC pursuant to the License Agreement dated as of November 11, 1999, by and between Licensor and Custom Nutrition LLC. It is understood and agreed by the parties hereto that this License is and shall be an element of the collateral for the secured Loan which is the subject of the Loan Documents, and, as such, is subject to the terms and conditions of the revised Security Agreement, entered into as of the Effective Date.


2. Consideration: As consideration for the performance by Licensor of all of its obligations and grant of all rights to Licensee herein, Licensee shall forego the immediate foreclosure of the Loan Obligation, and shall agree to extend the repayment of the same as set forth in the Second Amendment to Loan Agreement between Licensor and Licensee dated November 10, 2000 (the "Loan Agreement").


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3. The Program: The Program shall consist of the modules or components, shall perform the functions and shall comply with the proposals and specifications, identified or set forth on Schedule "A" to the Source Code Escrow Agreement, executed concurrently herewith, a copy of which is annexed hereto as Exhibit "A" (the "Escrow Agreement"), which modules and/or components together comprise a system known as the FitnessAge Assessment Application System.


4. Documentation: The Documentation shall consist of all operator and user manuals, training materials, guides, listings, specifications, and other materials for use in conjunction with the Program, as set forth in Schedule "B" to the Escrow Agreement. Licensor shall deliver to the Escrow Agent, as specified below, five (5) complete copies of the Documentation. Licensee shall have the right, as part of the license granted herein, to make as many additional copies of the Documentation for its own use as it may determine.


5. Source Code: No later than the full execution of this Agreement, Licensor shall place in escrow a fully commented and documented copy of the source code form of the Program, a listing thereof and all relevant Documentation, a listing thereof and Commentary pursuant to the Escrow Agreement (collectively the "Deposit"). Licensee shall be entitled to receive a copy of the Deposit under the circumstances set forth in the Escrow Agreement, and may then use any or all of the deposit for its own benefit. If Licensor corrects any defects in, or provides any revisions to, the Program under this Agreement, under any software maintenance agreement, or for any other reason, Licensor shall simultaneously furnish the Escrow Agent with a corrected or revised copy of the source code form of the Program, a revised listing thereof, and revised Documentation.


6. Term: This Agreement shall commence upon the Effective Date and shall continue until the last expiration of a term of any of the intellectual property transferred hereunder.


7. New Location: Licensee may, at any time, without prior notice to or consent of Licensor, transfer or copy the Program to an unlimited number of locations other than the site of initial installation for use on any other central processing unit ("CPU") which is owned or controlled by Licensee or by subsidiaries or other entities owned or controlled by Licensee.


8. Training: The License includes training of Licensee's employees on the use and operation of the Program, including instruction in any necessary conversion of Licensee's data for such use.


9. Licensor's Warranties: Licensor hereby warrants and represents to Licensee as follows:


(a) Ownership. Licensor is the owner of the Program or otherwise has the right to grant to Licensee the License without violating any rights of any third party, and there is currently no actual or threatened suit by any such third party based on an alleged violation of such right by Licensor;


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(b) Intellectual Property Rights. The use, public display, public performance, reproduction, distribution, or modification of the Program and/or Documentation does not and will not violate the rights of any third parties, including, but not limited to, copyrights, trade secrets, trademarks, publicity, privacy, and patents;


(c) Functionality. The Program, and each module or component and function thereof, will be capable of operating fully and correctly in the same manner, with the same hardware and the same operating system as it has been operated by Custom Nutrition, LLC since the inception of its utilization by Custom Nutrition, LLC and as it is currently operating, and as it is contemplated to operate within the six (6) months following the Effective Date. The Program will be capable of adapting to current hardware and operating systems as reasonably contemplated by the parties currently utilizing the Program;


(d) Warranty Period. For a period of one (1) year from the Effective Date, as specified above (the "Warranty Period") and for the term of any Program Maintenance Contract, the Program shall (i) be free from defects in material and workmanship under normal use and remain in good working order, and (ii) function properly and in conformity with the warranties herein and in accordance with this Agreement and the uses of the Program contemplated by the parties hereto, including updates or new releases, and the Documentation shall completely and accurately reflect the operation of the Program;


(e) Capacity. During the Warranty Period and for the term of any Program Maintenance Contract, the Program can and shall maintain, use, update, and otherwise process the number of transactions reasonably required to perform to the expectations of Licensee and Custom Nutrition, LLC without adversely affecting its response time or other performance, and shall do so in acceptable time frames;


(f) Reliability. During the Warranty Period and for the term of any Program Maintenance Contract ...