Exhibit 10.49
LICENSE AGREEMENT
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THIS LICENSE AGREEMENT, dated as of August 15, 2003, is made by and between
HOMECOM COMMUNICATIONS, INC., a Delaware corporation ("Licensor"), and XXXXXXX
GROUP, a corporation to be formed under the laws of United Kingdom (or other
European Countries) with a minimum net worth of $500,000 (USD) subject to
execution of this agreement ("Licensee").
WHEREAS, Licensor controls certain proprietary rights to manufacture
("Manufacture") market, sell, and distribute (collectively, "Distribute") Hybrid
Non-Isocyanate Polyurethane (HNIPU) binders and related components for
chemically resistant industrial paints and floor coatings (collectively, the
"Product"); and
WHEREAS, the Licensee desires to Manufacture the Product at the location or
locations designated by Licensee (the "Location") and to Distribute and sell the
Product in the European community marketplace.
NOW, THEREFORE, the parties, in consideration of the foregoing and of the
mutual promises set forth herein, do hereby agree as follows:
1. Recitals.
The recitals set forth above are hereby made a part of this License
Agreement and are incorporated in this Section 1 as if set forth at length in
more detail herein.
2. Definitions.
For purposes of this Agreement, the following words, terms and phrases,
where written with an initial capital letter, shall have the meaning assigned to
them in this Section 1 unless the context indicates otherwise:
a. "License" shall mean the non-exclusive right and license to Manufacture
the Product at the Location and to Distribute the Product described herein to,
and only to, the European community marketplace for and during the life of the
patents affecting the Product as of the date hereof.
b. "Product" shall mean such Product as hereinabove described, and any
by-product resulting from the Manufacture of the Product during the term of this
Agreement.
c. "Royalty" shall mean $0.16 (USD) per kilogram of Product sold, unless
otherwise specified herein.
3. Grant of License.
Licensor hereby grants to Licensee, and Licensee hereby accepts, the
License.
4. Reservation of Rights.
All rights whatsoever in the Product not specifically granted herein are
reserved to Licensor and may be freely exercised at any time by Licensor or its
designees without accounting to Licensee and without any claim, charge or
encumbrance in favor of Licensee. Licensee agrees that nothing herein shall be
construed as transferring to Licensee any right, title or interest in or to the
Product other than the License herein granted. Licensee shall not take any
action inconsistent with Licensor's rights. Notwithstanding the expiration or
termination of this License Agreement, the obligations of the Licensee hereunder
shall continue in full force and effect.
5. Payment of Royalty.
The Royalty, as described in Section 2(c) above, shall be paid by Licensee
to Licensor on a quarterly basis, in arrears, within five (5) days of the
expiration of each and every calendar quarter for and during the entire term of
this Agreement. Each Royalty payment shall be accompanied by adequate proof of
the amount of such payment in the form of shipping vouchers, paid invoices and
the like reasonably acceptable to Licensor.
6. Record Keeping/Right to Inspect Books.
(a) Licensee shall and hereby agrees to keep at the location specified in
Section 16(b) below, during the term hereof, for a period of five (5)
consecutive years following the end of each calendar year, a permanent, complete
and accurate record of all sales (including without limitation the amounts
thereof) arising from the Distribution by Licensee of the Product in the
European community marketplace for such calendar year. Licensee further agrees
to keep, retain and preserve for at least five (5) years after the expiration of
each calendar year, all original sales records and sales slips or sales checks
and other pertinent original sales records related to the Distribution by
Licensee of the Product. All such records, including sales tax reports and
business occupation tax reports and all other records and books kept by Licensee
in relation to the Distribution by Licensee of the Product in the European
community marketplace shall be open to the inspection and audit of Licensor and
its representatives or agents at all reasonable times during ordinary business
hours. Licensee shall provide Licensor with a copy of a report prepared and
certified by a licensed accountant in accordance with generally accepted
accounting principals in the country of incorporation of the Licensee at least
one (1) time in each calendar year, showing accurately in reasonable detail the
amount of sales of the Product made by Licensee and its licensees, assignees or
transferees, if any, with respect to the Distribution of the Product in the
European community marketplace during the preceding calendar year or fractional
part thereof, if any, and shall submit on or before the forty-fifth (45th) day
following the filing of the tax report in the country of incorporation provided
that Licensee hereby is and shall be obligated hereunder to file such tax
reports in the country of incorporation at least one (1) time in each calendar
year and the failure to do so will be a material default hereunder.. The report
to be provided pursuant to this section 6 shall be certified as true and correct
by an officer, member or other authorized signatory of Licensee in like
capacity. For purposes hereof, the first calendar year or portion thereof of the
term of the Agreement shall commence on July 1, 2003. Each subsequent calendar
year shall commence on January 1 of a respective year, and shall terminate on
December 31, of the said calendar year.
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(b) In the event of a failure of the Licensee to meet a scheduled audit
date at the time fixed by the Licensor, in addition to all other remedies
afforded to it under this Agreement, Licensor shall be promptly reimbursed by
Licensee for all costs of such scheduled audit together with an administrative
fee of $500.00.
(c) Failure of Licensee to promptly supply Licensor with the quarterly
and/or annual report required hereunder shall be deemed a default under this
Agreement and, in addition to all other remedies afforded to it at law or in
equity, Licensor shall be entitled, without notice to Licensee, to conduct an
audit of Licensee's books with respect to amounts of sales of the product and
any other information required hereunder for such period or periods during which
Licensee has failed to supply Licensor with reports at the cost and expense of
Licensee together with an administrative fee of $500.00.
(d) The receipt by Licensor of any statement or any payment of Royalty for
any period or the failure of Licensee to make an audit for said period shall
neither bind Licensor as to the correctness of the statement or the payment, nor
bar Licensee from collecting at any time thereafter the Royalty due for said
period. If any audit by Licensor or its agents of Licensor's records shall
reveal a deficiency in any payment of Royalty, Licensee shall forthwith pay the
Licensor the amount of the deficiency together with interest at the rate of ten
(10%) percent per annum from the date when said payment should have been made,
together with the reasonable cost of such audit (the Deficiency Payment"),
provided that any one (1) Deficiency Payment shall not be for a period in excess
of two consecutive years, and further provided that the payment by Licensee of a
Deficiency Payment shall not preclude the future requirement for Licensee to pay
a further Deficiency Payment in the event that any later audit reveals another
deficiency.
(e) It is agreed that nothing contained in this Agreement shall be deemed
or construed as creating a partnership or joint venture between Licensor and
Licensee, or between Licensor and any other party, or cause Licensor to be
responsible in any way for the debts or obligations of Licensee, or any other
party,
7. Warranty Provisions.
a. Licensor assumes no liability for the Product for which rights are
granted herein, or the inability of Licensee to exercise any rights granted
hereby by reason of distribution rights of third parties.
b. Licensor makes no representations or warranties whatsoever as to the
ability of Licensee to Manufacture the Product, the cost of same, or the
suitability or saleability of the Product in the European community marketplace
for the purposes contemplated now or hereafter by Licensee, whether or not
previously communicated to Licensor.
c. Licensor specifically disclaims all warranties of any kind or nature,
express or implied, including, implied warranties of merchantability, fitness
for a particular purpose and non-infringement, whether arising by law, contract,
custom or conduct. In no event shall Licensor be liable to Licensee or its
affiliates or any third parties for any indirect, consequential or special
damages hereunder, however caused.
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d. Licensor makes no representation or warranty whatsoever as to the full
or partial coverage and protection of the Product under and pursuant to national
and international patent laws that are now or may hereafter be in effect,
whether or not a patent has been granted or filed with respect to the Product.
8. Conversion to Exclusivity.
Licensee is hereby granted the right and option to convert the
non-exclusive right to Distribute the Product into an exclusive right to
Distribute the Product at any time and from time to time during the term of this
Agreement on written notice to Licensor given within thirty (30) days of the
expiration of any calendar year (the "Conversion Notice"), provided that the
Conversion Notice shall have been given within the thirty (30) day time period
provided above and shall be given in accordance with the provisions of Section
17 below, and further provided that Licensee shall have attained sales of the
Product equal to at least 50,000 metric tons in the calendar year immediately
preceding the Conversion Notice (the "Valid Conversion") and not be in arrears
in payments due. If Licensee shall have complied with each and all of the
foregoing requirements and thus completed a Valid Conversion, as and from the
first day of the calendar year in which the Valid Conversion occurs, Licensee
shall pay to Licensor a Royalty in the amount of $0.11 (USD) per kilogram of the
Product sold in lieu of the Royalty in the amount of $0.16 (USD) per kilogram of
Product sold per Section 2(c) above (the "Reduced Royalty"). If Licensee shall
thereafter fail to attain sales of the Product equal to at least 50,000 metric
tons in any calendar year after a Valid Conversion shall have been completed,
Licensor shall have the right on written notice to Licensee to terminate the
Licensee's option for the valid conversion (the "Termination Election") in which
event, effective with the first day of the calendar year in which the Licensor
exercises the Termination Election, the Valid Conversion shall terminate and
Licensee shall again have the non-exclusive right to Distribute the Product and
to pay the Royalty amount set forth in Section 2(c) above. The parties agree
that if at any time Licensee completes a Valid Conversion there shall exist
other licensees of Licensor with the right and license to Distribute the Product
in the European community marketplace, Licensor shall give a list to Licensee of
such other licensees who shall thereafter be excluded from Licensee's exclusive
right to Distribute the Product in the European community marketplace, and the
existence of such licensees shall not constitute a default by Licensor
hereunder.
9. Breach.
If Licensor or Licensee shall commit a breach of any term or provision of
this License Agreement the other party shall provide the breaching party with
written notice thereof specifying the details of such breach. If a material
breach of this License Agreement is not cured within 30 days after the breaching
party's receipt of such notice, the other party may terminate this License
Agreement at any time thereafter prior to cure of such material breach after
written notice to the breaching party, except if such breach is not curable in
30 days and Licensee has commenced to cure and has diligently made efforts to
cure within 30 days.
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10. Term.
This Agreement shall take effect as of the date first written above, and
shall continue as provided herein for and during the life of the patents
affecting the Product as listed below:
1. The issued U.S. Patent No. 6,120,905 for the basic Hybrid
Nonisocyanate Polyurethane Network Polymers.
2. The European Patent Application No. 99927530.8, title: Hybrid
Nonisocyanate Polyurethane Network Polymers and Composites Formed
Therefrom, corresponding to the above US Patent.
11. Costs.
Licensee shall assume any and all costs and expenses related to the
Distribution of the Product in the European marketplace, including, without
limitation, (i) the establishment of production in various European locations;
(ii) securing and paying for the services of any and all necessary inventors and
personnel required for technology transfer, which shall include but not be
limited to travel, and all costs associated with the establishment of Product
production; (iii) European product registration fees and governmental fees; (iv)
marketing and sales costs and expenses; (v) administrative costs and expenses;
and (vi) all costs and expenses incidental to the foregoing. Licensee also
agrees to directly reimburse the inventors and all needed supporting personal
for the all costs associated with establishment of the manufacturing, marketing
and modifications if needed of the Product in a minimum amount of $12,500.00 per
month. The foregoing notwithstanding, the parties acknowledge and agree that any
improvements and/or changes to the formulations of the Product and any products
and by-products derived therefrom during the term of this Agreement shall be
subject to the terms of this Agreement and shall be and remain the sole and
exclusive property of the Licensor.
12. Transfer.
On at least thirty (30) days prior written notice to Licensor, Licensee may
transfer its the License and right to Manufacture and Distribute the Product
pursuant to this Agreement to a third party arms-length purchaser for value
having a net worth at least equal to the net worth of Licensee on the date of
the transfer, provided that such transferee assumes, in writing, all obligations
of Licensee hereunder, and further provided that prior to the expiration of the
thirty (30) day notice period, Licensor shall have the right of first refusal to
acquire from Licensee the right to Manufacture and Distribute the Product on the
same terms and provisions that Licensee offered the License and right to
Manufacture and Distribute the Product to the proposed transferee.
13. Choice of Law.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York without giving effect to choice of law rules and any
lawsuits arising out of or in connection with this License Agreement brought
hereunder shall be brought and tried in the Supreme Court of the State of New
York in and for New York County, New York and service of process in such suits
shall be made as provided in Section 16 of this Agreement.
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14. Entire Agreement.
This Agreement forms the entire understanding of the parties with respect
to the subject matter hereof, and there are no representations, promises or
understandings other than those expressed and set forth herein. This Agreement
may be amended only by authorized representatives of both parties and only in
writing.
15. Continuing Obligations.
The parties covenant and agree to cooperate with each other whereby each
party may enjoy to the fullest extent the rights herein conveyed. Such
cooperation shall include each party's prompt execution of all papers prepared
at the expense of the requesting party that the requesting party reasonably
deems necessary or desirable to-perfect in it any of the rights herein conveyed.
16. Termination of Agreement.
If at any time during the term of this Agreement Licensee determines in its
reasonable judgment that it is no longer commercially viable for Licensee to
sell the Product or that Licensee is not producing enough product and is falling
below a minimum average level of production of 4,200 metric tons production per
month for the prior consecutive six (6) month period, Licensee shall have the
right to terminate this Agreement without penalty on at least sixty (60) days'
written notice to Licensor (the "Termination Notice"). The Termination Notice
shall be accompanied by written proof reasonably satisfactory to Licensor that
the foregoing conditions for termination have been met. The Termination Notice
shall also be accompanied by all written communications and documentation
applicable to the Product and the License in Licensee's possession or readily
accessible to Licensee.
17. Notice.
All notices hereunder shall be deemed given if in writing and delivered or
sent by facsimile transmission, nationally recognized courier or by registered
or certified mail (return receipt requested) to the following addresses or
facsimile numbers (or at such other addresses or facsimile numbers as shall be
specified by like notice):
a. if to Licensor, to:
HomeCom Communications, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx,
Vice President and Chief Operating Officer, Licensing Division
Facsimile No.: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxxxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
if Licensee, to;
XXXXXX XXXXXXX GROUP
Att. Xxxxxx Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX
Facsimile No.:
with a copy to:
Any notice given by delivery, mail or courier shall be effective when received.
Any notice given by facsimile transmission shall be effective upon oral or
machine confirmation of transmission. Notices may be given on behalf of a party
by such party's attorneys specified above.
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IN WITNESS WHEREOF, this Agreement has been signed can behalf of each of
the parties hereto as of the date first above-written.
HOMECOM COMMUNICATIONS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Vice President and
Chief Operating Officer,
Licensing Division
Name: XXXXXX XXXXXXX GROUP, a to be
formed ___________ (state) corporation
By: /s/
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President
Xxxxxx Xxxxxxx hereby executes the Agreement on behalf of the Licensee in his
individual capacity with the understanding that upon the formation of the
Licensee entity (which must occur within thirty (30) days of the date hereof for
this transfer provision to be operative), this Agreement and all obligations of
Xxxxxx Xxxxxxx hereunder shall be automatically without the need for further
documentation deemed transferred to Licensee with no further personal liability
on the part of Xxxxxx Xxxxxxx..
By: /s/
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Name: Xxxxxx Xxxxxxx
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