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EXHIBIT 10.904
STRATEGIC ALLIANCE AGREEMENT
This AGREEMENT, dated as of the 20th day of October, 1997 between
DAEDALUS ENTERPRISES, INC., a Delaware Corporation with offices at 000 Xxxxxxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000 with a mailing address of X.X. Xxx 0000, Xxx
Xxxxx, Xxxxxxxx, 00000-0000, (hereinafter referred to as "DAEDALUS") and ERIM
INTERNATIONAL, INC., a Michigan Corporation with offices at 0000 Xxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxx, 00000, with a mailing address of X.X. Xxx 000000, Xxx Xxxxx,
Xxxxxxxx, 00000-0000, (hereinafter referred to as "ERIM INT."); (hereinafter
referred to collectively as the "PARTIES").
RECITALS
WHEREAS, DAEDALUS has developed a prototype airborne multispectral
digital camera (AMDC) incorporating off-the-shelf third party computer, camera,
tape recorder and GPS components combined with a custom filter wheel and
controller and special system control, data formatting, and output software,
collectively referred to as the "airborne multispectral digital camera system";
and
WHEREAS, the airborne multispectral digital camera system was developed
under a NASA sponsored Small Business Innovation Research (SBIR) contract and
the commercial rights to the airborne multispectral digital camera are owned by
DAEDALUS; and
WHEREAS, DAEDALUS is well established in the airborne remote sensing
instrument market, and has the capabilities to perform production engineering,
manufacturing, marketing, and sales of the airborne multispectral digital camera
system; and
WHEREAS, ERIM INT. is well established in the remote sensing R&D and
applications market and has capabilities for the development, production,
marketing, and sales of specialized software for image registration,
geolocation, rectification, mapping, enhancement, and output; and
WHEREAS, DAEDALUS and ERIM INT. believe that by working together the
PARTIES can create an improved airborne multispectral digital camera system with
significantly increased market appeal resulting in significant revenue and
profits to the PARTIES; and
WHEREAS, the PARTIES desire to define and establish between them their
respective responsibilities, rights, obligations, working relationships, and
remuneration;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, it is agreed as follows:
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ARTICLE 1. Relationship of the Parties
ERIM INT. and DAEDALUS hereby agree to develop an Airborne
Multispectral Digital Camera System according to the provisions that follow.
This relationship shall be nonexcusive and both parties agree that either may
enter into other similar development and sales 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
Each PARTY hereto shall bear all its own expenses incurred in
connection with all efforts conducted pursuant to this Agreement, except as
otherwise agreed in advance by an instrument in writing signed by a duly
authorized officer of each of the Parties.
ARTICLE 3. DAEDALUS Development Responsibilities
DAEDALUS shall be responsible for all labor and material costs
necessary to convert the prototype AMDC, as illustrated in Attachment A, to a
production system for commercial sale including documentation and training
materials necessary to train customers in system operation and maintenance and
to provide after-sale support including warranty. This effort will be conducted
on such a schedule as necessary to permit offering a complete commercial AMDC
system for sale by 1 April 1998. In general, Daedalus will be responsible for
all airborne components and accessories for the AMDC.
ARTICLE 4. ERIM INT. Development Responsibilities
ERIM INT. will be responsible for all labor and materials necessary to
develop and produce a complete software system to read AMDC data tapes,
coregister and resample individual images to create composite frames, geo-locate
AMDC frames, and provide archive and catalog capabilities. This software system
will include a graphical user interface and be built as an integrated function
of ERDAS Imagine initially operating under Solaris 2.5 on a SUN work station.
This work will be done in the following two increments to meet the
respective schedules:
1. A basic software system will be built to permit DAEDALUS to
meet its requirements for delivery of the prototype AMDC to
NASA by 15 November 1997. This software system, built within
the ERDAS Imagine software environment, will include the
capability outlined in Work Unit I of Attachment B. ERIM INT.
will provide a single seat license for this software for
delivery to
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NASA at no cost to DAEDALUS. This does not include the base
ERDAS Imagine software that must be properly licensed and
installed by NASA before delivery.
2. A software system will be built to support the sale of
complete AMDC systems to commercial customers and be completed
by 1 April 1998. This software system will enhance the basic
system of Item 1 above with the capabilities outlined in Work
Unit II of Attachment B. It will also operate in accordance
with specifications established by ERIM INT. and be
accompanied by an operators manual and/or help functions.
ARTICLE 5. Joint Development Responsibilities of the PARTIES
The PARTIES will be jointly responsible for the collection and
production of sample image data from the AMDC system and software to demonstrate
the capabilities of the system and to prepare advertising and sales materials to
support marketing of the AMDC system.
DAEDALUS will be primarily responsible for providing and operating the
prototype AMDC system and arranging for aircraft services required.
DAEDALUS and ERIM INT. will share costs equally for aircraft services
relating to the collection, data production and preparation of materials for
advertising and marketing purposes, and these costs and activities will be
mutually agreed upon in advance.
The PARTIES agree that the initial collection of sample AMDC data must
be performed before the 15 November 1997 delivery of the prototype AMDC system
to NASA.
ARTICLE 6. Future Enhancements of the AMDC System
It is agreed that the PARTIES intend to continue the development of the
AMDC beyond its first commercial version to enhance its capabilities in both
data acquisition and data processing and output products. DAEDALUS will have
general responsibility for enhancement of the airborne equipment and ERIM INT.
will have general responsibility for enhancement of the software system. The
PARTIES will mutually agree on the enhancements to be made, the sharing of their
costs, and the schedule for completion and offering of enhancements.
ARTICLE 7. Product Warranty Responsibilities
DAEDALUS will provide a 12-month warranty for the complete airborne
portion of the AMDC system in accordance with its Standard Warranty Policy.
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ERIM INT. will provide a software warranty for the data processing
portion of the complete AMDC system that is mutually agreeable to DAEDALUS and
ERIM INT. ERIM INT. will also prepare and offer to customers a software
maintenance contract that is mutually agreeable to DAEDALUS and ERIM INT.
NO WARRANTIES OF ANY KIND ARE PROVIDED BETWEEN ERIM INT. AND DAEDALUS
PURSUANT TO THIS AGREEMENT. THIS INCLUDES, BUT IS NOT LIMITED TO ANY EXPRESS OR
IMPLIED WARRANTIES, WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE.
ARTICLE 8. Product Pricing
The selling price of the complete AMDC system will be a composite of
DAEDALUS and ERIM INT. selling prices for their respective portions of the AMDC
system. The respective prices will be independently determined based upon each
PARTY'S pricing model. The composite price will be reviewed jointly by the
PARTIES to determine its market acceptability and, if adjustment is deemed
necessary, such adjustment will be made in the price of each PARTY'S portion of
the system to the degree mutually agreed upon and the resultant price for each
portion of the system will be the price utilized to determine revenue sharing
percentage for each PARTY.
ARTICLE 9. Product Ownership
Title to and commercial rights to the complete airborne AMDC system
shall be retained by DAEDALUS.
Title to and commercial rights to the complete ground data processing
software system shall be retained by ERIM INT.
Ownership of future enhancements to either the airborne AMDC system or
the ground data processing software in those cases where DAEDALUS and ERIM INT.
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 and signed by both
PARTIES.
ARTICLE 10. Revenue sharing
All revenue from the sale of complete AMDC systems consisting of
airborne hardware and control software supplied by DAEDALUS and ground data
processing software (not including the basic ERDAS Imagine system) supplied by
ERIM INT. will be shared in accordance with the Revenue Sharing Schedule in
Attachment C. Revenue sharing will be based upon the net selling price for each
AMDC system sold whether sold by DAEDALUS or ERIM INT. Net selling price shall
mean the sale or lease price to third parties, less deductibles
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employed in normal royalty accounting practice, such as quantity, trade or
prompt payment discounts, commissions paid to independent sales agents,
container and packaging costs, transportation costs, sales and use taxes,
insurance, delivery expenses and charges, allowances for returns, duty, tax or
government charge on manufacture, sale, turnover or delivery, provided that
container and packaging costs, transportation costs, insurance costs, and
delivery expenses and charges shall be deducted only if and to the extent that
the same are billed and invoiced by the seller to the customer separately from
the product on which net selling price is to be determined. Such deductibles
shall not be construed to include manufacturing costs or manufacturing overhead.
All revenue sharing payments are to be made by the selling PARTY to the
other PARTY within 30 days from the time that the selling PARTY receives final
payment from the customer or, in the case of installment payments, within 30
days from the time each installment payment is received by the selling PARTY.
The PARTIES agree that there will be no sharing of revenues earned by
DAEDALUS for development and delivery of the prototype AMDC system to NASA.
ARTICLE 11. Exchange of Proprietary Information
ERIM INT. will maintain ownership of its Proprietary Information and
Intellectual Property related to the software developed for the ground
processing system. DAEDALUS will have no claims to any Proprietary Information
and Intellectual Property of ERIM INT.
DAEDALUS will maintain ownership of its Proprietary Information and
Intellectual Property related to the AMDC. ERIM INT. will have no claims to any
Proprietary Information and Intellectual Property of DAEDALUS.
The definition, exchange and protection of proprietary information
under this agreement will be in accordance with the "NONDISCLOSURE AGREEMENT"
between DAEDALUS and ERIM INT. dated 28 February 1997, included herein by
reference.
ARTICLE 12. Term and Termination
The term of this Agreement shall be one year and shall be
automatically renewed yearly. However, after the initial one year term either
party may terminate this Agreement by giving 30 days written notice to the
other.
Should DAEDALUS terminate this Agreement before ERIM INT. receives the
sum of $100,000 through system sales, DAEDALUS agrees to pay the difference
between $100,000 and the total received to the date of termination by ERIM INT.
(If ERIM INT. had received $50,000 to date then DAEDALUS would pay ERIM
$50,000.)
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Upon termination of this Agreement, ERIM INT. shall continue to
provide the software and honor all warranties and commitments for any existing
sales. In addition, should ERIM INT. terminate this Agreement, ERIM INT. will
continue to provide software and honor commitments for a six (6) month period
following termination to allow DAEDALUS to find suitable replacement software.
This Agreement shall also terminate upon the insolvency of the other
party. Insolvency shall be defined as the filing by either party under any
provision of the bankruptcy laws of the United States. Such termination shall
enable the surviving party to acquire exclusively the technology of the other
relating to the development of the AMDC System, to the extent allowed by law.
Termination shall not effect the obligations of the parties in respect
to the provisions listed in Article 11, Exchange of Proprietary Information.
ARTICLE 13. Assignment
This Agreement may not be assigned in whole or in part by either PARTY
without the prior written consent of the other PARTY; except upon the merger,
consolidation, sale or other transfer of all or substantially all of the assets
of either PARTY, provided that the surviving PARTY agrees to be bound in all
respects by the provisions of the Agreement.
ARTICLE 14. Entire Agreement
This Agreement contains the entire understanding between 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.
ARTICLE 15. Governing Law
This Agreement and any subsequent modifications thereto shall be
governed by and construed in accordance with the laws of the State of Michigan.
ARTICLE 16. 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.
ARTICLE 17. Intellectual Property Infringement Indemnification
DAEDALUS agrees to indemnify ERIM INT. and hold ERIM INT. harmless
against any and all claims, suits, judgments, damages, costs and other charges,
including attorney's fees
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as are asserted by a third party claiming that technology used or developed by
DAEDALUS herein, 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 ERIM INT. harmless
against any claims arising out of the performance by DAEDALUS or ERIM INT. 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 ERIM INT. must:
1. give DAEDALUS prompt notice of any such claim, and
2. allow DAEDALUS to control, and fully cooperate with DAEDALUS
in, the defense and all related settlement negotiations.
Article 17 sets forth ERIM INT. exclusive remedy against DAEDALUS with
respect to any action or claim for alleged infringement of intellectual property
rights.
ERIM INT. agrees to indemnify DAEDALUS and hold DAEDALUS harmless
against any and all claims, suits, judgments, damages, costs or other charges,
including attorney's fees that are asserted by a third party claiming that use
of ERIM INT. technology infringes upon such third party's patent, copyright,
trademark, trade secret or other intellectual property right.
To qualify for such indemnification defense DAEDALUS must:
1. give ERIM INT. prompt notice of any such claim, and
2. allow ERIM INT. to control, and fully cooperate with DAEDALUS
in, the defense and all related settlement negotiations.
Article 17 sets forth DAEDALUS exclusive remedy against ERIM INT. with
respect to any action or claim for alleged infringement of intellectual property
rights.
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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.
DAEDALUS ENTERPRISES, INC. ERIM INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxx By: /s/ Xxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxx Xxxxxx X. Xxxxx, Xx.
Its: President/CEO Its: Secretary and General Counsel
Date: 20 Oct. 1997 Date: 10/20/97
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