LICENSE AGREEMENT
FOR THE COMMERCIAL DEVELOPMENT & MANUFACTURE OF WIRELESS SYSTEMS
This Agreement is made and entered into on this 27th day of February 2004 by and
between the following:
|X| Photron Technologies Ltd. ("PHOTRON"); and
|X| aeroTelesis, Inc. ("AEROTELESIS")
Photron and aeroTelesis are hereinafter jointly referred to as the Parties to
this Agreement.
RECITALS:
Whereas Photron is the developer and provider of wireless telecommunications
technologies, turn-key operating systems, as well as an equipment manufacturing
company; and
Whereas Photron entered into an exclusive licensing & manufacturing agreement
with AeroTelesis Philippines Ltd. ("ATP"), a wholly owned subsidiary of
aeroTelesis, for which it was agreed that Photron would exclusively manufacture
and supply USM-based products and systems for ATP to deploy in advanced wireless
telephony services in the Philippines; and
Whereas aeroTelesis is a global wireless telecommunications service company that
is focused in the commercial deployment of advanced wireless networks in
developing countries and desires the opportunity to deploy the USM technology
for next generation wireless communication services in countries beyond the
Philippines; and
Whereas through this Agreement, the Parties mutually agree for a licensing and
manufacturing relationship (depending upon specific network applications) to be
established, for which Photron Technologies will execute the commercial
development and manufacture of wireless communication products & systems for
aeroTelesis to deliver and implement in to those countries that it enters and is
able to secure the necessary government rights and/or business licenses &
relationships for establishing new wireless services; and
Whereas this Agreement will also form the basis for a more detailed
Manufacturing Contract that will be entered into at a later date and which will
supercede this Agreement.
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NOW, THEREFORE, based on the foregoing premises and in consideration of the
mutual promises and covenants contained herein, the parties hereto hereby agree
as follows:
I. THE USM TECHNOLOGY
Photron is the sole developer and commercial manufacturer of a unique, next
generation wireless transmission technology that it has named "Ultra Spectral
Modulation" ("USM"). The concept of USM is to utilize a coding and modulation
method for the data that uses a minimum or almost zero bandwidth. USM creates
abrupt phase shifts in the radio frequency carrier to encode digital information
instead of using a separate modulating carrier of a specified bandwidth to phase
encode the information. The primary benefit of USM is its ability to provide for
increased data transmission rates and larger data capacity through narrow
channels as small as 3 KHz bandwidth or smaller because of "micro channeling"
techniques.
For wireless communications services, USM can be most effectively utilized for
the following mainstream applications:
|X| Wireless Local Loop (WLL)
|X| Mobile Voice & Data Networks
|X| Voice over Internet Protocol (VoIP)
|X| Satellite Communications
|X| Others
II. LICENSING RIGHTS FOR THE USE & DEPLOYMENT OF THE USM TECHNOLOGY
The Parties hereby agree that Photron Technologies will commercially develop and
manufacture the USM-based products & systems for aeroTelesis to use and deploy
in its advanced wireless networks, for which the terms & conditions of this
licensing relationship are hereby defined as follows:
SEMI-EXCLUSIVE DEVELOPMENT & MANUFACTURE OF ADVANCED WIRELESS TELECOMMUNICATION
PRODUCTS & SYSTEMS: Photron hereby agrees to develop and manufacture, on a
semi-exclusive basis, advanced wireless telecommunication products & systems --
which includes but is not limited to WIRELESS LOCAL LOOP as well as MOBILE VOICE
& DATA products and systems -- for aeroTelesis, using the USM technology.
It is understood by aeroTelesis that the other Licensee of the USM technology
for these wireless telecommunication products & services is Nations Mobile
Networks Ltd. ("Nations"), the company from which it acquired Aerotelesis
Philippines Inc. ("ATP") in October 2003 and from which aeroTelesis holds the
Right of First Refusal to purchase additional telecommunication licenses and/or
operations in developing nations, such as: Southeast Asia, Central & South
America, and the Middle East. If aeroTelesis endeavors to acquire exclusive
rights or any other non-conflict provisions for the use USM in these and other
telecommunication services, it understands that such an agreement will have to
be reached directly with Nations.
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EXCLUSIVE DEVELOPMENT & MANUFACTURE OF SATELLITE NETWORK PRODUCTS & SYSTEMS:
Photron hereby agrees to exclusively develop and manufacture satellite network
products & systems for aeroTelesis, using the USM technology. This includes but
is not limited to such satellite products & systems that can be integrated into
existing satellite-oriented terrestrial based infrastructure equipment, such as
earth stations, as well as other satellite-oriented equipment that is intended
for the consumer market, such as satellite set-top boxes (for the delivery of
HDTV, broadband internet, etc.) and mobile devices for voice & data services.
III. LICENSE TERMS & CONDITIONS
The Parties hereby agree that the License Fees for aeroTelesis to utilize and
deploy the USM technology in these wireless applications are as follows:
COUNTRY LICENSE PAYMENT: For each country that aeroTelesis deploys a new
wireless service with the USM technology, it will pay to Photron not less than
US **. For example, if aeroTelesis deploys the USM technology for wireless
telephony services in Country A, then it will make a minimum payment in the
amount of * to Photron; and if aeroTelesis deploys the USM technology for
satellite communication services in Country A, then it will make a minimum
payment in the amount of * to Photron. The actual amount to be paid for a
particular country and service will be dependent upon the following criteria:
o Size of the country and its demographics
o Business projections for the intended wireless service(s)
o Status of the USM products & systems (i.e. early stage development
vs. turnkey system)
o Other factors
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* [*] Confidential information has been omitted and separately filed with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
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The Parties will determine the license payment amount on a country by country
basis, taking into consideration all of the criteria described above. However,
in no event will it be less than **.
The license payments can be made in cash or stock. A payment schedule will be
determined a later.
ROYALTY PAYMENTS: The amount of royalty payments due to Photron by aeroTelesis
will be mutually agreed to by the parties at the time of deployment of the
product(s). Such royalty payments shall be memorialized by an amendment to this
agreement or in subsequent agreements entered into by the parties which will
detail such royalty payments and shall be in writing.
TERM. This semi-exclusive and exclusive commercial relationship shall commence
upon the effective date of this Agreement for a period of ten (10) years. After
this initial term, this Agreement shall be renewed for successive five (5) year
terms subject to terms & conditions, which may be changed if necessary or
appropriate, that will be negotiated between the Parties upon the commencement
of each new 5-year term.
IV. PRICING & PURCHASE OF USM PRODUCTS & SYSTEMS
For each wireless network that will be deployed, certain network equipment based
on the USM technology (the "USM Products & Systems") will be required. The USM
Products & Systems will be comprised of the following:
|X| Handsets
|X| Base Stations
|X| Transceivers
|X| Cell site infrastructure
|X| Other network components and terminals
Pricing for the USM products & systems will be as negotiated by the parties as
such purchases are made or agreed to and will depend upon the network
specifications and requirements.
Payments will be made in cash or through an irrevocable letter of credit.
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* [*] Confidential information has been omitted and separately filed with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
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Other terms and conditions for the purchase of the USM products and systems will
be determined in the detailed
Manufacturing Contract or upon the placement of a specific purchase order.
V. OTHER MATTERS
Any other business matters that are not covered in this Agreement can be agreed
to only in writing between the Parties and will be attached to this Agreement as
an Addendum.
This Agreement is legal and binding upon the Parties under the laws of the
Republic of Singapore.
SIGNATORIES
Photron Technologies Ltd. aeroTelesis, Inc.
Name: Xxxxxxx Xxxx Name: Xxxxxx Xxxxxxxxx
Title: Director Title: President
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