EX - 10.3
ALLIANCE AND LICENSE AGREEMENT
ALLIANCE AND LICENSE AGREEMENT (the "Agreement"), dated as of
April_7, 2001 (the "Effective Date"), by and between Savage
Beast Technologies Incorporated, a California corporation
("Savage Beast") and Othnet, Inc., a Delaware corporation
("Othnet").
1. Definitions.
1.1 "Advertising Revenues" means all revenue derived from
advertising and promotion less any amounts paid by Savage
Beast( or Othnet to third parties directly related to obtaining
such revenues.
1.2 "Content" means the information, categories, groups, lists,
tabs, descriptions, forms, and the like accessed through the
Music Discovery Applications or contained on the Savage Beast
Server.
1.3 "Disclosing Party" means a party to this Agreement that
discloses its Proprietary Information to the other party.
1.4 "Gross Revenues" means any and all income (other than
Advertising Revenues) derived from the pages on the Othnet
Client and Website that contain or provide access to the Music
Discovery Applications or a link to the Savage Beast Web Site.
1.5 "Initial Term" has the meaning set forth in Section 12.1
hereof.
1.6 "Music Discovery Applications" means the applications that
interface with Savage Beast's proprietary Music Genome Project(
music information resource to display the Content and to
deliver the Services, including, without limitation, song
matching and active profiling as contemplated in this
Agreement.
1.7 "Othnet Client and Website" means any client application
distributed by or on behalf of Othnet and the world wide web
site operated by or on behalf of Othnet which can be found at
the following URL: xxx.xxxxxx.xxx, or such other world wide web
site as Othnet determines in its sole discretion.
1.8 "Othnet Logo" means the trademark, service xxxx and/or logo
provided to Savage Beast in the form of a GIF button.
1.9 "Othnet Trademarks" means "OTHNET" and all other trademarks
(whether registered or unregistered), service marks, trade
names, copyrighted materials, logos, slogans, designs and
distinctive advertising which Othnet adopts or uses from time
to time in connection with the products and services offered by
Othnet including, without limitation, in connection with
products and services offered on the Othnet Client and Website.
1.10 "Proprietary Information'' of a Disclosing Party means,
to the extent previously, currently or subsequently disclosed
to the other party, its directors, officers, employees,
representatives or agents hereunder or otherwise: information
relating to the Disclosing Party's business (including, without
limitation, computer programs, algorithms, names and expertise
of employees and consultants, know-how, formulas, processes,
ideas, inventions (whether patentable or not), schematics and
other technical, business, financial, customer and product
development plans, forecasts, strategies and information). In
particular, but without limitation, the Software, the Content
and any and all improvements made by Savage Beast thereto shall
be considered Proprietary Information of Savage Beast. Also,
in particular, but without limitation, all customer information
collected through the Othnet Website and Client customer
registration process and in other parts of the Othnet Website
and Client are to be considered Proprietary Information of
Othnet; provided, that the information derived directly from
Othnet consumers' use of the Services will be jointly owned by
Savage Beast and Othnet. Any music information from the Savage
Beast Server used to build profiles of consumer taste, and the
actual consumer taste profiles themselves are to be considered
the Proprietary Information of Savage Beast.
1.11 "Receiving Party" means a party to this Agreement that
receives Proprietary Information of the other party.
1.12 "Savage Beast API" means the application programming
interface that provides music information, navigation and
recommendations to the Music Discovery Applications.
1.13 "Savage Beast Logo" means the trademark, service xxxx
and/or logo provided to Othnet in the form of a graphics
interchange format ("GIF") button and as more clearly described
on Exhibit A hereto.
1.14 "Savage Beast Server" means the computers run by or on
behalf of Savage Beast that provide music information,
navigation and recommendations to the Music Discovery
Applications.
1.15 "Savage Beast Trademarks" means "Savage Beast," "Music
Genome Project," and all other trademarks (whether registered
or unregistered), service marks, trade names, copyrighted
materials, logos, slogans, designs and distinctive advertising
which Savage Beast adopts or uses from time to time in
connection with the products and services offered by Savage
Beast, including, without limitation, in connection with
products or services offered on the Savage Beast Web Site.
1.16 "Savage Beast Web Site" means the world wide web site
operated by or on behalf of Savage Beast which can be found at
the following URL: xxx.xxxxxxxxxxx.xxx or such other world
wide web site as Savage Beast determines in its sole
discretion.
1.17 "Services" means the capabilities including, without
limitation, song matching, active profiling and 'advanced'
recommendations with context and related features delivered by
the Music Discovery Applications.
1.18 "Software" means Savage Beast's proprietary software
(including, without limitation, the software providing
recommendations and information for the Music Discovery
Applications) and all associated documentation. Software may
include any upgrades, new versions or releases, enhancements or
updates to the Software at Savage Beast's sole discretion.
2. License.
2.1 Subject to the terms and conditions of this Agreement,
during the term of this Agreement, Savage Beast grants to
Othnet a nontransferable, nonassignable, nonexclusive,
worldwide license: (i) to use the Savage Beast API solely to
provide the Music Discovery Applications on the Othnet Client
and Website; (ii) to display the Content on the Othnet Client
and Website so that it is accessible to the users of the Othnet
Client and Website, provided that Othnet does not alter,
modify, or remove any proprietary or other notices of Savage
Beast from the Savage Beast API or the Content.
2.2 Subject to the terms and conditions of this Agreement,
during the term of this Agreement, Savage Beast grants to
Othnet a nontransferable, nonassignable, nonexclusive worldwide
license to integrate and display the Savage Beast Logo on the
Othnet Client and Website in the manner and location mutually
agreed upon by the parties; provided, however, that for a
period of six (6) months following the Effective Date, Savage
Beast shall not grant a license to a competitor of Othnet named
on Exhibit B hereto in the musical "peer-to-peer" category for
use during such six (6) month period; thereafter, the license
granted hereunder shall be a non-exclusive license for all
categories, including the "peer-to-peer" category.
2.3 Subject to the terms and conditions of this Agreement,
during the term of this Agreement, Othnet hereby grants to
Savage Beast a nontransferable, nonassignable, nonexclusive,
worldwide license to integrate and display the Othnet Logo on
the Savage Beast Web Site in the manner and location mutually
agreed upon by the parties.
3. Restrictions.
3.1 Except as expressly provided herein, during the term of
this Agreement, Othnet may not, directly or indirectly: (i)
display the name, logo, trademark or other identifier of an
entity other than Savage Beast on the Othnet Client and Website
in such a manner as to give the viewer the impression that such
other person, including, without limitation, Othnet, is a
publisher or distributor of the Content; (ii) make any
warranties or representations on behalf of Savage Beast or its
licensors.
3.2 Except as expressly provided herein, during the term of
this Agreement, Savage Beast may not directly or indirectly
make any warranties or representations on behalf of Othnet or
its licensors.
3.3 Upon the expiration or termination of this Agreement,
neither party nor its subsidiaries and affiliates shall have
the right to use the Trademarks of the other party. Each party
agrees that it shall take reasonable precautions to protect the
Trademarks of the other party from infringement and advise the
other party of any infringement or apparent infringement as
soon as it becomes known to such party.
3.4 Each party shall comply with instructions of the other
party as to the form and manner in which the applicable
Trademarks shall be used and shall ensure that all markings are
in accordance with applicable legal requirements.
4. Launch of Othnet Client and Website.
4.1 Othnet will redesign and launch the Othnet Client and
Website, as more fully described in an implementation schedule
to be agreed to by the parties. In connection with the
redesign, launch and implementation of the Othnet Client and
Website, Savage Beast will use commercially reasonable efforts
to be accessible to Othnet to provide such assistance as Othnet
may reasonably request.
4.2 During the term of this Agreement Savage Beast will be the
exclusive provider for the Services and any related services or
functionality. During the term of this Agreement, Othnet will
not provide links to any competitor of Savage Beast and will
not co-brand with any competitor of Savage Beast.
4.3 The parties will work together to determine a mutually
agreeable means of maintaining accurate records with respect to
the Othnet Client and Website, the Music Discovery Applications
and the transactions contemplated by this Agreement. Each
party shall provide the other with monthly reports describing
database query activity, core business metrics, including but
not limited to specific sales and page view data on a
per-customer basis and such other data as the parties mutually
agree.
5. Othnet Obligations.
5.1 As soon as commercially reasonable, Othnet shall redesign
the Othnet Client and Website so as to accommodate and feature
the Music Discovery Applications.
5.2 Othnet shall be responsible for the design and "look and
feel" of the Othnet Client and Website. Space shall be built
into the Music Discovery Applications to allow for: a) at least
one promotional recommendation for every five total
recommendations, and b) at least one advertisement of a size
not smaller than 468 by 60 pixels.
5.3 Othnet shall use commercially reasonable efforts to
facilitate the use of the Music Discovery Applications on the
Othnet Client and Website.
5.4 Othnet agrees to integrate and display the Savage Beast
Logo into the Othnet Client and Website in a manner mutually
agreed upon by the parties. When using the Savage Beast Logo,
Othnet shall follow Savage Beast's trademark guidelines as
provided to Othnet from time to time, and Othnet shall use the
appropriate trademark symbol and clearly indicate Savage
Beast's ownership of the Savage Beast Logo. The Savage Beast
Logo shall be displayed on the Othnet Client and Website in a
manner reasonably acceptable to Savage Beast.
5.5 Othnet shall host the Othnet Client and Website. Hosting
may occur on hardware leased or owned by Othnet or through a
third party.
5.6 Othnet shall use commercially reasonable efforts to promote
the Music Discovery Applications on the Othnet Client and
Website in a manner consistent with Section 3 hereof.
5.7 Othnet shall provide to Savage Beast relevant customer and
sales statistics after the site launch, including but not
limited to average sales per customer per month, average page
views per customer per month, average site visits per customer
per month, and average dollar amount per transaction.
5.9 Proper and complete books of account of all sales
transactions and consumer behavior directly related to this
Agreement shall be kept at Othnet's place of business, and
shall be available for inspection by Savage Beast or its
accredited representatives during normal business hours and
only upon reasonable prior written notice to, and consent of,
Othnet, which consent shall not be unreasonably withheld. Such
inspection shall be solely for purposes of verification of
sales transactions, advertising revenue and consumer behavior
and for no other purpose, and any information derived from such
verification shall be considered "Proprietary Information"
under Section 8 hereof. The accounting records shall be
maintained in accordance with generally accepted accounting
practices.
6. Savage Beast Obligations.
6.1 Savage Beast shall provide level two customer support to
Othnet with respect to the Savage Beast API as reasonably
requested by Othnet. Othnet engineers shall have access to
Savage Beast engineers for the purposes of supporting the
Savage Beast API, and any message left for Savage Beast by
Othnet will be responded to as soon as reasonably practicable,
but no later than a maximum of two business days after the
message was left.
6.2 Savage Beast shall host and be responsible for the Savage
Beast Servers and the Savage Beast Web Site. Hosting may occur
on hardware leased or owned by Savage Beast, or through a third
party.
6.3 Savage Beast shall have the right to sell advertising and
promotions for pages in the Othnet Client and Website that
contain or provide access to the Music Discovery Applications.
7. Ownership.
7.1 Othnet agrees that: (i) Savage Beast shall retain all
right, title and interest, subject to the license granted
herein, in and to, and this Agreement does not confer in Othnet
any right of use or ownership in the Savage Beast API, the
Software, the Content, or, subject to the license granted
herein, the Savage Beast Logo or the Savage Beast Trademarks;
and (ii) all goodwill associated with the use by Othnet of the
Savage Beast Logo or the Savage Beast Trademarks shall inure to
the benefit of Savage Beast; provided, however, that in the
event of a termination of this Agreement by Othnet pursuant to
Section 12.2.1, the license granted in Section 2.1 hereof shall
be deemed to continue in full force and effect through the
Initial Term. At no time during or after the term of this
Agreement shall Othnet challenge or assist others to challenge
the Savage Beast Trademarks or the registration thereof or
attempt to register any trademarks, marks or trade names
confusingly similar to those of Savage Beast.
7.2 Savage Beast agrees that: (i) Othnet shall retain all
right, title and interest, subject to the license granted
herein, in and to the Othnet Logo and Othnet Trademarks and
this Agreement does not confer in Savage Beast any right of
ownership in the Othnet Logo and Othnet Trademarks; and (ii)
all goodwill associated with the uses by Savage Beast of the
Othnet Logo or the Othnet Trademarks shall inure to the benefit
of Othnet. At no time during or after the term of this
Agreement shall Savage Beast challenge or assist others to
challenge the Othnet Trademarks or the registration thereof or
attempt to register any trademarks, marks or trade names
confusingly similar to those of Othnet.
8. Proprietary Information. Each party recognizes the
importance to the other of the other's Proprietary Information.
In particular, Othnet recognizes that the Savage Beast Web
Site, the Savage Beast Logo, the Savage Beast Trademarks, the
Software, the Savage Beast API, the Content and other of Savage
Beast's Proprietary Information (and the confidential nature
thereof) are critical to the business of Savage Beast and
Savage Beast recognizes that the Othnet Client and Website,
Othnet Logo, Othnet Trademarks and other of Othnet's
Proprietary Information (and the confidential nature thereof)
are critical to the business of Othnet. In addition, both
parties recognize that neither party would enter into this
Agreement without assurance that such technology and
information and the value thereof shall be protected as
provided in this Section 8 and elsewhere in this Agreement.
Accordingly, each party agrees as follows:
8.1 The Receiving Party agrees: (i) to hold the Disclosing
Party's Proprietary Information in confidence and to take all
reasonable precautions to protect such Proprietary Information
(including, without limitation, all precautions the Receiving
Party employs with respect to its own confidential materials);
(ii) not to disclose any such Proprietary Information or any
information derived therefrom to any third party; (iii) not to
make any use whatsoever at any time of such Proprietary
Information except as expressly authorized in this Agreement.
Any director, officer, employee or other agent or
representative of either party given access to any such
Proprietary Information must have a legitimate "need to know''
and shall be similarly bound in writing. Without granting any
right or license, the Disclosing Party agrees that the
foregoing clauses (i), (ii) and (iii) shall not apply with
respect to information the Receiving Party can document: (A)
is in or (through no improper action or inaction by the
Receiving Party or any affiliate, agent, director, officer or
employee) enters the public domain (and is readily available
without substantial effort); (B) was lawfully in its possession
or known by it prior to receipt from the Disclosing Party; (C)
was lawfully disclosed to it by a third party who is not bound
in any confidential relationship to the Disclosing Party; or
(D) is required by law to be disclosed by the Receiving Party,
provided that the Receiving Party gives prompt written notice
of such requirement prior to such disclosure and cooperates
with the Disclosing Party in the latter's attempt, if any, to
prevent such disclosure or in obtaining a protective or similar
order with respect to the Confidential Information to be so
disclosed.
8.2 The Receiving Party acknowledges and agrees that due to the
unique nature of the Disclosing Party's Proprietary
Information, there can be no adequate remedy at law for any
breach of its obligations hereunder, that any such breach may
allow the Receiving Party or third parties to unfairly compete
with the Disclosing Party resulting in irreparable harm to the
Disclosing Party, and therefore, that upon any such breach or
any threat thereof, the Disclosing Party shall be entitled to
appropriate equitable relief (without the posting of any bond)
in addition to whatever remedies it might have at law and to be
indemnified by the Receiving Party from any loss or harm,
including, without limitation, lost profits and attorney's
fees, in connection with any breach or enforcement of the
Receiving Party's obligations hereunder or the unauthorized use
or release of any such Proprietary Information. The Receiving
Party shall notify the Disclosing Party in writing immediately
upon the occurrence of any such unauthorized release or other
breach. Any breach of this Section 8 shall constitute a
material breach of this Agreement.
8.3
9. License Fee, Revenue Sharing and Expenses.
9.1 In consideration of the licenses granted pursuant to
Sections 2.1 and 2.2, Othnet shall pay to Savage Beast a
non-refundable license fee as follows: (i) $100,000 upon
execution of this Agreement, and (ii) $80,000 on or before the
earlier to occur of (x) Othnet completing its next round of
financing, or (y) October 1, 2001.
9.2 Not later than June 1st, 2001, Othnet and Savage Beast
will in good faith negotiate fees for ongoing use of the
Services and Music Discovery Applications.
9.3 Each party shall be solely responsible for payment of any
and all international, federal, state and local sales, use,
value-added and excise taxes, any other taxes or duties or any
nature applicable to such party arising from this Agreement and
the transactions contemplated hereby.
10. Representations and Warranties. Each party represents and
warrants as to itself that:
10.1 It is a corporation duly organized and validly existing
under the laws of its jurisdiction of incorporation and is in
good standing under such laws. It has the requisite power and
authority to own and operate its properties and assets and to
carry on its business as presently conducted. It has all
requisite power to execute and deliver this Agreement and to
carry out and perform its obligations hereunder.
10.2 It has taken all necessary actions required by law, its
charter, its bylaws or otherwise to authorize the execution and
performance of this Agreement and the transactions contemplated
by this Agreement, and this Agreement is a valid and binding
obligation enforceable against it in accordance with its terms,
except to the extent limited by bankruptcy, insolvency,
moratorium and other laws affecting creditors' rights
generally, and by general equitable principles.
10.3 The execution, delivery and performance by it of this
Agreement and each other agreement, document, or instrument now
or hereafter executed and delivered by it pursuant hereto or in
connection herewith will not: (i) conflict with or violate its
charter or bylaws or any provision of any law, rule,
regulation, authorization or judgment of any governmental
authority having applicability to it or its actions; or (ii) to
its knowledge, conflict with or result in any breach of, or
constitute a default under, any note, security agreement,
commitment, contract or other agreement, instrument or
undertaking to which it is a party or by which any of its
property is bound.
11. Disclosure and Limitations.
11.1 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY EXHIBITS HERETO, NEITHER PARTY MAKES ANY
WARRANTY OR REPRESENTATION OF ANY KIND TO THE OTHER PARTY
WHETHER EXPRESS, IMPLIED, STATUTORY OR IN ANY OTHER PROVISION
OF THIS AGREEMENT, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY
IMPLIED WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT OR
FITNESS FOR A PARTICULAR PURPOSE.
11.2 Limitation. EXCEPT WITH RESPECT TO OBLIGATIONS UNDER
SECTIONS 2, 3, 8, 10 AND 14 OF THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE OR OBLIGATED WITH RESPECT TO THE SUBJECT MATTER
OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY
AMOUNTS IN EXCESS IN THE AGGREGATE OF THE AMOUNTS PAID OR
PAYABLE HEREUNDER, (II) ANY INDIRECT, INCIDENTAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR FOR LOSS OF PROFITS,
REVENUE OR DATA, OR (III) PROCUREMENT OF SUBSTITUTE GOODS OR
SERVICES, EVEN IF SUCH PARTY SHALL HAVE BEEN INFORMED OF THE
POSSIBILITY OF SUCH DAMAGES.
12. Term and Termination.
12.1 Term. The term of this Agreement commences on the
Effective Date and continues, unless earlier terminated, until
July ___, 2002 (the "Initial Term"). This Agreement may be
renewed on a year-by-year basis upon the mutual written
agreement of the parties pursuant to negotiations to be
commenced at least three (3) months prior to expiration of this
Agreement. In the event that this Agreement is not renewed, it
shall be deemed terminated.
12.2 Termination by Either Party. This Agreement may be
terminated by either party immediately upon the occurrence of
and in accordance with the following:
12.2.1 By delivering written notice to the other party upon the
occurrence of any of the following events: (i) a receiver is
appointed for either party or its property; (ii) either party
makes a general assignment for the benefit of its creditors;
(iii) either party commences, or has commenced against it,
proceedings under any bankruptcy, insolvency or debtor's relief
law, which proceedings are not dismissed within sixty (60)
days; or (iv) either party is liquidated or dissolved; or (v)
if either party fails to receive sufficient funding to continue
its operations.
12.2.2 Either party may terminate this Agreement effective upon
written notice to the other if the other party materially
breaches any covenant, agreement, representation or warranty
contained herein or otherwise fails to timely perform any of
its obligations or agreements hereunder, which breach or
failure is not cured within thirty (30) days after notice
thereof from the non-defaulting party stating its intention to
terminate this Agreement by reason thereof (provided such
breach or failure is capable of cure); provided, however, that
in any event Savage Beast shall not ever be, or be deemed to
have been, in material breach of this Agreement for any failure
of Savage Beast to continue and/or perform its obligations
hereunder if such failure is due to or arises from Savage
Beast's inability to secure sufficient financing to continue
its operations.
12.3 Effect of Termination.
12.3.1 Immediately upon the termination or expiration of this
Agreement, each party shall return, or with the other party's
consent, destroy all Proprietary Information and other
materials delivered or furnished to such party. Neither party
shall make or retain any copies of any Proprietary Information
delivered to it. Effective upon the termination or expiration
of this Agreement, each party shall immediately cease all use
of the Proprietary Information, and the Trademarks and Logo of
the other party.
12.4 Effect of Change of Control. In the event of a Change of
Control of Savage Beast prior to the expiration of the Initial
Term, Othnet may continue to use the Savage Beast API, and the
Content through the remainder of the Initial Term pursuant to
the terms hereof as long as Othnet continues to pay all amounts
due under Section 9 hereof. For the purpose of this Agreement
a "Change of Control" shall mean any merger, consolidation,
statutory share exchange of Savage Beast's equity securities
for equity securities of another entity or any similar
transaction, in each case in which the shareholders of Savage
Beast prior to such transaction do not own more than fifty
percent (50%) of the equity securities, directly by or
indirectly, of the surviving entity (measured in terms of both
combined voting power and value), or the sale of all equity
securities of Savage Beast all/or substantially all of the
assets of Savage Beast.
12.5 Survival. Sections 3, 7, 8, 9, 10, 11, 12, 13, 14, 15,
and 16 of this Agreement shall survive termination or
expiration of this Agreement.
13. Escrow of Source Code. Savage Beast hereby agrees, upon
payment to Savage Beast of the $80,000 due under Section 9.1
(ii) of this Agreement, to enter into, and to cause Othnet to
become a beneficiary of, a source code escrow agreement with
respect to the Software with Fort Xxxx Escrow Services, Inc. in
a form which is reasonably satisfactory to Othnet and Savage
Beast. The parties agree that (i) such escrow shall terminate
upon the earlier of (A) two (2) years from the Effective Date
and (B) termination of this Agreement for any reason other than
pursuant to Section 12.2 hereof, and (ii) the terms under which
the Software may be released from escrow under any such source
code escrow agreement shall be limited to an event of
termination pursuant to Section 12.2 hereof.
14. Indemnification. Each party shall defend, indemnify and
hold harmless the other party and its officers, directors,
employees, shareholders, customers, agents, successors and
assigns from and against any and all loss, damage, settlement
or expense (including legal expenses), as incurred, resulting
from, or arising out of or related to any breach of any
representation, warranty, covenant or agreement under this
Agreement.
15. Share Exchange.
15.1 Effective as of the Closing (as defined in
Section 15.2 below):
15.1.1 Savage Beast shall issue to Othnet
100,000 shares of Savage Beast's common stock, no par value per
share (the "Savage Beast Shares"), at an agreed valuation of
$2.50 per share, or $250,000 in the aggregate; and
15.1.2 Othnet shall issue to Savage Beast 50,000
shares of Othnet's common stock, $0.001 par value per share
(the "Othnet Shares"), at an agreed valuation of $5.00 per
share, or $250,000 in the aggregate; provided, that if Othnet
sells shares of its common stock at a price below $5.00 per
share (a "Reduced Price") in its next round of financing, the
number of shares of Othnet common stock issued to Savage Beast
hereunder shall be increased such that the total number of
shares issued hereunder multiplied by the Reduced Price equals
$250,000.
15.2 The closing of the transactions contemplated
under this Section 15 (the "Closing") shall take place at 10:00
a.m. (Chicago time) at the offices of Xxxxxx Xxxxxx Xxxxx, 000
Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, or such
other time and place to be determined by mutual agreement
between the parties, as soon as practicable after satisfaction
or waiver of the conditions set forth in Sections 15.5 and 15.6
hereof (other than those conditions which by their terms are
intended to be satisfied on the closing date), but in no event
later than the earlier of (i) 5 days after such conditions are
satisfied or waived or (ii) May 2, 2001.
15.3 Savage Beast hereby represents and warrants to Othnet as
follows:
15.3.1 Savage Beast is a corporation duly organized,
validly existing and in good standing under the laws of the
State of California.
15.3.2 Savage Beast has all requisite corporate power
and authority to enter into this Agreement, to issue the Savage
Beast Shares, and to carry out and perform its obligations
under the terms of this Agreement.
15.3.3 All corporate action on the part of Savage Beast
necessary for the authorization, execution, delivery and
performance by Savage Beast of this Agreement and the
consummation of the transactions contemplated hereby, and for
the authorization, issuance and delivery of the Savage Beast
Shares has been taken. This Agreement is the legal, valid and
binding obligation of Savage Beast, enforceable against Savage
Beast in accordance with its terms.
15.3.4 Upon issuance, the Savage Beast Shares will be
duly and validly issued, fully paid, non-assessable and free
and clear of all liens, charges and other encumbrances
("Liens").
15.3.5 Savage Beast will acquire the Othnet Shares
acquired by it hereunder for investment and not with a view to
distributing all or any part thereof in any transaction which
would constitute a "distribution" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
Savage Beast acknowledges that (i) the Othnet Shares have not
been registered under the Securities Act, (ii) the Othnet
Shares are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States
federal and state securities laws and Othnet is relying in part
upon the truth and accuracy of, and Savage Beast's compliance
with, the representations, warranties, agreements,
acknowledgements and understandings of Savage Beast set forth
herein in order to determine the availability of such
exemptions and the eligibility of Savage Beast to acquire such
securities, and (iii) Othnet is under no obligation to file a
registration statement with the Securities and Exchange
Commission (the "Commission") with respect to the Othnet
Shares. Savage Beast understands that the certificates
representing the Othnet Shares shall bear a restrictive legend
in substantially the following form (and a stop-transfer order
may be placed against transfer of such stock certificates),
until (i) the securities represented by such certificates are
effectively registered under the Securities Act, (ii) the
holder of such securities delivers to Othnet a written opinion
of counsel of such holder to the effect that such legend is no
longer necessary under the Securities Act, or (iii) such holder
provides Othnet with reasonable assurance that such securities
can be sold, assigned or transferred pursuant to Rule 144 of
the Securities Act:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, PLEDGED, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL,
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR
(II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
15.3.6 Savage Beast understands that no United States
federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement
of the Othnet Shares or the fairness or suitability of the
investment in the Othnet Shares nor have such authorities
passed upon or endorsed the merits of the offering of the
Othnet Shares.
15.3.7 Savage Beast (i) has such knowledge and
experience in financial and business matters that it is capable
of evaluating the merits and risks of its investment in the
securities acquired by it hereunder; (ii) is able to bear the
complete loss of its investment in the securities acquired by
it hereunder; and (iii) has had the opportunity to ask
questions of, and receive answers from, Othnet and its
management concerning the terms and conditions of the offering
of the securities acquired hereunder and to obtain additional
information. Neither such inquiries nor any other due
diligence investigations conducted by Savage Beast or its
advisors, if any, or its representatives shall modify, amend or
affect Savage Beast's right to rely on Othnet's representations
and warranties contained in Section 15.4 below. Savage Beast
understands that its investment in the Othnet Shares involves a
high degree of risk. Savage Beast has sought such accounting,
legal and tax advice as it has necessary to make an informed
investment decision with respect to its acquisition of the
Othnet Shares.
15.4 Othnet hereby represents and warrants to Savage Beast as
follows:
15.4.1 Othnet is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
15.4.2 Othnet has all requisite corporate power and
authority to enter into this Agreement, to issue the Othnet
Shares, and to carry out and perform its obligations under the
terms of this Agreement.
15.4.3 All corporate action on the part of Othnet
necessary for the authorization, execution, delivery and
performance by Othnet of this Agreement and the consummation of
the transactions contemplated hereby, and for the
authorization, issuance and delivery of the Othnet Shares has
been taken. This Agreement is the legal, valid and binding
obligation of Othnet, enforceable against Othnet in accordance
with its terms.
15.4.4 Upon issuance, the Othnet Shares will be duly
and validly issued, fully paid, non-assessable and free and
clear of all Liens.
15.4.5 Othnet will acquire the Savage Beast Shares
acquired by it hereunder for investment and not with a view to
distributing all or any part thereof in any transaction which
would constitute a "distribution" within the meaning of the
Securities Act. Othnet acknowledges that (i) the Savage Beast
Shares have not been registered under the Securities Act, (ii)
the Savage Beast Shares are being offered and sold to it in
reliance on specific exemptions from the registration
requirements of United States federal and state securities laws
and Savage Beast is relying in part upon the truth and accuracy
of, and Othnet's compliance with, the representations,
warranties, agreements, acknowledgements and understandings of
Othnet set forth herein in order to determine the availability
of such exemptions and the eligibility of Othnet to acquire
such securities, and (iii) Savage Beast is under no obligation
to file a registration statement with the Commission with
respect to the Savage Beast Shares. Othnet acknowledges that
the Savage Beast Shares have not been registered under the
Securities Act and Savage Beast is under no obligation to file
a registration statement with the Commission with respect to
the Savage Beast Shares. Othnet understands that the
certificates representing the Savage Beast Shares shall bear a
restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such
stock certificates), until (i) the securities represented by
such certificates are effectively registered under the
Securities Act, (ii) the holder of such securities delivers to
Savage Beast a written opinion of counsel of such holder to the
effect that such legend is no longer necessary under the
Securities Act, or (iii) such holder provides Savage Beast with
reasonable assurance that such securities can be sold, assigned
or transferred pursuant to Rule 144 of the Securities Act:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, PLEDGED, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL,
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR
(II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
15.4.6 Othnet understands that no United States federal
or state agency or any other government or governmental agency
has passed on or made any recommendations or endorsement of the
Savage Beast Shares or the fairness or suitability of the
investment in the Savage Beast Shares nor have such authorities
passed upon or endorsed the merits of the offering of the
Savage Beast Shares.
15.4.7 Othnet (i) has such knowledge and experience in
financial and business matters that it is capable of evaluating
the merits and risks of its investment in the securities
acquired by it hereunder; (ii) is able to bear the complete
loss of its investment in the securities acquired by it
hereunder; and (iii) has had the opportunity to ask questions
of, and receive answers from, Savage Beast and its management
concerning the terms and conditions of the offering of the
securities acquired hereunder and to obtain additional
information. Neither such inquiries nor any other due
diligence investigations conducted by Othnet or its advisors,
if any, or its representatives shall modify, amend or affect
Othnet's right to rely on Savage Beast's representations and
warranties contained in Section 15.3 above. Othnet understands
that its investment in the Savage Beast Shares involves a high
degree of risk. Othnet has sought such accounting, legal and
tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the
Savage Beast Shares.
15.5 The obligations of Savage Beast at the Closing
are subject to the satisfaction of the following conditions,
provided that these conditions are for Savage Beast's sole
benefit and may be waived by Savage Beast at any time in its
sole discretion by providing Othnet with prior written notice
thereof:
15.5.1 The representations and warranties made
by Othnet under this Section 15 shall be true and correct in
all material respects as of the date when made and as of the
date of the Closing as though made at that time, all conditions
contained in this Agreement to be complied with by Othnet prior
to the Closing shall have been complied with, and Savage Beast
shall have obtained any approvals, consents and qualifications
necessary to perform its obligations hereunder.
15.5.2 There shall not have been entered and be
continuing, or entered, promulgated or enforced, a preliminary
or permanent injunction, temporary restraining order or other
judicial or administrative order or decree, or statute, rule or
regulation, the effect of which prohibits the Closing.
15.5.3 There shall have been no material adverse
change in the assets, condition (financial or otherwise),
operating results, business relations, business activities or
business prospects of Othnet.
15.5.4 Savage Beast shall have received all
documents and other items to be delivered under Section 15.7
15.6 The obligations of Othnet at the Closing are
subject to the satisfaction of the following conditions,
provided that these conditions are for Othnet's sole benefit
and may be waived by Othnet at any time in its sole discretion
by providing Savage Beast with prior written notice thereof:
15.6.1 The representations and warranties made
by Savage Beast under this Section 15 shall be true and correct
in all material respects as of the date when made and as of the
date of the Closing as though made at that time, all conditions
contained in this Agreement to be complied with by Savage Beast
prior to the Closing shall have been complied with, and Othnet
shall have obtained any approvals, consents and qualifications
necessary to perform its obligations hereunder.
15.6.2 There shall not have been entered and be
continuing, or entered, promulgated or enforced, a preliminary
or permanent injunction, temporary restraining order or other
judicial or administrative order or decree, or statute, rule or
regulation, the effect of which prohibits the Closing.
15.6.3 There shall have been no material adverse
change in the assets, condition (financial or otherwise),
operating results, business relations, business activities or
business prospects of Savage Beast.
15.6.4 Othnet shall have received all documents
and other items to be delivered under Section 15.8.
15.7 At the Closing, Othnet shall deliver to Savage
Beast:
15.7.1 Duly executed certificates representing
the Othnet Shares.
15.7.2 Such other documents as Savage Beast and
its counsel may reasonably deem necessary to effect the
Closing.
15.8 At the Closing, Savage Beast shall deliver to
Othnet:
15.8.1 Duly executed certificates representing
the Savage Beast Shares.
15.8.2 Such other documents as Othnet and its
counsel may reasonably deem necessary to effect the Closing.
16. Miscellaneous.
16.1 The parties shall issue a joint press release regarding
transactions contemplated by this Agreement at a mutually
agreed date. Either party may issue its own press release with
the prior written consent of the other party (which consent may
be by facsimile signature). Othnet agrees to be interviewed by
industry "influencers" about why it chose to collaborate with
Savage Beast.
16.2 Neither party may assign any of its rights or delegate any
of its duties under this Agreement without the prior written
consent of the other party. Any attempt to assign this
Agreement in violation of this Section 16.2 is a material
breach of its terms and is null and void. This Agreement shall
be binding on and inure to the benefit of the successors and
permitted assigns of the parties.
16.3 For all purposes of this Agreement each party shall be and
act as an independent contractor and not as partner, joint
venturer, or agent of the other and shall not have the power to
bind, nor attempt to bind, the other to any contract, agreement
or other arrangement.
16.4 All notices under this Agreement shall be in writing,
addressed to the applicable party at its address set forth
below its name on the signature page of this Agreement, and
shall be deemed given when personally delivered, by confirmed
facsimile, or three (3) days after being sent by international
express courier service to the address of the party to be
noticed as set forth herein or such other address as such party
last provided to the other by written notice in accordance with
this Section 16.4.
16.5 This Agreement shall be governed by and construed under
the laws of the State of California and the United States
without regard to conflicts of laws provisions thereof.
16.6 The parties agree that any and all disputes, claims or
controversies arising out of or relating to this Agreement
shall be determined exclusively by confidential, final and
binding arbitration in accordance with the then existing rules
for commercial arbitration of the American Arbitration
Association; provided, however, that the party against whom any
such claim is brought shall be entitled to pick the venue. By
agreeing to submit all disputes, claims and controversies to
binding arbitration, each of the parties expressly waives its
rights to have such matters heard or tried in court before a
judge or jury or in another tribunal. Any award shall be
final, binding and conclusive upon the parties, subject only to
judicial review provided by statute, and a judgment rendered on
the arbitration award may be entered in any state or federal
court having jurisdiction thereof. In any action or proceeding
to enforce rights under this Agreement, the prevailing party
shall be entitled to recover costs and attorneys' fees.
16.7 If any portion of this Agreement is illegal or
unenforceable, such portion(s) shall be limited or excluded
from this Agreement to the minimum extent required so that this
Agreement shall otherwise remain in full force and effect and
enforceable.
16.8 Neither party shall be liable for any failure to perform
any obligation (other than payment obligations) hereunder, or
from any delay in the performance thereof, due to causes beyond
its reasonable control, provided that such party shall use
reasonable efforts to remedy and/or minimize any such delay or
failure.
16.9 Each party recognizes that neither party grants any
license, by implication or otherwise, except for the licenses
expressly set forth in this Agreement.
16.10 No delay or omission by either party to exercise any
right or power it has under this Agreement shall impair or be
construed as a waiver of such right or power. A waiver by any
party of any breach or covenant shall not be construed to be a
waiver of any succeeding breach or any other covenant. All
waivers must be signed by the party waiving its rights.
16.11 This Agreement contains the entire understanding of the
parties, and supersedes all prior agreements and understandings
(whether written or oral), regarding its subject matter and can
only be modified or waived by a subsequent written agreement
signed by both parties.
16.12 This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
agreement. Paragraph and section headings in this Agreement
and all Exhibits are for convenience only and shall not be
construed as adding substantive meaning.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed and delivered by its duly authorized
officer, all as of the Effective Date.
OTHNET, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
Address:
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxx, Xxxxxxxxx
Attn: Xxxx Xxxxxxx
Chief Executive Officer
Facsimile: (000) 000-0000
SAVAGE BEAST TECHNOLOGIES INCORPORATED
By:/s/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: CEO
Address:
360 22nd Street, Sute 3910
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx Xxxxx
President and Chief
Executive Officer
Facsimile: (000) 000-0000
