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EXHIBIT 10.905
COOPERATIVE DEVELOPMENT AND SERVICE AGREEMENT
BY AND BETWEEN ERIM INTERNATIONAL, INC. AND DAEDALUS
ENTERPRISES, INC.
This Agreement, dated as of the 26th day of March, 1998 (the "Effective Date")
between ERIM INTERNATIONAL, INC., a Michigan corporation with offices at 0000
Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx 00000, ("EI") with a mailing address of X.X. Xxx
000000, Xxx Xxxxx, Xxxxxxxx 00000-0000, and DAEDALUS ENTERPRISES, INC., with
offices at 000 Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx, 00000-0000 ("DAEDALUS").
RECITALS
WHEREAS, EI and DAEDALUS (the "PARTIES") desire to develop and
perform commercial service contract activities for third parties using an
Airborne Mutispectral Digital Camera System (the "AMDC") constructed by DAEDALUS
and an Image Processing System (the "IPS") developed by EI and to continue
development of application specific value-added software and/or hardware
techniques to further enhance the utility and attractiveness of the system to
potential customers; and
WHEREAS, the PARTIES desire to define and establish their
respective responsibilities, rights, obligations, working relationships, and
remuneration in this AGREEMENT;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, it is agreed as follows:
ARTICLE 1. Relationship of the PARTIES
This relationship shall be nonexclusive and the PARTIES agree that
either may enter into other similar development and service agreements with
third parties at their discretion. This AGREEMENT shall not constitute, create,
or in any way be interpreted as a joint venture, partnership, or formal business
organization of any kind. The PARTIES will operate as independent contractors
working together to achieve the objectives outlined in this AGREEMENT.
ARTICLE 2. Expenses
Except as otherwise specifically stated herein, each party shall
bear all of its own expenses incurred in connection with efforts under this
AGREEMENT.
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ARTICLE 3. DAEDALUS Responsibilities
a. DAEDALUS will build an AMDC which will meet the specifications
contained in Attachment A hereto, and shall demonstrate by appropriate tests
that said specifications are met. DAEDALUS shall also provide documentation and
training materials in sufficient detail to enable system installation and
operation of the AMDC by EI personnel.
b. DAEDALUS shall perform the fabrication and testing of the AMDC
in accordance with the following Milestones related to the EI payment schedule
of Article 4 (1).
Milestone 1: two (2) months from the Effective Date the following
major components will have been purchased and received by DAEDALUS:
- Frame grabber
- AIT tape recorder
- Timer card
- SCSI controller card
- Chassis, power and CPU for computer
- Kodak CCD camera
- Camera lens
The computer system and camera will be integrated and testing started. At this
milestone the system will be capable of capturing single frame images from the
camera and recording on tape-monochrome only.
Milestone 2: three (3) months from the Effective Date the
following shall have occurred:
- Ninety percent (90%) of all material will have been
purchased and received by DAEDALUS.
Most fabrication will be complete and the camera and computer will be integrated
and tested. The electromechanical assembly of filters and rotation stage will be
in process.
DAEDALUS will certify in writing to EI that it has satisfied the Milestones
specified under this Article by submitting a written invoice to EI. If DAEDALUS
fails to meet either Milestone above, EI shall have the right to withhold
progress payments for the fabrication of the AMDC until such Milestone is met.
c. The AMDC shall be completed within four months of the Effective
Date (the "Completion Date"). In the event DAEDALUS does not complete the
fabrication of the AMDC within sixty (60) days of the Completion Date, EI may
deduct 10% from the final progress payment. If the AMDC is not complete within
ninety (90) days of the
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Completion Date, EI may terminate this Agreement and DAEDALUS shall refund all
progress payments.
d. DAEDALUS will maintain the AMDC in operational condition for use
on commercial service contracts and provide all labor for the maintenance of the
same. For purposes of this AGREEMENT operational condition shall mean: (1) the
computer, camera, tape recorder and GPS components combined with a custom filter
wheel and controller and special system control, data formatting, and output
software, will be kept in working order; (2) normal and customary periodic
repair and maintenance of the AMDC will occur and be documented; (3)
configuration control and quality assurance shall be implemented such that the
nominal system performance shall be at least as good as that demonstrated during
the development stage.
ARTICLE 4. EI Responsibilities
(1) EI shall pay DAEDALUS a total of $120,000 to fund construction
of the AMDC under Section 3 of the AGREEMENT. Said sum shall be paid in four
installments as follows:
$30,000 at contract execution
$15,000 two months after the Effective Date
$15,000 three months after the Effective Date
$60,000 at completion of the AMDC
(2) EI will market and develop products and services that use the
AMDC. EI will also make improvements to the AMDC registration software as
mutually agreed upon by DAEDALUS and EI.
(3) EI will be responsible for scheduling service projects but will
consult with DAEDALUS when establishing such schedule, in accordance with
Article 7.
ARTICLE 5. Ownership Rights
a. AMDC
Title to and commercial rights in the complete AMDC system's
intellectual property shall be retained by DAEDALUS.
b. IPS
Title to and commercial rights in the complete IPS system's
intellectual property shall be retained by EI.
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c. Enhancements
Ownership of future enhancements to either the AMDC or the IPS in those
cases where DAEDALUS and EI work together to develop such enhancements, will be
agreed to on a case by case basis and documented as a written amendment to this
agreement signed by both PARTIES
d. AMDC
(1) Title to the AMDC delivered pursuant to Article 3, shall vest
jointly in DAEDALUS and EI, and each party shall be permitted to market and sell
commercial service projects. The PARTIES shall divide revenues from commercial
service projects in accordance with the provisions of Section 7 of this
AGREEMENT. It is agreed that the AMDC shall not be sold, leased or otherwise
conveyed or transferred by either party without the express written consent of
the other.
(2) Joint ownership of the AMDC shall not be construed as a grant,
license or other transfer of any right in the proprietary information or
intellectual property owned by either EI or DAEDALUS to the other.
ARTICLE 6. Joint Responsibilities of the PARTIES
a. It is agreed that the PARTIES intend to continue the development of
the AMDC and the IPS beyond its first commercial version. DAEDALUS will have
general responsibility for enhancement of the AMDC equipment and EI will have
general responsibility for enhancement of the IPS. The PARTIES will mutually
agree on the enhancements to be made, the sharing of their costs, and the
schedule for completion.
b. After completion of the AMDC, EI will share equally with DAEDALUS,
all expenses, net of insurance proceeds, for parts necessary for repair and/or
maintenance of the AMDC.
c. Each of the PARTIES shall be responsible for insuring the AMDC with
the other identified as a named insured party. DAEDALUS shall be responsible for
loss or damage to the AMDC when in possession of it and EI shall be responsible
for loss or damage to the AMDC when it is in possession of it. In the event of
damage or loss DAEDALUS shall be responsible for making appropriate repairs or
replacement within a reasonable period of time, provided the damage or loss is
covered by such insurance and proceeds from the same go to DAEDALUS.
ARTICLE 7. Project Coordination/Revenue Sharing
Project terms: In order to coordinate the efforts of the PARTIES on individual
service projects, terms relating to the schedule, personnel, Daily Use Fees, and
other individual project requirements will be mutually agreed to by the PARTIES
in a letter or other
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document that incorporates this AGREEMENT by reference.
Daily Use Fee: The PARTIES will agree on the number of days the AMDC will be
required to perform individual service projects. For use of the AMDC for
individual service projects, the party responsible for performing the project
shall pay to the other the sum of $1,250 per day based on the number of days
billed on such service project. Unless otherwise agreed, payment of the Daily
Use Fee shall be made within thirty (30) days from receipt of payment from the
project customer, but in no event later than one hundred and twenty (120) days
beyond project completion.
ARTICLE 8. Term and Termination
a. This AGREEMENT shall begin on the Effective Date and continue until
terminated as herein provided.
b. After the second anniversary of the Effective Date, either party may
terminate this AGREEMENT by giving thirty (30) days written notice to the other.
The party terminating under this provision shall give up all rights of ownership
in the AMDC and revenue derived from its use.
c. The PARTIES may terminate this AGREEMENT by mutual consent and
either party may purchase the other's interest in the AMDC at a price to be
negotiated between the PARTIES. If a purchase cannot be negotiated within sixty
(60) days from the date of mutual termination, the AMDC will be sold at a public
sale and the proceeds will be split equally between the PARTIES.
d. Except as may be prohibited by the bankruptcy laws of the United
States, in the event either party shall become or commit an act of voluntary or
involuntary bankruptcy, make an assignment for the benefit of creditors, or
become insolvent, the other party may elect to cancel any unfulfilled
obligations hereunder. Notwithstanding the foregoing, in the event of insolvency
or bankruptcy of DAEDALUS prior to the completion of the AMDC, EI shall have the
right to claim and possess the incomplete AMDC in order to protect its joint
interest in the title to the AMDC. In the event insolvency or bankruptcy the
solvent party shall have the right to acquire exclusively the technology of the
other relating to the development of the AMDC to the extent allowed by law.
e. Termination of this AGREEMENT for any reason shall not relieve a
party of any outstanding obligation with regard to services sold and delivered
or under contact prior to the date of termination, nor shall it effect the
obligations of the PARTIES under Article 10 hereof.
ARTICLE 9. Product Warranty Responsibilities
OTHER THAN AS STATED IN THIS AGREEMENT, NO WARRANTIES OF
ANY KIND ARE MADE BY EITHER PARTY TO THE OTHER OR FOR THE
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BENEFIT OF THIRD PARTIES, INCLUDING SPECIFICALLY EXPRESS OR IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 10. Exchange of Proprietary Information
a. EI will maintain ownership of its Proprietary Information and
Intellectual Property related to the IPS. DAEDALUS shall have no claim to any
Proprietary Information and Intellectual Property belonging to EI.
b. DAEDALUS will maintain ownership of its Proprietary Information and
Intellectual Property related to the AMDC and EI shall have no claim to any
Proprietary Information and Intellectual Property belonging to DAEDALUS.
c. The definition, exchange and protection of Proprietary Information
under this Agreement shall be governed by the "NONDISCLOSURE AGREEMENT" between
the parties dated 28 February 1997, included herein by reference.
ARTICLE 11. Intellectual Property Infringement Indemnification
a. DAEDALUS agrees to indemnify EI and hold EI harmless against any and
all claims, suits, judgments, damages, costs and other charges, including
attorney's fees that are asserted by a third party claiming that the activities
relating to or arising under this AGREEMENT by DAEDALUS infringes upon such
third party's patent, copyright, trademark, trade secret or other intellectual
property right. Specifically and without limitation, DAEDALUS agrees to further
indemnify and hold EI harmless against any claims arising out of performance by
DAEDALUS or EI under the terms of this AGREEMENT which may be brought under US
patent No. 5,247,356 entitled "Method and Apparatus for Mapping and Measuring
Land" presently held by Pictometry, Inc.
To qualify for such indemnification defense EI must:
(1) Give DAEDALUS notice of any such claim, and
(2) Allow DAEDALUS to control, and fully cooperate with DAEDALUS in the
defense and all related settlement negotiations.
This Article 11 sets forth EI exclusive remedy against DAEDALUS with
respect to any action or claim for alleged infringement of intellectual property
rights.
b. EI agrees to indemnify DAEDALUS and hold DAEDALUS harmless against
any and all claims, suits, judgments, damages, costs and other charges,
including attorney's fees that are asserted by a third party claiming that the
activities relating to or arising under this AGREEMENT by EI infringes upon such
third party's patent, copyright, trademark, trade secret or other intellectual
property right
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To qualify for such indemnification defense DAEDALUS must:
(1) Give EI notice of any such claim, and
(2) Allow EI to control, and fully cooperate with EI in the defense and
all related settlement negotiations.
This Article 11 sets forth DAEDALUS exclusive remedy against EI with
respect to any action or claim for alleged infringement of intellectual property
rights.
ARTICLE 12. Force Majeure
Neither party shall be liable for any delay or failure to perform its
obligations under this Agreement if such delay or failure arises from any cause
or causes beyond its reasonable control, including, but not limited to labor
disputes, strikes, acts of God, lightening, shortages of materials, rationing,
utility or communization failures, earthquakes, casualty, war, act of the public
enemy, riots, insurrections, embargoes, blockages, actions, restrictions or
orders of any government, agency or subdivision thereof.
Each party shall give the other written notice within ten (10) days of
such delay, and shall include in the notice the steps the party will take to
alleviate the problem.
ARTICLE 13. Entire AGREEMENT
This AGREEMENT contains the entire understanding of the PARTIES hereto
relating to the subject hereof. This AGREEMENT may not be modified in any manner
except by an instrument in writing signed by a duly authorized officer or
representative of each of the PARTIES. Nothing in this AGREEMENT should be
construed to modify or amend the PARTIES Strategic Alliance Agreement effective
20 October 1997.
ARTICLE 14. Severability of Provisions
In the event that one or more provision(s) of this AGREEMENT are found
unenforceable by law, the remaining provision(s) shall continue to have full
force and effect.
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IN WITNESS WHEREOF, the PARTIES have caused this AGREEMENT to be duly executed
in duplicate to become effective as of the day and year first written above.
ERIM INTERNATIONAL, INC. DAEDALUS ENTERPRISES, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxx
------------------------- ------------------
Xxxxxx Xxxxx Xxxxxx X. Xxx
Its: Executive Vice President Its: President
& COO
Date: 26 March 1998 Dated: March 26, 1998
