© 2012 IPXI, Inc. September 6, 2012 IP in Innovative Economy Krakow, Poland

© 2012 IPXI, Inc.

S e p t e m b e r 6 , 2 0 1 2

IP in Innovative EconomyKrakow, Poland

About IPXI®

• The world’s first financial exchange that facilitates non-exclusive licensing and trading of IP rights with market-based pricing and standardized terms.

• Developed with significant input from leading corporate, university, and laboratory IP owners.

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Member Overview

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Corporate University Laboratory Associate

CDC Propriété Intellectuelle Columbia Technology Venture Brookhaven National Laboratory

Article One Partners

Com-Pac International Northwestern University Lawrence Livermore National Laboratory

Bridges & Mavrakakis, LLP

Ford Global Technologies, LLC Regents of the University of California Pacific Northwest National Laboratory

DeWitt, Ross & Stevens S.C.

JP Morgan Chase & Co. Rutgers University DLA Piper, LLP

MetaPower, Inc. University of Chicago Innography

Palo Alto Research Center Incorporated University of Notre Dame Kerr & Wagstaffe, LLP

Philips Intellectual Property & Standards University of Utah Marsh, Inc.

Sony Corporation of America McGladrey, LLP

Nordic Patent Institute

North Point Advisors, LLC

Ocean Tomo, LLC

Pantros IP

PATENTSHIP Patentanwaltskanzlei

Red Chalk Group

Sullivan & Cromwell, LLP

TAEUS International Corporation

IPXI Update

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• 28 new members since IPXI’s funding announcement in December 2011 (34 in total and growing)

• Founding Members– 6 U.S. University Founding Members– 3 U.S. National Laboratory Founding Members– 7 U.S. and Foreign Corporate Founding Members

• First working version of the Rulebook approved by the Executive Committee

• $500 million+ in IP commitments

IPXI Market Rulebook – Working Edition 1.0

• Approved by IPXI Executive Committee

• Available by request

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Rules Committee

Business Conduct

Committee

Executive Committee

IPXI Governance

Market Operations Committee

Enforcement Committee

Selection Committee

Board of Directors

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IPXI Core Objective

IP Market Problem IP Exchange Result

Incomplete or insufficient market information

Detailed prospectus, published pricing, consumption data reporting, bid/ask

TRANSPARENCY - enabling more accurate IP asset management and R&D decisions

Arbitrary or unilaterally determined IP value

Market-based pricing reflecting the value of a technology and increasing buy-side confidence

PRICE DISCOVERY – ensuring fair and reasonable pricing

Lack of standards, including course of dealing, contract terms, and pricing

Standardized tradable license rights accessible to all market participants

LEVEL PLAYING FIELD – accelerating technology transfer and innovation

Time and transaction cost inefficiencies associated with bilateral licensing

Central marketplace with market enhancing solutions, such as standard contracts, outsourced auditing, and alternative dispute resolution processes

EFFICIENCY - providing easy access, liquidity, and increasing transaction volume

A more efficient and transparent IP marketplace

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Unit License Right™ Characteristics

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• Non-exclusive licensing

• Non-discriminatory terms

• Standardized rights within each offering

• Retired upon use

ULR™

SAMPLE UNIT LICENSE RIGHT SPECIFICATION

USP X,XXX,137 A/B/C

General Description: USP X,XXX,123 A/B/C Value Seat Insert

Patent(s): USP X,XXX,137 and continuations,continuations-in-part and foreign counterparts

Fields of Use: All

Restrictions: All Secondary Market sales through IPXI

Issuer Right to Use: Yes including all subsidiaries

Unit Basis: Each ULR covers one automotive or light truck engine

Total Offered Quantity: 50 million ULRs offered in 10 unit lots

Term of Rights: Until used

Opening: Dutch Auction (50% minimum quantity & price)

Encumbrances: Prior Licensing History

IPXI Price Banding: +/- 1%

Amnesty: Full

Tranche Priced at

U137A: 10 million ULR $0.50 per unit

U137B: 10 million ULR $0.75 per unit

U137C: 30 million ULR $1.00 per unit

Follow-on Offerings Through Term (2017)

10 million ULR each Deemed Market Price

SECONDARY MARKET PRICE DISCOVERY

USP X,XXX,137 A/B/CExpiration: 12/31/17

OFFERING DATA

Tranche Authorized Issued ConsumedU137A 10,000,000 10,000,000 6,688,658

U137B 10,000,000 2,250,000 -U137C 30,000,000 - -Follow-on 10,000,000 - -(each)

SECONDARY MARKET DATA

% of IssuedTranche Bid Ask URLs _ U137A $0.625 $0.630 28%U137B $0.750 $0.750 0%U137C - - -Follow-on - - -(each)

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Licensor / Licensee Benefits

Licensor Benefits

• Efficiently monetize patent portfolios

• Reduce transaction costs

• Avoid forced cross licensing

• Outsource marketing

• Outsource auditing

• Outsource enforcement

• Receive timely reports on licensee usage

• Flexible rights structure

Licensee Benefits

• Efficiently obtain licenses to patent portfolios at market price

• Ability to resell unused ULRs to accommodate reduced future needs

• Fair and level playing field for all prospective licensees

• Fair and reasonable market determined licensing terms

• Selection Committee screening and public comment period promote quality offering and rational market pricing

• Potential amnesty for prior usage

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Indicative Timeline and Task Allocation

Time Period

Task

Day 1 Submit formal OS Document

Day 2 - 30IPXI internal vetting

Review OS Document for preliminary acceptance or rejection by the Selection Committee

Day 30 Preliminary acceptance of OS Document by the Selection Committee and execution of Submission Agreement

Days 30 - 90

Initiate pre-marketing activities

Preliminary Offering Memorandum and Selection Committee findings available for Exchange Member review and comment

Use of external parties to further evaluate, including prior art search and valuation

Assess all comments and reports

Final Modification of OS Document, followed by its final assessment

Day 90

Final decision regarding acceptance or rejection of preliminary Offering Memorandum

Commitment fee is due and payable

Grant of exclusive license option of relevant IP to Special Purpose Vehicle (Issuer)

Days 91 -150Form Issuer

Market Authorized Product (Roadshow)

Day 150 Exercise of exclusive license by Issuer

Day 151 Initial Offering effective

Day 152 Secondary Market

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IPXI ULR vs. Other Monetization Methods

Monetization Method

Assumptions

EstimatedRevenues

To IP-owner

Sale through Broker or Auction*

75% Potential Market Penetration

75% Price Discount

15% Commission

15-20% of Total Licensing Revenues

Third-Party Enforcement

Program**


57% of Licensing Revenues

Paid as Fees

$1M to $5M in Legal Expenses Incurred


Self-managed Licensing

Program***


$1M to $5M in Legal Expenses Incurred

Approximately $500,000 in Internal Costs Allocated to Licensing Program


IPXI ULRs

15% Tranche Pricing Discount

20% of Licensing Revenues Paid to IPXI

$100,000 Listing Fee and $5,000 Annual Membership Fee

Approximately 68% of Total Licensing

Revenues

* 25% market discount reflects Purchaser expectations after acquiring the patent; 75% price discount reflects the typical discount necessary to assure sale to a single Purchaser in a limited market; 15% of licensing revenues payable as a fee to the brokerage/auction house facilitating the sale.

** 25% market discount based on expected ability of a specialized third-party enforcer to address the market of potential users of a patented technology; 57% of licensing revenues payable as fee to a third-party enforcer, based on a successful patent enforcement company’s financial information; $1M to $5M additional costs consistent with AIPLA’s estimate for patent litigation with potential damages of $1M to $25M+.

*** 50% market discount based on the expected ability of a patent-owner to address the market of potential users of a patented technology; $1M to $5M litigation costs plus $500,000 of non-attorney costs related to the internal management of licensing or enforcement program has been added for this model.

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IPXI ULR vs. Other Monetization Methods

Monetization Method

Revenues Expenses Net Income to Sponsor Risk to Sponsor

Total Revenue Potential

Revenue after Market Discount

Revenue after Price Discount

Broker Fee/ Commission

Additional Expenses

Total Income Realized

Loss of Patent

Ownership

Out-of-pocket

downside

Sale through Broker or IP

Auction $50M $37.5M $9.4M $1.4M $0 $8M Yes $0

Third-Party Enforcement

Program $50M $37.5M $37.5M $21.4M $5M $11.1M Yes $0

Self-managed LicensingProgram

$50M $25M $25M $0M $5.5M $19.5M No $5.5M

IPXI ULR $50M $50M $42.5M $8.5M $100,000 $33.9M No $0

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IP as an Exchange Traded Unit – Accelerated Innovation

• Efficient and transparent technology transfer

• More accurate R&D and intangible asset management decision-making

• Greater technology access for small/medium enterprises at fair and reasonable prices

• An alternative for universities and research laboratories

• Level playing field

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Intellectual Property Exchange International, Inc.

Disclaimer: The concepts covered by this presentation and the information included herein are for discussion purposes only and are not intended to be all-inclusive on the topic of IPXI or related parties. Many of the concepts are illustrative only and do not necessarily represent final IPXI functions and processes. Additionally all of the information contained herein is confidential is and the recipient acknowledges that unauthorized disclosure or use of such confidential information, will cause the Company irreparable harm. Therefore recipient shall maintain Confidential Information in strict confidence at all times without the Company’s written consent.

Gerard J. PannekoekIPXI Holdings, LLC10 South LaSalle Street, Suite 2130Chicago, IL 60603

Phone: +1 (312) 275-2701

[email protected]

Documents

© 2012 IPXI, Inc. September 6, 2012 IP in Innovative Economy Krakow, Poland