Development Agreement for
Prod IV (Model P-4R) Radio Units
TABLE OF CONTENTS
Section Title
1. DEFINITIONS......................................................... 1
2. DEVELOPMENT AND ACCEPTANCE.......................................... 2
2.1 Working Sample Development................................. 2
2.2 Working Sample Delivery and Testing........................ 3
2.3 Pre-Production Model Development........................... 3
2.4 Revised Pre-Production Models.............................. 4
3 CONSIDERATION AND PAYMENT........................................... 4
3.1 Price...................................................... 4
4. DELIVERY AND TITLE.................................................. 4
4.1 Shipping Requirements...................................... 4
4.2 Packaging and Other Requirements........................... 4
4.3 Working Sample Title....................................... 4
5. INSPECTIONS......................................................... 4
6. SUPPLY OF DOCUMENTS ................................................ 5
7. CONFIDENTIAL INFORMATION............................................ 5
7.1 Designation of Confidential Information.................... 5
7.2 Nondisclosure.............................................. 5
7.3 Exceptions................................................. 5
7.4 Limitations................................................ 6
7.5 Survival................................................... 6
8. TERM, TERMINATION AND EXPIRATION.................................... 6
8.1 Term....................................................... 6
8.2 Termination For Cause...................................... 6
8.3 Termination After Acceptance of Pre-Production Model....... 6
8.4 Return of Confidential Information......................... 6
8.5 Survival................................................... 6
9. INSURANCE AND INDEMNIFICATION....................................... 7
9.1 Indemnification............................................ 7
9.2 Insurance.................................................. 7
9.3 LIMITATION OF LIABILITY.................................... 7
10. INTELLECTUAL PROPERTY............................................... 7
10.1 Pre-Existing Intellectual Property......................... 7
10.2 Developed Proprietary Information.......................... 7
10.3 Use of Third Party Intellectual Property Rights............ 8
11. ARBITRATION......................................................... 8
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12. FORCE MAJEURE....................................................... 8
13. NOTICES............................................................. 9
13.1 Notice Requirements........................................ 9
13.2 Receipt.................................................... 9
14. SEVERABILITY........................................................ 9
15. SUBCONTRACTING...................................................... 9
16. LIENS. ............................................................ 10
17. WAIVER.............................................................. 10
18. ASSIGNMENT.......................................................... 10
19. AMENDMENT........................................................... 10
20. ENTIRE AGREEMENT.................................................... 10
21. HEADINGS............................................................ 10
22. GOVERNING LAW....................................................... 10
23. TAXES. ............................................................ 11
24. INDEPENDENT CONTRACTOR.............................................. 11
25. LABELING .......................................................... 11
26. PUBLIC ANNOUNCEMENTS. ............................................. 11
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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (the "Agreement"), made and entered into this 1st day
of March 1996 ("Effective Date") by and between INTERDIGITAL COMMUNICATIONS
CORPORATION, a Pennsylvania corporation having its principal place of business
at 781 Third Avenue, King of Prussia, PA 19406-1409, USA (hereinafter referred
to as "InterDigital") and KENWOOD CORPORATION, a Japanese corporation having its
principal place of business at 1-14-6, Dogenzaka, Shibuya-ku, Tokyo 150, Japan
(hereinafter referred to as "Kenwood").
W I T N E S E T H:
WHEREAS, InterDigital has developed a specification for an RF radio unit to be
incorporated in Prod IV, a subscriber unit; and
WHEREAS, Kenwood has expertise in the development of units similar to the RF
radio unit and is desirous of, and has already expended considerable time and
materials developing a Working Sample (as hereinafter defined) of the RF radio
unit for InterDigital and is desirous of further refining such Working Sample as
may be necessary to achieve volume production at desired cost (the
"Pre-Production Model" as further defined below) and making RF changes ("Revised
Pre-Production Models", as further defined below) as may be necessary by IDC
from time to time; and
WHEREAS, InterDigital and Kenwood have executed a Memorandum of Understanding
under which, among other things, Kenwood has agreed to undertake the
above-referenced development activities and for which InterDigital had paid
Kenwood US$*; and
WHEREAS, InterDigital desires to engage Kenwood to develop the Working Sample,
Pre-Production Model, and Revised Pre-Production Models under and subject to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, and intending to be legally bound, the parties hereto agree as follows:
1. DEFINITIONS
1.1 "Engineering Specifications" shall mean the drawings and
specification documents containing the physical, mechanical,
electrical, interface and protocol specifications of the Product
(as Confidential Treatment has been requested for the deleted text.
hereinafter defined) as accepted by InterDigital pursuant to this
Agreement.
1.2 "Intellectual Property" shall mean any and all patents, patent
applications, trademarks, copyrights, proprietary know-how, trade
secrets, processes, designs, discoveries, innovations, inventions or
other tangible or intangible intellectual property rights.
- ----------
* Confidential treatment has been requested for the deleted text, which has been
filed separately with the Securities and Exchange Commission.
1
1.3 "Pre-Production Model" shall mean the prototype of the printed circuit
board for the analog circuitry, which prototype conforms to the
Engineering Specifications and represents, from a design, layout,
materials, and manufacturing standpoint, the exact circuit board that
will be mass-produced by Kenwood for InterDigital.
1.4 "Product" shall mean the printed circuit board for the RF analogue
circuitry, which is part of the subscriber unit developed by
InterDigital.
1.5 "Revised Pre-Production Model" shall mean the prototype of the printed
circuit board for the analog circuitry incorporating an
InterDigital-requested frequency change, which prototype otherwise
conforms to the Engineering Specifications and represents, from a
design, layout, materials, and manufacturing standpoint, the exact
circuit board that will be produced by Kenwood for InterDigital for the
revised frequency requirements.
1.6 "Shipping Destination" shall mean InterDigital's receiving warehouse in
King of Prussia, Pennsylvania, or such other U.S. destination as
InterDigital may designate.
1.7 "Target Specifications" shall mean the specifications prepared by
InterDigital and mutually agreed to by InterDigital and Kenwood for the
development and manufacture of the Working Sample.
1.8 "Technical Material" shall mean designs, patterns, drawings, plans,
specifications, development processes, worksheets, and any other
information, manuals, documents, notes, letters, records, computer
programs, molds, dies, tooling, equipment and similar property
1.9 "Work" shall mean the efforts undertaken by Kenwood to develop, ship,
and as necessary, rework, repair or replace Working Samples, Pre-
Production Models and Revised Pre-Production Models.
1.10 "Working Sample" shall mean the sample of the printed circuit board for
the analog circuitry developed and manufactured in accordance with the
Target Specifications.
2. DEVELOPMENT AND ACCEPTANCE
2.1 Working Sample Development. Kenwood shall perform any and all work
necessary to complete the development of the Working Sample in
conformance with the Target Specifications. Kenwood shall periodically
inform InterDigital as to Kenwood's progress in such development,
including significant problems being incurred and any potential
schedule impact. If Kenwood determines that the Target Specifications
contain errors or have omissions, or that the Target Specifications
could be modified to produce a more desirable product (i.e., more
reliable, less expensive, more tolerant to environmental conditions),
Kenwood shall promptly notify InterDigital in that regard. InterDigital
and Kenwood shall work cooperatively to address
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any errors, omissions or enhancements regarding the Target
Specifications.
2.2 Working Sample Delivery and Testing. Within sixty (60) days of the
Effective Date, Kenwood shall deliver, or cause to be delivered, to the
Shipping Destination twenty (20) Working Samples together with two sets
of draft Engineering Specifications and the engineering data.
InterDigital shall evaluate the Working Sample and draft Engineering
Specifications and perform, or cause to be performed, at InterDigital's
sole cost and expense, all tests of the Working Sample as deemed
necessary by InterDigital. To expedite completion of InterDigital's
evaluation, Kenwood shall, at its cost, attend InterDigital's facility
to observe and assist InterDigital's Product and PROD IV evaluation. If
any problems arise or are observed, InterDigital and Kenwood shall work
cooperatively to find an acceptable resolution. If the problem is
related solely to the failure of the Product, Kenwood shall promptly
provide corrective measures. Within thirty (30) days after receipt of
Working Samples, InterDigital shall promptly notify Kenwood in writing
of the test results and also, whether or not, in InterDigital's sole
discretion, the Working Sample is acceptable; provided, however, that
Kenwood shall not commence production until InterDigital has accepted
the Working Sample. If the Working Sample is found unacceptable by
InterDigital, InterDigital shall provide Kenwood with a written
description as to the deficiencies and/or nonconformances of the
Working Samples. Kenwood shall have thirty (30) days to provide
InterDigital with revised and acceptable (as determined by
InterDigital) Working Samples.
2.3 Pre-Production Model Development. If the Working Sample is found
acceptable by InterDigital, InterDigital shall prepare Engineering
Specifications, with comments and input from Kenwood, which comments
and input InterDigital shall consider in good faith, and deliver such
specifications to Kenwood. InterDigital shall retain the Working
Sample(s) for the term of this Agreement. Kenwood shall thereafter
promptly develop and manufacture Pre-Production Models in accordance
with the Engineering Specifications. Kenwood shall promptly notify
InterDigital if any changes to the Working Sample. InterDigital shall
attend a pre-production review meeting at Kenwood's facility and
evaluate the Pre-Production Model together with the pre-production test
data. InterDigital shall use reasonable efforts to approve the
Pre-Production Model at Kenwood's facilities; however, InterDigital
reserves the right to have the Pre-Production Model shipped to
InterDigital's facilities for further evaluation. In such event,
Kenwood shall deliver, or cause to be delivered to the Shipping
Destination, the Pre-Production Models as well as the applicable
pre-production test data. Upon the receipt of the Pre- Production Model
and the pre-production test data, InterDigital shall evaluate the
Pre-Production Model and the related documentation. Within thirty (30)
days of receipt of the Pre-Production Model and the pre-production test
data, InterDigital shall accept or reject the Pre-Production Model and
the pre-production test data. If the Pre-Production Model or
pre-production test data is not acceptable to
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InterDigital, InterDigital shall provide Kenwood with a written
description as to the deficiencies and/or nonconformances. Kenwood
shall have thirty (30) days from receipt of such notice from
InterDigital to provide InterDigital with an acceptable (as determined
by InterDigital) Pre-Production Model and/or pre-production test data,
as applicable.
2.4 Revised Pre-Production Models. InterDigital may, from time to time,
request Kenwood to develop Revised Pre-Production Models and related
pre-production test data. Such request shall be made at least six
months prior to InterDigital requiring mass production of such units.
Kenwood shall engineer and produce up to two (2) different Revised
Pre-Production Models and related documentation without additional cost
to InterDigital, provided such units fall within the parameters set out
in Exhibit B. For additional Revised Pre-Production Models, Kenwood may
charge InterDigital US$* for each different Revised Pre- Production
Model.
3. CONSIDERATION AND PAYMENT
As full and complete consideration for the Work, InterDigital shall pay
Kenwood the total amount of US$* and development fee for Revised
Pre-Production Models as specified in Exhibit A.
4. DELIVERY AND TITLE
4.1 Shipping Requirements. Kenwood shall ship, or cause other to ship, the
Working Samples and related documentation to the Shipping Destination.
Kenwood shall deliver all Pre-Production Models and Revised
Pre-Production Models FCA, Japan (except that Kenwood shall also pay
marine insurance)(Incoterms 1990). For the Pre-Production Models and
Revised Pre-Production Models, as well as the related documentation,
Kenwood shall arrange for shipping to the Port of Philadelphia,
Pennsylvania, or such other destination as InterDigital may designate,
such costs (including freight and import fees but excluding insurance)
to be paid by InterDigital. Kenwood shall bear the risk of loss to all
Working Samples and Pre-Production Models, Revised Pre-Production
Models, work in progress, materials, tools and other things independent
of title until receipt by InterDigital at the Shipping Destination.
4.2 Packaging and Other Requirements. Unless otherwise specified by
InterDigital in writing, Kenwood shall properly pack, box, crate or
prepare all Working Samples, Pre-Production Models and Revised Pre-
Production Models for shipment so as to prevent damage in transit.
4.3 Working Sample, Pre-Production Model and Revised Pre-Production Model
Title. Title to and Risk of Loss for each Working Sample, Pre-
Production Model and Revised Pre-Production Model shall pass to
InterDigital when each such unit has been placed on the loading dock at
the Shipping Destination.
- ----------
* Confidential treatment has been requested for the deleted text, which has been
filed separately with the Securities and Exchange Commission.
4
5. INSPECTIONS
Upon reasonable advance written notice, Kenwood shall allow
InterDigital and its authorized representatives to observe and inspect
the Work, including materials and supplies being used, subject to
Kenwood's then-existing confidentiality restrictions and security and
safety requirements.
6. SUPPLY OF DOCUMENTS
Upon completion and acceptance of the Pre-Production Model, or upon
InterDigital's termination of this Agreement for cause, Kenwood shall
promptly provide to InterDigital any and all Technical Material
required for InterDigital, or its designee, to manufacture the Pre-
Production Model, such documentation to include:
Design Description
Schematic Diagrams and Block Diagrams
Parts List (B.O.M.)
Electronic Component Specification
PCB Drawings
Kenwood shall provide InterDigital with revised documentation
stipulated in this section twenty (20) days after acceptance of a
design change by InterDigital.
7. CONFIDENTIAL INFORMATION
7.1 Designation of Confidential Information. All information relating to
the Work provided by either party to the other, whether before or after
the date hereof and whether oral or written and transactions
contemplated in this Agreement, shall be and is hereby deemed to be
confidential and proprietary information (hereinafter called
"Confidential Information"). Neither party shall be obligated to
specifically identify any information as to whether the protection of
this Section is desired by any notice, legend, or other action.
7.2 Nondisclosure. A party receiving Confidential Information shall not,
without the prior written consent of the party disclosing such
information, (i) use any portion of the Confidential Information for
any purpose other than in connection with the performance of this
Agreement, or (ii) disclose any portion of the Confidential Information
to any persons or entities other than the employees and consultants of
receiving party, its subcontractor or its affiliated companies, who
reasonably need to have access to the Confidential Information in
connection with the performance of this Agreement; provided, however,
that such employees and consultants shall be informed of the
confidentiality requirements herein and shall be required to execute an
agreement having terms consistent with those provided in this Section
7; and provided further that the receiving
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party shall be responsible for any breach of the confidentiality
requirements by such employee or consultants.
7.3 Exceptions. Notwithstanding the foregoing, a receiving party shall not
be liable for disclosure of Confidential Information, or part thereof,
if the receiving party can demonstrate that such Confidential
Information:
(a) was in the public domain at the time it was
disclosed;
(b) has been known to or in the possession of the party
receiving it at the time of receipt;
(c) is known to the receiving party from a source other
than the disclosing party without breach of this
Section by the receiving party; or
(d) has been disclosed to the government of the receiving
party or its agent in accordance with its order.
7.4 Limitations. Notwithstanding the foregoing, nothing in this Section
shall be deemed to limit or alter InterDigital's rights under Section
10 hereto.
7.5 Survival. The provisions of this Article shall survive termination,
cancellation or expiration of this Agreement for five (5) years from
the date of such termination, cancellation or expiration.
8. TERM, TERMINATION AND EXPIRATION
8.1 Term. This Agreement shall be effective upon the Effective Date and,
unless earlier terminated as provided herein, shall be valid and in
force for a period of two (2) years thereafter. The parties may extend
this Agreement by mutual written agreement.
8.2 Termination for Cause. A party may terminate this Agreement at any
time, without liability, upon written notice to the other party, if:
(A) the other party becomes insolvent, or a petition of bankruptcy
is filed, or any similar relief is filed by or against such
party, or a receiver is appointed with respect to any of the
assets of such party, or a liquidation proceeding is commenced
by or against such party;
(B) the other party fails to correct or cure any material breach
of any covenant or obligation under this Agreement within
thirty (30) calendar days after receipt by such party of a
written notice from the other party specifying such breach.
8.3 Termination After Acceptance of Pre-Production Model. Notwithstanding
any provision of this Agreement to the contrary, InterDigital may,
without liability (except as provided in this section) and upon thirty
days' prior written notice to Kenwood, terminate this Agreement after
acceptance of the Pre-Production Model in the event that InterDigital
does not have sufficient customer orders for RF units. In the event of
such termination, InterDigital shall continue
6
to pay Kenwood the scheduled payments set out in Exhibit A, but at a
20% discount.
8.4 Return of Confidential Information. Upon the expiration or termination
of this Agreement, each party shall return to the other party all
Confidential Information of the other party together with all copies
made therefrom, except to the extent such information is required by
InterDigital to exercise its rights under Section 10.
8.5 Survival. The following provisions shall survive the termination or
expiration of this Agreement; Article 8.5, Article 9.1, Article 10,
Article 11, Article 14, Article 17, Article 20, Article 21 and Article
22. In addition, any provision of this Agreement necessary for a party
to exercise rights or obligations arising prior to expiration or
termination shall survive such expiration or termination.
9. INSURANCE AND INDEMNIFICATION
9.1 Indemnification. Either party shall, to the maximum extent permitted by
law, indemnify and hold harmless the other party, its affiliates and
subsidiaries and all offices, directors, employees, and agents of such
companies (collectively, "Indemnified Parties"), from against, for and
in respect pf any and all claims, investigations, proceedings,
injuries, demands, liabilities, losses, expense, including without
limitation attorney's fees, damages, judgements, or settlements arising
out of or resulting from the performance or non- performance under this
Agreement of either party, anyone directly or indirectly employed by
either party or anyone else whose acts either party may be liable. The
obligations under this paragraph shall not be constructed to negate,
abridge or otherwise reduce any other obligations of indemnity which
would otherwise exist as to any provisions or limits of insurance
required by this Agreement.
9.3 Insurance. Each party shall secure and maintain insurance commensurate
with the obligations and potential liabilities arising under this
Agreement. Each party shall, upon the request of the other party,
provide a description of the coverage secured, including deductibles,
exclusions, term, and policy limits.
9.4 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY FOR LOST PROFITS, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
OTHER KIND INCURRED ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
10. INTELLECTUAL PROPERTY
10.1 Pre-Existing Intellectual Property. Except as provided in Section 10.2,
nothing contained in this Agreement will be deemed to grant to either
party, either directly or by implication, estoppel or
7
otherwise, any title, ownership, license, or any interest whatsoever
in, of or to Intellectual Property or Technical Material of the other
party, whether existing prior to the Effective Date or developed
thereafter.
10.2 Developed Proprietary Information. The Technical Material supplied or
made specifically by Kenwood (or its contractors) under this Agreement
and any Intellectual Property hereunder developed, produced or created
by Kenwood (or its contractors) (collectively "Developed Information")
shall be the joint property of InterDigital and Kenwood, subject to the
following terms and conditions:
(A) InterDigital may use, sell, license, or otherwise transfer the
Developed Information without any accounting to Kenwood;
provided, however, that InterDigital shall notify Kenwood of
any license, sale, or other transfer of the Developed
Information to a third party;
(B) Kenwood may use the Developed Information for only the
manufacture of units for InterDigital;
(C) InterDigital shall have the right to apply for any patents on
Intellectual Property, in Kenwood and InterDigital's name.
Kenwood shall execute all documents reasonably required for
such applications. InterDigital shall provide Kenwood with
advance copies of significant patent application filings for
review and comment and will consider such comments in good
faith. InterDigital and Kenwood shall share equally the cost
of such patent filings; provided, however, that Kenwood may
elect not to have joint ownership in such patents in which
event Kenwood shall assign all of such patent rights to
InterDigital and execute all documentation required for
InterDigital to obtain patent protection in its name and at
its sole expense.
(D) Developed Information shall not include knowledge,
manufacturing, processes, designs, developed, produced, or
created by Kenwood (or its contractors) prior to the
Commencement of the Work or other than conjunction with the
Work.
10.3 Use of Third Party Intellectual Property Rights. In manufacturing the
Working Copy or Pre-Production Model, Kenwood shall not use or rely on
any method, process, or other tangible or intangible element requiring
the payment of royalties without the express written consent of
InterDigital. To the extent that InterDigital consents to Kenwood's use
of any license or other right under any patents or patent application
to perform the Work or develop, manufacture or supply the Working
Copies or Pre-Production Models under this Agreement, Kenwood shall pay
all royalties and license fees required pursuant thereto.
11. ARBITRATION
8
Any controversy, dispute, or claim arising out of or relating to this
Agreement, any modification or extension hereof, or any breach hereof
(including the question whether any particular matter is arbitrable
hereunder) which has not been settled after a meeting of the parties in
a good faith effort to resolve their differences shall be resolved
exclusively by arbitration under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by three
arbitrators chosen in accordance with said rules unless the parties
agree to use fewer arbitrators. The arbitration shall take place in
Paris, France and shall be conducted in English. The award of such
arbitration shall be final and binding on both parties.
12. FORCE MAJEURE
If either party's performance of this Agreement is interfered with by
reason of any circumstance beyond the reasonable control of the party
affected, including without limitation, war (whether an actual
declaration thereof is made or not), sabotage, insurrection, rebellion,
riot or other act of civil disobedience, act of a public enemy, failure
or delay in transportation, failure of or delay in performance of
InterDigital's or Kenwood's obligations under this Agreement due to act
of any government or any agency or subdivision thereof, judicial
action, labor dispute, fire, accident, explosion, epidemic, storm,
flood, earthquake, or other Act of God, or shortage of labor , fuel,
raw material, or machinery, then the party affected shall be excused
from such performance, but only for the period of time occasioned by
such event. A party claiming a force majeure shall notify the other
party within ten (10) working days of such force majeure event,
providing the type of event, the expected delay, and the efforts being
taken to minimize such delay. If any such interference extends for more
than Ninety (90) days, both parties shall discuss to seek for the best
course of action.
13. NOTICES
13.1 Notice Requirements. Any notices required to be given under this
Agreement shall be sent by registered air mail, facsimile or hand
delivery to the other party at the address listed below:
To InterDigital:
----------------
INTERDIGITAL COMMUNICATIONS CORPORATION
781 Third Avenue, King of Prussia
Pennsylvania 19406-1409, USA
Attn: William J. Merritt
Tel: 610-878-5700
Fax: 610-878-7844
To Kenwood:
-----------
KENWOOD CORPORATION
1-14-6, Dogenzaka
Shibuya-ku, Tokyo 150 Japan
Attn: Katsuhito Ohashi
9
Tel: 03-5457-7158
Fax: 03-5457-7160
13.2 Receipt. Notices given pursuant to section 13.1 shall be deemed to have
been received Five (5) business days after sending in the case of
registered air mail and at the time of receipt of the receiving party
in the case of hand delivery and facsimile, unless earlier confirmed by
the receiving party.
14. SEVERABILITY
In the even that, for any reason, any portion of this Agreement shall
be determined to be illegal, unlawful or unenforceable, the remaining
provisions of this Agreement shall, nevertheless remain in full force
and effect and this Agreement shall be construed as if the illegal,
unlawful or unenforceable provisions were not contained herein.
15. SUBCONTRACTING
Kenwood shall not subcontract any of the Work without the express
written consent of InterDigital. Kenwood's use of subcontractor's shall
not relieve Kenwood of its obligations hereunder and Kenwood shall be
liable to InterDigital for all the acts and omissions of any
subcontractor as if such act or omissions were made by Kenwood.
16. LIENS.
Kenwood shall not make nor permit to be made any attachments to the
Working Sample, Pre-Production Models, or components thereof, of liens,
encumbrances or claims for labor or material. Kenwood shall promptly
remove and shall protect and hold InterDigital harmless from all such
claims, liens and encumbrances arising from the manufacture, assembly
and transit of the Working Sample or Pre-Production Model.
17. WAIVER
Any failure of either party to enforce at any time or for any period,
any provisions of thus Agreement shall not be construed as a waiver of
such provisions or of the right of the party thereafter to enforce each
and every provision.
18. ASSIGNMENT
This Agreement shall not be assignable by either party without the
prior written consent of the other party; provided, however, that
either party may assign this Agreement to a subsidiary or affiliate of
the assigning party by written notice to the other party.
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19. AMENDMENT
This Agreement shall not be amended, altered, or modified except by an
instrument in writing duly executed by the parties hereto.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof, and it supersedes all prior
oral or written agreements, commitments, or understandings with respect
to the matters provided for herein.
21. HEADINGS
Section headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect
the meaning, construction, or scope of any of the provisions hereof.
22. GOVERNING LAW
This Agreement sets forth the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of New York.
Each party irrevocably submits to the jurisdiction of the courts of the
state or country of the party solely for the purposes of requiring the
other party to submit to arbitration as required hereunder and for
enforcing any award granted thereunder. Process may be served on either
party by certified or registered U.S. mail or by globally recognized
express mail service.
23. TAXES.
It is understand that no taxes, assessments, excises, duties,
impositions, or licenses will be levied. Assessed or imposed on Kenwood
by the U.S. Government on account of the Work or the Working Samples.
If, however, any such taxes, assessments, excises, duties, imposed on
Kenwood by the U.S. Government on account of the Work or the Working
Samples, they shall be borne by InterDigital and all payments owing to
Kenwood hereunder shall be net of any such taxes, levies, or charges
required to be withheld with respect to such payments
24. INDEPENDENT CONTRACTOR
In making and performing this Agreement, InterDigital and Kenwood act
and shall act at all times as independent contractors and nothing
contained in this Agreement shall be construed or implied to create an
agency, joint venture, partnership or employer and employee
relationship between InterDigital and Kenwood.
25. LABELING
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At InterDigital's request, Kenwood shall place appropriate notices or
labels on all Working Samples, and component parts thereto, being
manufactured for InterDigital pursuant to this Agreement to indicate
ownership by InterDigital. To the extent reasonably possible, the
Working Sample, and component parts thereto, shall be stored separately
from other inventory and conspicuously marked with labels indicating
ownership by InterDigital.
26. PUBLIC ANNOUNCEMENTS.
Except as may be required by law, neither party shall issue any press
release or make or cause to be made any public disclosure of this
Agreement without the prior written consent of the other party.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, and intending to be legally bound, the undersigned parties
have duly executed this Agreement in duplicate effective on the day first
written above.
INTERDIGITAL COMMUNICATIONS CORPORATION
Attest
/s/ Adrienne G. Juskalian By /s/ Mark Lemmo
- ------------------------------- -----------------------------------
Title General Manager
KENWOOD CORPORATION
Attest
/s/ SZ By /s/ Masakazu Kaneko
- -------------------------------- -----------------------------------
Title General Manager
Radio Communications Department
Communications Equipment Division
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EXHIBIT A
SCHEDULE OF PAYMENTS
================================================================================
Description Amount Payment Schedule
- --------------------------------------------------------------------------------
Initial Payment US$ * Paid under Memorandum of Understanding.
Development Fee 1 This payment was for work done prior to
the date of this Agreement. This amount
shall not be returned to InterDigital
for any reason.
- --------------------------------------------------------------------------------
Development Fee 2 US$ * Payable within 30 days of Working Sample
acceptance.
- --------------------------------------------------------------------------------
Development Fee 3 US$ * Payable within 30 days of Production
Model acceptance
- --------------------------------------------------------------------------------
Quarterly Payment US$ * Payable in four quarterly installments
of Engineering commencing at the end of the month of
Fee Pre-Production model acceptance unless
suspended in the event the Products
delivered by Kenwood to InterDigital
fail to meet mutually accepted Outgoing
and Incoming Inspection Regulations and
Standards stipulated in the Production
Agreement or any Kenwood-provided
Warranty.
- --------------------------------------------------------------------------------
Development Fee US$ * Applicable from third new frequency
for each Revised change. 50% payable upon acceptance of
Pre-Production Pre-Production Model and 50% payable
Model upon acceptance of first production
unit.
================================================================================
* Confidential treatment has been requested for the deleted text, which has been
filed separately with the Securities and Exchange Commission.
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