Exhibit 10.9
ACQUISITION OF PATENT AGREEMENT
Agreement (this
"Agreement"), made this 2nd day of July, 2004, by and
among
Georal International, Ltd., a
New York corporation ("Georal") and Dataworld
Solutions, Inc., a Delaware
Corporation ("DWLD"), DWS Defense Systems, Inc.
("Purchaser"), a Delaware
corporation and wholly-owned subsidiary of DWLD and
Alan J. Risi an individual
residing within the City and State of New York.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS,
Purchaser desires to purchase a certain patent controlled
and
owned by Alan J. Risi
("Risi") presently licensed to Georaland
WHEREAS,
Purchaser is a wholly-owned subsidiary of DWLD; and
WHEREAS, the
parties desire to define the relationship among the
parties;
and
WHEREAS, Risi
presently licenses a certain patent to Georal for
distribution by Georal and
DWLD desires to purchase said patent for the purpose
of distributing products
produced by Georal; and
WHEREAS, in
consideration of the mutual covenants and promises among
the
parties; and
WHEREFORE, in
consideration of the foregoing and the mutual benefits to
be
derived from this Agreement,
the parties hereto do hereby agree as follows:
Chapter 1 Defined Terms. For
purposes of this Agreement, the following terms
shall have the following
meanings:
"Agreement" shall mean this
Acquisition of Patent Agreement whereby purchaser
purchases certain patents
owned by Risi and as previously assigned to Georal and
attached hereto as Exhibit
and made part hereof.
"Customer's Prepared Site"
shall mean the area or site of Purchaser's customer
in which the Product will be
installed, which site has been prepared by such
customer to accommodate the
installation of the Product in accordance with the
Product
specifications.
"Designated Shipper" shall
have the meaning provided in Section 4.1 hereof.
"Events of Default" shall
have the meaning provided in Section 10.1 hereof.
"Patented Property" shall
mean the Patent presently owned by Risi and as
previously assigned to Georal
and to be sold to Purchaser.
"Georal Marks" shall mean all
copyrights, trademarks and trade names owned,
licensed to, or under the
exclusive control of Georal and/or Risi relating to
the Products, whether
registered or unregistered, including, without
limitation,
the trademark "GIL 2001
Security Doors."
"Patent" shall mean (i)
United States patent no. 6,472,982, which covers the
technology relating to the
secured portal presently marketed by Georal (the
"Initial Patent"), (ii) any
other patents in the United States or elsewhere
which are the same as or
based on the Initial Patent or the underlying invention
or technology or are
improvements or enhancements thereof and all divisions,
continuations, continuations
in part, reissues, substitutes and extensions of
any of the foregoing which
are owned by Georal or any of its affiliates, and
(iii) any other patents,
patent applications or other patent rights which are
acquired by Georal or any of
its affiliates subsequent to the date of this
Agreement.
<PAGE>
"Georal Technology" shall
mean all processes, methods, trade secrets, ideas,
techniques, information,
Know-how and other technology exclusively licensed to
Georal relating to the
Products in any way.
"List Price" or "List Prices"
for any Product shall be the lowest of (i) the
retail price for such Product
as set by Georal from time to time, (ii) the price
set by Georal for sales to
government agencies (the "GSA Price"), or (iii) such
other price as may be agreed
upon by Georal and Purchaser. The current retail
prices and GSA Prices are set
forth on Exhibit A to this Agreement. In the event
that Purchaser desires to
provide a client with a quantity discount from the
retail price or GSA Price,
Georal will not unreasonably withhold its consent to
such discount. Except as
otherwise expressly provided in this Agreement, the
List Price shall not include
freight, insurance, customs duties and taxes,
sales, VAT or other taxes,
and all other costs necessary to deliver the Product
to the Prepared Site as
specified in Purchaser's purchase order, all of which
will be payable by the
customer.
"Product" or "Products" shall
mean (i) all security entrance systems created,
developed, manufactured
and/or distributed or otherwise sold by Georal or its
successors, subsidiaries or
affiliates, including all models of the GIL-2001
security door series; (ii)
any other security products developed by Georal or
its affiliates, and (iii) any
other products covered by the Patents, unless, in
any instance or instances,
Georal advises Purchaser in writing that Georal does
not wish to include such
additional product within the scope of the definition
of Product.
"Purchase Price" shall have
the meaning provided in Chapter 5 hereof.
"Term" shall have the meaning
provided in Chapter 3 hereof.
Appointment of
Purchaser.
-------------------------
Subject to and in
consideration of the terms and conditions set forth in
this
Agreement, Georal hereby
waives its rights to license the Patent per a prior
agreement with Risi.
Purchaser shall purchase the Risi Patents.
Purchaser shall have the
right to lease Products to Customers during the Term
hereof, provided that
Purchaser pays Georal the Purchase Price therefor in
accordance with the terms of
this Agreement.
Georal will service all
products sold or leased by Purchaser to customers on
such commercially reasonable
terms as are determined by Georal from time to time
during the Term
hereof.
Purchaser hereby recognizes
Georal's exclusive worldwide right to the Georal
Brandname and agrees that it
will not, during the Term of this Agreement or
thereafter, attack the
validity or any rights of Georal in and to the Marks or
the Georal Brandname, or do
or suffer to be done any act or thing which might in
any way impair the rights of
Georal in and to the Georal Brandname. Georal
shall, at all times during
the Term hereof and at its sole cost and expense,
prosecute, maintain and
defend all patents, trademarks, trade names and
copyrights relating to the
Products, and all pending and future applications
therefore, as Georal
determines, in its sole discretion, to be commercially
reasonable. Georal will
notify Purchaser of all issued patents, trademarks,
trade names and copyrights
and of the status of all pending applications
therefor. To the extent
required by applicable law and at no cost to Purchaser,
Purchaser will cooperate with
Georal, upon Georal's reasonable request, with any
such pending or future
applications for any of the foregoing intellectual
property during the Term of
this Agreement.
2
<PAGE>
3.Term of the
Agreement.
----------------------
The term of this Agreement
shall commence on July 2, 2004 and shall expire on
July 1, 209, subject to
earlier termination as provided in Chapter 10 hereof
(the "Term")
4 Representations and
Warranties of the Parties.
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(A) Georal hereby represents and
warrants to Purchaser the following:
Georal is a
corporation, duly organized, validly existing, and in
good
standing under
the laws of the State of New York and has all requisite
power and
authority to own or lease its properties and carry on
its
business as now
conducted.
All action on
the part of Georal necessary for the authorization,
execution,
delivery and performance of this Agreement and the
consummation
of the
transactions contemplated hereby, has been properly taken
and
obtained by it
and this Agreement constitutes a valid and legally
binding
obligation of
Georal enforceable in accordance with its terms, except
as
the same may be
limited by bankruptcy, insolvency, reorganization,
moratorium, or
other laws affecting generally the enforcement of
creditors'
rights and by
general principles of equity.
There is no
action, suit, proceeding, or investigation pending or, to
the
knowledge of
Georal, threatened against Georal which in any way relates
to
the validity of
this Agreement or the right of Georal to enter into, to
consummate this
Agreement and the transactions contemplated hereby.
The
authorization, execution, delivery and performance of this
Agreement
and the
consummation of the transactions contemplated hereby will
not
result in any
violation or be in conflict with or constitute, with or
without the
passage of time or giving of notice, a default under
Georal's
certificate of
incorporation or by-laws or any instrument, judgment,
order,
writ, decree or
agreement to which Georal is a party or by which Georal
is
bound.
No consent,
approval, order, authorization, registration,
qualification,
license, permit,
designation or declaration of, or other filing with or
notification to,
any foreign and/or domestic federal, state or local
governmental
authority or agency or any third party is required in
connection with
the authorization, execution, delivery and performance
of
this Agreement
or the sale and distribution of the Products as
contemplated
hereby.
Georal Maintains no other
Patents other than those transferred pursuant to this
agreement for the design of
security doors that compete with or replace the
Patented Products by use of
superior technology.
Except as set
forth in this Chapter or as otherwise expressly provided
in
this Agreement,
Georal has made no other representations or warranties
to
Purchaser in
connection with this Agreement or the transactions
contemplated by
this Agreement.
(B) DWLD and
Purchaser hereby jointly and severally represent and
warrant
to Georal the following:
Each of DWLD and
Purchaser is a corporation, duly organized, validly
existing, and in
good standing under the laws of the State of Delaware
and
has all
requisite power and authority to own or lease its properties
and
carry on its
business as now conducted.
3
<PAGE>
All action on
the part of each of DWLD and Purchaser necessary for the
authorization,
execution, delivery and performance of this Agreement
and
the consummation
of the transactions contemplated hereby, has been
properly
taken and
obtained by it and this Agreement constitutes a valid and
legally
binding
obligation of DWLD and Purchaser enforceable in accordance with
its
terms, except as
the same may be limited by bankruptcy, insolvency,
reorganization,
moratorium, or other laws affecting generally the
enforcement of
creditors' rights and by general principles of equity.
There is no
action, suit, proceeding, or investigation pending or, to
the
knowledge of
DWLD or Purchaser, threatened against DWLD or Purchaser
which
in any way
relates to the validity of this Agreement or the right of
DWLD
or Purchaser to
enter into or to consummate this Agreement and the
transactions
contemplated hereby.
The
authorization, execution, delivery and performance of this
Agreement
and the
consummation of the transactions contemplated hereby will
not
result in any
violation or be in conflict with or constitute, with or
without the
passage of time or giving of notice, a default under DWLD
or
Purchaser's
certificate of incorporation or by-laws or any
instrument,
judgment, order,
writ, decree or agreement to which DWLD or Purchaser is
a
party.
No consent,
approval, order, authorization, registration,
qualification,
license, permit,
designation or declaration of, or other filing with or
notification to,
any foreign and/or domestic federal, state or local
governmental
authority or agency or any third party is required in
connection with
the authorization, execution, delivery and performance
of
this Agreement
or the sale and distribution of the Products as
contemplated
hereby.
Except as set
forth in this Chapter 6 (B) or as otherwise expressly
provided in this
Agreement, neither DWLD nor Purchaser has made any other
representations
or warranties to Georal in connection with this
Agreement
or the
transactions contemplated by this Agreement.
DWLD and
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