LICENSE AGREEMENT by and among FIRSTWAVE TECHNOLOGIES, INC., and FIRSTWAVE TECHNOLOGIES UK LTD. (a wholly owned subsidiary of AllAboutTickets, LLC after the “Closing Date”) and AllAboutTickets, LLC
Exhibit
2.2
by
and among
FIRSTWAVE
TECHNOLOGIES, INC.,
and
FIRSTWAVE
TECHNOLOGIES UK LTD.
(a
wholly owned subsidiary of
AllAboutTickets,
LLC after the “Closing Date”)
and
AllAboutTickets,
LLC
i
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This LICENSE AGREEMENT (the
“Agreement”), is effective the 3rd day of June, 2005 (the
“Closing Date”) by and among Firstwave Technologies, Inc., a
Georgia, U.S. corporation (“Firstwave”) and Firstwave
Technologies UK Ltd, its wholly owned subsidiary, whose current registered
office is at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(“Licensee”) and AllAboutTickets, LLC, a Georgia corporation
(the “Buyer”). Firstwave, Licensee and Buyer are sometimes individually referred
to herein as the “Party” and collectively referred to as the
“Parties.”
RECITALS
Firstwave is engaged principally in the
business of developing, marketing and distributing software and providing
related products and services, including installation, support and maintenance
services and marketing and distributing software and other products of third
parties. Firstwave has developed and owns the intellectual property rights,
including, without limitation, all worldwide copyrights, trademarks, patents,
trade secrets and other intellectual property rights (the “Intellectual
Property Rights” or “IPR”) in the customer
relationship management software (the “Firstwave Software” as defined in Section
1.1 below) that Firstwave markets, promotes, licenses, distributes and supports
worldwide, directly and indirectly, utilizing its sales and technical support
force and that of its subsidiary, Firstwave Technologies UK Ltd and third
parties. AllAboutTickets, LLC (the “Buyer”), is a newly formed Georgia limited
liability company that is acquiring all of the capital stock of Licensee through
a Stock Purchase Agreement and related agreements (collectively, the
“Transaction Documents”). In connection with such acquisition,
Buyer and Licensee desire that Licensee (which will be Buyer’s wholly owned
subsidiary after the “Closing Date” (as defined herein and in the Transaction
Documents)), obtain certain license rights to Firstwave Software for Licensee’s
use in the Sports Industry in connection with the operation of Licensee’s
business. The Parties, including the Buyer, acknowledge and agree that certain
of the rights being granted herein to Licensee have been exercised by Licensee
prior to the Closing Date of this Agreement. Notwithstanding the foregoing, all
Parties, including the Buyer, desire to clearly state Licensee’s rights and
obligations with respect to its use of the Firstwave Software during the period
before the Closing Date of this and after the Closing Date until this Agreement
is terminated. For purposes hereof, the “Sports Industry” shall
mean those competitive sports organizations identified as national governing
bodies, leagues, collegiate athletics, professional teams and sports promoters,
and the ticketing, promotional and marketing activities related directly
thereto, for whom Firstwave has tailored its existing customer relationship
software solution; and the “Non-Sports Industry” shall mean all
other verticals, excluding the Sports Industry.
Licensee
desires, in connection with its business operations, to license, and Firstwave
desires to grant to Licensee, certain IPR in the Firstwave Software developed,
owned and distributed by Firstwave in consideration of the covenants and
agreements contained herein.
NOW,
THEREFORE, in consideration of the mutual representations, warranties,
covenants, and agreements of the Parties hereinafter set forth, the Parties
hereto, intending to be legally bound, do hereby agree as follows:
1
ARTICLE
1
LICENSE
RIGHTS
Section
1.1 Grant of License. Subject to the terms and conditions hereof and
those stated in the Transaction Documents (including, without limitation,
Licensee’s obligations to pay to Firstwave the “Royalty Fees” stated herein and
the “Purchase Price” as defined in the Stock Purchase Agreement), from the
Closing Date of this Agreement until this Agreement may be terminated as stated
herein, Firstwave hereby grants to Licensee (i) a non-exclusive,
non-transferable, non-assignable, limited, worldwide (subject to “Firstwave’s
Protected Entities” as defined in Section 1.3 below) and revocable license to
use, modify, recompile, reproduce, distribute and maintain the executable,
object code version of certain portions of the “Firstwave Software” (defined
below), and (ii) a non-exclusive, non-transferable, non-assignable, limited and
revocable license to use, modify, recompile, maintain the “Source Code
Materials” (as defined in Section 8.1 below) relating to the Firstwave Software
for use only in the Sports Industry, subject to the non-compete agreement as
provided in Section 1.4 below. The Parties acknowledge and agree that if
Licensee and Buyer have not defaulted in any obligations hereunder or pursuant
to the Transaction Documents and Licensee and Buyer have paid all fees due
hereunder and as required by the Transaction Documents in full, the license
rights granted to Licensee shall then become transferable, assignable, perpetual
and royalty-free in the Sports Industry worldwide. After the Closing Date and
during the period that Licensee is obligated to deliver Source Code Materials
for escrow purposes (as provided in Section 8 below), the Parties may offer each
to the other the opportunity for the other Party to receive a copy of any bug
fixes, corrections and/or enhancements to the Firstwave Software for a fee
agreeable to the Parties. In the event the Parties agree to such exchange, the
manner and transfer of such information and fees shall be agreed upon by the
Parties.
For
purposes hereof and the license granted by Firstwave to Licensee, the
“Firstwave Software” includes, in the form as the following
modules existed on the Closing Date for use by Licensee only in the Sports
Industry:
· IDE Toolset & Architecture
(Panther)
| · |
Onside
Application |
| · |
.Net
Architecture (Tiger) |
| · |
Sports
Administration Application (referred to as “The
Game”) |
| · |
CRM
2004 (Connect Care) |
| · |
De-dupe
Application |
| · |
Business
Rules Engine |
| · |
Interoperability
Engine |
| · |
Web
Portal Templates (web connect) |
In
addition to the Firstwave Software described above, the documentation licensed
to Licensee herein includes the documentation currently existing for the
Firstwave Software which includes the following (and for purposes hereof will be
included in the term “Firstwave Software”):
| · |
IDE
Training Manual |
| · |
End
user training manual |
| · |
Feature
and specifications detailed descriptions (limited to Licensee’s internal
use and not for distribution, excluding certain specific circumstances
where warranted by a customer’s needs - in such specific circumstances,
customer must sign an agreement
|
2
customary
in the industry limiting their use of these materials to their internal support
of the Firstwave Software and must agree in writing to treat such materials as
confidential).
For
clarity, Licensee shall have the right to deliver the Source Code and Source
Code Material to an escrow agent when requested by a customer of Licensee;
provided a reasonable, customary escrow agreement is executed.
Section
1.2 Trademark License. In addition to the foregoing, Firstwave
acknowledges, agrees and hereby grants to Licensee a limited, non-transferable,
non-assignable, revocable right to: (i) use Firstwave’s trade name “Firswave”,
product names and trademarks (collectively, the “Trademarks”) in connection with
the marketing and distribution of the Firstwave Software through the period
ending twelve (12) months after the Closing Date (each such twelve month period,
a “Contract Year”). The intent of this right to use Firstwave’s
Trademarks is to provide a transition period for Licensee to establish its
products and services in the Sports Industry and to subsequently rename such
products and services. During this initial twelve-month period, Licensee
undertakes to faithfully reproduce all such Trademarks as may appear on or with
the products offered by Licensee. Licensee shall not tamper with or modify any
of the Trademarks and may employ the Trademarks in accordance with Firstwave’s
reasonable and customary trademark policies which Firstwave shall make available
to Licensee. Licensee shall not use the Trademarks in any manner likely to
confuse, mislead or deceive the public, or be injurious to the best interests of
Firstwave. Any rights granted by Firstwave pursuant to this Agreement shall be
terminable at any time if Licensee fails to use the Trademarks in accordance
with the terms herein or of any reasonable, written instructions from Firstwave
and shall terminate immediately upon the termination of this Agreement. At the
expiration of the first Contract Year, Licensee will have ceased all use of
Firstwave’s Trademarks and will, from that date forward, market, promote,
reproduce and distribute the Firstwave Software under its own trademarks and
labels, which will be created in a form and manner that is not likely to
confuse, mislead or deceive the public, or be injurious to the best interests of
Firstwave. Licensee will advise Firstwave in writing of the trademarks and
labels Licensee intends to use in connection with such Firstwave Software and
will cooperate with Firstwave in the event Firstwave reasonably determines that
a proposed trademark appears to be confusingly similar to any Trademark of
Firstwave. Licensee presently intends to transition to the names and trademark
“First Sports International”, and Firstwave consents to such name and ▇▇▇▇ and
shall make no claim of ownership to such name and ▇▇▇▇. Notwithstanding
Firstwave’s consent to Licensee’s use of such name and ▇▇▇▇, in the event there
is actual confusion of such name and ▇▇▇▇ with any of Firstwave’s Trademarks,
Licensee shall cease use of such name and ▇▇▇▇ within a reasonable period of
time and select another name and ▇▇▇▇ acceptable to Firstwave that the Parties
determine will not be confusingly similar to Firstwave Trademarks.
Section
1.3 Restrictions. Until License and Buyer have paid all amounts due
to Firstwave hereunder and pursuant to the Transaction Documents, Licensee and
Buyer shall not, license, sublicense, assign or transfer all, or a substantial
portion of the rights and obligations granted to Licensee hereunder to any third
party or other entity other than Licensee without Firstwave’s prior written
consent. In the event Licensee makes such assignment or transfer and Firstwave
does not agree to such assignment or transfer, then the remaining balance of the
Royalty Fees due hereunder and under the Transaction Documents will be
immediately due and such balance must be paid in its entirety prior to the
Closing Date of such
3
transfer.
Licensee and Buyer, or any third party who assumes these rights and obligations
shall not, under any circumstances or at any time use, modify, reproduce or
distribute the Firstwave Software or any derivative or combination thereof in
the Non-Sports Market. Nothing in this Section bars Licensee from sublicensing
the Firstwave Software in the Sports Industry to its customers in the ordinary
course of business.
Section 1.4 Noncompete. Licensee and Buyer acknowledge that
Firstwave is in the business of providing customer relationship management
solutions worldwide and that Firstwave is entering into this Agreement to
provide Licensee the opportunity to focus on delivering a solution for the
Sports Industry. Accordingly, Buyer and Licensee agree that Licensee will
exercise its license rights as granted herein, directly or indirectly, with
respect to the Firstwave Software only in the Sports Industry. Furthermore,
until the Royalty Fees and all amounts due under the Transaction Documents are
paid in full, Buyer and Licensee agree that Licensee will not market, promote,
distribute or sublicense, directly or indirectly, the Firstwave Software, and
neither Buyer nor Licensee will provide or offer to provide, directly or
indirectly, any “Professional Services” (as defined in Section 2.2(b)) related
to the Firstwave Software to those entities identified as “Firstwave
Protected Entities” and attached hereto as Exhibit A.
Furthermore, Firstwave has agreed that, until the Note and all amounts due to
Firstwave hereunder are paid in full, Firstwave will not license the Firstwave
Software directly to the Sports Industry outside the U.S. The foregoing
restriction will not prohibit Firstwave from private labeling the basic CRM
components of its software to third parties who derive less than 10% of their
revenues outside the U.S. from the Sports Industry as defined above, such as
non-sports ticketing organizations (e.g., Cygnus) who may imbed the basic CRM
components in its applications. Such licensee may then sublicense the basic CRM
components as an embedded solution to a customer in the Sports Industry outside
the U.S. and such transaction will not constitute a breach of this Agreement.
After the Note and all amounts due to Firstwave under the Transaction Documents
have been paid in full, then all Parties will be able to market, license,
distribute and support the Firstwave Software and its derivatives in the Sports
Industry worldwide. Licensee, Buyer, its subsidiaries, affiliates and partners
will, at all times, be restricted to use, license, distribution and support of
the Firstwave Software in the Sports Industry.
ARTICLE
2
ROYALTY
FEES
Section 2.1 Royalties. As consideration for the rights granted to
Licensee herein and other rights and property obtained by Buyer and Licensee
pursuant to the Transaction Documents, Buyer and Licensee shall pay to Firstwave
$2,214,000 (without duplication of the sums described in the Stock Purchase
Agreement) as follows:
|
2.1.1 |
$338,000 (US) representing the prepaid royalty fees accrued by Firstwave which have been acquired by Licensee as part of the transaction documented in the Transaction Documents and hereinafter referred to as “Prepaid Royalty”, payable in accordance with the terms set forth in Section 2.2 below; and |
|
2.1.2 |
$1,876,000 (US) representing the fees for the rights granted to Buyer and Licensee herein and such other related rights and property as may be granted in the Transaction Documents (the “Purchase Price”), to be paid in part by $256,000 in immediately available funds at Closing and in part by that certain promissory note in the principal amount of $1,620,000 to be executed on the Closing Date (the “Note”). For |
4
purposes
hereof, the Prepaid Royalty and the Purchase Price are collectively referred to
herein as the “Royalty Fees”, all of which are payable to
Firstwave as described herein.
Section 2.2 Calculation of Royalty Fees. The quarterly Royalty
Fee will be calculated as follows and to the extent that these amounts exceed
the amount paid on the Note at the beginning of each Contract Year, such amounts
will be paid to Firstwave as stated herein:
|
(a) |
35% (thirty-five percent) of all the “License Fees” earned by Licensee from its customers or from distributors, resellers, OEMs and any and all third parties, directly or indirectly, marketing and distributing the Firstwave Software and wherever deposited and shall be allocated upon receipt by Firstwave as follows: (1) 20% (twenty percent) of the License Fees to be applied to the Purchase Price and the principal balance of the Note, and (2) 15% (fifteen percent) of the License Fees to be applied to the Prepaid Royalty balance, until such time as Firstwave has recovered the total amount of such Prepaid Royalty amount (which amount is separate from the Purchase Price due hereunder and payments thereon will not be applied to the Purchase Price nor the principal balance of the Note due hereunder). Upon payment in full of the Prepaid Royalty amount, the royalty rate on License Fees shall be reduced to 20% and shall continue to be applied against the Note. In the event the Prepaid Royalty amount is not paid in full by the maturation date of the Note, Licensee shall add to the final installment under the Note the deficit in the cumulative Prepaid Royalty fee payments made by Licensee to Firstwave. For purposes hereof, “License Fees” shall mean all fees earned by Licensee during each Contract Year, directly or indirectly, from its licensing, sublicensing, lease, distribution and/or integration of the Firstwave Software and/or any third party software products (including products developed by Licensee) to the Sports Industry and received as license revenue or fees recognized as license revenue but received in a form other than cash, including, without limitation, if allocated for “in kind” products or services, the fair market value of such “in kind” products or services valued at the time Licensee delivers its products or services; and |
|
(b) |
10% of all “Professional Services” revenues earned by Licensee and wherever deposited shall be applied to the Purchase Price and the Principal Balance of the Note. For purposes hereof, “Professional Services” shall mean all fees earned by Licensee during each Contract Year, directly or indirectly, for the performance of services related in any way to the evaluation, customization, training and/or installation of the Firstwave Software and/or any third party software products (including products developed by Licensee) in the Sports Industry by |
5
Licensee
or its distributors, resellers, OEMs and any and all third parties and
identified as Professional Services or fees recognized as Professional Services
but received in a form other than cash, including, without limitation, if
allocated for “in kind” products or services, the fair market value of such “in
kind” products or services valued at the time Licensee delivers its products or
services; and
|
(c) |
20% of all “Maintenance Fees” earned by Licensee and wherever deposited shall be applied to the Purchase Price and the Principal Balance of the Note. For purposes hereof, “Maintenance Fees” shall mean all fees earned by Licensee during each Contract Year or attributed to such reporting period, directly or indirectly, for the performance of any and all maintenance, support and/or technical support of the Firstwave Software and/or any third party software products (including products developed by Licensee) by Licensee or its distributors, resellers, OEMs and any and all third parties and identified as Maintenance Fees or fees recognized as Maintenance Fees but received in a form other than cash, including without limitation, if allocated for “in kind” products or services, the fair market value of such “in kind” products or services valued at the time Licensee delivers its products or services. |
For
purposes hereof, “Revenue” shall include all such License Fees,
Professional Services and Maintenance Fees or the like, even if labeled
otherwise. Licensee and Buyer hereby warrant that all Revenue as described in
Sections 2.2(a), (b) and (c) above, regardless of where such amounts are
deposited (whether in Licensee’s or Buyer’s or other entity’s account), shall
for all purposes be included as Revenue hereunder.
ARTICLE
3
PAYMENT
TERMS
Section 3.1 Reports and Payments. On a
monthly basis following the Closing Date, Licensee and Buyer shall determine and
report to Firstwave, within ten (10) days following the end of each month,
whether the aggregate earned Royalty Fee for the preceding month-to-date
Contract Year (excluding the Prepaid Royalty) exceeds that amount paid at
Closing pursuant to installments due on the anniversary of the Closing Date. If
the aggregate earned Royalty Fees (excluding the Prepaid Royalty Fee) exceed the
amount paid by Licensee and Buyer pursuant to the Note on any anniversary of the
Closing Date, Licensee will pay to Firstwave, on the 15th day of the
month following the end of the fiscal quarter in which such excess occurs, the
Royalty Fee payments due to Firstwave on excess “Revenue” (defined below)
collected during such fiscal quarter. (For clarification, the installments due
under the Note on August 31, 2005 and November 30, 2005 shall not be considered
in determining whether quarterly Royalty Fee payments are due.) Although written
reports will be made on a monthly basis, payments, if required pursuant to the
terms hereof, will be made on a fiscal quarter basis and will be accompanied by
a fiscal quarterly, written report indicating the Revenue for the preceding
fiscal quarter and the amount of Royalty Fees due for such quarter. Royalty Fees
shall be paid in U.S.
6
currency
to be converted at the exchange rate used by Citibank of New York, in effect the
first day of each month included in the quarter in which the Royalty Fee payment
is due to Firstwave. Failure to make any payments due under the Note (which
failure is not cured in any applicable cure period) causes an immediate
acceleration of all subsequent amounts due. If any sum payable under this
Agreement is not paid within ten (10) days of the date due, then (without
prejudice to Firstwave's other rights and remedies) Firstwave shall be entitled
to interest on such sum on a day-to-day basis from the date due to the date of
payment (both dates inclusive) at the rate of one and one-half percent (1.5%)
per month on such past due amount. Licensee and Buyer shall not set-off against
any amounts owed to Firstwave under this Agreement any sums claimed to be owed
by Firstwave under this Agreement, the Transaction Documents or arising out of
any other purchase, license, service, development or other transaction between
or among Firstwave, Buyer and Licensee. In the event any Party deems it
necessary to enforce this Agreement by or through an attorney at law, the
non-prevailing Party shall pay the prevailing Party upon demand all costs and
expenses of enforcement, including, without limitation, reasonable attorneys’
fees. For purposes hereof, the Parties acknowledge and agree that Licensee’s
fiscal quarters shall consist of the periods from May 1st through
July 31st, August 1st through October 30th,
November 1st through January 31st, and February
1st through April 30th of each Contract Period.
Section 3.2 Records and Audit. Licensee and Buyer agree to keep
accurate written records sufficient in detail and in accordance with United
States generally accepted accounting principles to enable the Royalty Fee
payments payable under this Agreement by Licensee to Firstwave to be determined
and verified. Such records for each month and fiscal quarter reporting period
will be retained by Licensee and Buyer for a period of not less than five years
after the end of such quarter. Upon reasonable notice and during regular
business hours, Licensee and Buyer will from time to time (but no more
frequently than once per quarter) make available the records referred to herein
for audit at Firstwave’s expense to verify the accuracy of the reports and
payments delivered to Firstwave. In the event Firstwave or its auditors
determine that Licensee or Buyer have underreported or underpaid Royalty Fees
due to Firstwave, and if such audit shows an underpayment by more than five
percent (5%) for any Contract Year, Licensee or Buyer shall immediately pay such
underpaid amount to Firstwave along with all costs of performing the audit.
Failure to promptly pay any underpaid amounts constitutes grounds for
acceleration of remaining payments due under the Note and termination of this
Agreement by Firstwave.
Section 3.3
Intent of Revenue Sharing. For purposes of clarification, the intent of
Licensee’s obligation to remit the payments described in Section 2.3 above is to
enable Licensee and Buyer to reduce the balance due to Firstwave under the Note
as expeditiously as possible. Licensee and Buyer acknowledge and agree that the
percentages stated above in Section 2.3 are fair and reflect the Parties’
reasonable efforts to reduce the Note. The Parties acknowledge and agree that
Licensee’s prepayment of the total amount of Royalty Fees due hereunder prior to
the maturation of the Note will terminate Licensee’s obligation to continue
making payments as set forth herein.
ARTICLE
4
INTELLECTUAL
PROPERTY RIGHTS AND OWNERSHIP
Section
4.1 Ownership. Subject to the license granted to Licensee in Section
1, Firstwave shall retain all of its right, title and interest in and to the
Firstwave Software. Until
7
such time
as the Royalty Fees are paid in full and the Note retired, any and all
derivative works of the Firstwave Software developed, conceived, or prepared by
Licensee, alone or with others, including all IPR associated therewith shall be
part of the Firstwave Software and owned by Firstwave. Upon payment in full of
all amounts due hereunder and under the Note, Licensee shall be entitled to all
right, title and interest in and to only the derivative works created by
Licensee of the Firstwave Software after the Closing Date, not the underlying,
original Firstwave Software. Firstwave shall execute any assignment or other
document reasonably requested to evidence Licensee’s rights in such derivative
works. Notwithstanding the foregoing, the Parties acknowledge and agree that any
and all derivative works of the Firstwave Software developed, conceived, or
prepared by Licensee before the Closing Date, alone or with others, including
all IPR associated therewith shall be part of the Firstwave Software and all
right, title and interest therein shall remain with Firstwave. Licensee shall
have the license rights granted in Section 1.1 to such derivative works.
Furthermore, all right, title and interest and IPR in the underlying, original
Firstwave Software will remain with Firstwave. Any third party products
purchased or licensed by Licensee shall remain the property of their respective
owners.
ARTICLE
5
WARRANTIES
AND DISCLAIMER
Section 5.1 Limited Warranties by Firstwave. Firstwave
represents and warrants to Licensee that Firstwave has the right and authority
to grant the license granted herein.
Section 5.2 Warranty Disclaimer. The
Parties acknowledge and agree that Licensee is currently in possession of the
Firstwave Software. THERE ARE NO WARRANTIES, WRITTEN OR ORAL, EXPRESS OR
IMPLIED, WITH RESPECT TO THE FIRSTWAVE SOFTWARE, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH
ARE EXPRESSLY DISCLAIMED.
Section 5.3 Limited Warranties by Licensee. Licensee and Buyer
represent and warrant to Firstwave that: (i) Licensee is and shall be capable of
performing its duties and obligations as set forth herein; (ii) Licensee will
not alter, modify, obscure or cover any copyright notices or Trademark notices
or other proprietary rights legends placed on or embedded by Firstwave in the
Firstwave Software; (iii) with respect to any derivative works created by
Licensee or at Licensee’s direction after the Closing Date, such derivative
works shall be original works of authorship prepared by Licensee or at
Licensee’s direction and will not infringe any worldwide copyright, patent,
trade secret or other intellectual property right of any third party; and (iv)
with respect to its distribution of the Firstwave Software prior to the
termination of this Agreement, Licensee will not extend warranties to its
customers which are broader in their substance and duration than those set forth
in Firstwave’s standard license agreements without first consulting with
Firstwave. Firstwave shall have no liability to such customers for any breach
thereof .
Section 5.4 Indemnity by Licensee.
Licensee and Buyer shall indemnify, defend and hold harmless Firstwave from and
against all liabilities, losses, damages, claims, actions, costs and expenses
(including, without limitation, legal fees) arising out of or with respect to
the activities of Licensee, the failure of Licensee to perform any obligation of
Licensee under this Agreement, any
8
warranty
or guarantee granted by Licensee or Buyer with respect to the Firstwave Software
products or any services to be provided to Firstwave’s customers being serviced
by Licensee from and after the Closing Date hereof and any new customers of
Licensee following the Closing Date hereof.
Section 5.5 Indemnity by Firstwave. Firstwave shall indemnify,
defend and hold harmless Licensee from and against all liabilities, losses,
damages, claims, actions, costs and expenses (including, without limitation,
legal fees) arising out of or with respect to Firstwave’s breach of Section 5.1
hereof.
ARTICLE
6
LIMITATION
OF LIABILITY
Section
6.1 Limitation of Liability. In no event shall any Party be liable
to the other for loss of profits, business, revenue, goodwill or anticipated
savings; and/or indirect or consequential loss or damage. The Parties expressly
agree that should any limitation or provision contained herein be held to be
invalid under any applicable statute or rule of law it shall to that extent be
deemed omitted but if any Party thereby becomes liable for loss or damage which
would otherwise have been excluded, such liability shall be subject to the other
limitations and provisions set out herein. In the event this Agreement is
terminated for any reason, Firstwave shall not be liable for the debts,
accounts, obligations or other liabilities of Licensee or Buyer or of their
agents, employees or independent contractors, including, without limitation, the
salaries, overhead costs, market development investments or other costs and
expenses incurred by Licensee or Buyer, however described or
denominated.
ARTICLE
7
CONFIDENTIALITY
AND NON-DISCLOSURE
Section 7.1 Confidential Information. All “Confidential
Information” (as defined below) of any Party given by that Party to the other or
otherwise obtained (whether prior to or after the entering into of this
Agreement and including information disclosed in contemplation of this Agreement
being entered into) shall be treated by the other Party, its employees, agents
and sub-contractors as confidential and shall not be used other than for the
benefit of the disclosing Party. Each Party agrees to use the same means as it
uses to protect its own confidential information, and in any event no less than
reasonable means, to prevent the disclosure and to protect the confidentiality
of the other Party’s Confidential Information which it has been given or
otherwise obtained as set out above. Notwithstanding the foregoing, each Party
shall have the right to disclose Confidential Information to third parties
provided they have executed an enforceable nondisclosure agreement.
Section 7.2 Exceptions. The provisions of Section 7.1 shall not
apply to any information which:
|
7.2.1 |
is or becomes public knowledge other than by breach of this Section 7; |
|
7.2.2 |
is received from a third party who lawfully acquired or developed it and who is under no obligation restricting its disclosure; |
|
7.2.3 |
is independently developed without use of the other Party’s confidential information; or |
9
|
7.2.4 |
must be disclosed by the disclosing Party in the discharge of its obligations to supply information for parliamentary, governmental, regulatory or judicial purposes or under the rules or regulations of the governing jurisdiction. Where either Party reasonably determines that any disclosure of any such Confidential Information is in the discharge of its obligations to supply information for parliamentary, governmental or judicial purposes or the rules or regulations of the governing jurisdiction, or any governmental, regulatory or quasi governmental authority, it shall only make such disclosure after consultation with the other Party and taking into account its reasonable requirements as to its timing, contents and manner of disclosure of such Confidential Information. |
The
Parties acknowledge and agree that Licensee, as a wholly owned subsidiary of
Firstwave prior to the Closing Date of the Transaction Documents, was lawfully
in possession of Confidential Information of Firstwave. In the event this
Agreement is terminated, Buyer and any of Licensee’s employees, agents or
contractors having access to such Confidential Information shall be bound by the
nondisclosure obligations in this section and the exceptions stated herein may
not apply.
Section 7.3 Term of Non-Disclosure. The non-disclosure shall
remain in full force and effect notwithstanding the termination of this
Agreement during the term of the Agreement and (i) with respect to Confidential
Information, for a period of three (3) years from the Closing Date hereof; and
(ii) with respect to any information which may be identified and treated as a
Trade Secret, for so long as such information remains a “Trade Secret” (as
defined below) under applicable law.
Section 7.4 Definition of “Confidential Information”
and “Trade Secrets”. For purposes hereof, “Confidential
Information” shall mean data and information relating to a Party’s
business (which does not rise to the status of a Trade Secret) which has value
to such Party and is not generally known to its competitors including, but not
limited to, this Agreement, Firstwave Software, Source Code Materials,
derivatives thereof, software development and marketing strategies, software
programs in all forms, technical data and information, customers, prospects,
pricing and cost information, order patterns, financial data and business
strategies. “Trade Secrets” of a Party shall mean information
without regard to form belonging to the Party including, but not limited to,
inventions, methods, techniques, drawings, processes, diagrams, specifications,
research, development plans relating to existing and future products, and
computer programs of any type and lists of actual or potential customers or
suppliers which is not commonly known by or available to the public and which
information (1) derives economic value, actual or potential, from 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 (2)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy and has been identified as a “Trade Secret” at the time of
disclosure. Confidential Information may also include information, which has
been disclosed to a Party by a third party, which such Party is obligated to
treat as confidential.
10
ARTICLE
8
SOURCE
CODE ESCROW
Section 8.1 Escrow of Source Code Materials. On a fiscal
quarterly basis, Licensee will deliver to Firstwave the source code relating to
the Firstwave Software (including any and all derivatives thereof), including,
without limitation, all related documentation and technical specifications and a
list of all customers licensed to use the Firstwave Software or for whom
Licensee is providing Professional Services or Maintenance Services relating to
such Firstwave Software (collectively referred to herein as the “Source
Code Materials”). Until the Royalty Fees and Note
are paid in full, (i) Licensee will have a limited license to such Source Code
Materials as specified in Section 1.1 for the sole and exclusive purpose of
maintaining and supporting the Firstwave Software and as otherwise necessary to
exercise Licensee’s rights hereunder and for no other purpose, and (ii)
Firstwave will hold the Source Code Materials in confidence and will not use any
derivative works created by Licensee to such Source Code Materials unless this
Agreement is terminated pursuant to Section 9 or the Parties have agreed upon
some form of acceptable exchange regarding bug fixes, corrections and/or
enhancements as provided in Section 1.1. Other than the foregoing, Firstwave
shall restrict its access to Licensee’s derivative works of the Source Code
Materials to verification that Licensee has made the appropriate delivery of
such Source Code Materials and derivatives thereof. After the Royalty Fees and
Note are paid in full, (i) Licensee will no longer be required to escrow the
Source Code Materials but Licensee will continue to treat the Source Code
Materials as Confidential Information and/or Trade Secrets (as may be
applicable) in accordance with the terms hereof, and (ii) Firstwave shall
destroy the Source Code Material in its possession other than with respect to
bug fixes, corrections and enhancements acquired pursuant to Section 1.1 and
underlying code in which the IPR remain with Firstwave.
Section 8.2 Termination of Escrow. When Licensee has
paid the Royalty Fees in full, Licensee will no longer be required to deliver
the Source Code Materials to Firstwave. Upon the occurrence of any of the events
set forth below in Section 9 terminating the Agreement, the Source Code
Materials shall become the property of Firstwave.
Section
8.3 Ownership of Source Code Escrow Materials. Licensee
acknowledges and agrees that Licensee’s access to the Source Code Materials in
no way transfers any right, title or interest to such Source Code Materials, its
derivatives or its related products to Licensee. All right, title and interest
and the IPR in such Source Code Materials, including any derivatives thereof,
will belong to Firstwave in the event this Agreement is terminated pursuant to
Section 9. In the event Licensee and Buyer have remitted payment in full of the
Royalty Fees and under the Note, then all right, title and interest and IPR in
the derivative works only developed by Licensee will be assigned to Licensee.
Notwithstanding the foregoing, Firstwave will retain all right, title and
interest and IPR in the original Firstwave Software as obtained by Licensee on
the Closing Date of this Agreement, any derivative works thereof that may be
created by or at Firstwave’s direction, and any rights to the bug fixes, error
corrections and enhancements obtained by Firstwave pursuant to Section 1.1
above.
Section 8.4 Non-Disclosure Obligations. During the Term of
this Agreement, and thereafter with respect to the original Firstwave Software,
Licensee agrees that it will protect the Source Code Materials as Confidential
Information and as it protects its own software source code and that it will
only provide access to the Source Code Materials to those of its employees
and/or contractors who have agreed not to use or disclose the Source Code
Materials except as permitted herein.
11
Section 8.5 Release Conditions. In addition to any
termination events specified in Section 9, Firstwave shall be entitled all
right, title and interest in and to the IPRof the derivative works of the
Firstwave Software included in the Source Code Materials upon the occurrence of
any of the following events:
|
8.5.1 |
Licensee passes a resolution, or a court makes an order that Licensee be wound up otherwise than for the purpose of a bona fide reconstruction or amalgamation, or a receiver, manager or administrator on behalf of a creditor is appointed in respect of the Licensee’s business or any part thereof, or circumstances arise which entitle a court or a creditor to appoint a receiver, manager or administrator or which entitle a court otherwise than for the purpose of a bona fide reconstruction or amalgamation to make a winding-up order, or the Licensee is unable to pay its debts within the meaning of Section 123 of the Insolvency ▇▇▇ ▇▇▇▇ or any similar event occurs under the law of any other jurisdiction; or |
8.5.2
Pursuant
to termination under Section 9.2.2 if Licensee fails to remit payments in a
timely fashion as required herein.
ARTICLE
9
TERM
AND TERMINATION
Section 9.1 Term. This Agreement shall be effective from the Closing
Date as stated herein and shall continue indefinitely unless terminated earlier
as provided herein.
Section
9.2 Termination. This Agreement may be terminated as provided
below:
|
9.2.1 |
The Parties may terminate this Agreement by mutual written consent at any time; or |
|
9.2.2 |
Firstwave may terminate this Agreement by giving written notice to Licensee at any time in the event Licensee has breached any term of this Agreement as follows: (i) if Licensee or Buyer have failed to remit payment as set forth herein and/or the Note and the breach has continued without cure for a period of ten (10) days after the notice of breach is delivered; and (ii) if Licensee has breached any other provision hereunder and the breach has continued without cure for a period of thirty (30) days after notice of such breach is delivered; provided that if such breach is not possible to cure, Firstwave may immediately terminate this Agreement upon such breach; or |
12
|
9.2.3 |
Firstwave may at any time before payment in full of the Royalty Fees and all amounts due under the Note by notice in writing terminate this Agreement with effect on and from the date of service of such notice if Licensee or Buyer passes a resolution, or a court makes an order that Licensee or Buyer be wound up otherwise than for the purpose of a bona fide reconstruction or amalgamation, or a receiver, manager or administrator on behalf of a creditor is appointed in respect of the Licensee’s or Buyer’s business or any part thereof, or circumstances arise which entitle a court or a creditor to appoint a receiver, manager or administrator or which entitle a court otherwise than for the purpose of a bona fide reconstruction or amalgamation to make a winding-up order, or the Licensee or Buyer are unable to pay its debts within the meaning of Section 123 of the Insolvency ▇▇▇ ▇▇▇▇ or any similar event occurs under the law of any other jurisdiction; or |
|
9.2.4 |
This Agreement shall immediately terminate upon the termination of the Stock Purchase Agreement entered into by and between Buyer and Firstwave on even date herewith. |
Section 9.3 Effect of Termination.
|
9.3.1 |
If any such termination is due to a breach by Licensee or Buyer, the remaining amount due under the Note, after subtracting any payments made pursuant to Sections 2.1, 2.2 and 3.1 above (including any unpaid balance of the $338,000 of the Prepaid Royalty Fee), shall represent liquidated damages and as reimbursement for Firstwave’s loss of its Sports Industry business operations from the Closing Date of this Agreement to the date of termination. The Parties agree that this estimate of liquidated damages is reasonable and does not constitute a penalty. |
|
9.3.2 |
If this Agreement is terminated, all rights and obligations of the Parties hereunder (except for provisions that by their terms survive termination) shall terminate without any liability of any Party to the other Party, except for any liability of the Party then in breach. Upon termination, all license rights granted to Licensee shall terminate immediately and the Source Code Materials shall be released to Firstwave. |
Section 9.4 Events Upon
Termination. In the event that this Agreement is terminated, Licensee shall
return to Firstwave all property, including, without limitation, all copies of
the IPR and Firstwave Software and derivative works thereof, belonging to
Firstwave then in its possession. Forthwith upon completion of the activities
set out herein, Licensee shall certify in writing to Firstwave that it has fully
complied with the requirements of set forth herein. The termination of this
Agreement shall not prejudice or affect any right of action or remedy which
shall have accrued or shall thereafter accrue to Firstwave.
13
ARTICLE
10
MISCELLANEOUS
Section 10.1 Assignment.
Except as set forth herein, any assignment or transfer of this Agreement, and
any ”Change of Control” (as defined in the Stock Purchase Agreement) transaction
as to the ownership of Licensee after the Closing Date automatically triggers an
immediate acceleration of all payments due under this Agreement and the Note.
Upon payment of such accelerated amounts, Licensee shall be free to assign or
transfer this Agreement or consummate a Change of Control transaction.
Section 10.2 Expenses.
Except as otherwise provided in this Agreement, each Party hereto shall pay its
own expenses incidental to the preparation of this Agreement, the carrying out
of the provisions of this Agreement and the consummation of the transactions
contemplated hereby.
Section 10.3 Contents of
Agreement; Parties in Interest; etc. This Agreement, and the other
Transaction Documents, set forth the entire understanding of the Parties hereto
with respect to the transactions contemplated hereby. This Agreement shall not
be assigned, amended or modified except by written instrument duly executed by
each of the Parties hereto or as provided herein. Any and all previous
agreements and understandings between or among the Parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement.
Section 10.4 Waiver. Any
term or provision of this Agreement may be waived at any time by the Party
entitled to the benefit thereof only by a written instrument duly executed by
such Party. No failure or delay by either Party in exercising any right, power
or remedy will operate as a waiver of any such right, power or
remedy.
Section 10.5 Notices. Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted hereunder shall be in writing and shall be deemed given
only if delivered personally or sent by email, telecopier, courier, telegram or
by registered or certified mail, postage prepaid, as follows:
If to Firstwave,
to:
Firstwave Technologies, Inc.
Overlook III, Suite 1000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
14
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇ IV, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.P.
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
If to Licensee or Buyer,
to:
Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
to:
▇▇. ▇▇▇▇▇ ▇▇▇▇▇
AllAboutTickets, LLC
The Pavilion
1 ▇▇▇▇▇▇ Placed
Thames Ditton
Surrey KT7 ONF
England
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
or to
such other address as the addressee may have specified in a notice duly given to
the sender as provided herein. Such notice, request, demand, waiver, consent,
approval or other communication will be deemed to have been given as of the date
so delivered, transmitted by facsimile, telegraphed or mailed, as the case may
be; provided, however, if such date is not a business day, then
such notice or communication shall be deemed given on the first business day
following the date delivered, transmitted, telegraphed or mailed.
Section 10.6 Governing
Law. This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the State of Georgia, without regard to its conflict
of law principles.
Section 10.7 No Benefit to
Others. The representations, warranties, covenants and agreements contained
in this Agreement are for the sole benefit of the Parties hereto and their
respective heirs, executors, administrators, legal representatives, successors
and permitted
15
assigns,
and nothing contained in this Agreement or the other Transaction Documents shall
be construed as conferring any rights on any other persons.
Section 10.8 Non-Solicitation
/ No Poaching. For a period of three (3) years after the Closing Date or
earlier of the payment of the Note in full, neither Party shall, without the
prior written consent of the other Party, either directly or indirectly, on its
own behalf or in the service of or on behalf of others, divert, solicit, entice
or hire away (or seek to divert, solicit, entice or hire away) from the
employment of the other Party, any person employed (or any person who has been
so employed in the preceding twelve (12) months) by the other Party nor will
either Party, without prior written consent of the other, offer employment to
any employee of the other during the six month period immediately following the
employee’s termination. For purposes of this Agreement, the term “employee”
shall mean a person with whom such Party has had significant contacts, whether
or not such employee is a full or part-time employee or consultant of the other
Party and whether or not such employment is pursuant to a written agreement, for
a determined period or at will. Notwithstanding the foregoing, in the event this
Agreement is terminated pursuant to Section 9.2, then the foregoing restrictions
with respect to Firstwave’s ability to solicit or hire any of Licensee’s
employees shall be removed.
Section 10.9 Headings, Gender
and “Person”. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement. Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the context requires. Any
reference to “include” or “including” herein
shall be deemed to mean “include, without limitation” and
“including, but not limited to.” Any reference to a
“person” herein shall include an individual, firm, corporation,
partnership, trust, governmental authority or body, association, unincorporated
organization or any other entity. The “knowledge” of a person
shall include the current actual awareness of such person, such person’s
officers charged with the responsibility for the matters qualified by the use of
the term “knowledge” and such matters as would be revealed by a
review of such person’s records.
Section 10.10 Amendment.
No amendment or modification of any provision of this Agreement shall be
effective, unless it is set forth in writing which refers to the provisions so
affected and is signed by an authorized representative of each party.
Section 10.11
Severability. The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Section 10.12
Counterparts. This Agreement may be executed in any number of
counterparts and any Party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the Parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
Section 10.13 Assistance
of Counsel. Each Party hereto acknowledges that they have had the assistance
of counsel in negotiating and preparing the terms of this Agreement and the
other Transaction Documents; therefore, this Agreement and the other Transaction
Documents
16
shall be
construed without regard to any presumption or other rule requiring construction
against the Party causing them to be drafted.
Section 10.14 Time of
the Essence. Time is of the essence of this Agreement.
Section 10.15 Actions and
Proceedings. The Parties consent to the exclusive jurisdiction and venue of
the courts of ▇▇▇▇ County, Georgia and the United States District Court for any
District of Georgia in any action or judicial proceeding seeking an injunction
or other equitable relief or to enforce an arbitration award in favor of any
other Parties in connection with this Agreement or the transactions contemplated
hereby. The Parties agree that any forum other than the State of Georgia is an
inconvenient forum and that a suit (or non-compulsory counterclaim) brought by
any Party in a court of any state other than the State of Georgia should be
forthwith dismissed or transferred to a court located in the State of
Georgia.
Section 10.15 Publicity.
Licensee shall not disclose the terms and conditions of this Agreement to any
third party nor refer to Firstwave in connection with any promotion or
publication without the prior written approval of Firstwave. Further, any press
releases relating to the transaction undertaken in the Transaction Documents,
including this License Agreement, will be mutually agreed upon prior to release.
Section 10.16 Execution by
Facsimile. Any Party may deliver an executed copy of this Agreement and any
documents contemplated hereby by facsimile transmission to another Party, and
such delivery shall have the same force and effect as any other delivery of a
manually signed copy of this Agreement or of such other documents.
[Signatures
follow on next page]
17
IN WITNESS WHEREOF, the Parties hereto
have duly executed this Stock Purchase Agreement on the date first written
above:
“Licensee”
Firstwave
Technologies UK Ltd.
By:
/s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
Title:
Chairman
“Buyer”
AllAboutTickets,
LLC
By:
/s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title:
Manager
“Firstwave”
Firstwave
Technologies, Inc.
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
CEO
18
EXHIBIT
A
Firstwave
Protected Entities
Arena
Football League
Atlanta
Falcons
Atlanta
Hawks
Atlanta
Sports Council
Atlanta
Thrashers
ChampionsWorld
Cheyenne
Rodeo
CruiseOne
Cygnus
Quantum
Shift Technology
19