ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Assignment and
Assumption") is made by Othnet, Inc., a Delaware corporation
("Assignor") and People to People Publishing, Inc., a Delaware
corporation ("PPP" or "Assignee").
RECITALS
WHEREAS, the parties hereto propose to enter into a transaction
("Transaction") whereby Othnet will redeem certain shares of
its of stock from PPP (the "Redeemed Shares") in exchange for
this Assignment and the payment of Thirty Two Thousand Five
Hundred Dollars ($32,500) (the "Funds") all as more fully set
forth in that certain Redemption Agreement by and between the
parties hereto and of even date herewith (the "Redemption
Agreement"); and
WHEREAS, the parties hereto have also entered into an Escrow
Agreement of even date herewith (the "Escrow Agreement")
pursuant to which the terms by which the certificate for the
Redeemed Shares and the distribution of the Funds are set
forth.
WHEREAS, Assignor has agreed and desires to assign all rights
in and to the Othnet Technology (as defined below), and
Assignee wishes and has agreed to assume all liabilities with
respect to the Othnet Technology and any use made thereof, as
set forth below.
AGREEMENT
NOW, THEREFORE, for valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
1. Assignment. Subject to Othnet Shareholder Approval (as
defined below), Assignor hereby assigns, grants and conveys to
Assignee all of Assignor's right, title and interest in and to
Patent Application No. 09/921,731 and all source code, data,
logic, code, technology, documentation or other proprietary
rights associated with Othnet's peer to peer file sharing
software, including, without limitation, the technology with
respect to digital rights management technology which is the
subject of Patent Application No. 09/921,731 filed on behalf of
Othnet, and any technology employing this technology and any
and all enhancements or improvements made thereon (the "Othnet
Technology").
2. Shareholder Approval. The parties hereto acknowledge that
the Assignment and Assumption contemplated hereby is subject to
the consent of the holders of a majority of the issued and
outstanding shares of common stock of Othnet ("Othnet
Shareholder Approval").
3. Assumption. As of the date set forth below, and subject to
Othnet Shareholder Approval, Assignee hereby assumes all
liabilities and obligations currently outstanding or hereafter
incurred in connection with the ownership, operation and use of
the Othnet Technology, whether such liabilities or obligations
were incurred prior to or after the date hereof, except that
PPP shall have no obligation or liability for the legal fees or
trade creditor debt associated with the development of the
Othnet Technology.
4. Procedures. Upon execution of this Agreement, certificates
evidencing the Redeemed Shares and an Assignment Separate from
Certificate in the form attached as Exhibit A to the Redemption
Agreement shall be deposited with the Escrow Agent (as defined
in the Escrow Agreement) and shall be released by the Escrow
Agent to Othnet for redemption and cancellation only upon
fulfillment of the terms of the Escrow Agreement. If the terms
of the Escrow Agreement are not fulfilled on or before
September 30, 2002, this Agreement will terminate as of that
date, pursuant to Section 9.2 below.
5. Removal of Logos and Trademarks/ Notice of Non-Affilation.
Assignee agrees that within three (3) days following execution
of this Agreement, Assignee will remove all logos trademarks
and other proprietary information belonging to Othnet, Inc.
from any and all aspects of the Othnet Technology. Othnet will
arrange for the transfer of the legal file for the Othnet
Technology patent application to Xxxxxxxx X. Xxxxx, along with
an assignment of said patent application to PPP, which PPP
shall file with the United States Patent and Trademark office.
6. Confidentiality.
6.1 Confidential Information. "Confidential Information" means
(i) any trade secrets relating to either party's product plans,
designs, costs, prices and names, finances, marketing plans,
business opportunities, personnel, research development or
know-how; and (ii) the terms, conditions and existence of this
Agreement. "Confidential Information" shall not include
information that: (i) is or becomes generally known or
available by publication, commercial use or otherwise through
no fault of the receiving party; (ii) is known and has been
reduced to tangible form by the receiving party at the time of
disclosure and is not subject to restriction; (iii) is
independently developed or learned by the receiving party; (iv)
is lawfully obtained from a third party that has the right to
make such disclosure; or (v) is made generally available by the
disclosing party without restriction on disclosure.
6.2 Protection of Confidential Information. Each party shall
protect the other's Confidential Information from unauthorized
dissemination and use with the same degree of care that such
party uses to protect its own like information. Neither party
will use the other's Confidential Information for purposes
other than those necessary to directly further the purposes of
this Agreement. Neither party will disclose to third parties
the other's Confidential Information without the prior written
consent of the other party. Except as expressly provided in
this Agreement, no ownership or license right is granted in any
Confidential Information.
6.3 Cooperation in the Event of Disclosure. Each party will
immediately notify the other upon discovery of any unauthorized
use or disclosure of confidential information and will
cooperate in any reasonable way to help the other regain
possession of the confidential information and prevent further
unauthorized use.
7. Warranties.
7.1 People to People. PPP warrants and represents that it has
full power to enter into this Agreement and grant the rights
set forth herein;
7.2 Othnet. Othnet warrants and represents that:
(a) It has the full power to enter into this Agreement and
grant the rights set forth herein;
(b) It has not previously and will not grant any rights in the
Othnet Technology to any third party that are inconsistent with
the rights granted to PPP herein; and
7.3 No Other Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE OTHNET TECHNOLOGY IS PROVIDED "AS IS" WITHOUT
WARRANTY OF ANY KIND, AND THE PARTIES DISCLAIM ALL OTHER
WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, TITLE AND NONINFRINGEMENT OF
INTELLECTUAL PROPERTY.
8. Indemnity.
8.1 People to People. PPP shall, at its expense and Othnet's
request, indemnify Othnet and Othnet's subsidiaries,
affiliates, directors, officers, employees, agents and
independent contractors from and against any and all claim(s),
damages, costs, and expenses (including reasonable attorneys'
fees), and pay the amount of any adverse final judgment (or
settlement to which PPP and Othnet mutually consent) resulting
from: (i) any third party claim(s) that the Othnet Technology
infringes any copyright, patent, trademark, trade secret, or
other intellectual property or proprietary rights held by any
third party, and (ii) any claim or action, which, if true,
would constitute a breach of a warranty by PPP in Section 7.
Othnet shall provide PPP reasonably prompt notice in writing of
any such claim or action and permit PPP, through counsel
mutually acceptable to Othnet and PPP, to answer and defend
such claim or action and provide PPP information, assistance
and authority, at PPP's expense, to help PPP to defend such
claim or action.
8.2 Othnet. Othnet shall, at its expense and PPP's request,
defend any claim or action brought against PPP, and PPP's
subsidiaries, affiliates, directors, officers, employees,
agents and independent contractors, which, if true, would
constitute a breach of a warranty by Othnet in Section 7, and
Othnet will indemnify and hold PPP harmless from and against
any costs, damages and fees reasonably incurred by PPP,
including but not limited to fees of attorneys and other
professionals, that are attributable to such claim. PPP shall:
(i) provide Othnet reasonably prompt notice in writing of any
such claim or action and permit Othnet, through counsel
mutually acceptable to PPP and Othnet, to answer and defend
such claim or action; and (ii) provide Othnet information,
assistance and authority, at Othnet's expense, to help Othnet
to defend such claim or action. Othnet will not be responsible
for any settlement made by PPP without Othnet's written
permission, which permission will not be unreasonably withheld.
9. Termination.
9.1 Failure to Obtain Shareholder Approval. In the event
Shareholder Approval is not obtained on or before September 30,
2002, this Agreement and the obligations hereunder shall
terminate, subject to Section 9.3 below.
9.2 Failure to Fulfill Escrow Agreement. In the event the
terms of the Escrow Agreement are not met on or before
September 30, 2002, this Agreement and the obligations
hereunder shall terminate, subject to Section 9.3 below.
9.3 Effect of Termination. In the event of termination or
expiration of this Agreement for any reason, (a) the parties
obligations under Sections 6, 7, 8 and 10 shall survive; (b)
PPP may pursue its business model provided it does not utilize
the Othnet Technology; and (c) neither party shall be liable to
the other for damages of any sort resulting solely from
terminating this Agreement in accordance with its terms.
10. Limitation of Liabilities. EXCEPT WITH REGARD TO THIRD
PARTY DAMAGES COVERED UNDER THE INDEMNIFICATION OBLIGATIONS
UNDER SECTION 8 ABOVE, AND EXCEPT WITH REGARD TO A BREACH OF
SECTION 7 ABOVE, NEITHER PARTY SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL
DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF
BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION, AND THE LIKE, ARISING OUT OF OR RELATING TO THIS
AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND EVEN IF THE REMEDIES OTHERWISE
PROVIDED UNDER THIS AGREEMENT, AT LAW, OR IN EQUITY, FAIL OF
THEIR ESSENTIAL PURPOSE, AND REGARDLESS OF THE FORM OR CAUSE OF
ACTION OR THE ALLEGED BASIS OF THE CLAIM.
11. Independent Contractors. Neither this Agreement nor any
terms and conditions contained herein shall be construed as
creating an employer-employee relationship, a partnership, a
joint venture, agency, franchise, or other form of agreement or
relationship.
12. Governing Law. This Agreement shall be construed and
controlled by the laws of the State of Washington, without
reference to its conflict of laws provisions.
13. Construction. If for any reason a court of competent
jurisdiction finds any provision of this Agreement, or portion
thereof, to be unenforceable, such provision will be enforced
to the maximum extent permissible so as to effect the intent of
the parties, and the remainder of this Agreement will continue
in full force and effect. Failure by either party to enforce
any provision of this Agreement will not be deemed a waiver of
future enforcement of that or any other provision. This
Agreement has been negotiated by the parties and their
respective counsel and will be interpreted fairly in accordance
with its terms and without any strict construction in favor of
or against either party.
14. Entire Agreement. This Agreement does not constitute an
offer by Othnet and it shall not be effective until signed by
both parties. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and
merges all prior and contemporaneous communications. It shall
not be modified except by a written agreement dated subsequent
to the date of this Agreement and signed on behalf of PPP and
Othnet by their respective duly authorized representatives.
15. Authority. Each individual signing below hereby represents
and warrants that he or she has full authority to sign this
Agreement and bind such party to perform all duties and
obligations contemplated by this Agreement.
16. Counterparts. This Agreement may be executed in
counterparts each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
17. Further Assurances. Each party hereto covenants and agrees
to do, execute and deliver, or to cause to be done, executed
and delivered, all such further acts, transfers and assurances
as may be reasonably requested by the other party for the
performance of the transfer and assignment of the Othnet
Technology and associated obligations and liabilities
hereunder.
IN WITNESS WHEREOF, the parties have executed this Assignment
and Assumption Agreement this 9th day of May, 2002.
ASSIGNOR: OTHNET, INC.
By /s/ Xxxxxxx Xxxxxxx
Its CEO/Pres
ASSIGNEE: People to People Publishing, Inc.
By /s/ Xxxxxxxx X. Xxxxx
Its President
