ROYALTY AGREEMENT
This Royalty Agreement (this "Agreement") is entered into by and between
Eurotech Capital Ventures, Ltd. (ECV) with its primary offices at Xxx 00000
XX-00000 Xxxxxxxx, Xxxxxx and Wimax EU, Ltd., ("WEL") with offices at 000 Xxxx
Xxx #0, Xxxxxxx Xxxxx, XX 00000 effective as of November 15, 2004.
A. Eurotech desires to waive and release certain rights of reversion it
has pursuant to a Business Plan dated as of October 20, 2004, and to transfer to
WEL all rights in certain business strategy including all URL's as listed on
Exhibit A.
B. In consideration for the foregoing, WEL is willing to pay Eurotech
certain royalties and fees, all as set forth more fully herein.
NOW THEREFORE, the parties agree as follows:
1. CERTAIN DEFINITIONS.
(a) "Assignment" means that certain Assignment of properties as defined by
this agreement.
(b) "Gross Revenues" means one hundred percent (100%) of all amounts
accrued by WEL, its subsidiaries and its affiliates, as revenues, under
generally accepted accounting principles consistently applied, from all sources
whatsoever worldwide, including without limitation revenues from sales of
services, and from leases and licenses and sub licenses connected to any of the
assigned URL's on Exhibit A, but shall not include any amounts received for
sales, use or other transaction taxes, duties or shipping costs.
(c) "Reversion Rights" means those rights of reversion provided to
Eurotech in the Assignment.
(d) "Royalty Term" means the one hundred twenty (120) consecutive calendar
quarters, commencing with the first calendar quarter after the date of this
Agreement in which WEL has operating revenues from commercial subscriptions,
advertising sales and/or consumer product royalties or, at the election of
Eurotech, any calendar quarter prior thereto.
(e) "Technology" means all business concepts and URL's acquired or
developed by Eurotech from July 1, 2004 and ending on the date hereof, which
relates directly to the URL's assigned by Eurotech pursuant to the Assignment.
2. RELEASE, WAIVER AND TRANSFER. In consideration of the payment of fees and
royalties by WEL as set forth in Section 3 below, Eurotech hereby releases and
waives the Reversion Rights, and transfers to WEL all of its rights in and to
the business concept and URL's.
3. PAYMENT OF ROYALTIES. In consideration of the release, waiver and transfer
made by Eurotech pursuant to the provision of Section 2 above, WEL hereby agrees
to pay to Eurotech royalties equal to one and one
half percent (1.5%) of WEL's Gross Revenues for each calendar quarter in the
Royalty Term. WEL shall make the payments due to Eurotech hereunder with respect
to Gross Revenues for each of the quarters in the Royalty Term not later than
ninety (90) days after the end of such calendar quarter. Each quarterly payment
shall be accompanied by a report stating the amount of Gross Revenue received by
WEL during the quarter. WEL shall have the right to pay Eurotech said royalty in
fully registered shares in full compliance with SEC regulations based upon the
average bid price of the companies common stock for the 30 days prior to the
payment date but under no circumstances shall the price be more than the final
bid price on the day prior to the delivery of shares to Eurotech.
4. AUDITED FINANCIALS, RECORDKEEPING AND INSPECTION. WEL hereby agrees to
provide to Eurotech unaudited financial statements for each calendar quarter in
the Royalty Term within forty five (45) days following the end of such calendar
quarter. WEL hereby agrees to provide to Eurotech financial statements audited
by a qualified accounting firm for each calendar year including any calendar
quarter in the Royalty Term within ninety (90) days following the end of such
calendar year. If the Gross Revenues reported on such audited financial
statements differs from the cumulative amounts shown on the quarterly reports
for such calendar year, WEL shall make an adjustment payment to Eurotech if the
amounts shown on the quarterly reports were too low, or Eurotech shall make an
adjustment payment to WEL if the amounts shown on the quarterly reports were too
high, within twenty (20) days following delivery of the applicable audited
financial statement. WEL shall keep at its usual place or places of business
complete records of its Gross Revenues for each calendar quarter, for a period
of not less than three (3) years following the end of such calendar quarter, and
to regularly make entries in such records at its earliest business convenience
for the purpose of showing the amounts payable to Eurotech hereunder. On not
less than ten (10) days written notice, Eurotech shall have the right, not more
than once during any twelve (12) month period at mutually agreed upon times
during normal business hours at Eurotech's expense, to examine any and all of
WEL's records reflecting Gross Revenues for the sole purpose of verifying the
accuracy of WEL's reports of Gross Revenues and the performance of WEL's
obligations to make payments hereunder. In the event that any such examination
by Eurotech discloses an error in the determination of any amounts due hereunder
that is confirmed by WEL's independent auditors, WEL shall make an adjustment
payment to Eurotech if the amount previously paid was too low, or Eurotech shall
make an adjustment payment to WEL if the amount previously paid was too high,
within twenty (20) days following such independent auditor's confirmation of the
error. In the event that any such examination by Eurotech discloses an error in
the determination of any amounts due hereunder, that is confirmed by WEL's
independent auditors, such that amount previously paid to Eurotech was too low,
Eurotech thereafter shall be entitled to examine WEL's books and records on a
quarterly basis.
5. NOVATION. If a first underwritten registration of the offering of the
common stock of WEL does not become effective on or before November 30, 2005,
then effective December 1, 2005 this Agreement shall be extinguished, and all
rights and obligations created hereby shall terminate at the option of Eurotech.
6. ATTORNEYS' FEES. In the event either party shall commence any action or
proceeding against the other party by reason of any breach or claimed breach in
the performance of any of the terms or conditions of this Agreement or to seek a
judicial declaration of rights under this Agreement, the prevailing party in
such action shall be entitled to recover reasonable attorneys' fees and costs
from the non-prevailing party.
7. CONTROLLING LAW. This Agreement is entered into and to be performed in
Nevada, and it shall be interpreted and enforced under, and all questions
relating thereto shall be determined in accordance with the laws of the State of
Nevada.
8. WAIVER. No waiver of any provision of this Agreement shall be deemed or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
9. PARTIAL INVALIDITY. The illegality, invalidity or unenforceability of any
provision of this Agreement under the law of any jurisdiction shall not affect
its legality, validity or enforceability under the law of any other jurisdiction
nor the legality, validity or enforceability of any other provision.
10. ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and as a complete and exclusive statement of the
terms of their agreement with respect to its subject matter. This Agreement may
not be contradicted by evidence of any prior or contemporaneous agreement, oral
or written, and this Agreement may not be explained or supplemented by evidence
of consistent additional terms. This Agreement supersedes, merges, and voids all
prior representations, statements, negotiations, understandings, proposed
agreements, and other agreements, written or oral, relating to its subject
matter.
11. AMENDMENTS. This Agreement may not be amended, modified or supplemented
except by a writing executed by both parties.
12. COUNTERPARTS. This Agreement may be signed in counterparts, each an
original but all one and the same instrument.
13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of the
successors and assigns of Company and any successors and permitted assigns of
WEL, and shall be binding upon the successors and assigns of Eurotech and of
WEL.
14. FURTHER ASSURANCES. The parties hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other documents as any other party may reasonably request from
time to time in order to carry out the intent and purpose of this Agreement
contemplated hereby. Neither Eurotech nor WEL shall voluntarily undertake any
course of action inconsistent with satisfaction of the requirements applicable
to them set forth in this Agreement and each shall promptly do all such acts and
take all such measures as may be appropriate to enable them to
perform as early as practicable the obligations herein required to be
performed by them.
15. NOTICES. Any notice or other communication required or permitted under this
Agreement shall be in writing and either personally delivered or deposited in
the first class United States mail, prepaid, certified or registered, return
receipt requested, addressed as follows:
(a) If to Eurotech:
Eurotech Capital
Ventures, Ltd. Xxx
00000
XX-00000 Xxxxxxxx
Xxxxxx
Attn: President
(b) If to WEL:
Wimax EU, Ltd
000 Xxxx Xxx #0
Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000
Attn: President
Notice shall be deemed to have been given upon receipt. Either party may
change its address by giving written notice of such change to the other party in
the manner provided in this Section.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
Wimax EU, Ltd. EUROTECH CAPITAL VENTURES, LTD.
/s/ Xxxxxxxxxxx Xxxxx /s/ Xxxxxx Xxxxxxxx
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Title: President Title: President
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