Exhibit 4.6
On August 11, 2005 BVR entered into a
cooperation agreement with MLM a division of Israel Aircraft Industries Ltd.
(“IAI” or “MLM”).
The parties agreed in the agreement
to cooperate as follows:
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1.1 |
As
to the ▇▇▇▇ System the parties shall cooperate in one of the following two arrangements: |
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1.1.1 |
Royalties
Arrangement: |
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(a) |
The
leading party shall have the exclusive right to act in designated
territories, as agreed between the parties. The leading party, at its sole
discretion, may decide not to cooperate with the other party in a project
to be performed in said territories. The non-leading party shall not
compete with the leading party, during the term of this Agreement, whether
directly or indirectly, alone or in cooperation with third parties
(including by way of assistance to a competing entity) in all matters
relating to the ▇▇▇▇ System, in said territories. |
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(b) |
The
leading party shall pay royalties to the other party at a rate of 5% of the
total consideration. The royalties shall be paid back-to-back and pro rata
to the intakes received by the leading party from its customer. |
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1.1.2 |
Cooperation
Arrangement: |
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(a) |
The
leading party shall be responsible for the integration of the parties’ proposals
and for the management of the joint proposal, including its submission to
the customer, the negotiation with the customer, the execution of a prime
contract and the prime contracting. All activities related to the
preparation of the joint proposal shall be performed in full transparency
to the non-leading party. |
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(b) |
The
parties have agreed upon who shall act as prime contractor and who shall act
as subcontractor in certain territories. |
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(c) |
Each
party shall prepare the proposal relating to its part of the project. |
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(d) |
The
price proposal shall include all costs plus a net profit of a certain agreed
percentage. The prime contractor shall be entitled to load a certain
agreed percentage to the price of the subcontractor proposal, as well as
the joint costs relating to the project. |
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(e) |
The
integration of the parties proposals shall be performed by the prime
contractor, in coordination with the other party. A copy of the proposal
submitted to the customer shall be transferred to the subcontractor
immediately upon such submission. |
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(f) |
In
the event that the price agreed upon with the customer shall be higher than
the price of the joint proposal, the difference shall be equally shared by
the parties. |
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(g) |
Each
party shall bear its expenses associated with the preparation of the
proposal. |
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(h) |
The
terms of the prime contract with the customer shall be transferred to the
subcontractor by the prime contractor immediately upon its receipt by the
prime contractor. The parties shall jointly prepare their comments to the
customer. |
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(i) |
Within
21 days from the execution of a prime contract with the customer the
parties shall enter into a subcontracting agreement on terms that will
flow down from the prime contract with the customer, with the applicable
changes. |
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1.2 |
The
royalties arrangement shall apply in territories not specifically mentioned and agreed
upon between the parties. In each such territory, the parties shall agree who shall act
as the prime contractor, based on an equal division of potential scope of business in
such territories . |
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1.3 |
In
the event that an aircraft manufacturer would like to supply an ▇▇▇▇ System as part of a
comprehensive transaction for the sale of an aircraft and its systems the parties shall
act as follows: |
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(a) |
shall
make effort that the focal point and the prime contractor to the aircraft
manufacturer shall be the leading party in such territory, as set out in
the Agreement; |
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(b) |
if
the parties are unsuccessful in their effort in (a) above, the parties shall
revise the arrangement with respect to the specific sale and the leading
party shall pay the party originally designated to be the non-leading
party increased royalties at the rate of 8.5%. |
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1.4.2 |
R/C
– an exclusive agreement of BVR for a simulation system in a specific country (the
“Specific Country”); LDN – an exclusive agreement of MLM for Situation
Awareness System in the Specific Country. |
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1.4.3 |
In
the event that either party shall sign an agreement for the sale of options and/or
derivatives and/or additions and/or maintenance for its project, the following royalties
arrangement shall apply: |
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(a) |
The
party signing an agreement shall be obligated to pay the other party
royalties at the rate of 5% of the total consideration in the following
manner: 2.5% of the total consideration shall be paid upon receipt of the
advance payment from the customer and the additional 2.5% shall be paid
within 12 months from the date of execution of the agreement with the
customer. |
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(b) |
BVR
shall make its best efforts to transfer to MLM, in a subcontract, scope of work
in the R/C project. |
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1.4.4 |
It
is agreed that MLM will not be entitled, during the term of this Agreement, to market
and/or sale a R/C project in the Specific Country, whether directly or indirectly
(including through assistance to a competing entity). |
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1.4.5 |
It
is agreed that BVR will not be entitled, during the term of this Agreement, to market
and/or sale a LDN project in the Specific Country, whether directly or indirectly
(including through assistance to a competing entity). |
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The
NCMI is a system installed on naval vessels. |
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As
to NCMI projects the parties shall act as follows: |
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(a) |
Within
a reasonable time after the execution of this Agreement, BVR shall provide
MLM with its existing NCMI infrastructure as a technological base in order
to enable MLM to continue the development of the NCMI system, to submit
proposals and to enter into agreements for the sale and/or modification of
NCMI systems. BVR undertakes to continue the maintenance of its
infrastructure as part of BVR’s scope of work in such agreements,
including but not limited to the update of software as a result of
projects performed (including projects performed exclusively by BVR), in
consideration for royalties at the rate of 4% of the consideration of any
agreement entered into between MLM and a customer. |
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(b) |
BVR
shall grant MLM a non transferable license, for the term of the Agreement,
at no additional cost, to use the BVR NCMI infrastructure, in certain
agreed territories. This license grant is conditioned upon BVR performing
up to 30% of the scope of work as a subcontract to MLM for NCMI projects. |
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(c) |
The
cooperation arrangement detailed in Section 1.1.2 above shall apply to NCMI
projects, with the following changes:
The total consideration shall be
divided between the parties as follows: 70% to the prime contractor and
30% to the other party. In the event the prime contractor, at its sole
discretion, resolved not to subcontract work to the other party at the
rate of 30%, the prime contractor shall compensate the other party at a
rate of 1% of the total consideration for each 4% of the total
consideration not subcontracted to the other party. In any event the scope
of work of the subcontractor shall not be less than 14% of the total
consideration. |
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3. |
Electronic
Warfare Training Range |
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In
agreements for the supply of Electronic Warfare Training Ranges in specific agreed
territories MLM shall serve as the prime contractor and shall enter into a subcontracting
agreement with BVR, such that MLM as prime contractor shall have 70% of the scope of work
and BVR shall have 30% of the scope of work. |
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4. |
Both
parties hereby waive any claim and/or demand against each other relating to the
period prior to December 31, 2004. |
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5. |
This
Agreement is valid for ten years. |
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6. |
This
Agreement replaces any prior agreements and/or understandings between the
parties relating to the subject matters hereof. |