Exhibit 10.2
 
Execution Copy
 
LICENSE AGREEMENT
 
This License Agreement (the “AGREEMENT”) is made and executed effective this
28th day of July, 2008 (“EFFECTIVE DATE”), by and among HONEYWELL INTERNATIONAL
INC., a Delaware corporation, acting through its HONEYWELL INTELLECTUAL PROPERTY
INTERNATIONAL business unit (hereinafter “HONEYWELL”) and B/E Aerospace, Inc., a
Delaware corporation (“LICENSEE” and together with HONEYWELL, the “PARTIES” and
each a “PARTY”).
 
RECITALS
 
WHEREAS, HONEYWELL is now and has been engaged in the BUSINESS (as defined
below);
 
WHEREAS, the PARTIES have entered into that certain STOCK AND ASSET PURCHASE
AGREEMENT dated June 9, 2008 (“APA”) pursuant to which HONEYWELL has sold to
LICENSEE certain assets related to the BUSINESS;
 
WHEREAS, HONEYWELL owns certain technical information, know-how, business data
and intellectual property rights as more particularly described below that will
not be sold to LICENSEE but that are related to the BUSINESS which it desires to
license to LICENSEE;
 
WHEREAS, the PARTIES, simultaneously herewith, are entering into a Supply
Agreement dated as of the EFFECTIVE DATE (the “SUPPLY AGREEMENT”), pursuant to
which LICENSEE will have manufactured and sell the LICENSED PRODUCTS (as defined
below) to HONEYWELL using such technical information, know-how, business data
and intellectual property rights related to the BUSINESS and owned by HONEYWELL
as more particularly described below; and
 
WHEREAS, LICENSEE desires to obtain a license from HONEYWELL to such technical
information, know-how, business data and intellectual property rights to have
manufactured, sell, have sold, import and distribute certain proprietary
parts (“PARTS”) related to the BUSINESS.
 
NOW, THEREFORE, for and in consideration of the mutual covenants and agreement
of the PARTIES and the faithful performance thereof, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
PARTIES hereto agree as follows:
 
ARTICLE 1.
DEFINITIONS
 
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth below:
 
1.1.
“AFFILIATES” shall mean with respect to a PARTY, an entity that is controlling,
controlled by or under common control with the PARTY; and “control” means
(a) having the right to elect a majority of the directors, or (b) in the case of
an entity that does not have directors, (i) having the right to elect or appoint
a majority of the persons performing functions similar to directors, or (ii) by
contract or otherwise having the right to control the management, policies and
direction of the entity.

 

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1.2.
“BUSINESS” shall have the meaning assigned to it in the APA.

 
1.3.
“EXCLUSIVE LICENSED PRODUCTS” shall mean, individually and collectively, the
EXISTING EXCLUSIVE LICENSED PRODUCTS and any NEW LICENSED PRODUCTS.

 
1.4.
“EXISTING EXCLUSIVE LICENSED PRODUCTS” shall mean those PARTS identified on
EXHIBIT B, as such exhibit may be amended by mutual agreement of the PARTIES.

 
1.5.
“EXISTING NON-EXCLUSIVE LICENSED PRODUCTS” shall mean those PARTS identified on
EXHIBIT C, as such exhibit may be amended by mutual agreement of the PARTIES.

 
1.6.
“FORCE MAJEURE” shall mean that neither PARTY shall be in default for any delay
or failure to perform hereunder due to causes beyond its control despite the
exercise of all commercially reasonable efforts, and without its fault or
negligence; provided, that any delay or failure to perform caused by the default
of a supplier of LICENSEE at any lower-tier shall be excused only if (a) it is
beyond the control of both LICENSEE and such supplier and without the fault or
negligence of either, (b) the parts to be furnished are not attainable from
other sources in sufficient time to permit LICENSEE to meet the delivery
schedule, and (c) LICENSEE furnishes prompt written notice to HONEYWELL of the
occurrence of any such cause that will or may delay LICENSEE’S performance; and
that no delay or failure to perform shall be excused if it is caused by a labor
strike, stoppage, slow-down or other labor dispute.  If delivery of any item is
delayed by any excusable delay for more than forty-five (45) days, HONEYWELL may
exercise any of its remedies in accordance with this AGREEMENT.

 
1.7.
“GROSS REVENUES” shall mean the gross revenues invoiced by and/or received by
LICENSEE or its AFFILIATES or RESELLERS during the TERM for sales of the THIRD
PARTY LICENSED PRODUCTS that are NEW LICENSED PRODUCTS.  GROSS REVENUES shall
not include any revenues received by LICENSEE (or any of its AFFILIATES or
RESELLERS) from transactions with its AFFILIATES where the NEW LICENSED PRODUCTS
in question will be resold to an independent third party purchaser by the
AFFILIATE and where the revenue received by the AFFILIATE from such sale is
included in GROSS REVENUES.  GROSS REVENUES received by LICENSEE (or any of its
AFFILIATES or RESELLERS) from transactions with an AFFILIATE of LICENSEE, where
the NEW LICENSED PRODUCTS in question are used by the AFFILIATE solely for such
AFFILIATE’S internal purposes, shall also be included in GROSS REVENUES at a
price equal to the fair market value of such transfer(s).

 
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1.8.
“HONEYWELL EXCLUSIVE PERIOD” shall mean the period of time commencing with the
EFFECTIVE DATE and terminating upon the first to occur of:  (a) the expiration
or termination of the SUPPLY AGREEMENT, or (b) the termination or suspension of
any exclusivity period granted to LICENSEE under the SUPPLY AGREEMENT (subject
to LICENSEE’S right to have any suspended exclusivity reinstated pursuant to the
terms and conditions of the SUPPLY AGREEMENT, in which case the HONEYWELL
EXCLUSIVE PERIOD shall also be reinstated).

 
1.9.
“HONEYWELL LICENSED PRODUCTS” shall mean the EXISTING EXCLUSIVE LICENSED
PRODUCTS, EXISTING NON-EXCLUSIVE LICENSED PRODUCTS and NEW LICENSED PRODUCTS to
be manufactured for HONEYWELL pursuant to this AGREEMENT and the SUPPLY
AGREEMENT.  A current list of such HONEYWELL LICENSED PRODUCTS is attached
hereto as EXHIBIT D, as such exhibit may be revised, updated and/or amended from
time to time by the PARTIES during the TERM in accordance with Section 14.6 or
the SUPPLY AGREEMENT.

 
1.10.
“IMPROVEMENTS” shall mean, individually and collectively, all discoveries,
inventions, know-how, techniques, methodologies, modifications, improvements,
works of authorship, designs and data and all proprietary rights therein or
associated therewith (whether or not protectable under patent, copyright, trade
secrecy or similar laws) relating to additions, enhancements, updates,
alterations, modifications, derivative works or other changes to any TECHNOLOGY
or to any of the LICENSED PRODUCTS made by or on behalf of HONEYWELL
or LICENSEE.

 
1.11.
“INTELLECTUAL PROPERTY RIGHTS” shall mean all rights in, arising out of, or
associated with:  (a) published and unpublished works of authorship, including
without limitation audiovisual works, collective works, software, compilations,
databases, derivative works, literary works, mask works, and sound recordings,
including without limitation rights granted under the United States Copyright
Act or similar foreign acts, (b) inventions and discoveries, whether or not
patentable, including without limitation articles of manufacture, designs,
business methods, compositions of matter, improvements, know-how, machines,
methods, and processes and new uses for any of the preceding items, including
without limitation rights granted under the United States Patent Act or similar
foreign acts, (c) CONFIDENTIAL INFORMATION, including without limitation rights
granted under the Uniform Trade Secrets Act or any applicable state or foreign
statute, and (d) rights of attribution and integrity and other moral rights of
an author.

 
1.12.
“LICENSED PRODUCTS” shall mean, individually and collectively, the EXCLUSIVE
LICENSED PRODUCTS and the EXISTING NON-EXCLUSIVE LICENSED PRODUCTS.

 
1.13.
“NEW LICENSED PRODUCTS” shall mean PARTS (other than the EXISTING EXCLUSIVE
LICENSED PRODUCTS or the EXISTING NON-EXCLUSIVE LICENSED PRODUCTS) for new
products or for new product applications (a) that (i) are based on or otherwise
use any or all of the TECHNOLOGY (including any IMPROVEMENTS) or INTELLECTUAL
PROPERTY RIGHTS therein, or (ii) absent the licenses granted herein, would
infringe or misappropriate any INTELLECTUAL PROPERTY RIGHTS of HONEYWELL, and
(b) that are consistent with the type of products sold through, by or on behalf
of the BUSINESS as of the EFFECTIVE DATE.  NEW LICENSED PRODUCTS will
automatically be added to EXHIBIT F unless otherwise agreed to by both PARTIES.

 
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1.14.
“PERSON” means any individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization or
entity, and any government or department, agency or political subdivision
thereof.

 
1.15.
“PRE-EXISTING  AGREEMENTS” shall mean all license agreements and distribution
agreements between HONEYWELL and any third party in effect prior to the
EFFECTIVE DATE pursuant to which HONEYWELL has granted to such third party a
license or distribution right to the EXISTING NON-EXCLUSIVE LICENSED PRODUCTS,
and such agreements are identified on EXHIBIT G.  In the event that HONEYWELL
becomes aware of any other pre-existing license or distribution agreement that
it inadvertently failed to schedule on EXHIBIT G, it will promptly notify
LICENSEE and amend EXHIBIT G accordingly and HONEYWELL will have no liability to
LICENSEE with respect to any inadvertent failure to schedule any such agreement.

 
1.16.
“QUALIFYING CHANGE IN CONTROL” shall be deemed to occur when (a) with respect to
LICENSEE, any transaction or series of related transactions occurs in which a
QUALIFYING ENTITY would acquire, directly or indirectly, including pursuant to a
sale of assets, tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction,
more than fifty percent (50%) of the outstanding voting securities of LICENSEE
or all or substantially all of the assets of LICENSEE, or (b) assignment or
transfer is made by LICENSEE pursuant to Section 14.5 of this AGREEMENT to a
QUALIFYING ENTITY.  LICENSEE will provide HONEYWELL with written notice of any
QUALIFYING CHANGE OF CONTROL no later than five (5) days after the date that any
binding agreement is executed in respect of any such QUALIFYING CHANGE IN
CONTROL.

 
1.17.
“QUALIFYING ENTITY” means any entity listed in EXHIBIT H.

 
1.18.
“REGULATORY AUTHORITY” shall mean any national, supra-national, regional, state
or local regulatory agency, department, bureau, commission, council or other
governmental entity, including the Federal Aviation Administration (“FAA”) or
any comparable foreign regulatory authority.

 
1.19.
“RESELLER” shall mean a third party appointed by LICENSEE to distribute the
LICENSED PRODUCTS directly to end users, subject to the terms and conditions
imposed by this AGREEMENT.

 
1.20.
“TECHNOLOGY” shall mean certain information, data, know-how, trade secrets,
inventions, designs, drawings, specifications, manuals, and software (including
source and object code) described on EXHIBIT A existing within HONEYWELL’S
Aerospace division as of the EFFECTIVE DATE and related primarily to the
manufacture of the LICENSED PRODUCTS, and all INTELLECTUAL PROPERTY RIGHTS
therein.

 
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1.21.
“TERM” shall have the meaning assigned to it in Section 11.1.

 
1.22.
“TERRITORY” shall mean the world.

 
1.23.
“THIRD PARTY EXCLUSIVE PERIOD” shall mean the period of time commencing with the
EFFECTIVE DATE and terminating thirty (30) years after the EFFECTIVE DATE.

 
1.24.
“THIRD PARTY LICENSED PRODUCTS” shall mean the EXISTING EXCLUSIVE LICENSED
PRODUCTS, EXISTING NON-EXCLUSIVE LICENSED PRODUCTS and NEW LICENSED PRODUCTS
manufactured by or on behalf of LICENSEE for a third party pursuant to this
AGREEMENT.  A list of such THIRD PARTY LICENSED PRODUCTS is attached hereto as
EXHIBIT E, as such exhibit may be revised, updated and/or amended from time to
time by the PARTIES during the TERM in accordance with Section 14.6.

 
ARTICLE 2.
GRANT OF LICENSE
 
2.1.
License Grant. For good and valuable consideration, including, without
limitation, the consideration paid by LICENSEE to HONEYWELL pursuant to the APA,
and subject to LICENSEE’S compliance with the terms and conditions of this
AGREEMENT, HONEYWELL hereby grants to LICENSEE, and LICENSEE hereby accepts, the
following:

 
 
(a)
a non-transferable and non-assignable (except as provided in Section 14.5),
exclusive license, without the right to sublicense, within the TERRITORY (i) to
use the TECHNOLOGY to have manufactured, sell, have sold, import and distribute
the EXCLUSIVE LICENSED PRODUCTS, and (ii) to use, reproduce, copy, prepare
derivative works and otherwise revise and modify the TECHNOLOGY to generate
IMPROVEMENTS solely for the manufacture and support of the EXCLUSIVE LICENSED
PRODUCTS, subject to the provisions of Section 3.4; and

 
 
(b)
a non-transferable and non-assignable (except as provided in Section 14.5),
exclusive license (subject to the PRE-EXISTING AGREEMENTS), without the right to
sublicense, within the TERRITORY (i) to use the TECHNOLOGY to have manufactured,
sell, have sold, import and distribute the EXISTING NON-EXCLUSIVE LICENSED
PRODUCTS; and (ii) use, reproduce, copy, prepare derivative works and otherwise
revise and modify the TECHNOLOGY to generate IMPROVEMENTS solely for the
manufacture and support of the EXISTING NON-EXCLUSIVE LICENSED PRODUCTS, subject
to the provisions of Section 3.4.  For the avoidance of doubt, the foregoing
license is exclusive, subject only to the PRE-EXISTING AGREEMENTS and
accordingly,

 
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HONEYWELL agrees not to (A) grant any new licenses to use the TECHNOLOGY in
connection with the EXISTING NON-EXCLUSIVE LICENSED PRODUCTS to any PERSON, and
(B) during the HONEYWELL EXCLUSIVE PERIOD, use the TECHNOLOGY itself in
connection with the EXISTING NON-EXCLUSIVE LICENSED PRODUCTS.  HONEYWELL further
agrees not to grant any renewal of, extend the term of or expand any of the
rights granted in, the PRE-EXISTING AGREEMENTS, unless otherwise requested by
LICENSEE; and
 
 
(c)
a non-transferable and non-assignable (except as provided in Section 14.5),
non-exclusive license, without the right to sublicense, within the TERRITORY to
access the data and specifications described on EXHIBIT A (which data and
specifications are included in the TECHNOLOGY for purposes of this AGREEMENT)
for the sole purpose of exercising LICENSEE’S right set forth in
Section 2.1(a)(i) and (b)(i) above provided that LICENSEE complies and continues
to comply at all times during the TERM with HONEYWELL’S requirements, procedures
and certifications reasonably required by HONEYWELL for access to such
TECHNOLOGY.  The PARTIES agree to work together in good faith to promptly
establish the foregoing access rights for LICENSEE.  Nothing in this AGREEMENT
shall prohibit or limit HONEYWELL’S ability to update or modify (including
substituting alternate applications) the applications set forth on EXHIBIT A,
Part II, provided that any such update or modification shall still allow
LICENSEE to access the data and specifications included in the TECHNOLOGY
licensed to LICENSEE hereunder.  LICENSEE will be responsible, at its sole cost
and expense, for obtaining and maintaining any third party hardware or software
that is necessary to access such data and specifications.

 
2.2.
Exclusivity.

 
 
(a)
Exclusive Periods.  The licenses granted in Sections 2.1(a) and 2.1(b) shall be
exclusive (i) with respect to the HONEYWELL LICENSED PRODUCTS, until the
expiration of the HONEYWELL EXCLUSIVE PERIOD, […***…].

 
 
(b)
[…***…]

 

 
 
 
***CONFIDENTIAL TREATMENT REQUESTED
 
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[…***…]

2.3.
Third Party Negotiations.   Notwithstanding anything to the contrary herein,
commencing […***…] of the HONEYWELL EXCLUSIVE PERIOD, […***…] in connection with
the manufacture, sale, import and distribution of EXCLUSIVE LICENSED PRODUCTS in
the TERRITORY; provided that no rights granted in such agreements with third
parties shall be effective prior to the expiration of the HONEYWELL EXCLUSIVE
PERIOD.

 
ARTICLE 3.
OWNERSHIP
 
3.1.
Ownership. Notwithstanding anything contained in this AGREEMENT to the contrary,
HONEYWELL shall retain all ownership rights (including all INTELLECTUAL PROPERTY
RIGHTS) in and to the TECHNOLOGY, including all IMPROVEMENTS thereto and all
rights not expressly granted to LICENSEE hereunder are reserved to HONEYWELL,
including but not limited to the rights to:  (a) enforce the TECHNOLOGY against
third parties and collect damages awarded in any such enforcement action or
settlement thereof, except as otherwise provided in Article 9 hereof, (b) use or
grant licenses to the TECHNOLOGY to manufacture, have manufactured, sell, have
sold, import and distribute products other than the LICENSED PRODUCTS, and
(c) prosecute patents (or register or apply to register for any other
INTELLECTUAL PROPERTY RIGHTS) in respect of the TECHNOLOGY.  From and after the
EFFECTIVE DATE, HONEYWELL will use commercially reasonable efforts, at its
expense, to (i) prosecute and maintain any registrations or applications issued
by, filed with, or recorded by, any REGULATORY AUTHORITY with respect to the
TECHNOLOGY, and (ii) to maintain the confidentiality of all CONFIDENTIAL
INFORMATION within the TECHNOLOGY.  In the event of a breach of the foregoing
(ii), HONEYWELL shall (A) use reasonable best efforts to cure such unauthorized
disclosure of CONFIDENTIAL INFORMATION, and (B) take all reasonable precautions
to prevent any such unauthorized disclosure in the future.  For the avoidance of
doubt, HONEYWELL will not be obligated to prosecute any new registrations or
applications before any REGULATORY AUTHORITY with respect to the
TECHNOLOGY.  However, in the event HONEYWELL elects to prosecute any new
registrations or applications before any REGULATORY AUTHORITY with respect to
the TECHNOLOGY, it will use commercially reasonable efforts to prosecute and
maintain such new registrations or applications.

 
3.2.
HONEYWELL Covenant to LICENSEE. Subject to the terms and conditions of this
AGREEMENT, HONEYWELL covenants to LICENSEE not to assert any claims against
LICENSEE, its RESELLERS, its manufacturers, suppliers or customers for
infringement of any patent or other INTELLECTUAL PROPERTY RIGHTS of HONEYWELL’S,
where such infringement results from or arises out of (a) LICENSEE having made,
using, offering to sell, selling, exporting, importing or otherwise disposing of
LICENSED

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED
 
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PRODUCTS in accordance with the terms and conditions of this AGREEMENT, or
(b) LICENSEE’S marketing or advertising activities with respect to LICENSED
PRODUCTS in accordance with the terms and conditions of this AGREEMENT.
 
3.3.
Covenant Restrictions.

 
 
(a)
Inadvertent Assertion.  The covenant set forth in Section 3.2 will not be deemed
breached if HONEYWELL asserts a claim or sues without actual knowledge that the
products that are the subject of such assertion are LICENSED PRODUCTS and are
subject to this AGREEMENT, provided that HONEYWELL promptly retracts its
assertion and/or dismisses any claim in any such lawsuit to the extent that
LICENSEE reasonably demonstrates by written documentation that the covenant
applies to such claim.

 
 
(b)
Limited Scope of Covenants.  Except as expressly provided herein, the covenant
set forth in Section 3.2 above does not extend to the making, having made,
using, offering to sell, selling, exporting, importing or otherwise disposing of
products, unless such products are LICENSED PRODUCTS provided by or on behalf of
LICENSEE in accordance with the terms and conditions of this AGREEMENT.

 
 
(c)
No Effect On Present NDAs.  The covenant set forth in Section 3.2 above is not
intended to, and does not, amend, supersede or otherwise affect the PARTIES’
rights and duties under any non-disclosure agreements and confidential
disclosure agreements between them that are in force on the EFFECTIVE DATE.

 
 
(d)
Survival of Covenant.  Notwithstanding anything in this AGREEMENT to the
contrary, the covenant set forth in Section 3.2 shall survive any assignment of
this AGREEMENT and shall apply to any subsequent purchaser or assignee of any
INTELLECTUAL PROPERTY RIGHTS of HONEYWELL but shall apply only with respect to
the INTELLECTUAL PROPERTY RIGHTS of HONEYWELL acquired by such purchaser or
assignee.

 
3.4.
Improvements. Any IMPROVEMENTS to any TECHNOLOGY or to any of the LICENSED
PRODUCTS conceived or created or reduced to practice or fixed in a tangible
medium of expression during the TERM by:  (a) one or more REPRESENTATIVES of
LICENSEE (or its AFFILIATES) (“LICENSEE IMPROVEMENTS”), or (b) one or more
employees, consultants or sublicensees of HONEYWELL (or its AFFILIATES) will be
the sole and exclusive property of HONEYWELL (“HONEYWELL IMPROVEMENTS”).  In the
case of LICENSEE IMPROVEMENTS, LICENSEE shall and does hereby, irrevocably and
unconditionally assign to HONEYWELL all right, title and interest in and to such
LICENSEE IMPROVEMENTS.  LICENSEE will, without further consideration, take such
further action and execute and deliver such further instruments in order to vest
in HONEYWELL ownership of the LICENSEE IMPROVEMENTS.  For purposes of this
AGREEMENT, all LICENSEE IMPROVEMENTS, and any HONEYWELL IMPROVEMENTS having
application solely to the LICENSED PRODUCTS, will be automatically, and without
further action on the part of LICENSEE, included in the definition of TECHNOLOGY
and HONEYWELL hereby licenses such IMPROVEMENTS to LICENSEE in accordance with
the terms and conditions set forth in Sections 2.1(a) and (b), as
applicable.  LICENSEE hereby agrees that it shall not prosecute any patents
related to the IMPROVEMENTS.

 
 
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3.5.
Prior Approval. Any LICENSEE IMPROVEMENTS must be reviewed and expressly
approved in writing by HONEYWELL prior to reducing the IMPROVEMENT to practice;
and/or using or incorporating the IMPROVEMENT in or in connection with any
LICENSED PRODUCT.

 
3.6.
Technology Transfer. HONEYWELL shall transfer or provide access to, as
applicable, the TECHNOLOGY to LICENSEE as soon as practical after the EFFECTIVE
DATE and provide related technical transfer assistance as more fully set forth
in the TRANSITION SERVICES AGREEMENT between the PARTIES dated of even date
herewith.

 

 
ARTICLE 4.
ROYALTIES
 
[…***…]

***CONFIDENTIAL TREATMENT REQUESTED

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[…***…]

ARTICLE 5.
REPORTS AND RECORDS
 
5.1.
Reports.  LICENSEE shall, together with each payment of ROYALTIES, furnish
HONEYWELL with a written report setting forth the following with respect to the
period covered by such report: […***…]

 
5.2.
Recordkeeping.  LICENSEE shall maintain complete and accurate books of account
and records containing all financial information relating to the ROYALTIES and
all other amounts due and payable to HONEYWELL under this AGREEMENT.  Such books
and records shall be maintained at LICENSEE’S principal place of business, or at
such other office as LICENSEE shall notify HONEYWELL.

 

ARTICLE 6.
RIGHT TO AUDIT FACILITY AND RECORDS
 
6.1.
Audit and Inspection.  HONEYWELL, or its duly authorized agents, has the right
upon reasonable notice and during normal business hours during the TERM of this
AGREEMENT to visit LICENSEE and its AFFILIATES and RESELLERS and have

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED

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reasonable access to the inside and outside of LICENSEE’S and its AFFILIATES’
and RESELLERS’ facilities solely for the purpose of inspecting, observing and
evaluating LICENSEE’S and its AFFILIATES’ and RESELLERS’ total performance under
this AGREEMENT, including:  (a) compliance with all provisions of this
AGREEMENT, (b) any noncompliance with the provisions of this AGREEMENT,
(c) possession, access and control of HONEYWELL CONFIDENTIAL INFORMATION,
(d) adherence to HONEYWELL’S quality assurance requirements including inspection
inventory of the LICENSED PRODUCTS, work-in-process, raw materials to be used
for any LICENSED PRODUCTS, production records, quality manuals and such other
matters as may be pertinent to proper quality assurance of any LICENSED
PRODUCTS, (e) books, records, people and reports to determine compliance with
the terms of this AGREEMENT, (f) observing the manner and method of operating
under this AGREEMENT, and (g) unauthorized access, use and control of HONEYWELL
CONFIDENTIAL INFORMATION; provided, that HONEYWELL conducts the inspection,
observation and evaluation in a manner that protects LICENSEE’S CONFIDENTIAL
INFORMATION and does not disrupt LICENSEE’S operation of its business, including
without limitation, abiding by LICENSEE’S reasonable procedures and policies
regarding confidential information and execution of confidentiality agreements.
 
6.2.
Notice. Inspections shall occur no more than once per year and will take place
no earlier […***…] after HONEYWELL notifies LICENSEE of HONEYWELL’S intent to
conduct a facility audit provided, however, that HONEYWELL may carry out such
inspection more than once per year if HONEYWELL reasonably believes that
LICENSEE is not in compliance with LICENSEE’S obligations under this AGREEMENT.

 
6.3.
Reporting. LICENSEE will comply with the audit reporting requirements set forth
in Article 5 “Reports and Records” of this AGREEMENT.

 
6.4.
Corrective Action.  LICENSEE shall use its commercially reasonable efforts to
(a) immediately take such action as is required to correct any material
deficiencies identified by HONEYWELL relating to the production of any LICENSED
PRODUCTS, and (b) correct any non-material deficiencies identified by HONEYWELL
relating to the production of any LICENSED PRODUCTS in a timely
manner.  LICENSEE further agrees to use commercially reasonable efforts to
provide such documentation or conduct such analyses as HONEYWELL may reasonably
request in connection with any regulatory submission or audit.

 
6.5.
[…***…]

 

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED
 
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ARTICLE 7.
CONFIDENTIALITY
 
7.1.
Definition of CONFIDENTIAL INFORMATION.  As used in this AGREEMENT,
“CONFIDENTIAL INFORMATION” shall mean (a) the terms and conditions of this
AGREEMENT, excluding the existence of this AGREEMENT, and (b) all information,
data and materials that either PARTY (the “RECEIVING PARTY”) obtains from the
other (the “DISCLOSING PARTY”) under this AGREEMENT, including, without
limitation, the TECHNOLOGY, (i) which is marked as confidential, or (ii) which
the RECEIVING PARTY should reasonably know, by its nature or the manner of its
disclosure, to be confidential that the RECEIVING PARTY may receive or have
access to in connection with this AGREEMENT.  The RECEIVING PARTY acknowledges
and agrees that (A) CONFIDENTIAL INFORMATION constitute valuable trade secrets
of the DISCLOSING PARTY, and are not within the public domain, (B) the
DISCLOSING PARTY has and shall retain exclusive (except as expressly provided
herein) valuable property rights in and to CONFIDENTIAL INFORMATION,
(C) CONFIDENTIAL INFORMATION shall remain valuable trade secrets proprietary to
the DISCLOSING PARTY unless and until the DISCLOSING PARTY places CONFIDENTIAL
INFORMATION in the public domain or authorizes placement of the CONFIDENTIAL
INFORMATION in the public domain, and (D) but for this AGREEMENT, the RECEIVING
PARTY would have no rights in or access to the CONFIDENTIAL INFORMATION.

 

7.2.
Exceptions.  Notwithstanding Section 7.1, CONFIDENTIAL INFORMATION does not
include, or shall cease to include as appropriate, information (a) that is
lawfully received free of restriction from another source that, to the RECEIVING
PARTY’S knowledge or knowledge it should have, has the right to furnish such
information, (b) after it has become generally available to the public by acts
not attributable to the RECEIVING PARTY or its employees, subcontractors,
consultants or advisors, or (c) which, at the time of disclosure to the
RECEIVING PARTY, was known to the RECEIVING PARTY free of restriction. Only the
specific information that meets such exclusions will be excluded, and not any
other information that happens to appear in proximity to such excluded portions
(for example, a portion of a document may be excluded without affecting the
confidential nature of those portions that do not themselves qualify for
exclusion).

 
7.3.
Confidentiality Obligations.  The RECEIVING PARTY shall not use the CONFIDENTIAL
INFORMATION for any purpose except in performance of its obligations hereunder
or to exercise the rights granted to it hereunder.  The RECEIVING PARTY shall
maintain all CONFIDENTIAL INFORMATION in strict confidence.  The RECEIVING PARTY
shall not, without the prior written consent of the DISCLOSING PARTY, disclose,
in any manner or via any media whatsoever, any CONFIDENTIAL INFORMATION, other
than to its employees, manufacturing agents, resellers, consultants and
contractors (“REPRESENTATIVES”) (a) who have a specific need to know such
CONFIDENTIAL INFORMATION in order to exercise the RECEIVING PARTY’S rights
hereunder, (b) who are informed of the confidential nature of the CONFIDENTIAL
INFORMATION, and (c) who agree in writing to act in accordance with and be bound
by terms and conditions at least as restrictive as the terms and conditions
herein regarding the safeguarding and disclosure of CONFIDENTIAL
INFORMATION.  HONEYWELL shall have the right to disclose the existence and the
terms of this AGREEMENT to potential purchasers or licensees of any INTELLECTUAL
PROPERTY RIGHTS of HONEYWELL without the prior written consent of, or the
requirement to provide notice to, LICENSEE.

 
12

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7.4.
Required Disclosures.  Notwithstanding the foregoing, in the event disclosure of
CONFIDENTIAL INFORMATION by the RECEIVING PARTY is mandated by applicable law,
rule or regulation, or by an order of a court or governmental or law enforcement
agency or other authority, each of competent jurisdiction, then (a) the
RECEIVING PARTY will promptly notify the DISCLOSING PARTY of such requirement,
provided that, such notice is not prohibited by a regulatory, law enforcement,
other governmental authority or an order of court of competent jurisdiction, and
(b) the RECEIVING PARTY shall use good faith efforts, in consultation with the
DISCLOSING PARTY, to challenge such disclosure or, failing in such challenge,
secure a protective order or other appropriate confidential treatment of the
CONFIDENTIAL INFORMATION so disclosed. Any such required disclosure shall not
alter the nature of the information so disclosed as CONFIDENTIAL INFORMATION for
purposes of this AGREEMENT.

 

7.5.
Breaches.  The RECEIVING PARTY will be responsible for any breach of this
Article 7 by any of its REPRESENTATIVES.  The RECEIVING PARTY shall notify the
DISCLOSING PARTY immediately upon discovery of any unauthorized disclosure
(inadvertent or otherwise) and shall, within thirty (30) days of such notice
(a) use reasonable best efforts to cure such unauthorized disclosure of
CONFIDENTIAL INFORMATION, (b) take all reasonable precautions to prevent any
such unauthorized disclosure in the future, and (c) cooperate in good faith with
the DISCLOSING PARTY to assist the DISCLOSING PARTY to regain possession of its
CONFIDENTIAL INFORMATION and/or to prevent further unauthorized use or
disclosure.

 
7.6.
Remedies.  The RECEIVING PARTY acknowledges and agrees that the violation of its
obligations under this Article 7 would cause irreparable harm to the DISCLOSING
PARTY, which harm may not be compensable solely by monetary damages, and that,
therefore, in the event of an actual or threatened breach by the RECEIVING PARTY
of this Article 7, the DISCLOSING PARTY shall be entitled to injunctive and
other equitable relief, without the necessity of proving monetary damages or
posting bond or other security.  Any such equitable relief granted shall be
without limitation of or prejudice to any other rights and remedies as the
DISCLOSING PARTY may have under this AGREEMENT.

 

13

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ARTICLE 8.
REPRESENTATIONS AND WARRANTIES
 
8.1.
Mutual.  Each PARTY hereby represents, covenants and warrants to the other PARTY
that:

 

 
(a)
it has the corporate power to enter into this AGREEMENT and to grant the rights
and licenses granted herein and otherwise perform this AGREEMENT;

 
 
(b)
the entering into of this AGREEMENT will not (i) violate any provision of law,
statute, rule or regulation or any ruling, writ, injunction, order, judgment or
decree of any court, administrative agency or other governmental body, or
(ii) conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets under its organizational documents, as amended to date, or any material
note, indenture, mortgage, lease, agreement, contract, purchase order or other
instrument, document or agreement in which such PARTY is a party or by which it
or any of its properties or assets is bound or affected;

 
 
(c)
when executed and delivered by it, this AGREEMENT will constitute a legal, valid
and binding obligation of it, enforceable against it in accordance with the
provisions of this AGREEMENT; and

 
 
(d)
it shall perform its obligations under this AGREEMENT in compliance with all
laws.

 
8.2.
HONEYWELL.  HONEYWELL represents and warrants that (a) to its knowledge, it owns
all INTELLECTUAL PROPERTY RIGHTS in and to the TECHNOLOGY (excluding LICENSEE
IMPROVEMENTS) or has the right to grant the rights granted herein, (b) to its
knowledge, the TECHNOLOGY (excluding LICENSEE IMPROVEMENTS) is not subject to
any lien, encumbrance, security interest, restriction, license or adverse claim
of any nature, and (c) there is no legal action pending or, to its knowledge,
threatened, against HONEYWELL that challenges the ownership of the TECHNOLOGY.

 
8.3.
DISCLAIMER.  EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT, THE
SUPPLY AGREEMENT OR THE APA, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
EACH PARTY EXPRESSLY DISCLAIMS AND HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE
MADE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT WITH RESPECT TO THE TECHNOLOGY,
IMPROVEMENTS, THE MARK (AS DEFINED IN SECTION 13.10 BELOW) AND THE LICENSED
PRODUCTS.  EXCEPT AS TO ANY LIABILITY OR DAMAGES

 

14

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ARISING FROM THE INDEMNITY OBLIGATIONS SET FORTH IN ARTICLE 10 OR BREACH OF THE
CONFIDENTIALITY OBLIGATIONS AS SET FORTH IN ARTICLE 7, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, PUNITIVE, CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF
PROFITS, LOSS OF BUSINESS OPPORTUNITY, LOSS OF PROPERTY OR CAPITAL, OR OTHER
DAMAGES ARISING FROM OR RELATED TO THIS AGREEMENT OR THE OPERATION OR USE OF THE
TECHNOLOGY, IMPROVEMENTS, MARK AND THE LICENSED PRODUCTS, INCLUDING WITHOUT
LIMITATION, THE INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS BY THE
LICENSED PRODUCTS, DAMAGES ARISING FROM LOSS OF REVENUE OR PROFITS, FAILURE TO
REALIZE SAVINGS OR OTHER BENEFITS, DAMAGE TO EQUIPMENT, THE USE OR INABILITY TO
USE ANY TECHNOLOGY OR LICENSED PRODUCTS, REGARDLESS OF HOW SUCH LOSS OR DAMAGE
MAY HAVE OCCURRED AND EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND, EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, THE TECHNOLOGY AND THE MARK ARE BEING DELIVERED TO
LICENSEE AND LICENSEE IMPROVEMENTS ARE BEING PROVIDED TO HONEYWELL ON AN “AS IS”
AND “WHERE IS” BASIS, SUBJECT TO ACTUAL AVAILABILITY, IN THE DATA FORMAT
EXISTING AS OF THE EFFECTIVE DATE WHICH MAY INCLUDE, WITHOUT LIMITATION, PAPER
AND ELECTRONIC FORMATS.
 
ARTICLE 9.
LITIGATION
 
9.1.
ENFORCEMENT BY HONEYWELL.  HONEYWELL shall take whatever steps it deems
necessary or desirable to protect the TECHNOLOGY, including, without limitation,
the filing, prosecution and defense and settlement of litigation, at its own
expense; provided, however, that except as expressly set forth in Section 9.2,
nothing in this AGREEMENT shall obligate HONEYWELL to assume any responsibility
or liability respecting any action or possible action.  Each PARTY, upon
receiving knowledge thereof, shall give the other PARTY notice of any and all
threatened or actual claims, disputes, controversies, actions, lawsuits,
proceedings, investigations, or the issuance of any order, writ, injunction,
award, judgment or decree before or of any court, tribunal, arbitration panel,
agency or governmental instrumentality against HONEYWELL, LICENSEE or a third
party that is related to the TECHNOLOGY and/or the LICENSED PRODUCTS.  Such
notice will not obligate HONEYWELL to take action on such information.  In the
event HONEYWELL chooses to enforce its rights in the TECHNOLOGY, all costs and
expenses of any such litigation shall be borne solely by HONEYWELL and all
benefits, damages and settlement, shall be the sole property of
HONEYWELL.  LICENSEE shall, at HONEYWELL’S expense, cooperate with and assist
HONEYWELL and shall make available all evidence, information or particulars in
its possession which might assist HONEYWELL in such defense.  HONEYWELL shall
keep LICENSEE informed concerning the progress of such suit.

 
15

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9.2.
ENFORCEMENT BY LICENSEE.  If HONEYWELL does not elect to enforce its rights in
the TECHNOLOGY and/or defend any proceedings described in Section 9.1 within a
[…***…] by HONEYWELL of the aforesaid notice, LICENSEE may initiate an action in
respect of the TECHNOLOGY and/or INTELLECTUAL PROPERTY RIGHTS therein, in its
own name and entirely under its own direction and control as provided in this
Section 9.2.  In the event LICENSEE requests that HONEYWELL enforce its rights
in the TECHNOLOGY, within sixty (60) days from receiving such notice, HONEYWELL
may either elect to do so, or require that LICENSEE bring such action in each
case, at the sole cost and expense of LICENSEE.  In the event LICENSEE brings an
action, HONEYWELL shall, at LICENSEE’S expense, cooperate with and assist
LICENSEE (including being joined into such action if required) and shall make
available all evidence, information or particulars in its possession which might
assist LICENSEE in such defense.  All costs and expenses of any such litigation
shall be borne solely by LICENSEE and all benefits, damages and settlement,
shall be the sole property of LICENSEE; provided, however that any monies
recovered that are attributable to infringement relating to INTELLECTUAL
PROPERTY RIGHTS in the NEW LICENSED PRODUCTS (as opposed to EXISTING EXCLUSIVE
LICENSED PRODUCTS or EXISTING NON-EXCLUSIVE LICENSED PRODUCTS) shall be treated
as GROSS REVENUES and royalties in respect of such GROSS REVENUES shall be due
to HONEYWELL.  LICENSEE shall keep HONEYWELL informed concerning the progress of
such suit.  Notwithstanding the foregoing, LICENSEE shall not, under any
circumstances, be permitted to initiate an action in respect of the TECHNOLOGY
and/or INTELLECTUAL PROPERTY RIGHTS therein,  in its own name and entirely under
its own direction and control, or request that HONEYWELL enforce its rights in
the TECHNOLOGY, (a) with respect to any EXISTING NON-EXCLUSIVE LICENSED PRODUCTS
so long as the PRE-EXISTING AGREEMENTS are in effect, or (b) against any
supplier, competitor or customer of HONEYWELL or any licensee or distributor
under a PRE-EXISTING AGREEMENT (collectively, “PROTECTED PERSONS”) in the event
such lawsuit will have a material adverse effect, as reasonably determined by
HONEYWELL, on HONEYWELL or the operation of its businesses or its commercial
relationships; provided, however that HONEYWELL acknowledges and agrees that PMA
design houses are not PROTECTED PERSONS and manufacturers are not PROTECTED
PERSONS unless they supply to HONEYWELL.

 

 
9.3.
[…***…]

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED
 
16

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ARTICLE 10.
 

 
[…***…]
 

***CONFIDENTIAL TREATMENT REQUESTED

17

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[…***…]

ARTICLE 11.
TERM
 
11.1.
Term.  This AGREEMENT shall commence on the EFFECTIVE DATE and shall, unless
earlier terminated in accordance with this AGREEMENT, continue in perpetuity
(“TERM”).

 

11.2.
[…***…]

 

11.3.
[…***…]

 

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED

 
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[…***…]
 
11.4.
Return of Information.  For a period not to exceed six (6) months after the
effective date of termination of this AGREEMENT, LICENSEE may retain any
CONFIDENTIAL INFORMATION and the right to use such CONFIDENTIAL INFORMATION and
TECHNOLOGY (and IMPROVEMENTS, as necessary) in accordance with the terms and
conditions of this AGREEMENT for the sole purpose of transitioning the
maintenance and support of LICENSED PRODUCTS distributed prior to the
termination date to HONEYWELL or a third party designated by HONEYWELL.  After
expiration of such six (6) month period, (a) the licenses granted in Section 2.1
shall immediately terminate, and (b) all notes, compilations, and other types of
extracts that contain Confidential Information shall be destroyed by LICENSEE
within the thirty (30) day period following any such termination and the
destruction certified by an officer of LICENSEE in writing delivered to
HONEYWELL within such thirty (30) day period.

 

ARTICLE 12.
INSURANCE
 
12.1.
Insurance.  LICENSEE will maintain and carry liability insurance which includes
but is not limited to commercial general liability (including product liability
and for services to be performed, completed operations liability) in a sum no
[…***…], automobile liability in a sum no […***…], workmen’s compensation in an
amount no less than the applicable statutory minimum requirement and employer’s
liability in an amount of no […***…], with insurance carriers acceptable to
HONEYWELL.  LICENSEE will, if requested by HONEYWELL, furnish certificates of
insurance from its carrier(s) on the foregoing coverages, which shall provide
that such coverage shall not be changed without […***…] advance written
notification to HONEYWELL from the carrier(s).

 

ARTICLE 13.
DESIGN AUTHORITY AND DIRECT SHIP AUTHORITY
 
13.1.
Design Authority.  HONEYWELL shall maintain design authority with respect to all
LICENSED PRODUCTS.  Any LICENSEE IMPROVEMENTS must be reviewed and approved in
writing by HONEYWELL prior to use by LICENSEE as permitted under this AGREEMENT
in connection with LICENSED PRODUCTS.

 

13.2.
Direct Ship Authority.  Pursuant to the terms of this AGREEMENT, LICENSEE shall
be permitted to have manufactured, sell, have sold, import and distribute the
LICENSED PRODUCTS pursuant to HONEYWELL’S Direct Ship Authority.  In order to
maintain and meet the requirements of HONEYWELL’S Direct Ship Authority,
LICENSEE agrees to use the TECHNOLOGY in strict accordance with the terms and
conditions set forth in this AGREEMENT, and not to use the TECHNOLOGY for any
other purpose, including without limitation, to design or manufacture products,
compare a product or design of a product, or obtain FAA PMA, Designated
Engineering Representative approval, or other governmental approval to
manufacture or repair a product.  At all times

 

 
***CONFIDENTIAL TREATMENT REQUESTED
 
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during the TERM and subject to the terms hereof, LICENSEE will be entitled to
ship LICENSED PRODUCTS under HONEYWELL’S Direct Ship Authority as HONEYWELL’S
Tier 1 Supplier.
 
13.3.
Manufacturing Requirements.  (a)  LICENSEE will have manufactured on its behalf
only by those manufacturers authorized by HONEYWELL pursuant to HONEYWELL’S
Direct Ship Authority (“APPROVED MANUFACTURERS”) any LICENSED PRODUCTS in
accordance with the then-current guidelines of HONEYWELL’S Direct Ship Authority
and other pertinent laws, rules and regulations of any REGULATORY AUTHORITIES in
all applicable jurisdictions.  In the event that LICENSEE fails to comply with
the guidelines of HONEYWELL’S Direct Ship Authority set forth in this
Article 13, HONEYWELL may, at its option, have manufactured, sell, have sold,
import and distribute the LICENSED PRODUCTS through (a) one of the licensees to
the PRE-EXISTING AGREEMENTS, or (b) a manufacturer of the LICENSED PRODUCTS to
have manufactured and/or procure those LICENSED PRODUCTS in respect of which
LICENSEE is failing to comply with HONEYWELL’S Direct Ship Authority, until
HONEYWELL determines in its reasonable discretion that LICENSEE has cured such
failure.  The exercise of such right by HONEYWELL shall not be deemed to be a
breach of LICENSEE’S exclusive rights under this AGREEMENT or the SUPPLY
AGREEMENT, provided that HONEYWELL does not grant to any third party during such
period, a license or sublicense to the TECHNOLOGY to have manufactured, sell,
have sold, import or distribute the LICENSED PRODUCTS.  In the event that
LICENSEE fails to comply with the guidelines of HONEYWELL’S Direct Ship
Authority, HONEYWELL shall, at LICENSEE’s request and expense, use reasonable
efforts to assist LICENSEE in regaining compliance as soon as possible.

 
 
(b)
If LICENSEE desires to identify a new manufacturer for the LICENSED PRODUCTS,
LICENSEE shall identify such manufacturer to HONEYWELL and request that such
manufacturer become an APPROVED MANUFACTURER, and HONEYWELL shall analyze and
consider the authorization of the proposed manufacturer as an APPROVED
MANUFACTURER in respect of the LICENSED PRODUCTS, which authorization shall not
be unreasonably withheld by HONEYWELL; provided that (a) LICENSEE will reimburse
HONEYWELL for all out-of-pocket costs and expenses incurred by HONEYWELL in
connection with its review and consideration of such authorization, and (b) the
following shall be reasonable grounds for HONEYWELL to make its determination of
whether or not to grant such authorizations:  (1) whether or not the proposed
supplier has an AS9100 quality system or other equivalent quality system
reasonably satisfactory to HONEYWELL, (2) the extent to which technical
resubstantiation and/or requalification of the products supplied by such
manufacturer is required in order to meet HONEYWELL design specifications, and
(3) whether or not such manufacturer has obtained a score of at least 3 on the
HONEYWELL supplier common assessment scorecard.

 
13.4.
Regulatory Requirements.  LICENSEE will maintain or cause to be maintained the
LICENSED PRODUCTS’ distribution facility’s registration with all applicable
REGULATORY AUTHORITIES, if any.  LICENSEE will (a) report to every applicable
REGULATORY AUTHORITY within any relevant time periods all events that are
required to be reported by LICENSEE (including any death or serious bodily
injury caused by any LICENSED PRODUCTS), and (b) deliver, within the permitted
time periods, all annual or other periodic reports required to be delivered by
LICENSEE to every applicable REGULATORY AUTHORITY.

 

 
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13.5.
Quality Assurance.  LICENSEE shall maintain ongoing quality assurance policies
sufficient to satisfy its obligations under this AGREEMENT.

 

13.6.
Distribution Service Levels.  HONEYWELL represents and warrants to LICENSEE that
in connection with its operation of the BUSINESS, HONEYWELL maintained and
requires its current third party distributors to maintain the following service
standards (set forth in subsections (a)-(d) below) with respect to distribution
of THIRD PARTY LICENSED PRODUCTS (“SERVICE LEVELS”).  LICENSEE shall maintain
the following SERVICE LEVELS in connection with LICENSEE’S distribution of the
THIRD PARTY LICENSED PRODUCTS pursuant to HONEYWELL’S Direct Ship Authority:
[…***…]

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED

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[…***…]

13.7.
Notices.  LICENSEE shall notify HONEYWELL in a timely manner when it becomes
aware of any issue relating to regulatory compliance of any LICENSED PRODUCTS or
any malfunction of any LICENSED PRODUCTS or any regulatory inspections or other
communications with REGULATORY AUTHORITIES related to any LICENSED PRODUCTS or
that would in any way impact any LICENSED PRODUCTS or LICENSEE’S performance of
its responsibilities hereunder.  LICENSEE will notify HONEYWELL immediately if
it becomes aware of any issue relating to the safety of any LICENSED PRODUCTS or
of any death or bodily injury caused by any LICENSED PRODUCTS (or suspected to
be caused by any LICENSED PRODUCTS).

 
13.8.
Regulatory Audit.  LICENSEE will permit authorized representatives of any
REGULATORY AUTHORITY to inspect LICENSEE’S or its manufacturers’ plant and
production facilities relating to or used in connection with the manufacture of
the LICENSED PRODUCTS and will promptly notify HONEYWELL when LICENSEE receives
notice of any such inspection.  LICENSEE will advise HONEYWELL of the findings
of any regulatory inspection and will promptly take the necessary steps to
correct any compliance deficiencies found by the REGULATORY AUTHORITY relating
to the production of the LICENSED PRODUCTS.  LICENSEE further agrees to use
commercially reasonable efforts to provide to HONEYWELL such documentation or

 

 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED
 
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conduct such analyses as HONEYWELL may reasonably request in connection with any
regulatory submission or audit concerning the LICENSED PRODUCTS.
 
13.9.
Force Majeure.  LICENSEE is not liable for a breach of this Article 13 in the
event and to the extent that such breach is caused by a FORCE MAJEURE, provided,
that such FORCE MAJEURE shall not prevent or restrict HONEYWELL’S right to have
manufactured or procure LICENSED PRODUCTS during the pendency of any such FORCE
MAJEURE in accordance with Section 13.3.

 
13.10.
Use of HONEYWELL Name.

 

(a)           Subject to the restrictions set forth herein, during the TERM,
HONEYWELL hereby grants to LICENSEE effective as of the EFFECTIVE DATE, a
limited, personal, non-exclusive, non-assignable (except as provided in
Section 14.5), royalty-free license to use the HONEYWELL name and word mark (the
“MARK”) solely:
 
(i) to have the LICENSED PRODUCTS marked with the MARK and/or other HONEYWELL
trademarks, and/or the letters “HON” and/or the applicable PART number by
APPROVED MANUFACTURERS, if and only to the extent required by the drawings and
specifications for such LICENSED PRODUCTS,
 
(ii) to identify LICENSEE as Honeywell’s authorized exclusive distributor of the
applicable specific LICENSED PRODUCTS in LICENSEE’S sales literature, marketing
materials, and other communications made to REGULATORY AUTHORITIES, customers or
the public, and
 
(iii) generally, in communications made to the REGULATORY AUTHORITIES, to
customers or to the public, to accurately identify the LICENSED PRODUCTS as
products manufactured by HONEYWELL APPROVED MANUFACTURERS under HONEYWELL’S
production approval, that LICENSEE is distributing such LICENSED PRODUCTS under
HONEYWELL’S Direct Ship Authority, to otherwise accurately identify that
LICENSEE is authorized to distribute the LICENSED PRODUCTS, and/or to otherwise
make use of the MARK which qualifies as a statutory fair use described in
Section 1115(b)(4) of the Lanham Act and which is not prohibited by law.
 
This license does not include the right to sublicense, except to the extent
necessary to have LICENSED PRODUCTS bearing the MARK manufactured by APPROVED
MANUFACTURERS as permitted herein.  Except as expressly provided in this
Section 13.10 and in Section 5.14 of the APA, LICENSEE shall have no further
rights to use the MARK.  All use of the MARK as permitted hereunder shall inure
to the benefit of HONEYWELL.
 
(b)           LICENSEE shall use reasonable and good faith commercial efforts to
safeguard the established goodwill symbolized by the MARK and maintain the
quality and performance standards with respect to the LICENSED PRODUCTS as set
forth in this AGREEMENT.  LICENSEE shall not take any action or omit to take any
action which may reasonably be expected to derogate, erode or tarnish the Mark,
or otherwise diminish
 
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the value of the Mark.  If at any time, HONEYWELL determines that LICENSEE is
using or displaying the MARK in a manner which is or may likely be detrimental
to HONEYWELL’S interest or that degrades or tarnishes the value of the MARK or
the goodwill associated therewith, HONEYWELL may issue reasonable instructions
to LICENSEE concerning the manner in which, if any, LICENSEE may continue to use
the MARK and LICENSEE will promptly comply with such instructions and
discontinue such offending use.
 
(c)           LICENSEE acknowledges that the MARK is the sole and exclusive
property of HONEYWELL.  HONEYWELL is not conveying, and LICENSEE is not
acquiring, any right, title or interest, express or implied, in the MARK or its
use, individually or collectively, or to any associated trade names,
corresponding trademarks or other source indicators of  HONEYWELL.  LICENSEE
shall not knowingly at any time, either during the life of or after expiration
of this AGREEMENT, (i) contest the validity of the MARK or HONEYWELL’S rights
therein, or (ii) assert or claim any other right to manufacture, sell or offer
for sale products or services under the MARK, or any trademark confusingly
similar thereto or knowingly assist any third party in such activities, or
(iii) register, or attempt to register, in connection with any products or
services anywhere in the world in any medium, any trademarks, trade names or
domain names that include, are identical to or are confusingly similar to the
MARK or any derivation therefrom.
 
(d)           In the event that LICENSEE fails to comply with any of its
obligations set forth in this Section 13.10, HONEYWELL shall provide LICENSEE
with written notice of such failure and LICENSEE shall have a period of
thirty (30) days from the date of such notice to cure such failure.  LICENSEE
acknowledges that an uncured breach of LICENSEE’S obligations set forth in this
Section 13.10 may cause HONEYWELL irreparable damage which cannot be remedied in
monetary damages in an action at law and may also constitute infringement of the
MARK.  In any such event, notwithstanding anything to the contrary contained in
Section 14.8 of this AGREEMENT, HONEYWELL shall be entitled to an immediate
injunction to cease or prevent such irreparable harm, without being required to
show actual damage or post an injunction bond, in addition to any other legal or
equitable remedies available under this AGREEMENT or at law.  In addition, in
the event of a dispute between the parties regarding the MARK, the prevailing
party shall be entitled to recover its costs, expenses and attorneys’ fees
incurred in connection with enforcing the terms of this AGREEMENT as it relates
to the MARK.  A “prevailing party” shall mean a party who receives all or
substantially all of the relief sought by such party in an adjudication of its
claims arising out of or related to this AGREEMENT before a court of law or
other agreed upon tribunal.
 
ARTICLE 14.
MISCELLANEOUS
 
14.1.
Expenses.  Except as specifically set forth elsewhere herein, each of the
PARTIES hereto shall pay its own expenses and costs incurred or to be incurred
by it in negotiating, closing and carrying out this AGREEMENT.

 

 
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14.2.
Labeling and Marking.  Except as specifically set forth in Section 13.10 of this
AGREEMENT and in the APA, LICENSEE shall not at any time during or after the
TERM of this AGREEMENT use any trademark or trade name of HONEYWELL, including
but not limited to Honeywell®, on any advertising or sales literature,
brochures, packaging, documentation or the like.

 

 
14.3.
Entire Agreement.  The AGREEMENT, the SUPPLY AGREEMENT and the APA, including
all exhibits and schedules attached hereto and thereto,  constitute the entire
agreement between the PARTIES hereto with respect to the subject matter hereof
and supersedes any and all prior communications, representations, agreements and
understandings between the PARTIES hereto, whether oral or written.  In the
event of any conflict among the provisions of this AGREEMENT, the SUPPLY
AGREEMENT and the APA, the provisions of this AGREEMENT shall control.

 

 
14.4.
Notices. All notices or other communications given or made pursuant to this
AGREEMENT by a PARTY hereto to the other PARTY shall be in writing and shall be
deemed to have been duly given or made (a) on the date of delivery if delivered
personally, or by telecopy or facsimile, upon confirmation of receipt (if
received on a business day or, if not received on a business day, on the first
business day following such date of receipt), (b) on the first business day
following the date of dispatch if delivered by a recognized next-day courier
service, or (c) on the fifth business day following the date of mailing if
delivered by registered or certified mail return receipt requested, postage
prepaid and shall be delivered personally or mailed by registered or certified
mail (postage prepaid, return receipt requested), sent by overnight courier or
sent by telecopy, to the applicable PARTY at the following addresses or telecopy
numbers (or at such other address or telecopy number for a PARTY as shall be
specified by like notice):

 
 
If to HONEYWELL:

 
 
Honeywell International Inc.

 
101 Columbia Road

 
P.O. Box 4000

 
Morristown, New Jersey  07962-2487

 
Attention:  General Counsel and Senior Vice President

 
Telecopy No.:  (973) 455-4217

 
 
If to LICENSEE:

 
 
BE Aerospace, Inc.

 
1400 Corporate Center Way

 
Wellington, Florida 33414

 
Attention:  Thomas P. McCaffrey

 
Telecopy No. (561) 791-3966

 
 
25

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with a copy to:

 
 
M & M Aerospace Hardware, Inc., a B/E Aerospace Company

 
10000 NW 15th Terrace

 
Miami, FL 33172

 
Attention:  John Cuomo

 
Telecopy No. (305) 629-2779

 
14.5.
Assignment. Each PARTY may assign or otherwise transfer all of its rights or
obligations under this AGREEMENT without the consent of the other PARTY in
connection with a merger, reorganization or sale of all or substantially all of
the assets or business to which this AGREEMENT relates.  Each PARTY will provide
the other PARTY with written notice of any such assignment or transfer no later
than ten (10) days after the effective date of such assignment or
transfer.  HONEYWELL may assign this AGREEMENT, or any portion of its rights or
obligations hereunder, to one or more AFFILIATES without the prior written
consent of LICENSEE.  LICENSEE may delegate its rights and obligations to M & M
Aerospace Hardware, Inc. but LICENSEE remains liable for the performance by M &
M Aerospace Hardware, Inc.  LICENSEE may assign or delegate any portion of its
rights and obligations hereunder to any other AFFILIATES with the prior written
consent of HONEYWELL, such consent not be unreasonably withheld.  Any other
assignment, transfer or delegation of this AGREEMENT or the rights or
obligations of a PARTY hereunder will require the consent of the other
PARTY.  In the event of any assignment permitted hereunder, the assignee shall
agree in writing to be bound by the terms and conditions of this AGREEMENT and
to assume all of the obligations of the assigning PARTY hereunder.  Any other
assignment or transfer of this AGREEMENT shall be void.  All terms and
conditions of this AGREEMENT shall be binding on and inure to the benefit of the
legal representatives, successors and permitted assigns of the PARTIES.

 

14.6.
Amendment. The AGREEMENT may be amended only by written agreement duly executed
by representatives of the PARTIES hereto.

 

14.7.
Applicable Law.  The AGREEMENT shall in all respects be interpreted, construed,
and governed by and in accordance with the laws of the State of New York,
disregarding any conflict of laws provisions which may require the application
of the law of another jurisdiction.

 

14.8.
Dispute Resolution; Mediation; Jurisdiction.

 

 
(a)
In the event of any dispute, controversy or claim in any way arising out of or
relating to this AGREEMENT (a “DISPUTE”), upon the written notice of either
PARTY hereto, the PARTIES hereto shall attempt to negotiate a resolution of the
DISPUTE.  If the PARTIES hereto are unable for any reason to resolve a DISPUTE
within thirty (30) days after the receipt of such notice, the DISPUTE shall be
submitted to mediation in accordance with Section 14.8(b) hereof.

 
26

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(b)
Any DISPUTE not resolved pursuant to Section 14.8(a) hereof shall, at the
request of either PARTY hereto (a “MEDIATION REQUEST”), be submitted to
non-binding mediation in accordance with the then current CPR Mediation
Procedure (the “PROCEDURE”), except as modified herein.  The mediation shall be
held in New York, New York.  The PARTIES shall have twenty (20) days from
receipt by a PARTY of a MEDIATION REQUEST to agree on a mediator.  If no
mediator has been agreed upon by the PARTIES within twenty (20) days of receipt
by a PARTY (or PARTIES) of a MEDIATION REQUEST, then any PARTY may request (on
written notice to the other PARTIES), that the CPR appoint a mediator in
accordance with the PROCEDURE.  All mediation pursuant to this clause shall be
confidential and shall be treated as compromise and settlement negotiations, and
no oral or documentary representations made by the PARTIES during such mediation
shall be admissible for any purpose in any subsequent proceedings.  No PARTY
hereto shall disclose or permit the disclosure of any information about the
evidence adduced or the documents produced by the other PARTIES in the mediation
proceedings or about the existence, contents or results of the mediation without
the prior written consent of such other PARTIES except in the course of a
judicial or regulatory proceeding or as may be required by LAW (as defined in
the APA) or requested by a REGULATORY AUTHORITY or securities exchange.  Before
making any disclosure permitted by the preceding sentence, the PARTY intending
to make such disclosure shall give the other PARTIES reasonable written notice
of the intended disclosure and afford the other PARTIES a reasonable opportunity
to protect its interests.  If the DISPUTE has not been resolved within
sixty (60) days of the appointment of a mediator, or within ninety (90) days of
receipt by a PARTY of a MEDIATION REQUEST (whichever occurs sooner), or within
such longer period as the PARTIES may agree to in writing, then any PARTY may
file an action on the DISPUTE in any court having jurisdiction in accordance
with Section 14.8(c).

 
 
(c)
Each of the PARTIES hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York sitting in New
York County and the courts of the United States of America located in New York
County, New York for any litigation arising out of or relating to this AGREEMENT
or the transactions contemplated hereby or any of the other transactions
contemplated hereby (and agrees not to commence any litigation relating hereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective address set forth
in Section 14.4, shall be effective service of process for any litigation
brought against it in any such court.  Each of the PARTIES hereby irrevocably
and unconditionally waives any objection to the laying of venue of any
litigation arising out of this AGREEMENT or the transactions contemplated hereby
or any of the other transactions contemplated hereby in the courts of the State
of New York sitting in New York County or the courts of the United States of
America located in New York County, New York and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such litigation brought in any such court has been brought in an
inconvenient forum.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH
ANY LITIGATION ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT.

 
27

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14.9.
Export Compliance.  This AGREEMENT is subject to all applicable laws and
regulations of the U.S. Government.  LICENSEE shall be responsible for
obtaining, and for retaining documentation evidencing compliance with, any
necessary import licenses, export licenses or other governmental authorizations
required in connection with any disclosure by it under this AGREEMENT, including
disclosures to foreign nationals located within a facility of a PARTY hereto, as
the case may be.  Furnishing of information shall be subject to prior receipt of
all necessary governmental approvals.

 

14.10.
No Third Party Rights.  The AGREEMENT is not intended and shall not be construed
to create any rights in any party other than HONEYWELL and LICENSEE and no other
person shall assert any rights as a third party beneficiary hereunder.

 

14.11.
Counterparts.  The AGREEMENT may be executed simultaneously in two or more
counterparts (including by facsimile or electronic .pdf submission), each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

14.12.
Exhibits.  EXHIBITS attached hereto are incorporated into this AGREEMENT and
shall be deemed a part hereof as if set forth herein in full.  References herein
to “this AGREEMENT” and the words “therein”, “hereof” and words of similar
import refer to this AGREEMENT (including EXHIBITS) as an entirety.  In the
event of any conflict between the provisions of this AGREEMENT and any such
EXHIBIT, the provisions of this AGREEMENT shall control.

 

 
14.13.
Waivers.  Any waiver of rights hereunder must be set forth in writing.  A waiver
of any breach or failure to enforce any of the terms or conditions of this
AGREEMENT shall not in any way affect, limit or waive any PARTY’S rights at any
time to enforce strict compliance thereafter with every term or condition of
this AGREEMENT.

 

14.14.
Severability.  If any term or other provision of this AGREEMENT is invalid,
illegal or incapable of being enforced by any rule of Law or public policy, all
other conditions and provisions of this AGREEMENT shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any PARTY.  Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the PARTIES shall negotiate in
good faith to modify this AGREEMENT so as to affect their original intent as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the maximum extent possible.

 

14.15.
Construction.  The headings of Articles and Sections in this AGREEMENT are
provided for convenience only and will not affect its construction or
interpretation.  The language

 

28

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used in this AGREEMENT is the language chosen by the PARTIES to express their
mutual intent, and no rule of strict construction shall be applied against any
PARTY.
 
[Remainder of page left intentionally blank]
 
 
 
 
 
 

 
29

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IN WITNESS WHEREOF, HONEYWELL and LICENSEE have duly executed and delivered this
AGREEMENT as of the day and year first above written.
 

 
HONEYWELL INTERNATIONAL INC.
         
 
By:
/s/ ANNE T. MADDEN      
Name:  Anne T. Madden
      Title:          

 
 

 

 
LICENSEE
         
 
By:
/s/ THOMAS P. MCCAFFREY      
Name:  Thomas P. McCaffrey
     
Title:
         

 
 
 
Signature Page to Intellectual Property License Agreement
 

--------------------------------------------------------------------------------

EXHIBIT A
 
TECHNOLOGY
 
(I)
Technology to be provided to LICENSEE for the PARTS listed on Exhibits B, C, D,
E and F

 
 
·
PART prints which include product dimensions, definitions, tolerances,
applicable processing, materials, specifications and approved vendors.

 
·
Specifications

 
·
Supplementary Purchase Order Conditions (SPOC) Manual

 
·
Listing of APPROVED MANUFACTURERS for each PART

 
·
Direct Ship Authority Letter

 
·
HONEYWELL data that the REGULATORY AUTHORITIES advise LICENSEE are necessary for
exercising ODAR/ODA privileges at the LICENSEE facilities.

 
(II)
Access to the data contained in or generated by the following applications of
Honeywell Systems related to the Licensed Products to be provided to LICENSEE:

 
 
·
Honeywell Product Data Management (PDM) System, the repository of the data
required to manufacture a PART.

 
·
Approved Processing Supplier List (APSL) for each process specification via the
Supplier Portal web-based system that LICENSEE is already using

 
·
FAIR Tracker to assure a first article Is on file every three (3) years.

 
·
eCats in case a Request for Material Review Action (RMRA) deviation is requested
to ship Parts.

 
·
FAA Production Approval System (FPAS), FAA’s approved parts list to generate the
8130-3 tags.

 
·
Honeywell Consumable Solutions’ Procedures/Work Instructions Repository for each
Part.

 
·
MACPAC (HON Engines MRP ordering System).

 
·
View Rights only to FPAD (Federal Production Approval Database), which is a
Honeywell database that transfers 8130-3 data from FPAS via SAP

 
·
HON Electronic Store Front (HON Sky Harbor ordering system), and any successor
system thereto

 
·
User IDS, passwords or other authorizations provided to LICENSEE to access the
foregoing applications.

 
(III)           LICENSEE to receive:
 
 
·
Any Honeywell Aerospace Quality Alerts.

 
·
Any HONEYWELL “Stop Orders” to purge inventory.

 

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EXHIBIT B

 
EXISTING EXCLUSIVE LICENSED PRODUCTS
 
[…***…]
 
 
 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED ON 783 PAGES

--------------------------------------------------------------------------------

 

EXHIBIT C

 
EXISTING NON-EXCLUSIVE LICENSED PRODUCTS
 
[…***…]
 
 
 
 
 
***CONFIDENTIAL TREATMENT REQUESTED ON 135 PAGES
 

--------------------------------------------------------------------------------

 
EXHIBIT D

 
HONEYWELL LICENSED PRODUCTS
 
Exhibit D consists of the combination of Exhibit C (Existing Non-Exclusive
Licensed Products) and Attachment 1B of the Supply Agreement (which attachment
is incorporated by reference herein).
 
 
 

--------------------------------------------------------------------------------

 
EXHIBIT E
 
THIRD PARTY LICENSED PRODUCTS
 
 
 
[To be provided by LICENSEE after Closing]
 
 
 
 
 

--------------------------------------------------------------------------------

 
EXHIBIT F

 
NEW LICENSED PRODUCTS
 
 
 
 
[To be provided by HONEYWELL after Closing]
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
EXHIBIT G
 
PRE-EXISTING AGREEMENTS
 
[...***...]
 
*** CONFIDENTIAL TREATMENT REQUESTED
 

--------------------------------------------------------------------------------

 
EXHIBIT H

QUALIFYING ENTITIES
 
 

 
[...***...]
 
*** CONFIDENTIAL TREATMENT REQUESTED