FIRST AMENDMENT TO MEMORANDUM OF UNDERSTANDING
This First Amendment is made to the Memorandum of Understanding ("MOU") dated
December 3, 2004, by and between AirGATE Technologies Inc. ("AGTI"), a Texas
corporation with offices at 000 Xxxxxxx Xxxxxxx, Xxxxx, Xxxxx 00000, and Xxxxxx
Chemical Inc. (now Hexion Specialty Chemicals, Inc., ("Hexion"), a New Jersey
corporation, with offices at 00000 Xxxx Xxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
FOR AND IN CONSIDERATION of the mutual covenants and agreements contained in the
MOU and in this First Amendment, the parties hereby agree as follows:
1. Phases I and II have been completed pursuant to Sections 1.1 and 1.2 of the
MOU.
2. Pursuant to Section 1.3 and 1.4 of the MOU, the milestones, costs, budget and
due dates for Phase III shall be as shown on ATTACHMENT 1 to this First
Amendment. Any savings in engineering costs will be shared by the parties on a
50/50 basis.
3. Pursuant to Section 3.0 of the MOU, it is agreed that the royalty to be paid
by Hexion shall be 7.5% of the Revenue received by Hexion from commercialization
of the Work Product during the first seven (7) years after First
Commercialization, after which the royalty shall be deemed fully paid up.
"Revenue" means the net sales price received by Hexion after deducting any
returns, rebates, discounts, allowances, taxes and transportation. "First
Commercialization" is defined as being achieved upon Hexion receiving payment
from Hexion customers for ten (10) jobs run by AirGate engineers and deemed by
Hexion, in its reasonable judgment, to have been successful and to have met the
defined performance criteria of *** . The date of First Commercialization shall
be designated by Hexion in writing to AGTI. For a six (6) month period following
such date, AGTI shall, at no additional cost to Hexion, train up to three (3)
Hexion employees to operate the equipment and analyze the data and results.
4. The first sentence of the seventh paragraph of Section 8 of the MOU is
amended to read as follows:
"AGTI shall pay to Hexion a royalty based on 7.5% of all Revenue received by
AGTI in the AGTI Field of Use."
5. A new Section 1.6 is added to the MOU, to read as follows:
"1.6 AGTI shall provide Hexion monthly reports detailing progress to date,
milestones, hours and expenses. AGTI shall also establish a change order system
acceptable to Hexion to manage variations in hardware costs.
***Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment request.
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IN WITNESS WHEREOF, the parties have executed this First Amendment effective as
of this 12th day of September, 2006.
AIRGATE TECHNOLOGIES, INC. HEXION SPECIALTY CHEMICALS, INC.
By: ____________________ By: __________________________________
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxxx
CEO/President Vice President
***Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment request.
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