Strategic Alliance Agreement

STRATEGIC ALLIANCE AGREEMENT


This AGREEMENT, dated as of the 20th day of October, 1997 between DAEDALUS ENTERPRISES, INC., a Delaware Corporation with offices at 300 Parkland Plaza, Ann Arbor, Michigan 48103 with a mailing address of P.O. Box 1869, Ann Arbor, Michigan, 48106-1869, (hereinafter referred to as "DAEDALUS") and ERIM INTERNATIONAL, INC., a Michigan Corporation with offices at 3300 Green Road, Ann Arbor, Michigan, 48105, with a mailing address of P.O. Box 134008, Ann Arbor, Michigan, 48113-4008, (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.


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