Exhibit
10.58
BINDING MEMORANDUM OF
UNDERSTANDING
March 31, 2006
1. Founder:
John R. Huff (“Huff”), Founder and President of
Floating Bed, Inc., an Iowa “S” corporation (“FB
Inc.”).
2. Investor:
ORBIT BRANDS CORPORATION (“OBBC”), a Delaware
corporation, through an OBBC wholly-owned subsidiary.
3. Purpose:
Creating (by execution of a certificate of change of name) and
funding an OBBC wholly-owned subsidiary (a Delaware “C”
corporation) to be known as Floating Bed, International (“FB
Int’l.”), to manufacture, market and sell the
“Floating Bed.” FB Int’l. will be funded through
the public markets, by debt or equity offerings or any combination
of both, the terms of which shall be subject to OBBC’s
approval, in the exercise of its business judgment and discretion.
The parties anticipate entering into additional comprehensive
agreements memorializing their understanding, as summarized in this
Binding Memorandum of Understanding (“MOU”), including,
without limitation, a license agreement and an executive employment
agreement (the “Additional Agreements”).
4. Licensing
and Funding: Huff and FB Inc. agree to grant FB Int’l. a
non-exclusive license to manufacture, market and sell the
“Floating Bed” for the period commencing on or about
April 1, 2006 and ending at such time as OBBC shall have funded FB
Int’l the sum of at least $500,000, at which time such
license shall become an exclusive 10- year license, with two
10-year options, at the election of OBBC (the “License
Period”). The license shall remain
“non-exclusive” until OBBC has raised at least $500,000
and has funded FB Int’l.’s business operations in the
amount of $500,000, after which time the license shall become
exclusive to FB Int’l. However, Huff and FB Inc. further
agree that they shall not grant any other licenses (non-exclusive
or otherwise) with respect to the manufacture, marketing or sale of
the “Floating Bed” during the License Period, so long
as OBBC timely satisfies the “Funding Benchmarks”
described in Section 6, infra .
Once OBBC has
raised $500,000 to fund FB Int’l., the license shall become
exclusive for a period of ten (10) years, with two additional
10-year renewal terms at the sole election of OBBC. Thereafter, FB
Int’l. shall pay an additional $500,000 to Huff and/or FB
Inc. for each of the two successive option periods, beginning after
the tenth (10th) year, and after the twentieth (20th) year,
respectively, in order to renew the license.
5. Ownership
and Control: Huff shall be named the President of FB Int’l.
and shall have majority rights with respect to the appointment of
directors to FB Int’l.’s Board of Directors, as
specified below, as well as dominion and control over FB
Int’l.’s business operations and its use and
application of funds. OBBC shall hold 100% of the stock of FB
Int’l. FB Inc. and/or Huff shall be issued a convertible
promissory note or warrant(s) for 4.9 % of the presently
outstanding and issued common stock of OBBC, not to exceed
125,000,000 shares of OBBC common stock.
The number of shares of OBBC common stock to be
issued to Huff and/or FB Inc. shall be increased by three percent
(3 %) in the event that no other subsidiary of OBBC is contributing
“substantially” to OBBC, in the discretion of
OBBC.
Huff shall report directly to Joseph R. Cellura,
Chairman and Chief Executive Officer of OBBC. The FB Int’l.
Board of Directors shall consist of three (3) directors, two (2)
appointed by Huff and/or FB Inc., and one (1) appointed by OBBC.
Huff intends to nominate William Hickey and himself to be appointed
as his directors, and OBBC intends to nominate Allan I. Brown as
its director.
6. Funding
Benchmarks: OBBC shall raise and deposit the following sums into
the FB Int’l. operating account in order to fund the business
operations of FB Int’l. within the following designated
periods: (i) $100,000 by June 1, 2006; (ii) an additional
$200,000 by August 1, 2006; and (iii) an
additional $200,000 by December 31, 2006.
If OBBC fails
to raise and deposit into the FB Int’l. operating account a
total of $300,000 by or before August 1, 2006, then the
