8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

cPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 27, 2003

INTERNET PICTURES CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	000-26363	52-2213841
(State or other	(Commission	(IRS Employer
jurisdiction of incorporation)	File Number)	Identification Number)

3160 CROW CANYON ROAD, SAN RAMON, CALIFORNIA	94583
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (925) 242-4002

N/A

(Former name or former address, if changed since last report)

ITEM 5: OTHER EVENTS AND REQUIRED FD DISCLOSURE.

     On June 27, 2003, Internet Pictures Corporation (“iPIX”) announced that it had signed an amended license agreement with eBay Inc. A copy of the press release is furnished as an exhibit to this report. The following is a summary of the provisions of Amendment No. 3 to the Visual Content Services Agreement between iPIX and eBay. Amendment No. 3 should be read together with the Visual Content Services Agreement dated April 19, 2000, together with Amendment No. 1 and Amendment No. 2 to the Visual Content Services Agreement, all of which were filed as Exhibits to iPIX’s Form 10-Q filed on October 31, 2001. A copy of Amendment No. 3 is filed as an exhibit to this report.

     The Visual Content Services Agreement between iPIX and eBay remains unchanged through the contract period, which will expire by its terms on September 30, 2003. Under the terms of Amendment No. 3, iPIX will grant eBay a perpetual, non-exclusive license to the Rimfire Imaging technology for a one-time payment of $8 million. The payment will be made in three (3) installments with an initial $3 million installment paid immediately. Subject to eBay’s option to extend iPIX’s imaging services, iPIX will no longer provide imaging services to eBay after September 30, 2003. eBay has the option to extend the Rimfire Imaging services after September 30, 2003 for up to four (4) additional months for a minimum monthly payment of $450 thousand, plus 1.5 cents for every image submitted in excess of 12 million images a month. iPIX may also transfer to eBay, at eBay’s option, a Rimfire Imaging environment developed by iPIX specifically for eBay for an additional $2 million. The parties have agreed to terms to terminate certain equipment leases under which iPIX leases computer equipment from eBay and iPIX has also given eBay an option to purchase other assets, both of which relate to the eBay Rimfire Imaging service. The parties have also agreed to work together with some of iPIX’s third party service providers to efficiently transition appropriate services to eBay, thus allowing iPIX to continue to focus on its base of existing and new customers.

     (c)  Exhibits

Exhibit
Number	Description
10.1	Amendment No. 3 to the Visual Content Services Agreement dated as of June 27, 2003
99.1	Press Release dated June 27, 2003

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INTERNET PICTURES CORPORATION

Dated: June 27, 2003
	/s/  Paul Farmer Paul Farmer Chief Financial Officer

Exhibit Index

Exhibit
Number	Description
10.1 99.1	Amendment No. 3 to Visual Content Services Agreement dated as of June 27, 2003 Press Release dated June 27, 2003

EX-10.1 3 g83605exv10w1.txt EX-10.1/AMENDMENT #3 VISUAL CONTENT SERVICE AGREE EXHIBIT 10.1 AMENDMENT NO. 3 TO THE VISUAL CONTENT SERVICES AGREEMENT BETWEEN EBAY AND IPIX EFFECTIVE AS OF JUNE 27, 2003 This Amendment No. 3 ("Amendment") to the Visual Content Services Agreement dated April 19, 2000, as previously amended ("Agreement"), by and between eBay Inc. ("eBay") and Internet Pictures Corporation ("iPIX") modifies and amends the Agreement as set forth below. WHEREAS, the Agreement is scheduled to expire on September 30, 2003, subject to certain post-termination obligations; and WHEREAS, eBay is in the process of developing technology to support image services ("eBay Image Services"); and WHEREAS, eBay and iPIX desire to migrate eBay's customer base from the eBay-specific "Rimfire" technology-based service currently operated by iPIX to the eBay Image Services; and WHEREAS, eBay and iPIX desire to minimize any risks of service degradation during this transition; NOW, THEREFORE, eBay and iPIX agree to amend the Agreement as follows: Unless otherwise defined herein, all terms used in this Amendment shall retain the same meanings as defined in the Agreement. 1. DEFINITIONS. The following Sections 1.15.1, 1.15.2, 1.22.1, 1.22.2, and 1.25.1, and the attached Schedule L, are hereby added to the Agreement: "1.15.1 'eBay Rimfire Technology' means the current server and client technology deployed in production or used by iPIX (including without limitation the existing applicable object code, source code, scripts, Plug-Ins, Help Tools, specifications, architecture description, and documentation) to provide the Basic Service and the Enhanced Services (the "eBay Rimfire Services") on the effective date of Amendment No. 3, and on the two subsequent delivery dates set forth in Section 2.6(c) (Delivery of Technology), including without limitation the technology described in detail on Schedule L, Sections A and D. 1.15.2 'Rimfire Technology' means the next generation of server and client Rimfire technology currently deployed in pre-production and available for eBay (including without limitation the applicable object code, source code, scripts, Plug-Ins, Help Tools, specifications, architecture description, and documentation) on the effective date of Amendment No. 3, and on the two subsequent delivery dates set forth in Section 2.6(c) (Delivery of Technology), including without limitation the technology described in detail on Schedule L, Sections B and D. 1.15.3 'Photo-Album Technology' means the technology (including without limitation any object code, source code, scripts, specifications, architecture description, and documentation) developed by iPIX in conjunction with eBay and for the benefit of eBay as of the effective date of Amendment No. 3 that was intended to enable end users to manage multiple digital images and to relate those images to their respective eBay auction listings, including without limitation the technology described in detail on Schedule L, Section C. 1.22.1 'Parallel Transition Services' means the services to be provided by iPIX to eBay described in Section 2.3 (Parallel Transition Services). 1.22.2 'Migration Services' means the services to be provided by iPIX to eBay described in Section 2.4 (Migration Services). 1.22.3 'Support Services' means the services to be provided by iPIX to eBay described in Section 2.5 (Support Services). 1.25.1 'Operations Termination Date' means the date on which any Service Extension services, Parallel Transition Services, Migration Services and Support Services have been completed." 2. TRANSITION SERVICES. The following Sections 2.3, 2.4, 2.5, 2.6, and 2.7, and the attached Schedule K, are hereby added to the Agreement, and Sections 3.1 and 3.2 are amended as set forth below: (A) New Sections: "2.3 Parallel Transition Services. (a) Timing. Beginning on the effective date of Amendment No. 3, iPIX will begin providing the services described in this Section 2.3 to eBay and will continue during the Term of this Agreement to provide such services until the date eBay provides formal notice to iPIX that eBay will no longer route Customer Image submissions to iPIX and that iPIX will service only view requests for previously submitted Customer Images (the "Cut-Over Date"), subject to extension at eBay's option pursuant to Section 2.7 (Service Extension). As of the effective date of Amendment No. 3, the parties expect the Cut-Over Date to be on or before September 30, 2003. (b) Services. (i) iPIX will cooperate fully and promptly with eBay to (A) develop and implement a detailed, reasonable technical plan mutually agreeable to the parties, in accordance with Schedule K, Section A, for the parallel operation of the eBay Rimfire Services with the eBay Image Services (the "Parallel Processing Plan") in order to enable a smooth, orderly, and effective transition of services for Customers to the eBay Image Services and (B) operate the eBay Rimfire Services (including without limitation support for submission and viewing) in parallel with eBay's operation of the eBay Image Services, in accordance with the Parallel Processing Plan and in compliance with the Performance Standards. (ii) iPIX will provide the Parallel Transition Services described in this Section 2.3, in Schedule K, Section A, in the Parallel Processing Plan, and in any amendments to the Parallel Processing Plan that eBay may reasonably request, in a manner that ensures that the eBay Rimfire Services continue to meet the Performance Standards through the end of any Service Extension. Without limiting the foregoing, iPIX will (A) assist eBay in implementing the Parallel Processing Plan and (B) with respect to any agreement between iPIX and any third party that may conflict with iPIX's obligations under this Agreement as amended, use its commercially reasonable efforts to so amend, or obtain such a waiver or consent as required to enable iPIX's performance hereunder. 2.4 Migration Services. (a) Migration Path. Beginning on the effective date of Amendment No. 3 or a subsequent date (if so requested by eBay), through the Operations Termination Date, iPIX will (i) collaborate with eBay to develop and implement a detailed, reasonable technical plan mutually agreeable to the parties, in accordance with Schedule K, Section B, for the Migration Services ("Migration Plan"), (ii) collaborate with eBay to map the locations of any data (including Images) stored by iPIX after the Cut-Over Date to the systems used by eBay for the eBay Images Services, (iii) assist eBay in migrating data from iPIX's servers to eBay's servers (including "re-list" data), as requested by eBay, (iv) electronically or photonically deliver to eBay, in the format(s) and at the times reasonably requested by eBay, copies of all of the Images and related data stored by iPIX and train eBay regarding the types of data it stores as well as the procedures for modifying or reformatting such data, (v) otherwise perform the services set forth in the Migration Plan, and (vi) when requested by eBay at the end of the migration and transition process, disassemble the systems used for providing the eBay Rimfire Services ("eBay Rimfire Systems") and deliver the Other Assets which eBay has elected to purchase and the components of the eBay Rimfire Systems which eBay already owns to eBay, unless eBay has invoked the "Go Green Contingency," as defined below. IPIX shall not be in breach of any of the obligations in this Section to the extent its failure to perform results from any action or inaction by eBay. (b) Go-Green Contingency. eBay shall have the option to request, at any time after September 1, 2003 and before October 31, 2003, that iPIX extricate those systems used to provide services for other iPIX customers from the eBay Rimfire Systems and provide the eBay Rimfire Systems (as an operating whole and in their current location) to eBay and provide eBay employees with any additional training regarding the operation of the eBay Rimfire Systems reasonably requested by eBay (the "Go-Green Contingency"). The parties have not prepared a Go-Green Contingency implementation plan as of the effective date of Amendment No. 3. Immediately upon request by eBay, the parties will use their best efforts to promptly agree on a Go-Green Contingency plan (the "Go-Green Contingency Plan") to be implemented in accordance with the following framework: (i) In order to invoke the Go-Green Contingency, eBay must also invoke a Service Extension in accordance with Section 2.7 (Service Extension) for a period which shall be the shorter of four months from the date of eBay's invocation of the Go-Green Contingency or until February 1, 2004. (ii) eBay shall additionally pay iPIX two million dollars ($2,000,000) to implement the Go-Green Contingency, which payment includes the acquisition of any hardware or software needed to replicate portions of the eBay Rimfire Systems used to provide services to other iPIX customers. (iii) eBay shall purchase any asset on Schedule N ("Other Assets") which is part of the eBay Rimfire Systems when eBay invokes the Go-Green Contingency. The then-current version of Schedule N may only be modified by iPIX, in the event eBay invokes the Go-Green Contingency, to account for repair and maintenance requirements, such as reconfiguring or adding equipment to remedy an equipment failure. eBay shall be responsible for purchasing, and will own, any additional equipment necessary to scale the capacity of the eBay Rimfire Systems to eBay's then-current needs. (iv) iPIX shall provide (1) knowledge transfer services regarding operation of the eBay Rimfire Systems and (2) software and hardware maintenance and support related to the eBay Rimfire Technology in conformance with the performance criteria and the service level guarantees in Schedule K, Section D.1 in a manner that is designed to enable the eBay Rimfire Services to continue to meet the Performance Standards when operated by eBay. 2.5 Support Services. Beginning on the effective date of Amendment No. 3 through the end of the Term: (a) Consulting. iPIX will provide consulting services related to the eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album Technology in accordance with Schedule K, Section C. (b) Code Walk-Through. Upon request by eBay (but no more than a total of three times and not after the Operations Termination Date), iPIX will perform a "code walk-through" (anticipated not to exceed two days) of the eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album Technology with technical representatives of eBay. (c) Delivery of Technology. iPIX will electronically or photonically deliver a copy of each of the eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album Technology to eBay in all its current forms (i.e., object code, source code and script forms, etc.) and in its then-current version on or about each of the following dates: upon execution of Amendment No. 3, upon one request by eBay at any time prior to the termination or expiration of the Agreement, and on the Operations Termination Date. Unless eBay invokes the Go-Green Contingency, iPIX will have no further obligation to deliver any versions of the eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album Technology or any corrections, modifications, updates or enhancements thereof. 2.6 iPIX Employees. In addition to its other obligations in the Agreement, iPIX will ensure that it retains sufficient personnel to provide the services described in the Agreement through the Operations Termination Date. Although the Parallel Transition Services, the Migration Services and the Support Services may require significant commitment and attention by iPIX personnel, neither party contemplates that such services will require iPIX to hire additional personnel (other than in order to replace personnel whose employment terminates) or to incur significant incremental expenses outside the ordinary course of business. 2.7 Service Extension. eBay may, in its discretion, extend the Cut-Over Date or any or all of the services after September 30, 2003 upon fifteen days notice for the first extension and thirty days notice thereafter, on a month to month basis, for up to four months (the "Service Extension"). Upon any such extension, iPIX will (continue to) provide the applicable service to eBay for the applicable period for the fees set forth in Section 5.10(b); provided however, that, during any Service Extension, iPIX will not be required to accept submissions of (a) more than 2.5 million images per day or (b) more than a maximum of 66,106 image submissions per peak 15-minute period." (B) Amendment of Sections 3.1 and 3.2: (1) Section 3.1 of the Agreement is hereby deleted in its entirety and replaced with the following: "3.1 Performance Standards. iPIX will ensure that the provision of the Services meets the criteria described in Exhibits A and B." (2) Section 3.2 of the Agreement is hereby deleted in its entirety. 3. EQUIPMENT AND FACILITIES. 3.1 MASTER LEASE EQUIPMENT. Subject to (a) iPIX `s performance to eBay's reasonable satisfaction of the Parallel Transition Services, the Migration Services, and the Support Services and (b) iPIX's timely payment of the fees required to reduce the outstanding principal under the parties' Master Lease Agreement dated September 26, 2001 (including all the leases scheduled thereunder ("Master Lease")) to the balance due on September 30, 2003 (which as of the effective date of Amendment No. 3 is $1,197,838.00, but which will be adjusted in accordance with the terms of the Master Lease to account for the value of certain equipment decommissioned by iPIX), iPIX's obligation to make any additional payments under the Master Lease after such payment will be suspended. In addition, subject to iPIX's performance to eBay's reasonable satisfaction of the Parallel Transition Services, Migration Services and the Support Services during any Service Extension, upon the Operations Termination Date, eBay will waive its right to receive any additional lease payments under the Master Lease and execute a document (in a mutually agreeable form to be attached as Schedule M within two weeks of the effective date of Amendment No. 3) terminating the Master Lease as of the completion of the Migration Services. 3.2 OTHER ASSETS. eBay will review the inventory of other assets (including equipment, software, and maintenance agreements) used by iPIX to provide the eBay Rimfire Services as described on Schedule N ("Other Assets"). Schedule N, which is a complete list (as of the effective date of Amendment No. 3) of each of the Other Assets and the applicable net book value of same, is hereby added to the Agreement. iPIX may amend Schedule N at any time on reasonable written notice to eBay. eBay will have the right, but not the obligation, to purchase all or some of the Other Assets at each of such Other Assets' net book value as of the Operations Termination Date in accordance with an appropriate purchase agreement to be negotiated and executed by the parties. iPIX will maintain its then-current eBay Rimfire Services systems hardware, software, facilities and telecommunications environment (as a whole) until the Operations Termination Date. iPIX will not sell or transfer operation of the Other Assets to any third party until after the Operations Termination Date. 3.3 IPIX OBLIGATIONS TO QWEST. eBay will, in good faith, use its reasonable efforts to assist iPIX in terminating or renegotiating its contractual obligations to Qwest Communications International, Inc. ("Qwest") under iPIX's Qwest Total Advantage Agreement with Qwest dated January 16, 2003 ("Qwest Agreement") to be effective as of September 30, 2003. The parties shall cooperate to approach Qwest as soon as possible to begin discussions of such renegotiation or termination. If such obligations are not terminated as of the Operations Termination Date, eBay may choose, in its discretion, to assume some or all of iPIX's contractual obligations to Qwest under the Qwest Agreement. 3.4 REFERENCE ACCOUNT. eBay agrees to serve as a reference customer for iPIX's TSG business, subject to eBay's prior written approval of any materials in which iPIX may refer to eBay. 4. EXCLUSIVITY WAIVER. The following provision is added to the end of Section 4.3 of the Agreement: "iPIX waives the application of the provisions of Section 4.3 and Exhibit D with respect to any of the eBay activities contemplated by Amendment No. 3." 5. PAYMENTS. Each party will continue to pay the fees otherwise due and payable to such party under the Agreement through September 30, 2003. eBay has no intention of changing any of the fees it currently charges for image services, or imposing fees on any image services it currently offers at no charge, through September 30, 2003, and will pay iPIX for Enhanced Services in accordance with Section 5.3 (Enhanced Services Payments) through September 30, 2003. Except as provided under Section 3.1 (Master Lease Equipment) of Amendment No. 3, Section 3.2 (Other Assets) of Amendment No. 3, or new Sections 2.4(b) (Go-Green Contingency), 5.9 (License and Transition Services Fees) or 5.10 (Miscellaneous Fees), no fees will accrue to either party after September 30, 2003. The following Sections 5.9 and 5.10 are hereby added to the Agreement: "5.9 License and Transition Services Fees. eBay will pay iPIX an aggregate total of eight million dollars ($8,000,000), in consideration for the licenses granted and services provided to eBay under this Agreement, as provided in this Section 5.9. (a) License Fee. eBay will pay iPIX a first license fee payment of three million dollars ($3,000,000) upon execution of Amendment No. 3 to the Agreement, eBay's receipt of a legal opinion in a form satisfactory to eBay and the release of all liens on the eBay Rimfire Technology, Rimfire Technology and Photo-Album Technology in a form satisfactory to eBay. Upon payment of this fee, the license granted under Section 7.6 (License to Rimfire Technology and Photo-Album Technology) will be perpetual and irrevocable, notwithstanding any other provision in this Agreement to the contrary. (b) Additional License Fees. eBay will pay iPIX a second license fee payment of three million dollars ($3,000,000) on October 1, 2003, subject to iPIX's performance to eBay's reasonable satisfaction through such date of the Parallel Transition Services, the Migration Services or the Support Services. eBay will pay iPIX a third license fee payment of two million dollars ($2,000,000) upon completion of the Migration Services. 5.10 Miscellaneous Fees. (a) iPIX Bandwidth Fees. iPIX will be solely responsible for payment of all bandwidth costs associated with any and all services provided by it under this Agreement. (b) Service Extension Fees. If eBay exercises its Service Extension option described in Section 2.7 (Service Extension), eBay will pay iPIX (i) $450,000 for each month eBay elects to extend the services provided by iPIX and (ii) $0.015 for each Image submitted in excess of 12 million per month. If applicable, iPIX will invoice eBay for the foregoing fees at the end of each month of the Service Extension. eBay will pay such invoices within 20 days of receipt." 6. TERMINATION. Section 6 of the Agreement is hereby amended as follows: 6.1 Section 6.1 of the Agreement is hereby deleted and replaced with the following: "6.1 Term. The term of the Agreement will commence on the Effective Date and shall continue until the Operations Termination Date, with the first `Deal Quarter' commencing on April 1, 2000." 6.2 iPIX hereby waives all of its rights under Section 6.2 of the Agreement. 6.3 Section 6.3 is hereby deleted in its entirety and replaced with: "6.3 Termination for Breach. Unless otherwise agreed in writing between the parties, a party may terminate this Agreement in the event the other party breaches a material term, condition or representation of this Agreement, and fails to remedy such default within 30 days after being notified by the non-breaching party of such breach or failure. The failure by iPIX to meet any of the Performance Standards, other than from a failure resulting from eBay's act or failure to act, shall constitute a material breach of this Agreement, subject to the following additional exception: (a) The parties will cooperate to minimize the potential impact of any Parallel Transition Services or Migration Services on the performance of the eBay Rimfire Services or iPIX's ability to meet the Performance Standards. iPIX will promptly notify eBay if iPIX believes an eBay request for specific Parallel Transition Services or Migration Services will have a potentially adverse impact on the eBay Rimfire Services or iPIX's ability to meet the Performance Standards, specifying in reasonable detail the expected causes and scope of such potential degradation. If eBay then requests that iPIX nevertheless perform the applicable service, any failure by iPIX to meet the Performance Standards caused by performing the applicable service as requested by eBay shall not constitute a material breach of this Agreement and shall not constitute grounds for eBay to determine that iPIX has not performed any Parallel Transition Services or Migration Services to eBay's reasonable satisfaction in connection with the suspension or waiver of iPIX's payments under the Master Lease in accordance with Section 3.1 or eBay's payment obligations in Section 5.9." 6.4. Section 6.4(b) of the Agreement is hereby deleted in its entirety. Section 6.4(c) of the Agreement is hereby deleted in its entirety and replaced with the following: "(c) Except for the eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album Technology, eBay will cease all use of the iPIX Technology." Section 6.4(d) of the Agreement is hereby deleted in its entirety and replaced with the following: "(d) Each party will promptly destroy or return any Confidential Information of the other party in its possession, including, in iPIX's case, eBay's Customer Information. Notwithstanding the foregoing sentence, however, eBay may indefinitely retain copies of the eBay Rimfire Technology, the Rimfire Technology, the Photo Album Technology, and any other information provided as part of the Parallel Transition Services or the Migration Services or the Support Services." The paragraph at the end of Section 6.4 of the Agreement is hereby deleted. 6.5 Section 6.5 of the Agreement is hereby deleted in its entirety and replaced with the following: "6.5 Survival of Certain Terms. The provisions of the following sections will survive any expiration or termination of the Agreement: 1 (Definitions), 5.6 (Payment Terms; Taxes), 5.8 (Inspection of Records), 6.4 (Effects of Termination), 6.5 (Survival of Certain Terms), 7.1(a) (Ownership), 7.2(a), 7.2(b)(iii), 7.2(b)(iv), 7.3(a)(i), 7.3(a)(iii), 7.3(b)(i), 7.4 (Limitation on Grant of Rights), 7.6 (License to Rimfire Technology and Photo-Album Technology), 8 (Confidentiality), 9 (Representations and Warranties), 10 (Indemnification), 11 (Limitation of Liability), and all of 13 (General Provisions) except for Section 13.1. Except as otherwise expressly provided herein, all other rights and obligations of the parties will cease upon expiration or termination of the Agreement." 7. LICENSES. 7.1 MODIFICATION TO EXISTING LICENSES. Section 7.1(a) is hereby deleted in its entirety and replaced with the following: "(a) Ownership. All iPIX Technology (including the eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album Technology), all Images created prior to the Operations Termination Date ("iPIX Images"), and Help Tools (as well as any modifications to the foregoing made by eBay prior to the effective date of Amendment No. 3) are, and at all times will remain, the exclusive property of iPIX (or, in the case of iPIX Images, their submitters), and no provision of this Agreement implies any transfer to eBay of any ownership interest in the iPIX Technology, Help Tools, or iPIX Images. The licenses set forth in this Agreement confer neither title to, nor ownership in, the iPIX Technology, Help Tools or iPIX Images and are not a sale of any rights therein. Subject to iPIX's ownership of the iPIX Technology, Help Tools, and iPIX Images, any modifications or derivative works, made by eBay at any time after the effective date of Amendment No. 3, of the eBay Rimfire Technology, the Rimfire Technology, the Photo-Album Technology, or Images ("eBay Modifications"), shall be owned by eBay, including without limitation all right, title and interest (including any copyrights, trade secrets, patent rights, moral rights, contract rights and licensing rights worldwide) in and to the foregoing. iPIX represents and warrants that it has all rights necessary to grants the licenses granted under this Agreement, except that it makes no representation or warranty with respect to iPIX Images, which are the property of the Customers submitting them." 7.2 RESTRICTIONS. Sections 7.1(b)(i) and 7.1(b)(iii) are hereby deleted in their entirety. Former Section 7.1(b)(ii) is hereby renumbered as 7.1(b)(i) and former Section 7.1(b)(iv) is hereby renumbered as Section 7.1(b)(ii). 7.3 RIMFIRE AND PHOTO-ALBUM TECHNOLOGY. The following Section 7.6 and the attached Schedule O (Companies) are hereby added to the Agreement: "7.6 License to Rimfire Technology and Photo-Album Technology. As a license grant that is separate and independent of any license granted under Section 7.1, iPIX hereby grants eBay a perpetual, irrevocable (subject solely to payment of the license fee in Section 5.9(a) and notwithstanding any provision in the Agreement to the contrary), nonexclusive, fully-paid, royalty-free, worldwide license, including without limitation, any copyrights, trade secrets, patent rights, moral rights, contract rights and licensing rights worldwide, to use, reproduce, distribute, display, perform and digitally perform, modify, create derivative works of, and in any way exploit the eBay Rimfire Technology, the Rimfire Technology, the Photo-Album Technology, and the Images to make, have made, sell, offer to sell, import, and use any product or service as a part of eBay's or its affiliates' business, including the right (a) to sublicense such rights to eBay affiliates and third parties for the purpose of providing support to eBay or its affiliates and (b) to sublicense any eBay customer to use the Images and the object code version of any end user components (including without limitation Scripts, Help Tools, and Plug-Ins) in such technology. Notwithstanding anything to the contrary herein, eBay will not sublicense or resell to any third parties the eBay Rimfire Technology, the Rimfire Technology or the Photo-Album Technology (except as permitted in clauses (a) and (b) above) in the form of software code unless such technology is an integral part of a larger eBay product to which eBay has contributed the majority of the value. For a period of three years after the effective date of Amendment No. 3, iPIX agrees not to (y) use the eBay Rimfire Technology, the Rimfire Technology, the Photo-Album Technology or any other functionally-equivalent technology to itself directly enable the posting by end users of images to eBay and eBay affiliate marketplaces whose domains are in use as of the effective date of Amendment No. 3, or (z) license the eBay Rimfire Technology, the Rimfire Technology, the Photo-Album Technology or any functionally-equivalent technology to the companies listed in Schedule O (Companies)." 7.4 TRADEMARKS. The following Section 7.3(a)(iii) is hereby added to the Agreement: "(iii) iPIX hereby grants eBay a nonexclusive, perpetual, irrevocable (notwithstanding any provision in the Agreement to the contrary), worldwide, royalty-free, fully paid right (with the right to sublicense to eBay affiliates) to use the iPIX Marks (a) solely as a part of any iPIX watermarks that may appear in any of the Images stored as of the termination of the Agreement or (b) as may incidentally appear on eBay's (or its affiliates') sites for a reasonable time after eBay's transition to the eBay Image Services. In addition, iPIX agrees that it will cooperate with eBay to remove, and hereby permits eBay to remove, any such iPIX watermarks from any Images." 7.5 BANKRUPTCY. The last sentence of Section 11 (Bankruptcy Code) of Amendment No. 2 is hereby deleted in its entirety and replaced with the following: "Upon written request of eBay to iPIX or the bankruptcy trustee, iPIX or the bankruptcy trustee will not interfere with, and will fully comply with any restrictions on iPIX with respect to, the rights of eBay as provided in this Agreement." 8. CONFIDENTIALITY. The following Section 8.3 is hereby added to the Agreement: "8.3 Source Code. The parties acknowledge that the source code being provided to eBay under the Agreement ("Source Code") is the valuable intellectual property of iPIX. eBay shall maintain the Source Code in strictest confidence. In addition to the other obligations of confidentiality between the parties, eBay shall take at least those measures that eBay takes to protect its own most highly confidential source code to protect the Source Code, which procedures eBay represents are consistent with best industry practices." 9. REPRESENTATIONS AND WARRANTIES. The following is added at the end of Section 9.1 of the Agreement: "iPIX further represents and warrants that the eBay Rimfire Technology is all of the software and documentation used by iPIX to perform the eBay Rimfire Services and that the eBay Rimfire Technology, when operated in the eBay Rimfire Systems environment's then-current hardware, software, facilities and telecommunications configuration, is capable of meeting the Performance Standards." The parties agree that Section 9.2 of the Agreement applies to the eBay Rimfire Technology, Rimfire Technology and Photo-Album Technology. 10. INDEMNITY. The following new Section 10.4 is hereby added to the Agreement: "10.4 Any Claim arising from facts and circumstances in existence as of the Operations Termination Date, including claims with respect to Services, shall not be affected by this Section. With respect to Claims of third parties arising after the Operations Termination Date, the indemnification provisions of Section 10.1 shall apply only to Claims arising from the infringement or alleged infringement of a third party's worldwide patent, trademark, copyright, trade secret or other intellectual property right by the eBay Rimfire Technology, Rimfire Technology and Photo-Album Technology licensed under this Agreement as delivered to eBay on or before the Operations Termination Date. In addition, after the Operations Termination Date, the indemnification provisions of Section 10.1 shall not apply to (a) eBay's use of such licensed technologies to provide any services other than the Basic Service and Enhanced Services as conducted as of effective date of Amendment No. 3, (b) to any Claim arising from the combination of such licensed technologies with other technologies where such combination is the object of the Claim, or (c) any Claim relating solely to any modifications or derivative works made by eBay of such licensed technologies after their delivery to eBay hereunder." 11. LIMITATION OF LIABILITY. Section 11 of the Agreement is hereby deleted in its entirety and replaced with the following: "Except with respect to each party's indemnification obligations set forth in Section 10 or a breach by either party of its obligations described in Section 8 or a breach by eBay of the scope of the license granted by iPIX in Section 7.6, in no event will either party be liable to the other for lost profits or any form of indirect, special, incidental, or consequential damages of any character from any causes of action of any kind with respect to this Agreement whether based on breach of contract, tort (including negligence), or otherwise, and whether or not the other party has been advised of the possibility of such damage. Except with respect to each party's indemnification obligations set forth in Section 10 or a breach by either party of its obligations described in Section 8, and excluding amounts due and payable hereunder, neither party's liability under or in connection with this Agreement, shall exceed an amount equal to $16,000,000. This limitation of each party's liability is cumulative, with all payments for claims or damages under or in connection with this Agreement being aggregated to determine satisfaction of the limit. The existence of one or more claims will not enlarge the limit. Notwithstanding any inconsistent provision in any agreement between the parties (including without limitation this Agreement), except with respect to each party's indemnification obligations in Section 10 or a breach by either party of its obligations as described in Section 8 solely with respect to the disclosure of the other party's Confidential Information to third parties, each party hereby agrees that the other party shall have no liability of any kind to the other, and releases all claims against the other party and its affiliates and its and their employees, shareholders, directors, officers, agents, representatives, administrators, predecessors, successors and assigns, whether in contract or tort, or known, unknown or unsuspected, for any activities related to developing, providing, using, or in connection with, the iPIX Images, iPIX Technology, Services, eBay Image Services, eBay Rimfire Technology, Rimfire Technology, Photo-Album Technology or transitioning the eBay Rimfire Services to eBay that occurred prior to the effective date of Amendment No. 3, other than liability for payments due and payable in accordance with Section 5. Each party hereby waives any and all rights and benefits conferred by the provisions of Section 1542 of the Civil Code of the state of California ("Section 1542") and any other similar provision under applicable law. Section 1542 reads as follows: `A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.' " 12. ADDITIONAL PRESS RELEASE. The following new Section 13.3.1 is hereby added to the Agreement: "13.3.1 Additional Press Release. Any proposed press release concerning the substance of Amendment No. 3 must be pre-approved by both parties, which approval shall not be unreasonably withheld. A reasonable time, which shall not be less than three business days, before the press release is to be released, iPIX will provide eBay with a draft of such proposed press release, and eBay will then promptly review and comment on same." 13. ASSIGNMENT. The following text is hereby added to the end of Section 13.8: "Upon the expiration date or the effective date of termination, the foregoing restrictions shall no longer apply. Thereafter, this Agreement may not be assigned by either party, except as part of a corporate reorganization, consolidation, merger or sale of substantially all assets reasonably related to the subject matter of this Agreement or all stock of the assigning party, and the assigning party shall provide notice of such assignment to the other party. In any sale, transfer, assignment, or other disposition of the technology licensed to eBay hereunder, iPIX shall assign this Agreement to the acquiror of such technology and the acquiror will expressly agree in writing to be bound by the provisions hereof. Any attempted transfer or assignment in violation of the provisions of this Section will be void. This Agreement shall inure to the benefit of and be binding upon the successors of the parties." 14. NAMED CONTACTS. In addition to modifications to the Agreement, the parties hereby amend their March 17, 2003 Mutual Nondisclosure Agreement ("NDA") to delete the second paragraph of Section 2 of the NDA. 15. Except as provided in this Amendment, all terms and conditions set forth in the Agreement shall remain in full force and effect. In the event any provision or term of this Amendment conflicts with a provision or term in the Agreement or any prior Amendments thereto, the provision(s) or term(s) of this Amendment shall control and supercede any such conflicting provision(s) or term(s). IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to the Agreement as of the effective date set forth above. eBay: iPIX: eBay Inc. Internet Pictures Corporation /s/ Jeff Jordan /s/ Paul Farmer - ------------------------------ ------------------------------------ Authorized Signature Authorized Signature Jeff Jordan Paul Farmer - ------------------------------ ------------------------------------ Printed Name Printed Name Senior Vice President Chief Financial Officer - ------------------------------ ------------------------------------ Title Title June 27, 2003 June 27, 2003 - ------------------------------ ------------------------------------ Date Date EX-99.1 4 g83605exv99w1.txt EX-99.1/PRESS RELEASE EXHIBIT 99.1 [IPIX LOGO] MEDIA CONTACT: Jeanne Hornung Connecting Point Communications (415) 442-4038 JEANNE.HORNUNG@CONNECTINGPOINTCOMM.COM IPIX CONTACT: Paul Farmer (925) 242- 4002 PAUL.FARMER@IPIX.COM IPIX LICENSES ITS RIMFIRE IMAGING TECHNOLOGY TO EBAY SAN RAMON, CA/ OAK RIDGE, TN - June 27, 2003 - Internet Pictures Corporation (NASDAQ): IPIX) a leader in mission-critical imaging solutions and provider of the Rimfire photo hosting-technology used by many eBay sellers, today announced an amendment to its licensing agreement with eBay. "Our relationship with eBay over the last three years has proven that iPIX has world class competence in managing content for high-volume, high availability e-commerce," said Don Strickland, iPIX's president and CEO. "We believe that we are well positioned to expand our markets for Rimfire Imaging services across on-line and off-line image-based services with key focus on publishing, automotive, real estate and financial services such as credit card personalization." iPIX and eBay have amended their current commercial agreement that is scheduled to expire on September 30, 2003. The amended agreement includes a perpetual non-exclusive license to the Rimfire imaging technology and addresses additional potential consideration for certain other transition activities and contingencies. The amendment was filed today on a Form 8-K by iPix. "With our current financial position and the consideration we expect to receive from eBay under the licensing agreement," added Strickland, "we believe the company is well positioned to pursue both its Rimfire services and immersive technology businesses." ABOUT IPIX Internet Pictures Corporation (iPIX(R)) provides mission-critical imaging solutions for commerce, communication and security applications. The Company's solutions create, process and manage a rich variety of media including still images, 360-degree by 360-degree immersive images, video, text and audio. iPIX is the largest online image management and distribution company in the world and currently serves over a billion image views and two million image submissions. iPIX's intellectual property covers patents for immersive imaging, video and surveillance applications. The Company is headquartered in Oak Ridge, Tennessee, with co-headquarters in San Ramon, California. www.ipix.com # # # NOTE: Internet Pictures and iPIX are trademarks and service marks of Internet Pictures Corporation. All other copyrights and trademarks remain the property of their respective owners. This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbors under those sections. In some cases, you can identify forward-looking statements by terminology such as "expect," "believe," "may," "will," "plans" and "anticipate," or the negative of such terms or comparable terminology. Forward-looking statements appearing herein include statements concerning operating and profitability plans and goals and restructuring efforts, and are based on current expectations. Actual results may differ materially from those projected in the forward-looking statements based upon a number of factors including (i) the loss of existing, or an inability to attract new iPIX customers (ii) changes in the demand for iPIX products and services, (iii) technological changes and (iv) general economic, financial or market changes or developments. The matters discussed in this press release also involve risks and uncertainties described from time to time in Internet Pictures Corporation's filings with the Securities and Exchange Commission. In particular, see "Risk Factors" in the Company's annual report on Form 10-K filed with the SEC on March 31, 2003 and "Management's Discussion and Analysis" in the Company's quarterly report on Form 10-Q filed with the SEC on May 13, 2003 (www.sec.gov). Interested persons should also refer to information contained in iPIX's Form 8-K filed on June 27, 2003. -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                    EXHIBIT 10.1

                                 AMENDMENT NO. 3
                                     TO THE
                        VISUAL CONTENT SERVICES AGREEMENT
                                     BETWEEN
                                  EBAY AND IPIX

                          EFFECTIVE AS OF JUNE 27, 2003

This Amendment No. 3 ("Amendment") to the Visual Content Services Agreement
dated April 19, 2000, as previously amended ("Agreement"), by and between eBay
Inc. ("eBay") and Internet Pictures Corporation ("iPIX") modifies and amends the
Agreement as set forth below.

WHEREAS, the Agreement is scheduled to expire on September 30, 2003, subject to
certain post-termination obligations; and

WHEREAS, eBay is in the process of developing technology to support image
services ("eBay Image Services"); and

WHEREAS, eBay and iPIX desire to migrate eBay's customer base from the
eBay-specific "Rimfire" technology-based service currently operated by iPIX to
the eBay Image Services; and

WHEREAS, eBay and iPIX desire to minimize any risks of service degradation
during this transition;

NOW, THEREFORE, eBay and iPIX agree to amend the Agreement as follows:

Unless otherwise defined herein, all terms used in this Amendment shall retain
the same meanings as defined in the Agreement.

1.       DEFINITIONS.  The following Sections 1.15.1, 1.15.2, 1.22.1, 1.22.2,
and 1.25.1, and the attached Schedule L, are hereby added to the Agreement:

         "1.15.1 'eBay Rimfire Technology' means the current server and client
         technology deployed in production or used by iPIX (including without
         limitation the existing applicable object code, source code, scripts,
         Plug-Ins, Help Tools, specifications, architecture description, and
         documentation) to provide the Basic Service and the Enhanced Services
         (the "eBay Rimfire Services") on the effective date of Amendment No. 3,
         and on the two subsequent delivery dates set forth in Section 2.6(c)
         (Delivery of Technology), including without limitation the technology
         described in detail on Schedule L, Sections A and D.

         1.15.2 'Rimfire Technology' means the next generation of server and
         client Rimfire technology currently deployed in pre-production and
         available for eBay (including without limitation the applicable object
         code, source code, scripts, Plug-Ins, Help Tools, specifications,
         architecture description, and documentation) on the effective date of
         Amendment No. 3, and on the two subsequent delivery dates set forth in
         Section 2.6(c) (Delivery of Technology), including without limitation
         the technology described in detail on Schedule L, Sections B and D.

         1.15.3 'Photo-Album Technology' means the technology (including without
         limitation any object code, source code, scripts, specifications,
         architecture description, and documentation) developed by iPIX in
         conjunction with eBay and for the benefit of eBay as of the effective
         date of Amendment No. 3 that was intended to enable end users to manage
         multiple digital images and to relate those images to their respective
         eBay auction listings, including without limitation the technology
         described in detail on Schedule L, Section C.



         1.22.1 'Parallel Transition Services' means the services to be provided
         by iPIX to eBay described in Section 2.3 (Parallel Transition
         Services).

         1.22.2 'Migration Services' means the services to be provided by iPIX
         to eBay described in Section 2.4 (Migration Services).

         1.22.3 'Support Services' means the services to be provided by iPIX to
         eBay described in Section 2.5 (Support Services).

         1.25.1 'Operations Termination Date' means the date on which any
         Service Extension services, Parallel Transition Services, Migration
         Services and Support Services have been completed."

2.       TRANSITION SERVICES.  The following Sections 2.3, 2.4, 2.5, 2.6, and
2.7, and the attached Schedule K, are hereby added to the Agreement, and
Sections 3.1 and 3.2 are amended as set forth below:

(A) New Sections:

         "2.3  Parallel Transition Services.

         (a) Timing. Beginning on the effective date of Amendment No. 3, iPIX
         will begin providing the services described in this Section 2.3 to eBay
         and will continue during the Term of this Agreement to provide such
         services until the date eBay provides formal notice to iPIX that eBay
         will no longer route Customer Image submissions to iPIX and that iPIX
         will service only view requests for previously submitted Customer
         Images (the "Cut-Over Date"), subject to extension at eBay's option
         pursuant to Section 2.7 (Service Extension). As of the effective date
         of Amendment No. 3, the parties expect the Cut-Over Date to be on or
         before September 30, 2003.

         (b) Services.

         (i) iPIX will cooperate fully and promptly with eBay to (A) develop and
         implement a detailed, reasonable technical plan mutually agreeable to
         the parties, in accordance with Schedule K, Section A, for the parallel
         operation of the eBay Rimfire Services with the eBay Image Services
         (the "Parallel Processing Plan") in order to enable a smooth, orderly,
         and effective transition of services for Customers to the eBay Image
         Services and (B) operate the eBay Rimfire Services (including without
         limitation support for submission and viewing) in parallel with eBay's
         operation of the eBay Image Services, in accordance with the Parallel
         Processing Plan and in compliance with the Performance Standards.

         (ii) iPIX will provide the Parallel Transition Services described in
         this Section 2.3, in Schedule K, Section A, in the Parallel Processing
         Plan, and in any amendments to the Parallel Processing Plan that eBay
         may reasonably request, in a manner that ensures that the eBay Rimfire
         Services continue to meet the Performance Standards through the end of
         any Service Extension.

         Without limiting the foregoing, iPIX will (A) assist eBay in
         implementing the Parallel Processing Plan and (B) with respect to any
         agreement between iPIX and any third party that may conflict with
         iPIX's obligations under this Agreement as amended, use its
         commercially reasonable efforts to so amend, or obtain such a waiver or
         consent as required to enable iPIX's performance hereunder.

         2.4  Migration Services.

         (a) Migration Path. Beginning on the effective date of Amendment No. 3
         or a subsequent date (if so requested by eBay), through the Operations
         Termination Date, iPIX will (i) collaborate with eBay to develop and
         implement a detailed, reasonable technical plan mutually agreeable to
         the parties, in accordance with Schedule K, Section B, for the
         Migration Services ("Migration Plan"), (ii) collaborate with eBay to
         map the locations of any data (including Images) stored by iPIX after


         the Cut-Over Date to the systems used by eBay for the eBay Images
         Services, (iii) assist eBay in migrating data from iPIX's servers to
         eBay's servers (including "re-list" data), as requested by eBay, (iv)
         electronically or photonically deliver to eBay, in the format(s) and at
         the times reasonably requested by eBay, copies of all of the Images and
         related data stored by iPIX and train eBay regarding the types of data
         it stores as well as the procedures for modifying or reformatting such
         data, (v) otherwise perform the services set forth in the Migration
         Plan, and (vi) when requested by eBay at the end of the migration and
         transition process, disassemble the systems used for providing the eBay
         Rimfire Services ("eBay Rimfire Systems") and deliver the Other Assets
         which eBay has elected to purchase and the components of the eBay
         Rimfire Systems which eBay already owns to eBay, unless eBay has
         invoked the "Go Green Contingency," as defined below. IPIX shall not be
         in breach of any of the obligations in this Section to the extent its
         failure to perform results from any action or inaction by eBay.

         (b) Go-Green Contingency. eBay shall have the option to request, at any
         time after September 1, 2003 and before October 31, 2003, that iPIX
         extricate those systems used to provide services for other iPIX
         customers from the eBay Rimfire Systems and provide the eBay Rimfire
         Systems (as an operating whole and in their current location) to eBay
         and provide eBay employees with any additional training regarding the
         operation of the eBay Rimfire Systems reasonably requested by eBay (the
         "Go-Green Contingency"). The parties have not prepared a Go-Green
         Contingency implementation plan as of the effective date of Amendment
         No. 3. Immediately upon request by eBay, the parties will use their
         best efforts to promptly agree on a Go-Green Contingency plan (the
         "Go-Green Contingency Plan") to be implemented in accordance with the
         following framework:

         (i) In order to invoke the Go-Green Contingency, eBay must also invoke
         a Service Extension in accordance with Section 2.7 (Service Extension)
         for a period which shall be the shorter of four months from the date of
         eBay's invocation of the Go-Green Contingency or until February 1,
         2004.

         (ii) eBay shall additionally pay iPIX two million dollars ($2,000,000)
         to implement the Go-Green Contingency, which payment includes the
         acquisition of any hardware or software needed to replicate portions of
         the eBay Rimfire Systems used to provide services to other iPIX
         customers.

         (iii) eBay shall purchase any asset on Schedule N ("Other Assets")
         which is part of the eBay Rimfire Systems when eBay invokes the
         Go-Green Contingency. The then-current version of Schedule N may only
         be modified by iPIX, in the event eBay invokes the Go-Green
         Contingency, to account for repair and maintenance requirements, such
         as reconfiguring or adding equipment to remedy an equipment failure.
         eBay shall be responsible for purchasing, and will own, any additional
         equipment necessary to scale the capacity of the eBay Rimfire Systems
         to eBay's then-current needs.

         (iv) iPIX shall provide (1) knowledge transfer services regarding
         operation of the eBay Rimfire Systems and (2) software and hardware
         maintenance and support related to the eBay Rimfire Technology in
         conformance with the performance criteria and the service level
         guarantees in Schedule K, Section D.1 in a manner that is designed to
         enable the eBay Rimfire Services to continue to meet the Performance
         Standards when operated by eBay.

         2.5 Support Services. Beginning on the effective date of Amendment No.
         3 through the end of the Term:

         (a) Consulting. iPIX will provide consulting services related to the
         eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album
         Technology in accordance with Schedule K, Section C.

         (b) Code Walk-Through. Upon request by eBay (but no more than a total
         of three times and not after the Operations Termination Date), iPIX
         will perform a "code walk-through" (anticipated not




         to exceed two days) of the eBay Rimfire Technology, the Rimfire
         Technology, and the Photo-Album Technology with technical
         representatives of eBay.

         (c) Delivery of Technology. iPIX will electronically or photonically
         deliver a copy of each of the eBay Rimfire Technology, the Rimfire
         Technology, and the Photo-Album Technology to eBay in all its current
         forms (i.e., object code, source code and script forms, etc.) and in
         its then-current version on or about each of the following dates: upon
         execution of Amendment No. 3, upon one request by eBay at any time
         prior to the termination or expiration of the Agreement, and on the
         Operations Termination Date. Unless eBay invokes the Go-Green
         Contingency, iPIX will have no further obligation to deliver any
         versions of the eBay Rimfire Technology, the Rimfire Technology, and
         the Photo-Album Technology or any corrections, modifications, updates
         or enhancements thereof.

         2.6 iPIX Employees. In addition to its other obligations in the
         Agreement, iPIX will ensure that it retains sufficient personnel to
         provide the services described in the Agreement through the Operations
         Termination Date. Although the Parallel Transition Services, the
         Migration Services and the Support Services may require significant
         commitment and attention by iPIX personnel, neither party contemplates
         that such services will require iPIX to hire additional personnel
         (other than in order to replace personnel whose employment terminates)
         or to incur significant incremental expenses outside the ordinary
         course of business.

         2.7 Service Extension. eBay may, in its discretion, extend the Cut-Over
         Date or any or all of the services after September 30, 2003 upon
         fifteen days notice for the first extension and thirty days notice
         thereafter, on a month to month basis, for up to four months (the
         "Service Extension"). Upon any such extension, iPIX will (continue to)
         provide the applicable service to eBay for the applicable period for
         the fees set forth in Section 5.10(b); provided however, that, during
         any Service Extension, iPIX will not be required to accept submissions
         of (a) more than 2.5 million images per day or (b) more than a maximum
         of 66,106 image submissions per peak 15-minute period."

(B) Amendment of Sections 3.1 and 3.2:

         (1) Section 3.1 of the Agreement is hereby deleted in its entirety and
         replaced with the following:

         "3.1     Performance Standards. iPIX will ensure that the provision of
         the Services meets the criteria described in Exhibits A and B."

         (2) Section 3.2 of the Agreement is hereby deleted in its entirety.

3.       EQUIPMENT AND FACILITIES.

         3.1      MASTER LEASE EQUIPMENT.  Subject to (a) iPIX `s performance to
         eBay's reasonable satisfaction of the Parallel Transition Services, the
         Migration Services, and the Support Services and (b) iPIX's timely
         payment of the fees required to reduce the outstanding principal under
         the parties' Master Lease Agreement dated September 26, 2001 (including
         all the leases scheduled thereunder ("Master Lease")) to the balance
         due on September 30, 2003 (which as of the effective date of Amendment
         No. 3 is $1,197,838.00, but which will be adjusted in accordance with
         the terms of the Master Lease to account for the value of certain
         equipment decommissioned by iPIX), iPIX's obligation to make any
         additional payments under the Master Lease after such payment will be
         suspended. In addition, subject to iPIX's performance to eBay's
         reasonable satisfaction of the Parallel Transition Services, Migration
         Services and the Support Services during any Service Extension, upon
         the Operations Termination Date, eBay will waive its right to receive
         any additional lease payments under the Master Lease and execute a
         document (in a mutually agreeable form to be attached as Schedule M
         within two weeks of the effective date of Amendment No. 3) terminating
         the Master Lease as of the completion of the Migration Services.



         3.2      OTHER ASSETS.  eBay will review the inventory of other assets
         (including equipment, software, and maintenance agreements) used by
         iPIX to provide the eBay Rimfire Services as described on Schedule N
         ("Other Assets"). Schedule N, which is a complete list (as of the
         effective date of Amendment No. 3) of each of the Other Assets and the
         applicable net book value of same, is hereby added to the Agreement.
         iPIX may amend Schedule N at any time on reasonable written notice to
         eBay. eBay will have the right, but not the obligation, to purchase all
         or some of the Other Assets at each of such Other Assets' net book
         value as of the Operations Termination Date in accordance with an
         appropriate purchase agreement to be negotiated and executed by the
         parties. iPIX will maintain its then-current eBay Rimfire Services
         systems hardware, software, facilities and telecommunications
         environment (as a whole) until the Operations Termination Date. iPIX
         will not sell or transfer operation of the Other Assets to any third
         party until after the Operations Termination Date.

         3.3      IPIX OBLIGATIONS TO QWEST. eBay will, in good faith, use its
         reasonable efforts to assist iPIX in terminating or renegotiating its
         contractual obligations to Qwest Communications International, Inc.
         ("Qwest") under iPIX's Qwest Total Advantage Agreement with Qwest dated
         January 16, 2003 ("Qwest Agreement") to be effective as of September
         30, 2003. The parties shall cooperate to approach Qwest as soon as
         possible to begin discussions of such renegotiation or termination. If
         such obligations are not terminated as of the Operations Termination
         Date, eBay may choose, in its discretion, to assume some or all of
         iPIX's contractual obligations to Qwest under the Qwest Agreement.

         3.4      REFERENCE ACCOUNT.  eBay agrees to serve as a reference
         customer for iPIX's TSG business, subject to eBay's prior written
         approval of any materials in which iPIX may refer to eBay.





4.       EXCLUSIVITY WAIVER.  The following provision is added to the end of
Section 4.3 of the Agreement:

         "iPIX waives the application of the provisions of Section 4.3 and
         Exhibit D with respect to any of the eBay activities contemplated by
         Amendment No. 3."

5.       PAYMENTS.   Each party will continue to pay the fees otherwise due and
payable to such party under the Agreement through September 30, 2003. eBay has
no intention of changing any of the fees it currently charges for image
services, or imposing fees on any image services it currently offers at no
charge, through September 30, 2003, and will pay iPIX for Enhanced Services in
accordance with Section 5.3 (Enhanced Services Payments) through September 30,
2003. Except as provided under Section 3.1 (Master Lease Equipment) of Amendment
No. 3, Section 3.2 (Other Assets) of Amendment No. 3, or new Sections 2.4(b)
(Go-Green Contingency), 5.9 (License and Transition Services Fees) or 5.10
(Miscellaneous Fees), no fees will accrue to either party after September 30,
2003. The following Sections 5.9 and 5.10 are hereby added to the Agreement:

         "5.9 License and Transition Services Fees. eBay will pay iPIX an
         aggregate total of eight million dollars ($8,000,000), in consideration
         for the licenses granted and services provided to eBay under this
         Agreement, as provided in this Section 5.9.

         (a) License Fee. eBay will pay iPIX a first license fee payment of
         three million dollars ($3,000,000) upon execution of Amendment No. 3 to
         the Agreement, eBay's receipt of a legal opinion in a form satisfactory
         to eBay and the release of all liens on the eBay Rimfire Technology,
         Rimfire Technology and Photo-Album Technology in a form satisfactory to
         eBay. Upon payment of this fee, the license granted under Section 7.6
         (License to Rimfire Technology and Photo-Album Technology) will be
         perpetual and irrevocable, notwithstanding any other provision in this
         Agreement to the contrary.

         (b) Additional License Fees. eBay will pay iPIX a second license fee
         payment of three million dollars ($3,000,000) on October 1, 2003,
         subject to iPIX's performance to eBay's reasonable satisfaction through
         such date of the Parallel Transition Services, the Migration Services
         or the Support Services. eBay will pay iPIX a third license fee payment
         of two million dollars ($2,000,000) upon completion of the Migration
         Services.

         5.10 Miscellaneous Fees.

         (a) iPIX Bandwidth Fees. iPIX will be solely responsible for payment of
         all bandwidth costs associated with any and all services provided by it
         under this Agreement.

         (b) Service Extension Fees. If eBay exercises its Service Extension
         option described in Section 2.7 (Service Extension), eBay will pay iPIX
         (i) $450,000 for each month eBay elects to extend the services provided
         by iPIX and (ii) $0.015 for each Image submitted in excess of 12
         million per month. If applicable, iPIX will invoice eBay for the
         foregoing fees at the end of each month of the Service Extension. eBay
         will pay such invoices within 20 days of receipt."

6.       TERMINATION.  Section 6 of the Agreement is hereby amended as follows:

         6.1      Section 6.1 of the Agreement is hereby deleted and replaced
                  with the following:

                  "6.1 Term. The term of the Agreement will commence on the
                  Effective Date and shall continue until the Operations
                  Termination Date, with the first `Deal Quarter' commencing on
                  April 1, 2000."

         6.2      iPIX hereby waives all of its rights under Section 6.2 of the
                  Agreement.

         6.3      Section 6.3 is hereby deleted in its entirety and replaced
                  with:



                  "6.3 Termination for Breach. Unless otherwise agreed in
                  writing between the parties, a party may terminate this
                  Agreement in the event the other party breaches a material
                  term, condition or representation of this Agreement, and fails
                  to remedy such default within 30 days after being notified by
                  the non-breaching party of such breach or failure. The failure
                  by iPIX to meet any of the Performance Standards, other than
                  from a failure resulting from eBay's act or failure to act,
                  shall constitute a material breach of this Agreement, subject
                  to the following additional exception:

                  (a) The parties will cooperate to minimize the potential
                  impact of any Parallel Transition Services or Migration
                  Services on the performance of the eBay Rimfire Services or
                  iPIX's ability to meet the Performance Standards. iPIX will
                  promptly notify eBay if iPIX believes an eBay request for
                  specific Parallel Transition Services or Migration Services
                  will have a potentially adverse impact on the eBay Rimfire
                  Services or iPIX's ability to meet the Performance Standards,
                  specifying in reasonable detail the expected causes and scope
                  of such potential degradation. If eBay then requests that iPIX
                  nevertheless perform the applicable service, any failure by
                  iPIX to meet the Performance Standards caused by performing
                  the applicable service as requested by eBay shall not
                  constitute a material breach of this Agreement and shall not
                  constitute grounds for eBay to determine that iPIX has not
                  performed any Parallel Transition Services or Migration
                  Services to eBay's reasonable satisfaction in connection with
                  the suspension or waiver of iPIX's payments under the Master
                  Lease in accordance with Section 3.1 or eBay's payment
                  obligations in Section 5.9."

         6.4. Section 6.4(b) of the Agreement is hereby deleted in its entirety.

         Section 6.4(c) of the Agreement is hereby deleted in its entirety and
         replaced with the following:

                  "(c) Except for the eBay Rimfire Technology, the Rimfire
                  Technology, and the Photo-Album Technology, eBay will cease
                  all use of the iPIX Technology."

         Section 6.4(d) of the Agreement is hereby deleted in its entirety and
         replaced with the following:

                  "(d) Each party will promptly destroy or return any
                  Confidential Information of the other party in its possession,
                  including, in iPIX's case, eBay's Customer Information.
                  Notwithstanding the foregoing sentence, however, eBay may
                  indefinitely retain copies of the eBay Rimfire Technology, the
                  Rimfire Technology, the Photo Album Technology, and any other
                  information provided as part of the Parallel Transition
                  Services or the Migration Services or the Support Services."

         The paragraph at the end of Section 6.4 of the Agreement is hereby
         deleted.

         6.5    Section 6.5 of the Agreement is hereby deleted in its entirety
and replaced with the following:

         "6.5 Survival of Certain Terms. The provisions of the following
         sections will survive any expiration or termination of the Agreement: 1
         (Definitions), 5.6 (Payment Terms; Taxes), 5.8 (Inspection of Records),
         6.4 (Effects of Termination), 6.5 (Survival of Certain Terms), 7.1(a)
         (Ownership), 7.2(a), 7.2(b)(iii), 7.2(b)(iv), 7.3(a)(i), 7.3(a)(iii),
         7.3(b)(i), 7.4 (Limitation on Grant of Rights), 7.6 (License to Rimfire
         Technology and Photo-Album Technology), 8 (Confidentiality), 9
         (Representations and Warranties), 10 (Indemnification), 11 (Limitation
         of Liability), and all of 13 (General Provisions) except for Section
         13.1. Except as otherwise expressly provided herein, all other rights
         and obligations of the parties will cease upon expiration or
         termination of the Agreement."

7.       LICENSES.



         7.1      MODIFICATION TO EXISTING LICENSES.  Section 7.1(a) is hereby
deleted in its entirety and replaced with the following:

         "(a) Ownership. All iPIX Technology (including the eBay Rimfire
         Technology, the Rimfire Technology, and the Photo-Album Technology),
         all Images created prior to the Operations Termination Date ("iPIX
         Images"), and Help Tools (as well as any modifications to the foregoing
         made by eBay prior to the effective date of Amendment No. 3) are, and
         at all times will remain, the exclusive property of iPIX (or, in the
         case of iPIX Images, their submitters), and no provision of this
         Agreement implies any transfer to eBay of any ownership interest in the
         iPIX Technology, Help Tools, or iPIX Images. The licenses set forth in
         this Agreement confer neither title to, nor ownership in, the iPIX
         Technology, Help Tools or iPIX Images and are not a sale of any rights
         therein. Subject to iPIX's ownership of the iPIX Technology, Help
         Tools, and iPIX Images, any modifications or derivative works, made by
         eBay at any time after the effective date of Amendment No. 3, of the
         eBay Rimfire Technology, the Rimfire Technology, the Photo-Album
         Technology, or Images ("eBay Modifications"), shall be owned by eBay,
         including without limitation all right, title and interest (including
         any copyrights, trade secrets, patent rights, moral rights, contract
         rights and licensing rights worldwide) in and to the foregoing. iPIX
         represents and warrants that it has all rights necessary to grants the
         licenses granted under this Agreement, except that it makes no
         representation or warranty with respect to iPIX Images, which are the
         property of the Customers submitting them."

         7.2      RESTRICTIONS.  Sections 7.1(b)(i) and 7.1(b)(iii) are hereby
deleted in their entirety. Former Section 7.1(b)(ii) is hereby renumbered as
7.1(b)(i) and former Section 7.1(b)(iv) is hereby renumbered as Section
7.1(b)(ii).

         7.3      RIMFIRE AND PHOTO-ALBUM TECHNOLOGY.  The following Section
7.6 and the attached Schedule O (Companies) are hereby added to the Agreement:

         "7.6 License to Rimfire Technology and Photo-Album Technology. As a
         license grant that is separate and independent of any license granted
         under Section 7.1, iPIX hereby grants eBay a perpetual, irrevocable
         (subject solely to payment of the license fee in Section 5.9(a) and
         notwithstanding any provision in the Agreement to the contrary),
         nonexclusive, fully-paid, royalty-free, worldwide license, including
         without limitation, any copyrights, trade secrets, patent rights, moral
         rights, contract rights and licensing rights worldwide, to use,
         reproduce, distribute, display, perform and digitally perform, modify,
         create derivative works of, and in any way exploit the eBay Rimfire
         Technology, the Rimfire Technology, the Photo-Album Technology, and the
         Images to make, have made, sell, offer to sell, import, and use any
         product or service as a part of eBay's or its affiliates' business,
         including the right (a) to sublicense such rights to eBay affiliates
         and third parties for the purpose of providing support to eBay or its
         affiliates and (b) to sublicense any eBay customer to use the Images
         and the object code version of any end user components (including
         without limitation Scripts, Help Tools, and Plug-Ins) in such
         technology. Notwithstanding anything to the contrary herein, eBay will
         not sublicense or resell to any third parties the eBay Rimfire
         Technology, the Rimfire Technology or the Photo-Album Technology
         (except as permitted in clauses (a) and (b) above) in the form of
         software code unless such technology is an integral part of a larger
         eBay product to which eBay has contributed the majority of the value.
         For a period of three years after the effective date of Amendment No.
         3, iPIX agrees not to (y) use the eBay Rimfire Technology, the Rimfire
         Technology, the Photo-Album Technology or any other
         functionally-equivalent technology to itself directly enable the
         posting by end users of images to eBay and eBay affiliate marketplaces
         whose domains are in use as of the effective date of Amendment No. 3,
         or (z) license the eBay Rimfire Technology, the Rimfire Technology, the
         Photo-Album Technology or any functionally-equivalent technology to the
         companies listed in Schedule O (Companies)."

         7.4      TRADEMARKS.  The following Section 7.3(a)(iii) is hereby added
to the Agreement:



         "(iii) iPIX hereby grants eBay a nonexclusive, perpetual, irrevocable
         (notwithstanding any provision in the Agreement to the contrary),
         worldwide, royalty-free, fully paid right (with the right to sublicense
         to eBay affiliates) to use the iPIX Marks (a) solely as a part of any
         iPIX watermarks that may appear in any of the Images stored as of the
         termination of the Agreement or (b) as may incidentally appear on
         eBay's (or its affiliates') sites for a reasonable time after eBay's
         transition to the eBay Image Services. In addition, iPIX agrees that it
         will cooperate with eBay to remove, and hereby permits eBay to remove,
         any such iPIX watermarks from any Images."

         7.5      BANKRUPTCY.  The last sentence of Section 11 (Bankruptcy Code)
         of Amendment No. 2 is hereby deleted in its entirety and replaced with
         the following: "Upon written request of eBay to iPIX or the bankruptcy
         trustee, iPIX or the bankruptcy trustee will not interfere with, and
         will fully comply with any restrictions on iPIX with respect to, the
         rights of eBay as provided in this Agreement."

8.       CONFIDENTIALITY. The following Section 8.3 is hereby added to the
         Agreement:

         "8.3 Source Code. The parties acknowledge that the source code being
         provided to eBay under the Agreement ("Source Code") is the valuable
         intellectual property of iPIX. eBay shall maintain the Source Code in
         strictest confidence. In addition to the other obligations of
         confidentiality between the parties, eBay shall take at least those
         measures that eBay takes to protect its own most highly confidential
         source code to protect the Source Code, which procedures eBay
         represents are consistent with best industry practices."

9.       REPRESENTATIONS AND WARRANTIES.

         The following is added at the end of Section 9.1 of the Agreement:

         "iPIX further represents and warrants that the eBay Rimfire Technology
         is all of the software and documentation used by iPIX to perform the
         eBay Rimfire Services and that the eBay Rimfire Technology, when
         operated in the eBay Rimfire Systems environment's then-current
         hardware, software, facilities and telecommunications configuration, is
         capable of meeting the Performance Standards."

         The parties agree that Section 9.2 of the Agreement applies to the eBay
         Rimfire Technology, Rimfire Technology and Photo-Album Technology.

10.      INDEMNITY. The following new Section 10.4 is hereby added to the
         Agreement:

         "10.4 Any Claim arising from facts and circumstances in existence as of
         the Operations Termination Date, including claims with respect to
         Services, shall not be affected by this Section. With respect to Claims
         of third parties arising after the Operations Termination Date, the
         indemnification provisions of Section 10.1 shall apply only to Claims
         arising from the infringement or alleged infringement of a third
         party's worldwide patent, trademark, copyright, trade secret or other
         intellectual property right by the eBay Rimfire Technology, Rimfire
         Technology and Photo-Album Technology licensed under this Agreement as
         delivered to eBay on or before the Operations Termination Date. In
         addition, after the Operations Termination Date, the indemnification
         provisions of Section 10.1 shall not apply to (a) eBay's use of such
         licensed technologies to provide any services other than the Basic
         Service and Enhanced Services as conducted as of effective date of
         Amendment No. 3, (b) to any Claim arising from the combination of such
         licensed technologies with other technologies where such combination is
         the object of the Claim, or (c) any Claim relating solely to any
         modifications or derivative works made by eBay of such licensed
         technologies after their delivery to eBay hereunder."

11.      LIMITATION OF LIABILITY. Section 11 of the Agreement is hereby deleted
         in its entirety and replaced with the following:



         "Except with respect to each party's indemnification obligations set
         forth in Section 10 or a breach by either party of its obligations
         described in Section 8 or a breach by eBay of the scope of the license
         granted by iPIX in Section 7.6, in no event will either party be liable
         to the other for lost profits or any form of indirect, special,
         incidental, or consequential damages of any character from any causes
         of action of any kind with respect to this Agreement whether based on
         breach of contract, tort (including negligence), or otherwise, and
         whether or not the other party has been advised of the possibility of
         such damage. Except with respect to each party's indemnification
         obligations set forth in Section 10 or a breach by either party of its
         obligations described in Section 8, and excluding amounts due and
         payable hereunder, neither party's liability under or in connection
         with this Agreement, shall exceed an amount equal to $16,000,000. This
         limitation of each party's liability is cumulative, with all payments
         for claims or damages under or in connection with this Agreement being
         aggregated to determine satisfaction of the limit. The existence of one
         or more claims will not enlarge the limit.

         Notwithstanding any inconsistent provision in any agreement between the
         parties (including without limitation this Agreement), except with
         respect to each party's indemnification obligations in Section 10 or a
         breach by either party of its obligations as described in Section 8
         solely with respect to the disclosure of the other party's Confidential
         Information to third parties, each party hereby agrees that the other
         party shall have no liability of any kind to the other, and releases
         all claims against the other party and its affiliates and its and their
         employees, shareholders, directors, officers, agents, representatives,
         administrators, predecessors, successors and assigns, whether in
         contract or tort, or known, unknown or unsuspected, for any activities
         related to developing, providing, using, or in connection with, the
         iPIX Images, iPIX Technology, Services, eBay Image Services, eBay
         Rimfire Technology, Rimfire Technology, Photo-Album Technology or
         transitioning the eBay Rimfire Services to eBay that occurred prior to
         the effective date of Amendment No. 3, other than liability for
         payments due and payable in accordance with Section 5. Each party
         hereby waives any and all rights and benefits conferred by the
         provisions of Section 1542 of the Civil Code of the state of California
         ("Section 1542") and any other similar provision under applicable law.
         Section 1542 reads as follows:

                  `A general release does not extend to claims which the
                  creditor does not know or suspect to exist in his favor at the
                  time of executing the release, which if known by him must have
                  materially affected his settlement with the debtor.' "

12.      ADDITIONAL PRESS RELEASE. The following new Section 13.3.1 is hereby
         added to the Agreement:

         "13.3.1 Additional Press Release. Any proposed press release concerning
         the substance of Amendment No. 3 must be pre-approved by both parties,
         which approval shall not be unreasonably withheld. A reasonable time,
         which shall not be less than three business days, before the press
         release is to be released, iPIX will provide eBay with a draft of such
         proposed press release, and eBay will then promptly review and comment
         on same."

13.      ASSIGNMENT. The following text is hereby added to the end of Section
         13.8:

         "Upon the expiration date or the effective date of termination, the
         foregoing restrictions shall no longer apply. Thereafter, this
         Agreement may not be assigned by either party, except as part of a
         corporate reorganization, consolidation, merger or sale of
         substantially all assets reasonably related to the subject matter of
         this Agreement or all stock of the assigning party, and the assigning
         party shall provide notice of such assignment to the other party. In
         any sale, transfer, assignment, or other disposition of the technology
         licensed to eBay hereunder, iPIX shall assign this Agreement to the
         acquiror of such technology and the acquiror will expressly agree in
         writing to be bound by the provisions hereof. Any attempted transfer or
         assignment in violation of the provisions of this Section will be void.
         This Agreement shall inure to the benefit of and be binding upon the
         successors of the parties."



14.      NAMED CONTACTS. In addition to modifications to the Agreement, the
         parties hereby amend their March 17, 2003 Mutual Nondisclosure
         Agreement ("NDA") to delete the second paragraph of Section 2 of the
         NDA.

15.      Except as provided in this Amendment, all terms and conditions set
         forth in the Agreement shall remain in full force and effect. In the
         event any provision or term of this Amendment conflicts with a
         provision or term in the Agreement or any prior Amendments thereto, the
         provision(s) or term(s) of this Amendment shall control and supercede
         any such conflicting provision(s) or term(s).






IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to the
Agreement as of the effective date set forth above.

eBay:                                     iPIX:

eBay Inc.                                 Internet Pictures Corporation

/s/ Jeff Jordan                           /s/ Paul Farmer
- ------------------------------            ------------------------------------
Authorized Signature                      Authorized Signature

Jeff Jordan                               Paul Farmer
- ------------------------------            ------------------------------------
Printed Name                              Printed Name

Senior Vice President                     Chief Financial Officer
- ------------------------------            ------------------------------------
Title                                     Title

June 27, 2003                             June 27, 2003
- ------------------------------            ------------------------------------
Date                                      Date

EX-99.1

                                                                    EXHIBIT 99.1


[IPIX LOGO]

                                                                  MEDIA CONTACT:
                                                                  Jeanne Hornung
                                                 Connecting Point Communications
                                                                  (415) 442-4038
                                          JEANNE.HORNUNG@CONNECTINGPOINTCOMM.COM

                                                                   IPIX CONTACT:
                                                                     Paul Farmer
                                                                 (925) 242- 4002
                                                            PAUL.FARMER@IPIX.COM

              IPIX LICENSES ITS RIMFIRE IMAGING TECHNOLOGY TO EBAY

SAN RAMON, CA/ OAK RIDGE, TN - June 27, 2003 - Internet Pictures Corporation
(NASDAQ): IPIX) a leader in mission-critical imaging solutions and provider of
the Rimfire photo hosting-technology used by many eBay sellers, today announced
an amendment to its licensing agreement with eBay.

"Our relationship with eBay over the last three years has proven that iPIX has
world class competence in managing content for high-volume, high availability
e-commerce," said Don Strickland, iPIX's president and CEO. "We believe that we
are well positioned to expand our markets for Rimfire Imaging services across
on-line and off-line image-based services with key focus on publishing,
automotive, real estate and financial services such as credit card
personalization."

iPIX and eBay have amended their current commercial agreement that is scheduled
to expire on September 30, 2003. The amended agreement includes a perpetual
non-exclusive license to the Rimfire imaging technology and addresses additional
potential consideration for certain other transition activities and
contingencies. The amendment was filed today on a Form 8-K by iPix.

"With our current financial position and the consideration we expect to receive
from eBay under the licensing agreement," added Strickland, "we believe the
company is well positioned to pursue both its Rimfire services and immersive
technology businesses."

ABOUT IPIX

Internet Pictures Corporation (iPIX(R)) provides mission-critical imaging
solutions for commerce, communication and security applications. The Company's
solutions create, process and manage a rich variety of media including still
images, 360-degree by 360-degree immersive images, video, text and audio. iPIX
is the largest online image management and distribution company in the world and
currently serves over a billion image views and two million image submissions.
iPIX's intellectual property covers patents for immersive imaging, video and
surveillance applications.




The Company is headquartered in Oak Ridge, Tennessee, with co-headquarters in
San Ramon, California. www.ipix.com


                                      # # #

NOTE: Internet Pictures and iPIX are trademarks and service marks of Internet
Pictures Corporation. All other copyrights and trademarks remain the property of
their respective owners.

This press release contains forward-looking information within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and is subject to the safe harbors under those sections.
In some cases, you can identify forward-looking statements by terminology such
as "expect," "believe," "may," "will," "plans" and "anticipate," or the negative
of such terms or comparable terminology. Forward-looking statements appearing
herein include statements concerning operating and profitability plans and goals
and restructuring efforts, and are based on current expectations. Actual results
may differ materially from those projected in the forward-looking statements
based upon a number of factors including (i) the loss of existing, or an
inability to attract new iPIX customers (ii) changes in the demand for iPIX
products and services, (iii) technological changes and (iv) general economic,
financial or market changes or developments. The matters discussed in this press
release also involve risks and uncertainties described from time to time in
Internet Pictures Corporation's filings with the Securities and Exchange
Commission. In particular, see "Risk Factors" in the Company's annual report on
Form 10-K filed with the SEC on March 31, 2003 and "Management's Discussion and
Analysis" in the Company's quarterly report on Form 10-Q filed with the SEC on
May 13, 2003 (www.sec.gov). Interested persons should also refer to information
contained in iPIX's Form 8-K filed on June 27, 2003.