<PAGE>
EXHIBIT 10.4
APOGEE TECHNOLOGY, INC. HAS OMITTED FROM THIS EXHIBIT 10.4 PORTIONS OF THE
AGREEMENT FOR WHICH APOGEE TECHNOLOGY, INC. HAS REQUESTED CONFIDENTIAL TREATMENT
FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE AGREEMENT FOR
WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED WITH BRACKETS AND AN
ASTERISK AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
DEVELOPMENT AND LICENSING AGREEMENT
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Confidential
Table of Contents
<TABLE>
<S> <C>
1. DEFINITIONS......................................................................................... 1
2. CONFIDENTIAL INFORMATION............................................................................ 4
2.1. Definition of Confidential Information......................................................... 4
2.2. Non-Use; Non-Disclosure........................................................................ 4
2.3. Standard of Care............................................................................... 5
2.4. Disclosure Restrictions........................................................................ 5
2.5 Duties Concerning Confidential Information Upon Termination.................................... 5
2.6. Governmental Orders............................................................................ 5
2.7. Confidentiality of Terms and Conditions........................................................ 6
2.8. Required "Confidential" Legend; Oral Information............................................... 6
3. INITIAL DEVELOPMENT................................................................................. 6
3.1. Interface Development.......................................................................... 6
3.2. ALST Provision of Information.................................................................. 6
3.3. Completion of Initial Product Development...................................................... 7
3.4. Ownership...................................................................................... 7
4. DELIVERY OF LICENSED TECHNOLOGY..................................................................... 7
4.1. DDX Controller Technology...................................................................... 7
4.2. DDX Power Technology........................................................................... 8
4.3. Additional Initial Development Support......................................................... 8
5. GRANT OF RIGHTS..................................................................................... 9
5.1. Field Of Use................................................................................... 9
5.2. Development Rights............................................................................. 9
5.3. Apogee-enhanced Products....................................................................... 9
5.4. Right To Make.................................................................................. 9
5.5. Right To Have Made............................................................................. 10
5.6. Right To Use................................................................................... 10
5.7. Right To Sell.................................................................................. 10
5.8. Apogee's Ownership Rights...................................................................... 11
5.9. ALST's Ownership Rights........................................................................ 11
5.10. No Exploitation of ALST's Ownership Rights By Apogee........................................... 12
5.11. Non-Exclusive Nature of ALST's License......................................................... 12
6. PROMOTIONAL MATERIALS; MARKING...................................................................... 12
6.1. Press Releases................................................................................. 12
6.2. Marking........................................................................................ 12
7. LICENSE FEES AND ROYALTIES.......................................................................... 12
7.1. Initial License Fee............................................................................ 12
7.2. Royalties...................................................................................... 12
7.3. Royalty Reports................................................................................ 13
7.4. Late Payments.................................................................................. 13
8. AUDIT RIGHT......................................................................................... 13
8.1. Obligation To Maintain Books And Records....................................................... 13
8.2. Audit.......................................................................................... 14
8.3. Costs Of Audit In The Event Of Underpayment.................................................... 14
9. APOGEE PURCHASES FROM ALST.......................................................................... 14
</TABLE>
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<TABLE>
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10. FUTURE COLLABORATIVE PRODUCT DEVELOPMENT............................................................. 14
10.1. Collaborative Development Efforts............................................................... 14
10.2. Scope oOf Collaborative Development Efforts...................................................... 14
10.3. Collaborative Development Procedures; Apogee's "Opt Out" Right.................................. 15
10.4. Licensing Terms, Royalties, And Ownership of The Results of Collaborative Development Efforts... 15
10.5. Consulting Fee.................................................................................. 16
10.6. Additional Support Services..................................................................... 16
11. INTELLECTUAL PROPERTY WARRANTIES, INFRINGEMENT, AND INDEMNIFICATION.................................. 16
11.1. Apogee Non-infringement Warranty and Indemnification............................................ 16
11.2. ALST Non-Infringement Warranty and Indemnification.............................................. 16
11.3. Other Indemnification........................................................................... 17
11.4. Indemnification Obligations..................................................................... 17
11.5. Infringement Litigation......................................................................... 17
12. TRADEMARKS AND TRADENAMES............................................................................ 18
13. EXPORT REGULATIONS................................................................................... 18
14. WAIVER............................................................................................... 18
15. FORCE MAJEURE........................................................................................ 19
16. GOVERNING LAWS; ARBITRATION; MEDIATION............................................................... 19
16.1. Choice of Law................................................................................... 19
16.2. Jurisdiction; Venue............................................................................. 19
16.3. Informal Dispute Resolution..................................................................... 19
16.4. Arbitration..................................................................................... 20
17. GENERAL LIMITATION ON LIABILITY...................................................................... 22
18. GENERAL WARRANTIES................................................................................... 22
19. NOTICE METHODS....................................................................................... 23
19.1. For ALST........................................................................................ 23
19.2. For Apogee...................................................................................... 23
19.3. For Altec....................................................................................... 23
19.4. Effective Date of Notices....................................................................... 23
20. TERM................................................................................................. 24
21. TERMINATION.......................................................................................... 24
21.1. Payment Default................................................................................. 24
21.2. Material Breach................................................................................. 24
21.3. Insolvency...................................................................................... 24
21.4. Commercialization by ALST....................................................................... 24
22. SURVIVAL............................................................................................. 25
23. CESSATION OF RIGHTS UPON TERMINATION OR EXPIRATION................................................... 25
23.1. End Of Licenses; Return or Destruction of Confidential Materials................................ 25
23.2. Effect On STM Contract.......................................................................... 25
24. ASSURANCES OF PERFORMANCE............................................................................ 25
</TABLE>
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<TABLE>
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25. ASSIGNMENT....................................................................................... 25
26. RELATIONSHIP OF THE PARTIES...................................................................... 25
27. SECTIONS AND SUBSECTIONS......................................................................... 26
28. ENTIRE AGREEMENT................................................................................. 26
</TABLE>
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THIS AGREEMENT is made this 13th day of August, 1999 (the "Effective
Date"), by and between ALST Technical Excellence Center, a Delaware corporation
with offices in Kfar Saba, Israel (hereinafter referred to as "ALST") and Altec
Lansing Technologies, Inc., a Pennsylvania corporation with offices located in
Milford, Pennsylvania (hereinafter referred to as "Altec"), on the one hand, and
Apogee Technology, Inc., a Delaware corporation with offices located in Norwood,
Massachusetts (hereinafter referred to as "Apogee"), on the other hand.
Recitals
--------
WHEREAS, ALST is a strategic partnership between Altec and
STMicroelectronics (hereinafter referred to as "STM") that develops joint
technologies and systems solutions for the computer, consumer electronics, and
communications technology markets; and
WHEREAS, ALST is a majority owned subsidiary of Altec; and
WHEREAS, Apogee is a research and development company specializing in
high efficiency audio amplification; and
WHEREAS, Apogee has developed and owns certain technology relating to
digital, high efficiency audio amplification (the "Technology"); and
WHEREAS, ALST wishes Apogee to undertake development efforts for
purposes of incorporating certain Apogee Technology into ALST's semiconductor
products ("Apogee-Enhanced Products"); and
WHEREAS, ALST wishes to have Apogee-Enhanced Products produced by its
partner, STM; and
WHEREAS, Apogee is willing to allow STM to produce Apogee-Enhanced
Products, for use in ALST's Products, if STM meets certain conditions, specified
herein; and
WHEREAS, ALST wishes to license the Technology from Apogee for such
purposes, and Apogee is willing to license the same to ALST as specifically
provided herein;
WHEREAS, the Parties contemplate engaging in future development
efforts, and wish to structure such development efforts;
NOW, THEREFORE, upon the terms and conditions contained in this
Agreement, and based upon mutual promises contained herein and intending to be
legally bound, each of the Parties hereby agrees as follows:
Agreement
---------
1. DEFINITIONS
-----------
"Acceptance Deadline" shall have the meaning provided in Section 10.3.2.
-------------------
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"Affiliate" shall mean any entity controlling, controlled by or under
---------
common control with ALST. The term "control" as used herein shall mean the
legal, beneficial or equitable ownership, directly or indirectly, of more
than 50% of the aggregate of all voting equity interests in such entity.
"ALST Products" shall mean audio-based silicon solutions for the computer,
-------------
consumer electronics, automotive, or communications markets.
"Apogee-Enhanced Products" shall have the meaning provided in Section
------------------------
5.3.
"Channel" shall mean an independent audio signal that is converted or
-------
processed in whole or in part using DDX Controller Technology or amplified
in whole or in part by DDX Power Technology.
"Collaborative Development Efforts" shall have the meaning provided in
---------------------------------
Section 10.1.
"Confidential Information" shall have the meaning provided in Section
-------------------------
2.1.
"DDX Controller Technology" shall have the meaning provided in Section 4.1.
-------------------------
"DDX Power Technology" shall have the meaning provided in Section 4.2.
--------------------
"Derivative Work" shall mean: (i) for copyrightable or copyrighted
---------------
material, any modification, correction, addition, extension, upgrade,
improvement, compilation, abridgement, or other form in which an existing
work may be recast, transformed, or adapted; (ii) for patentable or
patented material, any improvement thereon; and (iii) for material which is
protected by trade secret, any new material derived from such existing
trade secret material, including new material which may be protected by
copyright, patent, and/or trade secret.
"Development Rights" shall have the meaning provided in Section 5.2.
------------------
"Effective Date" shall have the meaning provided in the Preamble.
--------------
"Enhancements" shall mean all improvements, additions, and any
------------
modifications to a technology developed solely by Apogee. The term
"Enhancements" shall include all upgrades, bug fixes, work-arounds,
software patches, and other fixes, Derivative Works, and all works of
authorship, data, know-how, technology, information, Inventions and/or
discoveries related thereto which are conceived, or conceived and reduced
to practice by Apogee, but excluding all modifications or improvements
developed with third parties to the extent the right to license such
modifications or improvements is not obtained, after reasonable efforts to
do so.
"Field of Use" shall have the meaning provided in Section 5.1.
------------
"Initial Apogee-Enhanced Products" shall mean those items listed on Exhibit
--------------------------------
A.
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"Intellectual Property Rights" shall mean any and all patent rights,
----------------------------
copyrights, trade secrets and trademarks and any other rights to exclude,
existing from time to time in a jurisdiction under patent law, copyright
law, moral rights law, trade-secret law, semiconductor chip protection law,
trademark law, unfair competition law, or other similar law.
"Interface" shall have the meaning provided in Section 3.1.
---------
"Inventions" shall mean any invention, discovery, process, art, method
----------
(including mathematical algorithms), machine, manufacture, composition of
matter, or improvement thereof, whether or not patentable. The terms
"conceived," "reduced to practice," and other like and related terms shall
have their ordinary meanings as they are used in the patent laws of the
United States.
"Licensed Patents" shall mean United States Patent No. 5,077,539, United
----------------
States Patent No. 5,617,058, the inventions described and claimed therein,
and any divisions or continuations thereof, patents issuing thereon or
reissues thereof, and any and all foreign patents and patent applications
corresponding thereto. The term "Technology" when used hereunder to refer
to Apogee's Technology shall include within its meaning "Licensed Patents."
"Licensed Technology" shall collectively mean the DDX Controller Technology
-------------------
and the DDX Power Technology.
"Parties" shall mean ALST and Apogee and, where the context permits, ALST
-------
Apogee, and Altec.
"Request for Collaborative Development" shall have the meaning provided in
-------------------------------------
Section 10.3.1.
"RTL" shall mean Registered Transfer Level.
---
"Source Code" shall mean software in human-readable form, including
-----------
programmer's comments, data files and structures, header and include files,
macros, make files, object libraries, programming tools not commercially
available, technical specifications, flowcharts and logic diagrams,
schematics, annotations and documentation reasonably required or necessary
to enable a competent independent third party programmer to create,
operate, maintain, modify and improve such software without the help of any
other person, and with data files containing Source Code in standard ASCII
format readable by a text editor.
"STM" shall mean STMicroelectronics SRL, incorporated under the laws of
---
Italy, with registered offices in via C Olivetti 2, Agrate Brianza MI,
Italy, and offices in Lexington, Massachusetts. ALST and Altec represent
that STM and Altec are partners in ALST.
"STM Contract" shall have the meaning provided in Section 5.5.2.
------------
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"Technology" shall mean digital, high efficiency amplifier technology and
----------
related information, including without limitation, and irrespective of
whether such information is of a confidential nature, (i) all software
(including both Source Code and object code), hardware, tools,
documentation, data and know-how owned or invented by Apogee and in
existence as of the Effective Date, and (ii) all Enhancements and
Inventions relating thereto owned or invented by Apogee and in existence as
of the Effective Date.
"Term" shall have the meaning provided in Section 20.
----
"VHDL" shall have the meaning provided in Section 4.1.1.
----
"VHSIC" shall mean Very High Speed Integrated Circuit.
-----
2. CONFIDENTIAL INFORMATION
In carrying out the development and production tasks specified herein, the
Parties contemplate disclosing to each other Confidential Information, as
defined in this Section 2, and agree that all Confidential Information so
disclosed shall be subject to this Section 2.
2.1. Definition of Confidential Information.
"Confidential Information" shall mean information concerning any
Party's Inventions, Intellectual Property Rights, technology, proposed
or actual Enhancements to such technology, current products, future
products, business plans, marketing plans, or research and
development, and includes all instructive or descriptive material and
know-how and show-how documentation of any Party, disclosed in
written, digital, or oral form. The term "Confidential Information"
shall not include information which:
2.1.1 is known to the receiving Party before receipt thereof from any
other Party, as evidenced by written records kept by the
receiving Party in the ordinary course of business;
2.1.2 is disclosed to the receiving Party by a third party who had a
right to make such disclosure;
2.1.3 is made public by the originating Party including, but not
limited to, public disclosure as a consequence of the patent
process; or
2.1.4 is or becomes part of the public domain otherwise than as a
consequence of a breach by the receiving Party of its
obligations hereunder.
2.2. Non-Use; Non-Disclosure.
Except as expressly provided herein, Confidential Information
disclosed hereunder shall remain the property of the disclosing Party.
The receiving Party shall not disclose or confirm any Confidential
Information to third parties nor
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Confidential
publish the same for any purpose whatsoever, without the express
written permission of the disclosing Party. In addition, the receiving
Party and its employees shall not use any Confidential Information
disclosed or obtained hereunder for any purpose other than strictly in
connection with the receiving Party's rights under this Agreement.
2.3. Standard of Care.
In handling Confidential Information, the receiving Party shall use at
least the same degree of care as it uses for safeguarding its own
Confidential Information, but shall provide such Confidential
Information no less than a reasonable degree of care in any event.
2.4. Disclosure Restrictions.
The receiving Party shall limit the disclosure of Confidential
Information to its employees who have a need to know such Confidential
Information for the purpose of acting in accordance with this
Agreement, and such Confidential Information will be disclosed to only
such of its employees who have agreed to be bound by restrictions on
disclosure of Confidential Information which are at least as
restrictive as those applicable to the receiving Party under Sections
2.2 and 2.3 above. In any event, the receiving Party shall remain
fully responsible for the conduct of such employees.
2.5. Duties Concerning Confidential Information Upon Termination.
Upon termination of this Agreement, the receiving Party shall promptly
return to the disclosing Party any Confidential Information of the
disclosing Party or, at the receiving Party's option, shall destroy
such information and reasonably shall certify such destruction in
writing to the disclosing Party.
2.6. Governmental Orders.
If a receiving Party is ordered by a court, administrative agency, or
other governmental body of competent jurisdiction to disclose
Confidential Information of a disclosing Party, or if it is served
with or otherwise becomes aware of a motion or similar request that
such an order is to be issued, then the receiving Party will not be
liable to the disclosing Party for disclosure of its Confidential
Information required by such order if the receiving Party complies
with the following requirements:
2.6.1 if an order which has already issued calls for immediate
disclosure, then the receiving Party shall immediately move for
or otherwise request a stay of such order to permit the owner
of the Confidential Information to timely respond to such
order, with the reasonable expense of any action required to be
taken by a receiving Party under this Section 2.6.1 to be at
the expense of the disclosing Party;
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Confidential
2.6.2 the receiving Party shall immediately notify the disclosing
Party of the motion or order by the most expeditious means
possible; and
2.6.3 the receiving Party shall join or agree to (or at a minimum
shall not oppose) a motion or similar request by the disclosing
Party for an order protecting the confidentiality of the
Confidential Information, including joining or agreeing to (or
non-opposition to) a motion for leave to intervene by the owner
of the Confidential Information. The reasonable expense of any
action required to be taken by a receiving Party under this
Section 2.6.3 shall be at the expense of the disclosing Party.
2.7. Confidentiality of Terms and Conditions.
ALST and Apogee agree to maintain the pricing terms and conditions of
this Agreement in confidence save for such disclosures as are
necessary for reporting, accounting, or tax purposes.
2.8. Required "Confidential" Legend; Oral Information.
The Parties agree that Confidential Information (a) shall include
written information only if such information is labeled "Confidential"
or "Proprietary" at the time of disclosure or within thirty (30) days
of such disclosure; and (b) shall include orally disclosed
information, only if such information is reduced to writing and so
marked within thirty (30) days of such oral disclosure. All notices of
Confidential Information will be addressed and forwarded as directed
in Section 19, "Notice Methods". Notwithstanding the provisions of
this Section 2.8, the Parties agree that information which the
receiving Party should reasonably understand to be Confidential
Information shall be Confidential Information under this Section 2,
irrespective of whether it is reduced to writing or marked
"Confidential" or "Proprietary" at any point.
3. INITIAL DEVELOPMENT
-------------------
3.1. Interface Development.
As part of the delivery of the Licensed Technology, Apogee shall
develop an interface (the "Interface") for incorporating its DDX
Controller Technology into the Initial Apogee-Enhanced Products. The
Initial Apogee-Enhanced Products for which the Interface is to be
provided are identified as items 1 through 3 on Exhibit A.
3.2. ALST Provision of Information.
To allow Apogee to develop and test the Interface, ALST shall provide
to Apogee good and sufficient product information and materials
concerning the Initial Apogee-Enhanced Products, including, but not
limited to, product specification, requirements, and reference
schematics such that one of ordinary skill in the art could develop
and test an Interface.
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3.3. Completion of Initial Product Development.
Conditioned upon ALST's prompt compliance with Section 3.2, Apogee
shall use reasonable best efforts to develop the Interface within
forty-five (45) days after Apogee's receipt of Interface information
per Section 3.2. In the event that Apogee is unable to complete the
Interface within 45 days after receiving the Interface information,
Apogee shall notify ALST and explain the nature of the problem causing
the delay, after which ALST may consent to extend the deadline for
completed development as needed, which consent shall not be
unreasonably withheld.
3.4. Ownership.
Apogee shall own all right, title, and interest in the Interface, and
the Interface shall be deemed included within the definition of
Licensed Technology hereunder.
4. DELIVERY OF LICENSED TECHNOLOGY
-------------------------------
Upon completion of the Interface, Apogee shall promptly supply to ALST the
below defined services and, strictly subject to the licenses granted in
Section 5, Technology consisting of the DDX Controller Technology and the
DDX Power Technology, as defined in Sections 4.1 and 4.2, below (the DDX
Controller Technology and the DDX Power Technology are referred to
collectively as the "Licensed Technology").
4.1. DDX Controller Technology.
Apogee has developed Technology for the design of integrated circuits
that convert digital audio signals into Apogee patented modulation
signals, as set forth in part in the Licensed Patents ("DDX Controller
Technology").
4.1.1 Licensed DDX Controller Technology. The DDX Controller
----------------------------------
Technology licensed to ALST shall be in the form of VHSIC
Hardware Description Language ("VHDL"), that ALST or STM can
target and synthesize to specific, authorized semiconductor
processes. The Licensed DDX Controller Technology shall consist
of:
4.1.1.1. Top level system specification and interface
definition;
4.1.1.2. Verified VHDL RTL Code intended for synthesis and
test bench;
4.1.1.3. Test vectors for integration verification; and
4.1.1.4. The Interface developed in accordance with Section
3.
4.1.2 Warranty. Apogee warrants that the DDX Controller Technology,
--------
at the VHDL RTL design level, shall perform in accordance with
Section 4.1.1.1.
7
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4.1.3 Support. Apogee shall provide in a timely manner (and ALST
-------
shall request in a timely manner) up to three (3) weeks (120
man hours) of good and workmanlike engineering time for
Interface synthesis and production test development (assuming
scan insertion verification), with respect to the licensed DDX
Controller Technology for use in the Initial Apogee-Enhanced
Products (the "DDX Controller Technology Support").
4.2. DDX Power Technology
Apogee has developed Technology for the design and specification of
integrated circuits that convert DDX Controller Technology outputs
into audio power outputs ("DDX Power Technology"). The design consists
of a digital interface, decode logic, power MOSFET H-Switches and
protection circuitry and is applicable for low to medium audio power
applications.
4.2.1 Licensed DDX Power Technology. The DDX Power Technology shall
-----------------------------
be in the form of a detailed product specification that
defines:
4.2.1.1. General requirements and minimum standards;
4.2.1.2. Device functional block diagrams and application and
test schematics;
4.2.1.3. Electrical performance characteristics and critical
design parameters; and
4.2.1.4. Packaging information.
4.2.2 Support. Apogee shall, upon timely request by ALST, deliver in
-------
a timely manner the following support services in connection
with the license of the DDX Power Technology for use in the
Initial Apogee-Enhanced Products (the "DDX Power Technology
Support"):
4.2.2.1. Up to two (2) weeks (80 man-hours) of good and
workmanlike engineering time for device development.
4.2.2.2. Up to four (4) weeks (160 man-hours) of good and
workmanlike engineering time for device
verification.
4.3. Additional Initial Development Support
At ALST's request, Apogee shall provide further engineering support
over and above the agreed-upon DDX Controller Technology Support and
the DDX Power Technology Support defined in Sections 4.1.3 and 4.2.2,
respectively; provided, however, that any request by ALST for such
additional support shall be reasonable in light of Apogee's then
current engineering resources and project commitments. Additional
support shall be invoiced and paid in accordance with Section 10.5 or
10.6.
8
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5. GRANT OF RIGHTS
---------------
5.1. Field Of Use.
For purposes of this agreement, the term "Field of Use" shall mean
uses in connection with audio-based silicon solutions for the
computer, consumer electronics, automotive or communications markets;
provided, however, that the term "Field of Use" expressly does not
cover uses in connection with commercial audio installations. Other
products or applications may be added by the parties as mutually
agreed upon, on a product by product or amendment of "Field of Use"
basis.
5.2. Development Rights.
In consideration of ALST's and Altec's obligations hereunder, and for
the Term of this Agreement, Apogee hereby grants ALST a world-wide,
non-transferable, non-exclusive license to enhance, use, copy, modify,
improve and adapt the Licensed Technology in existence as of the
Effective Date (i) in order to develop specifications and design
approaches for incorporating such Technology in ALST Products in the
Field of Use, and (ii) in order to implement such specification and
design approaches in ALST Products in the Field of Use (the
"Development Rights"). Apogee expressly forbids ALST from sublicensing
such Development Rights.
5.3. Apogee-Enhanced Products.
Any ALST Product or part thereof (i) which incorporates some or all of
the Licensed Technology; (ii) which results from or arises out of the
exercise of the Development Rights; or (iii) which results from or
arises out of any Collaborative Development Efforts shall be
considered an "Apogee-Enhanced Product" for the purposes of this
Agreement. For Apogee-Enhanced Products, Apogee grants ALST, strictly
subject to the terms and conditions of Sections 5.4 through 5.11, a
world-wide, non-transferable, non-exclusive license to make, use, sell
or import or have made or have sold on ALST's behalf. ALST shall
provide Apogee with prompt written notice of the development of any
Apogee-Enhanced Product, and shall include in such notice information
and materials sufficient to enable Apogee to ensure compliance with
Section 7.
5.4. Right To Make.
In consideration of ALST's and Altec's obligations hereunder, Apogee
hereby grants ALST a worldwide, non-transferable license to make
Apogee-Enhanced Products in the Field of Use for the Term of this
Agreement. ALST may not sublicense such rights except as provided
expressly in Section 5.5.
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5.5. Right To Have Made.
Apogee acknowledges that ALST desires to have Apogee-Enhanced Products
made by STM. Apogee hereby grants ALST a limited, non-transferable
right to have Apogee-Enhanced Products made by STM, provided that all
of the following conditions (set forth in Sections 5.5.1 through
5.5.4, inclusive) are maintained:
5.5.1. ALST shall disclose to STM only that portion of the Apogee
Technology as is necessary for the production of the Apogee-
Enhanced Products, and STM shall not disclose such Apogee
Technology to any third party, and shall not use such
Technology except strictly in connection with its manufacture
of the Apogee-Enhanced Products.
5.5.2. Any agreement or understanding between ALST and STM concerning
an Apogee-Enhanced Product shall provide (i) that ALST shall
enjoy audit and reporting rights with respect to STM that do
not materially differ from those provided to Apogee under
Section 7.3 and Section 8, below; (ii) that STM shall
compensate ALST on sales of Apogee-Enhanced Products such that
ALST shall meet its obligations to Apogee under Section 7.2;
and (iii) that STM shall not disclose Apogee Technology to any
third party, and shall not use such Technology except strictly
in connection with its manufacture of the Apogee-Enhanced
Products. An agreement or understanding between ALST and STM
that meets these criteria is referred to herein as an "STM
Contract."
5.5.3. ALST shall exercise its audit rights under an STM Contract upon
reasonable request by Apogee, which exercise shall not occur
more than twice per year. ALST shall use best efforts in
conducting such audit, and shall promptly provide the results
and supporting work-papers from such audit to Apogee.
5.5.4. ALST and Altec shall be responsible for STM's compliance with
STM Contracts, as provided in Section 24.
5.6. Right to Use.
In consideration of ALST's and Altec's obligations hereunder, and
subject to Section 7, Apogee hereby grants ALST a worldwide right to
use and to allow others to use Apogee-Enhanced Products for their
intended purposes, in the Field of Use and for the Term of this
Agreement.
5.7. Right to Sell.
5.7.1. ALST's Right to Sell. In consideration of ALST's and Altec's
--------------------
obligations hereunder, Apogee hereby grants ALST a worldwide,
non-transferable license to sell Apogee-Enhanced Products in
the Field of Use for the Term of this Agreement.
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5.7.2. STM's Right to Sell. In consideration of ALST's and Altec's
-------------------
obligations hereunder, Apogee hereby authorizes ALST to grant
to STM a worldwide, non-transferable sublicense to sell Apogee-
Enhanced Products in the Field of Use for the Term of this
Agreement, on the express condition that, in making such sales,
STM acts in accordance with an STM Contract. In the event sales
take place which are not in accordance with the provisions of
an STM Contract identified in Section 5.5.2, Apogee shall have
the right, in its discretion, to terminate the grant of this
sublicense under this Section 5.7.2, without affecting the
remainder of this Agreement, after notifying ALST of its
intention to so terminate the sublicense, and after providing a
sixty (60) day opportunity to cure.
5.7.3. Notice. ALST shall use best efforts to provide Apogee with
------
timely notice of STM's non-compliance or threatened non-
compliance with an STM Contract.
5.8. Apogee's Ownership Rights.
ALST acknowledges that, as between the Parties, Apogee owns all right,
title, and interest in the Licensed Technology, including but not
limited to any associated Intellectual Property Rights. ALST agrees
that it shall have no intellectual property claim on, or license to,
any Apogee Enhancements to the Licensed Technology occurring after the
Effective Date, except as provided in Section 10.
5.9. ALST's Ownership Rights.
Apogee agrees that ALST shall own (i) the Apogee-Enhanced Products and
(ii) Inventions and modifications, enhancements or improvements
arising from the Development Rights, or otherwise relating to the
Licensed Technology, which meet each of the following conditions: (a)
the Invention or modifications, enhancements or improvements must be
embodied in an Apogee-Enhanced Product and (b) the Invention or
modifications, enhancements or improvements must arise from the
efforts of ALST or must arise through the Collaborative Development
Efforts of ALST and Apogee under Section 10; provided, however, that:
5.9.1. such rights in ALST shall be subject to and dominated by
Apogee's underlying ownership rights in the Licensed
Technology, as provided in Section 5.8; and
5.9.2. such rights in ALST shall further be strictly subject to ALST's
royalty obligations under Section 7, concerning any and all
Apogee-Enhanced Products.
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5.10. No Exploitation of ALST's Ownership Rights by Apogee.
The Parties agree that an effect of ALST's ownership rights under
Section 5.9 shall be that, except as expressly allowed by ALST,
Apogee may not use or exploit rights owned or held by ALST in
accordance with Section 5.9.
5.11. Non-Exclusive Nature of ALST's License.
ALST expressly acknowledges that its license to the Licensed
Technology hereunder is strictly on a non-exclusive basis, and agrees
that Apogee is free to exploit, use, adapt, enhance, and license this
Licensed Technology as Apogee sees fit, without obligation to ALST.
6. PROMOTIONAL MATERIALS; MARKING
------------------------------
6.1. Press Releases.
ALST agrees that Apogee shall be entitled to issue press releases
concerning this Agreement or any other developments of significance
warranting disclosure by Apogee, in a form and manner acceptable to
ALST subject to prior written approval of ALST, such approval not to
be unreasonably withheld. ALST and Apogee agree that such releases
shall not include the Confidential Information of the other.
6.2. Marking.
ALST agrees to use reasonable best efforts to insure that suitable
notice of patent rights (consisting of the word "patent" or its
abbreviation "pat." together with the appropriate patent number)
either (i) shall be included on those Apogee-Enhanced Products which
rely upon or are derived from the Licensed Patents or (ii) shall be
included in documentation (such as user manuals) delivered to
purchasers with such Products.
7. LICENSE FEES AND ROYALTIES.
--------------------------
7.1. Initial License Fee.
In consideration of the grant, during the Term, of the license rights
set forth in Section 5.2, 5.4, and 5.5 and the support set forth in
Sections 4.1.3, 4.2.2 and 3.1, ALST shall pay Apogee an initial
license fee of [ * ]. This initial license fee shall be due and
payable [ * ], the first of which ALST shall pay [ * ] and the second
of which ALST shall pay [ * ], in accordance with Section 4, of (a) [
* ] and (b) [ * ].
7.2. Royalties.
7.2.1. [ * ]. The Parties contemplate that each Apogee-Enhanced
Product shall contain one or more [ * ].
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7.2.2. Royalty Amount. On all Apogee-Enhanced Products, Apogee shall
--------------
be paid [ * ] as follows:
7.2.2.1. [ * ]; and
7.2.2.2. [ * ].
7.2.3. Royalty Trigger. The royalty on an individual Apogee-Enhanced
---------------
Product shall be deemed earned upon the sale of that Product.
7.2.4. [ * ]. Payment of all royalties earned under this Agreement
shall be made [ * ]. Upon timely notification of Apogee, ALST
shall be entitled to an extension of time as necessary, not to
exceed [ * ] to Apogee before such payment shall be considered
late pursuant to Section 7.4 ("Due Date").
7.2.5. Alterations. The royalty amount shall remain as provided in
-----------
Section 7.2.2 for the Term of this Agreement, unless Apogee
and ALST mutually agree to lower or raise the royalty amount
to meet competitive pricing demands from the relevant
market(s).
7.2.6. [ * ]. The Parties agree that Apogee shall be entitled to
royalty payments set forth in this Section 7 [ * ].
7.3. Royalty Reports.
Within thirty (30) days following the close of each [ * ] and
simultaneously with payment of all requisite royalties under Section
7.2, ALST shall submit to Apogee, with respect to the Apogee-Enhanced
Products a complete and accurate royalty report ("Royalty Report")
setting forth (i) an itemized summary of the quantity and sales of
products subject to royalty, identifying whether the products were
sold by ALST or by STM; (ii) an itemized summary of the [ * ]; and
(iii) the payments due to Apogee under the terms of this Agreement,
showing in detail the manner of calculating the same. Upon timely
notification of Apogee, ALST shall be entitled to an extension of time
as necessary, not to exceed fifteen (15) days, to submit such royalty
reports to Apogee.
7.4. Late Payments.
Any payments due and owing by ALST to Apogee if not made within 7 days
of the Due Date set forth in Section 7.2.4, shall bear interest at the
rate of [ * ], beginning on the date the payment was due.
8. AUDIT RIGHT
-----------
8.1. Obligation To Maintain Books And Records.
With respect to the subject matter of this Agreement, ALST (the
"Audited Party") shall each keep books and records pertaining to the
sale, distribution, pricing, and
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payments made under this Agreement in accordance with generally
accepted accounting principles. The Audited Party shall keep such
books and records for purposes of allowing Apogee to verify amounts
payable under this Agreement and to verify compliance with this
Agreement and any STM Contract.
8.2. Audit.
Upon twenty (20) days written notice and not more than twice per
year, Apogee or its designee may inspect such books and records
during the Audited Party's normal business hours. The Audited Party
shall make such books and records available in the form in which such
records are maintained (including digital form as well as print form,
if so maintained by the Audited Party), and shall provide reasonable
assistance during such audit, at the Audited Party's expense. Apogee
may exercise this audit right during the Term of this Agreement, and
for a period of two years thereafter.
8.3. Costs Of Audit In The Event Of Underpayment.
If such audit shows that Apogee has been underpaid by more than ten
percent (10%), ALST shall reimburse Apogee for all reasonable costs,
including travel, incurred by Apogee or its designee in connection
with the audit, upon submission of supporting invoices. ALST
acknowledges that such reimbursement shall be in addition to, and
shall not effect or impair Apogee's rights to recover for a breach of
this Agreement or any STM Contract.
9. APOGEE PURCHASES FROM ALST
--------------------------
Apogee shall have the right to purchase semiconductor chips embodying the
Licensed Technology direct from ALST. Apogee's purchases shall be subject
to the provisions of ALST's standard order administration, with the
exception that Apogee shall enjoy (a) pricing which shall be equal to the
lowest price offered by ALST to other related or unrelated persons or
entities for such semiconductor chips, and (b) any other special provisions
established by ALST for the sale of such semiconductor chips; provided,
however, that Apogee shall not resell semiconductor chips purchased under
this Section 9 in the same form in which Apogee purchases them.
10. FUTURE COLLABORATIVE PRODUCT DEVELOPMENT
----------------------------------------
10.1. Collaborative Development Efforts.
The Parties may collaborate for purposes of developing additional
Apogee-Enhanced Products (the "Collaborative Development Efforts").
10.2. Scope of Collaborative Development Efforts.
Collaborative Development Efforts shall consist of (a) Apogee
considering opportunities presented by ALST to develop custom audio
processing or system prototyping to support additional Apogee-
Enhanced Products; and (b) Apogee
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providing reasonable engineering consulting support services to ALST
in connection with the Development Efforts.
10.3. Collaborative Development Procedures; Apogee's "Opt Out" Right.
The procedure for initiating a Collaborative Development Effort shall
be as follows:
10.3.1 Initiation by ALST. ALST shall notify Apogee of its desire to
------------------
engage in a Collaborative Development Effort (a "Request for
Collaborative Development"). Subject to Section 10.3.4,
below, a Request for Collaborative Development shall contain
information and materials sufficient to allow Apogee to
assess the desirability, in Apogee's sole discretion, of
engaging in the proposed Collaborative Development Effort.
10.3.2 Assessment by Apogee. Within ten business days of Apogee's
--------------------
receipt of a Request for Collaborative Development (the
"Acceptance Deadline"), Apogee shall notify ALST in writing
whether it desires to engage in the proposed Collaborative
Development Efforts. Apogee shall have the right, in its sole
discretion, to decline to engage in proposed Development
Effort(s). If Apogee does not respond by the close of the
Acceptance Deadline under this Section 10.3.2, ALST shall
deem its Request for Collaborative Development declined by
Apogee.
10.3.3 Assent by Apogee. In the event Apogee determines, in its sole
----------------
discretion, to accept a Request for Collaborative
Development, Apogee shall notify ALST of such acceptance in
writing, on or before the Acceptance Deadline. The parties
shall then proceed as they see fit, in accordance with the
scope of such Collaborative Developments Efforts provided
under Section 10.2.
10.3.4 Level of Disclosure. ALST shall not include in a Request for
-------------------
Collaborative Development any materials deemed by ALST to be
Confidential Information, unless Apogee requests such
materials in writing. If Apogee makes such a written request,
then materials ALST determines, in its sole discretion, to
provide in response shall be considered Confidential
Information under this Agreement.
10.4. Licensing Terms, Royalties, and Ownership of the Results of
Collaborative Development Efforts.
With respect to Apogee-Enhanced Products that result from or are
derived through Collaborative Development Efforts under this Section
10, the parties agree as follows:
10.4.1 such Apogee-Enhanced Products shall be licensed in accordance
with Section 5;
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10.4.2 such Apogee-Enhanced Products shall bear royalties as
provided in Section 7;
10.4.3 ownership of such Apogee-Enhanced Products shall be in
accordance with Section 5.9; and
10.4.4 such Apogee-Enhanced Products shall be treated under this
Agreement in all other ways the same as Apogee-Enhanced
Products which did not result from or were not derived
through Collaborative Development Efforts.
10.5. Consulting Fee.
In consideration of any Collaborative Development Efforts provided by
Apogee under this Section 10 and in consideration of the rights
granted ALST above in Section 10.4, ALST shall pay Apogee at the rate
of [*] (the "Consulting Rate"). If Apogee has to contract external
engineering services or purchase any other materials, Apogee will
invoice ALST for the actual cost without any additional markup.
Apogee shall have the right to increase the Consulting Rate;
provided, however, that such increases shall not exceed [*] in any
one year. Payment on invoices for Consulting Fees shall be due thirty
(30) days from the date of the invoice.
10.6. Additional Support Services.
The Parties agree to negotiate in good faith the terms for such other
support services and other matters as may be deemed necessary in
connection with the Collaborative Development Efforts, which may
include, but not be limited to: additional support services,
allocation of extraordinary expenses in connection with the
Collaborative Development Efforts and additional payment terms.
11. INTELLECTUAL PROPERTY WARRANTIES, INFRINGEMENT, AND INDEMNIFICATION
-------------------------------------------------------------------
11.1. Apogee Non-Infringement Warranty and Indemnification.
Apogee represents and warrants the Licensed Patents shall not
knowingly (after a good faith search) infringe the patent,
trademarks, mask rights, copyright, or trade secret rights of any
third party. Apogee will defend, indemnify, and hold ALST and ALST's
customers and suppliers harmless from any claim, suit, action, or
expense (including reasonable attorney's fees) alleging that the
Licensed Patents infringe any such rights.
11.2. ALST Non-Infringement Warranty and Indemnification.
ALST represents and warrants that its contributions to Apogee-
Enhanced Products, including circuit designs, specifications, and any
products or materials produced by it (or any combination of the
foregoing) and submitted to Apogee or
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incorporated into such Products ("ALST Contributions") shall not
knowingly (after a good faith search) infringe the patent, trademark,
mask rights, copyright, or trade secret rights of a third party. ALST
will defend, indemnify, and hold Apogee and Apogee's customers and
suppliers harmless from any claim, suit, action, or expense
(including reasonable attorney's fees) alleging that ALST
Contributions infringe any such rights.
11.3. Other Indemnification.
Apogee and ALST shall each indemnify the other from any claim or
damages due to the injury or death of any individual, or the loss of,
damage to, or misappropriation of real or personal property, in
digital or other form, resulting from the willful or negligent acts,
or omissions of the indemnifying party, its agents or employees.
11.4. Indemnification Obligations.
In the event indemnification is sought under Section 11.1, 11.2, or
11.3, then the Party seeking such indemnification (the "Indemnitee")
shall:
11.4.1 Notify the other Party (the "Indemnitor) within 10 (ten)
days of receiving notice of such claim, suit, cause of
action or action (the "Claim") giving rise to the
Indemnitor's obligations
11.4.2 Give the Indemnitor sole authority to defend or settle the
Claim; provided, however, that the Indemnitee shall be
entitled to appear, defend, and protect its rights and
interests, through settlement or otherwise, if the
Indemnitee reasonably believes it has grounds for
insecurity, and provided further, however, that the
Indemnitor shall not settle the Claim without the prior
written consent of the Indemnitee, which consent shall not
unreasonably be withheld;
11.4.3 Responsibly cooperate and assist the Indemnitor (including,
but not limited to, the provision of information related to
the Claim) at the Indemnitor's expense with defense of the
Claim.
11.5. Infringement Litigation.
11.5.1 Apogee's Right To Pursue. Apogee shall have the sole right
------------------------
to prosecute any claim, suit, or action (and to retain any
and all proceeds therefrom) arising from alleged
infringement of the Licensed Technology as embodied in an
Apogee-Enhanced Product (collectively, an "Infringement
Claim"). Apogee shall promptly notify ALST of the alleged
infringement.
11.5.2 ALST's Right To Pursue. If Apogee elects not to pursue an
----------------------
Infringement Claim, Apogee shall promptly notify ALST of
Apogee's decision not to pursue the Infringement Claim.
Within ten (10) business days of Apogee's notification
regarding Apogee's decision, ALST will notify Apogee
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whether ALST elects to pursue the Infringement Claim, during
which time Apogee may reconsider its decision concerning the
Infringement Claim. At the expiration of the ten (10)
business day period beginning on the date on which ALST was
notified, if Apogee still elects not to pursue the
Infringement Claim, then ALST may pursue such Infringement
Claim at its own expense. In the event ALST pursues such a
Infringement Claim, recoveries or reimbursements resulting
from such Infringement Claim shall be distributed and
disbursed at ALST's election. In the event that a
declaratory judgment action, claim, or counterclaim alleging
invalidity of any of the Licensed Patents shall be brought
against ALST or Apogee, Apogee at its sole option shall have
the right to intervene and take over the sole defense of the
action at its own expense.
11.5.3 Cooperation. In any action for infringement, declaratory
-----------
judgment, invalidity, or other actions affecting the
intellectual property right of any Party to this Agreement,
each Party shall, at the request and expense of the other
Party cooperate of the fullest extent reasonably possible.
This provision shall not be construed to require either
Party to undertake any activities, including legal
discovery, at the request of any third party except as may
be required by lawful process of a court of competent
jurisdiction.
12. TRADEMARKS AND TRADENAMES
-------------------------
Except as expressly provided herein, neither Party has the right to use any
other Party's trademarks, logos, or trade names, directly or indirectly, in
connection with marketing activities of any kind without the first Party's
prior consent, which shall not be unreasonably withheld.
13. EXPORT REGULATIONS
------------------
Each Party agrees that it will abide by the United States Department of
Commerce regulations concerning the export or re-export of United States
source technical data, or the direct product thereof, to unauthorized
destinations with regard to the type of information or products supplied by
any other Party hereunder. ALST acknowledges that performance of this
Agreement is expressly conditioned upon the obtaining of all appropriate or
necessary export licenses or approvals.
14. WAIVER
------
Delay in exercise or non-exercise of the rights, authorities, or exemptions
under this Agreement shall not function as waiver thereof, and partial or
singular exercise of the rights, authorities, or exemptions under this
Agreement shall not disturb the Party from exercising such rights,
authorities, or exemptions.
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15. FORCE MAJEURE
-------------
No Party shall be liable for failure to perform duties under this Agreement
if such failure is due to fire, flood, earthquake, storm, strikes or any
other circumstances beyond the control of the Parties.
16. GOVERNING LAWS; ARBITRATION; MEDIATION
--------------------------------------
16.1. Choice of Law.
The validity, interpretation, and performance of this Agreement shall
be controlled by and construed under the laws of the Commonwealth of
Pennsylvania, United States of America, without respect to its rules
on conflicts of laws.
16.2. Jurisdiction; Venue.
For any controversy or claim not covered by Section 16.4, each Party
(i) consents to the personal jurisdiction of, and venue in federal
courts located in Philadelphia, Pennsylvania, or (ii) to the extent
diversity jurisdiction is not present, or federal question subject
matter jurisdiction does not exist, each Party consents to the
jurisdiction of the State Courts located in Philadelphia,
Pennsylvania.
16.3. Informal Dispute Resolution.
Except for any controversy or claim relating to the ownership by
either Party of any Intellectual Property Rights, which shall not be
subject to the provisions of this Section and shall be subject to the
provisions of Section 16.2, any controversy of claim between the
Parties arising from or in connection with this Agreement, whether
based on contract, tort, common law, equity, statute, regulation,
order or otherwise ("Dispute"), shall be resolved as follows:
16.3.1 Upon written request of any Party hereto, each Party shall
appoint a designated representative whose task it will be to
meet for the purpose of endeavoring to resolve such Dispute.
The designated representatives shall meet as often as the
parties reasonably deem necessary to discuss the problem in
an effort to resolve the Dispute without the necessity of
any formal proceeding.
16.3.2 In the event that such representatives are unable to resolve
the Dispute within 30 days after the Dispute is submitted to
them, or if after 10 days either party determines in good
faith prior to the expiration of such period that such
representatives are unlikely to be able to resolve such
matter, the Dispute shall be submitted to arbitration in
accordance with Section 16.4 hereof.
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16.4. Arbitration.
Except for any controversy or claim relating to the ownership by
either Party of any Intellectual Property Rights, which shall not be
subject to the provisions of this Section and shall be subject to the
provisions of Section 16.2:
16.4.1 If the Parties are unable to resolve any Dispute arising
after the Effective Date as contemplated by Section 16.3
hereof, such Dispute shall be submitted to mandatory and
binding arbitration at the election of a Party hereto (the
"Disputing Party"), in the City of Philadelphia,
Pennsylvania. Except as otherwise provided in this Section
16.4, the arbitration shall be pursuant to the Commercial
Arbitration Rules of the AAA.
16.4.2 To initiate the arbitration, the Disputing Party shall
notify the other party in writing (the "Arbitration
Demand"), which shall describe in reasonable detail the
nature of the Dispute, state the amount of the claim,
specify the requested relief and name an arbitrator who has
been licensed to practice law in the U.S. for at least ten
years, is not then an employee of a Party or any Affiliate
thereof, and is experienced in representing clients in
connection with commercial agreements and experience in
dealing with software and computer issues (the "Basic
Qualifications"). Within 30 days after the other Party's
receipt of the Arbitration Demand, such other Party shall
file, and serve on the Disputing Party, a written statement
(i) answering the claims set forth in the Arbitration Demand
and including any affirmative defenses of such party; (ii)
asserting any counterclaim, which shall (A) describe in
reasonable detail the nature of the Dispute relating to the
counterclaim, (B) state the amount of the counterclaim, and
(C) specify the requested relief (an "Answer"); and (iii)
naming a second arbitrator satisfying the Basic
Qualifications. Promptly, but in any event within 30 days
thereafter, the two arbitrators so named will select a third
neutral arbitrator from a list provided by the AAA of
potential arbitrators who satisfy the Basic Qualifications
and who have no past or present relationships with the
parties or their counsel, except as otherwise disclosed in
writing to and approved by the parties. The arbitration will
be heard by a panel of the three arbitrators so chosen (the
"Arbitration Panel"), with the third arbitrator so chosen
serving as the chairperson of the Arbitration Panel.
Decisions of a majority of the members of the Arbitration
Panel shall be determinative. The powers of the Arbitration
Panel shall in all cases be limited to the specific powers
conferred under the arbitration law of Pennsylvania and, the
Arbitration Panel may not award damages not provided for
therein, or not provided for under this Agreement.
16.4.3 If a panel of arbitrators has not been selected within
thirty (30) days of the filing of the Answer as provided
Section 16.4.2, then either Party may elect to waive the
Basic Qualification requirements set forth in
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Section 16.4.2, in which event the AAA shall provide the
Parties a list of proposed arbitrators, in accordance with
the AAA's standard practices, and such standard practices
shall govern the selection of the Arbitration Panel.
16.4.4 The Party bringing a particular claim or asserting an
affirmative defense will have the burden of proof with
respect thereto. The arbitration proceedings and all
testimony, filings, documents and information relating to or
presented during the arbitration proceedings shall be deemed
to be information subject to the confidentiality provisions
of this Agreement. The Arbitration Panel will have no power
or authority, under the Commercial Arbitration Rules of the
AAA or otherwise, to relieve the parties from their
agreement hereunder to arbitrate or otherwise to amend or
disregard any provision of this Agreement, including,
without limitation, the provisions of this Section 16.4.
16.4.5 Should an arbitrator refuse or be unable to proceed with
arbitration proceedings as called for by this Section 16.4,
the arbitrator shall be replaced by the party who selected
such arbitrator (unless an election under Section 16.4.3 has
occurred, in which event the AAA's standard procedures for
replacement shall govern), or it such arbitrator was
selected by the two party-appointed arbitrators, by such two
party-appointed arbitrators selecting a new third arbitrator
in accordance with Section 16.4.2 (unless an election under
Section has occurred, in which event the AAA's standard
procedures for replacement shall govern). Each such
replacement arbitrator shall satisfy the Basic
Qualifications. If an arbitrator is replaced pursuant to
this Section after the arbitration hearing has commenced,
then a rehearing shall take place in accordance with the
provisions of this Section 16.4 and the Commercial
Arbitration Rules of the AAA.
16.4.6 Within 30 days after the closing of the arbitration hearing
and any post-hearing briefing, the Arbitration Panel shall
prepare and distribute to the parties a writing setting
forth the Arbitration Panel's findings of facts and
conclusions of law relating to the Dispute, including the
reasons for the giving or denial of any award. The findings
and conclusions and the award, if any, shall be deemed to be
information subject to the Confidentiality provisions of
this Agreement, Section 2.
16.4.7 The Arbitration Panel is instructed to schedule promptly all
discovery and other procedural steps and otherwise to assume
case management initiative and control to effect an
efficient and expeditious resolution of the Dispute. The
Arbitration Panel is authorized to issue reasonable monetary
sanctions against either party if, upon a showing of good
cause, such party is unreasonably delaying the proceeding.
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16.4.8 Any award rendered by the Arbitration Panel will be final,
conclusive and binding upon the parties and any judgment
hereon may be entered and enforced in any court of competent
jurisdiction.
16.4.9 During the pendency of any proceeding pursuant to this
Section 16.4, each party will bear a pro rata share of all
fees, costs and expenses of the arbitrators, and
notwithstanding any law to the contrary, each party will
bear all the fees, costs and expenses of its own attorneys,
experts and witnesses; provided, however, that the
Arbitration Panel will be instructed and shall require the
non-prevailing party to pay all fees, costs and expenses,
including reasonable attorneys' fees, of the prevailing
party.
16.4.10 In connection with any judicial proceeding to compel
arbitration pursuant to this Agreement or to confirm, vacate
or enforce any award rendered by the Arbitration Panel, the
prevailing party in such a proceeding will be entitled to
recover reasonable attorneys' fees and expenses incurred in
connection with such proceeding, in addition to any other
relief to which it may be entitled.
16.4.11 The parties acknowledge and agree that performance of the
obligations under this Agreement necessitates the use of
instrumentalities of interstate commerce and,
notwithstanding other general choice of law provisions in
this Agreement, the parties agree that the Federal
Arbitration Act shall govern and control with respect to
relevant provisions of these Section 16.3 and 16.4.
17. GENERAL LIMITATION ON LIABILITY
-------------------------------
IN NO EVENT SHALL ANY PARTY HERETO BE LIABLE FOR LOSS OF PROSPECTIVE
PROFITS OR INDIRECT OR CONSEQUENTIAL DAMAGES TO ANY OTHER PARTY EVEN IF IT
IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. IN ADDITION, THE LIABILITY OF
ANY PARTY TO ANY OTHER PARTY UNDER THIS AGREEMENT SHALL NOT EXCEED AN
AMOUNT EQUAL TO THAT PAID TO APOGEE WITHIN THE PREVIOUS TWELVE - MONTH
PERIOD HEREUNDER. THESE LIMITATIONS ON LIABILITY SHALL NOT APPLY TO THE
EXTENT SUCH LIABILITY ARISES FROM THE PARTIES' OBLIGATIONS AND LIABILITIES
UNDER SECTIONS 2,7, 11.1-11.3, 11.5, 16.4.9 AND 24.
18. GENERAL WARRANTIES
------------------
Except as expressly provided herein, Technology and Confidential
Information exchanged or licensed between the parties hereunder is without
warranty of any kind, either expressed or implied, including, but not
limited to the implied warranties of merchantability and fitness for a
particular purpose.
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19. NOTICE METHODS
--------------
All notices, request, demands, and other communications required or
permitted hereunder shall be written in English and shall be delivered
personally, or by air courier, or by telecopy, telex, or cable, or by
registered mail (postage prepaid) addressed to the Parties hereof, at the
addresses stated here:
19.1. For ALST.
ALST Technical Excellence Center
2 Hanagar Street
PO Box 2277
44425 Kfar Saba (Industry District)
Israel
Attention: Giora Sussmann
Phone: 011-972-9766-1934
Fax: 011-972-9766-1937
19.2. For Apogee.
Apogee Technology, Inc.
129 Morgan Drive
Norwood, Massachusetts 02062
Attention: Dave Meyers
Phone: (781)551-9450
Fax: (781) 440-9528
19.3. For Altec.
Altec Lansing Technologies, Inc.
Route 6 & 209
Milford, PA 18337
Attention: Edward Anchel
Phone: 570-296-4434
Fax: 570-296-6887
19.4. Effective Date of Notices
Notices, request, demands, and other communication delivered
personally or by air courier shall be effective on the date of
receipt; notices given by registered mail shall be effective ten (10)
business days after the date of mailing. Any Party may change its
address from time to time by providing written notice to the other
Parties in the manner set forth above.
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20. TERM
----
The term ("Term") of this Agreement shall commence on the Effective Date
and shall continue in force, unless sooner terminated in accordance with
Section 21, until the last-to-expire of the Licensed Patents.
21. TERMINATION
-----------
Without prejudice to other remedies, a Party may terminate this Agreement
on the occurrence of one or more of the following:
21.1. Payment Default.
In the event ALST fails to make payments due hereunder, Apogee shall
have the right to terminate this Agreement upon forty-five (45) days
written notice (the "Late Payment Grace Period"). If ALST fails to
make such payments, plus interest as provided under Section 7.4,
within the Late Payment Grace Period, Apogee may immediately
terminate the Agreement upon expiration of the Late Payment Grace
Period.
21.2. Material Breach.
In the event that either of the Parties is in material breach of any
obligation under this Agreement, the non-breaching Party may
terminate this Agreement upon (i) providing the other Party with
written notice of the breach (a "Notice of Breach") and (ii)
providing thereafter a thirty (30) day opportunity to cure beginning
on the date of receipt by the alleged breaching Party of the Notice
of Breach.
21.3. Insolvency.
In the event a Party shall become insolvent, shall make an assignment
for the benefit of creditors, or shall have a petition in bankruptcy
filed for or against it, the other Party shall have the right to
terminate this entire Agreement immediately upon providing written
notice of such termination.
21.4. Commercialization by ALST.
In the event ALST (i) makes a business decision to not commercialize
or to cease commercializing the Licensed Technology or (ii) makes a
business decision to cease commercializing Apogee-Enhanced Products,
ALST shall provide timely notice to Apogee of such decision, after
which ALST and Apogee shall in good faith negotiate terms suitable
for terminating the present Agreement, recognizing ALST's investment
in Apogee-Enhanced Products, and the benefits received and foregone
by Apogee due to this Agreement.
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22. SURVIVAL
--------
The following terms and conditions shall survive termination or expiration
of this Agreement: Sections 2, 3.4, 5.8, 5.9, 5.10, 8, 11, 16, 17, and 18.
23. CESSATION OF RIGHTS UPON TERMINATION OR EXPIRATION
--------------------------------------------------
23.1. End Of Licenses; Return or Destruction of Confidential Materials.
Upon termination or expiration of this Agreement, any and all
licenses or sublicenses granted by Apogee hereunder shall immediately
cease. Each Party (a) shall return to the other any and all
Confidential Information received under this Agreement, or (b) shall
destroy such Information, and promptly certify in writing to the
other Party such destruction.
23.2. Effect On STM Contract.
Any STM Contract(s) granted under this Agreement shall provide that,
upon termination or expiration of this Agreement, the STM Contract
shall similarly expire or terminate.
24. ASSURANCES OF PERFORMANCE
-------------------------
Altec hereby assures Apogee and warrants that ALST shall perform and comply
with each of ALST's obligations under this Agreement. Altec shall indemnify
Apogee from any and all damage or loss (including reasonable attorney's,
consultants' and expert witness fees) arising from the conduct of ALST.
ALST and Altec similarly assure Apogee and warrant that STM shall comply
with its obligations under STM Contracts. ALST and Altec shall indemnify
Apogee from any and all damage or loss (including reasonable attorney's,
consultants' and expert witness fees) arising from the conduct of STM. Each
of ALST and Altec acknowledge that Apogee has relied upon the assurances
and obligations contained in this Section 24 as material inducements in
entering this Agreement.
25. ASSIGNMENT
----------
No Party shall transfer or assign any or all of its rights or interests nor
delegate any of its duties hereunder without the prior written consent of
each other Party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, any Party may assign this Agreement to a
party acquiring all or substantially all of its assets or business upon
notice to the other Parties.
26. RELATIONSHIP OF THE PARTIES
---------------------------
No Party shall be deemed by operation of this Agreement or otherwise to be
the agent or representative of any other Party for any purpose hereunder
whatsoever. The Parties shall at all times be considered independent
contractors. No Party shall have any right or authority to assume, create,
or incur any liability or obligation of any kind in the name of
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or on behalf of any other Party except in accordance with the provisions
hereof, or as may otherwise be agreed by the Parties in writing.
27. SECTIONS AND SUBSECTIONS
------------------------
Reference to a Section shall include reference to all Sections junior to
the referenced Section. By way of example only, reference to "Section 7"
shall include reference to Section 7.1 and 7.2, and reference to "Section
6.1" shall include reference to Section 6.1.1 and 6.1.2.
28. ENTIRE AGREEMENT
----------------
This Agreement contains the entire agreement and understanding between the
Parties hereto, and merges and supersedes all prior discussions and
writings with respect to the subject matter hereof Amendments, if any, to
this Agreement shall be made in writing and shall be fully executed by a
representative for each and every Party to the present Agreement.
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IN WITNESS WHEREOF, the duly authorized representatives of the Parties
have executed this Agreement,. effective the day and year set forth on the first
page of this Agreement.
APOGEE:
Apogee Technology, Inc.
By: ____________________
David Spiegel
President
ALST:
ALST Technical Excellence Center
By: __________________
Name: __________________
Title: __________________
ALTEC:
Altec Lansing Technologies, Inc.
By: __________________
Name: __________________
Title: __________________
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