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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, Inc.
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 _____, 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.
ARTICLE III
IPIX REPRESENTATIONS AND WARRANTIES
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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.
4.2 Authority of AdMission. AdMission has full power and
authority to
enter into this Agreement and to consummate the transactions
contemplated
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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.
(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
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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
(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
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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 stockh
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