EXHIBIT 10.3
PATENT AND TRADEMARK SUBLICENSE AGREEMENT BETWEEN AURORA
MARKETING INC. AND INTERACTIVE PROCESSING, INC. DATED APRIL 17, 1996
PATENT AND TRADEMARK SUBLICENSE
THIS SUBLICENSE is made this __17__ day of __April___, 1996, by and
between AURORA MARKETING INC., an Irish corporation ("Sublicensor") and
INTERACTIVE PROCESSING, INC., a Nevada corporation ("Sublicensee").
RECITALS
A. Sublicensor is the licensee of Amoeba Corporation ("Licensor"), and
has the right to grant a sublicense with respect to an invention entitled TV
Terminator, described generally as an interactive universal remote control,
including United States Patent Number 5,253,068 and Canadian patent number
2,107,736, and under any divisions, continuations, and continuations-in-part
thereof, and under any patents that may issue thereon or any reissues or
extensions thereof ("Amoeba Patent").
B. Sublicensor is or will be utilizing the marks TV Terminator, TVT and
The Fazer, and other marks that may be developed, in connection with the Amoeba
Patent ("Trademarks").
C. Sublicensee is desirous of securing and Sublicensor is willing to
grant, a non-exclusive license for the development, manufacture, marketing,
distribution, and sale of products based in whole or in part on the Amoeba
Patent and all improvements and developments pertaining thereto ("Licensed
Products") to Sublicensor, or its affiliates, subject to the terms and
conditions contained herein.
D. Sublicensee is desirous of securing and Sublicensor is willing to
grant, a license for use of the Trademarks in connection with the Licensed
Products only, subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. GRANT OF LICENSE.
X. XXXXX. Sublicensor hereby grants to Sublicensee an
exclusive license within the territory identified in subparagraph 1.c to
develop, make, have made, use, modify, market, manufacture, distribute, and sell
Licensed Products; and to use the Trademarks and any trade names, trademarks,
service marks and the like utilized by Sublicensor in the manufacture, sale and
distribution of Licensed Products ("Intellectual Property"). This grant shall
include all rights of Sublicensor, whether presently existing or hereafter
arising, and whether scheduled in this Agreement or not. Sublicensee may use the
Trademarks in product labels, tags, containers, displays, publicity,
advertising, telephone listings,
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electronic data interchange (including on-line services), business names, signs
or in any other manner whatsoever without the prior written approval of
Sublicensor.
B. NEW INVENTION PRODUCTS. The parties acknowledge that new or
modified versions of the Licensed Products ("New Invention Products") other than
as defined herein are anticipated. Any New Invention Products shall be the
exclusive property of Licensor, whether or not developed by Licensor and whether
or not Licensor's trade secrets are used to develop the New Invention Products;
provided that such New Invention Products shall be deemed to be within the
license granted hereunder.
C. REGION. The territory within which this exclusive license
is valid is: All of Europe, including the United Kingdom; Russia; and all
republics which were part of the former Soviet Union.
2. PAYMENT AND ROYALTY. In consideration for the grant of the
license hereunder Sublicensee shall:
a. Issue to Sublicensor Nine Hundred Thousand (900,000) shares
of the common stock of Sublicensee (the "Shares"), free and clear of all liens
and encumbrances, representing Nine and 65/100ths percent (9.65%) of the issued
and outstanding and reserved common stock of Sublicensee; and
b. Pay Sublicensor royalties on gross sales of the Licensed
Products and any New Invention Products during the term of this license. Such
royalties shall be paid quarterly within thirty (30) days after the first days
of January, April, July, and October of each year during the continuance of this
Agreement for the prior three (3) calendar months (except that the first such
report shall cover only the portion of the quarter between the date of this
Agreement and the end of the quarter), and shall be equal to One and 50/100
Dollars ($1.50) per unit of Licensed Products sold; and
c. In the event of a sublicense granted in accordance with the
terms of this Agreement Sublicensor shall be paid a royalty of One and 50/100
Dollars ($1.50) per unit of Licensed Products sold by or through such
sublicensee (or other arrangement), unless agreed otherwise by Sublicensor in
writing in connection with the sublicense.
3. TITLE; WARRANTY. This Agreement shall not act to transfer title or
ownership of the Amoeba Patent, Trademarks or Intellectual Property. Sublicensor
warrants it has a valid license to use and sublicense, with Licensor's
permission, the Amoeba Patent, Trademarks and Intellectual Property, no
knowledge of conflicting claims to the Amoeba Patent, Trademarks and
Intellectual Property and that the Amoeba Patent, Trademarks and Intellectual
Property do not infringe the rights of any other person.
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4. RECORDS. Sublicensee shall keep full and accurate records and books
of account showing the manufacture, inventory and sale quantities and the
selling prices of the Licensed Products. Any accountant authorized in writing by
Sublicensor shall be given access to such records and books at all reasonable
times. Any inspection or audit of the records by Sublicensor or its agent shall
be at the expense of Sublicensor unless such shall disclose a discrepancy of two
percent (2%) or more. Quarterly, within thirty (30) days after the first days of
January, April, July, and October of each year during the continuance of this
Agreement, Sublicensee shall render written reports to Sublicensor stating in
each such report the quantities and net selling prices of all Licensed Products
sold and manufactured by Sublicensee during the preceding three (3) calendar
months, except that the first such report shall cover only the portion of the
quarter between the date of this Agreement and the end of the quarter. Each such
report shall be accompanied by remittance in full covering the royalties shown
thereby to be due Sublicensor. Licensed Products shall be considered sold when
billed out; if Licensed Products are not billed out, they shall be considered
sold when delivered, shipped or when paid for, in part or full, whichever occurs
first. Royalties paid on Licensed Products that are returned by customers may be
credited against future royalty payments, provided royalties are paid on any
such returned Licensed Products that are later sold. No royalties need be paid
on Licensed Products furnished to customers without charge to replace returned
Licensed Products on which royalties had previously been paid, provided no
credit is taken against royalty payments for such returned Licensed Products.
Licensed Products shall not be given free to any third party without
Sublicensor's written permission or used internally by Sublicensee, without
commission being paid.
5. REPRESENTATIONS AND WARRANTIES OF SUBLICENSEE. Sublicensee
represents and warrants to Sublicensor as of the date hereof, and as of the date
of consummation of each and every element of this Agreement, as follows:
a. ORGANIZATION AND STANDING: POWER AND AUTHORITY. Sublicensee
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada and has the full corporate power and corporate
authority to carry on its business, as it is now being conducted, and to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby and thereby. Sublicensee is qualified as a foreign corporation in all
jurisdictions in which the failure so to qualify would have a material adverse
effect on Sublicensee. Sublicensee has no subsidiaries or equity or other
interest in any entity.
b. CAPITALIZATION. The authorized capital of Sublicensee
consists of 25,000,000 shares of Common Stock, par value $.001 per share, of
which 3,124,000 shares have been validly issued and are outstanding, fully paid
and nonassessable on the date hereof. Sublicensee has reserved 900,000 shares of
capital
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stock for issuance to Sublicensor in connection with the acquisition of product
licenses. There are no other reserved shares and no outstanding options,
restricted stock awards, warrants, calls, commitments or rights of any character
to purchase or otherwise to acquire from Sublicensee shares of capital stock of
any class, no outstanding securities of Sublicensee that are convertible into
shares of capital stock of Sublicensee of any class, and no options, warrants or
rights to purchase from the Company any of such convertible securities.
c. CORPORATE APPROVAL. Sublicensee has the necessary corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement by Sublicensee, the performance by Sublicensee of its obligations
hereunder and thereunder, and the consummation by Sublicensee of the
transactions contemplated hereby and thereby, have been duly authorized by the
Board of Directors of Sublicensee, which authorization has not been modified and
is in full force and effect, and no other corporate proceeding on the part of
Sublicensee is necessary for the execution and delivery of this Agreement by
Sublicensee and the performance by Sublicensee of its obligations hereunder and
the consummation by Sublicensee of the transactions contemplated hereby, does
not violate any provision of the Articles of Incorporation or the By-Laws of
Sublicensee.
d. GOVERNMENTAL FILINGS AND AUTHORIZATIONS. No filing,
authorization or approval, governmental or otherwise, is necessary to enable
Sublicensee to enter into, and to perform each of its obligations under, this
Agreement except for such filings as may be required to comply with federal and
state securities laws which filings, if any, have been made prior to the date
hereof.
e. SUBLICENSEE COMMON STOCK - VALID ISSUANCE. The shares of
the Sublicensee's common stock to be issued to Sublicensor hereunder will be
duly authorized, validly issued, fully paid and nonassessable and will be issued
in compliance with the Act and any appropriate state securities laws.
f. BINDING OBLIGATION. This Agreement has been duly and
validly executed and delivered by Sublicensee. This Agreement and each document
and instrument to be executed by Sublicensee pursuant hereto constitutes a
legal, valid and binding obligation of Sublicensee, enforceable in accordance
with its terms, except to the extent that its enforceability may be subject to
limitations imposed by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity) and to the
effect of applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws of general application relating to or affecting creditors' rights,
including, without limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers.
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g. CONSENTS. Sublicensee is not subject to any law, ordinance,
regulation, rule, order, judgment, injunction, decree, charter or bylaw,
contract, commitment, lease, agreement, instrument or other restriction that
would prevent the consummation of this Agreement or any of the transactions
contemplated hereby and thereby without the consent of any third party, that
would require the consent of any third party to the consummation of this
Agreement or of the transactions contemplated hereby or thereby or, to the
knowledge of Sublicensee, that would result in any penalty, forfeiture or
termination which would be materially adverse to Sublicensee as a result of such
consummation.
h. OBLIGATIONS: ABSENCE OF VIOLATION. Neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby and thereby constitutes a violation or default under, or
conflicts with, any term or provision of the Articles of Incorporation or Bylaws
of Sublicensee, or any material agreement, including, without limitation, any
material contract, license, commitment, lease, instrument, arrangement or
understanding to which Sublicensee is a party or to which Sublicensee or any of
its property is subject, or by which Sublicensee or any of its property is
bound, where such encumbrance would be materially adverse to the Sublicensor.
i. DISCLOSURE. No representation or warranty by Sublicensee,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary, in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
j. 504 OFFERING. Sublicensee sold 3,725,000 shares of its
common stock at $.05 per share in an offering pursuant to an exemption from
registration provided by Rule 504 of Regulation D promulgated under the
Securities Act of 1933, as amended, and applicable state law.
6. REPRESENTATIONS AND WARRANTIES OF SUBLICENSOR. Sublicensor
represents and warrants to Sublicensee as of the date hereof, and as of the date
of consummation of each and every element of this Agreement, as follows:
a. ORGANIZATION AND STANDING: POWER AND AUTHORITY. Sublicensor
is a corporation duly organized, validly existing and in good standing under the
laws of the Bahamas and has the full corporate power and corporate authority to
carry on its business, as it is now being conducted, and to execute and deliver
this Agreement and to consummate the transactions contemplated hereby and
thereby.
b. CORPORATE APPROVAL. Sublicensor has the necessary corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder and thereunder. The execution
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and delivery of this Agreement by Sublicensor, the performance by Sublicensor of
its obligations hereunder and thereunder, and the consummation by Sublicensor of
the transactions contemplated hereby and thereby, have been duly authorized by
the Sublicensor, which authorization has not been modified and is in full force
and effect, and no other corporate proceeding on the part of Sublicensor is
necessary for the execution and delivery of this Agreement by Sublicensor and
the performance by Sublicensor of its obligations hereunder and the consummation
by Sublicensor of the transactions contemplated hereby, does not violate any
provision of the constituting articles of Sublicensor.
c. BINDING OBLIGATION. This Agreement has been duly and
validly executed and delivered by Sublicensor. This Agreement and each document
and instrument to be executed by Sublicensor pursuant hereto constitutes a
legal, valid and binding obligation of Sublicensor, enforceable in accordance
with its terms, except to the extent that its enforceability may be subject to
limitations imposed by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity) and to the
effect of applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws of general application relating to or affecting creditors' rights,
including, without limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers.
7. NO SUBLICENSES. Sublicensee shall not have the right to grant
sublicenses hereunder or to transfer any rights to manufacture, modify, develop,
make, have made, market or sell the Amoeba Patent or Licensed Products, or use
the Trademarks or Intellectual Property, without the prior written consent of
Sublicensor. In the event of any approved sublicense or other transfer to third
parties, Sublicensee shall take reasonable steps to preclude the further
sublicense or transfer of the Amoeba Patent or Licensed Products.
8. BEST EFFORTS. Sublicensee agrees to utilize its best
efforts to promote and exploit the Licensed Products, subject to the
restrictions of this Agreement.
9. PROSECUTION OF APPLICATIONS. Licensor shall have full and complete
control over the prosecution of any patent or trademark applications, or any
reissue of such licensed patents and of any disclaimer proceedings in connection
therewith. Licensor shall keep Sublicensee fully and promptly informed of such
prosecution, and shall give Sublicensee reasonable opportunity to make
suggestions with regard to such prosecution. Licensor shall be under no
obligation to accept any such suggestion, or to continue such prosecution beyond
the point that it considers desirable. Each party shall bear the cost of its own
activities in connection with the foregoing.
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10. MARKING.
a. PRODUCTS. Sublicensee shall xxxx all Licensed Products sold
by it under this Agreement with the number of any patent that is applicable
thereto and under which it is hereby licensed.
b. TRADEMARKS. Sublicensee agrees to xxxx all Trademarks with
either a (R) (for registered trademark) or "TM" (for unregistered trademarks)
and to designate Sublicensor as owner.
11. INFRINGEMENT. In the event that any infringement of the Licensed
Products comes to the attention of Sublicensee, Sublicensee shall promptly
notify Sublicensor of the infringement. Sublicensor shall control the
prosecution of any such action.
If the use of the Amoeba Patent, Trademark, or Intellectual Property,
or any information or material furnished hereunder is enjoined, Sublicensor
shall have the right and option to:
a. procure for Sublicensee the right to continue such further
use;
b. modify such so they no longer infringe any such rights;
c. obtain for Sublicensee similar products or marks which do
not infringe any marks; or
d. terminate the agreement and pay Sublicensee liquidated
damages of the lesser of actual damages or the amount of royalties actually
received by Sublicensor for the previous six-month period immediately preceding
such injunction for that specific property.
This paragraph 12 states the entire obligation and liability of Sublicensor with
respect to infringement or violation of any proprietary interest of another or
claims thereof.
12. INVALIDITY OF PATENT. If any claim of any patent under which this
license is granted shall be declared invalid by a final decision of a court of
competent jurisdiction, whether an appellate court or a lower court whose
decision becomes final by failure to appeal therefrom, or if, as a result of a
final decision, any such claim shall be hereafter awarded to another,
Sublicensee shall not be relieved of any obligations hereunder. In the event
that any claim of any patent application under which this license is granted
shall be finally rejected, such claim shall thenceforth be treated as if it did
not exist, unless and until such final rejection shall be withdrawn or reversed
and such claim allowed, and this license shall be deemed to be of trade secrets
and know how of Sublicensor.
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13. NON-USE. In the event that Sublicensee makes no substantial use of
the Amoeba Patent or Licensed Products or of any claims of an issued patent
under which it is hereby licensed for any six (6) month period after the date
hereof, Sublicensor shall have the right to cancel this license, in part or in
full, on thirty (30) days' written notice to Sublicensee.
14. ATTORNEYS' FEES. In the event either party shall enforce this
Agreement by legal means, the prevailing party shall be entitled to reasonable
attorneys' fees, experts' fees and costs whether in pretrial, trial, arbitration
or appeal or in any bankruptcy proceeding. Venue shall be in King County,
Washington. This Agreement shall be construed in accordance with the laws of the
State of Washington.
15. NOTICE. Any written notice necessary or appropriate under this
Agreement shall be deemed to be properly given if delivered or sent by United
States Registered Mail or the Canadian equivalent to the party to be notified at
the address set forth below or at such other address as either party may
hereafter designate in writing. The date of service of any notice so sent by
registered mail shall be deemed to be three (3) days after the mailing thereof.
16. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding on and
inure to the benefit of the successors of the parties, and Sublicensee shall not
have any right to assign this Agreement without the consent in writing of
Sublicensor. Sublicensor shall be free to assign its interest herein upon
written notice to Sublicensee.
17. QUALITY CONTROL. Sublicensee acknowledges that the quality of the
Licensed Products and any advertising or promotional materials used in
connection with the Trademarks and Intellectual Property is of utmost importance
to Sublicensor and that any use of unauthorized products or materials will
damage Sublicensor's goodwill and name. Therefore, Sublicensee agrees to
maintain the quality of the Licensed Products and Trademarks and all advertising
and promotional materials used at a high level. The Licensed Products and
Trademarks and advertising and promotional materials shall be subject to prior
written approval of Sublicensor. Sublicensor may withhold approval for any use
or proposed use which may disparage or bring into disrepute Sublicensor's name
in Sublicensor's sole discretion. For each and every type of Licensed Product or
New Invention Product and for each material change to a Trademark, Sublicensee
shall provide Sublicensor a randomly selected example for inspection before such
is marketed and on a quarterly basis thereafter.
18. WARRANTY. The parties recognize that Sublicensor is the Licensee of
the Amoeba Patent, Licensed Products, Trademarks and Intellectual Property and
that nothing herein shall give Sublicensee any continuing interest in and to
such Amoeba Patent,
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Licensed Products, New Invention Products, or Trademarks or any derivatives
therefrom. Further, Sublicensee understands that Sublicensor is not in the
business of manufacturing or selling products. Sublicensee therefore agrees to
hold harmless, defend and indemnify Sublicensor and Licensor from any and all
damages and claims arising out of Sublicensor's, Sublicensee's or any third
party's use of the Amoeba Patent or Licensed Products. In addition, Sublicensee
shall be responsible to meet any requirements of any law or regulating agency in
connection therewith, including warning requirements.
19. CONFIDENTIAL INFORMATION. Sublicensee shall keep confidential and
otherwise protect from disclosure all information and property obtained from
Licensor and Sublicensor in connection with this Agreement and identified as
confidential or proprietary. Sublicensee agrees, unless otherwise expressly
authorized herein or by Sublicensor, Sublicensee shall use such information and
property, and the features thereof, only in the performance and for the purpose
of this Agreement. Upon Sublicensor's request, and in any event upon the
completion, termination or cancellation of this Agreement, the Sublicensee shall
return all such information and property to the Sublicensor or make such other
disposition thereof as is directed by Sublicensor. In all lower tier
subcontracts and purchase contracts issued by Sublicensee and involving
subcontractor receipt of such information or property, Sublicensee shall provide
to Sublicensor the same rights and protection as contained in this clause. This
provision shall survive termination of this Agreement. Information shall not be
confidential or proprietary for the purposes of this provision, if
a. Known to the receiving party without restriction when
received, or thereafter is developed independently by the receiving party
without reference to proprietary information of the originating party; or
b. Obtained from a source other than the originating party
through no breach of confidence by the receiving party; or
c. In the public domain when received, or thereafter enters
the public domain through no fault of the receiving party; or
d. Disclosed by the originating party to a third party without
restriction; or
e. Required by applicable law or regulation, provided the
receiving party notifies the originating party of the requirement promptly, and
cooperates with the originating party (at the request and expense of the
originating party) in contesting the requirement.
20. DEFAULT. Any payment due from Sublicensee to Sublicensor shall bear
interest at the rate of the lesser of 1-1/2% per month
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or the highest rate permitted by law. In addition, if Sublicensee shall be in
arrears in the payment of any such amount, Sublicensor shall have the right to
cancel this Agreement upon giving Sublicensee thirty (30) days' written notice
with an opportunity to cure. If Sublicensee violates or fails to keep or perform
any other obligation, term or condition hereof, or if Sublicensee shall be
adjudged a bankrupt or become insolvent or makes an assignment for the benefit
of creditors, or is placed in the hands of a receiver or trustee in bankruptcy,
then Sublicensor may, at its option, cancel and terminate this Agreement by
giving thirty (30) days' written notice, specifying the default complained of;
provided, however, that if Sublicensee shall, within such thirty (30) days, cure
the default complained of, then the notice shall cease to be operative and this
License Agreement shall continue in full force and effect as though such default
had not occurred. These remedies are in addition to any and all remedies
available at law or in equity to Sublicensor.
21. RIGHTS UPON TERMINATION. Upon termination of this Agreement, by
expiration or otherwise, all use of Sublicensor's Licensed Products, New
Invention Products, Trademarks and Intellectual Property shall immediately cease
except that termination shall not release Sublicensee from any monetary
obligations, continuing warranties or restrictive covenants herein. Sublicensee
shall have no future rights to the Licensed Products, New Invention Products,
Trademarks, Intellectual Property or confidential information and Sublicensee
agrees to return all Intellectual Properties to Sublicensor. Upon termination,
no future manufacturing shall occur for or on behalf of Sublicensee. Existing
stock shall be offered at wholesale first to Sublicensor and if Sublicensor
decides not to purchase such in ten days, then such may be sold for an
additional 60 days at not less than standard wholesale prices. No extensions
will be granted.
The rights of termination herein are absolute, and Sublicensee
acknowledges it has considered such in making expenditures of money and time in
preparing for the performance of this Agreement and further the possible losses
of or damages on account of the loss of prospective profits or anticipated sales
or on account of expenditures, investments, leases, property improvements, or
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commitments in connection with the goodwill or business of Sublicensee resulting
for the termination hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
"SUBLICENSOR" AURORA MARKETING INC.
By/s/Xxxx Xxxxxx
Its Director
00 Xxxxxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx
XX0 0XX
"SUBLICENSEE" INTERACTIVE PROCESSING, INC.
By/s/Xxxxx Xxxxxxxxx
Its President/Director
0000 - 000 Xxxxxxxxx Xx.
Xxxxxxxxx, X.X.
XXXXXX X0X 0X0
By executing this Agreement, Amoeba Corporation expressly consents to
the Sublicense granted herein.
"LICENSOR" AMOEBA CORPORATION
By/s/Xxxxxxxx XxXxxx
Its Director
00 Xxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx
XXXXXXX XX0 0XX
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