EXHIBIT 10.3
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (this "MOU") is entered into this 28th day
of January, 2004, by and between QUIET TIGER, INC., a Nevada corporation, whose
address is 000 X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("QT") and the
shareholders of DARKNOISE TECHNOLOGIES, LIMITED, Uk registered company number
4450538 and whose registered office is at 0 Xx Xxxxxx Xxxxxx Xxxxxx XX0X
0. QT hereby agrees to purchase 100% of the capital stock of DNT from its
shareholders, and DNT and its shareholders agree to sell 100% of its
capital stock to QT upon the following terms and conditions:
(a) Upon the execution of this MOU, QT shall pay to DNT a non-refundable
deposit of $50,000 (US). The development teams of both parties have
compiled an action list of items which includes the audio test matrix
to be completed prior to the closing. The details are defined in
"Exhibit A" as attached to this agreement.
2. Upon the execution of a mutually acceptable Stock Purchase Agreement
("SPA"), QT shall:
(a) pay to DNT $100,000 (US) and.
(b) deliver to the shareholders of DNT, pro rata, a minimum of 1,000,000
(post reverse) QT shares of common stock. Such stock shall be
considered fully paid and non-assessable, and for the purposes of this
transaction shall be free of any and all liens and encumbrances as of
the date of issue subject to the laws of the United Kingdom. An
additional number of QT common shares in excess of the minimum of
1,000,000 (post 10 to 1 reverse share split) common shares may be
issued depending on the "QT Stock Price Increase". All stock issuances
referred to in this section 2(b) will be issued in accordance with
Rule 144 of the Securities Act.
In the event of a QT Stock Price Increase, an additional percentage of
common shares will be issued proportionately to the percentage
increase in the QT Stock Price Increase. The QT Stock Price Increase
will be calculated based upon the closing stock price of QT upon the
execution of this MOU plus one-half (50%) of the increase (if any) in
the closing stock price of QT between the date of the execution of
this MOU and the date of the execution of the final SPA.
The closing stock price for purposes of this agreement will be QT's
closing stock price as quoted on the OTC Electronic Bulletin Board.
For example, if the closing stock price of QT between the execution of
this MOU and the signing of the final SPA increases 100%, then DNT
will receive an additional 50% of the minimum number of shares.
(c) QT shall enter into employment agreements with Xxx Xxxxxx, Xxxxxxx
Xxxxx, Xxxx Xxxxx and Xxxxx XxXxx. The details of which shall be
agreed with the individuals between the date of this agreement and the
date of the final SPA; . Xx. Xxxxxx and Xx. Xxxxx shall each receive
an annual salary of 50,000 pounds sterling, and Xx. Xxxxx and Xx.
XxXxx shall receive an annual salary of 100,000 pounds sterling.
Mssrs. Currie, Keech, Xxxxx and XxXxx shall also each receive 500,000
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EXHIBIT 10.3 - continued
options pursuant to QT's Employee Stock Option Compensation Plan (the
Plan"). Such options shall vest in accordance with the terms of the
Plan.
3. Upon the execution of a mutually acceptable Stock Purchase Agreement
("SPA"), DNT shall:
(a) deliver to QT all corporate documents, but not limited to such
documents as its Corporate Minutes, Incorporation documents, Articles
of Association, Shareholder Ledger and accounting books and records,
and
(b) DNT shall cause its shareholders to deliver to QT certificates
representing 100% of the issued and outstanding capital stock of DNT
upon the closing of the SPA.
4. The SPA shall contain mutually acceptable representations, warranties and
such other terms as are customary and usual, and shall be executed, and the
transactions contemplated therein shall be consummated, on or before 45
days from the date of this MOA. The SPA shall be contingent upon the
approval of the shareholders of DNT approving the sale of 100% of the
capital stock of DNT to QT.
5. Upon the closing, DNT shall be a wholly-owned subsidiary of QT. QT
represents and warrants that it shall be responsible for any and all costs
associated with the on-going operations of DNT upon the closing of the SPA.
6. On or before 60 days from the closing of the SPA, DNT shall deliver to QT
its audited financial statements from its inception to the date of the
closing of the SPA. and QT shall cause to be filed with the Securities and
Exchange Commission a Form SB-2 Registration Statement registering the QT
Stock as defined in section 1(c) of this agreement, subject to DNT's timely
delivery of its audited financial statements.
7. This MOU is a legally binding obligation upon the parties hereto, and shall
be governed by, and construed in accordance with, the laws of the State of
Arizona, without regard to conflict of laws principals.
QUIET TIGER, INC. a Nevada corporation
By:________________________________
Xxxxxxx X. Xxxxxxxx, Chief Executive Officer
By:_______________________________
Xxxxxx Xxxxxxx, Chief Financial Officer
By:_______________________________
Xxxx X. Xxxxxxxx, Director
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EXHIBIT 10.3 - continued
DARKNOISE TECHNOLOGIES, INC., a UK registered company
By:______________________________
Xxxx Xxxxx, CEO, Director and Shareholder
By:_______________________________
Xxx Xxxxxx, COO, Director and Shareholder
By:_______________________________
Xxxxxxx Xxxxx, CTO, Director and Shareholder
By:_______________________________
Xxxxx XxXxx, EVP, Director and Shareholder
By:_______________________________
Xxxxx Xxxxxx, Non-Executive Director and Shareholder
By:_______________________________
Xxxxx Xxxxx, Non-Executive Chairman and Shareholder
By:_______________________________
Xxx XxxXxxx, Non-Executive Director and Shareholder
By:_______________________________
Xxxxxxx Xxxx, Shareholder
By:_______________________________
Xxxxxxx Xxxxx, On behalf of Quarma Ltd.
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Exhibit A
List of goals
Objectives and Deadlines to achieve an integrated version 1.0 release of
DarkNoise(TM) Q-Spoiler, within SunnComm's existing DRM proposition.
Following the meeting with Xxxx Xxxxxxxxxx, Xxxxxxx Xxxxx and Xxx Xxxxxx 26th
January 2004
1. Agreed specification:
a) The DarkNoise system will be designed to comply with the Sony/Xxxxxxxx
Red Book standard (44.1Khz, 16-Bit, Dual Channel etc.).
b) The DarkNoise system will be used with an original CD-DA file format
(the originating file format).
c) The DarkNoise system will prevent a useable (i.e. noticeably spoiled)
compressed file to be generated from the originating file format using
the following `lossy' codecs:
o Mpeg Layer 3 at 128, 192 and 256kbps bandwidth.
o WMA at 128 and 256kbps bandwidth.
d) The spoiling noise will be designed to remove `user perceived'
artefacts on playback, whilst at the same time, maximising spoiling
effects (It is to be understood that this could result in a solution
that has a spoiling effect that is just noticeable enough to annoy the
listener when the compressed MP3/WMA audio content is played. See
3.c).
Deadline: 2-1-04
2. Determine the method of modulating DarkNoise(TM) technology with the
original file format:
a) To achieve an acceptable level of inaudibility of artefacts when the
encoded audio file is played back on a CD-DA Player (both high and low
quality devices), and PC (both non-linear and `flat response'
soundcards).
b) To determine whether a `threshold and ramping' method of modulation
will produce acceptable (inaudible playback artefacts) results in
comparison to a psychoacoustic type model (including pre/post masking
solutions).
c) To achieve a solution that streams the DarkNoise(TM) components with
the original audio file (not necessarily in real-time).
Deadline: TBA
3. Modify the existing DarkNoise(TM) C/C++ encoder module to:
a) Be integrated into SunnComm's multi-threading server by being DLL file
compliant.
b) Upgrade the encoding engine to take into account any extra parameter
settings/ranges to achieve the specification objectives (Win to
determine).
c) Include an adjustable `spoiling/audible playback noise' ratio slider
on the encoder API.
Deadline: 2-15-04
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EXHIBIT 10.3 - continued
Further development activities will include:
4. Commercial laboratory based `Subjective Audio Testing' using the ABX method
to:
a) Underpin the research and development conducted in 2 a), b) and c)
above.
b) Determine whether specific amplifier/graphic equaliser stages cause
unwanted audible artefacts on playback of the originating file format.
5. Providing a solution that can be presented to music industry contacts, by
SunnComm, for evaluation and external audio testing.
Deadline: 2-15-04
Other desirable features that will be explored at this stage, to enhance the
SunnComm/DarkNoise proposition are:
6. The ability to allow a controlled Red Book file to be compressed (within
strictly defined business rules) to a WMA audio file format.
Deadline: TBA
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