Exhibit 10.22
AMENDMENT NUMBER 1
to
SYNTRON, INC. - BENTHOS, INC.
HYDROPHONE LICENSE AGREEMENT
This Amendment Number 1 modifies the SYNTRON, INC. - BENTHOS, INC. HYDROPHONE
LICENSE AGREEMENT in the following respects. The SYNTRON, INC. - BENTHOS, INC.
HYDROPHONE LICENSE AGREEMENT and this Amendment Number 1 shall be referred to
collectively as the "Agreement". LICENSOR and LICENSEE agree as follows:
1. Replace ARTICLE IV in its entirety with:
ARTICLE IV - FEE, COST BASIS/REMUNERATION, ROYALTIES, AND REPORTING
4.1. For the rights, privileges and license granted hereunder, LICENSEE shall
pay a license fee, provide engineering services, provide preferred selling
price and delivery status, and pay royalties to LICENSOR in the manner
hereinafter provided to the end of the term of the Proprietary Rights,
which shall be until the last patent to expire of all patents included
within Proprietary Rights, or until this Agreement shall be terminated as
hereinafter provided:
(A) LICENSEE agrees to pay LICENSOR a License Issue fee in the amount
of Ten Dollars ($10.00);
(B.1) LICENSEE shall provide engineering services to complete the
engineering required to place the Licensed Product in a high volume
manufacturing design state including without limitation the
generation of the Documentation. Such services shall include all
engineering design, manufacturing design, the generation and
copying of the Documentation and any future updates thereto as and
when initiated by LICENSEE and prototype materials required to
fabricate parts for proof of design. Such services shall be deemed
initially completed by LICENSEE on 1) the successful completion of
testing to the satisfaction of LICENSOR and LICENSEE to a mutually
agreed upon set of performance specifications documented in
Appendix B attached hereto and made a part hereof and 2) delivery
to LICENSOR by LICENSEE of a complete and accurate reproducible
copy of the then current Documentation.
The work product of LICENSEE's services, including results, and all
ideas, plans, developments, and inventions which LICENSEE conceives
or reduces to practice during the course of performance under this
subparagraph 4.1.(B) and this Agreement shall be the exclusive
property of LICENSOR. This information, material, plans, and any
such ideas or inventions shall be deemed LICENSOR Proprietary
Information and shall not be disclosed to anyone outside of
LICENSOR or used by LICENSEE outside the terms and conditions of
this Agreement or used by others without the prior written consent
of LICENSOR. Such work product which qualifies as a "work for hire"
under the copyright laws of the United States shall be the
exclusive property of LICENSOR as "work for hire". All right,
title, and interest, including any copyright in and to any written
data which does not qualify as a "work-for-hire" shall be deemed to
have been automatically transferred to LICENSOR from the date of
inception thereof. Upon LICENSOR's
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Syntron, Inc. - Benthos, Inc.
Hydrophone License Agreement
Amendment Number 1
request, LICENSEE shall execute any document and render such other
assistance as reasonably necessary to perfect full right, title,
and interest worldwide in the written data, including formal
conveyance of copyright. Written data shall not be published or
submitted for publication by LICENSEE without the prior written
approval of LICENSOR. Further, if any such article, paper,
treatise, or report includes work previously copyrighted by
LICENSEE, LICENSEE hereby grants to LICENSOR a nonexclusive,
worldwide, irrevocable, paid-up license under such copyrights to
reproduce, distribute, and use the works in any manner.
During the period of this Agreement and thereafter at any
reasonable time when called upon to do so by LICENSOR, LICENSEE
shall execute patent applications, assignments to LICENSOR, and
other papers and shall render such other assistance that LICENSOR
believes necessary to secure for LICENSOR the full protection and
ownership of all rights in and to the work product of the services
performed by LICENSEE. The filing of patent applications on
inventions made by LICENSEE shall be decided by LICENSOR and shall
be for such countries as LICENSOR shall elect. LICENSOR shall bear
all the expenses in connection with the preparation, filing, and
prosecution of applications for patents and for all matters
provided in this subparagraph requiring the time and/or assistance
of LICENSEE as to inventions. Further, LICENSOR shall pay LICENSEE
the hourly rate of $ 75.00 for services which LICENSEE performs in
connection with inventions and patent applications which may be
required by LICENSOR whether during the term of this Agreement or
after expiration or termination of this Agreement. LICENSEE
warrants that the engineering design, manufacturing design, the
generation and copying of the Documentation and any future updates
thereto shall not violate any third party's intellectual property
rights nor include any unauthorized disclosure of any third party's
intellectual property and agrees to, at its sole expense, at all
times during the term of this Agreement and thereafter indemnify,
defend, and hold LICENSOR, their trustees, officers, employees and
affiliates harmless against any and all costs and/or liabilities of
whatever nature that may result from any claim by any third party
for infringement of such third party's intellectual property
rights. The aforementioned documentation deemed "work for hire"
shall be clearly marked as the property and proprietary information
of LICENSOR.
(B.2) LICENSEE shall provide engineering services to determine what
production tooling will be necesary and provide such production
tooling required by LICENSEE or LICENSEE's subcontractors to
produce the Licensed Product. Such services shall include all
engineering design and manufacturing for production tooling
required by LICENSEE or LICENSEE's subcontractors and any future
updates thereto as and when initiated by LICENSEE to produce the
Licensed Product. Such services shall be deemed initially completed
by LICENSEE on 1) the successful completion of testing to the
satisfaction of LICENSOR and LICENSEE of Licensed Product
manufactured using the production tooling to be tested to a
mutually agreed upon set of performance specifications documented
in Appendix B attached hereto and made a part hereof and 2)
delivery to LICENSOR by LICENSEE of a complete and accurate listing
of such production tooling with values per individual item. Title
to such production tooling provided by LICENSEE to itself and its
subcontractors shall be held by LICENSEE. LICENSEE shall be
responsible for maintenance and replacement of such production
tooling as required.
(C) LICENSEE shall manufacture the Licensed Product to the
specifications agreed to for the use of LICENSOR and all other
customers that may have a need for this product regardless of these
other customers competitive position with LICENSOR.
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Syntron, Inc. - Benthos, Inc.
Hydrophone License Agreement
Amendment Number 1
(D) In consideration of granting said exclusive license to LICENSEE,
LICENSEE will provide most favored customer status to LICENSOR with
respect to any selling price and delivery of the Licensed Product
to LICENSOR. NO ROYALTIES ARE DUE LICENSOR ON THE VALUE OF PRODUCTS
SOLD TO LICENSOR. At all times that this license is exclusive to
LICENSEE, LICENSOR will not compete with LICENSEE in the Licensed
Product as an saleable end-item.
(E) LICENSEE is free to set the unit sales price of the Licensed
Product to any LICENSEE customer. The foregoing notwithstanding and
by way of indication of most favored customer status of LICENSOR,
the Net Selling Price of such unit sales price to any third party
will not be lower at any time than the actual gross selling price
to LICENSOR for like or lesser quantity purchase commitment.
(F) For all sales of the Licensed Product to any organization or entity
other than LICENSOR up to the combined, cummulative amount of the
first 250,000 units, LICENSEE shall not be required to pay any
running Royalties to LICENSOR. For all sales of the Licensed
Product to any organization or entity other than LICENSOR following
such first 250,000 units, LICENSEE shall pay to LICENSOR running
Royalties in the amount of $0.75 per unit for each Commercial Sale
of Licensed Products by LICENSEE - said Royalty to be due and
payable upon delivery of the report due pursuant to Paragraph 4.5
hereof. In the event a Commercial Sale of Licensed Products occurs
together with the sale or lease of a system or other product, such
royalty shall be solely on the Licensed Product, as no royalty
shall be payable with respect to any other portion of such system
or product.
4.2 No multiple royalties shall be payable solely for the reason that any
Licensed Products, its manufacture, use, or sale are or shall be covered by
more than one patent application, patent or certificate of registration
licensed under this Agreement.
4.3 Royalty payments shall be paid in United States dollars in Houston, Texas,
or at such other place as LICENSOR may reasonably designate.
4.4 LICENSEE shall keep full, true and accurate books of account and records
containing all particulars that may be necessary for the purposes of
showing the amounts payable to or by LICENSOR hereunder. Said books of
account shall be kept at LICENSEE's principal place of business or the
principal place of business of the appropriate division of LICENSEE to
which this Agreement relates. Said books and the supporting data shall be
open at all reasonable times for three (3) years following the end of the
calendar year to which they pertain, to the inspection of independent CPA's
to be proposed by LICENSOR and approved by LICENSEE, said approval not to
be unreasonably withheld, for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement, such
inspection to occur no more than once each calendar year upon reasonable
prior notice to LICENSEE. The expense of such inspection shall be borne by
LICENSOR unless such inspection reveals a shortfall in payments due to
LICENSOR by LICENSEE or other violation of the terms and conditions of this
Agreement by LICENSEE in which case such expenses shall be borne by
LICENSEE.
4.5 The Royalty provided in Paragraph 4.1(F) shall be payable to LICENSOR
within in one (1) month after the end of each calendar quarter. LICENSEE
shall have the option of paying any portions of the
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Syntron, Inc. - Benthos, Inc.
Hydrophone License Agreement
Amendment Number 1
royalty herein provided at any time earlier than that specified. Each
royalty payment to LICENSOR shall include an appropriate statement of the
gross revenues due LICENSOR and shall identify the portion of the Agreement
under which said royalty payments are made. In addition, each royalty
payment shall be accompanied by true and accurate reports giving such
particulars of the business conducted by LICENSEE during the period to
which such payment applies under this Agreement ending thirty (30) days
prior to such payment date as shall be pertinent to an accounting
hereunder.
4.6 The royalty payments set forth in this Agreement shall, if overdue, bear
interest until payment at the maximum per annum rate permitted by
applicable law. The payment of such interest shall not foreclose LICENSOR
from exercising any other rights it may have as a consequence of the
lateness of any payment.
2. Replace Appendix A dated October 16, 1997 in its entirety with Appendix A
dated June 18, 1998.
3. Replace Appendix B Revision E dated October 17, 1997 in its entirety with
Appendix B Revision G dated May 26, 1998.
4. All other terms and conditions of the Agreement remain unchanged.
IN WITNESS THEREOF, the parties have hereunto set their hands and duly executed
this Amendment Number 1 as of the day and year set forth below.
AGREED ON BEHALF OF AGREED ON BEHALF OF
SYNTRON, INC. (LICENSOR) BENTHOS, INC. (LICENSEE)
By: /s/ RICHARD F. MILES By: /s/ JOHN L. COUGHLIN
----------------------- ----------------------
Name: RICHARD F. MILES Name: JOHN L. COUGHLIN
Title: President Title: President/CEO
Date: September 11, 1998 Date: 9-9-98
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