EXHIBIT 10.1
EXCLUSIVE MARKETING AGREEMENT
THIS EXCLUSIVE MARKETING AGREEMENT (this "Agreement") is entered into this 2nd
day of February, 2004 (the "Effective Date"), between SUNNCOMM TECHNOLOGIES,
INC. a Nevada corporation having its principal place of business located at 000
Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("SunnComm"), and QUIET
TIGER, INC., a Nevada corporation having its principal place of business located
at 000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("Licensee).
RECITALS
WHEREAS SunnComm has developed and owns intellectual property rights to
proprietary copy control technologies used for the protection of enhanced
audio-only and audiovisual compact discs (hereinafter "CD(s)") and enhanced
audio-only and audiovisual digital video discs (hereinafter "DVD(s)"), as more
particularly described on Exhibit "A" attached hereto.(the "SunnComm Products");
and
WHEREAS SunnComm and Licensee previously entered into that certain Asset
Purchase Agreement, as amended, dated November 15, 2002, that, among other
things, granted to Licensee an exclusive right of first refusal to license
existing or future-developed SunnComm technologies and products for purposes of
Marketing; and
WHEREAS Licensee desires to exercise its right of first refusal and whereby
Licensee will be granted an exclusive license to distribute, market, advertise,
and sublicense the "SunnComm Products throughout the Territory (as described
below) upon the terms and conditions set forth herein.
AGREEMENT
1. GRANT OF RIGHTS. SunnComm hereby grants to Licensee an exclusive,
non-transferable right and license throughout the Territory to distribute,
market, advertise and sublicense the SunnComm Products throughout the Territory
during the Term. Licensee is further granted an assignment of all revenues
derived from the following:
a. that certain Copy Protection Agreement dated May 30, 2003, by and
between SunnComm, as Licensor, and BMG Music, as Licensee, and
b. that certain Technology License Agreement dated December 2, 2003, by
and between SunnComm, as licensor and Sonopress, L.L.C., as Licensee,
and
c. that certain Software Licensing Agreement dated January 12, 2004, by
and between SunnComm, as Licensor and Immediatek, Inc. as Licensee.
d. This Agreement shall remain exclusive so long as Licensee pays
SunnComm a minimum monthly royalty of One Hundred Thirty Eight
Thousand Dollars per month to be applied against current and future
royalties owed SunnComm, and a monthly administrative support fee of
Twelve Thousand Dollars ($12,000). SunnComm shall pay an interest
charge of five percent (5%) to be applied against the advance on
future royalties.
2. TERM. The term of this Agreement shall commence upon the date hereof and
shall continue in perpetuity except as otherwise provided in this Agreement.
(the "Term").
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3. TERRITORY. The territory shall be the world (the "Territory").
4. LICENSE FEE. Upon the execution of this Agreement, Licensee shall pay
SunnComm an initial license fee (the "License Fee") of Two Million and Thirty
Thousand Dollars ($2,030,000) payable as follows:
a. Licensee shall issue to SunnComm 64,000,000 shares of the common stock
of Licensee (the "Shares") based upon a value of $.03 per share. The
Shares shall bear a restrictive legend in accordance with the rules
and regulations of the Securities and Exchange Commission, shall be
non-assessable and free and clear of any and all liens and
encumbrances;
b. Licensee agrees to register the Shares with the Securities and
Exchange Commission on Form SB-2 in accordance with a plan of
Marketing to the SunnComm shareholders upon thirty (30) days written
notice from SunnComm to Licensee.
c. Licensee shall assume an obligation in the approximate amount of One
Hundred and Ten Thousand Dollars ($110,000) of SunnComm to Xxxxx Xxxx
for consulting services rendered to SunnComm.
5. MARKETING AND CONSULTING STAFF. As a condition to the effectiveness of this
Agreement, it is further agreed between the parties hereto that Xxxxxxx Xxxxxxxx
and Xxxxxx Xxxxx shall resign their respective positions with SunnComm and enter
into an employment arrangement with Licensee upon terms acceptable to the
parties hereto. Further, Xxxxx Xxxx shall enter into a mutually acceptable
consulting agreement with Licensee.
6. ROYALTY. Licensee shall pay a royalty to SunnComm equal to sixty percent
(60%) of any and all gross licensing revenue earned by Licensee with respect to
the SunnComm Products until Licensee exceeds Three Million Six Hundred Thousand
Dollars ($3,600,000) in annual gross licensing revenue. Thereafter, Licensee
shall pay SunnComm a royalty equal to fifty percent (50%) of any and all gross
licensing revenue earned by Licensee with respect to the SunnComm Products.
7. MARKETING COSTS AND EXPENSES. Except as otherwise set forth in this
Agreement, Licensee shall be responsible for all of its marketing costs and
related expenses.
8. MAINTENANCE AND SUPPORT. SunnComm hereby agrees to maintain and support the
SunnComm Products, and to provide upgrades, modifications and enhancements to
Licensee at SunnComm's sole cost and expense.
9. REPRESENTATIONS AND WARRANTIES OF SUNNCOMM. SunnComm represents and warrants
to Licensee that it owns all right, title and interest in and to the SunnComm
Products, has full authority to enter into this Agreement and effectuate the
transactions contemplated hereunder, and that executing this Agreement shall not
infringe upon any third party right.
10. REPRESENTATIONS AND WARRATIES OF LICENSEE. Licensee represents and warrants
to SunnComm that it has obtained any and all necessary approvals, and has the
authority to enter into this Agreement.
11. GENERAL.
11.1.Governing Law and Venue. This Agreement shall be governed and
interpreted in accordance with the laws of the State of Arizona without regard
to principles of conflict of laws. Arizona courts (state or federal) will have
the exclusive jurisdiction over any controversies regarding this Agreement; any
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Governing Law and Venue - continued
action or other proceeding which involves such a controversy will be brought in
such Arizona courts and not elsewhere. The Parties agree to submit to the
exclusive jurisdiction over all disputes hereunder in the appropriate federal or
state courts in the State of Arizona located in Maricopa County.
11.2. Assignment. Neither party shall assign any of its rights or
obligations under this Agreement other than, with prior written consent of the
other, to an entity owning or acquiring all or substantially all of its stock or
assets.
11.3. Publicity; Licensee Marks. In no event shall SunnComm or Licensee
publish or otherwise release any press release or other article, announcement or
publication concerning this Agreement or the subject matter related hereto
without first obtaining the other party's written approval thereof, and to the
content and timing thereof, which approval may be given in its sole discretion.
In no event shall SunnComm or Licensee use any trademark, service xxxx, or trade
name of the other party without the prior written approval of the rights-holder
in such trademark, service xxxx, or trade name.
11.4. Remedies. To the extent permitted by applicable law, the rights and
remedies of the Parties provided under this Agreement are cumulative, and the
exercise or failure to exercise any particular right or remedy will not be in
limitation of any other right or remedy, whether hereunder, at law or equity or
by contract.
11.5. Confidentiality. Each party shall use its reasonable efforts to (i)
keep confidential the terms of this Agreement and all other information obtained
from the other party pursuant to this Agreement, provided that such terms and/or
information are identified, in writing, as confidential, (ii) keep confidential
all information which is specifically designated in writing as "trade secret"
for so long as the information remains secret, and (iii) not divulge to or
discuss with any third parties the results of any testing and/or evaluation of
the SunnComm Products which Licensee may carry out under this Agreement. All
business terms of this Agreement are to be considered as confidential. Except as
otherwise specified in section (ii) of this Section 7.5, these obligations shall
survive for a period of two (2) years following the date of the termination of
the Term, but such obligations shall not apply to information already known to
the recipient at the time of disclosure and not subject to terms of
confidentiality, independently developed by the recipient, or otherwise
generally publicly available. Notwithstanding anything to the contrary contained
in this Section 7.5, it shall not be deemed to be a breach of this Section 7.5
or of this Agreement if either party is required to disclose confidential
information pursuant to: (a) any statute, regulation, order, subpoena or
document discovery request, provided that, if allowed by applicable law, prior
written notice of such disclosure is furnished to the disclosing party as soon
as practicable in order to afford the disclosing party an opportunity to seek a
protective order (it being agreed that if the disclosing party is unable to
obtain or does not seek a protective order and the receiving party is legally
compelled to disclose such information, disclosure of such information may be
made without liability); or (b) in connection with an audit or review by any
taxing authority, provided that, if allowed by applicable law, prior written
notice of the request thereof is furnished to disclosing party.
11.6. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes any and all prior written or oral agreement
or understanding relating to the same subject matter. No change to this
Agreement will be effective unless made in writing and signed by both parties.
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11.7. Headings. The use of headings in each Section of this Agreement are
for convenience only and will have no legal effect whatsoever.
IN WITNESS WHEREOF the parties have executed this Agreement as of the Effective
Date.
SUNNCOMM TECHNOLOGIES, INC. QUIET TIGER, INC.
By: By:
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Signature Signature
Name: Name:
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Print Print
Title: Title:
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Print Print
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EXHIBIT A
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Description of SunnComm Products
MediaMax M4 Technology
SunnComm's MediaMax M4 technology provides cross-platform playability, security
and an enhanced visual and listening experience for PC and Mac users. The
technology is based on a two session CD wherein the first session is made up of
CD-A files and the second session is made of up of compressed WMA files embedded
into a versatile multimedia user interface.
When the CD is inserted into a standard music CD or DVD player, the first
session is accessed and played normally. However, when the CD is inserted into a
CDROM or DVD drive of a computer, this session is inaccessible. Instead, a
second session becomes available. This second session contains a duplicate set
of songs which are stored in a protected format. In addition, the second session
contains special features such as video clips, photos, artist information, song
lyrics, MusicMail(TM) (song sharing capability), and web links (artist's site,
label's site) etc.
Media Max technology offers:
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Content Protection
Regions on the disc that are marked as being protected are inaccessible by
any software on the computer.
Self Authentication
For regions on the disc where normal access by the computer is allowed,
additional markings are present on the original CD that will allow the
software to instantly detect if the disc is the result of an unauthorized
copy and prevent any further access.
Track Identification
This software identifies unauthorized copies and individual tracks of
MediaMax protected CDs and prevents access accordingly. As a result, when
the user xxxxx a custom CD that includes tracks from protected MediaMax
CDs, those tracks will not be accessible on any computer that has the LMT
installed.
Digital Rights Management (DRM)
This technology allows users to enjoy the music stored on the second
session of the CD but only after a license has been downloaded from the
MediaMax license server. This process is conducted seamlessly and
automatically without user interaction the first time the original disc is
inserted in the drive.
Note: This option is used for Macs and Windows Media Players 6.4 - 7.0.
Onboard Digital Right Management
This technology allow owners of original CD's to obtain a license directly
from the CD without the need for Internet access.
Note: This option is only available for PCs utilizing Windows Media Players
7.1 and above.
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MusicMail(TM)
This feature allows the owner of an originally purchased MediaMax protected CD
to share music with friends without violating any copyright laws. The owner can
invite friends to download songs by using MusicMail to create and send email
messages. The friends can then download the songs by clicking on the links
included in the message. The embedded DRM technology will allow the friends to
play the song for a limited amount of days or plays.
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