Exhibit 10(z)
Framework Agreement
between
NXT plc New Transducers Limited NCT Group, Inc.
and
NCT Audio Products, Inc.
relating to
the reorganisation of certain existing arrangements
THIS AGREEMENT is dated as of the 30th day of March 2001 and made
BETWEEN:
(1) NXT PLC. ("NXT'), a public company registered in England and Wales under
company number 514718 and having its registered office at Xxxxxxx Xxxxx, 00
Xxxxxxx Xxxxx, Xxxxxx, XX0 0XX, Xxxxxxx;
(2) NEW TRANSDUCERS LIMITED ("NTL") a company registered in England and Wales
under company number 3135528 and having its registered office at Xxxxxxx
Xxxxx, 00 Xxxxxxx Xxxxx, Xxxxxx XX0 0XX, Xxxxxxx;
(3) NCT GROUP. INC. ("NCT"), a corporation incorporated under the laws of
Delaware, USA and having its offices at 00 Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, 00000, X.X.X; and
(4) NCT AUDIO PRODUCTS. INC. ('NCT Audio") a corporation incorporated under the
laws of Delaware, U.S.A and having its offices at 00 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, U.S.A
Background:
NXT (and its wholly owned subsidiary NTL) and NCT (and its subsidiary NCT Audio)
have over several years entered into various arrangements relating to flat panel
speaker technology. The parties wish to reorganise certain of the existing
arrangements and to enter into new arrangements on and subject to the terms of
this Agreement.
THE PARTIES AGREE THAT
1. Interpretation
1.1 Definitions
In this Agreement where the context admits:
"Affiliate" means in relation to any party:
(A) any legal entity in which that party has an Interest;
(B) any legal entity which directly or indirectly Controls that party (in
relation to each party a "Parent");
(C) any legal entity in which a Parent of that party has an Interest or
(D) in relation to NCT, On Active L.L.C. provided that the percentage of
shares held by NCT or any Affiliate of NCT (as defined in (A) to (C)
above) in On Active L.L.C. does not fall below 42.5%.
For these purposes, "Control" of any entity shall be deemed to exist by
virtue of having the right to influence the operation and affairs thereof
by holding directly 51% or more of each of the equity and voting rights in
such entity and an 'Interest" in any entity shall be deemed to exist by
virtue of owning voting rights equal to or greater than 50% of all voting
rights in such entity.
"Agreed Form" means, in relation to any document, a document in the terms
signed or initialed by or on behalf of the parties for identification.
"Audited Accounts" means the audited consolidated balance sheet of NCT and
its subsidiaries (including without limitation NCT Audio) made up as at the
Balance Sheet Date and the audited consolidated statement of operations and
statement of cash flows of NCT and its subsidiaries (including without
limitation NCT Audio) in respect of the financial year ended on the Balance
Sheet Date including, in each case, the notes thereto and the auditors'
report.
"Balance Sheet Date" means 31 December, 1999.
"Business Day" means a day (other than a Saturday or Sunday) on which banks
are open for ordinary banking business in London
"Cancellation Letter" means the letter terminating the New Cross Licence to
be executed by NXT, NTL, NCT and NCT Audio in the Agreed Form.
"Common Stock Purchase Option" means the Common Stock Purchase Option
issued by NCT in favour of NXT (under its previous name of Verity Group
plc) on April 15, 1997.
"Completion" means completion of the transactions described in clauses 2
and 3 in accordance with clause 5.
"Completion Date" means the date upon which Completion takes place.
"Conditions" means the conditions set out in clause 4.1.
"DMC' means Distributed Media Corporation, a company incorporated under the
laws of Delaware, U.S.A. which is a subsidiary of NCT.
"Encumbrance" includes any interest or equity of any person (including any
right to acquire, option or right of pre-emption): any mortgage, charge,
pledge, lien, assignment, hypothecation, security interest (including any
created by law), title retention or other security agreement or
arrangement.
"Gekko Letter" means the letter relating to the supply of Gekko speakers to
be executed by NTL and NCT in the Agreed Form.
"IP Sale Agreement' means the IP Sale Agreement to be entered into between
NTL, NCT and NCT Audio in the Agreed Form.
"London Stock Exchange" means London Stock Exchange plc.
"NCT Option Shares" means the 3,850,000 shares of common stock, par value
US$0.01 each, of NCT which are the subject of the Common Stock Purchase
Option.
"New Cross Licence Agreement" means the New Cross Licence Agreement dated
27 September 1997 and made between NXT (1), NTL (2), NCT (3) and NCT Audio
(4) as amended at the date hereof.
"NXT Consideration Shares" means 2,000 000 ordinary shares of 25p each in
the capital of NXT.
"Quarterly Accounts" means the unaudited consolidated balance sheet of NCT
and its subsidiaries (including without limitation NCT Audio) made up as at
30 September, 2000 and the unaudited consolidated statement of operations
and statement of cash flows of NCT and its subsidiaries (including without
limitation NCT Audio) in respect of the nine months ended on such date.
"Registration Rights Agreement' means the agreement to be entered into
between NXT and NCT granting certain registration rights in relation to the
NCT Consideration Shares to NXT in the Agreed Form.
"UK Listing Authority" means the Financial Services Authority acting in its
capacity as the competent authority for the purposes of Part IV of the
Financial Services Xxx 0000 and in the exercise of its functions in respect
of admissions.
1.2 Construction of certain references
In this Agreement, where the context admits:
(A) words and phrases the definitions of which are contained or referred
to in Part XXVI Companies Act 1985 shall be construed as having the
meanings thereby attributed to them;
(B) references to, or to any provision of, any treaty, statute, directive,
regulation, decision, order, instrument, by-law, or any other law of,
or having effect in, any jurisdiction ("Laws") shall be construed also
as references to all other Laws made under the Law referred to, and to
all such Laws as amended, re-enacted, consolidated or replaced or as
their application is modified by other Laws from time to time, and
whether before or after the date of this Agreement;
(C) references to causes and schedule are references to clauses of and the
schedule to this Agreement and references to this Agreement include
the schedules;
(D) references to the singular shall include the plural and vice versa and
references to the masculine the feminine and the neuter shall include
each other such gender
(E) "person" include any individual, partnership body corporate,
corporation sole or aggregate state or agency of a state, and any
unincorporated association or organisation, in each case whether or
not having separate legal personality and
(F) "company" an "includes any body corporate.
1.3 Headings
The headings and sub-headings are inserted for convenience only and shall
not affect the construction of this Agreement.
1.4 Schedules
Each of the schedules shall have effect as if set out herein.
2. NXT's and NTL's Obligations
2.1 Obligations
Subject to the terms of this Agreement and in consideration of the
obligations accepted by NCT and NCT Audio hereunder, on Completion:
(A) NXT will allot and issue the NXT Consideration Shares (credited as
fully paid as to nominal value and as to a premium of 298p on each
share) to NCT Audio as consideration for the termination of the New
Cross Licence Agreement and the rights of NCT Audio to receive
royalties thereunder;
(B) NXT and NTL will terminate the New Cross Licence Agreement (including
without limitation all and any rights of NXT or NTL to receive any
royalties thereunder) by each executing the Cancellation Letter
(C) NTL will enter into the IP Sale Agreement;
(D) NTL will grant to NCT a new General Licence in relation to loudspeaker
technology in the Agreed Form and enter into a letter in relation to
the General Licence in the Agreed Form;
(E) NXT will transfer the 533 shares of common stock, par value US$0.01,
in NCT Audio registered in the name of NXT to NCT representing the
consideration due to NCT on exercise of the Common Stock Purchase
Option and NXT will exercise the Common Stock Purchase Option in
respect of all of the NCT Option Shares, and
(F) NTL will enter into the Gekko Letter;
2.2 No part performance
NXT and NTL shall not be obliged to perform at Completion any of the
obligations set out in clause 2.'I unless the obligations of NCT and NCT
Audio set out in clause 3.'I shall be performed simultaneously.
3. NCT's and NCT Audio's Obligations
3.1 Obligations
Subject to the terms of this Agreement and in consideration of the
obligations accepted by NXT and NTL hereunder on Completion:
(A) NCT and NCT Audio will terminate the New Cross Licence Agreement
(including without limitation all and any rights of NCT or NCT Audio
to receive any royalties thereunder) by each executing the
Cancellation Letter;
(B) NCT and NCT Audio will enter into the IP Sale Agreement,
(C) NCT will enter into the Gekko Letter;
(D) NCT will enter into a new General Licence in relation to loudspeaker
technology in the Agreed Form together with a letter in relation to
the General Licence in the Agreed Form;
(E) NCT will accept the transfer of the shares of common stock in NCT
Audio referred to in clause 2.1(E) in full satisfaction of the
consideration due upon the exercise of the Common Stock Purchase
Option (and the terms of exercise of the Common Stock Purchase Option
shall be deemed amended to the extent necessary to enable such
exercise to proceed) and confirm the valid exercise of the Common
Stock Purchase Option and NCT will issue the NCT Option Shares
(credited as fully paid and non-assessable) to NXT; and
(F) NCT will enter into the Registration Rights Agreement.
3.2 No part performance
NCT and NCT Audio shall not be obliged to perform at Completion any of the
obligations set out in clause 3.1 unless the obligations of NXT and NTL set
out in clause 2.1 shall be performed simultaneously.
4. Conditions
4.1 Conditions
Completion is conditional upon:
(A) the delivery to NCT Audio of a report prepared by Xxxxxxx Xxxxx
Xxxxxxxxx in accordance with the requirements of section 103 of the
Companies Act, 1985; and
(B) the agreement by the UK Listing Authority to admit the NXT
Consideration Shares to the Official List of the UK Listing Authority
(subject only to allotment) and such admission having become fully
effective and the agreement by the London Stock Exchange to admit the
NXT Consideration Shares to trading (subject only to allotment).
4.2 Satisfaction
NXT shall use its reasonable endeavours to procure the satisfaction of the
Conditions set out in clause 4.1(A) and (B).
4.3 Disclosure of difficulties in satisfying Conditions
Should NXT become aware of anything which will or may prevent any of the
Conditions from being satisfied it shall forthwith disclose the same to NCT
and NCT Audio.
5. Completion
5.1 Date and place of Completion
Completion shall take place at the offices of Xxxxxxx 8 Xxxxxxx at
XxxxXxxxx Xxx Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX within two Business Days
after this Agreement ceases to be subject to any of the Conditions.
5.2 NXT's and NTL's obligations
On Completion:
(A) NXT shall allot and issue the NXT Consideration Shares free from all
Encumbrances to NCT Audio (as evidenced by the delivery to NCT Audio
of a certified copy of the resolution of the directors of NXT making
such allotment) and deliver to NCT Audio duly executed share
certificates in respect of the NXT Consideration Shares; and
(B) NXT and NTL shall deliver to NCT:
(1) the Cancellation Letter duly executed by NXT and NTL;
(2) the IP Sale Agreement duly executed by NTL;
(3) a new General Licence in the Agreed Form together with a letter
in relation to the General Licence in the Agreed Form both duly
executed by NTL,
(4) a transfer of the 533 shares of common stock, par value US$0.01,
in NCT Audio duly executed by NXT as the registered shareholder
thereof;
(5) the Gekko Letter duly executed by NTL; and
(6) the Registration Rights Agreement duly executed by NXT.
5.3 NCT's and NCT Audio's obligations
On Completion:
(A) NCT and NCT Audio shall deliver to NXT:
(1) the Cancellation Letter duly executed by NCT and NCT Audio;
(2) the IP Sale Agreement duly executed by NCT and NCT Audio;
(3) the Gekko Letter duly executed by NCT;
(4) a new General Licence in the Agreed Form together with a letter
in relation to the General Licence in the Agreed Form both duly
executed by NCT:
(5) the Registration Rights Agreement duly executed by NCT, and
(6) a duly signed legal opinion of Xxxxxx & & Xxxxxxx in the Agreed
Form that this Agreement and the other agreements and documents
referred to herein have been duly authorised and executed by and
are within the corporate powers of NCT and NCT Audio as a matter
of applicable U.S. state and federal laws.
(B) NCT shall confirm the valid exercise by NXT of the Common Stock
Purchase Option and shall issue the NCT Option Shares free from all
Encumbrances to NXT and deliver to NXT a duly executed share
certificate in respect of the NCT Option Shares
5.4 Failure to complete
If in any respect the obligations of NXT and NTL or the obligations of NCT
and NCT Audio are not complied with on the date for Completion set by
clause 5.1 NXT (in the case of a default by NCT or NCT Audio) or NCT (in
the case of a default by NXT or NTL) may:
(A) defer Completion to a date not more than 14 days after the date set by
clause 5.1 (and so that the provisions of this clause 5.4, apart from
this clause 5.4(A), shall apply to Completion as so deferred); or
(B) proceed to Completion so far as practicable (without prejudice to its
rights hereunder): or
(C) rescind this Agreement.
6. The NXT Consideration Shares
6.1 Rights and Dividends
The NXT Consideration Shares shall rank pari passu and as a single class
with the ordinary shares of 25p each in the capital of NXT in issue at the
date of this Agreement and shall carry the right to receive in full all
dividends and other distributions declared, made or paid by reference to a
record date after the Completion Date.
6.2 Restrictions on Sale
NCT Audio shall not, directly or indirectly offer, sell, contract to sell
or otherwise dispose of or transfer, any legal or beneficial interest in
the NXT Consideration Shares or enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly any interest in any of the NXT Consideration Shares prior to 30
June 2001 provided that the foregoing shall not restrict NCT Audio from
selling or otherwise disposing of or dealing with up to 695,000 of the NXT
Consideration Shares and provided further that any sale of any of the NXT
Consideration Shares in accordance with this proviso shall be made through
Xxxxxxx Xxxxx International in London (as NXT's nominated brokers) and any
proposed sale will be notified by NCT Audio to NXT in advance in writing
not less than 5 Business Days before the proposed date of such sale.
With effect from 01 July 2001 NCT Audio shall be free to sell or otherwise
dispose or deal with the NXT Consideration Shares provided that it shall
consult with NXT in order to ensure that any such sales take place evenly
during the period of 6 months from 01 July 2001 in a manner designed to
avoid disrupting the market in, or creating a disorderly or false market
in, shares in the capital of NXT.
NCT Audio shall be entitled to charge or pledge any of the NXT
Consideration Shares as collateral for a loan to generate cash in lieu of a
sale of any of the NXT Consideration Shares provided that the beneficiary
of any such charge or pledge shall agree (in terms reasonably acceptable to
NXT and approved in advance of the creation of such charge or pledge by
NXT) that they will only dispose of any of the NXT Consideration Shares in
accordance with the restrictions set out in this clause 6.2. NCT Audio
shall also be entitled to transfer the NXT Consideration Shares to any
Affiliate of NCT Audio provided that prior to any such transfer taking
place the proposed transferee shall have delivered to NXT a duly executed
undertaking (in terms reasonably acceptable to NXT) confirming that such
proposed transferee will only dispose of any interest in any of the NXT
Consideration Shares in accordance with the restrictions set out in this
clause 6.2.
In order to ensure the due funding of payments under the Gekko Letter NCT
Audio will on Completion deposit 200,000 of the NXT Consideration Shares
with Xxxxxxx Xxxxx International on terms that such NXT Consideration
Shares are to be sold at such time as NCT Audio shall decide in the period
of 15 days following the making of such deposit and that such NXT
Consideration Shares and the proceeds arising from the sale of the same may
only be released to NCT Audio with the prior written agreement of NXT
NCT Audio confirms ms that in the event that it shall sell or otherwise
dispose or deal with the NXT Consideration Shares at any time it shall not
do so through any transaction that would require any registration or filing
under United States federal or state securities laws.
7. The NCT Option Shares
7.1 Rights and Dividends
The NCT Option Shares shall rank pari passu and as a single class with the
shares of common stock of par value US$0.01 each in NCT in issue at the
date of this Agreement and shall carry the right to receive in full all
dividends and other distributions declared made or paid by reference to a
record date after the Completion Date.
8. Warranties and Undertaking
8.1 General
NCT hereby warrants and represents to and for the benefit of NXT and NTL in
the terms of the warranties and representations set out in the schedule
(the "Warranties") and acknowledges and accepts that NXT and NTL entering
into this Agreement in reliance upon each of the Warranties each of which
is given on the basis that it will remain true and accurate at all times up
to and including Completion. NCT further acknowledges that no information
relating to NCT or its Affiliates (including without limitation NCT Audio)
of which NXT or NTL has knowledge (actual or constructive) shall prejudice
any claim made by NXT or NTL under this Agreement or operate to reduce any
amount recoverable
8.2 Warranties to be independent
Each of the Warranties shall be separate and independent and, save as
expressly provided, shall not be limited by reference to any other Warranty
or anything in this Agreement.
8.3 Undertaking
NCT undertakes to and for the benefit of NXT and NTL that NCT shall not
require the repayment by NCT Audio of any inter group indebtedness now or
in the future owing by NCT Audio to NCT unless at the time of any such
repayment NCT Audio would, after making such repayment, be solvent and able
to meet all of its liabilities (whether actual or contingent) at such time
provided that the foregoing shall not prevent (subject to compliance with
the other provisions of this Agreement) the transfer by NCT Audio of any of
the NXT Consideration Shares in satisfaction or partial satisfaction of any
inter-group indebtedness owing by NCT Audio to NCT. In addition, the
foregoing shall not (subject to compliance with the other provisions of
this Agreement) prevent the transfer by NCT Audio of any of the NXT
Consideration Shares to DMC.
9. Confidentiality
9.1 Confidentiality
Subject to clause 9.2 and to clause 10, each party:-
(A) shall treat as strictly confidential the provisions of this Agreement
and the process of their negotiation and all information about the
other party (or any of its Affiliates) obtained or received by it as a
result of negotiating, entering into or performing its obligations
under this Agreement ("Confidential Information"), and
(B) shall not, except with the prior written consent of the other parties
(which shall not be unreasonably withheld or delayed), publish or
otherwise disclose to any person any Confidential Information.
9.2 Permitted disclosures
Clause 9.1 shall not apply if and to the extent that the party disclosing
Confidential Information can demonstrate that:
(A) such disclosure is required by law or by any securities exchange or
regulatory or governmental body having jurisdiction over it (
including but not limited to the London Stock Exchange, the UK Listing
Authority, the Financial Services Authority, the Panel on Take-overs
and Mergers, the Serious Fraud Office and the Securities and Exchange
Commission of the United States) and whether or not the requirement
has the force of law; or
(B) such disclosure is to its professional advisers in relation to the
negotiation, entry into or performance of this Agreement or any matter
arising out of the same; or
(C) such disclosure is required to facilitate the satisfaction of any of
the Conditions; or
(D) the Confidential Information concerned was lawfully in its possession
(as evidenced by written records) prior to its being obtained or
received as described in clause 9.1(A); or
(E) the Confidential Information concerned has come into the public domain
other than through its fault or the fault of any person to whom such
Confidential Information has been disclosed in accordance with clause
9.1(B).
9.3 Continuance of restrictions
The restrictions contained in this clause 9 shall survive Completion and
shall continue without limit of time.
10. Announcements
10.1 Restrictions
Subject to clause 10.2, and whether or not any restriction contained in
clause 9 applies, no party to this Agreement shall make any announcement,
(including, without limitation any communication to the public), concerning
the provisions or subject matter of this Agreement or containing any
information about the other parties without the prior written approval oval
of the others (which shall not be unreasonably withheld or delayed).
10.2 Permitted announcements
Clause 10.1 shall not apply if and to the extent that such announcement is
required by law or by any securities exchange or regulatory or governmental
body having jurisdiction over it (including but not limited to the London
Stock Exchange, the UK Listing Authority, The Panel on Take-overs and
Mergers, the Serious Fraud Office and the Securities and Exchange
Commission of the United States) and whether or not the requirement has the
force of law and provided that any such announcement shall be made only
after consultation with the other party.
10.3 Continuance of restrictions
The restrictions contained in this clause 10 shall survive Completion and
shall continue without limit of time.
11. Provisions relating to this Agreement
11.1 Assignment
This Agreement shall be binding upon and enure for the benefit of the
successors of the parties but shall not be assignable.
11.2 Whole agreement and variations
(A) This Agreement, together with any documents referred to in it,
constitutes the whole agreement between the parties relating to its
subject matter and supersedes and extinguishes any prior drafts,
agreements and undertakings, whether in writing or oral, relating to
such subject matter, except to the extent that the same are repeated
in this Agreement.
(B) Each of the parties acknowledges that it has not been induced to enter
into this Agreement by any representation, warranty, promise or
assurance by the other party or any other person save (in the case of
NXT and NTL) for those contained in this Agreement.
(C) No variation of this Agreement shall be effective unless made in
writing and signed by each of the parties.
11.3 Agreement survives Completion
The Warranties and all other provisions of this Agreement, in so far as the
same shall not have been performed at Completion, shall remain in full
force and effect notwithstanding Completion.
11.4 Rights etc cumulative and other matters
(A) The rights, powers, privileges and remedies provided in this Agreement
are cumulative and are not exclusive of any rights, powers, privileges
or remedies provided by law or otherwise.
(B) No failure to exercise nor any delay in exercising any right, power,
privilege or remedy under this Agreement shall in any way impair or
affect the exercise thereof or operate as a waiver thereof in whole or
in part.
(C) No single or partial exercise of any right power, privilege or remedy
under this Agreement shall prevent any further or other exercise
thereof or the exercise of any other right, power, privilege or remedy
11.5 Further assurance
At any time after Completion each party shall, at the request and cost of
the requesting party, execute or procure the execution of such documents
and do or procure the doing of such acts and things as the requesting party
may reasonably require for the purpose of giving to the requesting party
the full benefit of all the provisions of this Agreement.
11.6 Invalidity
If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the legality,
validity and enforceability of the remainder of this Agreement in that
jurisdiction shall not be affected, and the legality, validity and
enforceability of the whole of this Agreement in any other jurisdiction
shall not be affected.
11.7 Counterparts
This Agreement may be executed in any number of counterparts, which shall
together constitute one Agreement. Any party may enter into this Agreement
by signing any such counterpart.
11.8 Costs
Each party shall bear its own costs arising out of or in connection with
the preparation, negotiation and implementation of this Agreement.
11.9 Notices
(A) Any notice or other communication required to be given under this
Agreement or in connection with the matters contemplated by it shall,
except where otherwise specifically provided, be in writing in the
English language and shall be addressed as provided in clause 11.9(B)
and may be:
(1) personally delivered, in which case it shall be deemed to have
been given upon delivery at the relevant address; or
(2) if from or to any place outside the United Kingdom, sent by
pre-paid priority airmail, in which case it shall be deemed to
have been given seven Business Days after the date of posting; or
(3) sent by fax, in which case it shall be deemed to have been given
when despatched, subject to confirmation of uninterrupted
transmission by a transmission report provided that any notice
despatched by fax after 17.00 hours (at the place where such fax
is to be received) on any day shall be deemed to have been
received at 08.00 on the next Business Day.
(B) The addresses and other details of the parties referred to in clause
11.9(A) are, subject to clause 11.9(C):
Name: NXT plc and New Transducers Limited
For the attention of: Xxxxx Xxxxx
Address: Xxxxxxx Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Fax number: (00) 000 000 0000
Name: NCT Group, Inc, and NCT Audio Products, Inc.
For the attention of: Xxxxxxx X. Xxxxxxxx and Xx Xxxxxxx
Address: 00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 X.X.X.
Fax number: (0)000-000-0000
(C) Any party to this Agreement may notify the other parties of any change
to its address or other details specified in clause 11 9(B), provided
that such notification shall only be effective on the date specified
in such notice or five Business Days after the notice is given,
whichever is later.
12. Law and Jurisdiction
12.1 English Law
This Agreement shall be governed by, and construed in accordance with,
English law.
12.2 Jurisdiction
In relation to any legal action or proceedings to enforce this Agreement or
arising out of or in connection with this Agreement ("Proceedings") NCT and
NCT Audio irrevocably submit to the exclusive jurisdiction of the English
courts and waive any objection to Proceedings in such courts on the grounds
of venue or on the grounds that the Proceedings have been brought in an
inconvenient forum. This clause operates for the sole benefit of NXT and
NTL who shall each retain the right to take Proceedings in any other
jurisdiction.
12.3 Process Agent
NCT and NCT Audio appoint Noise Cancellation Technologies (Europe) Limited
of Xxxx 0, Xxxxx Xxxxx, 0 Xxxxxxxxx Xxx, Xxx Xxxx, Xxxxxxxxx XX0 0XX as
process agent to receive on their behalf service of process in any
proceedings in England. Service upon the process agent shall be good
service upon NCT or NCT Audio whether or not it is forwarded to and
received by NCT or NCT Audio. If for any reason the process agent ceases to
be able to act as process agent, or no longer has an address in England,
NCT and NCT Audio irrevocably agree to appoint a substitute process agent
with an address in England acceptable to NXT and to deliver to NXT a copy
of the substitute process agent's acceptance of that appointment within 20
Business Days.
12.4 Contracts (Rights of Third Parties) Xxx 0000
No person who is not a party to this Agreement shall have any right under
the Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of
this Agreement.
AS WITNESS the hands of the duly authorised representatives of the parties
on the date first before written.
SCHEDULE: WARRANTIES AND REPRESENTATIONS
NCT hereby warrants and represents to and for the benefit of NXT and NTL as set
out in the following paragraphs of this schedule each such warranty and
representation being given on the basis that it will remain true and accurate at
all time up to and including Completion.
(A) Capacity
NCT and NCT Audio each have full power and authority to enter into and perform
this Agreement, and may execute and deliver this Agreement and perform their
obligations under this Agreement without requiring or obtaining the consent of
their shareholders or of any other person, authority or body and this Agreement
constitutes valid and binding obligations of NCT and NCT Audio in accordance
with its terms Each of NCT and NCT Audio is receiving good and fair value for
the consideration that is being provided by each of them in accordance with the
terms of this Agreement, the IP Sale Agreement and the Gekko Letter.
(B) Litigation
(1) Neither NCT nor NCT Audio nor any of their Affiliates (including without
limitation DMC) is engaged in or the subject of any litigation or
arbitration or mediation (including alternative dispute resolution) or
administrative or criminal proceedings (including without limitation
proceedings before the Securities and Exchange Commission of the United
States (the 'SEC")) whether as claimant, plaintiff, defendant or otherwise,
which adversely affects or is likely to have an adverse effect on the that
entity's business otherwise than as properly disclosed in the Form S-1
Registration Statement as filed with the SEC on 9 February 2001.
(2) No such litigation or arbitration or administrative or mediation (including
alternative dispute resolution) or criminal proceedings or investigation or
enquiry are pending or threatened or expected by or against NCT or NCT
Audio or any of their Affiliates (including without limitation DMC)
otherwise than as properly disclosed in the Form S-1 Registration Statement
as filed with the SEC on 9 February, 2001.
(C) Insolvency
NCT and NCT Audio are able to pay their debts as they fall due and are trading
as going concerns Neither NCT nor NCT Audio nor any of their Affiliates have
taken any steps for the appointment of any liquidator receiver. administrator,
or any similar officer or for protection from its creditors.
(D) Accounts
The Audited Accounts:
(1) were prepared in accordance with the requirements of all relevant statutes
and generally accepted accounting principles in the United States at the
time they were audited and commonly adopted by companies carrying on
business similar to that of NCT;
(2) show a true and fair view of the assets and liabilities of NCT and its
subsidiaries (as a whole) as at, and the profits of NCT and its
subsidiaries for the period ended on, the Balance Sheet Date;
(3) apply bases and policies of accounting which have been consistently applied
in the case of NCT and its subsidiaries, in the audited consolidated
financial statements for the three accounting reference periods ending on
the Balance Sheet Date.
Full provision has been made in the Audited Accounts for all actual liabilities
of NCT and its subsidiaries outstanding at the Balance Sheet Date and proper
provision (or note) in accordance with generally accepted accounting principles
in the United States at the time they were audited has been made therein for all
other liabilities of NCT and its subsidiaries then outstanding whether
contingent, quantified, disputed.
The Quarterly Accounts have been carefully prepared in accordance with
accounting policies consistent with those used in preparing the Audited Accounts
and in accordance with the requirements of the United States Securities and
Exchange Commission and on a basis consistent with quarterly accounts prepared
in respect of the most recent four financial quarters of NCT and its Affiliates.
The cumulative profits, assets and liabilities of NCT and its Affiliates stated
in the Quarterly Accounts have not been materially misstated and are not
materially inaccurate.
(E) Filings
The Form S-1 Registration Statement as filed by NCT with the SEC on 9 February
2001 and all other filings made by NCT in the 12 months prior thereto comply in
all respects with the requirements of the SEC and do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(F) Contracts
(1) Each of the material contracts to which NCT or NCT Audio or DMC is party is
valid and binding and no notice of termination of any such contract has
been received or served by NCT or NCT Audio or, as the case may be DMC.
(2) Neither NCT nor NCT Audio nor DMC nor any other party to any agreement with
NCT or NCT Audio or DMC is in default thereunder, and NCT is not aware of
any invalidity or grounds for termination, avoidance, rescission or
repudiation of any agreement to which NCT or NCT Audio or DMC is a party
which, in any such case, would be material in the context of the financial
or trading position of NCT and its subsidiaries.
(G) Use of Proceeds
Not less than 66 per cent. of the proceeds received by NCT from any sale or
disposal of any of the NXT Consideration Shares (or in connection with any
charge or pledge of any of the NXT Consideration Shares) will be applied by NCT
in the development of the business of DMC as described in the business plan of
DMC (a copy of which has been provided to NXT prior to the date hereof).
SIGNED by: /s/ XXXXX X. XXXXX
duly authorised for and on
behalf of NXT plc
SIGNED by /s/ XXXXX X. XXXXX
duly authorised for and on
behalf of New Transducers Limited )
SIGNED by /s/ XXXXXXX X. XXXXXXXX
duly authorised for and on
behalf of NCT Group, Inc.
SIGNED by /s/ XXXXXXX X. XXXXXXXX
duly authorised for and on
behalf of NCT Audio Products, Inc.
