EXHIBIT 10.24
DATED May 5, 1997
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BRONZEBASE LIMITED
- and -
DETECTION SYSTEMS, INC.
TECHNOLOGY LICENCE
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EA/GWH/V238/3 GWH1529A 07/05/97
DATE: May 5, 1997
PARTIES:
(1) BRONZEBASE LIMITED (Company No. 2716839) whose registered office is at
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Licensor"); and
(2) DETECTION SYSTEMS, INC., a New York State corporation having its
principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
("the Licensee").
RECITALS:
A. Licensor is the assignee of UK Patent No. 2115651 and UK Patent No.
2167625 ("the Patents") and is the beneficial owner of them. Each of
the Patents claims certain systems for providing communication between
a central location and instrumentalities other than a conventional
telephone located at the premises of telephone network subscribers
("the Systems").
B. The Licensor owns other intellectual property rights and a substantial
and secret body of know-how relating to the Systems, the individual
components thereof, and the use and exploitation thereof.
C. An essential component in each of the Systems is a subscriber terminal
unit ("STU") installed at each telephone network subscriber's premises,
to which are connected various instrumentalities to be monitored by the
System. The STU is electronically interrogated at appropriate intervals
as to the status of the said instrumentalities, and responds by means
of similar electronic signals. Critical to the operation of each STU is
a microprocessor contained therein which is pre-programmed to enable
the STU to function as part of the particular System in which it is
used.
D. The Licensee contemporaneously herewith acquires the entire issued
share capital in Digital Audio Limited ("DAL"), a company that has for
several years enjoyed, and until immediately prior to this Agreement
continued to enjoy, a licence of the same technology as forms the
subject-matter of this licence.
E. The Licensee has requested the Licensor to grant to the Licensee a
licence to make and sell STU's of a certain type, and the Licensor has
agreed to grant such a licence to the Licensee on the terms and
conditions set out in this Agreement.
NOW IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement the words and phrases set out in the following table
of definitions shall bear the meanings respectively set against them in
the table:-
"Ancillary Rights" means design rights, copyrights, and other
intellectual property rights (if any) held by
the Licensor in the STU or any part thereof;
"BLU STU" means a STU, the distinguishing features of
which are described in the Schedule hereto,
to any of the designs shown in DAL's drawings
no.'s D271-01, D271-02, D271-04 and D271-05;
"Commencement Date" means the date hereof;
"Connected Company" means a company controlled by, under the
control of or under common control with the
Licensee;
"European Community" means the member states from time to time of
the European Economic Area;
"Improvement" means any addition, improvement, variation,
revision, modification or development to or
of the STU or the manufacture thereof
(including without limitation new or modified
designs for any feature of the shape or
configuration of the STU or any internal or
external parts thereof);
"Initial Term" means the period of five (5) years commencing
on the Commencement Date;
"Interest Rate" means a rate of interest equal to the base
lending rate of Lloyds Bank plc plus 3%;
"Know-How" means so much of the technical knowledge and
information at the free disposal of the
Licensor relating to the manufacture of STU's
(based upon the use of Microprocessors
supplied by the Licensor) as is necessary for
the Licensee to use, and includes both the
whole body of such knowledge, experience,
skills and information and also any one or
more parts of the same;
"Licensed Property" means collectively the Patents, the Know-How,
the Licensor's Improvements, and the
Ancillary Rights;
"Licensee's Improvements" means Improvements made, developed or
acquired by the Licensee during the Term;
"Licensor's Improvements" means Improvements made, developed or
acquired by the Licensor during the Term;
"Microprocessor" means the microprocessor referred to in
Recital C (which is the Licensor's part no.
44855) in the Licensor's current issue from
time to time;
"New Product" means an improved or revised STU developed
by the Licensor after the Commencement Date
which the Licensor wishes to market following
successful tests in the market;
"Party" means a party to this Agreement and "Parties"
means both the parties to this Agreement;
"Person" includes any natural person, firm,
partnership, trust, company, corporate body,
unincorporated body, governmental body or
administrative body (in each case, whether or
not having separate legal personality);
"Royalties" means royalties payable pursuant to Clause
12.1;
"Sales Tax" means sales tax, purchase tax, Value Added
Tax or any other tax performing an equivalent
or similar fiscal function;
"STU" means a subscriber terminal unit which shall
include a BLU STU or any New Product;
"Supply" means any disposition of STU's whether under
a contract of sale, hire, leasing or
otherwise, including the supply by the
Licensee to itself for its own use and
"Supplied" and the verb "Supply" shall be
construed accordingly;
"the Systems" means the systems described in Recital A and
"the System" means any one of them;
"Technical Documentation" means the manuals, drawings, designs, circuit
diagrams, specifications, computer programs
and other documentation, media and materials
in which the Know-How is recorded;
"Term" means the period of eight (8) years
commencing on the Commencement Date;
"Termination Date" means the date on which this Agreement
terminates whether by the expiration of the
Term or by reason of the termination of this
Agreement under any of its provisions;
"Territory" means the United Kingdom and Eire; and
"Year of this
Agreement" or "Year" means each consecutive period of twelve (12)
months during the continuance of this
Agreement, and "quarters" shall be defined by
reference to such Year rather than by
reference to the calendar year.
1.2 In this Agreement:-
1.2.1 the Index and Clause headings are included for convenience
only and shall not affect the construction of this Agreement;
1.2.2 words denoting the singular shall include the plural and vice
versa; and
1.2.3 words denoting the neuter shall include the male and female.
1.3 References in this Agreement to Recitals and Clauses are references to
recitals to this Agreement and clauses of this Agreement.
2. LICENCE
2.1 In consideration of the undertakings of the Licensee hereunder the
Licensor grants to the Licensee with effect from the Commencement
Date:-
2.1.1 a licence during the Term under the Patents to manufacture
STU's, import STU's into the Territory, and Supply and offer
to Supply STU's manufactured by or on behalf of the Licensee
within the Territory for use in or in conjunction with
Systems; and
2.1.2 a licence during the Term to use the Know-How and exploit the
Ancillary Rights to the extent necessary in the aforesaid
manufacture of STU's and the Supply of STU's within the
Territory, on and subject to the terms and conditions of this
Agreement.
2.2 Subject to Clause 2.3, the Licensor shall not during the Initial Term
grant to any other Person a licence equivalent to that set out in
Clause 2.1, in relation to the manufacture, importation and/or Supply
of STU's in or into the Territory. However the Licensor shall itself
remain free to licence Versus Technology Limited to carry out the
activities and do the things referred to in Clause 2.1.
2.3 Subject as follows, the undertaking in Clause 2.2 shall apply until the
earliest to occur of the following: (a) the termination or expiry of
this Agreement; and (b) the date on which the STU ceases to be
protected by at least one of the following: the Patents and the
Know-How. (For
such purposes, the Know-How shall be deemed to protect the STU until
such time as it is not secret and/or not substantial within the meaning
laid down in Article 10 of Commission Regulation (EC) No. 240/96.) The
Licensor may at any time (without prejudice to its other rights and
remedies), by written notice to the Licensee having immediate effect,
cancel the undertaking given in Clause 2.2, without liability on the
Licensor and without any further effect on this Agreement if, at the
time of the Licensor's said notice, the Licensee is in breach of Clause
3. Moreover, Clause 2.2 shall not prohibit the grant by the Licensor of
any licence as described in Clause 2.2 if required by any applicable
statute, laws, regulation, or ordinance, or the order of any Court or
regulatory authority pursuant thereto.
2.4 The Licensee shall not at any time during the Term without the
Licensor's express permission Supply or offer to Supply STU's in or
export STU's to any place outside the European Community.
2.5 The Licensee shall not at any time during the Term, Supply or offer to
Supply STU's in, export STU's to, specifically direct advertising on
STU's to, or establish any distribution depot or branch for STU's in,
any territory outside the Territory that is in the European Community
except any such territory in which, at that time, both of the following
factors apply: the Systems are not protected by any patent owned or
controlled by the Licensor, and the Know-How no longer protects the STU
(within the meaning laid down in Clause 2.3).
2.6 Neither party shall at any time during the Term, supply or offer to
supply STU's combined, bundled or incorporated with or into any other
product or device whatsoever.
2.7 Without prejudice to the foregoing provisions, the Licensor reserves
its right to exercise its patent rights within the European Community
and elsewhere to oppose the exploitation of the technology licensed
herein outside the Territory.
2.8 Notwithstanding Clause 2.7, the Licensee shall not be prohibited, at
any time after there shall have elapsed the five-year period referred
to in Article 1 paragraph 2 of the aforementioned Commission Regulation
in relation to the technology covered by this Agreement, from Supplying
STU's, in response to unsolicited orders, in any territory within the
European Community in which the Licensor has licensed such technology
to other licensees.
2.9 The Parties agree that the spirit and intention of this Agreement is
such that neither Party shall participate or engage in any conduct
which would or is likely to harm the business, goodwill or reputation
of the other Party.
3. SALES ENDEAVOURS
3.1 The Licensee shall throughout the Term use its best endeavours to
promote and maximise the use of the Systems throughout the Territory.
3.2 The Licensee shall forthwith inform the Licensor if for any reason it
is unable to meet any demand for BLU STU's in the Territory other than
due to the Licensor's failure to supply Microprocessors under Clause 8,
giving sufficient information to enable the Licensor to enable
Versus Technology Limited to supply customers whom the Licensee is
unable to Supply.
3.3 Without prejudice to the foregoing, the Licensee shall manufacture and
Supply hereunder during Initial Term:-
3.3.1 at least 12,000 (twelve thousand) BLU STU's in each Year; and
3.3.2 (without prejudice to Clause 3.3.1) shall not manufacture and
supply less than 2,500 (two thousand five hundred) BLU STU's
per quarter in any two consecutive quarters.
3.4 The sole remedy of the Licensor for a failure by the Licensee to
manufacture and supply the number of STU's set forth in this Article 3
is to cancel the undertaking given in Clause 2.2 of this Agreement, and
the Licensee shall in no event be subject to damages, lost profits or
lost Royalties as a result of any such failure.
4. PROTECTION OF MICROPROCESSOR
4.1 The Licensee shall have no licence under applicable copyrights or
related forms of protection to (or to license or permit any other
Person to):-
4.1.1 disassemble, decompile or reverse engineer any Microprocessor
or any program (in whatever form it subsists) comprised in or
recorded on any Microprocessor;
4.1.2 copy, adapt, modify or translate any such program; or
4.1.3 Supply or provide any such program to any Person other than as
incorporated into STU, within the Microprocessor in which it
is supplied to the Licensee under this Agreement.
4.2 Clause 4.1 shall apply save to the extent (if any) that it may be
unlawful under applicable law for the Licensor to prevent the
activities by the Licensee referred to therein.
4.3 The Licensee shall not remove, obscure, supplement, alter or deface any
labelling on any Microprocessor, or attach any other labelling or marks
to the same.
5. ASSIGNMENT AND SUB-LICENSING
5.1 Subject to Clause 5.2 the Licensee shall not be entitled to grant to
any Person other than a Connected Company any licence, sub-licence,
sub-contract, permission or authorisation ("Sub-Licence") of or in
relation to any rights granted to it under this Agreement without the
prior written consent of the Licensor (not to be unreasonably withheld)
provided that:-
5.1.1. any such Sub-Licence is on the same terms and conditions
contained by this Agreement mutatis mutandis; and
5.1.2. upon such Connected Company ceasing to be a Connected Company,
any Sub-Licence granted by the Licencee will be terminated
forthwith and such Sub-Licence shall provide accordingly.
5.2 The Licensee shall be entitled to grant Sub-Licences for manufacturing
purposes only provided that any such Sub-Licence is on the same terms
and conditions contained by this Agreement mutatis mutandis.
5.3 Notwithstanding the grant of any Sub-Licence pursuant to Clauses 5.1 or
5.2, the Licensee shall be responsible to the Licensor for the
performance of all obligations under this Agreement.
5.4 This Agreement is personal to the Licensee. The Licensee shall not
assign, transfer, charge or part with any of its rights under this
Agreement without the prior written consent of the Licensor (not to be
unreasonably withheld).
5.5 The Licensor shall be entitled to assign the benefits (or any of them)
that it enjoys under this Agreement. For the avoidance of doubt should
the Licensor seek to assign or transfer any or all of the Licensed
Property, it hereby undertakes that such assignment or transfer shall
be subject to the burden of this Agreement.
6. PROVISION OF THE KNOW-HOW
6.1 The Licensor shall as soon as reasonably practicable after the date of
this Agreement provide to the Licensee one complete copy of the
Technical Documentation, or request and permit DAL to provide the
Licensee with the copy thereof provided to DAL by the Licensor pursuant
to the licence referred to in Recital D.
6.2 All Technical Documentation provided by the Licensor or DAL under this
Clause 6 will be provided in its English language version, and the
copyright therein shall belong to and remain vested in the Licensor.
The Licensor hereby grants to the Licensee licence to make such number
of copies of the same as the Licensee may reasonably require in
connection with the manufacture of STU's and to make such number of
copies of any manuals as the Licensee may reasonably require in
connection with the Supply of STU's.
6.3 If at any time during the Term the Licensee requires any information
and assistance in relation to the manufacture of STU's, the Licensor
shall to the extent that it is reasonably able from its existing
experience and knowledge and subject to its other commitments provide
such information and assistance to the Licensee, subject to:-
6.3.1 the Licensee paying a consultancy fee to the Licensor in
respect of such assistance at the Licensor's standard rates
for consultancy services current from time to time (except in
the first Year, when the Licensor shall provide such
information and assistance as may reasonably be required free
of charge); and
6.3.2 the Licensee paying or reimbursing to the Licensor all
expenses properly incurred by the Licensor in providing such
assistance.
6.4 The Licensee shall be solely responsible for ensuring that the STU's it
produces and its methods of manufacturing them comply in all respects
with all requirements of all competent governmental or other regulatory
authorities and the Licensor shall have no responsibility for
compliance with such requirements.
7. QUALITY CONTROL
During the continuance of this Agreement the Licensee shall:-
7.1. ensure that all STU's marketed by it are of good and merchantable
quality and comply with all applicable United Kingdom, Eire and EC laws
and regulations (including without limitation all laws and regulations
relating to EMC and voltage) and all relevant BABT and other
regulations and approvals;
7.2 provide the Licensor with a sample of each description of STU that it
proposes to Supply prior to making any Supply of STU's of that
description;
7.3 upon reasonable notice from the Licensor, give the Licensor or its
authorised representatives free access at any reasonable time to the
premises of the Licensee for the purpose of ensuring that the Licensee
is performing and observing the obligations of the Licensee under this
Agreement;
7.4 ensure that all literature prepared by the Licensee relating to STU's
it produces or has produced bears an acknowledgment in a form first
approved by the Licensor to the effect that the STU's are made and
Supplied under licence from the Licensor and details of the Patents
under which STU's are Supplied by the Licensee; and
7.5 not act as, or purport to be, the agent of the Licensor nor make any
representation that it is acting otherwise than as principal in
relation to the manufacture and/or Supply of STU's nor make any
representation or give any warranty in relation to STU's on behalf of
the Licensor or which would impose any liability on the Licensor.
8. USE AND PURCHASE OF THE MICROPROCESSORS
8.1 The Licensee accepts that the use of the Microprocessors is necessary
in order that the STU functions as part of the System in which it is
used, and that the Microprocessors are therefore necessary for a
technically satisfactory exploitation of the STU's and the System in
which they are used.
8.2 The Licensee undertakes to acquire the Microprocessors exclusively from
the Licensor or such Person as the Licensor may from time to time
designate and undertakes not itself to manufacture or have manufactured
or acquire from any Person (other than a Person designated by the
Licensor) any Microprocessors or any products in substitution for
Microprocessors.
8.3 The Licensor shall, subject to availability, supply or procure the
supply to the Licensee of such amounts of the Microprocessors as the
Licensee shall reasonably require, on the standard terms and conditions
of Supply of the Licensor or its designated supplier. The Licensee
shall not order or carry a greater stock of Microprocessors than may be
necessary to satisfy its reasonably
foreseeable needs from time to time during the Term in producing STU's
hereunder, and shall provide the Licensor with reasonable evidence
thereof if so required from time to time.
8.4 Microprocessors supplied hereunder and used by the Licensee in the
manufacture of STU's shall be so supplied at the price of (pound)2.00
(two pounds sterling) plus Value Added Tax per Microprocessor.
Microprocessors supplied hereunder and used by the Licensee in the
manufacture of New Products shall be so supplied at a price equal to
the Licensor's total supply cost (as notified to the Licensee from time
to time). The Licensee shall pay for Microprocessors as and when
consignments thereof are supplied to the Licensee, making each such
payment prior to delivery of the consignment in question or within the
30 (thirty) days thereafter.
8.5 The Licensor undertakes to the Licensee to use all reasonable
endeavours to supply Microprocessors to the Licensee (if so ordered by
the Licensee), given the placement of an order therefor at least one
hundred and twenty (120) days in advance of the requested delivery
date. If the Licensor is unable to fulfil any such order the Licensor
shall supply to the Licensee at least one-third of all Microprocessors
as are available to the Licensor at the requested delivery date.
8.6 The Licensor's obligations under this Clause 8 are subject to the
Licensee's continued compliance in full with Clause 12 and Clause 8.4.
9. IMPROVEMENTS
9.1 The Licensee shall forthwith disclose to the Licensor in confidence, as
and when made, developed or acquired (and in such detail as the
Licensor may reasonably require) all the Licensee's Improvements.
9.2 Insofar as the Licensee is able to grant the same, the Licensor shall
have an irrevocable worldwide licence (free of any obligation to make
royalty or other payments) during the Term to use and exploit all
Improvements which the Licensee is required to disclose to the Licensor
under Clause.
9.1 and to use and exploit all intellectual property rights in respect
thereof owned by the Licensee and shall have the further right to grant
sub-licences out of such licence.
9.3 The Licensor shall forthwith disclose to the Licensee in confidence, as
and when made, developed or acquired (and in such detail as the
Licensee may reasonably require) all the Licensor's Improvements.
9.4 Insofar as the Licensor is able to grant the same, the Licensee shall
have a licence during the Term within the Territory in connection with
the manufacture and Supply of STU's on the terms of Clause 2.1 to use
all of the Licensor's Improvements and to use and exploit all
intellectual property rights in respect thereof owned by the Licensor.
10. LIABILITY OF LICENSOR FOR DEFAULTS
The Licensor and its employees, agents, consultants and contractors
shall not have (nor shall any of them have) any liability whatsoever to
the Licensee for (and the Licensee shall keep the Licensor and its
employees agents consultants and contractors and each of them
indemnified
against) any losses, damages, claims, actions, proceedings, costs and
expenses suffered or incurred by the Licensee or brought against the
Licensee and any consequential loss or damage and any loss of profits
or other economic loss suffered by the Licensee and any claim made
against the Licensee by any third party to the extent due to or caused
(whether directly or indirectly) by or arising from:-
10.1 any defect or inaccuracy in, or inadequacy of, any of the Know-How,
procedures, plans, information, advice, or assistance provided by the
Licensor under this Agreement; or
10.2 any default of the Licensor or its employees in connection with or in
relation to the subject-matter of this Agreement.
11. PRODUCT LIABILITY AND INDEMNITY
11.1 The Licensee shall indemnify the Licensor and its directors
and employees, and keep them fully and effectively indemnified
against any and all losses, claims, damages, costs, charges,
expenses, liabilities, demands, proceedings and actions which
they (or any of them) may sustain or incur, or which may be
brought or established against them (or any of them) as a
result (whether direct or indirect) of or arising from :-
11.1.1 any action or omission of the Licensee or its
employees, agents or contractors in the performance
of its obligations or the exercise of any of its
rights under this Agreement; or
11.1.2 the death of or personal injury to any Person and/or
any loss or damage to any property and/or any other
loss or damage caused (whether directly or
indirectly) by reason of the Licensee manufacturing,
Supplying, offering to Supply, and/or agreeing to
Supply any STU or other article which:
(a) is not of merchantable quality; or
(b) is defective in any respect; or
(c) is or may be injurious to the health or
safety of any Person using or handling the
STU or article in question for any reasonably
foreseeable purpose; or
(d) is or may be injurious to the property of any
Person referred to in paragraph (c).
11.2 If so requested by the Licensor at any time, the Licensee shall use its
best endeavours to effect and maintain in force throughout the
continuance of this Agreement a policy of insurance in the joint names
of the Licensor and the Licensee with a reputable insurance company
approved by the Licensor at a level of cover first approved by the
Licensor (such approval not to be unreasonably withheld) against any
damages, liabilities, claims and costs arising from any of the causes
events or circumstances referred to in Clause 11.1 and with an
endorsement thereon that the insurer will not cancel the policy for any
reason whatsoever without first giving to the Licensor not less than
fourteen days notice in writing of its intention to cancel the policy
and
also containing an endorsement that no act omission breach of warranty
misrepresentation or non-disclosure by the Licensee will enable the
insurer to avoid the policy in whole or in part against the Licensor.
11.3 The Licensor shall indemnify the Licensee and its directors and
employees, and keep them fully and effectively indemnified against any
and all losses, claims, damages, costs, charges, expenses, liabilities,
demands, proceedings and actions which they (or any of them) may
sustain or incur, or which may be brought or established against them
(or any of them) as a result (whether direct or indirect) of or arising
from :-
11.3.1 any action or omission of the Licensor or its employees,
agents or contractors in the performance of its obligations or
the exercise of any of its rights under this Agreement; or
11.3.2 the death of or personal injury to any Person and/or any loss
or damage to any property and/or any other loss or damage
caused (whether directly or indirectly) by reason of the
Licensor manufacturing, supplying, offering to supply, and/or
agreeing to supply any Microprocessor which:
(a) is not of merchantable quality; or
(b) is defective in any respect; or
(c) is or may be injurious to the health or safety of any
Person using or handling the Microprocessor for any
reasonably foreseeable purpose; or
(d) is or may be injurious to the property of any Person
referred to in paragraph (c).
12. ROYALTIES
12.1 In consideration of the rights and facilities hereby granted to the
Licensee, the Licensee shall pay to the Licensor a royalty, paid and
calculated as set out in Clauses 12.2 and 12.3.
12.2 Payment of the Royalty shall be made by reference to the Supply of
STU's by or on behalf of the Licensee, and shall be paid at the rate
(applicable throughout the Term) of 59.14% of the average sales price
of the Licensor for an equivalent STU excluding any Sales Tax and Value
Added Tax for the preceding completed quarter (such calculation not to
include the Licensor's prices for part exchange of STU's undertaken by
the Licensor in respect of STU's which no longer meet legal
requirements) ("Average Price"). The Licensor shall notify the Licensee
of the Average Price of the quarter immediately preceding the
Commencement Date within 21 days of the Commencement Date and for each
subsequent quarter, within 21 days of the end of each such quarter.
12.3 The Licensor shall permit the Licensee (or the Licensee's
representatives) within business hours during the Term and at any time
or times during the two years following the Termination Date and on not
less than forty-eight hours prior notice to inspect the Licensor's
records relating to the calculation of the Average Price referred to in
Clause 12.2 to the extent necessary and solely for the purpose of
verifying the Average Price.
12.4 The Royalty shall be paid on a monthly basis throughout the Term,
payment to be made in respect of all STU's supplied during each month
within 30 (thirty) days after the end of that month. With each such
payment the Licensee shall provide a statement showing the Royalty due
and giving full details of its calculation.
12.5 Payment of Royalties, and payments due under Clause 8.4, shall be made
in Pounds Sterling to such account or place in the United Kingdom and
in such manner as the Licensor may from time to time direct.
13. OVERDUE PAYMENTS
In the event of default by the Licensee in payment within the relevant
period specified in this Agreement of any Royalties or any other sum
due to the Licensor under this Agreement then (without prejudice to the
Licensor's other rights and remedies) the Licensee shall on demand pay
to the Licensor interest at the Interest Rate on such sum from the date
of expiration of the relevant period up to the date of actual payment
(as well after as before any judgement).
14. REPORTING PROCEDURES
14.1 The Licensee shall supply to the Licensor in respect of each calendar
month a production, Supply and inventory analysis in the form required
by the Licensor in respect of STU's manufactured by or on behalf of the
Licensee, the analysis for each calendar month to be supplied within 30
days after the end of that calendar month.
14.2 The Licensee shall within three months after the end of each Year of
this Agreement deliver to the Licensor a statement in a form approved
by the Licensor and certified by two directors of the Licensee showing
the quantity of all STU's made and quantity of STU's Supplied by the
Licensee during the Year of this Agreement just ended.
14.3 The Licensee shall maintain at its principal place of business full and
accurate records relating to the manufacture and Supply of STU's by the
Licensee and shall retain all supporting records, invoices, vouchers,
receipts and other documents for the last two years at least, and for
at least two years after the Termination Date shall preserve the said
books of account and the supporting records, invoices, vouchers,
receipts and other documents relating to the two years preceding the
Termination Date.
14.4 The Licensee shall permit the Licensor (or the Licensor's authorised
representatives) within business hours during the Term and at any time
or times during the two years following the Termination Date and on not
less than forty-eight hours prior notice to inspect the records
referred to in Clause 14.3 to the extent necessary and solely for the
purpose of verifying the amount of Royalties payable by the Licensee
under Clause 12.
15. TAXES
15.1 The Licensee shall be entitled to deduct from the Royalties payable to
the Licensor under Clause 12 and pay over to the revenue authorities in
the Territory such taxes (if any) as the Licensee may be required under
UK or Eire law to deduct on remission of the Royalties to the Licensor.
The Licensee shall provide such documentary evidence as the Licensor
may reasonably require that the amount so deducted has been paid over
to the relevant revenue authorities in the Territory, and to give the
Licensor all the assistance and information that the Licensor may
reasonably require in the Licensor's endeavours to obtain a set-off or
credit in respect of such deductions.
15.2 The Licensee shall permit the Licensor (or the Licensor's authorised
representatives) within business hours during the Term and at any time
or times during the two years following the Termination Date and on not
less than forty-eight hours notice to inspect its financial records to
the extent necessary and for the sole purpose of verifying the amounts
payable to or recoverable by the Licensor under this Clause 15.
16. MAINTENANCE OF PATENTS
The Licensor shall during the Term pay all renewal fees for the
Patents.
17. WARRANTIES
The Licensor hereby warrants and represents that it is not aware that
the Patents are invalid, or that the manufacture, use and/or Supply of
STU's, the use of the Know-How, and/or the exploitation of the Patents,
Ancillary Rights or any of them by the Licensee hereunder (and in
strict accordance with the terms and conditions hereof) would infringe
the rights of any third party, but no further or other warranty or
representation is given by the Licensor.
18. INFRINGEMENTS AND INDEMNITY
18.1 The Licensee shall forthwith notify the Licensor in writing of any
infringement or suspected or threatened infringement of the Patents (or
either of them) or any of the Ancillary Rights or any unauthorised use
of the Know-How which shall at any time come to its knowledge.
18.2 The Licensor shall be entitled in its sole discretion to decide whether
or not to take any steps (including any proceedings) as may be
necessary to prevent or restrain any infringement by a third party of
either Patent or any of the Ancillary Rights or any unauthorised use by
any third party of the Know-How. The Licensee shall provide or procure
the provision of such assistance in taking such steps (including any
proceedings) as the Licensor shall reasonably require (subject to the
Licensor reimbursing the Licensee for any costs and expenses it may
incur in providing such assistance). The Licensor shall be entitled to
retain any award of damages or other compensation obtained as a result
of any steps (including any proceedings) taken by the Licensor pursuant
to this Clause 18.2.
18.3 If any claim is made against the Licensee on the grounds that the use
or exploitation by the Licensee of the Patents (or either of them) or
any of the Ancillary Rights or any of the Know-How infringes the
rights of any third party, the Licensee shall forthwith notify the
Licensor of the same and the Licensor shall indemnify and keep
indemnified the Licensee against any and all losses, claims, damages,
costs, charges, expenses, liabilities, demands proceedings and actions
(including for the avoidance of doubt proper and reasonable legal fees
and expenses) which may be sustained or incurred by the Licensee or
which may be brought or established against it arising from any such
claim, provided that:-
18.3.1 the Licensee allows the Licensor to control the defence and
settlement of the claim; and
18.3.2 the Licensee makes no admission or settlement in respect of
the claim without the Licensor's consent.
19. CONFIDENTIALITY AND OTHER PROTECTION
19.1 The Licensee undertakes :-
19.1.1 to keep secret and treat as confidential and to ensure that
its employees, agents, and sub-contractors keep secret and
treat as confidential all of the Know-How, all of the
Licensor's Improvements, all of the Technical Documentation,
all of the design verification procedures, test and trials
procedures and quality plans, and all other information,
documentation and advice supplied by the Licensor pursuant to
the terms of, or in the course of performance of, this
Agreement (including all of the same that has been supplied
prior to the date of this Agreement); and
19.1.2 not to use any of the Know-How, the Licensor's Improvements,
the Technical Documentation, procedures and plans or any other
information, documentation and advice referred to in Clause
19.1.1 except as permitted by this Agreement; and
19.1.3 only to disclose the Know-How, the Licensor's Improvements,
the Technical Documentation, procedures, plans and other
information, documentation and advice referred to in Clause
19.1.1 to those of the Licensee's employees who need to know
the same for the fulfilment of their duties to the Licensee
and have been made aware that the same is confidential
information of the Licensor.
19.2 The Licensee undertakes to keep secret and treat as confidential the
contents of this Agreement and the content of any records of the
Licensor inspected pursuant to Clause 12.3. If at any time during the
Term the Licensee disputes or directly or indirectly assists any third
party to dispute the validity of the Patents (or either or them) or any
of the claims thereof, or the secrecy or substantiality of the
Know-How, the Licensor shall be entitled at any time thereafter by
notice in writing to the Licensee forthwith to terminate this
Agreement.
19.3 The Licensor undertakes to keep secret and treat as confidential the
content of any records of the Licensee inspected pursuant to Clauses
14.4 and 15.2. The Licensor undertakes to keep secret and treat as
confidential all of the Licensee's Improvements communicated to the
Licensor and (save as aforesaid) not to use any of the same except as
permitted by this Agreement and to ensure that its employees, agents,
subsidiaries and sub-contractors do likewise.
19.4 The obligations under Clauses 19.1 and 19.3 shall not extend to any
Know-How, Improvements, Technical Documentation, procedures, plans or
other information, documentation or advice which the Party to whom the
same shall have been disclosed ("the recipient") can demonstrate:-
19.4.1 is in the public domain or has ceased to be secret (otherwise
than as a result of disclosure by the recipient or any of its
officers, employees, agents, contractors or representatives);
19.4.2 is required to be disclosed pursuant to any Order of a Court
of competent jurisdiction (but only for the purpose of such
disclosure);
19.4.3 is contained in a published patent specification;
19.4.4 is required to be disclosed pursuant to any statute,
regulation or ordinance or under any laws or regulations of
the European Community (but only for the purpose of
disclosure);
19.4.5 is (at the time the recipient seeks to disclose or use the
same) already in the possession of the recipient free from any
obligation of confidentiality and has not been acquired by the
recipient in breach of any obligation of confidentiality; or
19.4.6 has been disclosed to the recipient under an express written
statement that it is not confidential.
19.5 The following acts shall not be deemed to be a breach of the
obligations contained in Clauses 19.1 and 19.3 in relation to the
disclosure of any Know-How, Improvements, Technical Documentation,
procedures, plans, or other information, documentation or advice by the
recipient:-
19.5.1 disclosure occurring in the ordinary course of manufacture of
STU's by the recipient;
19.5.2 disclosure occurring in the ordinary course of the Supply of
STU's by the recipient;
19.5.3 disclosure by the recipient to its customers for STU's; or
19.5.4 disclosure by reproduction of drawings in advertising
literature, instruction books and spare parts lists
Provided that (in each case) any disclosure is made bona fide and to no
greater degree than is necessary in the circumstances, is made under
conditions of confidence wherever commercially practicable, and is made
with a view to promoting the Supply or use of STU's.
19.6 Any information communicated to a Party under this Agreement may, with
the prior written permission of the Party which communicated that
information, be disclosed by the former to any sub-contractor appointed
by it to manufacture STU's or components for STU's provided that the
disclosing Party procures that such disclosure is limited to such
officers or employees of the sub-contractor as cannot properly fulfil
their duties to the sub-contractor without such disclosure and who
undertake in writing to keep such information confidential.
20. DURATION AND TERMINATION
20.1 This Agreement shall come into effect on the Commencement Date and,
unless terminated earlier in accordance with the provisions of this
Agreement, shall continue in force for the Term.
20.2 The Licensor shall be entitled to terminate this Agreement by notice in
writing to the Licensee having immediate effect :-
20.2.1 if the Licensee fails to pay any amount due to the Licensor
under this Agreement within thirty (30) days after written
notice from the Licensor notifying the Licensee that a payment
is overdue and requiring that payment be made;
20.2.2 if a Court makes an administration order with respect to the
Licensee or any composition in satisfaction of the debts of,
or a scheme of arrangement of the affairs of, the Licensee or
if the Licensee undergoes any comparable procedure under the
laws of any competent jurisdiction;
20.2.3 if the Licensee enters into liquidation (not being a voluntary
liquidation for the purposes only of reconstruction or
amalgamation on terms first approved by the Licensor, such
approval not to be unreasonably withheld) or is declared
insolvent or bankrupt or makes an assignment or other
arrangement for the benefit of its creditors or has an
administrative receiver appointed to it or has a receiver or
manager of its assets or a material part thereof appointed, or
undergoes any comparable procedure under the laws of any
competent jurisdiction;
20.2.4 if control (as defined in Section 435(10) of the Insolvency
Act 1986) or the power to take control of the Licensee is
acquired by any person or group of associates (as defined in
that Section) not having control of the Licensee at the date
of this Agreement unless such event occurs with the prior
consent in writing of the Licensor; or
20.2.5 in the event of any material breach by the Licensee of any of
its obligations under a certain "Stock Purchase Agreement"
between Numerex Corporation (1) and the Licensee (2), of even
date herewith, which is not remedied with a period of thirty
(30) days after service of a written notice by Numerex
Corporation, requiring such remedy.
20.3 If either Party is :-
20.3.1 in breach of any material obligation binding on it under this
Agreement which is incapable of remedy; or
20.3.2 in breach of any other obligation binding on it under this
Agreement which has not been remedied by such Party within
thirty (30) days after written notice from the other Party
specifying the breach and requiring it to be remedied, the
Party not in breach may forthwith terminate this Agreement by
notice in writing to the other Party.
20.4.1 If at any time the Licensee is, in the Licensor's opinion,
operating in a manner which would give, or has given, rise to
a right of any Person to apply for and be granted a
compulsory licence under the Patents (or either of them), the
Licensor shall have the right (in addition to any other remedy
it may possess) to serve on the Licensee a notice in writing
requiring the Licensee within 28 days to take such steps as
may be necessary to prevent such right from arising or to
nullify such right.
20.4.2 A notice given under Clause 20.4.1 shall be deemed withdrawn
if the Licensee shall within 28 days after the date of such
notice produce evidence satisfactory to the Licensor
establishing that no such right to a compulsory licence has
arisen or (if it has arisen) that the Licensee has taken such
steps as may be necessary to nullify such right.
20.4.3 If a notice given under Clause 20.4.1 is not deemed to be
withdrawn under Clause 20.4.2, the Licensor shall be entitled
at any time after the expiration of such notice by notice in
writing to the Licensee forthwith to terminate this Agreement.
20.5 Any termination of this Agreement shall be without prejudice to any
rights accrued in favour of either Party in respect of any breach
committed prior to the date of such termination by the other Party
including (without limitation) the breach giving rise to termination.
21. CONSEQUENCES OF TERMINATION
21.1 Termination of this Agreement for any reason shall not bring to an
end:-
21.1.1 the confidentiality obligations of the Parties; or
21.1.2 the Licensee's obligations to pay Royalties or any other sum
which may be or shall have accrued due under this Agreement;
or
21.1.3 the obligations of both Parties set out in this Agreement to
indemnify the other Party in relation to events giving rise to
the liability to indemnify occurring prior to the Termination
Date.
21.2 With effect from the Termination Date all the licences granted to the
Licensee hereunder or pursuant hereto shall be at an end and the
Licensee shall cease carrying on (and shall not thereafter carry on)
those activities permitted by this Agreement for which it would require
the licence or consent of the Licensor, save as provided in Clause
22.3.
21.3 Notwithstanding the expiration of the Term or the determination of this
Agreement under any of its provisions, all the provisions of this
Agreement which are expressed to have effect on and/or after the
expiration of the Term or determination of this Agreement shall survive
the expiration of the Term or the determination of this Agreement and
shall be deemed to remain in full force and effect.
22. DISPOSAL OF MATERIALS ON TERMINATION
22.1 Upon the expiration of the Term or sooner determination of this
Agreement, the Licensee shall:-
22.1.1 at its own cost promptly deliver up to the Licensor, or
otherwise dispose of as the Licensor may instruct, all
Technical Documentation and all other documentation and papers
supplied to the Licensee by the Licensor or DAL and all copies
thereof and notes and extracts taken therefrom by the
Licensee; and
22.1.2 destroy all catalogues, advertising and promotional material,
stationery and materials of any sort relating to STU's and
shall supply to the Licensor within twenty-eight days after
the Termination Date a certificate signed by two directors of
the Licensee as to the destruction of all such catalogues,
advertising and promotional material, stationery and other
materials.
22.2 The Licensor shall have the right to purchase any unused
Microprocessors at a price equal to that paid therefor by the Licensee
to the Licensor under Clause 8.4.
22.3 The Licensee shall have the right to sell or otherwise dispose of all
its remaining stock of STU's, save as provided in Clause 22.4.
22.4 At the expiration of the period of 9 months following the Termination
Date, the Licensee shall at its own cost and in accordance with the
directions of the Licensor destroy all STU's then held in stock by it
and shall supply to the Licensor a certificate signed by two directors
of the Licensee as to the destruction of all such STU's.
22.5 The Licensee shall bear any loss which the Licensee may incur or suffer
by reason of the Supply, disposal and destruction of STU's and
Microprocessors in accordance with the provisions of this Clause 22.
23. VALUE ADDED TAX
All sums payable to the Licensor under this Agreement are stated
exclusive of Value Added Tax which shall (where applicable) be paid by
the Licensee in addition to such sums at the rate in force at the due
time for payment subject to the Licensor either supplying a VAT invoice
to the Licensee or informing the Licensee of its VAT registration
number.
24. FURTHER ASSURANCE
Each of the Parties shall do execute and perform and shall procure to
be done executed and performed all such further acts deeds documents
and things as the other Party may reasonably require from time to time
to give full effect to the terms of this Agreement.
25. NO PARTNERSHIP
Nothing in this Agreement shall be taken to constitute a partnership
between the Parties nor the appointment of one of the Parties as the
agent of the other.
26. FORCE MAJEURE
Neither Party shall be in breach of this Agreement if there is any
total or partial failure or performance by it of its duties and
obligations under this Agreement occasioned by any cause
beyond the control of either Party. If either Party is unable to
perform its duties and obligations under this Agreement as a direct
result of the effect of one or more of such causes such Party shall
give written notice to the other of such inability stating the cause in
question. The operation of this Agreement shall be suspended during the
period (and only during the period) in which the cause continues to
have effect. Forthwith upon the cause ceasing to have effect the Party
relying upon it shall given written notice thereof to the other. If the
causes continues to have effect for a period of more than 60 days the
Party not claiming relief under this Clause shall have the right to
terminate this Agreement upon giving 30 days written notice of such
termination to the other Party, but such notice shall not take effect
if the other Party gives notice within that period that the cause has
ceased to prevent the operation of this Agreement.
27. SEVERANCE
If at any time any provision of this Agreement is or becomes invalid or
illegal in any respect:
27.1 such provision shall be deemed to be severed from this Agreement but
the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected or impaired thereby; and
27.2 the Parties shall negotiate in good faith and use their best endeavours
to agree to the minimum necessary changes to this Agreement to replace
the invalid, illegal or unenforceable provisions. In the event that the
Parties are unable to arrive at a binding agreement as to any such
changes within 30 days of the said provisions being declared invalid,
illegal or unenforceable, a barrister of 10 years standing who is a
specialist in the field shall be chosen and appointed jointly by the
Parties (on a shared cost basis) to develop a substitute provision or
provisions which are valid, legal and enforceable and which have an
economic effect on the Parties as close to the economic effect of the
invalid, illegal or unenforceable provisions as is possible. The
barrister shall have the authority to modify other provisions of this
Agreement which are valid, legal and enforceable as necessary to
implement the foregoing changes. Such new provision or provisions and
any existing provisions so modified shall be binding on both the
Parties.
28. APPLICABLE LAW
28.1 This Agreement shall be deemed to have been made in England and English
law shall govern:-
28.1.1 its existence and validity;
28.1.2 its interpretation;
28.1.3 its performance;
28.1.4 within the limits of the powers of the Courts of England by
its procedural law, the consequences of its breach; and
28.1.5 the various ways of extinguishing obligations under it and
limitation of actions arising from it or its breach.
28.2 Each Party submits to the exclusive jurisdiction of the Supreme Court
of Judicature of England, waives personal service of any proceedings,
and agrees that service on it of proceedings may be effected by
registered mail to its address for service referred to in Clause 30 of
this Agreement.
28.3 Nothing contained in this Clause 28 shall affect the right to serve
process in any other manner permitted by law.
29. COUNTERPARTS
This Agreement may be executed in two counterparts, each of which shall
be deemed to be an original, and which together shall constitute one
and the same Agreement. Unless otherwise
provided in this Agreement, this Agreement shall be dated (and each
counterpart shall be dated) on the date on which a counterpart of this
Agreement is signed by the last of the Parties to execute this
Agreement.
30. NOTICES
30.1 Any notice required to be given under this Agreement shall be
sufficiently given:-
30.1.1 if delivered personally; or
30.1.2 if sent by reputable air courier for next-day delivery; or
30.1.3 if sent by facsimile copier or other electronic means of
communication with confirmation by letter despatched by
reputable air courier for next-day delivery by the close of
business on the next following business day (in which case,
the effective notice shall be that sent by facsimile copier or
other electronic means; not the confirmatory letter).
The words "in writing" whenever contained in this Agreement shall be
deemed to include any communication sent by any of such means.
30.2 Any notice which is sent or dispatched in accordance with this
Clause 29 shall be deemed to have been received by the addressee:-
30.2.1 if delivered personally, at the time of delivery;
30.2.2 in the case of a notice sent by reputable air courier, 48
hours after the envelope containing the notice was delivered
to the courier company with appropriate instructions for
next-day delivery; and
30.2.3 in the case of a notice sent by facsimile copier or other
electronic means of communication, if the notice was sent
during the business hours of the addressee then on the day of
transmission; otherwise on the next following business day.
In proving service by post it shall be necessary to prove only that the
notice was sent or despatched and that the notice was contained in an
envelope properly addressed, stamped first class and delivered to the
postal authorities for the purpose of recorded delivery. In proving
service by facsimile copier or other electronic means of communication
it shall be necessary to prove only that the confirmatory letter was
sent or despatched in accordance with this Clause 30.
30.3 For the purposes of this Clause 30, a "business day" means a day (other
than a Saturday) on which the clearing banks in the United Kingdom are
open for business and "business hours" means the hours of 9 a.m. to
5.30 p.m. local time in United Kingdom.
30.4 Any notice required to be given under this Agreement shall be sent:-
30.4.1 to the Licensor at:
▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ Summit Centre,
Farnborough, Hants ▇▇▇▇ ▇▇▇
Facsimile No: (01252) 371166
For the attention of : Managing Director
30.4.2 to the Licensee at:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
For the attention of: President
or to such other address or facsimile number as may be notified in
writing from time to time by either Party to the other.
31. WAIVERS
A failure by any Party to exercise and any delay forbearance or
indulgence by any Party in exercising any right, power or remedy under
this Agreement shall not operate as a waiver of that right, power or
remedy or preclude its exercise at any subsequent time or on any
subsequent occasion. The single or partial exercise of any right, power
or remedy shall not preclude any other or further exercise of that
right, power or remedy or the exercise of any other right, power or
remedy. No custom or practice of the Parties at variance with the terms
of this Agreement shall constitute a waiver of the rights of any Party
under this Agreement. The rights, powers and remedies provided in this
Agreement are cumulative and not exclusive of any rights, powers or
remedies provided by law.
32. ENTIRE AGREEMENT
32.1 This Agreement:-
32.1.1 constitutes the entire agreement and understanding between the
Parties with respect to the subject matter of this Agreement;
and
32.1.2 (in relation to such subject matter) supersedes all prior
discussions, understandings and agreements between the Parties
and their agents (or any of them) and all prior
representations and expressions of opinion by any Party (or
its agent) to any other Party (or its agent).
32.2 Except as expressly incorporated in this Agreement, all conditions,
warranties, guarantees, representations and understandings with respect
to the subject matter of this Agreement are hereby excluded.
AS WITNESS the hands of the Parties or their duly authorised representatives on
the date written on page 1 of this Agreement.
THE SCHEDULE
The BLU STU family of Subscriber Terminal Units are distinguished by the use,
within the units, of mechanical switches incorporated into the input trigger
circuits. These switches permit the inversion of the electrical input to any
individual input port, irrespective of the data pre-programmed in the local
non-volatile memory device by the customer. The feature is of value in
facilitating on-site changes to be effected during the unit installation
process.
SIGNED by ▇.▇. ▇▇▇▇▇▇ ) /s/ ▇. ▇. ▇▇▇▇▇▇
a Director duly authorised )
for and on behalf of )
BRONZEBASE LIMITED )
in the presence of):- )
Witness Name: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address:
Occupation:
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
the President duly authorised )
for and on behalf of )
DETECTION SYSTEMS, INC. )
in the presence of :- )
Witness Name:
Address:
Occupation: