AviChina Industry & Technology Company Limited had the Board approve the entering into the Technology Development Agreement by the Company with AVICOPTER Plc and AVIC Xi'an Flight Automatic Control Research Institute, pursuant to which the Company and AVICOPTER (as entrusting parties) will entrust AVIC Automatic Control Institute (as entrusted party) to conduct research and development on intelligent electric aircraft flight control technology in accordance with the Technology Development Agreement. The principal terms of the Technology Development Agreement are summarized as follows: Parties: 1. The Company (as entrusting party) 2. AVICOPTER (as entrusting party) 3. AVIC Automatic Control Institute (as entrusted party). Scope of R&D: AVIC Automatic Control Institute shall conduct research on flight control technology for intelligent electric aircraft in accordance with the Technology Development Agreement and the requirements of the Company and AVICOPTER.
In line with the project schedule, it shall develop an overall conceptual scheme, detailed plan and solution for key systems, accomplish the prototyping and flight tests of the verification platform, and complete the principal research and flight test verification of the flight control system for fully tiltrotor aircraft. R&D Funding and Payment Term: The total R&D Funding amounts to RMB 90 million, of which the Company and AVICOPTER shall each contribute RMB 45 million. The R&D Funding was determined through arm?s length negotiations among the parties with reference to publicly available data and industry reports, using industry-standard cost estimation models adjusted for the characteristics of electric aircraft, and with reference to the research and development costs of comparable aircraft, taking into account electrification technology substitution costs, system innovation, and technical risks.
The Company and AVICOPTER shall pay the R&D Funding to AVIC Automatic Control Institute according to the following arrangements: (1) Within 30 days after the entering into the Technology Development Agreement, a total of RMB 30 million shall be paid, of which the Company shall pay RMB 15 million and AVICOPTER shall pay RMB 15 million; (2) Within 30 days after the AVIC Automatic Control Institute completes the first flight of the tilt-transition mode of the basic intelligent flight control technology verification platform and relevant reports pass the acceptance, a total of RMB 47 million shall be paid, of which the Company shall pay RMB 30 million and AVICOPTER shall pay RMB 17 million; and (3) Within 30 days after the AVIC Automatic Control Institute completes the vertical take-off and landing flight of the intelligent flight control technology verification platform and delivers the technical achievement data to the Company and AVICOPTER, AVICOPTER shall pay RMB 13 million. Term of Agreement: The term of the Technology Development Agreement shall be 30 months, commencing from the effective date of the Technology Development Agreement. The Technology Development Agreement shall become effective from the date on which all parties have completed their respective internal decision making procedures and the legal representatives or authorized representatives have affixed their signatures and company seals or contract seals.
Intellectual Property: New technological achievements and intellectual property rights arising from the performance of the Technology Development Agreement shall be jointly owned by the Company, AVICOPTER, and AVIC Automatic Control Institute. Each party shall have the right to apply for or register the relevant intellectual property rights in respect of such jointly owned new technological achievements and intellectual property, provided that the applying party shall obtain the prior written consent of the other parties and include their names in the application. Each party may carry out independent technical development, upgrades and improvements based on the new technological achievements and intellectual property rights generated under the Technology Development Agreement, and any new achievements arising therefrom shall be owned by the party making the improvements.
Industrialization of Scientific and Technological Achievements: With respect to the implementation of industrialization of scientific and technological achievements and intellectual property, each party shall enjoy a right of first refusal under equal conditions.
