LICENSE AND DISTRIBUTION AGREEMENT

 

Exhibit 10.1

 

                LICENSE AND DISTRIBUTION AGREEMENT

 

     THIS AGREEMENT made and entered into on this 21st day of June, 2004 (the

"Agreement"), by and between TTA Technologies Limited, a corporation existing

under the laws of the Commonwealth of the Bahamas with offices at East Mall

Drive and Pioneers Way, Freeport, Grand Bahama, (hereinafter referred to as

"TTA") and VidRev Technologies, Inc., a corporation existing under the laws of

Florida with offices at 301 Arthur Godfrey Road, Miami Beach, Florida 33140

(hereinafter referred to as "VidRev").

 

     WHEREAS, TTA is in the business of licensing and operating software used

for video conferencing, video telephony, security and compression and

transmission of electronic files, in connection with the World Wide Web, and

has been authorized to distribute the products identified on Schedule A hereto

(the "Licensed Software");

 

     WHEREAS, VidRev is engaged in the marketing and distribution of computer

programs in the United States of America; and

 

     WHEREAS, VidRev desires to market and distribute the Licensed Software;

and

 

     WHEREAS, TTA desires to grant to VidRev and VidRev wishes to acquire

certain rights to market and distribute the Licensed Software to VidRev

customers and otherwise upon the terms and conditions set forth in this

Agreement and provide certain other services related to the Licensed Software

pursuant to the terms of this Agreement.

 

     NOW, THEREFORE, in consideration of the mutual promises herein

contained, the parties hereto agree as follows:

 

     1.    Distribution License.

          (a)   Exclusive License.   Subject to the terms and conditions set

forth in this Agreement, TTA hereby grants to VidRev the exclusive right to

distribute and further sublicense the distribution and use of the Licensed

Software to Third Party Distributors and End Users subject to the terms and

conditions hereof, provided that, all promotion, marketing, distribution and

use shall be limited geographically to the United States of America, excluding

its territories or possessions. "Third Party Distributor" means any third

party, including affiliates of TTA, which acquire a sublicense from VidRev to

further distribute copies of the Licensed Software to End Users. "End User"

means any third party which, upon payment of a license fee, acquires a

sublicense from VidRev or a Third Party Distributor as provided herein to use

the Licensed Software solely for its own internal use and without any

intention to market, sell or otherwise dispose of the Licensed Software.

VidRev agrees that it will not, and will require that Third Party

Distributor(s) not, without the prior written consent of TTA, transmit or

transfer the Licensed Software, directly or indirectly, in violation of the

geographic restrictions set forth herein.

 

          (b)   Exclusions from License.   The license set forth in Section 1

(a) above excludes any right to distribute or further sublicense the

distribution and use of the Licensed Software for purposes excluded by the

terms of Schedule D (the "Excluded Purposes").

 

          (c)   Promotion and Sublicense of Licensed Software. VidRev shall

use, and require that Third Party Distributors use, commercially reasonable

efforts to promote, advertise, demonstrate, market and distribute the Licensed

Software. VidRev and Third Party Distributor(s) shall sublicense the Licensed

Software to End Users only in accordance with terms and conditions

substantially similar to those found in VidRev's End User License Agreement, a

copy of which is attached hereto as Schedule E (the "Sublicense Agreement").

The Sublicense Agreement may be modified to conform to applicable local laws.

VidRev acknowledges that upon TTA's development of subsequent products, it may

be subject to additional terms and conditions under this Agreement.

 

     2.    Pricing.   Within thirty (30) calendar days after signing this

Agreement, and then annually thereafter, appropriate representatives of VidRev

will submit to TTA a price proposal for services, including video

conferencing, video telephony, broadcasting, etc., available at that time.

Such proposal will establish minimum licensing fees for both individual and

volume sales for each of the Licensed Software and related services.   TTA and

VidRev will agree to and sign an agreement stating the applicable prices or

fees at that time, and that fee schedule will be incorporated by reference

into this Agreement.

 

     3.    Foreign Language Translation License.

 

          (a)   Translation of Licensed Software.   TTA hereby grants to

VidRev the non-exclusive right to translate the error messages, prompts,

screen literals and documentation associated with the Licensed Software and

any updates thereto from the original English version into the Spanish

language (all such translations by VidRev shall be referred to as "Foreign

Language Translation").   Except as set forth in this Section 3 (a), all such

translations shall be included within the definition of "Licensed Software"

and governed by the provisions of this Agreement relating thereto, including

without limitation, the payment provisions set forth in Section 4 below.   All

rights to all other translations of the Licensed Software and updates thereto

into any languages other than the Foreign Language Translations are hereby

reserved to TTA or its licensor.

 

          (b)   Marketing of Translations.   During the term of this

Agreement, TTA hereby grants to VidRev and Third Party Distributor(s) the

exclusive right to sublicense use of the Foreign Language Translations of the

Licensed Software developed by or for the benefit of VidRev to End Users

pursuant to the terms of this Agreement.

 

          (c)   Review.   TTA shall receive a copy of all Foreign Language

Translations, and shall have a right to review and modify such translations to

ensure accuracy with the original English version.

 

     4.    Supply of Licensed Software.

 

          (a)   Fees and Payment.   VidRev shall pay TTA an initial fee of

One Thousand Dollars ($1,000) upon the execution of this Agreement. Such

payment shall be applied as a credit towards the first One Thousand

Dollars($1,000) due by VidRev to TTA for sublicenses granted hereunder. All

payments shall be made in United States (U.S.) Dollars via wire transfer to

TTA's designated bank, Soci t   G n rale, in accordance with the wiring

instructions provided in Schedule B.

 

          (b)   Royalty.   For each sublicense granted by VidRev or Third

Party Distributor(s) to an End User, VidRev shall pay a fee to TTA of eighteen

percent (18%) of the license or use fee for each product sublicensed.   Such

payment must be paid in full no later than the 15th of the following calendar

month.

 

          (c)   Distribution Procedure.   VidRev shall distribute the

Licensed Software in accordance with the Distribution Procedure set forth in

Schedule G.

 

          (d)   Taxes.   Payments to TTA hereunder shall be paid without

deduction for any withholding tax or of any other amount. If, under any

applicable law, VidRev is required to withhold tax or any other amount from

any such payment, then: (i) any sum payable hereunder shall be increased as

may be necessary so that after making all required deductions or withholdings

(including deductions applicable to additional sums payable under this Section

4(d)), TTA receives an amount equal to the sum it would have received had no

such deductions or withholding (including deductions applicable to additional

sums payable under this Section 4(d) been made; (ii) VidRev shall make such

deductions and withholdings; and (iii) VidRev shall pay the full amount

deducted or withheld to the relevant taxing authority in accordance with

applicable law.   Within thirty (30) days after the date of any payment of any

of the taxes withheld by VidRev irrespective of any payment to TTA, VidRev

shall furnish to TTA the original or a certified copy of a receipt or other

evidence satisfactory to TTA evidencing payment thereof.    In addition to all

other amounts due to TTA hereunder, VidRev shall pay to or reimburse TTA for

the amount of any sales, value added, use, excise, property or other similar

federal, state, local or foreign taxes, duties, tariffs or other assessments

(other than any tax based solely on TTA's net income) and related interest and

penalties which TTA is at any time obligated to pay or collect in connection

with or arising out of the transactions contemplated under this Agreement.

 

          (e)   Promotional Material.   Upon execution and delivery of this

Agreement   TTA shall provide VidRev with technical descriptions to be used in

any promotional materials for Services using the Licensed Software.   VidRev

shall make no other statements, representations or warranties regarding the

Licensed Software or the Services as they relate to the Licensed Software and

shall not take any actions that would bind or obligate TTA or its licensor in

any way.

 

          (f)   Marks.   TTA grants VidRev a revocable, non-exclusive, non-

transferable, royalty-free license to use and reproduce the trademarks,

service marks, trade names and logos ("Marks") solely in connection with this

Agreement.   VidRev acknowledges that it has no right, title or interest in any

current or future Marks that are used or will be used by VidRev pursuant to

this Agreement.   VidRev further acknowledges that all use of such Marks by

VidRev inures to the benefit of TTA and its licensor.   In addition, to the

extent that VidRev creates any additional Mark(s), VidRev will promptly assign

full right, title and interest to such Mark(s) to TTA, at the request of TTA.

Any use by VidRev of the Mark(s) must be submitted to TTA in writing in

advance for written approval, which approval shall be within the sole

discretion of TTA.   VidRev may affix its own marks on the Licensed Software in

connection with its promotion and sale of the Licensed Software hereunder.

 

     5.    Upgrades and Improvements.

 

          (a)   New Versions.   If TTA obtains and markets an improved or

enhanced version of the Licensed Software designated by a new major numerical

sequence (e.g., Version 2.y after prior release of 1.x, where x and y are any

numbers, as distinguished from a new minor numerical sequence such as Version

z.2 after z.l where z is any number) and having substantially new or improved

functions, which TTA's licensor, in its sole discretion, elects to designate

as a "new version" of the Licensed Software (the "New Version") and, if at the

time TTA releases the New Version, VidRev is a party to the Distributor

Maintenance Agreement and is not in breach of any of its obligations, TTA

shall grant to VidRev the non-exclusive right to sublicense such New Version

in accordance with Section 1(a) and such New Version, unless VidRev notifies

TTA as provided below, shall be deemed to be the "Licensed Software" for the

purposes of this Agreement.   The New Version will not become the "Licensed

Software" if VidRev notifies TTA in writing within sixty (60) days from the

date TTA announces the availability of the New Version that VidRev does not

intend to obtain such right to sublicense any New Version, understanding that

TTA shall have no obligation to provide maintenance service.

 

          (b)   Other Services. TTA shall provide such consulting, training

and installation services with respect to the Licensed Software upon VidRev's

request, at its standard time and materials rates therefor, subject to

availability.

 

     6.    Representations, Warranties and Covenants.

 

          (a)   TTA's Representation.   TTA represents and warrants that it

has the authority to enter into this Agreement.

 

          (b)   VidRev's Representations, Warranties and Covenants.   VidRev

represents and warrants that:

 

               (i)   VidRev has the authority to enter into this Agreement;

 

               (ii) VidRev shall not utilize in any manner whatsoever the

corporate name or any trademark, or tradename of TTA, or its licensor in

connection with the Licensed Software.   VidRev shall ensure that TTA's

copyright notice and any other proprietary notice of TTA is reproduced on each

copy of the Licensed Software. VidRev shall not contest the validity of any of

TTA's, or its licensor's patents, trademarks, tradenames or copyrights used in

connection with the Licensed Software, nor contest TTA's exclusive right to

use the same throughout the world;

 

               (iii)      During the Term (as hereinafter defined) of this

Agreement, VidRev shall use its best efforts promptly to notify TTA in the

event that any End User in the Territory is reselling or otherwise disposing

of the Licensed Software in contravention of TTA's rights hereunder or under

the Sublicense Agreement.   VidRev will render such assistance as reasonably

may be required by TTA with respect thereto and the costs of any action

(including legal expenses) on the part of TTA to protect the Licensed Software

will be borne ninety percent (90%) by VidRev and ten percent (10%) by TTA

unless otherwise agreed by the parties hereto at the relevant time.

 

               (iv) VidRev covenants that it will not do, permit, or omit

to do anything that would endanger any proprietary rights of TTA or its

licensor, including any patent, trademark, trade-name, design or copyright of

TTA and its licensor, and that it will not claim any proprietary interest in

any patent, copyright, trademark or other right related to the Licensed

Software except as a licensee hereunder, and then only during the term of this

Agreement;

 

          (c)   Third Party Distributor's Representations, Warranties and

Covenants.   VidRev shall obtain the same warranties and representations set

forth in Section 6(b) above from each Third Party Distributor.

 

     7.    Limited Warranties and Limitation on TTA's Liability.

 

          (a)   Limited Warranty for Licensed Software.   TTA warrants that,

for one (1) year after delivery, the Licensed Software shall conform in all

material respects to the then current user manual or other documentation

related thereto and any New Version delivered to VidRev hereunder shall

conform in all material respects to then current user manual or any other

documentation delivered therewith. TTA hereby disclaims any and all warranties

with respect to the Licensed Software with the exception of the warranty

specified in this Section 7(a). TTA SPECIFICALLY DISCLAIMS ANY IMPLIED

WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-

INFRINGEMENT.   TTA DOES NOT MAKE AND HEREBY EXPRESSLY DISCLAIMS ANY

REPRESENTATION OR WARRANTY TO ANY THIRD PARTY WITH RESPECT TO THE LICENSED

SOFTWARE OR ANY PORTION THEREOF, INCLUDING WITHOUT LIMITATION, THE IMPLIED

WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-

INFRINGEMENT.   NEITHER VIDREV NOR ANY THIRD PARTY DISTRIBUTOR(S) SHALL HAVE

THE RIGHT TO MAKE OR PASS ON, AND SHALL TAKE ALL MEASURES NECESSARY TO INSURE

THAT NEITHER IT NOR ANY OF ITS AGENTS OR EMPLOYEES MAKE OR PASS ON, OR ATTEMPT

TO MAKE OR PASS ON, ANY WARRANTY, OBLIGATION OR REPRESENTATION ON BEHALF OF

TTA TO ANY SUCH END USER OR POTENTIAL END USER.

 

          (b)   Limitation of Liability.   NOTWITHSTANDING ANYTHING TO THE

CONTRARY CONTAINED HEREIN, TTA SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE

FOR LOST PROFITS OR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR EXEMPLARY

DAMAGES ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED HEREUNDER,

OR A VIDREV SUBLICENSE AGREEMENT, EVEN IF TTA IS APPRISED OF THE LIKELIHOOD OF

SUCH DAMAGES OCCURRING.   TTA'S LIABILITY (WHETHER BASED ON AN ACTION OR CLAIM

IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THE THIS

AGREEMENT SHALL NOT EXCEED TWO HUNDRED FIFTY THOUSAND UNITED STATES DOLLARS

(U.S.$250,000).

 

     8.    Indemnification.

 

          (a)   TTA Obligation.   TTA shall indemnify and hold VidRev

harmless from any claims, actions, damages, loss, liabilities, judgments,

costs, awards, and expenses (including reasonable attorneys' fees) arising out

of any claimed infringement or violation of any patent, copyright or trade

secret by any unmodified portion of the Licensed Software, provided that such

party notifies TTA of such claims and proceedings promptly and gives TTA an

opportunity, at TTA's expense, to control the defense and/or settlement of

such claims and proceedings. TTA's obligations under this Section 8(a) shall

not apply to any infringement arising from a modification or misuse by VidRev

or any other party of the Licensed Software or its combination, operation or

use with programs not furnished by TTA.

 

           (b)   VidRev's and Third Party Distributors' Obligation.   VidRev

shall, and shall require that Third Party Distributor(s), fully indemnify and

hold TTA, and its licensor, harmless from any claims, actions, damages, loss,

judgments, liabilities, costs, awards, expenses (including attorneys' fees)

resulting from (i) any breach by VidRev or Third Party Distributor(s) of any

of its or their obligations contained herein or in any agreement between

VidRev and the Third Party Distributor or any Sublicense Agreement; and (ii)

except as provided in Section 8(a) above, all claims of whatever form arising

out of distribution or use of the Licensed Software.

 

     9.    Term and Termination.

 

          (a)   Term.   Unless terminated earlier pursuant to Section 9(b)

below, this Agreement shall commence on the date first written above and shall

continue and remain in force for an initial period of fifty (50) years from

such date,   and shall be   renewed thereafter upon the agreement of the

parties.

 

          (b)   Rights of Termination.   This Agreement may be terminated

upon thirty (30) days written notice as follows:

 

               (i)   by either party upon the filing by the other party of

a voluntary petition in bankruptcy (or similar proceeding relating to either

party's insolvency), or filing against such other party of an involuntary

petition in bankruptcy which is not dismissed within thirty (30) days, or

appointment of a receiver or trustee of any of such other party's property if

such appointment is not vacated within thirty (30) days, or adjudication of

such other party as insolvent, or assignment of such other party's property

for the benefit of its creditors;

 

               (ii) by either party if the other party fails to comply

with any of its material obligations under this Agreement, and if such failure

remains uncured within such thirty (30) days provided, however, that TTA may

terminate this Agreement immediately upon the breach by VidRev of any of the

provisions of Section 12;

 

               (iii)      by TTA if any Third Party Distributor fails to comply

with any of its material obligations under its agreement with VidRev, and if

such failure remains uncured thirty (30) days after written notice thereof is

received by VidRev, and VidRev fails to enforce such compliance. TTA may

require that VidRev terminate any agreement with a Third Party Distributor

immediately upon the breach by the Third Party Distributor of TTA's

proprietary rights, extended to it by Section 12;

 

               (iv) a change in Control of VidRev where such Control is

acquired, directly or indirectly, in a single transaction or series of related

transactions or VidRev is the subject of a hostile takeover.   For purposes of

the preceding sentence, "Control" shall mean the possession, directly or

indirectly, of the power to direct or cause the direction of the voting of

more than fifty percent (50%) of the total voting power of an entity's voting

securities, partnership interests, membership interests, or similar equity

interests; or

 

                (v)   any other transaction which results in the disposition

of fifty percent (50%) or more of the voting power of all classes of capital

stock of VidRev unless VidRev's stockholders of record as constituted

immediately prior to such acquisition or sale will, immediately after such

acquisition or sale (solely by virtue of securities issued as consideration

for VidRev's acquisition or sale or otherwise) hold at least fifty percent

(50%) of the voting power of the surviving or acquiring entity.

 

      The rights of termination provided in this Section 9(b) shall not

prejudice any other rights or remedies which either party may have at law or

in equity.

 

          (c)   Upon the termination of this Agreement as provided for in

Section 9(a) and (b), VidRev and Third Party Distributor(s) shall return to

TTA all information, confidential or otherwise, relating to the Licensed

Software. Upon such termination, VidRev and Third Party Distributor(s) shall

cease marketing and sublicensing the Licensed Software, except for the

completion of contractual commitments existing on the date of receipt of

notice of termination.

 

     10.   Third Party Distribution Agreements.   VidRev shall enter into

written distribution agreements with all Third Party Distributor(s) which

shall contain all the obligations, representations and warranties of the Third

Party Distributor set forth in this Agreement.   VidRev shall retain fully

executed copies of all Third Party Distribution Agreements and shall provide

TTA with copies of the same within thirty (30) calendar days of execution.

 

     11.   Access to Books and Records.   VidRev shall, and shall require that

all Third Party Distributors, keep at their principal places of business

accurate records relating to their sublicense of the Licensed Software.

VidRev and its Third Party Distributors shall deliver to TTA, on a monthly

basis, a report of their sales records, in addition to a separate audited

report within ninety (90) days following the end of each calendar year during

the term of this Agreement statements setting forth such sales, certified by

an independent certified public accountant. Following the delivery of such

certified statement, TTA shall have the right to retain another independent

accountant to inspect VidRev's and Third Party Distributor(s)' records to

verify the sales quantities and other records upon which payments to TTA are

based.   TTA shall pay for the expenses to conduct such audit, provided that if

such audit reveals an underpayment by VidRev and its Third Party Distributors

of more than five percent (5%) of any royalties otherwise due hereunder,

VidRev and its Third Party Distributors shall immediately reimburse TTA for

its audit expense.

 

     12.   Proprietary Rights.

          (a)   Title to Licensed Software and Confidential Information.   By

virture of this Agreement, VidRev and Third Party Distributor(s) shall not own

or have title to the Licensed Software, nor any Confidential Information and

shall only obtain the licensed rights with respect to the Licensed Software

provided for herein, subject to all of the terms and conditions hereof. VidRev

agrees, and shall require Third Party Distributor(s) not to reverse engineer

or modify the Licensed Software or create a derivative work from the Licensed

Software except as provided for herein.

 

          (b)   Definition of Confidential Information.   "Confidential

Information" shall mean the Licensed Software, the User Manual and other

documentation related thereto, all modifications, enhancements, improvements

of the foregoing and New Versions, including Foreign Language Translations, in

VidRev's and Third Party Distributor(s') possession hereunder, and all data,

information, techniques, know-how, procedures, specifications, programs,

source code, object code, documentation, diagrams and other materials of any

type whatsoever contained or revealed in any of the foregoing, except for

information generally available to or known to the public, independently

developed outside the scope of this Agreement or lawfully and rightfully

disclosed by a third party. VidRev hereby acknowledges and agrees, and shall

obtain an acknowledgement from Third Party Distributor(s), that the

Confidential Information contains valuable proprietary and confidential

information and trade secrets developed or acquired by TTA, or its

licensor,through the expenditure of substantial time and money.

 

          (c)   Obligations Regarding Confidential Information.   VidRev

agrees, and shall require Third Party Distributor(s), not to disclose to or

otherwise permit any third person or entity access to the Confidential

Information except to the extent required by with the terms of this Agreement;

to insure that employees who receive access to the Confidential Information or

any portion thereof are advised of the confidential and proprietary nature of

the Confidential Information and to require that any such employee agree to

refrain from taking any action prohibited under this Agreement; to notify TTA

promptly of any circumstances of which VidRev or any Third Party Distributor

has knowledge relating to any possession or use of the Confidential

Information by any person or entity other than those authorized; to take at

the VidRev's expense, but at TTA's option and under TTA's control and

discretion, any legal action necessary to prevent or stop the unauthorized use

of the Confidential Information by any third person or entity who or which has

gained access to such information due in substantial part, to the fault or

negligence of VidRev or any Third Party Distributor.

 

          (d)   Survival of Confidentiality Obligations; Right to Equitab