EXHIBIT 10.2 PATENT PURCHASE, LICENSE AND REPURCHASE AGREEMENT

 

                                                                    EXHIBIT 10.2

 

 

                PATENT PURCHASE, LICENSE AND REPURCHASE AGREEMENT

 

     This Patent Purchase, License and Repurchase Agreement is made effective as

of the Effective Date (defined below) between:

 

        IPIX Corporation

        1009 Commerce Park

        Oak Ridge, TN 37830 (hereinafter "IPIX")

 

            and

 

        AdMission Corporation

        3160 Crow Canyon Road

        San Ramon, CA 94583 (hereinafter "AdMission")

 

     IPIX and   AdMission   may be   referred   to   individually   as a "Party,"   and

collectively as the "Parties."

 

     WHEREAS,   IPIX   owns or   controls   title   to   certain   patents   and   patent

applications   and IPIX is willing   to   transfer   and sell all   right,   title and

interest to such patents and patent   applications   to   AdMission   in   connection

with, and in consideration for, the execution,   delivery and performance of that

certain Asset   Purchase   Agreement by and among IPIX and   AdMission   dated as of

January 11, 2005 (the "Asset Purchase Agreement"),   provided, however, that IPIX

is   willing   to make   such   transfer   and   sale to   AdMission   if,   and only if,

AdMission   enters into this   Agreement and grants back to IPIX a license of such

patents   and   patent   applications   and the   repurchase   right on the   terms and

conditions set forth herein.

 

     WHEREAS,   AdMission   is willing to purchase and accept title to the Patents

subject to the terms and   conditions   set forth   herein   and   desires to grant a

license   back   and   the   repurchase    right   to   IPIX   the   patents   and   patent

applications as provided herein.

 

     WHEREAS,   IPIX   is   prepared   to   accept   such   license   and the   right   to

repurchase the Patents.

 

     NOW   THEREFORE,   for good   and   valuable   consideration,   the   receipt   and

adequacy of which is acknowledged, the parties agree as follows:

 

                                   ARTICLE I

                                   DEFINITIONS

 

     1.1 Affiliate.   Any   corporation or other legal entity that either directly

or indirectly   controls a Party to this Agreement,   is controlled by such Party,

or is under common   control of such Party.   As used herein,   the term   "control"

means possession of the power to direct or cause the direction of the management

and policies of a corporation or other entity,   whether through the ownership of

the majority of voting securities, by contract, or otherwise

 

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     1.2   Effective   Date.   The   "Effective   Date" shall mean the last date that

either Party hereto signs this Agreement.

 

     1.3 Knowledge.   The term "Knowledge" shall have the meaning given such term

in the Asset Purchase Agreement.

 

     1.4 Marketplace Definition.   Except for the specific exclusions relating to

the Security Sector, AdMission intends to fully exploit the intrinsic commercial

value of the Patents and assets   acquired   in this   transaction.   The sectors in

which AdMission will participate   include, but are not limited to, the following

areas of commerce and digital media   sharing for both online and print,   as such

may be   modified,   amended or   supplemented   from time to time,   by the Board of

Directors of AdMission: a) online search: local, national, and international; b)

publishing; c) yellow pages directories; d) directories: industrial, commercial,

and consumer; e) newspapers:   local, regional,   national, and international;   f)

real estate retail sales and aggregation;   g) automotive sales; h) catalogs;   i)

marketplaces:   online,   virtual,   and   physical;   j)   advertising:    commercial,

classified,   display, and consumer;   k) auctions;   l) appraisals;   m) credit and

debit cards: media transfer n) dating, alumni,   membership and personal affinity

building   sites;   and o) classified   ads, all   categories.   Notwithstanding   the

foregoing,   field of use relating to the Security Sector are expressly   excluded

from the Marketplace   Definition and AdMission   shall in no case   participate in

and the Marketplace Definition shall in no case include or be amended to include

any sector relating to the Security Sector.

 

     1.5 Patents.   The patents and patent applications listed in Schedule A, and

any other   application   based in whole or in part upon such   patents   and patent

applications   in   any   country   (including   divisional,    renewal,    substitute,

continuation, and continuation-in-part   applications), and all patents which may

be granted   thereon   (including   all reissues,   reexaminations,   and   extensions

thereof).

 

     1.6 Security Sector. Uses for security, surveillance,   military, police, or

law enforcement.

 

     1.7 . Triggering Event. For purposes of this Agreement a "Triggering Event"

shall mean an event where   AdMission   remains   Insolvent   and unable to meet its

current obligations for a period of three (3) months or longer.

 

                                   ARTICLE II

                                    TRANSFER

 

     2.1   Assignment.   Except as otherwise set forth herein,   IPIX hereby sells,

assigns,   and transfers to AdMission all of the IPIX's right, title and interest

in the Patents.

 

     2.2   Encumbrances.   AdMission   acknowledges that the Patents are subject to

various   preexisting   licenses and   agreements,   and agrees to take title to the

Patents subject to such   preexisting   licenses and agreements and to the License

granted to IPIX hereunder.

 

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                                  ARTICLE III

                       IPIX REPRESENTATIONS AND WARRANTIES

 

     As a material   inducement to AdMission to enter into this   Agreement and to

consummate the transactions   contemplated by this Agreement, IPIX represents and

warrants   to   AdMission,   as of the date   hereof:   3.1   Organization.   IPIX is a

corporation   duly   incorporated   and   organized,   validly   existing   and in good

standing under the laws of the State of Delaware and has the requisite corporate

power and authority to own and operate the Patents.

 

     3.2 Authority of IPIX. IPIX has full power and authority to enter into this

Agreement and to consummate the transactions contemplated hereby. This Agreement

has been duly authorized, executed and delivered by IPIX and is the legal, valid

and   binding   agreement   or   instrument   of IPIX,   enforceable   against   IPIX in

accordance   with its   terms,   except as such   enforceability   may be   limited by

principles   of public   policy and   subject   to the laws of   general   application

relating to   bankruptcy,   insolvency   and the relief of debtors and rules of law

governing specific   performance,   injunctive relief or other equitable remedies.

The execution,   delivery and   performance of this Agreement does not require the

consent of or notice to any   third-party.   Neither the execution and delivery of

this Agreement nor the consummation of the transactions contemplated hereby will

conflict   with or result in any   violation of or   constitute a default under any

term of the   Articles   of   Incorporation   or Bylaws of IPIX,   or any   agreement,

mortgage,   debt instrument,   indenture, or other instrument,   judgment,   decree,

order,   award,   law or   regulation   by which   IPIX is   bound,   or   result in the

creation of any lien, security interest, charge or encumbrance upon the Patents,

except if such conflict violation, default, lien or encumbrance would not have a

Material Adverse Effect.

 

     3.3 Intellectual Property.

 

          (a) To the Knowledge of IPIX,   IPIX has sole title to and ownership of

     the Patents.

 

          (b)   To the   Knowledge   of   IPIX,   Schedule   A   lists   each   currently

     effective   or   pending   patent   and   patent    application    (including   all

     provisional applications, continuations and continuations-in-part), in each

     case, included in the Patents.

 

          (c) To the   Knowledge of IPIX,   no action,   suit,   proceeding or claim

     with   respect   to   the   Patents   has   been   instituted,   or is   pending   or

     threatened against IPIX.

 

                                   ARTICLE IV

                    ADMISSION REPRESENTATIONS AND WARRANTIES

 

     As a   material   inducement   to IPIX to enter   into   this   Agreement   and to

consummate the transactions contemplated by this Agreement, AdMission represents

and warrants to IPIX, as of the date hereof:

 

     4.1   Organization.    AdMission   is   a   corporation   duly   incorporated   and

organized,   validly existing and in good standing under the laws of the State of

Delaware and has the requisite corporate power and authority to own or lease all

of its assets and to carry on its business as now conducted.

 

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     4.2 Authority of AdMission. AdMission has full power and authority to enter

into this Agreement and to consummate the transactions contemplated hereby. This

Agreement has been duly   authorized,   executed and delivered by AdMission and is

the legal,   valid and binding agreement or instrument of AdMission,   enforceable

against   AdMission in accordance with its terms,   except as such   enforceability

may be limited by principles of public policy and subject to the laws of general

application   relating to   bankruptcy,   insolvency   and the relief of debtors and

rules   of   law   governing   specific   performance,   injunctive   relief   or   other

equitable remedies. The execution, delivery and performance of this Agreement do

not require the consent of or notice to any   third-party.   Neither the execution

and   delivery   of   this   Agreement   nor   the   consummation   of the   transactions

contemplated   thereby   will   conflict   with or   result   in any   violation   of or

constitute a default under any term of the Articles of   Incorporation   or Bylaws

of AdMission, or any agreement,   mortgage, debt instrument,   indenture, or other

instrument,   judgment,   decree,   order, award, law or regulation by which any of

AdMission is bound,   or result in the creation of any lien,   security   interest,

charge   or   encumbrance   upon   the   assets   of   AdMission,    or   result   in   the

cancellation,    modification,    revocation    or    suspension    of   any   license,

certificate, permit or authorization held by AdMission.

 

     4.3 Due   Diligence.   In   making   its   determination   to   proceed   with   the

transactions contemplated by this Agreement,   AdMission has relied solely on the

results   of its   own   independent   investigation   and   the   representations   and

warranties of IPIX set forth in Article III,   including   the schedules   thereto.

Such   representations   and warranties by IPIX   constitute the sole and exclusive

representations   and   warranties   of IPIX to   AdMission in   connection   with the

transactions   contemplated   hereby,   and AdMission   acknowledges and agrees that

IPIX is not   making   any   representation   or   warranty   whatsoever,   express   or

implied,   beyond those expressly given in this Agreement,   including any implied

warranty   as to   condition,   merchantability   or   suitability   as to   any of the

Patents   and it is   understood   that   AdMission   is taking the Patents as is and

where   is.   AdMission   has no   knowledge   that   any of the   representations   and

warranties of IPIX in this Agreement is not true and correct,   and AdMission has

no knowledge of any errors in, or omissions   from, the   information set forth in

the schedules to this Agreement.

 

                                   ARTICLE V

                             LICENSE AND REPURCHASE

 

     5.1 License.   AdMission grants to IPIX an exclusive (including exclusive to

AdMission), worldwide, royalty-free,   paid-up, transferable,   perpetual license,

which is revocable only as   specifically   set forth herein,   to make, have made,

use, sell, offer for sale,   lease,   import,   or otherwise   exploit any invention

covered by the Patents, but only in the Security Sector (the "License").

 

     5.2 Sublicenses.

 

     (a) IPIX may freely,   and without   consultation with AdMission,   sublicense

any all rights contained in the License to its Affiliates, customers, end-users,

distributors,   manufacturers,   vendors,   or   anyone   otherwise   involved   in   or

supporting   IPIX's   commercial   activities   for any use relating to IPIX branded

activities.

 

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     (b) If IPIX wishes to sublicense any rights contained in the License to its

Affiliates,   customers,   end-users,   distributors,   manufacturers,   vendors,   or

anyone otherwise involved in or supporting IPIX's commercial   activities for the

use of the License for activities   which are not IPIX branded   activities,   IPIX

shall first obtain the prior written   consent of   AdMission,   which shall not be

unreasonably   withheld or delayed.   Any objection to such sublicensing   shall be

set out in writing together with the reasons therefor,   and AdMission's   failure

to provide such an   objection   within   thirty (30) days after   receipt of IPIX's

written request shall be deemed irrevocable consent to such sublicensing.

 

     (c) For the purposes of this License,   "IPIX branded   activities" means any

activities   for which any resulting   product or service shall use or contain the

IPIX name or logo or which   shall be   incorporated   into any   product or service

which uses or contains the IPIX name or logo.

 

     5.3 Scope   Extension.   If,   within 36   months of the   commencement   of this

Agreement,   IPIX   determines   that it is necessary to extend   License beyond the

Security   Sector for the pursuit of its own core   business   strategy,   then IPIX

shall   have the right to seek   AdMission's   consent   to extend   the scope of the

license,   which consent shall not be unreasonably   withheld,   provided that such

extension   does not infringe   upon or compete   with   AdMission's   core   business

activities   as set forth in the   Marketplace   Definition.   Any   extension of the

scope of the License shall be considered part of the original   License and shall

also   be   an    exclusive    (including    exclusive   to    AdMission),     worldwide,

royalty-free,   paid-up,   transferable   and perpetual   license which is revocable

only as specifically set forth herein. However, the right to extend the scope of

the License   shall be   non-transferable   and shall apply only to "IPIX"   branded

activities. The Company's consent to extend the scope of the License under these

circumstances shall not be unreasonably   withheld.   If the Parties are unable to

reach an   agreement   regarding   an   extension,   then either Party may submit the

dispute to binding arbitration to determine fair and equitable terms.

 

     5.4 Repurchase.

 

     (a) In case of a   Triggering   Event by   AdMission   at any point   during the

first    thirty-six    (36)   months   of   this    Agreement,    IPIX   will   have   the

non-assignable right to repurchase the Patents (hereinafter, "Repurchase Right")

in   exchange   for   payment   by   IPIX   of the   "Repurchase   Right   Payment."   The

Repurchase Right Payment shall be an amount calculated by dividing the numerator

(36 months minus the number of complete   months from the   Effective   Date to the

date   of the   Triggering   Event)   by the   denominator   of 36   (the   term   of the

Repurchase   Right being 36 months) and   multiplying   that number times $700,000.

This Repurchase Right shall irrevocably expire on the third anniversary from the

Effective Date of this Agreement.

 

     (b) In the event of a Change in   Control of IPIX,   AdMission   will have the

non-assignable   first right of refusal to buy back the   Repurchase   Right at the

then current fair market value.   For purposes of this Section 5.4(b),   a "Change

of Control"   shall mean the   acquisition   of IPIX by another person or entity by

means of any transaction or series of related transactions   (including,   without

limitation, any reorganization, merger or consolidation, or acquisition directly

or indirectly,   of the securities of IPIX   representing   more than fifty percent

 

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(50%) of the total voting power   represented by IPIX's then   outstanding   voting

securities,   but excluding any merger   effected   exclusively   for the purpose of

changing the domicile of IPIX), (b) a sale,   conveyance or disposition of all or

substantially   all of the   assets of IPIX,   or (c) any   reorganization,   merger,

consolidation   or similar   transaction in which IPIX is not the surviving entity

(unless,   IPIX's stockholders of record as constituted immediately prior to such

acquisition,