Read the 4th paragraph --"....if granted...." TVL HAS NEVER MISLEAD ANYONE ABOUT THIS FACT.
"Rights to the V-Chip Technology
The rights to the V-Chip Technology were transferred by Timothy Collings to a partnership between Mr. Collings, his wife and Simon Fraser University. These rights were again transferred by the partnership to Canadian V-Chip Design Inc. ("CVCD"), a private corporation owned by Mr. Collings, his wife and SF Univentures Corporation, a wholly owned subsidiary of Simon Fraser University. On March 19, 1997, all rights to the V-Chip Technology (other than the related trade-mark and patents (if granted)) were transferred by CVCD to V-Chip Canada Enterprises Inc. ("VCCE"), a wholly-owned subsidiary of CVCD. The trade-mark and patents (if granted) relating to the V-Chip Technology were licensed on an exclusive basis by CVCD to VCCE at that time.
Pursuant to a licence agreement dated May 9, 1996 (the "Canadian Licence Agreement") between CVCD and TVE, CVCD granted to TVE the exclusive Canadian rights to use the V-Chip Technology in television converters, for a twenty year term.
On January 14, 1997, CVCD agreed, in principle, to grant to the Company the worldwide rights to use the V-Chip Technology in connection with the design, development, manufacturing and sale of specified products. Formal agreements providing for the grant of these rights (which supersede the Canadian Licence Agreement) were executed by VCCE, CVCD, TVI and TVE on June 10, 1997 and, as amended by agreement effective December 30, 1997, contain the following terms and conditions:
VCCE (as the purchaser of the V-Chip Technology and licensee of the patents (if granted) and trade-mark rights from CVCD) granted to TVE an exclusive sub-licence in respect of the trade-mark, a sole sub-licence in respect of any patents and an exclusive licence with respect to other intellectual property rights relating to the V-Chip Technology to enable TVE to design, develop, manufacture, market, distribute and sell the V-Chip Technology in specified products anywhere in the world for a twenty year term.
The specified products include (i) television converters (which includes the ViewControlTM V-Chip Decoder), (ii) "Other Devices", which are defined as electronic devices which contain the television converter circuitry and/or functionality, together with audio or video record, play or display capabilities, including televisions, video cassette recorders and laser disk recorders and players, and (iii) certain ASIC devices.
VCCE and CVCD retain all rights to the V-Chip Technology not specifically granted to TVE pursuant to the agreements.
The consideration paid to VCCE for the worldwide rights to the V-Chip Technology was comprised of: (i) a cash payment of $200,000 paid at the time of execution of the formal agreements; (ii) a $1,900,000 promissory note issued at closing bearing interest at 4% per annum, calculated monthly, with principal and interest payable on the earlier of October 1, 1997 and 10 days after the completion of the next public offering or private placement of securities by TVI (which date has been extended by agreement of the parties to no later than April 15, 1998); (iii) the issuance at closing of 3,600,000 Common Shares of TVI; and (iv) a fee in respect of each individual sale of a product containing the V-Chip Technology, payable monthly, the amount of which varies depending on the type of product sold. The 3,600,000 common shares of TVI issued to VCCE have been placed in escrow and are to be released based on the cash-flow generated by the V-Chip Technology. See "Escrow Arrangements".
TVI guarantees the payment obligations of TVE under the promissory note.
|
