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Sample Business Contracts

License Agreement - Sharp Corp. and NCT Group Inc.

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                                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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<PAGE>


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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<PAGE>


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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<PAGE>


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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<PAGE>


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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<PAGE>


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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<PAGE>


     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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<PAGE>


     (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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<PAGE>


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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<PAGE>


     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
     8 all of the Deliverables and confidential  information,  received pursuant
     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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<PAGE>


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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<PAGE>


     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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<PAGE>


(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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<PAGE>


     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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<PAGE>


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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<PAGE>


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.



                                       16
<PAGE>


     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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<PAGE>


     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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<PAGE>


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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