License Agreement - SurfNet Media Group Inc. and YP.Net Inc.
surfnet (R)
Media Group, Inc.
2235 W. UNIVERSITY DR - SUITE 9 - TEMPE, ARIZONA 85281-7246
VOICE: 877.311.9474 - FAX: 480.557.0627
www.surfnetmedia.com
September 24, 2003
YP Net, Inc.
4840 E. Jasmine Street
Suite 105
Mesa, Arizona 85205
Re: Letter of Intent
Gentlemen:
Over the last several months, SurfNet Media Group, Inc., a Delaware corporation,
and YP Net, Inc., a Nevada corporation, have been in dialogue over strategic
implementation of SurfNet's Metaphor TM Technology and services in YP.net's
Business. YP.net and SurfNet desire to form a long-term cooperative business
relationship. This Letter of Intent is entered into by YP.net and SurfNet as of
the Effective Date and confirms YP.net's and SurfNet's understanding with
respect to our preliminary discussions and summarize the intent and initial
scope of our relationship.
1. CERTAIN DEFINITIONS. For purposes of this letter, the following terms have
the following meaning:
a. "Effective Date" means the date YP.net signs this Letter of Intent.
b. "Parties" means YP.net and SurfNet, and "Party" means YP.net or
SurfNet as the context requires.
c. "Protected Information" mean, information from which SurfNet or YP.net
derives economic value, actual or potential, from such information not
being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from its
disclosure or use, and which is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Protected
information includes, without limitation, confidential information
pertaining to matters such as technology, financing and business
operations, development and integration strategies.
d. "SurfNet's Metaphor TM Technology" means the method and system for
adding functionality to a Web page described in US Patent 6,594,691
issued to SurfNet on July 15, 2003.
e. "YP.net's Business" means the business of providing internet-based
yellow page advertising space on or through www.Yellow-Page.Net, www.
YP.net and www.YP.com.
2. INTENTION. This will confirm the mutual intentions of the Parties to enter
into a licensing agreement or other business arrangement to exploit the
synergies between YP.net's Business and SurfNet's Metaphor(TM) Technology.
The Parties will endeavor to execute all definitive agreements by December
1, 2003. Except as provided in Section 7, the Parties agree that neither
company will disclose the fact or content of their discussions to others
unless required by law or if both parties agree to do so.
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3. EXCLUSIVITY; JOINT DEVELOPMENT EFFORTS; STOCK SWAP. The definitive
agreements referred to in Section 2 above will include provisions stating
the following:
a. SurfNet will not enter into a licensing agreement or other business
arrangement relating to SurfNet's Metaphor(TM) Technology with any
third party engaged in the business of providing Internet-based yellow
page advertising space, and (II) YP.net will not enter into a
licensing agreement or other business arrangement with any third party
having technology providing the same or similar functionality as
SurfNet's MetaphorTM Technology.
b. Derivative works (as defined in the United States Copyright Act) and
other modifications, improvements, fixes, enhancements, and upgrades
with respect to SurfNet's MetaphorTM Technology that are jointly
developed by the Parties shall be jointly owned by the Parties, and
that, with respect to such jointly developed derivative works, each
shall grant to the other a worldwide, non-exclusive, fully-paid,
royalty-free, irrevocable, sublicensable license to make, have made,
use, sell, offer for sale, import and otherwise exploit such
derivative works, including products or services that include or rely
on or use such derivative works.
c. The Parties will exchange shares of stock in an amount and on the
basis of an exchange ratio to be agreed upon.
4. CONFIDENTIALITY. During the course of SurfNet's and YP.net's discussions,
the parties will disclose Protected Information. As a condition to sharing,
whether in writing or orally, Protected Information, each Party hereby
acknowledges and agrees as follows:
a. The Protected Information, whether now or hereafter shared, in whole
or in part, is confidential.
b. The business and prospects of a Party could be damaged if the other
Party discloses Protected Information to any person without such
Party's consent.
c. Each Party will each keep confidential and refrain from disclosing or
divulging to any person the other's Protected Information without the
other's prior written consent (other than disclosures by a Party to
its agents, representatives or employees who will be bound by the
terms of this Agreement and advised that the other's Protected
Information must be treated as confidential).
d. Each Party will not use the other's Protected Information (nor permit
the use thereof) in a manner or for a purpose detrimental to the
other's business.
e. Obligations of confidentiality with respect to Protected Information
which constitutes trade secrets under the Uniform Trade Secrets Act
(or other similar applicable law) will extend for so long as such
information remains a trade secret.
f. Obligations of confidentiality with respect to Protected Information
that is not covered under the Uniform Trade Secrets Act (or other
similar applicable law), will (i) be defined in a subsequent agreement
entered into between the Parties, or, (ii) if no such subsequent
agreement is executed, extend for three (3) years from the date the
Parties mutually agree, or one Party notifies the other, that a
licensing agreement or other business arrangements between them
relating to the subject matter hereof will not be consummated.
g. Wrongful disclosure or use of Protected Information in contravention
of the provisions of this agreement will give rise to irreparable
injuries not adequately compensable in damages. In the event that
preliminary injunctive relief to maintain the status quo is required,
such relief may be
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sought by a Party from any court of competent jurisdiction, and each Party
agree to be bound by any and all orders rendered by such court. No failure
or delay in exercising any right, power or privilege hereunder will operate
as a waiver thereof nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any
right, power or privilege. No Party can waive or amend any provision hereof
except with the other Party's written consent, which consent will
specifically refer to any such provision and explicitly make such waiver or
amendment.
5. NONBINDING. Although SurfNet and YP.net may exchange proposals (written or
oral), term sheets, draft agreements or other materials, neither party will
have any obligations or liability to the other party unless and until
SurfNet's and YP.net's authorized representatives sign definitive written
agreements. Either party can end these discussions at any time, for any
reason, and without liability to the other. Each party remains free to
negotiate or enter into similar relationships with others. Any business
decision either party makes in anticipation of definitive agreements is at
the sole risk of the party making the decision, even if the other party is
aware of, or has indicated approval of, such decision.
6. PUBLICITY. Neither party shall identify, either expressly or by
implication, this relationship, the other party or use any of the other
party's names, trademarks, trade names, services marks, or other
proprietary marks in any marketing material, advertising, press releases,
publicity matters or other promotional materials without the other party's
prior written approval. The Parties will issue a mutually agreed upon joint
press release within five business days following the execution of this
Letter of Intent announcing the execution hereof. Except as required by law
or applicable listing agreement, no other press release shall be issued
regarding the execution of this Letter of Intent by either Party without
the prior written consent of the other. Notwithstanding the foregoing, the
Parties will be permitted to make reference to the matters addressed in the
Letter of Intent in other press releases, provided that such references are
consistent in substance with the initial press release.
7. STOCK PURCHASE. SurfNet shall sell to YP.net, and YP. Net shall purchase
from SurfNet 11,667 shares of Common Stock (collectively, the "Shares"),
for an aggregate price of $35,000.00 (the "Purchase Price"), based upon the
closing sale price of the Common St6ock as quoted on Yahoo Finance on
September 24, 2003, payable in immediately available funds upon execution
of this Agreement and a Subscription Agreement mutually agreeable to the
Parties. Thereupon, SurfNet shall issue to YP.net certificates representing
the Shares registered on SurfNet's stock ledger in the name of YP.net
equaling the aggregate number of Shares being purchased by UP.net under
this Agreement. YP.net agrees that the certificates representing the Shares
shall bear a legend in substantially the following form:
"The shares represented by this certificate are "restricted securities" as
that term is defined in Rule 144 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), and may not be offered, sold or
otherwise transferred, pledged or hypothecated except in a transaction
registered under the Securities Act or in a transaction exempt from such
registration."
8. EXPENSES. Each party will re responsible for its own expenses and costs
related to these discussions. Neither party is authorized to make any
commitments or statements on behalf of the other party.
9. GOVERNING LAW. The substantive laws of the State of Arizona govern this
Letter of Intent.
10. COMPLETE AGREEMENT. This Letter of Intent represents the complete and
exclusive understanding of the Parties on this subject and supersedes all
proposals or other prior agreements, oral or written, and all other
communications between the Parties relating to this subject. This letter of
Intent can only be
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modified by a writing signed by each Party that states it amends this
Letter of Intent. The parties indicate their agreement to the terms of this
Letter of Intent by signing below.
Very truly yours,
SURFNET MEDIA GROUP, INC.
By: /s/ Robert D. Arkin
-------------------------------------
Robert D. Arkin
Chief Executive Officer
ACKNOWLEDGED AND AGREED:
YP.NET, INC.
By: /s/ Angleo Tullo
-------------------------------------
Angleo Tullo
Chief Executive Officer
Effective Date: Aug 26th 2003
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