Exhibit 10.1
SOFTWARE AND TECHNOLOGY
SUB-LICENSE AGREEMENT
THIS SOFTWARE AND TECHNOLOGY SUB-LICENSE AGREEMENT
("Agreement") is entered into as of
this 30th day of November, 2007, by and among MEDIA DISTRIBUTION
SOLUTIONS, LLC, a Texas limited liability company ("MDS"),
ESPRE SOLUTIONS, INC., a Texas corporation ("ESPRE") and
ALL LINK LIVE, INC. a New York corporation ("ALL LINK
LIVE").
WITNESSETH:
WHEREAS, on or about April 14, 2006, MDS entered into an
Intellectual Property License Agreement of same date with ESPRE
(the "Espre License Agreement") which is the creator and owner of
certain intellectual property rights defined herein as the Licensed
Technology. MDS has entered into a subsequent agreement with ESPRE
which effects a reversion of the Espre License Agreement. Copies of
the Espre License Agreement and the subsequent agreement are
annexed hereto as Exhibit A and Exhibit B;
WHEREAS, under the terms of the Espre License Agreement,
MDS has the right and authority to grant sub-licenses for such
Licensed Technology to third parties;
WHEREAS, ALL LINK LIVE wishes to develop, market, and
offer for sale and/or license Software (as defined) which would
embody the Licensed Technology (as defined);
WHEREAS, ALL LINK LIVE now desires to acquire a
sub-license from MDS to use the Licensed Technology in conjunction
with ALL LINK LIVE'S Business (as defined); and
WHEREAS, MDS is willing to grant such a sub-license for
use of the Licensed Technology by ALL LINK LIVE for use in ALL LINK
LIVE'S Business on the terms and conditions as hereinafter
defined.
NOW THEREFORE, in consideration of the preceding rights and
obligations hereinafter set forth and the mutual promises and
covenants herein contained, the parties hereto agree as
follows.
1.1
"Affiliate" means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with ALL LINK LIVE. As
used in this definition of "Affiliate," the term "control" means
either the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
such entity, through the ownership of voting securities or
ownership of a direct or indirect equity interest of ten percent
(10%) or more in the entity.
1.2
"Business" means ALL LINK LIVE'S business to create,
perform, reproduce, create derivative works of, develop, use,
operate, market, sell, license, sublicense, display, publish,
transmit and/or distribute the Software in the business-to-consumer
and/or consumer-toconsumer markets in the Territory, solely
and exclusively for, adult oriented material, adult entertainment
applications, and/or direct adult consumer-oriented online
communities.
1.3
"Business Day" means the days Monday through Friday
of each calendar week, except legal holidays recognized as such by
either the government of the United States or of the State of
Texas.
1.4
"Confidential Information" means the respective
Confidential Information of ALL LINK LIVE and MDS, as defined in
Article VI, below.
1.5
" Contractor(s)" means any Person with whom ALL LINK
LIVE enters a separate agreement to modify, conform and adapt the
Licensed Technology for ALL LINK LIVE'S Business.
1.6
"Documentation" means all system documentation,
operating instructions, logs and training manuals created by ALL
LINK LIVE and reasonably necessary to implement ALL LINK LIVE'S
Business under this Agreement.
1.7
"Excluded Technology" means those certain third-party
software processes, programs and documentation necessary to the
functionality and operation of the Licensed Technology and/or the
Software and which the parties do not own and/or have the legal
capacity to license to one another and which licenses the parties
acknowledge ALL LINK LIVE may need to obtain to market the
Software.
1.8
"Intellectual Property Rights" means all current and
future worldwide patents, copyrights, mask work rights and trade
secret rights, protections and the like available under the laws of
any jurisdiction relative to the Licensed Technology, the Licensed
Technology Derivative Work, the Documentation, and the Software
which a party owns or which a party has the right to obtain or
benefit from the same, whether now or in the future.
1.9
"Licensed Technology" means all research and
development information, intellectual property (including
intellectual property upon expiration or abandonment of patents),
improvements, know-how, trade secrets, works of authorship,
technical data, compilations, methods, processes, and/or Object
Code relative to image and video compression applications, and any
derivative applications thereof, which deliver, encode, decode,
compress, record, store and/or host images or video content to
which MDS and/or ESPRE owns the Intellectual Property Rights and
which is necessary for and/or supports the Business, including,
without limitation, the technology and patents described in
Schedule 1.9 attached hereto. The Licensed Technology also
includes all Updates and Upgrades. Notwithstanding the foregoing,
the term "Licensed Technology" shall not include any technical
data, methods, processes and software source code comprising the
Excluded Technology. The source code and associated tools will be
placed in an escrow account that will be governed by the rules for
corporate survivability.
1.10
"Licensed Technology Derivative Work" means any
adaptation of, improvement of, addition to or deletion from the
substance or structure of the Licensed Technology by ALL LINK LIVE
or its Contractors for the Business, including, without limitation,
the Intellectual Property Rights described in Schedule 1.10
.
"Net
Revenue" means the
total aggregate of all monies and receipts received by ALL LINK
LIVE and derived from all Video, Video Streaming and the MDS Video
Player Software based on the Licensed Technology with the Licensed
Technology Derivative Work, which is licensed, sublicensed,
distributed or sold by ALL LINK LIVE, less: (i) all
sales taxes imposed by governmental authorities directly on sales
of the Video, Video Streaming and the MDS Video Player Software and
actually collected from customers (provided such taxes are added to
the selling price and are, in fact, paid by ALL LINK LIVE to the
appropriate governmental authority); (ii) any returns; and, (iii)
the operating expenses of ALL LINK LIVE. The monies and receipts
within Net Revenues shall be deemed to be realized by ALL LINK LIVE
at the time of receipt of good funds for the Video, Video Streaming
and the MDS Video Player Software. "Net Revenues" specifically
excludes (a) any other monies received from such customers related
to other offerings or services provided by ALL LINK LIVE,
including, without limitation as set forth in Schedule 3.3
attached hereto ("ALL LINK LIVE Technology") and (b) the sale of
substantially all of the assets, the merger, the consolidation,
and/or the initial public offering of ALL LINK LIVE.
1.11
"Person" means any natural person, contractor,
partnership, corporation, trust, association, limited liability
company, or other legally recognized entity.
1.12
"Software" means ALL LINK LIVE'S combination of the
Licensed Technology with the Licensed Technology Derivative Work
and all necessary Documentation into a commercially available
software package, usable whether remotely stored and accessible via
the global information network, on a local area network, or on an
application service model.
1.13
"Source Code" means, collectively (a) the series of
un-compiled instructions or any part thereof in human readable
form, test programs and program specifications, compiler and
assembler descriptions comprising a portion of the Licensed
Technology; (b) descriptions and locations of Excluded Technology
required to use or support the Licensed Technology; and/or (c)
technical documentation, system documentation, operating
instructions, logs, and/or training manuals that MDS uses to
maintain or support the Licensed Technology.
1.14
"Territory" means the world.
1.15
"Transfer" means the voluntary, involuntary, direct
or indirect assignment, sale or other transfer by a party of any
interest in this Agreement, any part or all of the ownership, of
the party, and/or the License or any interest therein granted
pursuant to this Agreement, including, without limitation: (a) the
transfer of ownership of an equity interest, assets or otherwise;
(b) merger or consolidation; or (c) issuance of additional
securities representing, either individually or in the aggregate, a
direct or indirect ownership interest in the party of twenty-five
percent (25%) or more.
1.16
"Update" means any and all changes and updates to the
Licensed Technology that improve the general utility, efficiency
and operating performance of the Licensed Technology without
altering the basic function of the Licensed Technology or adding
new functionality.
1.17
"Upgrade" means
any and all improvements in the Licensed Technology that add to or
alter the basic functions of the Licensed Technology. Upgrades
incorporate all Updates as well as all fixes for known
errors.
GRANT OF LICENSE AND LICENSE
FEE
2.1
Licensed Technology; Availability . Subject to the
terms and conditions of this Agreement, MDS hereby grants to ALL
LINK LIVE, and ALL LINK LIVE accepts, an exclusive,
royalty-bearing, personal, non-transferable, sub-license (the
"License") to use the Licensed Technology in any manner deemed
necessary, in ALL LINK LIVE'S sole discretion, to accomplish its
Business, including, without limitation (a) to use and copy the
Object Code to create the Licensed Technology Derivative Work from
the Licensed Technology, accomplished by ALL LINK LIVE or its
Contractor; (b) to create Documentation for use with the Licensed
Technology Derivative Work and the Software; and/or (c) to license,
sublease, use, copy, compile, develop, and market the Licensed
Technology Derivative Work and all necessary Documentation as a
part of the Software. As of the date first set forth above, MDS
shall make available to ALL LINK LIVE, for ALL LINK LIVE'S use, the
Licensed Technology. It is understood and agreed that this
sub-license grant is subordinate to the terms and provisions of the
Espre License Agreement. In the event of termination or expiration
of the Espre License Agreement, this Sub-License Agreement shall
automatically terminate. In the event that there are any
inconsistencies between the terms of this Sub-License Agreement and
the Espre License Agreement, the terms of the Espre License
Agreement shall govern.
2.2
MDS's Ownership of Licensed Technology; Responsibility
. Notwithstanding the granting of the License, MDS and/or ESPRE
shall be and remain the sole and exclusive owners of the Licensed
Technology and any Intellectual Property Rights therein with full
discretion to direct and derive the economic benefit of its
commercial exploitation, except as otherwise set forth herein. MDS
and/or ESPRE shall vigorously prepare, file, prosecute, and
maintain all of the patents comprising part of the Licensed
Technology to the fullest extent possible at the sole cost and
expense of MDS and/or ESPRE. ALL LINK LIVE shall have reasonable
opportunities to advise MDS and shall cooperate with MDS and/or
ESPRE in such filing, prosecution and maintenance of such patents,
including, without limitation, to have any of ALL LINK LIVE'S
employees testify when reasonably requested by MDS or ESPRE, and to
make available any records, papers, information, specimens, and the
like upon the reasonable request of MDS or ESPRE.
2.3
ALL LINK LIVE'S Ownership of Improvements and Adaptations
. Subject to the ownership interest of MDS and/or ESPRE as
described herein, ALL LINK LIVE shall be the owner of the Licensed
Technology Derivative Work, Documentation, and Software that are
developed by ALL LINK LIVE or any Contractor in furtherance of the
Business, notwithstanding any assistance by MDS or ESPRE to ALL
LINK LIVE in such development and related matters, including,
without limitation, pursuant to any software development agreement
and/or software maintenance agreement by and between MDS, ESPRE and
ALL LINK LIVE. MDS will have the right to cross license the newly
developed IP for non-competitive markets based under satisfactory
terms as agreed to by ALL LINK LIVE.
2.4
License Consideration . In full consideration of MDS's grant of the
License, ALL LINK LIVE shall pay, and/or has paid, to MDS, as a
license fee ("License Fee") the aggregate amount of One Million
United States Dollars (US$1,000,000.00), which is due and payable
as follows:
(a) A
down payment of One Hundred and Twenty-Five Thousand United States
Dollars(US$125,000.00), all of which has been paid by ALL LINK LIVE
(such payment beingacknowledged by MDS); and
(b) The
sum of One Hundred and Twenty-Five Thousand United States Dollars
(US$125,000.00) due and payable as follows:
$25,000.00 due and payable upon execution of
this Agreement $25,000.00 due and payable on or before December
20 th
, 2007 $25,000.00 due and payable on
or before January 20 th ,
2008; The remaining balance due upon the delivery of video chat;
and
(c) The
balance of Seven Hundred Fifty Thousand United States Dollars
(US$750,000.00) to be paid monthly at a rate of 20% from Net
Monthly Revenues (as defined) collected in the month and which are
due and payable within ten days (10) following the close of the
prior month, until the aggregate License Fee obligation has been
fulfilled.
It is
understood and agreed that the payment of these monthly
installments is dependent upon ALL LINK LIVE generating sufficient
Net Revenues to support such monthly installments and ALL LINK LIVE
is making no guarantee of such payments should such Net Revenues
fail to support such payments.
UPDATES, ROYALTY AND
ADMINISTRATION FEES
3.1
Updates and Upgrades . In consideration of the
Royalty (as defined), MDS and/or Espre shall provide and deliver to
ALL LINK LIVE significant Updates on a regular basis, and
significant Upgrades no less often than annually, beginning the
first full calendar month following the receipt of funds concerning
ALL LINK LIVE'S first sale and/or license of the
Software.
3.2
Royalty . In consideration of MDS's providing Updates
and Upgrades in accordance with Section 3.1 herein, ALL LINK
LIVE shall pay to MDS, as a royalty ("Royalty"), ten percent (10%)
of the Net Revenues (as defined) derived from the proceeds directly
related to Video, Video Streaming and the use of the MDS Video
Player beginning the first full calendar month following the
receipt of funds concerning ALL LINK LIVE'S first sale or license
of the Software, which Royalty shall be due in payable on a monthly
basis within ten (10) Business Days following the close of each
Month after receipt of the Updates and/or Updates as described in
Section 3.1 herein. ALL LINK LIVE shall have no obligation
to pay such Royalty unless and until MDS has performed in
accordance with Section 3.1 .
3.3
Record Keeping System . ALL LINK LIVE shall establish and maintain, at
its own expense, bookkeeping, accounting, and record keeping
systems, including the preparation and retention of books and
records. MDS shall have the right to review a statement summarizing
Gross Revenues receipts on a quarterly basis upon ten (10) Business
Days' prior written notice to ALL LINK LIVE. ALL LINK LIVE shall
provide a report to MDS of all persons or entities from which Gross
Revenues have been derived in the previous quarter.
ARTICLE IV.
4.1
Valid and Existing Authority . Each party does hereby
warrant to the other that, as of the date of this Agreement, this
Agreement has been duly and validly authorized and executed by it
and is its valid and binding obligation and that it has the legal
right and authority to execute this Agreement.
4.2
Force and Effect . MDS and ESPRE hereby jointly and
severally represent and warrant that, as of the date of this
Agreement (a) the Licensed Technology is valid and existing in full
force and effect and (b) no Licensed Technology is subject to any
proceeding or outstanding decree, order, judgment, settlement or
other similar agreement or stipulation that restricts in any manner
the use, transfer or licensing thereof by MDS and ESPRE or would
affect the validity, use or enforceability of the Licensed
Technology.
4.3
No Violation . MDS and ESPRE hereby jointly and
severally represent and warrant that, as of the date of this
Agreement (a) the consummation of the transactions contemplated by
this Agreement will not result in the loss of, or otherwise
adversely affect, any ownership rights of MDS or ESPRE in the
Licensed Technology, or result in the breach or termination of any
license, contract or agreement to which MDS or ESPRE is a party
with respect to the Licensed Technology and (b) the consummation of
the transactions contemplated by this Agreement will not cause or
obligate MDS or ESPRE to (i) grant to any Person any rights or
licenses with respect to the Licensed Technology, or (ii) pay any
royalties or other amounts with respect to the Licensed Technology
in excess of those being paid prior to the execution of this
Agreement.
4.4
Infringement . MDS and ESPRE hereby jointly and
severally represent and warrant that, as of the date of this
Agreement (a) no claim or allegation has been made by any Person
that the Licensed Technology or any part thereof infringes upon any
United States issued patent, trade secret or copyright of such
Person; (b) MDS and ESPRE know of no claim by any Person that the
Licensed Technology or any part thereof infringes upon any Person's
patent, copyright, trademark, trade secret, or any other
intellectual property of such Person, or of any applicable law or
regulation; (c) there is no pending claim by MDS or Espre against
any Person for infringing or misappropriating the Licensed
Technology; (d) without limiting the foregoing, there is no pending
claim by any Person, other than MDS or ESPRE, against any Person
for infringing or misappropriating the Licensed Technology; and (e)
ALL LINK LIVE'S use of the Licensed Technology will not infringe
upon the intellectual property rights of any third
party.
4.5
Ownership . MDS and ESPRE hereby jointly and
severally represent and warrant that, as of the date of this
Agreement (a) MDS and/or ESPRE have sole and e
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