Exhibit 10(41)
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ASSIGNMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 7th day of February,
2000, by and between Planet Communications Ltd., a company incorporated under
the laws of the State of Israel with registered offices at 6 Balfour Street, Tel
Aviv, Israel ("Assignor") and Cortext Ltd., a company incorporated under the
laws of the State of Israel, with registered offices at Hamiktzoa 9, Tel Aviv,
Israel ("Assignee") and Virtual Communities, Inc., a company incorporated under
the laws of Delaware, USA with offices at 589 8/th/ Avenue, New York, NY
("VCI").
WHEREAS, Assignee and Assignor entered into a Partnership Agreement (the
"Partnership Agreement"), dated November 2, 1997, with respect to the "Magazine
Software" (as defined below); and
WHEREAS, Assignee has been the active party in the development, marketing,
sale, licensing and support of the Magazine Software; and
WHEREAS, Assignee has "Rights" (as defined below) in and to the Magazine
Software pursuant to the Partnership Agreement; and
WHEREAS, Assignee desires to acquire all Rights of Assignor in and to the
Magazine Software, and Assignor is willing to assign all such Rights, as
provided herein; and
WHEREAS, VCI intends to purchase shares of Assignee, according to the terms
and conditions set forth in the Share Purchase Agreement by and between
Assignee and VCI (the "SPA") entered into simultaneously herewith ("VCI's
Investment"); and
WHEREAS, according to the SPA, VCI's Investment is conditioned on Assignor
assigning all "Rights" in the Magazine Software to Assignee; and
WHEREAS, in connection with the SPA, Assignee is entitled to certain
payments from VCI, in accordance with the SPA;
THEREFORE, it is hereby agreed by the parties as follows:
1. Effective as of the date when VCI, on behalf of Assignee, shall pay to
Planet the payments set forth in sections 9.1 and 9.2 herein (the "Relevant
Date") and subject to such payments, Assignor hereby irrevocably assigns
to Assignee, and Assignee accepts, free from any encumbrances or other
third party rights, all of Assignor's rights, title and interest in and to
a certain magazine web publishing tool kit software (the "Magazine
Software"), and any related technology or work of any kind related to the
Magazine Software (including without limitation, interfaces and manuals)
owned or developed by Assignor, alone or together with the Assignee,
including, inter alia, all rights pursuant to, or in connection with, the
Partnership Agreement and the Software License Agreement among the parties
hereto, dated July 18, 1999 (the "VCI License"), and the Work Order among
Internet Dapei Zahav; Assignee and Assignor dated
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August 13, 1998, including all rights to any work developed pursuant to, or
in connection with such agreements and which relate to the Magazine
Software, all subject to Assignor's right to sell up to 10 licences of the
Magazine Software in form and substance as set forth in Exhibit A attached
hereto only to Domain End Users (all of the above, collectively, the
"Rights").
2. The "Rights" shall include without limitation, any and all industrial and
intellectual property rights relating to the Magazine Software and to any
other related technology or work of any kind owned or developed by
Assignor, and which relate to the Magazine Software, including without
limitation, if any, patents, patent applications, patent rights,
trademarks, trademark applications, trade names, service marks, service
mark applications, copyrights, moral rights, computer programs, content and
other computer software, source code, object code, technology, know-how,
trade secrets, proprietary processes and formulae information, data,
technology, know-how, inventions, discoveries, designs, models, technical
reports, diagrams, software and hardware, ideas, and trade and business
plans.
3. The assignment of Rights to Assignee includes, but is not limited to all of
the Rights of Assignor (in partnership with Assignee) as follows:
3.1. The right to become the sole registered owner of any Rights, whether or not
currently registered.
3.2. The right to become the sole registered owner of any not yet registered or
non-crystallized (as the case may be) Rights.
3.3. All rights and powers arising or accrued from the Rights, including the
right to sue for damages and other remedies in respect of any infringement
of the Rights, or in respect of other acts within the scope of the claims
of any published specification of any patent or accompanying any
application therefor or accompanying any applications prior to the date
hereof.
3.4. The right to apply for, prosecute and obtain patents, trade names,
intellectual property or similar protection throughout the world in respect
to any right accrued, derived or based on the Rights, including the right
to claim patent priority or other legal priority.
4. If any right assigned to Assignee hereunder is not capable of assignment,
then to the extent required to vest such right in Assignee, Assignor hereby
waives and relinquishes such right in favor of Assignee and/or grants to
Assignee a perpetual, exclusive, royalty free, worldwide license to exploit
and use such right, including a license to assign, transfer and sub-license
such right, in any manner that Assignee deems fit, and further hereby
consents to any exercise whatsoever of such right by Assignee. Assignor
shall promptly cooperate with Assignee, sign all documents and otherwise
take all steps, at the request and expense of the Assignee, necessary to
vest in the Assignee the rights assigned to the Assignee under this
Agreement.
5. Assignor declares and warrants that to the best of its knowledge it does
not possess any software designs, lines of code or and any other tangible
property or physical objects which relate to the Rights (and shall promptly
deliver any of the foregoing if discovered). Assignor shall maintain the
confidentiality of all information relating to the Rights and shall ensure
that all persons which it has afforded access to such information shall not
use or disclose such information.
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6. The Partnership Agreement is hereby terminated as of the Relevant Date.
Each of Cortext and Planet irrevocably releases the other as of the
Relevant Date from all claims and obligations arising out of the
Partnership Agreement.
7. The Assignor represents and warrants that, (a) it has not granted rights in
the Rights to any third parties in any manner whatsoever; (b) Assignee,
entirely through the efforts of its employees, has been the active party in
the development, marketing, sale, licensing and support of the Magazine
Software and Assignor was only a passive investor (supplying funds,
equipment and premises) with respect to the development, licensing and
support of the Magazine Software; and (c) to the best of its knowledge, (1)
the Rights being assigned are free and clear of all liens, claims,
encumbrances, rights, or equities whatsoever of any third party other than
the Assignee and VCI; (2) the Rights being assigned have not been forfeited
to the public domain and have been maintained in confidence; (3) no person
has the right to assert any claim regarding the use of, or challenging or
questioning the Assignor's right or title in, any of the Rights; and (4)
there are no claims by or against the Assignor relating to the Rights and
no ground exists that may give rise to such a claim. To eliminate any
doubt, Assignor shall have no liability, in any way whatsoever, if any of
its representations and warranties shall be found to be incorrect if they
were effected by the acts of the Assignee or by any act in which Assignee
was an active party with respect to the Magazine Software.
8. Assignor represents and warrants to the best of its knowledge, information
and belief, that (a) the Magazine Software does not infringe any patent,
copyright, or trade secret of, or the intellectual property or other rights
of, any third party; and (b) upon the effective date of this Agreement,
Assignee will own all of the intellectual property or other rights relating
to the Magazine Software subject to Assignor's right as set forth in
section 1.
9. In consideration of Assignor's obligations and representations herein,
Assignee hereby authorizes and instructs VCI, on behalf of Assignee, and
VCI hereby irrevocably accepts, agrees and obliges toward Assignor, to
effect the following:
9.1. Within three (3) business days after the execution of this Agreement, pay
to Assignor an amount of $35,000 plus V.A.T (against Planet's duly issued
invoice to Assignee) and the V.A.T due on the advanced sum of $30,000
already paid (against Assignor's duly issued invoice to Assignee in the
amount of $30,000 plus V.A.T.) by wire transfer to Assignor account number
322100/46 in Bank Leumi Branch Ahad Haam, Tel Aviv (No. 811) (the "$35,000
Payment").
9.2. Within ten (10) days after the execution of this Agreement, pay to Assignor
an amount of $285,000 plus V.A.T (against Assignor's duly issued invoice to
Assignee) by wire transfer to the account specified in section 9.1 above
(the "Second Installment").
9.3. Pay to Assignor an additional aggregate amount of $75,000 plus V.A.T
(against Assignor's duly issued invoice to Assignee) by wire transfer to
the account specified in section 9.1 above in three (3) installments
($25,000 plus V.A.T [against Assignor's duly issued invoice to Assignee]
each), on April 15, 2000, June 15, 2000 and August 15, 2000.
9.4. In any manner whatsoever, unless this Agreement shall be cancelled, all
sums as mentioned in sections 9.1 - 9.3 shall be paid to Assignor as
detailed above. In particular, Assignee or VCI shall have no right to delay
or postpone any of such payments and none of such payments shall
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be paid any other method (including, but not limited to a claim or plea of
set-off) than the method detailed above. To eliminate any doubt, the
foregoing shall not derogate from Assignor's liability for its
representations and warranties contained herein.
9.5. In the event that any of the sums mentioned in sections 9.1 - 9.3 above or
any portion thereof, shall not have been paid on the dates set forth in
such section 9.1 - 9.3, then without derogating from any of Assignor's
rights in such event, such sum(s) shall bear interest at the rate of one
percent (1%) per month (on a daily basis) plus V.A.T, which shall be added
to such sum and paid by VCI to Assignor.
9.6. In the event that VCI fails to meet any of its obligations under sections
9.1 through 9.5 herein, or any portion thereof, such breach shall be deemed
to be a fundamental breach of this Agreement. In such event, and without
derogating from any of Assignor's rights in the event of such breach,
including, but not limited to, the enforcement of this Agreement, VCI shall
pay Assignor as agreed compensation, and without the need of proof of
damages, the sum of $35,000. Without derogating from Assignor's rights, if
in the event of a fundamental breach Assignor elects to cancel this
Agreement after the sum of $35,000 pursuant to section 9.1 above has been
paid by VCI (on behalf of Assignee) then, in such event, Assignor shall be
entitled to retain this sum. Assignor acknowledges the prior receipt of
$30,000 as an advance payment hereunder. In the event of a cancellation of
this Agreement, Assignor shall not have to return this advance payment of
$30,000 and such sum shall be applied toward VCI's purchase of additional
licenses for Magazine Software pursuant to the VCI License.
9.7. To eliminate any doubt, regardless of the fact that VCI's payments and/or
obligations, set forth in sections 9.1 - 9.6 are made on behalf of
Assignee, Assignor's rights to these payments and/or to such rights shall
be directly toward VCI (as well as, jointly and severally toward Assignee)
and nothing in connection with the relationship between VCI and Assignee
and/or the SPA, in any manner whatsoever, shall have any effect nor shall
derogate from VCI obligations toward Assignor. Nevertheless, but without
derogating from Assignor's rights, as mentioned above, all such payments,
when paid by VCI, on behalf of Assignee, shall be considered as paid by
Assignee and consequently, Assignor shall issue the invoices for such
payments to Assignee.
10. Each Party represents that the execution, delivery, and performance by such
Party of this Agreement and all transactions contemplated hereby have been
duly and validly authorized by all necessary actions on the part of such
Party and that neither the execution of this Agreement nor the performance
hereunder by such Party is in violation of such Party's obligations,
contractual or otherwise, to any government, agency or any other party or
parties.
11. This Agreement merges and supersedes all prior and contemporaneous
agreements, assurances, representations, and communications between the
parties hereto regarding the subject matter hereof.
12. This Agreement shall be governed by and construed under the laws of the
State of Israel. Sole jurisdiction is given to the court in Tel Aviv,
Israel.
13. Any notice required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified or upon deposit with the Israeli Post Office, by
registered or certified mail, postage prepaid and addressed to the
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party to be notified at the address indicated for such party below, or at
such other address as such party may designate by ten (10) day's advance
written notice to the other parties.
If to Assignor: Planet Communications Ltd.
57 Igal Allon Street, Tel Aviv Israel
Attn: Shimon Ohaion
Fax: 972 3 636 6463
With a copy (which shall not
constitute notice) to: Ami Sadan & Co. - Law Offices
315 Haryarkon St. Tel Aviv, Israel
Attn:Ami Sadan, Adv.
Fax 972 3 602 2503
If to Assignee: Cortext Ltd.
Hamikztoa 9
Tel Aviv, Israel
Attn: Noam Ilan
Fax: 972 3
If to VCI: Virtual Communities Israel Ltd.
Jerusalem Technology Park, Malcha
Jerusalem, Israel
Attn: David Kahn
Fax: 972 2 568 9171
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed.
Cortext Ltd. Planet Communications Ltd.
By: _____________________ By: _____________________
Virtual Communities, Inc.
By: _____________________
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