Exhibit 2.2
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
TABLE OF
CONTENTS
LICENSE
AGREEMENT
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 The Pavilion, 1
Atwell Place, Thames Ditton, Surrey, KT7 0NF (“
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:
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)
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·
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.Net
Architecture (Tiger)
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·
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Sports
Administration Application (referred to as “The
Game”)
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·
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Web Portal
Templates (web connect)
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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”):
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·
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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
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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 mark and shall make no claim of ownership to such
name and mark. Notwithstanding Firstwave’s consent to
Licensee’s use of such name and mark, in the event there is
actual confusion of such name and mark with any of
Firstwave’s Trademarks, Licensee shall cease use of such name
and mark within a reasonable period of time and select another name
and mark 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
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:
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2.1.1
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$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
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2.1.2
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$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
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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:
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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
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(b)
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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
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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
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(c)
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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.
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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 15 th 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.
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 accelerat
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