License Agreement - Sharp Corp. and NCT Group Inc.
LICENSE AGREEMENT
License Agreement made this tenth day of August, 2001 by and between Sharp
Corporation, a Japanese corporation, acting through its Communication Systems
Group with offices at 2-13-1 Iida Hachihonmatsu Higashihiroshima-City, Hiroshima
739- 0192, Japan hereinafter ("Licensee" or "SHARP") and NCT Group, Inc., a
Delaware corporation with offices at 20 Ketchum Street, Westport, CT 06880
hereinafter ("NCT")
WHEREAS SHARP is engaged in the design, development, manufacture and marketing
of wireless communication products for various markets around the world; and
WHEREAS NCT is engaged in the development of Active Wave Management software,
and patented technologies that have been applied to various fields and
industries, and is the owner of certain United States and foreign patents and
copyrights covering various aspects of Active Wave Management which both parties
believe can be applied to products manufactured and sold by SHARP; and
WHEREAS SHARP is desirous of obtaining a non-exclusive license from NCT to make,
use, develop and sell wireless communication products incorporating Licensed
Software and Patents;
NOW THEREFORE, in consideration of the mutual covenants contained herein, as
well as other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
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ARTICLE 1. DEFINITIONS
As used herein, the terms described below have the following meanings.
1.1 "Affiliate" shall mean any legal entity, which directly or indirectly, is
controlled by, is in control of, or under common control with the legal
entity with reference to which the term "Affiliate" is used.
1.2 "Confidential Information" shall mean the information described in Article
5 below and shall include the Deliverables and any and all samples, models,
prototypes, drawings, specifications, formulas, algorithms, software,
operating techniques, processes, data, technical and other information,
including any information relating to the status of research or other
investigations being conducted, whether given in writing, orally, or in
magnetic or other electronic processing form to the extent that such
information is not in the public domain through other than a breach of this
Agreement.
1.3 "Deliverables" shall mean the master copy of Licensed Software and
Technical Information described on Schedule A hereto.
1.4 "Product" shall mean a specific SHARP Product.
1.5 "Licensed Product" shall mean Licensed Product incorporating the Licensed
Software.
1.6 "Technical Information" shall mean technical, design, engineering, and
manufacturing information and data pertaining to the use of Licensed
Software and the design, manufacture, commercial production and
distribution of Licensed Products.
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ARTICLE 2. LICENSES
2.1 License - License to Licensed Software Subject to the terms and conditions
of this Agreement, NCT hereby grants to SHARP a non-exclusive, worldwide
license to duplicate Licensed Software and to make, have made, use,
distribute, sell and/or have sold Licenced Products which incorporate such
Licensed Software under NCT's copyrights and patents.
2.2 Assignment and Sublicensing. The rights and licenses granted hereunder may
not be sublicensed, conveyed, assigned or otherwise transferred by SHARP to
any third party without NCT's prior written consent in each instance.
However, SHARP shall have the right to have Licensed Products manufactured
for it by Affiliates or others. Providing that any NCT confidential
information provided to such parties is labeled as SHARP confidential
material and such Affiliates and others have signed a Non-Disclosure
Agreement with SHARP similar in content to Articles 5 herein.
2.3 Acceptance. SHARP hereby (i) accepts the rights under the NCT Software
License granted to it by NCT under this Article 2, and (ii) acknowledges
that the rights that NCT has granted to SHARP hereunder are non-exclusive
and limited to the manufacture, use, distribution and sale of Licensed
Products subject to the limitations set forth herein.
ARTICLE 3. FEES AND ROYALTIES
3.1 Fees. SHARP shall pay NCT Seventy Five Thousand Dollars (US $75,000.QO) as
a non-refundable up-&ont license fee within forty five (45) days of the
execution of this Agreement.
3.2 Royalties. SHARP shall pay NCT a royalty for each Licensed Product sold,
leased, distributed or otherwise transferred by SHARP, any sub-Licensee
permitted under Section 2.2 above or otherwise. Except that no royalty
shall be
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paid for prototypes or engineering samples furnished without consideration to
unaffiliated customers.
For the purposes of royalty calculations, each Licensed Product shall equal one
"Unit". Each Unit will have one (1) or more "Channels". "Channel" shall mean
each simultaneous or concurrent channel of signal processing embodying or
employing all or part of the Licensed Patents and/or the Licensed Technology.
In calculating the royalty payable with respect to Licensed Products comprised
of one (1) Channel the royalty per Unit and per Channel is the same. In
calculating the royalty payable with respect to Licensed Products comprised of
more than one (1) Channel, the following shall apply:
(i) The applicable amount specified in clause (a), (b) or (c) immediately below
shall be payable with respect to one (1) Channel of the Licensed Product in
question which amount is hereinafter referred to as the "Per Channel
Royalty".
(ii) The Per Channel Royalty shall be multiplied by the number of Channels used
in one Unit of the Licensed Product to determine the "Per Unit Royalty."
The Per Unit Royalty amount shall then be multiplied by the number of
Licensed Products sold, leased, distributed or otherwise transferred to
determine the royalty payable with respect to such Licensed Product.
(a) Fifty Cents (US $0.50) per Channel for each of the first 500,000 Channels
sold, leased, distributed or otherwise transferred;
(b) Forty Five Cents (US $0.45) per Channel for each Channel sold, leased,
distributed or otherwise transferred in excess of 500,000 Channels to and
including 1,000,000 Channel; and
(c) Thirty Cents (US $0.30) per Channel for each Channel sold, leased,
distributed or otherwise transferred in excess of 1,000,000 Channels. 3.3
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3.3 Payment. Royalties shall be paid to NCT within forty-five (45) days from
the last day of each calendar quarter of each calendar year as provided in
Article6. SHARP agrees that NCT may inspect its royalty/revenue records by
independent certified Public Accountants once a year upon thirty (30) days
notice, at NCT's own expense.
ARTICLE 4. DISCLOSURE OF INFORMATION, DATA AND KNOW-HOW
4.1 Deliverables. NCT shall deliver the Deliverables to SHARP in accordance
with the delivery dates set forth on Schedule A, attached hereto.
ARTICLE 5. CONFIDENTIALITY
5.1 Definitions. Each party possesses and will continue to possess confidential
information relating to its business and technology that has substantial
commercial and scientific value in the business in which it is engaged
("Confidential Information"). Subject to Section 5.4, Confidential
Information includes, but is not limited to: Deliverables, Technical
Information, trade secrets, processes, formulas, data and know-how,
discoveries, developments, designs, improvements, inventions, techniques,
marketing plans, strategies, forecasts, new products, software
documentation, unpublished financial statements, budgets, projections,
licenses, prices, costs, customer lists, supplier lists and any other
material marked "Confidential Information", "Proprietary Information" or in
some other reasonable manner to indicate it is confidential. Any
Confidential Information disclosed between the parties hereto orally or
visually, in order to be subject to this Agreement, shall be so identified
to the receiving party at the time of disclosure and confirmed in a written
summary appropriately marked as herein provided within ten (10) days after
such oral or visual disclosure.
5.2 Treatment. Each party shall during the term of this Agreement and for a
period of five (5) years thereafter , hold in confidence and not disclose
to third parties except
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as specifically permitted under this Section 5.2 and Section 5.4 below any and
all Confidential Information of the other party disclosed directly or indirectly
to it by the other party.
Each party shall take the following minimum safeguards with respect to the
Confidential Information of the other party:
(a) only those of its employees who need to receive the other party's
Confidential Information in order to carry out the purposes of this
Agreement shall have access to such information and such access shall be
limited to only so much of such information as is necessary for the
particular employee to properly perform his or her functions;
(b) all documents, drawings, writings and other embodiments which contain
Confidential Information of the other party shall be maintained in a
prudent manner in a secure fashion separate and apart from other
information in its possession and shall be removed there&om only as needed
to carry out the purposes of this Agreement;
(c) all documents, drawings, writings and other embodiments of information the
security or safekeeping of which are subject to governmental regulations
shall be kept in accordance with those regulations;
(d) all employees and contractors who shall have access to Confidential
Information of the other party shall be under written obligation to it; (i)
to hold in confidence and not disclose all Confidential Information made
available to them in the course of their employment; (ii) to use such
Confidential Information only in the course of performing their employment
duties; and (iii) to assign to their employer or the party retaining them
all inventions or improvements relating to their employer's business and
conceived while in their employer's employ unless such assignment is
prohibited by applicable law.
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Notwithstanding the foregoing, a party receiving Confidential Information
of the other party may disclose to its subcontractors and material and
component suppliers so much of such Confidential Information as is
necessary to enable such party to perform its duties and obligations
related to the accomplishment of the purposes of this Agreement provided
that such subcontractors and suppliers are obligated to such party in
writing; (i) to hold in confidence and not disclose such information; and
(ii) not to use such information except as authorized by such party.
In no event shall the party receiving Confidential Information of the other
party disassemble, reverse engineer, re-engineer, redesign, decrypt,
decipher, reconstruct, re-orient, modify or alter any Confidential
Information of the disclosing party or any circuit design, algorithm, logic
or program code in any of the disclosing party's products, models or
prototypes which contain Confidential Information or attempt any of the
foregoing without first obtaining written consent of the disclosing party
in each instance.
5.3 Return. All documents, drawings, writings and other embodiments of a
party's Confidential Information, as well as those produced, created or
derived from the disclosing party's Confidential Information which
incorporate the disclosing party's Confidential Information and all copies
thereof shall be returned promptly to it by the other party upon the
termination of this Agreement provided that the parties shall continue to
be bound by the provisions of Section 5.2 above.
5.4 Exclusions. Confidential Information shall not include information that;
(a) was at the time of disclosure in the public domain through no fault of
the party receiving it;
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(b) becomes part of the public domain after disclosure to the party
receiving it through no fault of such party;
(c) was in the possession of the party receiving it (as evidenced by
written records) at the time of disclosure and was not acquired
directly or indirectly from the other party, or a third party, as the
case may be, under a continuing obligation of confidence of which the
party receiving it was aware;
(d) was received by the party receiving it (as evidenced by written
records) after the time of disclosure hereunder from a third party who
did not require it to be held in confidence and who did not acquire it
directly or indirectly from the other party under a continuing
obligation of confidence of which the party receiving it was aware;
(e) required by law, governmental regulations, court order or the rules of
any relevant securities exchange to be disclosed, but only to the
extent of such required disclosure; provided, that a party required to
so disclose Confidential Information shall use best efforts to notify
the other party of such potential disclosure so that such party may
seek a protective order or other remedies to maintain in confidence
any such Confidential Information;
(f) was developed independently by the receiving party and without the use
of any Confidential Information received from the disclosing party
under this Agreement; or
(g) was or is disclosed by the party owning it to third parties without
restrictions on use or disclosure comparable to those contained
herein.
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ARTICLE 6. PAYMENTS, REPORTS AND RECORDS
Royalties shall be due and payable in U.S. dollars, in immediately available New
York, New York funds within forty-five (45) days after the last business day of
each calendar quarter of each calendar year during the term of this Agreement.
If requested by NCT, SHARP shall direct its independent certified public
accountants at SHARP's expense to provide NCT with a certified written royalty
report (the "Royalty Report") for each of SHARP's fiscal years, or portions
thereof, during the term of this Agreement within sixty (60) days of the end of
each calendar year of this Agreement. A similar Royalty Report shall be rendered
and Royalty payment shall be made within sixty (60) days after termination of
this Agreement.
ARTICLE 7. TERM
The term of this Agreement shall begin on the date hereof and, unless extended
or earlier terminated by the written agreement of the parties or the provisions
of Article 8 below, shall continue in full force and effect for three (3) years
thereafter . Upon expiration of the then-current term, it shall be automatically
renewed for successive one (1) year terms unless either party provides written
notice of its intention to terminate this Agreement at least six (6) months
prior to the expiration of the initial term or any renewed term hereof.
ARTICLE 8. TERMINATION
8.1 General. This Agreement may be terminated prior to the end of the term
provided in Article 7 above under any of the following provisions of this
Article.
8.2 Breach. In the event of a material breach of this Agreement, if the
defaulting party fails to cure the breach within thirty (30) days, in the
case of a breach involving non-payment of amounts to be paid hereunder, or
sixty (60) days, in the case of any other kind of breach following its
receipt of written notice from the non-defaulting party specifying the
nature of the breach and the corrective action to be taken, then the
non-defaulting party may terminate this Agreement forthwith by delivering
its written declaration to the defaulting party that this Agreement is
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terminated; provided any payment default will require the defaulting party
to pay interest in order to cover the default at the rate of the then
current prime rate at The Chase Manhattan Bank N.A.
8.3 Insolvency. If one of the parties becomes bankrupt or insolvent, or files a
petition therefor, or makes a general assignment for the benefit of
creditors, or otherwise seeks protection under any bankruptcy or insolvency
law, or upon the appointment of a receiver of the assets of a party
("defaulting party") then the other party shall have the right to
immediately terminate this Agreement upon written notice to the defaulting
party provided, in any such instance, that said right of termination shall
be postponed for as long as the defaulting party continues to conduct its
business in the ordinary course. 8.4 Survival of Certain Terms.
Notwithstanding the termination of this Agreement under any of the
provisions of this Article 8, the terms and conditions of Section Article
5, shall survive termination of this Agreement and shall continue to be
applicable and govern the parties with respect to the subject matter
thereof.
8.4 Document Return. Each party shall return to the other party within thirty
(30) days of the date of termination under either Article 7 or this Article
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to this Agreement together with all other tangible property loaned for the
implementation of this Agreement.
ARTICLE 9. FORCE MAJEURE
In the event of enforced delay in the performance by either party of
obligations under this Agreement due to unforeseeable causes beyond its
reasonable control and without its fault or negligence, including, but not
limited to, acts of God, acts of the government, acts of the other party,
fires, floods, strikes, freight embargoes, unusually severe weather, or
delays of subcontractors due to such causes (an "Event of Force Majeure"),
the time for performance of such obligations shall be extended for the
period of the enforced delay; provided that the party seeking the benefit
of the provisions of this paragraph shall,
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within ten (10) days after the beginning of any such enforced delay, have first
notified the other party in writing of the causes and requested an extension for
the period of the enforced delay and shall use all reasonable endeavors to
minimize the effects of any Event of Force Majeure.
ARTICLE 10. APPLICABLE LAW
The terms and conditions of this Agreement and the performance thereof shall be
interpreted in accordance with and governed by the laws of the State of Delaware
and the United States of America.
ARTICLE 11. DISPUTE RESOLUTION
The parties agree to attempt in good faith to resolve any dispute arising out of
or in connection with the performance, operation or interpretation of this
Agreement promptly by negotiation between the authorized contacts of the
parties.
If a dispute should arise, the authorized contacts will meet at least once and
will attempt to resolve the matter. Either authorized contact may request the
other to meet within fourteen (14) days, at a mutually agreed time and place. If
the matter has not been resolved within thirty (30) days of a request being made
for such a meeting, the authorized contacts shall refer the matter to the
representatives of the parties who are responsible for matters at the policy or
strategic level who shall meet within fourteen (14) days of the end of the
thirty (30) day period referred to above, at a mutually agreed time and place.
If the matter has not been resolved within thirty (30) days of a request being
made for this meeting, the parties shall proceed as follows:
(a) Any action, suit or proceeding where the amount in controversy as to
at least one party, exclusive of the interest and costs, exceeds one
million dollars (a "Summary Proceeding"), arising out of or relating
to this Agreement or the breach, termination or validity thereof,
shall be litigated exclusively in the Superior Court of the State of
Delaware (the "Delaware Superior Court") as a summary proceeding
pursuant to Rules 124-131 of
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the Delaware Superior Court, or any successor rules (the "Summary
Proceeding Rules"). Each of the parties hereto hereby irrevocably and
unconditionally (i) submits to the jurisdiction of the Delaware Superior
Court for any Summary Proceeding, (ii) agrees not to commence any Summary
Proceeding except in the Delaware Superior Court, (iii) waives, and agrees
not to plead or to make, any objection to the venue of any Summary
Proceeding in the Delaware Superior Court, (iv) waives, and agrees not to
plead or to make, any claim that any Summary Proceeding brought in the
Delaware Superior Court has been brought in an improper or otherwise
inconvenient forum, (v) waives, and agrees not to plead or to make, any
claim that the Delaware Superior Court lacks personal jurisdiction over it,
(vi) waives its right to remove any Summary Proceeding to the federal
courts except where such courts are vested with sole and exclusive
jurisdiction by statute and (vii) understands and agrees that it shall not
seek a jury trial or punitive damages in any Summary Proceeding based upon
or arising out of or otherwise related to this Agreement and waives any and
all rights to any such jury trial or to seek punitive damages.
(b) In the event any action, suit or proceeding where the amount in controversy
as to at least one party, exclusive of interest and costs, does not exceed
One Million Dollars (a "Proceeding"), arising out of or relating to this
Agreement or the breach, termination or validity thereof is brought, the
parties to such Proceeding agree to make application to the Delaware
Superior Court to proceed under the Summary Proceeding Rules. Until such
time as such application is rejected, such Proceeding shall be treated as a
Summary Proceeding and all of the foregoing provisions of this Section
relating to Summary Proceedings shall apply to such Proceeding.
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(c) In the event a Summary Proceeding is not available to resolve any dispute
hereunder, the controversy or claim shall be settled by arbitration
conducted on a confidential basis, under the U.S. Arbitration Act, if
applicable, and the then current Commercial Arbitration Rules of the
American Arbitration Association ("Association") strictly in accordance
with the terms of this Agreement and the substantive law of the State of
Delaware. The arbitration shall be conducted at the Association's regional
office located closest to SHARP's principal place of business by three
arbitrators, at least one of whom shall be knowledgeable in Active
Technology and one of whom shall be an attorney. Judgment upon the
arbitrators' award may be entered and enforced in any court of competent
jurisdiction. Neither party shall institute a proceeding hereunder unless
at least sixty (60) days prior thereto such party shall have given written
notice to the other party of its intent to do so. Neither party shall be
precluded hereby from securing equitable remedies in courts of any
jurisdiction, including, but not limited to, temporary restraining orders
and preliminary injunctions to protect its rights and interests but such
shall not be sought as a means to avoid or stay arbitration.
(d) Notices to SHARP shall be sent to NB4 Project Team of the Personal
Communication Systems Division, Communication Systems Group, Sharp
Corporation, with offices on the date hereof at 2-13-1 Iida Hachihonmatsu
Higashihiroshima-City, Hiroshima 739-0192, Japan to receive service of
process in any Proceeding or Summary Proceeding. NCT hereby designates and
appoints Corporation Service Company with offices on the date hereof at
1013 Centre Road, Wilmington, DE 19805, as its agent to receive such
service. Each of the parties hereto further covenants and agrees that, so
long as this Agreement shall be in effect, each such party shall maintain a
duly appointed representative for the service of summonses and other legal
processes, and will notify the other parties
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hereto of the name and address of such Representative if it is no longer
the entity identified in this article.
ARTICLE 12. ANNOUNCEMENTS AND PUBLICITY; INDEPENDENT
CONTRACTORS
Except for any disclosure which may be required by law, including appropriate
filings with the Securities Exchange Commission and the Nasdaq Stock Market,
Inc., neither party may use the other's name or disclose the terms of this
Agreement without the consent of the other, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, upon the execution of this
Agreement NCT may issue a press release in NCT's customary format and manner
reporting the execution of this Agreement and its general subject matter
provided NCT shall have received SHARP's prior written approval thereof which
approval shall not be unreasonably withheld or delayed.
Each party to this Agreement is an independent contractor and neither shall be
considered the partner, employer, agent or representative of the other.
ARTICLE 13. SEVERABILITY
If any part of this Agreement for any reason shall be declared invalid or
unenforceable, such decision shall not affect the validity or enforceability of
any remaining portion, which shall remain in full force and effect; provided,
however, that in the event a part of this Agreement is declared invalid and the
invalidity or enforceability of such part has the effect of materially altering
the obligations of any party under this Agreement, the parties agree, promptly
upon such declaration being made, to negotiate in good faith to amend this
Agreement so as to put such party in a position substantially similar to the
position such party was in prior to such declaration.
ARTICLE 14. RIGHTS OF ASSIGNMENT; SUCCESSORS AND ASSIGNS
Neither NCT nor SHARP shall have any right to assign this Agreement or any of
their respective rights or obligations under this Agreement to any third party
except by operation of law or with the prior written consent of the other party.
In the event SHARP
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wishes to assign any of its rights or obligations under this Agreement to an
Affiliate of SHARP, NCT's consent will not be unreasonably withheld. In the
event NCT wishes to assign any of its rights or obligations under this Agreement
to an Affiliate of NCT, SHARP's consent will not be unreasonably withheld. The
provisions of this Agreement shall inure to the benefit of, or be binding upon,
the successors and assigns of each party hereto.
ARTICLE 15. NOTICES
Any notices under this Agreement shall be in writing and shall be deemed
delivered on the date of delivery if delivered by personal service, or sent by
telecopy and confirmed by first class registered or certified mail, or same day
or overnight courier service with postage or charges prepaid and on the third
day following dispatch if sent only by first class registered or certified mail
or same day or overnight courier service with postage or charges prepaid. Unless
subsequently notified in writing in accordance with this Section by the other
party, any notice or communication hereunder shall be addressed to NCT as
follows:
NCT Group, Inc., Inc.
20 Ketchum Street
Westport, CT 06880
Attn: President
Telecopy No: 1-203-226-3123
To SHARP as follows:
NB4 Project Team
Personal Communication Systems Division
Communication Systems Group
Sharp Corporation
2-13-1 Iida Hachihonmatsu Higashihiroshima-City
Hiroshima 739-0192,Japan
Attn: Masao Miyazaki, Project Chief
Telecopy no. +81-824-20-1826
ARTICLE 16. TAXES
SHARP shall be solely responsible for any sales, use, occupational or privilege
taxes, duties, fees or other similar charges imposed by any governmental
authority in
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connection with the manufacture, sale, lease, distribution, use or other
disposition by SHARP of Licensed Products or the Licenses granted hereunder. Any
other taxes, including income taxes based on royalties and other payments to
NCT, shall be the responsibility of NCT.
ARTICLE 17. INDEMNIFICATION
NCT and SHARP agree to indemnify, defend, and hold harmless the other party and
each of its officers, directors, employees, agents, successors and assigns
(hereinafter referred to in the aggregate in this section as "the Indemnified
Party") against any and all losses, claims, damages, liabilities, costs and
expenses (including without limitation, reasonable attorneys' fees and other
costs of defense of every kind whatsoever and the aggregate amount of reasonable
settlement of any suit, claim or proceeding) which the Indemnified Party may
incur or for which the Indemnified Party may become liable on account of any
suit, claim or proceeding purporting to be based upon a failure to perform
obligations under this Agreement to be performed by the other party (hereafter
the "Indemnifying Party") and its employees or agents. The Indemnified Party
shall promptly advise the Indemnifying Party of any such suit, claim or
proceeding and shall cooperate with the Indemnifying Party in the defense or
settlement of such suit, claim or proceedings providing no settlement shall be
made without the consent of the Indemnified Party, which consent shall not be
unreasonably withheld. In any event, the Indemnified Party shall furnish to the
Indemnifying Party such information relating to such suit, claim or proceeding
as the Indemnifying Party shall reasonably request for use in defending the
same.
ARTICLE 18. MAINTENANCE AND DEFENSE OF LICENSED PATENTS
18.1 Enforcement of Patents. Throughout the term of this Agreement, NCT shall
maintain in force the Licensed Patents. In this connection, NCT shall
promptly pay all costs of any and all continuations, continuations-in-part,
divisions, extensions, reissues, re-examinations, or renewals of the
Licensed Patents, including, without limitation, the costs and expenses of
any and all attorneys, experts or other professionals engaged in connection
with any of the foregoing.
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In addition, NCT shall actively protect the Licensed Patents and shall
institute all such suits, actions or proceedings for infringement of any of
the Licensed Patents as may be necessary in this regard. Unless NCT shall
have received the advice of counsel that success on the merits is
reasonably certain, NCT shall be excused from its duty to commence and/or
may withdraw from any enforcement action under the Licensed Patents and
SHARP shall then be free to pursue enforcement of the Licensed Patents in
its own name and at its sole expense and risk, but only to the extent such
infringement occurs in the Market. In the event NCT fails to commence an
enforcement action or otherwise protect the Licensed Patents as aforesaid
after notice of possible infringement from SHARP, SHARP shall be entitled
by itself to take proceedings in the name of and with the cooperation of
NCT to restrain any such infringement at SHARP's expense and for SHARP's
benefit. Where SHARP proceeds alone and achieves an award from the official
enforcement forum in such an action brought by it, SHARP shall be entitled
to retain such award. However, any compromise of such enforcement action or
concession of invalidity or priority of invention of any patent whether in
connection with an enforcement action or any other proceeding shall require
NCT's participation and express prior written approval. If NCT has elected
to participate in and share in the expense of any such enforcement action,
any award shall be shared equally by NCT and SHARP.
18.2 Infringement. NCT shall defend and save harmless SHARP against any suit,
damage claim or demand, and any loss, cost or expense suffered as a result
thereof (including reasonable attorneys fees), based on actual or alleged
infringement of any patent, copyright or trademark or any unfair trade
practice resulting from the exercise or use of any right or license granted
under this Agreement; provided that SHARP (a) promptly notifies NCT of such
suit, claim or demand and (b) provides NCT with such assistance as NCT may
reasonably request for the defense or settlement of such suit, claim or
demand.
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Notwithstanding the foregoing, NCT shall have no liability to defend or pay
damages or costs to SHARP with respect to any claim of infringement which
is based on an implementation designed or modified by any third party or
SHARP's use of the Licensed Patents or the Licensed Technology for any
purpose other than the design, manufacture, use or sale of Licensed
Products pursuant to this Agreement.
ARTICLE 19 WARRANTIES
19.1 NCT represents and warrants that it has the right, power and authority to
enter into this Agreement and to grant the licenses and other rights
contained herein to SHARP as herein provided and that none of the same will
breach or be in violation of any agreement, license, or grant made with or
to any other party by NCT and that to the best of NCT's knowledge and
belief the Licensed Software and Patents do not infringe any other patent
issued prior to the date hereof
19.2 NCT warrants Licensed Software will be free from defects in workmanship or
function for one (1) year from the date of delivery. In the event of
notification of defects in workmanship or function within the said warranty
period from SHARP to NCT, NCT will use best commercial efforts to repair or
replace such defects without any charge.
ARTICLE 20. DISCLAIMER
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, NCT HEREBY DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTY OF THE ACCURACY, RELIABILITY, TECHNOLOGICAL OR
COMMERCIAL VALUE, COMPREHENSIVENESS OR MERCHANTABILITY OF THE LICENSED PATENTS
AND SOFTWARE, OR THE LICENSED PRODUCTS, OR THEIR SUITABILITY OR FITNESS FOR ANY
PURPOSE WHATSOEVER. NCT DISCLAIMS ALL OTHER WARRANTIES OF WHATEVER NATURE,
EXPRESS OR IMPLIED. NCT DISCLAIMS ALL LIABILITY FOR ANY LOSS OR INDIRECT DAMAGE
RESULTING FROM THE USE OF THE LICENSED PATENTS AND SOFTWARE, OTHER THAN THOSE
ARISING FROM CLAIMS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES; WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THIS DSCLAIMER
EMBRACES CONSEQUENTAL DAMAGES, LOSS OF PROFITS OR GOOD WILL, OR EXPENSES FOR
DOWNTIME OR FOR MAKING UP DOWNTIME.
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ARTICLE 21. SUPPORT SERVICES
NCT shall provide SHARP with engineering, maintenance and sales support, if
necessary, with respect to Licensed Products to be sold, leased distributed or
otherwise transferred by SHARP under this Agreement to the extent and at the
rates set forth in Schedule B hereto.
ARTICLE 22. SCOPE OF THE AGREEMENT
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior oral or written agreements
or understandings of the parties with regard to the subject matter hereof. No
interpretation, change, termination or waiver of any provision hereof shall be
binding upon a party unless in writing and executed by the other party. No
modification, waiver, termination, recession, discharge or cancellation of any
right or claim under the Agreement shall affect the right of any party hereto
enforce any other claim or right hereunder.
IN WITNESS THEREOF, SHARP and NCT have executed the Agreement effective as of
the date first written above.
SHARP CORPORATION: NCT GROUP, INC.
By: /s/ Masafumi Matsumoto By: /s/ Cy E. Hammond
------------------------------- --------------------------------
- Masafumi Matsumoto Cy E. Hammond
Title: Deputy Group Manager of Title: Senior Vice President &
Communication Systems Group Chief Financial Officer
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<PAGE>
Schedule A
----------
Deliverables
Pursuant to Section 4.1 NCT will supply SHARP with the following
Deliverables on or before the dates set forth below:
Deliverable Date
----------- ----
NCT Part Number 07-216-183
ASF-M.FXPT.54x XDSP.08-1.0 Upon Signing of This Agreement
(ASF Version "Popular" on CD)
NCT Part Number 07-216-184
ASF-M.FXPT.54x XDSP.var-ELEGANT.08-1.0 Upon Signing of This Agreement
(ASF Version "Elegant'* on CD)
Documentation for the above will be included on the CDs
Patent relating to the above Deliverables:
5,768,473 Filed Ol/30/95 Adaptive Speech Filter Eatwell et al
Issued 06/16/98
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<PAGE>
Schedule B
----------
Support Services
----------------
NCT will provide engineering, maintenance and sales support services, subject to
personnel availability, at the following standard rates. Actual rates may vary,
and rates are subject to change without notice. Out-of-pocket, travel and
material expenses are additional and will be billed at cost.
Technician/Draftman US $ 90.00/Hour
Junior Engineer US $105.00/Hour
Engineer US $125.00/Hour
Senior Engineer US $140.00/Hour
Manager US $170.00/Hour
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