TECHNOLOGY TRANSFER AGREEMENT
This
Agreement is effective as of July 8, 2005 (the "Effective
Date"),
between Centale, Inc., a New York
corporation, with executive offices at 6700
N. Andrews Ave., Suite 605, Ft. Lauderdale,
FL 33309 ("Centale"), and Moses
Johnson, whose offices are at 2207 Chestnut
Street, 2nd Floor, Philadelphia,
PA 19103 ("Johnson").
WHEREAS,
Johnson owns and operates a Website under the domain name
"musicondemand.net," and owns or has rights
to use the technology used in the
operation of the Website, and Centale
wishes to acquire the Website and the
related technologies, and Johnson is willing to transfer
same on the terms
and subject to the conditions hereof.
NOW,
THEREFORE, it is agreed:
ARTICLE I
DEFINITIONS
For the purpose
of this Agreement the following capitalized terms are
defined in this Article I and shall have
the meaning specified herein:
1.1 Business. "Business" means the operation of
a Website under the
Domain Name and all related commercial
activity carried on prior to this date
by Johnson, as well as any other
commercialization of the music on demand
technology described in U.S. provisional
application 60/692070, filed on or
about June 17, 2005, entitled "Media Search
And Retrieval System Using Links".
1.2 Copyrights. "Copyrights" mean (i) any
copyright in any original
works of authorship fixed in any tangible
medium of expression as set forth in
17 U.S.C. Section 101 et. seq., whether
registered or unregistered, including
any applications for registration thereof,
(ii) any corresponding foreign
copyrights under the laws of any
jurisdiction, in each case, whether
registered or unregistered, and any
applications for registration thereof, and
(iii) moral rights under the laws of any
jurisdiction.
1.3 Database Rights. "Database Rights" means any rights
in databases
under the laws of the United States or any
other jurisdiction, whether
registered or unregistered, and any
applications for registration thereof.
1.4 Domain Names. "Domain Name" means
"musicondemand.net" as
registered by Moses Johnson on
______________ with ____________________, as
well as any other domain names owned of
record by Johnson..
1.5 Johnson Technology. "Johnson Technology" means all of
the
Technology owned, developed or used with
rights of assignment by Johnson in
connection with the Business.
1.6 Patent Application. "Patent Application" means the
application
for Letters Patent of the United States
[Application Serial No. 60/692070]
executed on or about June 17, 2005,
entitled AMedia Search And Retrieval
System Using Links,@ with the inventor
Moses Johnson.
1.7 Person. "Person" means an individual, a
partnership, a
corporation, a limited liability company,
an association, a joint stock
company, a trust, a joint venture, an
unincorporated organization, and a
governmental entity or any department,
agency or political subdivision
thereof.
1.8 Technology. "Technology" means technological
models, algorithms,
manufacturing processes, design processes,
behavioral models, logic diagrams,
schematics, test vectors, know-how,
computer and electronic data processing
and other apparatus programs and software
(object code and source code),
optical, hydraulic and fluidic apparatus
and processes, detection and
analytical devices, databases and
documentation thereof, trade secrets,
technical information, specifications,
drawings, records, documentation, works
of authorship or other creative works,
websites, ideas, knowledge, data or the
like. The term "Technology" includes
Copyrights, Database Rights, trade
secrets and any other intellectual property
right, including any trademark,
trade name, trade dress or service mark,
domain name or applications for
registration thereof.
1.9 Third Party. "Third Party" means a Person other
than Johnson and
Centale.
1.10
Websites. "Website" means the business
carried on at the URL
identified by the Domain Names.
ARTICLE II
TRANSFER OF OWNERSHIP
2.1 Assignment
of Domain Names.
a. At the Closing, Johnson will
transfer to Centale all of Johnson's
right, title and interest in and to all of
the Domain Names. Said
transfer
will be documented by:
i the delivery by Johnson to
Centale at the Closing of a completed and
duly executed
A______________________________@ as published by
_________________________, sufficient in
form to register Centale as
the Registrant for the Domain Names;
and
ii Submission on the Closing Date by
Centale to ___________________ of
a modification to the Service Agreement
covering the Domain Names,
said modification being the designation of
__________________ as
Administrative Contact and Billing Contact
and of ______________ as
Technical Contact.
b. The parties contemplate that
Centale will utilize the Domain Names
in connection with the Business.
Accordingly, Johnson
will take any action in
addition to those specified in Section
2.1(a) above which is reasonably
necessary to permit Centale full
utilization of the Domain Names.
2.2 Assignment of Patent Application.
At the Closing,
Johnson will
execute and tender to Centale the
Assignment of Patent Application which is
annexed hereto as Appendix A. In addition, Johnson will provide
Centale all
reasonable assistance required in order to
cause the letters patent to issue
in the name of Centale.
2.3 Assignment Of Technology.
At the Closing,
Johnson will deliver an
instrument of assignment that will grant,
convey and assign to Centale all of
Johnson's right, title and interest in and
to the Johnson Technology, to be
held and enjoyed by Centale, its successors
and assigns. Johnson will further
grant, convey and assign to Centale at the
Closing all of Johnson's right,
title and interest in and to any and all
causes of action and rights of
recovery for past infringement of
Copyrights, Patents or Database Rights in
and to the Johnson Technology, and for past
misappropriation of trade secrets
in and to the Johnson Technology. Johnson
further covenants that Johnson will,
without demanding any further consideration
therefore, at the request and
expense of Centale (except for the value of
the time of Johnson employees), do
all commercially reasonable lawful and just
acts that may be or become
necessary for evidencing, maintaining,
recording and perfecting Centale's
rights to such Johnson Technology,
including, but not limited to, execution
and acknowledgement of assignments and
other instruments in a form reasonably
required by Centale for each Copyright,
Patent or Database Right jurisdiction.
2.4 Assignment Disclaimer.
CENTALE ACKNOWLEDGES
AND AGREES THAT THE
FOREGOING ASSIGNMENTS ARE MADE ON AN "AS
IS," QUITCLAIM BASIS AND THAT JOHNSON
HAS NOT MADE OR WILL MAKE ANY WARRANTY
WHATSOEVER, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE, ENFORCEABILITY OR
NON-INFRINGEMENT.
ARTICLE III
CONSIDERATION FOR TECHNOLOGY
3.1 Cash Consideration. Centale will pay Johnson a total
of Fifty
Thousand Dollars ($50,000) for the Johnson
Technology. Johnson
acknowledges
prior receipt of Twenty-Five Thousand
Dollars ($25,000), which shall be a
credit toward Centale's obligation under
this Section 3.1.
3.2 Royalty.
a. Payments. Centale shall pay to Johnson, in
perpetuum, a royalty
equal to (i) ten percent (10%) of Centale's
Music Net Revenue up to Twenty-
Five Million Dollars ($25,000,000) in
revenue and (ii) twenty percent (20%) of
Centale's Music Net Revenue in excess of
Twenty-Five Million Dollars
($25,000,000). These payments shall be made
within thirty (30) days after the
end of each calendar quarter, based upon
the Music Net Revenue during that
calendar quarter, and shall be accompanied
by a report, in reasonable detail,
specifying the basis for the amount paid.
b. Audit Rights. Johnson shall be entitled to have
an independent
public accounting firm audit Centale's
books and records for the sole purpose
of confirming the accuracy of Music Net
Revenue reported pursuant to Section
3.2(a) above. Any such audit shall be performed
on at least twenty (20) days'
prior written notice to Centale, during
normal business hours and, at
Centale's request, subject to the
independent accounting firm's execution of a
reasonable confidentiality agreement. The
independent accounting firm shall
report to Johnson.whether the correct Music
Net Revenue has been reported
and/or the correct royalties have been
paid, as applicable, and, if not, the
amount of the discrepancy and an
explanation as to how the discrepancy likely
occurred. Audits shall be conducted no more
frequently than twice in any
twelve (12) month period, unless the
preceding audit revealed a discrepancy.
In the case of any discrepancy, the
appropriate adjustment in payments shall
promptly be made. Any such audit shall be
performed at the Johnson's expense,
unless the audit reveals a discrepancy of
more than the greater of (i) five
thousand dollars ($5,000) or (ii) five
percent (5%) between the Net Revenue
actually reported and those which should
have been reported, in which case
Centale shall reimburse the audit fee.
c. "Music Net Revenue" means (i) the
aggregate license fees and other
revenue received by Centale from
commercialization of all or part of the music
on demand technology described in U.S.
provisional application 60/692070,
filed on or about June 17, 2005, entitled
"Media Search And Retrieval System
Using Links," net of the cost of goods
sold, if any, , and not including
freight, taxes, insurance, and similar
ancillary charges, less (ii) credits
for refunds and returns.
d. Free Distribution. Centale shall be entitled to
distribute the
services provided by the Website
free-of-charge or coupled with other products
and services marketed by Centale, provided
such distribution serves a
legitimate business purpose of Centale.
In such circumstances
unless Centale
receives payment specifically attributable
to the Website, there will be no
Music Net Revenue arising from the
transaction. Johnson
acknowledges that his
royalty may be limited by this practice,
but expects to obtain benefit from
the practice as a shareholder of
Centale.
3.3 Stock Grant. At the Closing Centale will
deliver to Johnson a
certificate for five hundred thousand
(500,000) shares of Centale common
stock. The certificate will be issued
pursuant to the Award Agreement annexed
hereto as Appendix B, and Johnson's rights
in the shares shall be subject to
the restrictions set forth in the Award
Agreement.
ARTICLE IV
JOHNSON WARRANTIES
4.1 To the best of his knowledge,
Johnson represents and warrants to
Centale the following:
a. Taxes. Johnson has either (i) sought
necessary filing extensions,
or (ii) filed all tax returns that he is
required to file with all governmental
agencies as a result of the Business, and
has paid or accrued for payment all
taxes as shown on such returns.
There is no material
claim for taxes that is a
lien against the Johnson Technology;
b. Pending Actions.
There are no material
legal actions, lawsuits,
proceedings or investigations, either
administrative or judicial, pending or
threatened, against or affecting Johnson or
the Business that arose out of the
Business. Johnson is not subject to any
order, writ, judgment, injunction,
decree, determination or award of any
court, arbitrator or administrative,
governmental or regulatory authority or
body which would be likely to have a
material adverse effect on the Business or
the Website;
c. Intellectual Property And
Intangible Assets.
Johnson has full
legal right, title and interest in and to
all of the Johnson Technology.
Johnson has not received any written notice
that the rights of any other
person are violated by the use by Johnson
of the Johnson Technology. None of
the intellectual property included in the
Johnson Technology has ever been
declared invalid or unenforceable, or is
the subject of any pending or, to
Johnson's knowledge, threatened action for
opposition, cancellation,
declaration, infringement, or invalidity,
unenforceability or misappropriation
or like claim, action or proceeding;
and
d. Validity of the Agreement.
This Agreement has
been duly executed by
Johnson and constitutes his valid and
binding obligation, except to the extent
limited by applicable bankruptcy,
reorganization, insolvency, moratorium or
other laws relating to or affecting
generally the enforcement of creditors
rights. The execution and delivery of this
Agreement and the carrying out of
its purposes will not result in the breach
of any of the terms or conditions
of, or constitute a default under or
violate any agreement, lease, mortgage,
bond, indenture, license or other material
document or undertaking, oral or
written, to which Johnson is a party or is
bound, nor will such execution,
delivery and carrying out violate any
order, writ, injunction, decree, law,
rule or regulation of any court, regulatory
agency or other governmental body.
e. No Retentions. The Johnson Technology includes
all of the Technology
utilized for commercial purposes by
Johnson, either individually or in
connection with the business of
Solarbaybies, during the twelve months preceding
the date of this Agreement, except for such
Technology as is being transferred
to Centale by Solarbaybies pursuant to the
Asset Transfer Agreement of even date
herewith.
4.2.
OTHER THAN
THE REPRESENTATIONS EXPRESSLY SET FORTH HEREIN, JOHNSON
MAKES NO OTHER REPRESENTATION OR
WARRANTY,
