EXHIBIT NO. 10(b)
MASTER LICENCE AGREEMENT between:
(1) NEW TRANSDUCERS LIMITED a company incorporated under the laws of England
and Wales and registered in England with number 3135528 and having its
registered office at Stonehill, Huntingdon PE18 6ED, England ("NXT").
(2) NCT AUDIO PRODUCTS, INC. a Delaware corporation with offices at 1025
West Nursery Road, Linthicum, Maryland 21090 USA ("the Licensee").
WHEREAS:
(A) NXT has developed distributed mode acoustic technology enabling the
manufacture of a lightweight panel loudspeaker which radiates sound
efficiently and evenly over a wide frequency range and a wide acoustic
area.
(B) NXT owns certain patent and other rights, together with substantial
know-how relating to its distributed mode loudspeaker technology covering,
amongst other things, both the manufacture of loudspeakers and their
integration into other systems.
(C) NXT has acquired a reputation in relation to distributed mode loudspeakers
and has valuable goodwill in its trade marks and names.
(D) NXT has entered into exclusive licensing arrangements with the Defence
Evaluation & Research Agency of the United Kingdom Ministry of Defence and
with Noise Cancellation Technologies Inc., for additional patent and other
rights, but both of which limit NXT to certain fields and applications.
Therefore, NXT must ensure that its licensees' activities correspond to
those fields and applications.
(E) NXT has selected licensed end users who are able to use the distributed
mode acoustic technology to make or assemble products to the required
technical standard.
(F) The Licensee believes it can develop a substantial demand for NXT's
distributed mode loudspeakers using NXT's patent rights, know-how and trade
marks.
NOW IT IS AGREED AS FOLLOWS:
NXT hereby grants to the Licensee the rights set out in the attached Standard
Licence Terms (which are incorporated into this Licence Agreement) in
consideration for the Licensee's payments, covenants and obligations set out
below and in the said Standard Licence Terms.
In this Licence Agreement and in the accompanying Standard Licence Terms the
following words and expressions shall have the meanings shown.
"Field of Use" all Fields subject to Schedule 2 of the Standard
Licence Terms which contains details of particular
matters which are expressly excluded.
"Licensed Products" flat panel loudspeakers using the IPRs.
"NXT Assemblies" loudspeakers which use the IPRs and which are
supplied by an NXT Master Licensee.
"NXT Licensee" a party which has the right under a licence
agreement with NXT to use the IPRs to manufacture and
assemble, distribute, market, sell and use products in
the Field of Use.
"NXT Master Licensee" a party which has entered into a
licence agreement in the same terms (or substantially
the same terms) as this Licence Agreement.
"NXT User Licensee" a party which has the right under a
licence agreement with NXT to use the IPRs to
incorporate NXT Assemblies into products in the Field of
Use to the required technical and quality standards.
"NXT User Licence" a licence agreement with NXT to
incorporate NXT Assemblies in the Field of Use supplied
by an NXT Master Licensee into its NXT User Licensee's
own products.
"Production Territory" worldwide
"Sales Territory" worldwide
The following payments referred to in the Standard Licence Terms shall be:
"Initial Licensing Fee" US$: nil
"Annual Licensing Fee" US$: nil
"Royalty Rate" 1. For Licensed Products manufactured, assembled,
supplied or sold as finished products destined for sale
to end users the Royalty Rate shall be the greater of 2%
of Net Sales Revenue or US$0.10 (ten cents) per Licensed
Product or
2. for Licensed Products manufactured, assembled,
supplied or sold as products adapted or destined for incorporation into
products of NXT Licensees the Royalty Rate shall be:
US$0.92 per each electrodynamic transducer
US$0.74 per each piezoelectric transducer
provided that (a) where NXT agrees Royalty Rates with
other NXT Master Licensees which are lower than the
rates specified in 2 above ("the Third Party Rate") the
Royalty Rate payable by the Licensee shall be reduced to
the Third Party Rate less eight percent (8%) ("the New
Royalty Rate") and NXT shall inform the Licensee
accordingly. The New Royalty Rate shall be payable by
the Licensee with effect from the quarter day
immediately following notification of the New Royalty
Rate by NXT; and (b) in order to take into account
market conditions the parties may need to renegotiate
separate Royalty Rates for Licensed Products for
different Fields of Use provided that the concept of the
new Royalty Rate referred to in (a) above shall continue
to apply to such renegotiated rates.
The Licencee shall have the right to execute NXT User Licences on behalf of NXT
in the precise terms as notified in writing by NXT from time to time and shall
send to NXT a copy of any such User Licence within 14 calendar days of
execution.
IN WITNESS WHEREOF the duly authorised representatives of the parties have
executed this Licence Agreement which is made the day and year of the signature
for and on behalf of New Transducers Limited.
Signed for and on behalf of )
NEW TRANSDUCERS LIMITED ) /s/ Ernest Schneider
this 27th day of September 1997 ) name and position: Director
date of signature and of this Agreement )
Signed for and on behalf of the )
LICENSEE ) /s/ Michael J. Parrella
) name and position: CEO
These are the Standard License Terms referred to in the
accompanying Licence Agreement and initialled for
identification purposes
ES MJP
New Transducers Limited The Licensee
STANDARD LICENCE TERMS
1 Definitions
In these Standard Licence Terms and the accompanying Licence Agreement, the
following words and expressions shall have the meanings shown.
"the Agreement" the accompanying Licence Agreement and these
Standard Licence Terms.
"New Cross Licence" the New Cross Licence Agreement dated 27
September 1997 by
and between Verity Group plc, NXT, Noise
Cancellation
Technologies, Inc. and the Licensee.
"Associated Company" (i) any legal entity in which a party has an
Interest;
(ii) any legal entity which directly or indirectly
Controls a party ("Parent");
(iii) any legal entity in which a Parent has an
Interest; or
(iv) OnActive Technologies LLC so long as the
percentage of voting rights held by the Licensee
in that Company does not fall below 42.5%
(forty-two point five percent).
For purposes of this Agreement "Control" of an entity
shall be deemed to exist by virtue of having the
right to influence the operation and affairs thereof
by holding directly 51% or more of each of the equity
interests and voting rights in such entity.
"Interest" in an entity shall be deemed to exist by
virtue of owning voting rights equal to or greater
than 50% of all voting rights in such entity.
"Commencement Date" the date of the attached Licence Agreement
which is the date of its signature for and on
behalf of NXT.
"Copyright" copyright, design right and all other rights in
the nature of copyright and design right in the
Supporting Documentation.
"Improvement(s)" any addition, development, improvement,
modification or adaptation of any of the IPRs or
new application of any of the IPRs.
"IPRs" the NCTI Patents, the NCTI Technology, the NCTI
IPR, the NXT Patents, the NXT Technology and the
NXT IPR as defined in the New Cross Licence
together with Know How, the Marks and the
Copyright which are owned by or licensed (with a
right to sublicense) to NXT and which directly
concern the manufacture, assembly, distribution,
marketing, sale and use of the Licensed Products
under the Marks.
"Know How" the Supporting Documentation together with
confidential information, advice, descriptions and
other technical data (whether written, oral or in
any other form, provided that where such
information, advice, descriptions or data is first
disclosed orally it shall be confirmed in writing)
which are supplied by NXT to the Licensee at any
time under the Agreement which support, amplify or
explain the specifications or claims of the
Patents to the extent that the aforesaid
i) is not published or otherwise in the public
domain (otherwise than by any unauthorised
disclosure by the Licensee); or
ii)was known to the Licensee (otherwise than through
NXT or its agents or the unauthorised disclosure
by any third party).
"Marks" the registered and unregistered trade marks set
out in Schedule 1.
"Net Revenue Sales" the revenues received from the sale by the
Licensee of the Licensed Products less:
i) costs of packing, transportation and insurance;
ii) sales, value added and other taxes not based
on income;
iii) ordinary trade discounts and commissions;
iv) customs duties and expenses; and
v) royalties payable to third parties
In the event of sales of Licensed Products by the
Licensee other than to a third party in a commercial
arm's length transaction, the Net Sales Revenues
shall be the amount which would have been charged by
the Licensee in a commercial arm's length
transaction.
"NXT Improvements" an Improvement created or arising as a
result of technical assistance, training, research or
development carried out by NXT for the Licensee.
"Sale" sale or any other disposal by the Licensee (whether
for value or not) which shall (including "sales", "sell", "sold" etc.)
include lease, hire or any other transaction which transfers ownership
or possession of any Licensed Product.
"Supporting Documentation" the documents, software and other
materials to be supplied by NXT to the Licensee to
assist the Licensee to manufacture, assemble,
distribute, market sell and use the Licensed Products.
"US Consumer Price Index" the Consumer Price Index for all Consumers, US City
Average (1982 - 84 = 100 ("CPI") All Item Index, published by the Bureau of
Labor
Statistics, United States Department of Labor.
If the CPI shall cease to be compiled and published at
any time during the term of the Agreement, but a
comparable successor index is compiled and published
by the Bureau of Labor Statistics, United States
Department of Labor, such successor index shall be
used for the purposes of the Agreement. If neither the
CPI, nor a comparable successor index is compiled by
the Bureau of Labor Statistics, the index reflecting
cost of living increases generally recognised by
financial and insurance institutions in the United
States shall be used.
2 Commencement and Duration
2.1 Subject to the following provisions, the Agreement shall come into effect
on the Commencement Date.
2.2 If any governmental or other approval is required, then the Licensee shall
use its best efforts to secure such approval of the Agreement in the same
form as executed and the Commencement Date shall be the date of such
approval being obtained by the Licensee. If such approval is not obtained
within one year from the date of the Agreement then the Agreement shall
automatically cease to be of any further effect.
2.3 The Agreement and the licence granted under it shall continue from the
Commencement Date until terminated in accordance with the terms hereof.
3 Grant
3.1 In consideration for the Initial Licensing Fee, the Annual Licensing Fee
and the royalties payable under the Agreement, NXT hereby grants to the
Licensee a non-exclusive non-assignable licence to use in the Field of Use
the IPRs and the NXT Improvements to manufacture and assemble the Licensed
Products in the Production Territory and to distribute, market, sell and
use the Licensed Products in the Field of Use in the Sales Territory.
3.2 The Licensee may not sub-license the IPRs to any party (including without
limitation any Associated Company of the Licensee).
3.3 NXT shall upon written request by the Licensee extend the Agreement to an
Associated Company of the Licensee on the same terms (except that no
further Initial and Annual Licensing Fees shall become due) provided the
Associated Company covenants directly with NXT to observe the terms and
conditions of the Agreement in the terms of the draft letter agreement set
out in Schedule 3. The Licensee shall be jointly and severally responsible
with any Associated Company to which the Agreement has been extended for
the performance by that Associated Company of the terms and conditions of
this Agreement. For the purposes of reporting sales and making royalty
payments, the Licensee shall inform NXT whether sales of an Associated
Company shall be deemed to be sales of the Licensee or whether the
Associated Company shall make the reports and royalty payments directly to
NXT.
3.4 The Licensee may sub-contract in the Production Territory the manufacture
and/or assembly of the Licensed Products (and/or components therefor which
require the use of the IPRs) provided:
i) the Licensee informs NXT in writing of the identity of such
sub-contractor;
ii) the sub-contractor has a separate written agreement with the
Licensee which expressly prohibits the sub-contractor from
supplying any third party and which requires the
sub-contractor to comply mutatis mutandi with the terms and
conditions of this Agreement (including without limitation the
confidentiality obligations in clause 13); and
The Licensee may not commence using the proposed sub-contractor until both
of the above conditions are satisfied. The use of a sub-contractor shall
not relieve the Licensee of any of its obligations under the Agreement to
NXT. The Licensee shall be liable for any activities or threatened
activities of the sub-contractor (whether authorised by the Licensee or
not) which are inconsistent with the terms and conditions of this
Agreement and the Licensee shall fully and promptly protect, hold harmless
and indemnify NXT against all damage, loss, expenses and costs (including
reasonable legal fees and expenses) arising out of the sub-contractor's
activities or threatened activities and any steps taken by NXT to
terminate such matters.
3.5 The Licensee acknowledges that the grant of rights to the Licensee
pursuant to clause 3 is conditional on the Licensee marking all Licensed
Products with the Marks in accordance with the terms of the Agreement. The
Licensee further acknowledges that a failure to comply with the marking
provisions will result in the manufacture, assembly, distribution,
marketing, sale or use (as the case may be) of unlicensed products and
will constitute both a material breach of the Agreement and infringement
of the IPRs.
4 Supply of Supporting Documentation and Know How
4.1 Within sixty days from the Commencement Date NXT shall supply to the
Licensee the Supporting Documentation. At the Licensee's request, NXT may
provide additional copies of the Supporting Documentation where it
believes that it is appropriate to do so and at such cost as it may
decide.
4.2 NXT may (in its absolute discretion) supply to the Licensee such further
Know How in its possession which it is free to disclose to the Licensee
and which may assist the Licensee to manufacture the Licensed Products.
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5 Technical assistance
5.1 In addition to the Supporting Documentation, NXT shall provide the
Licensee with a two-day technical briefing (at such date and location as
NXT may in its absolute discretion determine) on the use of the IPRs to
manufacture the Licensed Products.
5.2 To the fullest extent as is permissible by law, all liability for the
technical assistance provided by NXT to the Licensee or for NXT's failure
to provide such assistance is excluded.
5.3 Should the Licensee require technical assistance beyond that allowed in
sub-clause 5.1 or require training, research or development, NXT may
provide such services at the rate of US$ 1,000 per day (plus out of pocket
expenses and VAT if applicable) and on further terms to be agreed between
the parties.
6 Intellectual property
6.1 The Agreement licenses a package of rights consisting of the Patents, the
Know How and the Marks. No territorial restrictions relating to
distribution, marketing and sales of the Licensed Products are placed
either on the Licensee or its customers. Under sub-clause 15.2, the
royalty payments reduce by 33% upon expiry of the last of the Patents.
Accordingly, the Licensee acknowledges NXT's right to receive royalties
for the full period during which the Licensee continues to manufacture,
assemble, market, distribute or sell the Licensed Products notwithstanding
that within the Sales Territory some or even all of the registrations for
patent and/or trade mark rights may not be applied for or fail to proceed
to grant.
6.2 The Licensee hereby acknowledges and agrees that subject to the terms
hereof and the New Cross Licence it shall not acquire or hold any rights
in respect of the IPRs nor in respect of any NXT Improvements. All such
rights shall belong to and shall vest in NXT and/or NXT's licensors. For
the avoidance of doubt, any rights granted hereunder in relation to any
IPRs licensed by a third party to NXT shall automatically terminate on the
termination of such third party licence to NXT.
6.3 The Licensee shall not do, procure or omit to do anything that might
diminish the validity or subsistence of the IPRs nor NXT's or NXT
licensors' ownership of such rights. However, neither this sub-clause nor
anything in the Agreement shall prevent the Licensee from challenging or
assisting others to challenge the ownership, validity or subsistence of
the IPRs or any part of it.
6.4 At the request of NXT, the Licensee shall use its commercially reasonable
endeavours to provide all reasonable information and assistance to enable
any of the IPRs to be registered with any appropriate body anywhere in the
world including, without limitation, by the giving of written and oral
evidence by the relevant employees and officers of the Licensee. NXT shall
reimburse the Licensee in respect of its reasonable out-of-pocket expense
reasonably incurred in the provision of such information and assistance.
7 Warranties
7.1 NXT hereby represents and warrants that:
7.1.1 it is the owner or licensee of the IPRs;
7.1.2 it has the right and power to grant the licence in the
Agreement;
7.1.3 so far as NXT is aware, there is no claim on its title; and
7.1.4 it will use its commercially reasonable endeavours to maintain
the IPRs.
7.2 Subject to the above, NXT does not represent and excludes any warranty:
7.2.1 that what is licensed hereunder is useful, of merchantable or
satisfactory quality or fit for any purpose or is in good
commercial form;
7.2.2 that in exercising its rights hereunder no third party might
bring a claim or action against the Licensee for infringement of
any intellectual property right;
7.2.3 as to the accuracy of the technical information and the Know
How; or
7.2.4 that the IPRs are valid and enforceable.
7.3 Nothing in sub-clause 7.2 shall exclude, restrict or modify any condition
or product warranty implied in the Agreement by law where to do so would
render sub-clause 7.2 void.
7.4 The Licensee hereby represents and warrants that it has the willingness,
ability and resources to manufacture, assemble, distribute, market and
sell commercially the Licensed Products.
8 Product liability
8.1 NXT shall have no liability whatsoever to the Licensee for any injury,
loss or damage of any kind sustained or incurred by the Licensee or any
other person arising from or in connection with the manufacture, assembly,
distribution, marketing, sale, supply or use of the Licensed Products.
Nothing in this sub-clause shall exclude, restrict or modify any condition
or warranty implied by law where to do so would render this sub-clause
void.
8.2 The Licensee shall fully and promptly protect, hold harmless and indemnify
NXT against all liabilities, claims, damages, losses, expenses and costs
(including reasonable legal fees and expenses) arising out of the
manufacture, assembly, distribution, marketing, sale, supply and use of
the Licensed Products by the Licensee or its customers or arising out of
the use of the IPRs by the Licensee.
9 Third party infringement and legal proceedings
9.1 The Licensee shall immediately report to NXT any infringement or
threatened infringement or unauthorised disclosure or use of the IPRs
which comes to its attention, giving full particulars of all information
available to the Licensee in respect of such infringement, disclosure or
use.
9.2 At NXT's request, the Licensee shall promptly provide all reasonable
information and assistance in respect of potential or actual proceedings
concerning the IPRs including, without limitation, the giving of written
and oral evidence by the relevant employees and officers of the Licensee.
9.3 Subject to the New Cross Licence Agreement the Licensee shall have no
right to bring any proceedings or counterclaims against third parties in
respect of the IPRs without the prior written consent of NXT.
10 NXT Improvements
10.1 The Licensee shall keep confidential any NXT Improvements save to the
extent that any such NXT Improvement is published or otherwise in the
public domain (other than by any unauthorised disclosure by the Licensee).
The Licensee shall forthwith communicate full particulars of such NXT
Improvement to NXT together with all information available to the Licensee
concerning the mode of working and using the same. The Licensee shall
execute all documents and do all such things necessary to enable NXT to
obtain, defend or enforce its rights in and to NXT Improvements.
11 Trade Marks
11.1 The Licensee shall use the Marks and only in relation to the Licensed
Products.
11.2 The Licensee shall use the Marks as agreed with NXT from time to time and
shall not manufacture, assemble, distribute, market or sell (or offer to
distribute, market or sell) Licensed Products in respect of which the
Marks are not used or are used in a manner other than agreed with NXT. It
is hereby agreed in principle that the Licensee shall use the Marks
wherever it uses its own trade marks, but with less prominence in a
similar manner as the use of the "Dolby" mark and logo on document hifi
equipment.
11.3 The Licensee shall not use any mark or name so resembling the Marks as to
be likely to cause confusion or deception in respect of any goods or
services and shall use its best endeavours when using the Marks to
preserve and maintain their distinctiveness and reputation.
11.4 The Licensee shall not and shall procure that any Associated Company of
the Licensee does not
11.4.1 use or register any name, word or device identical or similar
to the Marks as part of a corporate, business or trading name;
or
11.4.2 apply to register anywhere in the world any mark or name
identical to or similar to the Marks in respect of the Licensed
Products or any other goods or services;
11.5 The Licensee shall make such applications as NXT may reasonably consider
necessary or desirable to record the Licensee as a licensee of all or any
of the Marks. The Licensee hereby agrees that such entry may be cancelled
by NXT on termination of the Agreement and the Licensee hereby irrevocably
authorises NXT to do such acts or things and will assist NXT so far as may
be necessary to achieve such cancellation including executing any
necessary documents.
11.6 The Licensee acknowledges that any and all goodwill and any and all rights
resulting from the licensed use of each Mark shall accrue to the benefit
of NXT. At the request of NXT, the Licensee shall promptly execute any
confirmatory assignment to NXT of such rights.
11.7 Without prejudice to the other terms of the Agreement, the Licensee
undertakes not to do or authorise to be done any act which impairs any
registration of the Marks, diminishes the rights of NXT in the Marks,
debases the Marks, or reduces the value of the Marks to NXT.
12 Quality control and marking
12.1 The License shall manufacture and/or assemble the Licensed Products in
accordance with the reasonable quality standards as required by NXT from
time to time and the Licensee shall not distribute, market or sell (or
offer to distribute, market or sell) Licensed Products which do not comply
with such quality standards.
12.2 The Licensee shall ensure that each Licensed Product shall comply at all
times with all applicable laws, and regulations of governmental or other
competent authorities in each relevant country and with any established
industry standards in both the country of origin and the country of
destination.
12.3 The Licensee shall comply fully with NXT's instructions for marking the
Licensed Products and/or their packaging materials and/or their
promotional materials with such notices relating to the IPRs as are
required by applicable laws or are desirable in the opinion of NXT.
12.4 The Licensee shall comply fully with NXT's instructions for placing
identifying marks on the Licensed Products or on their packaging in an
inconspicuous manner so that NXT can readily identify the source of such
Licensed Products.
13 Confidentiality
13.1 The parties hereto shall treat "Confidential Information" (as defined in
the New Cross Licence) in accordance with the terms of clause 8 of the New
Cross License. Without prejudice to the generality of the foregoing, the
term Confidential Information shall include Know How.
13.2 The provisions of sub-clauses 13.1 shall survive termination of the
Agreement.
14 Initial Licensing Fee and Annual Licensing Fee
14.1 In addition to any other sums that may be payable by the Licensee under
any other provisions of the Agreement, the Licensee shall pay to NXT:
14.1.1 the non-reimbursable Initial Licensing Fee within thirty days of
the Commencement Date in respect of the technology transferred pursuant to
the Agreement; and
14.1.2for as long as the Agreement remains in force, the Annual Licensing
Fee within thirty days of each anniversary of the Commencement Date.
15 Royalty
15.1 The Licensee shall pay running royalties to NXT calculated on the basis of
the Royalty Rate set out in the accompanying Licence Agreement.
15.2 Each royalty payment shall be reduced by 33% after the expiry (whether by
effluxion of time or revocation) of the last of the Patents.
15.3 The royalty shall be calculated on the first day of January, April, July
and October of each year and shall account for sales covered by the
Agreement but not included in any previous royalty calculation.
15.4 The Licensee shall account to and pay NXT the royalty due within one month
of the above quarter days, together with a statement of:
15.4.1 the number of Licensed Products sold according to transducer
type and the number of transducers per panel; and
15.4.2 particulars of the calculation of the royalties payable.
16 Index-Linking, Payments and Taxation
16.1 Royalty payments and Annual Licensing Fee payments due on or after the
first day of April 1998 shall be adjusted annually by the increase (if
any) in the US Consumer Price Index over the immediately preceding
calendar year.
16.2 The Licensee shall pay all sums due under the Agreement in United States
dollars in immediately available funds to such account as NXT shall
nominate.
16.3 The Licensee shall pay to NXT interest on all sums due and payable for so
long as they are due and payable but unpaid, at the rate of 5% per annum
over the base rate of Barclays Bank plce.
16.4 All sums payable under the Agreement are exclusive of Value Added Tax,
consumption tax or other sales tax which shall where applicable be payable
by the Licensee in addition.
16.5 All sums payable by the Licensee hereunder shall be paid in full without
any set off or counterclaim and without deduction or withholding on any
ground whatsoever, save only as may be required by law. If any such
deduction or withholding is required by law in respect of any sum payable,
the Licensee shall be obliged to pay to NXT such additional amount as
would ensure that after any such deductions or withholdings have been made
NXT would have received a sum equal to the amount that it would otherwise
have received in the absence of any such deductions or withholdings. If it
shall appear that any such sum as aforesaid is or is likely to be or
become subject to any such deduction or withholding as aforesaid the
parties shall consider together to what extent, if at all, it may lawfully
be possible to mitigate the amount of such deduction or withholding or of
the amount required to be paid as aforesaid.
16.6 If the Licensee makes an additional payment under sub-clause 16.5 for the
account of NXT and NXT receives or is granted a credit against or relief
or remission for, or repayment of, any tax paid or payable by the Licensee
in respect of or calculated with reference to the deduction or withholding
giving rise to such payment, NXT shall, to the extent that it can do so
without prejudice to the retention of the amount of such credit, relief,
remission or repayment, pay to the Licensee as the case may be, such
amount of the deduction or withholding which will leave NXT (after such
payment) in no better or worse position than it would have been in if the
Licensee had not been required to make such deduction or withholding.
17 Books and inspection
17.1 The Licensee shall keep detailed, true and accurate books of account with
regard to all sales of Licensed Products.
17.2 NXT or its appointed representatives may inspect on five days' notice such
of the Licensee's records as may be necessary to verify the accuracy of
the books of accounts, the sub-clause 15.4 statements and the payments
made under the Agreement. In any event, NXT shall pay the fees of its
appointed representatives in performing such verification. If the
verification reveals an under or over payment, a correcting payment shall
be made in thirty days of notification thereof.
18 Termination
18.1 NXT may terminate the Agreement forthwith at any time by giving seven days
written notice where:
18.1.1 the Licensee breaches any of the terms of the Agreement which
cannot be remedied or, if capable of remedy, such breach is not
remedied within a period of thirty days after notification
thereof;
18.1.2 the Licensee becomes insolvent, is adjudicated bankrupt or
compounds with or makes any arrangement with or makes any
general assignment for the benefit of its creditors or enters
into liquidation, whether compulsorily or voluntarily (except
for the purposes of a bona fide reconstruction or
amalgamation) or has a receiver, administrative receiver or
administrator (or the equivalent under United States or other
relevant local bankruptcy law) appointed over the whole or any
part of its undertaking or assets or a similar occurrence
under any jurisdiction affects the Licensee or if the Licensee
ceases or threatens to cease or makes any material change in
its business.
18.1.3 the Licensee challenges or assists others to challenge the
validity, subsistence or scope of the IPRs or NXT's ownership of
or entitlement to use such rights;
18.1.4 the Agreement or any part thereof is held invalid or
unenforceable by any court of competent jurisdiction or competent
governmental body and the Licensee and NXT fail to reach
agreement as to amendment of the Agreement under clause 21.
19 Rights after termination
19.1 The termination of the Agreement howsoever arising shall not relieve
either of the parties of any obligation to the other arising prior to
termination.
19.2 All moneys due under the Agreement shall be paid forthwith.
19.3 The Licensee shall not be entitled to a pro-rata or any refund of the
Annual Licensing Fee for the year of termination.
19.4 The licence granted under sub-clause 3.1 shall terminate forthwith.
19.5 The Licensee shall promptly arrange for the destruction or, at the option
of NXT, the return or surrender to NXT of all copies of:
(i) the Supporting Documentation; and
(ii) other documents or media on which the Know How is contained,
incorporated or stored; which are within its custody, power,
possession or control.
19.6 Notwithstanding termination of the licence granted in sub-clause 3.1 for a
period of six months following the termination and subject to all the
terms of the Agreement, the Licensee may:
19.6.1 manufacture Licensed Products and apply the Marks to the Licensed
Products where this is to fulfil an order received prior to
termination of the Agreement;
19.6.2 effect sales of Licensed Products held in stock at the time of
termination or manufactured thereafter in accordance with the
above provisions.
20 Assignment
20.1 The Licensee shall not and shall not attempt to assign, transfer,
mortgage, charge or otherwise howsoever part with its rights,
duties and obligations under the Agreement without the previous
written consent of NXT.
20.2 NXT may assign the benefit and burden of the Agreement
together with its rights in and to the IPRs.
21 Invalidity
If any provision of the Agreement is determined to be illegal or
unenforceable by any court of law or any competent governmental or other
authority, the remaining provisions shall be severable and enforceable in
accordance with their terms so long as the Agreement without such terms or
provisions does not fail in its essential purpose. The parties shall
negotiate in good faith to replace any such illegal or unenforceable
provisions with suitable substitute provisions which will maintain as far
as possible the purposes and the effect of the Agreement.
22 Force Majeure
22.1 If either party is prevented or delayed in the performance of any of its
obligations under the Agreement by force majeure and if such party gives
written notice thereof to the other party specifying the matters
constituting force majeure together with such evidence as it reasonably
can give and specifying the period for which it is estimated that such
prevention or delay will continue, then the party so prevented or delayed
shall be excused the performance or the punctual performance as the case
may be as from the date of such notice for so long as such cause of
prevention or delay shall continue.
22.2 For the purpose of the Agreement, the term "force majeure" shall be deemed
to include any cause affecting the performance of the Agreement arising
from or attributable to acts, events, non-happenings, omissions or
accidents any of which are beyond the reasonable control of the party
obliged to perform.
23 Modification
No modification, waiver, alteration or amendment to or of the Agreement
shall be valid unless set out in writing and executed by or on behalf of
NXT and the Licensee.
24 Waiver
Any failure by either party at any time or from time to time to enforce or
require the other party strictly to observe and perform any of the terms
and conditions of the Agreement shall not constitute a waiver of such
terms or conditions or in any way affect the right of either party at any
time to avail itself of such remedies as it may have under the Agreement
or otherwise for any breach or breaches of such terms and conditions.
25 Entire agreement
The Agreement and the New Cross Licence constitute the entire agreement of
the parties as to its subject matter and supersedes and cancels all prior
agreements, understandings and negotiations in connection with it. Each of
the parties confirms and acknowledges that it has not agreed to enter into
the Agreement in reliance upon any statements or representations (whether
of fact or otherwise) made by the other which are not set out in the
Agreement.
26 Relationship
Nothing in the Agreement shall constitute or be deemed to constitute a
partnership between the parties or constitute NXT as agent for the
Licensee or vice versa for any purpose and neither party shall have the
right or authority to and shall not do any act, enter into any contract,
make any representation, give any warranty, incur any liability, assume
any obligation, whether express or implied, of any kind on behalf of the
other or binding to the other in any way.
27 Notices
27.1 Any notice given under the Agreement shall be given in writing and shall
be served by sending the same by pre-paid first class post (or by airmail
if being served outside the United Kingdom) or facsimile or by delivering
the same by hand to the address of the party set out above (or such other
address as either party has specified by notice to the other).
27.2 Any notice served in accordance with sub-clause 27.1 shall be deemed to
have been served when delivered by hand at the time of such delivery and
when sent through the post five calendar days after the date of despatch
and when sent by facsimile on the date of transmission. In the case of
service by facsimile a confirmatory copy of the same shall be sent by
pre-paid first class post (or by airmail if being served outside the
United Kingdom) on the same day as transmission otherwise such notice
shall be invalid.
28 Dispute resolution
28.1 The parties shall meet as soon as possible to discuss and to attempt to
resolve all matters not specifically provided for in the Agreement and
which require a decision including all differences, disputes or
disagreements which may arise out of or in connection with the Agreement.
If the parties are unable to resolve any such matter or dispute then it
shall be referred to the Chairman of NXT and the Chairman (or equivalent
officer) of the Licensee, who shall meet within five days of being
requested to do so and shall in good faith attempt to resolve the matter
or dispute.
28.2 The parties agree to refer any matter or dispute which is not able to be
resolved pursuant to sub-clause 28.1 to the Centre for Dispute Resolution
("CEDR") in London, England in an attempt to settle the same in good faith
by Alternative Dispute Resolution ("ADR").
28.3 Neither party shall be deemed to be precluded from taking such interim
formal steps as may be considered necessary to protect such party's
position while the procedures referred to in sub-clauses 28.1 and 28.2 are
being pursued.
28.4 In the event that the matter remains unresolved by such ADR procedure
within thirty days of the commencement of such procedure, then the parties
shall be at liberty to take such other Proceedings (as defined below) as
they think fit.
29 Governing law and jurisdiction
29.1 The Agreement shall be governed by and construed in accordance with
English law.
29.2 Except as provided for in sub-clauses 28.1, 28.2 and 28.3 in relation to
any legal action or proceedings to enforce the Agreement (including the
licence granted therein) or arising out of or in connection with the
Agreement ("Proceedings"), the Licensee irrevocably submits to the
exclusive jurisdiction of the English Courts and waives any objection to
Proceedings in such Courts on the grounds of venue or on the grounds that
Proceedings have been brought in an inappropriate forum. This sub-clause
operates for the benefit of NXT which shall retain the right to take
Proceedings in any other jurisdiction.
SCHEDULE 1
Marks
"NXT" Electronic and electrical apparatus and instruments; loudspeakers;
loudspeaker drive units; public address
Class 9 systems; display panels for advertising, information and publicity
purposes, with integrated or incorporated loudspeakers; display
apparatus, having electrical or electronic components; sound
reproduction apparatus; sound generation apparatus; acoustic
apparatus for reproducing sound; loudspeakers integral to ceiling
tiles; loudspeakers incorporated into ceiling tiles; sound
reverberation units; noise cancellation apparatus; noise suppression
apparatus; audio and video recording and reproducing equipment;
amplifiers, tuners, turntables, compact disc players, cassette
players, microphones, headphones; digital to analogue converters;
magnetic and optical media for or bearing sound recordings; cables
and connectors; televisions and video recorders; control units;
computers; computer peripheral devices; parts and fittings for all
the aforesaid goods.
Country Application no. Date
European Union* 11.07.1996
Australia 712934 17.07.1996
Canada 817786 12.07.1996
China 960091234 08.08.1996
Hong Kong 8610/96 16.07.1996
Japan 13.08.1996
Korea (South) 02.08.1996
Korea (North) 16.07.1996
Malaysia 96/10150 28.08.1996
Mexico 268964 22.07.1996
New Zealand 264569 15.07.1996
Singapore 8587/1996 16.08.1996
Taiwan 85035652 18.07.1996
United Kingdom 2107906 17.08.1996
United States of America 17.08.1996
* Austria, Belgium, Denmark, Finland, France, Germany, Greece, Netherlands,
Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, United Kingdom.
SCHEDULE 2
The rights granted to the Licensee in relation to the "Field of Use" shall
exclude any rights in relation to the following fields of use for flat panel
transducer and audio speaker products which rights are governed by the New Cross
License:
(A) Aircraft including, but not limited to, all civil and military fixed
and rotary wing aircraft of any nature and any other craft capable
of sustained flight.
(B) Headsets, headphones, earplugs, earbuds, earmuffs, and all forms of
"on the ear" and "in the ear" sound generating devices (for the
avoidance of doubt, this field shall not include communications
handsets such as telephones, cellular telephones, speaker
telephones, telephone conferencing, two-way radios, mobile radios,
ham radios, CB radios, public telephones, wireless telephones, SMR
telephones, answering machines, pagers).
(C) Hearing aids, hearing assistance devices and other devices to assist
impaired hearing.
(D) All devices and systems where the sole purpose is reducing,
isolating, controlling or attenuating noise or vibration.
SCHEDULE 3
To [name of Licensee]
[date]
[address]
Dear Sirs
NXT Licence
We refer to the agreement between ourselves dated [date] ("the Agreement"), a
copy of which is enclosed for reference.
You have requested that the benefit of the Agreement be extended to [name of the
Licensee's Associated Company] (the "Company") under the terms of sub-clause 3.3
of the Agreement. We agree to this request in consideration for the following:
1. payment by the Company of US$1 (receipt and sufficiency of which are
hereby acknowledged);
2. a joint and several warranty from you and the Company that the Company is
an Associated Company;
3. agreement by the Company to perform and be bound by all the terms of the
Agreement as from the Effective Date (as defined below) other than the
obligation to pay the Initial and Annual Licensing Fees; and
4. acknowledgement by the Company that the rights granted to the Company by
this letter may be terminated under the terms of the Agreement or upon
the Company ceasing to be an Associated Company.
The term "Effective Date" means the date when NXT is in receipt of a signed copy
of this letter duly executed by you and the Company.
Unless defined differently in this letter, defined words and expressions shall
have the meanings given in the Agreement.
The law which governs this letter and the Courts which shall have jurisdiction
over any matter arising out of this letter shall be as described in clause 29 of
the Agreement.
Please indicate your acceptance and agreement to these terms by signing, dating
and returning the enclosed copy of this letter. A copy of this letter is also
being sent to the Company, and signature of that copy by the Company shall be
evidence of the Company's acceptance and agreement to these terms.
Yours faithfully We, [name of the Licensee], hereby confirm and
accept the terms of this letter
For and on behalf of
New Transducers Limited
We, [name of the Company], hereby confirm and
accept
the terms of this letter
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