INTELLISYS LICENSE AGREEMENT
AGREEMENT made as of the 1st day of August, 1995 between IntelliSys
Systems, Inc., a Delaware corporation with offices at 0000 X. Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 (the "Licensor"), and IntelliSys Automotive Systems,
Inc., a Delaware corporation with offices at 0000 Xxxxxx Xxxx, Xxxxx 000-X, Xxxx
Xxxxx, Xxxxxxx 00000 (the "Licensee").
WHEREAS, the Licensor is the owner of certain technology and computer
know-how and related documentation more particularly described in Schedule "A"
which is annexed hereto and made a part hereof (the "Products"); and
WHEREAS, the Licensor is a party to certain contracts more particularly
described in Schedule "B" which is annexed hereto and made a part hereof (the
"Contracts"); and
WHEREAS, the Licensor wishes to grant certain rights to the Licensee in
the Products and Contracts and the Licensee wishes to accept such rights from
the Licensor,
NOW, THEREFORE, in consideration of the mutual covenants of the parties
which are hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
IT IS AGREED:
1. Grant of License. Upon the terms and subject to the conditions of this
Agreement, the Licensor grants to the Licensee, and the Licensee accepts from
the Licensor, an exclusive license
(the "License") to utilize the Products for manufacturers of automotive
vehicles, including, but not limited to, automobiles, buses, trucks and vans and
manufacturers of parts for automotive vehicles (collectively the "Automotive
Industry"). The Licensee acknowledges that the License is exclusive as to, and
limited to, the Automotive Industry. The Licensor acknowledges that during the
term of this Agreement it shall not grant licenses to others for the use of the
Products in the Automotive Industry in North America nor will it directly or
indirectly use the Products in the Automotive Industry in North America.
2. Assignment of Contracts. The Licensor hereby assigns, conveys and
transfers to the Licensee all of its rights pursuant to the Contracts. The
Licensee assumes and agrees to perform all of the Licensor's obligations
pursuant to the Contracts.
3. Other Business. The Licensee may engage in any other businesses without
restrictions as to type and location as long as any such business is not
competitive with any business of the Licensor and/or any other business
utilizing the Products.
4. Geographical Scope. The geographical scope of the License shall be
North America.
5. Term. The term of this Agreement shall commence as of the date hereof
and shall remain in force in perpetuity, subject to the terms of this Agreement,
and unless terminated pursuant to Article "13" of this Agreement.
6. Royalty. A. The Licensee shall pay a royalty (the "Royalty") to the
Licensor for the License of:
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(i) One Million Dollars ($1,000,000) of which One Hundred Thousand
Dollars ($100,000) shall be payable upon execution of this Agreement. Nine
Hundred Thousand Dollars shall be paid in monthly installments of ten (10%)
percent of the Licensee's Gross Revenues (as defined in Paragraph "B" of this
Article "6" of this Agreement). Said ten (10%) percent shall be in addition to
the forty (40%) percent specified in Subparagraph "(ii)" of this Paragraph "A"
of this Article "6" of this Agreement and shall be paid until an aggregate of
One Million Dollars ($1,000,000), including the One Hundred Thousand Dollars
($100,000) due and payable upon the execution hereof, has been paid; and
(ii) Forty (40%) percent of the Licensee's Gross Revenues payable
monthly.
B. The Licensee shall pay the Royalty within fifteen (15) days after
the end of each calendar month accompanied by a statement setting forth the
calculation of the Royalty. The Licensee shall provide the Licensor with such
other and further information with respect to the calculation of the Royalty as
the Licensor shall reasonably request. For purposes of this Agreement, "Gross
Revenues" shall mean monies actually received by the Licensee from use of the
Products with respect to the use and operation of the software licensed pursuant
to this Agreement; provided, however, that Gross Revenues shall not include
sales of, and fees for the installation of, computer hardware or other
equipment.
7. Records. The Licensee shall keep full and accurate records containing
all information reasonably required for
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verification of the Royalty. The Licensor, or its authorized agent, upon
reasonable notice, shall have the right to examine and audit relevant records
during normal business hours, but not more than once during each calendar
quarter for the purpose of determining whether it concurs with the Licensee's
calculation of its Gross Revenues and the Royalty. If the Licensor or its
designee believes that the Licensee has erroneously calculated its Gross
Revenues and/or Royalty then within sixty (60) days after the close of the
quarter being examined, the Licensor shall notify the Licensee of its findings
pursuant to Paragraph "C" of Article "17" of this Agreement, setting forth the
errors believed to have been made. The parties thereafter shall attempt to
mutually resolve any alleged errors within thirty (30) days after the
notification to the Licensee. If any alleged errors cannot be resolved within
such period of time, the parties agree to submit the resolution of any alleged
error to arbitration in accordance with Paragraph "D" of Article "17" of this
Agreement.
8. Reproduction and Modification of Products.
The Licensee may:
A. Use the Products to process information, and copy, record,
transcribe and compile the Products from one form to another and make
modifications, enhancements and other changes thereto; provided, however, that
any such modifications, enhancements and other changes shall be provided to the
Licensor, upon the Licensor's payment of one-half (1/2) of the cost of
developing and producing such modifications, enhancements and other
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changes which it desires to obtain.
B. Reproduce the Products, but all copies of the Products, in whole
or in part, shall contain all of the Licensor's restrictive and proprietary
notices in form and content as they appear on or in the Products provided to the
Licensee hereunder.
9. Maintenance Services. The Licensor agrees:
A. To correct, without charge, any errors on Products known to the
Licensor or reported to it as quickly as is possible, and, where prompt
correction is not reasonably feasible, to provide to the Licensee instructions
for allowing use of the Products pending correction of the error.
B. To provide to the Licensee all innovations, improvements,
upgrades, modifications, substitutions or replacement for, or enhanced versions
of the Products subsequently developed by the Licensor.
10. Support Services. During the term of this Agreement, the Licensor
shall only be required to provide such consultation, education and support
services to the Licensee as is mutually agreed upon by the Licensee and the
Licensor, and the parties agree to bargain in good faith with respect thereto.
11. Non-Use and Non-Disclosure of Confidential Information.
A. As used in this Agreement, "Confidential Information" means
information which is disclosed to the Licensee or known by the Licensee as a
result of or through this Agreement, and not generally known by the public about
the Products, including without limitation, all documentation and software
relating
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thereto, and all know how and technology required to use such manuals and
information and data in written, graphic and/or machine readable form, products,
processes and services, including information with respect to research,
development, inventions, manufacture, purchasing, accounting, engineering,
marketing, merchandising and selling regardless of whether patentable,
trademarkable or copyrightable, including, but not limited to, any information
acquired by the Licensee from any source prior to the commencement of this
Agreement.
B. Except as required in order to exploit the License, the Licensee
will not, during or after the term of this Agreement, directly or indirectly,
use any Confidential Information or disseminate or disclose any Confidential
Information to any person, firm, corporation, association or other entity except
in accordance with this Agreement. The foregoing prohibition shall not apply to
any Confidential Information which (i) becomes publicly available through no act
or omission of the Licensee, (ii) is disclosed as reasonably required in a
proceeding to enforce the Licensee's rights under this Agreement, (iii) is
disclosed as required by court order or as otherwise required by law, (iv) is or
becomes available to the Licensee from third parties who in making such
disclosure breach no confidentiality relationships, or (v) is intentionally
disclosed by the Licensor on an unrestricted basis to others not privy to this
Agreement.
C. Upon the termination of this Agreement, all documents, records,
notebooks and similar repositories of or containing
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Confidential Information, including copies thereof, then in the Licensee's
possession, whether prepared by it or others, will be delivered to the Licensor.
D. The Licensee will not assert any rights under or with respect to
any discoveries, concepts or ideas which relate to the Products, or any
improvements thereof or know-how related thereto, or claim any thereof as having
been made or acquired by it prior to this Agreement.
12. Proprietary Rights Indemnity.
A. The Licensor shall defend or settle at its own expense any claim
made against the Licensee or Automotive Industry manufacturer (the
"Indemnitees") that the use of the Products hereunder infringes any trademark,
service term, patent, copyright, trade secret or other proprietary right, and
shall indemnify the Indemnitees and hold them harmless against any final
judgment, including an award of attorneys' fees, that may be awarded by a court
of competent jurisdiction against the Indemnitees as a result of the foregoing;
provided, however, that the Indemnitees shall give the Licensor prompt written
notice of any such claim and shall provide the Licensor with all reasonable
cooperation and information in the Indemnitee's possession.
B. If a claim is made that the use of the Products under the License
infringes any trademark, servicemark, patent, copyright, trade secret or other
proprietary right, or if the Licensor believes that such a claim may exist, the
Licensor shall use its best efforts to procure for the Indemnitees the right to
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continue using the Products, or to modify the Products to make them
noninfringing but continuing to meet the specifications therefor, or to replace
the Products with noninfringing Products of like functionality that meet the
specifications for the Products. The choice of which alternative to pursue shall
be in the sole and absolute discretion of the Licensor. If none of the foregoing
alternatives is reasonably available to the Licensor, the Licensee may terminate
this License.
C. The provisions of this Article "12" shall survive the termination
of this Agreement.
13. Termination.
A. The Licensor may terminate this Agreement:
(i) if the Licensee defaults in any of its obligations under
Article "6" of this Agreement, unless within ten (10) calendar days after the
Licensee receives written notice of such default pursuant to Paragraph "C" of
Article "17" of this Agreement, Licensee cures the default;
(ii) if the Licensee defaults in any of its obligations under
this Agreement, unless within sixty (60) calendar days after the Licensee
receives written notice of such default pursuant to Paragraph "C" of Article
"17" of this Agreement, the Licensee cures the default, or, if there is a
default which cannot with due diligence be cured within sixty (60) calendar
days, the Licensee institutes within sixty (60) calendar days steps reasonably
necessary to remedy the default and thereafter diligently prosecutes the same to
completion:
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(iii) if the Licensee files a petition for protection as a
debtor under the bankruptcy laws;
(iv) if the Licensee makes an assignment for the benefit of
its creditors;
(v) if the Licensee consents to the appointment of, or
possession by, a custodian for the whole or any substantial part of its
property;
(vi) if the Licensee on a petition by a third party to subject
the Licensee as a debtor to the bankruptcy laws which is filed with or without
its consent, fails to have such petition dismissed within one hundred twenty
(120) days from the date that such petition is filed;
(vii) if the Licensee on a petition in bankruptcy filed
against it is adjudicated a bankrupt; or
(viii) if the Licensee files a petition or answer seeking
reorganization or similar aid or relief under the bankruptcy laws or any other
state or federal law for the relief of debtors or fails to deny in a timely
fashion, the material allegations of a petition filed against it for any such
relief; or
(ix) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing, with or without its consent, a custodian
for the whole or any substantial part of the Licensee's property, or approving a
petition filed against it seeking reorganization or arrangement under any
bankruptcy or insolvency laws or any other state or federal law for the relief
of debtors, and such order, judgment or decree shall not be vacated or
9
set aside or stayed within one hundred twenty (120) days from the date of entry
thereof; or
(x) if under the provisions of any other law for the relief of
debtors, any court of competent jurisdiction or a custodian shall assume custody
or control of the whole or any substantial part of the Licensee' s property,
with or without its consent, and such custody or control shall not be terminated
or stayed within one hundred twenty (120) days from the date of assumption of
such custody or control.
B. If there is a termination of this Agreement, the Licensor may:
(i) Require that the Licensee cease any further use of the
Products or any portion thereof;
(ii) Cease performance of all of the Licensor's obligations
hereunder without liability to the Licensee; and
(iii) Cancel the assignment of the Contracts with all rights
thereunder reverting to the Licensor.
C. The Licensor's foregoing rights and remedies shall be cumulative
and in addition to all other rights and remedies available to the Licensor in
law and equity.
14. Licensor's Representations and Warranties. The Licensor warrants and
represents that:
A. It is a corporation duly organized, validly existing and in good
standing under the laws of Delaware with all requisite power and authority to
carry on its business as presently conducted in all jurisdictions where
presently conducted, to enter into this
10
Agreement and to carry out the transactions which are contemplated herein.
B. The Licensor has full right, power and legal capacity to enter
into this Agreement and to consummate the transactions which are provided for
herein. The execution of this Agreement by the Licensor, and its delivery to the
Licensee, and the consummation of the transactions which are contemplated herein
have been duly approved and authorized by all necessary action by the Licensor's
Board of Directors and no further authorization shall be necessary on the part
of the Licensor for the performance and consummation by the Licensor of the
transactions which are contemplated by this Agreement.
C. The business and operations of the Licensor have been and are
being conducted in accordance with all applicable laws, rules and regulations of
all authorities which affect the Licensor or its properties, assets, businesses
or prospects. The performance of this Agreement shall not result in any breach
of, or constitute a default under, or result in the imposition of any lien or
encumbrance upon any property of the Licensor or cause an acceleration under any
arrangement, agreement or other instrument to which the Licensor is a party or
by which any of its assets is bound. The Licensor has performed all of its
obligations which are required to be performed by it pursuant to the terms of
any such agreement, contract or commitment.
D. All the contracts listed in Schedule "B" have been entered into
in the ordinary course of business and neither the
11
Licensor nor any other party to any such contract is in default under any such
contract. The Licensor is not a guarantor of payment or collection of any
obligation. The Licensor has not assigned any of its rights in the Contracts in
whole or in part.
E. The Licensor does not know or have any reason to believe that any
of the products or items developed, manufactured or sold by the Licensor, or any
of the processes, techniques, know how or designations used in its business,
infringes on any patents, trademarks or copyrights. The Licensor has the sole
and exclusive right to conduct the business it currently performs with respect
to the Products set forth on Schedule "A". The Licensor has not granted any
other right or license for use of any of the Products set forth on Schedule "A",
and does not know or have any reason to believe that there are any claims of
third parties to the use of any of the Products set forth on Schedule "A".
F. No representation or warranty of the Licensor which is contained
in this Agreement, or in a writing furnished or to be furnished pursuant to this
Agreement contains or shall contain any untrue statement of a material fact,
omits or shall omit to state any material fact which is required to make the
statements which are contained herein or therein, in the light of the
circumstances under which they were made, not misleading. There is no material
fact relating to the Products which would adversely affect same which has not
been disclosed to the Licensee.
G. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that the
12
Licensee knew or had reason to know that any covenant, representation or
warranty in this Agreement or furnished or to be furnished to the Licensee
contained untrue statements.
H. The Licensor is the sole and exclusive owner of the Products;
I. The Licensor has the right to license the Products as herein
licensed and to assign the Contracts as herein assigned;
J. The Licensor, in whole or in part, has not granted any other
right or license for use of the Products or assigned the Contracts. The Licensor
has not assigned any of its rights in the Contracts in whole or in part.
K. Neither the Products nor any significant part of any of them are
in the public domain; and
L. The Products conform in all material respects to the
specifications and documents set forth in Exhibit "A".
15. Licensee's Representations, Warranties and Covenants. The Licensee
represents and warrants to the Licensor and covenants, as follows:
A. The Licensee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with all requisite
power and authority to carry on its business as presently conducted, to enter
into this Agreement and to carry out the transactions which are contemplated
herein.
B. The Licensee has full right, power and legal capacity to enter
into this Agreement and to consummate the transactions which are provided for
herein. The execution of this Agreement by
13
the Licensee and its delivery to the Licensor, and the consummation by it of the
transactions which are contemplated herein have been duly approved and
authorized by all necessary action by its Board of Directors and no further
authorization shall be necessary on the part of the Licensee for the performance
and consummation by the Licensee of the transactions which are contemplated in
this Agreement.
C. The performance of this Agreement shall not result in any breach
of, or constitute a default under, or result in the imposition of any lien or
encumbrance upon any property of the Licensee or cause an acceleration under any
arrangement, agreement or other instrument to which the Licensee is a party or
by which any of its assets is bound.
D. The Licensee agrees to utilize its best efforts to promote and
utilize the License in accordance with the terms and conditions of this
Agreement.
E. No representation or warranty of the Licensee which is contained
in this Agreement, or in a writing furnished or to be furnished pursuant to this
Agreement, contains or shall contain any untrue statement of a material fact,
omits or shall omit to state any material fact which is required to make the
statements which are contained herein or therein, in the light of the
circumstances under which they were made, not misleading. There is no material
fact relating to the business, affairs, operations, conditions (financial or
otherwise) or prospects of the Licensee which would materially adversely affect
same which has not been disclosed to
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the Licensor.
F. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that the Licensor knew or
had reason to know that any covenant, representation or warranty in this
Agreement or furnished or to be furnished to the Licensor contained untrue
statements.
16. Survival. All covenants, agreements, representations and warranties
made in or in connection with this Agreement shall survive its termination, and
shall continue in full force and effect after its termination, it being
understood and agreed that each of such covenants, agreements, representations
and warranties is of the essence of this Agreement and the same shall be binding
upon and shall inure to the benefit of the parties hereto, their successors and
assigns.
17. Miscellaneous.
A. Headings. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
B. Enforceability. If any provision which is contained in this
Agreement should, for any reason, be held to be invalid or unenforceable in any
respect under the laws of any jurisdiction, such invalidity or unenforceability
shall not affect any other provision of this Agreement. Instead, this Agreement
shall be construed as if such invalid or unenforceable provisions had not been
contained herein.
C. Notices. Any notices or other communication required
15
or permitted hereunder shall be in writing and be given sufficiently if sent by
first class or certified mail, return receipt requested, postage prepaid
addressed as follows:
To the Licensor: IntelliSys Systems, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxxx
Copy to: Xxxxxx Beach Xxxxxx, LLP
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, Esq.
To the Licensee: IntelliSys Automotive Systems, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000-X
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx Michelin
Copy to: Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
or in each case to such other address as shall have last been furnished by like
notice. If mailing is impossible due to an absence of postal service, notice
shall be in writing and personally delivered to the aforesaid addresses. Each
notice or communication shall be deemed to have been given as of three (3) days
after the date so mailed or as of the date delivered, as the case may be.
D. Governing Law; Disputes. This Agreement shall in all respects be
construed, governed, applied and enforced under the internal laws of the State
of New York without giving effect to the principles of conflicts of law and be
deemed to be an agreement entered into in the State of New York and made under
the laws of the State of New York. The parties agree that they shall be deemed
to
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have agreed to binding arbitration in New York, New York for the entire subject
matter of any and all disputes relating to or arising under this Agreement. Any
such arbitration shall be conducted in New York, New York by under the rules
then obtaining of the American Arbitration Association in New York, New York. In
all arbitrations, judgment upon the arbitration award may be entered in any
court having jurisdiction. The parties specifically designate the Courts in the
City of New York and State of New York as properly having venue for any
proceeding to confirm and enter judgment upon any such arbitration award. The
parties hereby consent to and submit to personal jurisdiction over each of them
by the Courts of the State of New York in any action or proceeding, waive
personal service of any and all process and specifically consent that in any
such action or proceeding, any service of process may be effectuated upon any of
them by first class or certified mail, return receipt requested in accordance
with paragraph "C" of this Article "17" of this Agreement. The parties agree,
further, that the prevailing party in any such arbitration as determined by the
arbitrators shall be entitled to such costs and attorney's fees, if any, in
connection with such arbitration as may be awarded by the arbitrators; provided,
however, that if a proceeding is commenced to confirm and enter a judgment
thereon by the Courts of the State of New York and such application is denied,
no such costs or attorneys fees shall be paid. In connection with the
arbitrators' determination for this purpose of which party, if any, is the
prevailing party, they shall take into account all of the facts and
circumstances including, without
17
limitation, the relief sought, and by whom, and the relief, if any, awarded, and
to whom. In addition, and notwithstanding the foregoing sentence, a party shall
not be deemed to be the prevailing party unless the amount of the arbitration
award is greater than fifteen (15%) percent of the amount offered in writing by
the other party. For example, if the party initiating the arbitration ("A")
seeks an award of $100,000 plus costs and expenses, the other party ("B") has
offered A $50,000 prior to the commencement of the arbitration proceeding, and
the arbitration panel awards any amount less than $57,500 to A, the panel should
determine that B has "prevailed".
E. Entire Agreement. The parties have not made any representations,
warranties, or covenants about the subject matter hereof which is not set forth
herein, and this Agreement, together with any instruments executed
simultaneously herewith, constitutes the entire Agreement between them about the
subject matter hereof. All understandings and agreements heretofore had between
the parties about the subject matter hereof are merged in this Agreement and any
such instrument which alone fully and completely expresses their Agreement.
F. Modification. This Agreement may not be changed, modified,
extended, terminated or discharged orally, but only by an
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Agreement in writing, which is signed by all of the parties to this Agreement.
G. Effect. The Parties agree to execute any and all such other and
further instruments and documents, and to take any and all such further actions
which are reasonably required to effectuate this Agreement and the intents and
purposes hereof.
H. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their successors and assigns.
I. Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver of any
other or subsequent breach.
J. Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be
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deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused these presents to be signed by
their duly authorized officers, as of the day, month and year first above
written.
Attest: IntelliSys Systems, Inc.
/s/[SIGNATURE ILLEGIBLE] By: /s/[SIGNATURE ILLEGIBLE]
10-2-95 ---------------------------
Name:
Title:
Attest: IntelliSys Automotive Systems, Inc.
/s/[SIGNATURE ILLEGIBLE] By: /s/Xxxxxxxx X. Xxxxxxxxx
10-2-95 ---------------------------
Name:
Title: President
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Schedule A
The Products
A. Software
1. RT/AI Agentware(R)
2. RT/AI NexGen(tm)
3. RT/AI XXXX(tm)
4. RT/AI AddA(tm)
5. RT/AI Adapt(tm)
6. RT/AI Agility(tm)
7. RT/AI InfoView(tm)
B. Documentation
All manuals associated with the above.
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Schedule "B"
The Contracts
XXXXX Blanket Purchase Order SB102061-9402
IPAS Purchase Order 1523
Ford Motor Company Purchase Order 75-2-R34313
XXXXX Purchase Order 40554
IPAS Purchase Order 4890
Ford Procurement Number B7 1P095-052341
All contracts arising under the following proposals outstanding:
IAS PROPOSALS
-------------
Xxxx Xxxxxxxx Transmission Axle Assembly 113,498.00
Ford Windsor Casting Crankshaft 68,500.00
Chrysler Kenosha Engine Pin Stamp 145,000.00
Ford Romeo Engine Piston Sub-Assem 233,000.00
Ford Romeo Engine Snap Ring 105,952.00
Ford Essex Engine Crank AddA 55,000.00
Ford Essex Engine RF AddA 55,000.00
Ford Romeo Engine C312 123,200.00
