License Agreement - NCT Group Inc. and Stopnoise Inc.
LICENSE AGREEMENT
License Agreement, dated as of January 6, 2003, between NCT Group, Inc., a
Delaware corporation ("Licensor"), and Stopnoise, Inc., a New Jersey corporation
("Licensee").
WHEREAS, Licensor is engaged in the development of technologies and is the owner
of certain United States and foreign patents and copyrights covering various
aspects of such technologies that both parties believe can be applied to
products manufactured and sold by Licensee; and
WHEREAS, Licensee is engaged in the design, development, manufacture and
marketing of noise canceling sound barriers;
WHEREAS, Licensee desires to obtain a license from Licensor to make, use,
develop and sell products incorporating certain of Licensor's technologies, as
more fully described herein;
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:
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 hereof.
1.3 "Deliverables" shall mean the models, specifications, codes and other
documentation and materials described on Schedule 1.3 hereto to be
delivered by Licensor to Licensee as described in Section 4.2 of this
Agreement.
1.4 "Improvement" shall mean any improvement, further invention, enhancement,
derivative product, technology, software, firmware, mask work, trade
secret, Know-how, patent, patent application or other intellectual property
making use of, extending, based upon or relating to (a) Licensor Technology
("Licensor Improvements") or (b) Licensee Technology ("Licensee
Improvements"); provided however, that no Sponsor Technology shall be
deemed an Improvement.
1.5 "Know-how", in general, will have its usual and accepted meaning, that is,
inter alia, all factual knowledge and information not capable of precise,
separate description but that, in an accumulated form, after being acquired
as the result of trial and error, gives to the one acquiring it an ability
to produce and market something that one otherwise would not have known how
to produce and market with the same accuracy or precision necessary for
commercial success.
1.6 "Licensed Patents" shall mean all those patents relating to the Licensor
Technology owned by Licensor and listed on Schedule 1.6 hereto together
with those patents issued under patent applications filed or to be filed
relating to the Licensor Technology and also listed on Schedule 1.6 hereto,
including any continuations, continuations-in-part, divisions, extensions,
reissues, re-examinations and renewals of any of the foregoing.
1.7 "Licensed Product" shall mean a specific Licensee Product embodying or
employing all or part of the Licensed Patents and/or the Licensed
Technology.
1.8 "Licensed Technology" shall mean that unpatented technology relating to the
Licensor Technology described on Schedule 1.8 hereto.
1.9 "Licensee Products" shall mean Licensee-developed proprietary Active Sound
Barriers.
1.10 "Licensee Technology" shall mean all existing and future technology, other
than Sponsor Technology, relating to the design, development, manufacture
and assembly of Licensee Products, now or hereinafter owned or licensed by
or to Licensee or its Affiliates, including without limitation all
Know-how, trade secrets, methods, operating techniques, processes,
software, materials, technical data, engineering information, formulas,
specifications, drawings, machinery and apparatus, patents, patent
applications, copyrights and other intellectual property relating thereto.
1.11 "Licensor Technology" shall mean all existing and future technology, other
than Sponsor Technology, relating to the attenuation, isolation, control
and/or cancellation of noise and/or vibration and/or signals, now or
hereinafter owned or licensed by or to Licensor or its Affiliates,
including but not limited to all Know-how, trade secrets, methods,
operating techniques, processes, software, materials, technical data,
engineering information, formulas, specifications, drawings, machinery and
apparatus, patents, patent applications, copyrights and other intellectual
property relating thereto.
1.12 "Licensor Technology License" shall mean the license to the Licensed
Patents and the Licensed Technology granted by Licensor to Licensee under
Article 2 of this Agreement.
1.13 "Market" shall mean the world.
1.14 "Sponsor Technology" shall mean, with respect to a party hereto, (a) all
existing and future technology owned by or licensed to a party or its
Affiliates that, by virtue of contract restrictions binding on such party,
cannot be disclosed or transferred to the other party on the same terms and
conditions as Licensor Technology or Licensee Technology, as the case may
be, and (b) all existing and future technology that results from the
combination of such party's technology and a third party's technology and
that by virtue of contract restrictions binding on such party cannot be
disclosed or transferred to the other party on the same terms and
conditions as Licensor Technology or Licensee Technology, as the case may
be.
1.15 "Technical Information" shall mean technical, design, engineering, and
manufacturing information and data pertaining to the design, manufacture,
commercial production and distribution of Licensed Products in the form of
designs, prints, plans, material lists, drawings, specifications,
instructions, reports, records, manuals, other written materials, computer
programs and software and other forms or media relating thereto.
ARTICLE 2. LICENSES
2.1 Licensor Technology License. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee an exclusive license to make,
have made, use, distribute, sell and have sold Licensed Products that
incorporate or embody, or are covered or claimed by, or are based on one or
more of, the Licensed Patents and/or Licensed Technology.
2.2 Limitations. The Licensor Technology License shall be limited to the
manufacture, use, distribution and sale of Licensed Products in the Market
that practice, claim or contain the Licensed Patents and/or the Licensed
Technology.
2.3 Sublicensing and Assignment. The rights and licenses granted hereunder may
not be sublicensed, conveyed, assigned or otherwise transferred by Licensee
to any third party without Licensor's prior written consent in each
instance. Licensee may have Licensed Products manufactured for it by others
only after obtaining Licensor's prior written consent thereto and only
under nondisclosure agreements implemented in accordance with Articles 4
and 5 hereof.
2.4 Acceptance. Licensee hereby (a) accepts the rights under the Licensor
Technology License granted to it by Licensor under this Article 2 and (b)
acknowledges that the rights granted to Licensee hereunder are exclusive
and limited to the manufacture, use, distribution and sale of Licensed
Products in the Market subject to the limitations set forth herein.
2.5 Patent and Copyright Notices. Licensee shall mark each Licensed Product
sold, leased, distributed or otherwise transferred, and shall cause all
licenses, contracts and agreements with other parties for the sale, lease,
distribution, use or other disposition of Licensed Products to contain a
provision requiring (if feasible in Licensee's reasonable opinion) such
other parties to mark each Licensed Product, with a suitable legend
identifying the Licensed Patents and Licensed Technology with the
appropriate patent or copyright notice, as the case may be. If, in
Licensee's reasonable opinion, the Licensed Product is too small to have a
legend placed on it, Licensee will use all reasonable efforts to have a
legend placed on the packaging for the Licensed Product or some other
location of like visibility.
2.6 Product Marking. Licensee shall prominently mark each Licensed Product
sold, leased, distributed or otherwise transferred, and shall cause all
licenses, contracts and agreements with other parties for the sale, lease,
distribution, use or other disposition of Licensed Products to contain a
provision requiring (if feasible in Licensee's reasonable opinion) such
other parties prominently to mark each Licensed Product, with a suitable
legend identifying the Licensed Product as being a product that
incorporates Licensor Technology and including the words "NCT Group, Inc."
If, in Licensee's reasonable opinion, the Licensed Product is too small to
have such a legend placed on it, Licensee will use all reasonable efforts
to have such a legend placed on the packaging for the Licensed Product or
some other location of like visibility.
ARTICLE 3. FEES AND ROYALTIES
3.1 Fees. Licensee agrees to completely fund the development by Licensor of
Active Sound Barrier products derived from Licensed Patents and/or Licensed
Technology as a non-refundable license fee. Such development fees shall be
payable within 30 days of Licensee's receipt of Licensor's invoice
therefor.
3.2 Unit Royalties. Licensee shall pay Licensor a royalty with respect to each
Licensed Product unit ("Unit," which term, for purposes of royalty
calculations, shall not include prototypes or engineering samples furnished
without consideration to unaffiliated customers) sold, leased, distributed
or otherwise transferred by Licensee or any sublicensee permitted under
Section 2.3 hereof of 5% (five percent) of the gross revenues generated by
the Licensed Technology.
3.2 Payment. Unit royalties shall be paid to Licensor within 45 days of the end
of each calendar quarter and otherwise as provided in Article 7 hereof.
ARTICLE 4. DISCLOSURE OF INFORMATION, DATA AND KNOW-HOW
4.1 Disclosure. The parties shall disclose to each other such appropriate
Technical Information as may be reasonably required to accomplish the
purposes of this Agreement. Neither party, however, shall be obligated to
disclose information, the disclosure of which has been restricted by a
third party.
4.2 Deliverables. Licensor shall deliver the Deliverables to Licensee in
accordance with the delivery dates set forth on Schedule 1.3 hereto.
4.3 Treatment. All disclosed Technical Information that is Confidential
Information (as defined in Article 5 hereof) shall be kept confidential by
the receiving party in accordance with the further provisions of Article 5
and shall remain the property of the disclosing party.
ARTICLE 5. CONFIDENTIALITY
5.1 Definition. 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 hereof, Confidential
Information includes but is not limited to Deliverables, Technical
Information, Know-how, trade secrets, processes, formulas, data,
discoveries, developments, designs, improvements, inventions, techniques,
samples, models, prototypes, drawings, specifications, formulas,
algorithms, operating techniques, processes, technical information,
information relating to research or investigations, marketing plans,
strategies, forecasts, new products, products in development, software,
software documentation, 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, in each
instance whether given in writing, orally, visually or in electronic or
other form. 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 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 years thereafter, hold in confidence and not disclose to
third parties, except as specifically permitted under this Section 5.2 and
Section 5.4 hereof, 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 and contractors 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 Confidential
Information, and such access shall be limited to only so much of such
Confidential Information as is necessary for the particular employee
or contractor to perform his or her proper functions. All employees
and contractors who have access to Confidential Information of the
other party shall be under written obligation to (i) hold in
confidence and not disclose the Confidential Information made
available to them except as authorized by the party employing or
retaining them in a manner consistent with this Article 5; (ii) use
such Confidential Information only in the course of performing their
duties; and (iii) assign to the party hereto employing or retaining
them all rights to inventions or improvements in any way derived from
or relating to the Confidential Information.
(b) All documents, drawings, writings and other embodiments that 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 the party's possession and shall be removed therefrom
only as necessary to carry out the purposes of this Agreement.
(c) All documents, drawings, writings and other embodiments of
Confidential Information the possession, security or safekeeping of
which are subject to governmental regulations shall be kept in
accordance with such regulations.
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 that contain
Confidential Information, or attempt any of the foregoing, without the prior
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 that
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. Such return, however, shall not terminate or
affect the party's continuing obligations with respect to such Confidential
Information under Section 5.2 hereof.
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;
(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 from a third party
that was at the time under an 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) Is 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, however, that the party
required to so disclose Confidential Information shall use its best
efforts to notify the other party of such potential disclosure as soon
as practicable so that such party may seek a protective order or other
remedy to maintain in confidence such Confidential Information;
(f) Was developed independently by the receiving party 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.
ARTICLE 6. IMPROVEMENTS
6.1 Licensor Improvements. In the event that Licensee, individually or together
with Licensor, discovers, develops or creates any Licensor Improvements
during the term of this Agreement, Licensee promptly shall grant and
assign, on a quitclaim basis, all of its rights of ownership in such
Licensor Improvements to Licensor, whether such Licensor Improvements are
patentable or non-patentable, subject to any governmental approvals that
may be required for such grant and assignment, it being understood that any
such Licensor Improvements that are not made the subject of a patent shall
constitute part of the Licensed Technology licensed to Licensee hereunder
and that any such Licensor Improvements that are made the subject of a
patent shall constitute one of the Licensed Patents licensed to Licensee
hereunder. In the event that Licensor individually discovers, develops or
creates any Licensor Improvements during the term of this Agreement that
make use of, extend, are based upon or relate to the Licensed Patents or
the Licensed Technology, any such Licensor Improvements that are not made
the subject of a patent shall constitute part of the Licensed Technology
licensed hereunder and any such Licensor Improvements that are made the
subject of a patent shall constitute a Licensed Patent licensed hereunder.
6.2 Licensee Improvements. In the event that Licensor individually or together
with Licensee discovers, develops or creates any Licensee Improvements
during the term of this Agreement, Licensor promptly shall grant and
assign, on a quitclaim basis, all of its rights of ownership in such
Licensee Improvements to Licensee, whether such Licensee Improvements are
patentable or non-patentable, subject to any governmental approvals that
may be required for such grant and assignment.
6.3 Joint Discoveries. In the event that Licensee and Licensor jointly
discover, develop or create any intellectual property, whether patentable
or non-patentable, that is not an Improvement or is an Improvement not
covered by Section 6.1 or 6.2 hereof, all rights and interest in and to
such intellectual property shall be owned equally by Licensee and Licensor,
and each party hereby grants to the other a royalty free, perpetual,
irrevocable license to use and exploit any such intellectual property.
6.4 Dual Improvements. In the event Licensee and Licensor jointly discover,
develop or create any intellectual property, whether patentable or
non-patentable, that is or could be an Improvement under both Sections 6.1
and 6.2 hereof, all rights and interest in and to such intellectual
property shall be owned equally by Licensee and Licensor, and each party
hereby grants to the other a royalty free, perpetual, irrevocable license
to use and exploit any such intellectual property.
6.5 Individual Discoveries. In the event that either Licensee or Licensor
individually discovers, develops or creates any intellectual property,
whether patentable or non-patentable, that is not an Improvement or is an
Improvement not covered by Section 6.1 or 6.2 hereof, all rights and
interest in and to such intellectual property shall be owned by the party
discovering, developing or creating the same.
6.6 Further Assurances. The parties shall take all action legally permitted
that may be necessary or appropriate to assure full compliance with the
provisions of this Article 6, notwithstanding the fact that intellectual
property covered by this Article 6 may be discovered, developed or created
by an employee of one of the parties hereto.
ARTICLE 7. PAYMENTS, REPORTS AND RECORDS
7.1. Payments. Except as may be otherwise provided herein, royalties under this
Agreement are due and payable in U.S. dollars in immediately available New
York, New York funds within 45 days after the end of each calendar quarter
of each calendar year during the term of this Agreement.
7.2. Books and Records. Licensor or its agent, at Licensor's expense, may
inspect Licensee's books and records pertaining to royalties under this
Agreement, during ordinary business hours, but no more than once per
calendar year upon 15 days' prior written notice to Licensee.
7.3. Royalty Reports. Upon the written request of Licensor, Licensee shall
direct its independent certified public accountants, at Licensee's expense,
to provide Licensor with a certified written royalty report (the "Royalty
Report") for each of Licensee's fiscal years, or portions thereof, during
the term of this Agreement within 60 days after the end of each calendar
year during the term of this Agreement. Such Royalty Reports shall be
prepared in accordance with the standard reporting procedures of such
independent certified public accountants applied in a consistent manner. A
similar Royalty Report shall be rendered within 60 days after the
expiration or any termination of this Agreement.
ARTICLE 8. TERM
The term of this Agreement shall begin on the date hereof and, unless extended
or earlier terminated by written agreement of the parties or the provisions of
Article 9 hereof, shall expire (a) with respect to rights granted under any
patent hereunder, upon the expiration of such patent under applicable law and
(b) with respect to the other rights granted hereunder, upon the expiration of
the last to expire of the patents licensed hereunder.
ARTICLE 9. TERMINATION
9.1 General. This Agreement may be terminated prior to the end of its ordinary
term under any of the following provisions of this Article.
9.2 Breach. In the event of a material breach of this Agreement, if the
defaulting party fails to cure the breach within 30 days (in the case of a
breach involving non-payment of amounts payable) or 60 days (in the case of
any other kind of breach) after 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 by
delivering a further written notice that this Agreement is terminated. In
the event of any payment default, a cure shall require the defaulting party
to pay interest on the default amount at the then current prime rate as
reported in the Wall Street Journal.
9.3 Bankruptcy, Etc. If one of the parties becomes bankrupt, files a petition
therefor, makes a general assignment for the benefit of creditors,
otherwise seeks protection under any bankruptcy or insolvency law or
suffers the appointment of a receiver over its assets (the "Insolvent
Party"), the other party shall have the right to terminate this Agreement
upon written notice to the Insolvent Party. Notwithstanding the foregoing,
such right of termination shall not apply (a) with respect to a bankruptcy
petition filed against the Insolvent Party by a third party, until the
passage of 120 days after such filing without dismissal of such petition
and (b) for so long as the Insolvent Party continues to satisfy its
obligations under this Agreement and conduct its business in the ordinary
course.
9.4 Survival. Notwithstanding the termination of this Agreement under any of
the provisions of this Article 9, the provisions of Section 4.3, Articles 5
and 14, and the provisions of Article 6 that pertain to the ownership of
rights acquired, shall survive the termination of this Agreement.
ARTICLE 10. 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, if the party
seeking the benefit of this provision (a) as soon as practicable, gives the
other party written notice of the delay, describes its cause and, if possible,
provides an estimate of the duration of the delay and (b) uses all reasonable
efforts to minimize the delay and any other effects of the Event of Force
Majeure.
ARTICLE 11. APPLICABLE LAW
This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Connecticut and the United States of America, as applicable to
agreements to be performed wholly therein, excluding with respect to conflicts
of law principles.
ARTICLE 12. DISPUTE RESOLUTION
12.1.Informal Discussion. The parties agree to attempt in good faith to resolve
any disputes 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
14 days, at a mutually agreed time and place. If the matter has not been
resolved within 30 days of the request for such 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 14 days of the end of such 30-day period, at a mutually agreed time
and place.
12.2.Arbitration. If a dispute has not been resolved within 30 days of the
meeting described in the last sentence of Section 12.1 hereof, the dispute
shall be settled by arbitration conducted under the then current Commercial
Arbitration Rules of the American Arbitration Association (the
"Association") in accordance with the terms of this Agreement. The
arbitration shall be conducted at the Association's regional office located
closest to Licensor's principal place of business by an arbitrator agreed
upon by the parties or, if they cannot agree, by three arbitrators, one
selected by each of the parties and the third selected by such two
arbitrators. Judgment upon the arbitration award may be entered and
enforced in any court of competent jurisdiction. Neither party shall
institute an arbitration proceeding hereunder unless at least 30 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 remedies shall not be sought solely as a
means to avoid or delay arbitration.
ARTICLE 13. NOTICE
Any notices under this Agreement shall be in writing and shall be deemed
delivered (a) if delivered personally, on the date of delivery (b) if sent by
recognized commercial courier, on the date of scheduled delivery, (c) if sent by
telecopy and promptly confirmed by first class mail, on the date of telecopy
delivery, (d) if sent by registered or certified mail (postage or charges
prepaid), on the third day following dispatch. Unless notice is given in
accordance herewith to change the data below, any notice under this Agreement
shall be addressed as follows:
If to Licensor: If to Licensee:
-------------- --------------
NCT Group, Inc. Stopnoise, Inc.
20 Ketchum St. 431 Route 10
Westport, CT 06880 Randolph, NJ 07102
Attention: Chief Executive Officer Attention: Morton Salkind
Telecopy: 203-226-3123 Telecopy: 973-328-1335
ARTICLE 14. INDEMNIFICATION
14.1.Breaches of this Agreement. Each of Licensor and Licensee shall indemnify,
defend and hold harmless the other party, the other party's Affiliates,
successors and assigns, and the officers, directors, employees and agents
of all thereof (the "Indemnified Party") against any and all losses,
claims, damages, liabilities, costs and expenses (including but not limited
to reasonable attorneys' fees and other costs of defense) (collectively,
"Losses") that the Indemnified Party may incur or for which the Indemnified
Party may become liable on account of any suit, claim or proceeding based
upon or purporting to be based upon a breach of this Agreement by the other
party (the "Indemnifying Party") or its employees or agents.
14.2.Intellectual Property. Licensor (as an Indemnifying Party) shall
indemnify, defend and hold harmless Licensee, Licensee's Affiliates,
successors and assigns, and the officers, directors, employees and agents
of all thereof (as an Indemnified Party) against any and all Losses based
on or arising out of actual or alleged infringement of any patent or
trademark or any unfair trade practice resulting from the exercise or use
of any right or license granted to Licensee under this Agreement; provided,
however, that Licensor shall have no liability to defend or pay damages or
costs to Licensee with respect to any claim of infringement based on or
arising out of an implementation designed or modified by Licensee or any
third party or based on or arising out of Licensee'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.
14.3.Procedures. 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 of such suit, claim or proceeding. No
settlement of such a suit, claim or proceeding shall be made without the
prior written consent of the Indemnified Party, which 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 15. WARRANTIES AND DISCLAIMER
15.1.Validity and Non-Infringement. To the best of Licensor's knowledge and
belief, as of the date of this Agreement the Licensed Patents are valid and
do not infringe any other patent issued prior to the date hereof.
15.2.Enforcement. Throughout the term of this Agreement, Licensor shall
maintain in force the Licensed Patents. In this connection, Licensor shall
promptly pay all costs of continuations, continuations-in-part, divisions,
extensions, reissues, re-examinations, or renewals of the Licensed Patents,
including but not limited to the costs of attorneys, experts or other
professionals engaged in connection with any of the foregoing. In addition,
Licensor shall actively protect the Licensed Patents and shall institute
such suits, actions or proceedings for infringement of the Licensed Patents
as may be necessary in this regard; provided, however, that no suit, action
or proceeding need be brought by Licensor unless Licensor shall have
received the advice of counsel that success on the merits is reasonably
certain. In the event Licensor fails to commence an enforcement action or
otherwise protect the Licensed Patents as aforesaid after notice of
possible infringement from Licensee, Licensee shall be entitled by itself,
at its own expense, to institute proceedings in the name of and with the
cooperation of Licensor to restrain such infringement. Where Licensee
proceeds alone and achieves an award from the official enforcement forum in
an action brought by it, Licensee 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
Licensor's participation and prior written consent. If Licensor has elected
to participate and share in the expense of any such enforcement action, any
award shall be shared equally by Licensor and Licensee.
15.3.DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, LICENSOR
HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF THE ACCURACY,
RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS OR
MERCHANTABILITY OF THE LICENSED PATENTS, THE LICENSED TECHNOLOGY OR THE
LICENSED PRODUCTS, OR THEIR SUITABILITY OR FITNESS FOR ANY PURPOSE
WHATSOEVER. LICENSOR DISCLAIMS ALL OTHER WARRANTIES OF WHATEVER NATURE,
EXPRESS OR IMPLIED. LICENSOR DISCLAIMS ALL LIABILITY FOR ANY LOSS OR DAMAGE
RESULTING, DIRECTLY OR INDIRECTLY, FROM THE USE OF THE LICENSED PATENTS,
THE LICENSED TECHNOLOGY AND THE LICENSED PRODUCTS, OTHER THAN THOSE ARISING
FROM CLAIMS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES; WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THIS DISCLAIMER
EMBRACES CONSEQUENTIAL, INCIDENTAL AND PUNITIVE DAMAGES, LOSS OF PROFITS OR
GOOD WILL, EXPENSES FOR DOWNTIME OR FOR MAKING UP DOWNTIME, DAMAGES FOR
WHICH LICENSEE MAY BE LIABLE TO OTHER PERSONS, DAMAGES TO PROPERTY AND
INJURY TO OR DEATH OF ANY PERSONS.
ARTICLE 16. SUPPORT SERVICES
Licensor shall provide Licensee with engineering, maintenance and sales support
with respect to Licensed Products to be sold, leased, distributed or otherwise
transferred by Licensee under this Agreement to the extent and at the rates set
forth in Schedule 16 hereto.
ARTICLE 17. MISCELLANEOUS
17.1.Authority. Each party hereto represents and warrants to the other party
that it has the right, power and authority to enter into and perform this
Agreement and that such execution and performance will not breach or
conflict with any agreement or governmental or judicial order by which it
or its assets are bound.
17.2.Announcements. Except for disclosures required by law, including required
filings with the Securities and Exchange Commission, neither party shall
use the other party's name or disclose the terms of this Agreement without
the prior written consent of the other party, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, upon the execution of
this Agreement, either party may issue a press release in such party's
customary format reporting the execution of this Agreement and its general
subject matter if such party has received the other party's prior written
consent thereto, which consent shall not be unreasonably withheld.
17.3.Taxes. Licensee shall be solely responsible for any sales, use,
occupational or privilege taxes, duties, fees or other similar charges
imposed by any governmental authority in connection with the manufacture,
sale, lease, distribution, use or other disposition by Licensee of Licensed
Products or of any other rights granted to Licensee hereunder. Other taxes,
including income taxes based on royalties and other payments to Licensor,
shall be the responsibility of Licensor.
17.4.Independent Contractors. Each party hereto is an independent contractor
with respect to the other party hereto and neither shall be considered the
partner, employer, agent or representative of the other.
17.5.Entire 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 such subject matter.
17.6.Waivers. No waiver of any provision of this Agreement shall be binding
unless in writing and executed by the party being charged. No modification,
waiver or discharge of any right or claim under this Agreement shall affect
the right of a party hereto to enforce any other claim or right hereunder.
17.7.Severability. If any portion of this Agreement for any reason is declared
invalid or unenforceable, such declaration shall not affect the validity or
enforceability of the remainder of this Agreement, which shall still be in
full force and effect; provided, however, that in the event a portion of
this Agreement is declared invalid and the invalidity or enforceability of
such portion has the effect of materially altering the obligations of any
party under this Agreement, the parties will 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.
17.8.Successors and Assigns. Neither party hereto may assign this Agreement or
any of its rights or obligations hereunder, except (a) as described in
Section 2.3 hereof; (b) with the prior written consent of the other party;
or (c) where the assignment is to an Affiliate of the assigning party, if
the assigning party gives the other party 30 days' prior written notice of
the assignment and the assignee agrees in writing to be bound by the
provisions of this Agreement. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of the parties
hereto.
17.9.Drafter. No provision of this Agreement shall be construed against either
party hereto solely because such party or its agent drafted such provision.
IN WITNESS WHEREOF, Licensor and Licensee have executed this Agreement as of the
date first above written.
Licensor: Licensee:
-------- --------
NCT GROUP, INC. STOPNOISE, INC.
By: /s/ Michael J. Parrella By: /s/ Morton Salkind
------------------------------- -----------------------------
Name: Michael J. Parrella Name: Morton Salkind
------------------------- --------------------------
Title: C.E.O. Title: Vice President
------------------------- --------------------------
Schedule 1.3
DELIVERABLES
In accordance with Section 4.2 of this Agreement, Licensor will deliver to
Licensee the following Deliverables on or before the respective dates set forth
below:
Deliverable: Date:
----------- ----
None.
Schedule 1.6
LICENSED PATENTS
1. Patents:
-------
The patents listed below:
Patent Number Country
------------- -------
4,489,441 United States
4,654,871 United States
4,566,118 United States
2110504B United Kingdom
EP(BE)96684 Belgium
EP(FR)96684 France
P3269764.3 Germany
EP(NL)96884 Netherlands
8302725 Norway
82/8700 South Africa
EP(SE)96684 Sweden
EP(CH)96684 Switzerland
2147166A United Kingdom
4,589,133 United States
1964147 Japan
2,142,091 United Kingdom
4,596,033 United States
2,154,830 United Kingdom
4,637,048 United States
2,155,734 United Kingdom
4,669,122 United States
2,160,742 United Kingdom
4,862,506 United States
1,322,782 Canada
5,097,923 United States
PCT/US89/00665 PCT
622158 Australia
1,329,140 Canada
0373188 EPO
0373188 United Kingdom
0373188 SE
0373188 IT
0373188 FR
P 689 11 112.6-08 DE
2709743 Japan
137271 Korea
2009334 Russia
4,977,600 United States
1,296,651 Canada
4,878,188 United States
PCT/US89/03907 PCT
628401 Australia
1,329,834 Canada
0396666 EPO
0396666 FR
689 26 039 DE
0396666 IT
0396666 SE
0396666 GB
2627807 Japan
122602 Korea
5,105,377 United States
PCT/US91/00722 PCT
650259 Australia
2,076,007-9 Canada
0 521 868 EPO
03-504512 Japan
136565 Korea
5,091,953 United States
PCT/US91/00756 PCT
2,074,951 Canada
0 515 518 EPO
50 5555/91 Japan
PCT/US91/02731 PCT
0 580 579 EPO
E 167.775 Austria
691 29 664.2 Germany
HK1011163 Hong Kong
PCT/US92/05770 PCT
2,140,152 Canada
0 651 899 EPO
5,563,817 United States
5,311,453 United States
PCT/US92/05772 PCT
2,140,153 Canada
0 659 288 EPO
69231855 Germany
5,627,746 United States
PCT/US92/03025 PCT
2,118,211 Canada
92916056.2 EPO
0 636 207 Austria
69220245.5 Germany
07/928,471 United States
PCT/US92/07650 PCT
2,142,014 Canada
0 655 151 EPO
506204/94 Japan
PCT/US92/05229 PCT
2,138,553 Canada
0 694 234 EPO
5,638,022 United States
PCT/US92/05228 PCT
2,138,552 Canada
0 647 372 EPO
5,469,087 United States
PCT/US92/07802 PCT
2,145,077 Canada
0 660 958 EPO
5,652,770 United States
5,361,303 United States
PCT/US94/03357 PCT
2,159,589 Canada
0695452 EP
5,440,642 United States
PCT/US94/09999 PCT
94928558.9 EP
2,170,026 CA
3219770 JP
PCT/US94/08393 PCT
94922156.8 EP
3027824 JP
5,546,467 United States
PCT/US95/01038 PCT
2,179,619 CA
0 742 941 EP
69524062 Germany
5,745,581 United States
5,475,761 United States
PCT/US95/01039 PCT
2,179,620 CA
0 742 971 EP
69522208 Germany
PCT/GB91/00265 PCT
639761 Australia
2076390-6 Canada
91904859.5 EPO
0 516 695 France
691 25 601.2-08 Germany
0 516 695 Italy
0 516 695 Netherlands
0 516 695 Sweden
0 516 695 United Kingdom
505505 Japan
08/050,023 United States
PCT/GB91/01850 PCT
660291 Australia
2,095,038 Canada
0 555 248 EPO
0 555 248 Austria
0 555 248 Belgium
0 555 248 Denmark
0 555 248 France
0 555 248 Germany
69129413.5 Greece
0 555 248 Italy
0 555 248 Luxembourg
0 555 248 Netherlands
0 555 248 Spain
0 555 248 Sweden
0 555 248 Switzerland
0 555 248 United Kingdom
516924/91 Japan
4,715,559 United States
2230920 United Kingdom
2049332-1 Canada
5,365,594 United States
PCT/GB90/00617 PCT
635266 Australia
0470153 EPC
0470153 (FR) France
0470153 (DE) Germany
0470153 (IT) Italy
0470153 (SP) Spain
0470153 (SE) Sweden
5,133,017 United States
PCT/US91/01395 PCT
0 533 680 EPC
PCT/GB92/01399 PCT
665565 Australia
2114529 Canada
5-503383 Japan
231938 Korea
5,638,454 United States
0 596 971 EPC
69223147.1 Germany
PCT/GB92/00642 PCT
664988 Australia
2107663 Canada
4-507711 Japan
0255030 Korea
5,434,925 United States
0 579 667 EPC
PCT/US93/03354 PCT
08/082,402 United States
PCT/US94/07027 PCT
0 705 472 EPC
99203047.8 EP
6,118,878 United States
09/595,558 United States
5,416,845 United States
(FWC of 08/054,935
PCT/US94/04821 PCT
0 724 415 EP
2,160,672 CA
2,001,199-8 Canada
2. Patents Pending Under Filed Applications:
----------------------------------------
None.
3. Disclosures for Which Patent Applications are to be Filed:
---------------------------------------------------------
None.
Schedule 1.8
LICENSED TECHNOLOGY
1. The unpatented technology contained in the patent applications filed or to
be filed and listed on Schedule 1.6 to this Agreement.
2. The unpatented technology in Licensor's possession that Licensor is free to
disclose and that supports, amplifies, explains or enables the design or
manufacture of products embodying any of the claims of the Licensed
Patents.
3. The unpatented technology contained in the Deliverables.
4. The technology contained in the expired or abandoned patents and patent
applications listed below:
Patent or Patent Application Number Country
----------------------------------- -------
4,122,303 United States
1555760 United Kingdom
501 428 Australia
853039 Belgium
7710193 France
2712534 Germany
148465 Norway
211/81 Singapore
77/1689 South Africa
4,153,815 United States
1577322 United Kingdom
507 688 Australia
854547 Belgium
2351466 France
P2721745.5 Germany
147851 Norway
210/81 Singapore
447937 Sweden
4,417,098 United States
EP(UK)34592 United Kingdom
537227 Australia
EP(FR)34592 France
P3066842.9 Germany
2012840 Japan
EP(NL)346592 Netherlands
151684 Norway
81/0990 South Africa
EP(SE)34592 Sweden
EP(CH)34592 Switzerland
2077988B United Kingdom
542511 Australia
E40613 Austria
EP(FR)40613 France
P3071417.1 Germany
EP(NL)40613 Netherlands
153074 Norway
EP(SE)40613 Sweden
EP(CH)40613 Switzerland
2104754B United Kingdom
550700 Australia
E17410 Austria
EP(FR)81516 France
P3268382.0 Germany
EP(NL)81516 Netherlands
157478 Norway
82/4145 South Africa
EP(SE)81516 Sweden
EP(CH)81516 Switzerland
4,527,282 United States
2105948B United Kingdom
552558 Australia
E13953 Austria
EP(BE)85691 Belgium
EP(FR)85691 France
P3264276.8 Germany
EP(LU)85691 Luxembourg
EP(NL)85691 Netherlands
158392 Norway
82/5676 South Africa
EP(SE)85691 Sweden
EP(CH)85691 Switzerland
4,423,289 United States
1484903 Japan
2054999 United Kingdom
4,480,333 United States
2097629 United Kingdom
4,171,465 United States
1,548,362 United Kingdom
4,044,203 United States
7,341,862 France
80/469 Hong Kong
80/116 Singapore
1,456,018 United Kingdom
2009334 Ukraine
2,108,696 Canada
518527/91 Japan
08/133,119 United States
08/422,403 United States
PCT/US93/06633 PCT
08/318,629 United States
08/065,420 United Stated
PCT/US94/05640 PCT
08/104,754 United States
PCT/US95/02704 PCT
08/187,022 United States
520165/95 JP
07/920,494 United States
2,088,951B United Kingdom
4,473,906 United States
1667325 Japan
1,161,766 Canada
3144052 Germany
506649/90 Japan
20440115-0 Canada
9116433.5 United Kingdom
9107416.1 United Kingdom
07/866,918 United States
93909299.5 EPC
2,117,803 Canada
503060/95 JP
524609/94 JP
Schedule 16
SUPPORT SERVICES
In connection with this License Agreement, Licensor shall provide Licensee with
engineering, maintenance and sales support services, subject to personnel
availability, at the rates set forth below. Rates are subject to change upon
reasonable prior notice. Out-of-pocket, travel and materials expenses are
additional and will be billed and paid at cost.
Personnel: Hourly Rate:
--------- -----------
Technician/Draftsman Licensor's then-standard rate(s) therefor
Junior Engineer Licensor's then-standard rate(s) therefor
Engineer Licensor's then-standard rate(s) therefor
Senior Engineer Licensor's then-standard rate(s) therefor
Manager Licensor's then-standard rate(s) therefor