EXHIBIT A
LICENSE AGREEMENT
INFRARED ENHANCED VISION SENSOR SYSTEM
THIS AGREEMENT is made this day of July, 1997, b and between Infrared
Systems International, Inc., a corporation organized and existing under the
laws of the State of Nevada, having a business address at Xxxxx 000, X.X.
Xxx 0000, Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxxx 00000 ("ISI" or "Licensor") a
KOLLSMAN, INC., a corporation organized and existing under the laws of the
State of D having a business address at 000 Xxxxxx Xxxxxxx Xxxxxxx,
Xxxxxxxxx, XX 00000-0000 ("KOLLSMAN" Or "Licensee").
WHEREAS, ISI has acquired a non-exclusive license and an agreement in
principal for an exclusive license from Xxxxxx Aircraft Co. (XXXXXX), the
owner of U.S. Patent No. 5,534,694, titled "INFRARED IMAGING SYSTEM FOR
ENHANCING THE PERCEPTION OF A SCENE BY A VEHICLE OPERATOR," and which
provides for the rights to make, have made, use, sell and have sold
products for commercial aircraft covered under the claims of this patent
and XXXXXX Proprietary Data; and
WHEREAS, ISI represents that it has further developed a design for an
infrared aircraft landing aid system including additional ISI Technical
Knowhow, ISI Proprietary Data, and ISI marketing contacts; and
WHEREAS, 1ST has further acquired from XXXXXX the rights to sublicense and
desires to sublicense to KOLLSMAN; and
WHEREAS, KOLLSMAN seeks the right to develop, make, have made, use, sell
and have sold as infrared landing aid system, a part of which is or may be
covered by said XXXXXX patent, XXXXXX Proprietary Data, and IS! Proprietary
Data and Technical Knowhow;
NOW, THEREFORE, 1ST and KOLLSMAN (the "Parties") agree as follows:
ARTICLE I: DEFINITIONS
Section 1.1 "Licensed Patents" - shall mean any patents issuing from the
XXXXXX Patent Applications, serial no. 071894, 143 files on June 4, 1992
and 300,895 filed September 6, 1994, both entitled "INFRARED IMAGING SYSTEM
FOR ENHANCING THE PERCEPTION OF A SCENE BY A VEHICLE OPERATOR," and any
continuations or divisions thereof. This includes the U.S. Patent No.
5,534,694 received July 9, 1996 of the same name and all reissues and
extensions of such patents.
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Doc. No. LIC-97-EVS [ 15 July 97 1 Page 1
Section 1.2 "XXXXXX Proprietary Data" - shall mean information licensed to
ISI which has been originated by or is peculiarly within the knowledge of
XXXXXX and is subject to protection under recognized legal principles,
provided that no element of such information shall be considered XXXXXX
Proprietary Data after any date on which such element is shown to be
available to the general public without fault of KOLLSMAN or ISI.
Section 1.3 "ISI Proprietary Data" - shall mean information which has been
originated by or is peculiarly within the knowledge of ISI and is subject
to protection under recognized legal principles, provided that no element
of such information shall be considered ISI Proprietary Data after any date
on which such element is shown to be available to the general public
without fault of KOLLSMAN.
Section 1.4 "Licensed Products" - shall mean any product or portion thereof
which embodies any invention covered by one or more claims of the Licensed
Patents or incorporates, utilizes or is based upon XXXXXX Proprietary Data
licensed to ISI or IS! Proprietary Data at the time of manufacture, use or
sale of such product.
Section 1.5 "Licensed Field" - shall mean the commercial sale to any
customer for use on any aircraft licensed to operate by the Federal
Aviation Administration in the United States or the equivalent regulatory
agency in the applicable or appropriate region of the world.
Section 1.6 "Affiliates" - shall mean any company of which a third of their
voting shares are now or hereafter owned or controlled, directly or
indirectly, by a Party, or a parent company which now or hereafter owns or
controls, directly or indirectly, a third of the voting shares of a Party,
or any company a third of whose voting shares are now or hereafter owned or
controlled directly or indirectly by said parent company.
Section 1.7 "Sell" or "Sold" - shall mean and include to lease, give,
transfer, deliver, or otherwise dispose of for consideration, or retain for
non-experimental use by KOLLSMAN or its Affiliates, except that the term
non-experimental use shall not apply to Marketing Demonstration or Test
Units (the title to which is retained by KOLLSMAN).
Section 1.8 "Effective Date of this License Agreement" - shall mean the
date first set forth above, following the completion of all of those events
described immediately below:
(a) signature of this License Agreement by both parties;
(b) ISI's receipt of initial Advance Royalty Payment described under
Section 4.1(a); and,
(c) KOLLSMAN's receipt of an originally executed copy of the License
Amendment No. 1 to be concluded between XXXXXX and ISI under the
license dated the 26th day of October 1995, evidencing ISI's
successful completion of that condition precedent described under
Article V (Section 5.1).
ISI I KOLLSMAN - EVS
Dec. No. LIC-97-EVS [ 15 July 97 1 Page 2
ARTICLE II: LICENSE GRANT
Section 2.1 ISI hereby grants to KOLLSMAN a worldwide, exclusive sublicense
under
XXXXXX Licensed Patents and XXXXXX Proprietary Data to make, have made,
use, Sell, and have Sold, as well as the maintenance and repair of, the
Licensed Products for the Licensed Field only.
Section 2.2 ISI hereby grants to KOLLSMAN a worldwide, exclusive license
for the use of IS! Proprietary Data to make, have made, use, Sell, and have
Sold, as well as the maintenance and repair of, the Licensed Products for
the Licensed Field only.
Section 2.3 The foregoing sublicense and license shall include the right
for KOLLSMAN to effect an assignment to any affiliate of any and all of
KOLLSMAN's rights and obligations as specified elsewhere herein, subject to
the written consent of IS!. ISI's approval shall not be unreasonably
withheld.
Section 2.4 IS! Represents and warrants that it is the owner of the above
referenced License from XXXXXX for Licensed Products and that it has the
right to grant the rights and sublicenses described in this Agreement.
Section 2.5 No rights or licenses are granted herein to KOLLSMAN, expressly
or by implication, under any patents, applications for patents, designs, or
proprietary information, other than the rights and sublicenses granted in
Sections 2.1, 2.2, and 2.3 of this Article II.
Section 2.6 No rights or licenses are granted herein to KOLLSMAN, expressly
or by implication, to use the names "Infrared Systems International, Inc.",
or "IS!".
ARTICLE III: DOCUMENTATION
Section 3.1 within thirty (30) days of the Effective Date of this
Agreement, ISI agrees to provide KOLLSMAN with any XXXXXX Proprietary Data
licensed to ISI and any IS! Proprietary Data related to Licensed Products
to the extent available, consistent with KOLLSMAN's rights in Sections 2.1
and 2.2.
Section 3.2 For the effective period or "Term" of this Agreement, ISI
agrees to provide KOLLSMAN with any future developed ISI Proprietary Data
related to Licensed Products consistent with KOLLSMAN's rights in Sections
2.1 and 2.2.
Section 3.3 ISI Proprietary Data, XXXXXX Proprietary Data and KOLLSMAN
Proprietary Data shall be treated under conditions of confidence by each of
the other Parties. Each Party agrees to use such information only in
furtherance of the Agreement. In the event that any of such information is
disclosed to a third party, the disclosing Party shall cause the third
party to execute a Nondisclosure Agreement obligating the third party to
treat such information in confidence, and to afford at least the same
degree of protection against unauthorized use or
ISI / KOLLSMAN - EVS
Doc. No. LIC-97-EVS [ 15 July 97 ] Page 3
Disclosure which the third party exercises in the protection of its own
proprietary information. All of the provisions of this Section 3.3
regarding confidentiality shall survive expiration or termination of this
Agreement.
Section 3.4 All ISI and XXXXXX proprietary material previously provided
KOLLSMAN under the provision of the non-disclosure agreement between ISI
and KOLLSMAN shall be included by reference in, and subject to the
confidentiality obligations set forth under, this Agreement.
ARTICLE IV: PAYMENTS BY KOLLSMAN
Section 4.1 KOLLSMAN shall make payments to ISI as follows:
(a) A non-refundable * Initial Advance Royalty Payment of TWENTY THOUSAND
DOLLARS and NO CENTS ($20,000.00) payable within thirty (30) days after the
execution of this License Agreement by both parties. This Advance Royalty
Payment shall be credited against any royalties which become due and
payable under 4.1(c) below; and
* It is agreed this Initial Advanced Royalty Payment will only become non-
refundable at such time that ISI actually pays this amount over to XXXXXX
under and in accordance with the License between Xxxxxx and ISI (dated the
26th of October 1995).
(b) An Advanced Royalty Payment of FIVE THOUSAND DOLLARS and NO CENTS
($5,000.00) per month, payable each month starting the end of the month
following the Effective Date of this License Agreement and continuing until
March of 1999. However, KOLLSMAN agrees to extend this Advanced Royalty
Payment on a month-to-month basis providing that the technical/marketing
services of Xx. X. Xxxx continues to be required by KOLLSMAN as requested
by the Primary Contact, but not to exceed that point at which two hundred
(200) units have been sold, or June of 2000, whichever the first to occur.
This Advanced Royalty Payment shall be credited against any royalties which
shall become due and payable under Section 4.1(c) below. As part
consideration for its receipt of these monthly Advance Royalty Payments,
ISI agrees and shall provide the personal services of X. Xxxx to KOLLSMAN
or its affiliates at the rate of one-half (1/2) time in support of
KOLLSMAN's EVS development and commercialization efforts. It is understood
that such monthly Advanced Royalty Payments are exclusive of (do not
include) travel expenses for travel associated with tasks directed by
KOLLSMAN through the KOLLSMAN Primary Contact identified below, which
expenses will be reimbursed to ISI by KOLLSMAN.
KOLLSMAN Primary Contact: Xx. Xxxxx X. Xxxxxxx
and,
ISI / KOLLSMAN - EVS
Doe. No. LIC-97-EVS [ 15 July 97 1 Page 4
(c) A royalty payment for each Licensed Product Sold according to the
following formula:
Licensed Product Sales Royalty Payment for each
Accumulative Quantity EVS System Sold that
contains Licensed Produced
For 1st through 20th unit Prepaid under 4.1(a) 0
For 21St through 200th Unit REDACTED
201 through 2,000th Unit REDACTED
2,001 through 5,000th Unit REDACTED
5,001 through 10,000th Unit REDACTED
> 10,000 Units REDACTED
Advanced Royalty Payments under paragraph 4.1 (b) of this Paragraph 4.1
(above) will be netted out of (recouped through the reduction of) the
Royalty payment starting at unit 201 at a rate of per (REDACTED) unit
until all advanced royalty payments have been reimbursed.
Section 4.2 Licensed Products shall be considered sold and the obligation
to pay royalty payments shall accrue, when KOLLSMAN has issued an invoice
and received payment therefore. Royalty payments made to ISI On Licensed
Products that are subsequently not accepted or are returned to KOLLSMAN for
credit by customers may be taken as a credit against subsequent royalty
payments, or if not so credited within a period of twelve (12) months from
payment, then refunded to KOLLSMAN.
Section 4.3 KOLLSMAN shall pay any sales or use taxes imposed by the State
of New Hampshire relating to the manufacture or sale of the products
without diminution of any other payments otherwise due under this
Agreement.
Section 4.4 KOLLSMAN shall pay to IS! royalties, in such amounts as defined
by Section 4.1 (c), on a quarterly basis, for those Licensed Products sold
for which payment has been received by KOLLSMAN from the customer in the
preceding quarterly period. Royalties are payable within thirty (30) days
after the end of the quarterly period as defined in Section 4.5. ISI shall
provide within thirty (30) days of receipt of above payment from KOLLSMAN,
documentation to KOLLSMAN of payment of any royalties due to XXXXXX under
the License Agreement between XXXXXX and ISI.
Section 4.5 On or before the last day of each January, April, July, and
October, during the term of this Agreement, KOLLSMAN shall render a report
to ISI, setting forth the types and total number of Licensed Products sold
by KOLLSMAN and its affiliates during the preceding calendar quarter, the
date of shipment to customer, the date payment received from customer, and
the amount of royalties payable hereunder on account thereof. Within thirty
(30) days after termination of this Agreement, KOLLSMAN shall render such a
report to ISI covering any period prior to termination for which a report
had not been previously rendered. Each such report shall be accompanied by
payment to ISI of the royalties shown thereby to be due.
ISI / KOLLSMAN - EVS
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Payment shall be in U.S. currency and mailed to the following address:
REDACTED
Each payment shall identify KOLLSMAN's name, the type of payment (i.e.,
royalty payment) and the Document Number and Title set forth on the cover
page of this Agreement. The royalty report of KOLLSMAN shall be certified
as to correctness by a corporate officer of KOLLSMAN. If no Licensed
Product has been sold during any such period, KOLLSMAN shall render a
written report to ISI of such fact.
Section 4.6 ISI may require KOLLSMAN to pay interest to it upon any and all
amounts of royalty that are thirty (30) days overdue and payable to ISI
from the date due to the date of payment at the U.S. maximum prime rate at
the Bank of America as of the last day of the period for which payment is
due, but in no event shall the interest exceed the applicable maximum legal
rate that may be then specified by the laws of the State of New Hampshire.
Section 4.7 KOLLSMAN shall keep, and cause its affiliates to keep, full and
accurate records of all Licensed Products which are manufactured and Sold
by KOLLSMAN and its affiliates. For a period of one year following the
submission of each quarterly report described in Section
4.5, KOLLSMAN agrees to permit such quarterly report records to be
examined, upon at least fifteen (15) days prior written request and during
KOLLSMAN's normal business hours, by an independent Certified Public
Accountant which ISI may designate in writing, in order to determine the
accuracy of KOLLSMAN's reports, and of the payments required to be made
hereunder. Prompt adjustment shall be made to correct any errors or
omission in KOLLSMAN's reports or figures disclosed by such audits. Neither
such right to audit nor the right to receive adjustment shall be affected
by any statement to the contrary appearing on checks or otherwise.
ARTICLE V: XXXXXX LICENSE AMENDMENT
Section 5.1 ISI shall take prompt action to conclude its currently ongoing
discussions with XXXXXX regarding a formal License Amendment No. 1 to that
license agreement between XXXXXX (as licensor therein) and IS! (as licensee
therein) [ the 26th day of October 1995], so as to establish the clauses
for exclusivity, sublicense approval, extended term, and those other
matters as identified and set forth in the Specimen - Amendment No. 1
attached hereto. Failure to obtain this Amendment, or a substantially
similar amendment containing similar provisions which are satisfactory to
KOLLSMAN, within a period of Ninety (90) Days from the effective date of
this Agreement shall render this Agreement void at KOLLSMAN 's sole option.
[ Exhibit I Specimen - Amendment Xx. 00
XXX / XXXXXXXX - XXX
Xxx. No. LIC-97-EVS [
15 July 97 1
Page 6
ARTICLE VI: TERM AND TERMINATION
Section 6.1 This Agreement shall become effective on the date first set out
above and upon the completion of those actions set out under Section 1.8,
and shall extend for a term equal to the valid effective term of the
underlying XXXXXX Licensed Patent(s) described under Subparagraph 1.1,
unless terminated sooner in accordance with the provisions of this Article
VI.
Section 6.2 This Agreement may be terminated upon mutual written agreement
of the Parties. ISI shall obtain KOLLSMAN's mutual agreement prior to
mutually terminating its agreement with XXXXXX (under Para. 5.3 of the
License Agreement between XXXXXX and ISI).
Section 6.3 Should IS! receive notification from XXXXXX of any actions
under Para. 5.4 or 5.5 of the aforementioned License Agreement between
XXXXXX and ISI, ISI shall provide notification of same to KOLLSMAN.
Further, should KOLLSMAN elect to remedy the cause for XXXXXX' action
against ISI to the satisfaction of XXXXXX, and KOLLSMAN is in good
standings with all the terms and conditions of this agreement, then ISI
agrees to the assignment of its agreement with XXXXXX to KOLLSMAN.
Section 6.4 Termination In Circumstances of Default [ & Cure Period]:
Section 6.4.1 If KOLLSMAN shall at any time default in making any payment,
or in rendering any statement required under this Agreement, or commit any
breach of any covenant or agreement contained herein, and shall fail to
remedy any such default or breach within sixty (60) days after written
notice thereof by ISI, ISI may, without further delay, by notice in writing
and at its option, terminate this Agreement and the licenses hereunder.
Section 6.4.2 KOLLSMAN reserves a similar right to terminate this License
Agreement, including but not limited to any obligation to pay any royalties
hereunder, in the event that a judgement is rendered by any U.S. Court
which interferes with KOLLSMAN's enjoyment of those License Rights
purported to have been granted to KOLLSMAN hereunder or which otherwise
limit or interfere with ISI's ability to fulfill its responsibilities
hereunder.
Section 6.4.3 Such termination shall not prejudice either parties' rights
which shall have accrued to the date of such termination, nor shall it
prejudice any cause of action or claims of a party which has accrued or is
to accrue on account of any breach or default by the other party.
Section 6.5 ISI shall have the right to terminate this Agreement at any
time if KOLLSMAN fails to sell an EVS System containing the Licensed
Product during any 24 month period after the initial delivery of EVS
Systems under the first sale. Upon the exercise of such right, this
Agreement shall terminate thirty (30) days after notice in writing to that
effect has been given by ISI to KOLLSMAN.
Section 6.6 ISI reserves the right to terminate that provision requiring
the performance of personal services of X. Xxxx, as described under Section
4.1(b), in the event that for any reason X. Xxxx becomes medically impaired
in a manner which interferes with his ability to provide such
ISI / KOLLSMAN - EVS
Doc. No. L!C-97-EVS [ 15 July 97 1 Page 7
Services. In such event, the corresponding obligation of KOLLSMAN to
continue making the monthly Advance Royalty Payments under Section 4.1(b)
shall similarly terminate.
Section 6.7 Termination of this Agreement, by expiration or otherwise,
shall not release KOLLSMAN from any of its obligations under this Agreement
with regard to Licensed Products Sold or manufactured, or in the process of
manufacture, prior to termination, and shall not rescind or give rise to
any right to anything done or to claim return of, or cancellation of any
payment made, obligation accruing, or other consideration given to ISI
hereunder, prior to the time of such termination.
ARTICLE VII: GENERAL PROVISIONS
Section 7.1 KOLLSMAN expressly covenants that neither this Agreement nor
any of its benefits nor any rights hereunder shall be, directly or
indirectly, assigned, transferred, divided, or shared by KOLLSMAN or its
affiliates to or with any other individual, firm, corporation, or
association whatsoever without the prior written consent of ISI. Written
consent, when required, shall not be unreasonably withheld.
Section 7.2 With the exception of ISI's responsibilities covered by Section
7.3, KOLLSMAN or its affiliates shall defend or settle at its expense any
action, cause of action or suite against ISI, its officers, directors,
employees and agents, arising directly or indirectly from KOLLSMAN's or its
affiliates or its customers' use, manufacture, sale, or other action with
respect to Licensed Products. ISI will provide, at its own expense,
reasonable support and council to KOLLSMAN in defense hereunder.
Section 7.3 ISI shall provide indemnification to KOLLSMAN, its officers,
directors, employees and agents, or its affiliates for claims or suits
brought by third parties against KOLLSMAN or its affiliates or its
customers for any claim of patent infringement, copyright violation, and/or
improper use or conveyance of a third party's trade secret by ISI with
respect to that portion related to the making, using, or selling of
Licensed Products which is based upon that technical information embodied
under the XXXXXX Patent, the XXXXXX Proprietary Data, or the ISI
Proprietary Data which is the subject of this Agreement.
Section 7.4 The Parties agree to keep each other currently informed
regarding any knowledge that either shall have with respect to infringement
of Licensed Patents by any third parties. If within six (6) months after
receiving a written request from KOLLSMAN for legal action against
infringement by any third party and/or in defense against any action for
declaratory judgment brought by any such third party, ISI, or Xxxxxx at
ISI's request, shall have neither abated such infringement nor taken any
such legal action, KOLLSMAN shall have the right to bring suit against such
third party for such infringement or to defend against such action for
declaratory judgment. If either Xxxxxx, ISI or KOLLSMAN shall bring such
action or make such defense, such party shall be entitled to join the other
party in such action or defense and the parties so joined shall, at the
expense of the party bringing said action or making said defense, render
such assistance as shall reasonably be requested. The party bringing such
action or defense shall have
ISI/ KOLLSMAN - EVS
Xxx.Xx. LIC-97-EVS [ 15 July 97 } Page 8
Control over and bear the entire expense thereof and shall retain any
damages obtained from any defendant third parties herein.
Section 7.5 Any statement, notice or request required to be given under
this agreement shall be deemed to have been received when actually given to
or acknowledged by:
For IS!: INFRARED SYSTEMS INTERNATIONAL, INC.
ATTN.: Xx. Xxxx X. Xxxx, President REDACTED
For KOLLSMAN: KOLLSMAN, INC.
ATTN.: Xxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000-0000
FAX:000-000-0000
Such statement, notice or request shall be effective upon receipt. Either
Party may give written notice of a change of address, and thereafter any
such statement, notice or request shall be given as provided above at such
changed address.
Section 7.6 This Agreement is deemed to be executed and delivered within
the State of New Hampshire, and it is the intention of the Parties that it
shall be construed, interpreted and applied in accordance with the laws of
the State of New Hampshire.
Continued on nextpage I//I//I/I/Il/I/I
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Doe. No. LIC-97-EVS [ 15 July 97 1 Page 9
Section 7.7 This Agreement sets forth the entire agreement and
understanding between the Parties as to the subject matter hereof and
merges all prior discussions and agreements between them pertaining to the
same. Neither Party shall b bound by any conditions, definitions,
warranties, or representations other than as expressly provided in this
Agreement or as duly set forth on or subsequent to the date hereof in
writing and signed by a proper and duly authorized officer of
representative of the Party to be bound thereby.
IN WITNESS WHEREOF, the parties hereto have caused two (2) copies of this
Agreement to be executed by their duly authorized representatives as of the
date specified in the heading of this Agreement.
(Type)
//$fl;
INC.
KOLLSMAN, INC.
Xxxxxxx X. Xxxx, Director, Contracts
/3 /
By: (Sign)
(Type)
Title: _____ Pr
Date: ______________
By: (Sign)
Title: __________________________________
Date: ________________________________
[ Exhibit I - Specimen AMENDMENT NO. I to XXXXXX I ISI License Agreement
(26 October 1995)]
Doc. No. LIC-97-EVS [
15 July 97 1
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