EXHIBIT 16.1
PATENT PURCHASE AGREEMENT
This PATENT PURCHASE AGREEMENT is entered into on April 8, 2005 by and between
NeoMedia Technologies, Inc., a Delaware corporation ("Purchaser"), having a
place of business at 0000 Xxxxxx Xx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, and
Loyaltypoint, Inc., a Delaware corporation ("Seller"), having a place of
business at 0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000. The parties
hereby agree as follows.
1. BACKGROUND
1.1 Seller owns certain United States Letters Patents and/or applications
for United States Letters Patents and/or related foreign patents and
applications.
1.2 Seller wishes to sell its right, title and interest in such patents and
applications to Purchaser.
1.3 Purchaser wishes to purchase such patents and applications.
2. DEFINITIONS
2.1 "Closing Date" date means April 11, 2005 or such earlier or later date
as the parties shall agree to in writing.
2.2 "Escrow Agent" means Xxxxxx Xxxxxx LLP.
2.3 "Initial Payment" has the meaning set forth in Section 3.2.
2.4 "Licensing Revenues" shall mean all revenues, including royalties and
license payments as well as litigation net proceeds, actually or
constructively received by Purchaser from a third party which are in
any way attributable to the Patents.
2.5 "Patents" means those patents and applications listed in Exhibit A
hereto, and all reissues, reexaminations, extensions, continuations,
continuations in part, continuing prosecution applications, and
divisions of such patents and applications; provisional patent
applications that are or will be continuations or continuations in part
of such patents and applications; and foreign counterparts to any of
the foregoing including without limitation utility models.
2.6 "Royalties" has the meaning set forth in Section 3.3.
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3. CLOSING, PAYMENT AND LICENSES
3.1 Initial Payment/ Escrow. On or before April 8, 2005, Purchaser shall
deliver to Escrow Agent the sum of One Million Five Hundred Thousand
Dollars ($1,500,000) by wire transfer (the "Initial Payment"). The
Initial Payment shall be held in escrow by Escrow Agent subject to
Seller's satisfaction of the conditions set forth in Section 3.2. In
the event that Seller satisfies the conditions set forth in Section
3.2, Escrow agent shall release the Initial Payment to Seller. In the
event that Seller fails to satisfy the conditions set forth in Section
3.2, Escrow agent shall release the Initial Payment to Purchaser.
Escrow agent. shall not be liable for any action related to this
Agreement, except as a result of gross negligence or willful
misconduct. In the event of a dispute under this Agreement, Escrow
Agent shall have the right to tender the escrowed funds to the registry
of the appropriate court or disburse the escrowed funds in accordance
with the court's ultimate disposition, and the undersigned shall
indemnify and hold Escrow Agent harmless from and against any damages
or loss in connection therewith, including, but not limited to,
reasonable attorneys fees and court costs.
3.2 Delivery. On the Closing Date, Seller shall deliver to Purchaser
original notarized Assignments of Patent Rights in the forms attached
as Exhibit B hereto.
3.3 License Fee. As additional consideration for the transfer of the
Patents, Purchaser shall pay Seller royalties equal to ten percent
(10%) of Licensing Revenues for a period of 10 years from the Closing
Date (the "Royalties"). The Royalties shall be payable to Seller in U.S
dollars at the address of Seller on a quarterly basis 20 days following
the end of each calendar quarter. Purchaser shall provide to Seller
adequate detail reflecting the calculation of the Royalties along with
each payment. Purchaser shall keep proper books and records as required
to account for the Royalties, which books and records shall be subject
to inspection and audit by Seller or its representatives during normal
business hours with reasonable prior notice. Purchaser shall be
responsible for the cost of such examination and audit if there is a
discrepancy of more than 5%.
3.4 Grant-back License. As additional consideration for the transfer of the
Patents, effective as of the Closing Date, Purchaser grants back to
Seller a non-exclusive royalty-free non-transferable right and license
under the Patents to use any products and services covered by the
Patents, but only for Seller's internal business use, without any right
to sublicense. For purposes of the preceding sentence, "Seller's
internal business use" shall include the use by Seller, entities
controlled by or under common control with Seller, and any successors
to the preceding as a result of merger, reorganization, consolidation,
asset sale, liquidation or similar transaction.
4. ADDITIONAL OBLIGATIONS
4.1 Further Cooperation. Within 10 days following the Closing Date, Seller
shall deliver to Purchaser all files and original documents owned or
controlled by Seller (including without limitation Letters Patents)
relating to the Patents. At the reasonable request of Purchaser or its
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designees, Seller shall execute and deliver such other instruments and
do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of the transactions
contemplated hereby, including without limitation execution,
acknowledgment and recordation of other such papers, and using
commercially reasonable efforts to obtain the same from the respective
inventors, as necessary or desirable for fully perfecting and conveying
unto Purchaser or its designees the benefit of the transactions
contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES
Except as specifically described on Exhibit C to this Agreement, Seller
hereby represents and warrants to Purchaser as follows:
5.1 Authority. Seller has the right and authority to enter into this
Agreement and to carry out its obligations hereunder.
5.2 Title and Contest. Seller has good and marketable title to the Patents,
including without limitation all rights, title, and interest in the
Patents to xxx for infringement thereof. The Patents are free and clear
of all liens, mortgages, security interests or other encumbrances, and
restrictions on transfer. There are no co-owners, actions, suits,
investigations, claims or proceedings threatened, pending or in
progress relating in any way to the Patents. There are no existing
contracts, agreements, options, or commitments, or rights with, to, or
in any person to acquire any of the Patents.
5.3 Existing Licenses. No rights or licenses have been granted under the
Patents.
5.4 Restrictions on Rights. Purchaser or its designees will not be subject
to any covenant not to xxx or similar restrictions on its enforcement
or enjoyment of the Patents as a result of the transaction contemplated
in this Agreement, or any prior transaction related to the Patents.
5.5 Enforcement. Seller has not put a third party on notice of actual or
potential infringement of any of the Patents or considered enforcement
action(s) with respect to any of the Patents.
5.6 Patent Office Proceedings. None of the Patents have been or are
currently involved in any reexamination, reissue, interference
proceeding, or any similar proceeding and that no such proceedings are
pending or threatened.
5.7 Fees. All maintenance fees, annuities, and the like due on the Patents
have been timely paid.
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5.8 Consents. Seller has obtained all third party consents, approvals,
and/or other authorizations required to make the assignments set forth
in Exhibit B.
5.9 Validity and Enforceability. The Patents have never been found invalid
or unenforceable for any reason in any administrative, arbitration,
judicial or other proceeding, and Seller has not received any notice or
information of any kind from any source suggesting that the Patents may
be invalid or unenforceable.
6. MISCELLANEOUS
6.1 Limitation on Consequential Damages. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR LOSS OF PROFITS, OR ANY SPECIAL, CONSEQUENTIAL OR
INCIDENTAL DAMAGES, HOWEVER CAUSED, EVEN IF ADVISED OF THE POSSIBILITY
OF SUCH DAMAGE. THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON
POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN SETTING
CONSIDERATION UNDER THIS AGREEMENT.
6.2 Limitation of Liability. EITHER PARTY'S TOTAL LIABILITY UNDER THIS
AGREEMENT SHALL BE THE PAYMENT OF CONSIDERATION AS REQUIRED PURSUANT TO
SECTION 3. THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON POTENTIAL
LIABILITIES WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER
THIS AGREEMENT.
6.3 Compliance with Laws. Notwithstanding anything contained in this
Agreement to the contrary, the obligations of the parties shall be
subject to all laws, present and future, of any government having
jurisdiction over the parties and this transaction, and to orders,
regulations, directions or requests of any such government.
6.4 Jurisdiction. Each party hereby agrees to jurisdiction and venue in the
courts of the State of Georgia or the federal courts sitting therein
for all disputes and litigation arising from or relating to this
Agreement.
6.5 Entire Agreement. The terms and conditions of this Agreement, including
its exhibits, constitutes the entire agreement between the parties with
respect to the subject matter hereof, and merges and supersedes all
prior and contemporaneous agreements, understandings, negotiations and
discussions. Neither of the parties shall be bound by any conditions,
definitions, warranties, understandings, or representations with
respect to the subject matter hereof other than as expressly provided
herein. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. No oral explanation or oral
information by either party hereto shall alter the meaning or
interpretation of this Agreement. No amendments or modifications shall
be effective unless in writing signed by authorized representatives of
both parties. These terms and conditions will prevail notwithstanding
any different, conflicting or additional terms and conditions which may
appear on any acknowledgment or other writing not expressly
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incorporated into this Agreement. This Agreement may be executed in two
(2) or more counterparts, all of which, taken together, shall be
regarded as one and the same instrument. The following exhibits are
attached hereto and incorporated herein: Exhibit A (entitled "Patent
Rights to be Assigned"); Exhibit B (entitled "Assignment of Patent
Rights") and Exhibit C (entitled "Exceptions to Seller's
Representations").
6.6 Notices: All notices required or permitted to be given hereunder shall
be in writing, shall make reference to this Agreement, and shall be
delivered by hand, or dispatched by prepaid air courier or by
registered or certified airmail, postage prepaid, addressed as follows:
If to Seller If to Purchaser
Loyaltypoint, Inc. NeoMedia, Technologies, Inc
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 0000 Xxxxxx Xx, Xxxxx 000
Xxxxxx, XX 00000 Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq., Attn: Xxxxxxx X. Xxxxxx,
General Counsel President & CEO
Such notices shall be deemed served when received by addressee or, if
delivery is not accomplished by reason of some fault of the addressee,
when tendered for delivery. Either party may give written notice of a
change of address and, after notice of such change has been received,
any notice or request shall thereafter be given to such party at such
changed address.
6.7 Severability. The terms and conditions stated herein are declared to be
severable. If any paragraph, provision, or clause in this Agreement
shall be found or be held to be invalid or unenforceable in any
jurisdiction in which this Agreement is being performed, the remainder
of this Agreement shall be valid and enforceable and the parties shall
use good faith to negotiate a substitute, valid and enforceable
provision which most nearly effects the parties' intent in entering
into this Agreement.
6.8 Waiver. Failure by either party to enforce any term of this Agreement
shall not be deemed a waiver of future enforcement of that or any other
term in this Agreement or any other agreement that may be in place
between the parties.
6.9 Assignment. The terms and conditions of this Agreement shall inure to
the benefit of Purchaser, its successors, assigns and other legal
representatives, and shall be binding upon Seller, its successor,
assigns and other legal representatives.
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6.10 Survival. The provisions of Sections 3.3, 3.4, 4.1 and 6 shall survive
the closing of the purchase and sale.
6.11 Execution/ Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument. Signatures
may be original or facsimile.
[INTENTIONALLY LEFT BLANK]
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In witness whereof, the parties have executed this Patent Purchase
Agreement as of the Effective Date:
Loyaltypoint, Inc. NeoMedia Technologies, Inc.
/s/ Xxxx Xxxxxxxx /s/ Xxxxxxx X. Xxxxxx
---------------------------- ------------------------------
Signature Signature
Xxxx Xxxxxxxx Xxxxxxx X. Xxxxxx
---------------------------- ------------------------------
Printed Name Printed Name
CEO President & CEO
---------------------------- ------------------------------
Title Title
4/8/05 April 7, 2005
---------------------------- ------------------------------
Date Date
ESCROW AGENT:
Xxxxxx Xxxxxx LLP
By: Xxxxx Xxxxxx & Associates, P.A., Partner
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx, President
AS TO SECTION 3.1 ONLY
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Exhibit A
Patent Rights To Be Assigned
Patent or Application No. Country Filing Date Title and Inventor(s)
---------------------------------------------------------------------------------------------
Interactive System for investigating
US6430554B1 products on a network, Xxxxx X.
US Jan. 25, 2000 Rothschild
---------------------------------------------------------------------------------------------
Interactive System for investigating
US6651053B1 US Aug. 28, 2000 products on a network, Xxxxx X.
Xxxxxxxxxx
---------------------------------------------------------------------------------------------
Interactive System for investigating
EP00 909 978.9-2201 EP Jan. 25, 2000 products on a network, Xxxxx X.
Xxxxxxxxxx
---------------------------------------------------------------------------------------------
Interactive System for investigating
JP, S.N. 2000-596490 JP Jan. 25, 2000 products on a network, Xxxxx X.
Xxxxxxxxxx
---------------------------------------------------------------------------------------------
Method for linking a billboard or
signage to information on a global
computer network through manual
US6675165B1 US Aug. 28, 2000 information input or a global
positioning system, Xxxxx X.
Xxxxxxxxxx
---------------------------------------------------------------------------------------------
System and method of linking items in
audio, visual, and printed media to
US6766363B1 US Aug. 31, 2000 related information stored on an
electronic network using a mobile
device, Xxxxx X. Xxxxxxxxxx
---------------------------------------------------------------------------------------------
Exhibit B
ASSIGNMENT OF PATENT RIGHTS
ASSIGNMENT
WHEREAS, XxxXxxxx.xxx, Inc. (now LoyaltyPoint, Inc.), a corporation of
the State of Delaware, having a principal address at Lilburn, 0000 Xxxxxxxxx
Xxxxxxx, Xxxxxx, Xxxxxxx 00000, "Assignor", is the owner of the entire right,
title and interest in and to the following United States Patents in the United
States of America:
Patent No. Issue Date Title
---------- ---------- -----
6,430,554 August 6, 2002 INTERACTIVE SYSTEM FOR
INVESTIGATING PRODUCTS
ON A NETWORK
6,651,053 November 18, 2003 INTERACTIVE SYSTEM FOR
INVESTIGATING PRODUCTS
ON A NETWORK
6,675,165 January 6, 2004 METHOD FOR LINKING A
BILLBOARD OR SIGNAGE TO
INFORMATION ON A GLOBAL
COMPUTER NETWORK THROUGH
MANUAL INFORMATION INPUT
OR A GLOBAL POSITIONING
SYSTEM
6,766,363 July 20, 2004 SYSTEM AND METHOD OF
LINKING ITEMS IN AUDIO,
VISUAL, AND PRINTED MEDIA
TO RELATED INFORMATION
STORED ON AN ELECTRONIC
NETWORK USING A MOBILE
DEVICE
and the inventions disclosed therein;
WHEREAS, NeoMedia Technologies, Inc., a corporation organized under the
laws of the State of Delaware with its principal place of business located at
0000 Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, "Assignee", desires to acquire
the entire right, title and interest in and to said inventions and in and to the
above-identified Letters Patents of the United States;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor does hereby sell, assign,
transfer and set over unto Assignee, its legal representatives, successors and
assigns, the entire right, title and interest in and to the above-identified
Patents and the inventions disclosed therein, including any corresponding
foreign patent rights and the right to xxx for past infringements of said
Patents, to be held and enjoyed by Assignee as fully and entirely as they would
have been held and enjoyed by Assignor to the end of the term for which the
above-identified Patents have been granted.
Upon said considerations, Assignor hereby agrees with Assignee that
Assignor will not execute any writing or do any act whatsoever conflicting with
these presents, and that Assignor will, at any time upon request, without
further or additional consideration, execute such additional assignments and
other writings and do such additional acts as Assignee may deem necessary or
desirable to perfect Assignee's enjoyment of this grant.
XxxXxxxx.xxx, Inc. (now LoyaltyPoint, Inc.)
Date: 4/11/05 /s/ Xxxx Xxxxxxxx
---------- -------------------------------------------
By: Xxxx Xxxxxxxx
Title: CEO
DEED OF ASSIGNMENT
Japanese Patent Application No. 2000-596490
We (I), XXXXXXXX.XXX, INC. (now know as Loyaltypoint, Inc.), of 0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000 U.S.A., hereby declare that we (I) assign
the entire right deriving from the above-mentioned Patent Application in Japan
to NEOMEDIA TECHNOLOGIES, INC. of 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, XX
3901 U.S.A. in accordance with this Deed of Assignment.
Signed at Duluth, GA
Dated this 11th day of April, 2005
XXXXXXXX.XXX, INC. (now know as Loyaltypoint, Inc.)
Signature: /s/ Xxxx Xxxxxxxx
-----------------
Name (in block letters): XXXX XXXXXXXX
-------------
Title: CEO
(NO LEGALIZATION)
PATENT
UTILITY MODEL
DESIGN
TRADE XXXX
XXXXX OF ATTORNEY
I, ( We) , NeoMedia Technologies, Inc. of 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx
Xxxxx, XX 00000 hereby appoint and nominate Xxxxxxxxx XXXXXX and Xxxxxxxxx
XXXXXX, Registered Patent Attorney(s) of Japan, as my (our) agent with full
power of substitution and revocation, to apply for ________________________ to
the Japanese Patent Office and, if necessary, to file a request for examination
relating to the said application, to file a written explanation of the
circumstances relating to advancement of examination of the said application, to
convert the said application into one for patent of utility model or design
registration, to demand a trial against rejection of the application or against
a decision of dismissal of supplement or amendment, to lodge an administrative
petition or a suit from dissatisfaction with an administrative action and to
withdraw or abandon the application, opposition, demand, administrative petition
or suit, and to perform all other formalities and acts under the provisions
concerned to the Patent, Utility Model, Design and Trade Xxxx Xxxx of Japan or
any Orders issued on the basis thereof, and I (we) hereby appoint said attorney
as applicant's administrators to perform all acts necessary for protection of
the right established with regard to the above.
Dated this ______ day of _______________, 200__.
NeoMedia Technologies, Inc.
-----------------------------
Signature of Applicant
Ubertragungserklarung Declaration of Assignment
Der/Die unterzeichnete/n Inhaber des/der folgenden I/We the undersigned owner of the following protective
Schultzrechte/s bwz. Anmeldung/en right(s)/application(s)
00 909 978.9-2201 (Aktenzeichen der Schutrechte eintragen)
ubertrage/n dies emit xxxxx Xxxxxxx und Pflichten auf herewith assign those with all rights and duties to
Und erklrt/en sich gleichzeitig mit der Umschreibung auf and agree that the assignment is recorded in the Patent
den/die Erwerber einverstanden. Office.
Ort/Datum: 4/11/05 Place/Date: 4/11/05
/s/ Xxxx Xxxxxxxx /s/ Xxxx Xxxxxxxx
----------------- -----------------
Unterschrift des/der Abtretenden Signature of the assignor
Keine Beglaubigung erforderlich Attestation is not required
Exhibit C
Exceptions to Seller's Representations
1. See XxxxxXxxxxxx.xxx Settlement Agreement dated September 23, 2004 as set
forth in Form 8-K filed with the Securities and Exchange Commission on March 1,
2005.
2. On November 20, 2002, Seller filed suit against Fullplay Media Systems, Inc.
and Trans World Entertainment Corp. for infringement of our U.S. Patent No.
6,430,554, "Interactive System for Investigating Products on a Network", (known
as the 554 Patent). The case was filed in the United States District Court for
the Southern District of Florida. The Company alleges that certain multimedia
kiosk-type listening and viewing stations made, used, and/or sold by the
defendants infringes upon the '554 Patent. On March 18, 2003 the parties agreed
to settle the case by execution of a license and settlement agreement. On March
24, 2003 the court approved the license and settlement agreement and dismissed
the case. Fullplay has filed bankruptcy in the United States bankruptcy court,
western district of Washington at Seattle. It has not been determined what
effect, if any such filing will have on the agreement.
