EXHIBIT 10.10
AMENDMENT TO
AGREEMENT FOR LICENSE AND TRANSFER OF
INTELLECTUAL PROPERTY RIGHTS
This amendment is made as of this 23 day of April, 1998, by and between
Lightrays, Ltd., a California limited partnership, herein "Lightrays" and
Xenonics, Inc., a Delaware corporation, herein "Xenonics", amending that certain
Agreement For the License and Transfer of Intellectual Property Rights, dated
March 27, 1997, as amended by amendment dated June 9, 1997, herein collectively
referred to as "the Agreement."
Recitals:
A. Pursuant to Article VI, paragraph A of the Agreement, Xenonics has
previously issued and delivered to Lightrays 100,000 shares of its common stock;
B. Xenonics has expended in excess of $800,000 in developing and refining
the Lightrays products;
C. Xxxxxxx Xxxxxx, chief executive officer of the former general partner
of Lightrays, while acting as general partner of Lightrays, without the consent
of Xenonics, entered into the business premises of Xenonics and absconded with
intellectual and physical materials pertaining to Lightrays Rights as defined in
the Agreement and refuses to return the same to Xenonics;
D. Xenonics has brought suit against Lightrays, Worldwide Technologies,
Inc., its former general partner, and Xxxxxxx Xxxxxx, chief executive officer of
said general partner; and
E. The parties desire to settle all claims between them arising from the
acts of its former general partner and amend the Agreement.
IN CONSIDERATION of the foregoing and the mutual promises and covenants
provided herein, the parties agree as follows:
1. Article VI is stricken in its entirety and the following provided in
its place and stead:
Article VI Consideration
As consideration for the licensing and sale of the patent and intellectual
property rights by Lightrays to Xenonics, Xenonics shall:
A. Cause to be issued to Lightrays within thirty (30) days of
execution hereof an additional 150,000 shares of its common stock, fully paid
and non-assessable (Lightrays acknowledges receipt of 100,000 shares issued
pursuant to the previous provisions of the Agreement);
B. Cause to be paid to Lightrays, an annual royalty equal to fifty
percent (50%) of its net annual profit until such time as the amount of such
annual royalties paid shall total the sum of $400,000.
(a) Such amounts shall be paid on or before ninety (90) days
after close of each fiscal year until paid in full and shall be accompanied by
financial statements of Xenonics prepared by an independent certified public
accountant.
(b) For the purposes hereof, net annual profit shall mean net
profits of Xenonics after, reserve or payment of state or federal taxes based on
income and in compliance with general accounting principles, excluding any
excessive or unreasonable bonuses or incentive compensation paid to officers,
directors or shareholders.
(c) Dismiss, with prejudice, the action against Lightrays,
being San Diego Superior Court action No. 076138.
(d) Upon full payment of $400,000, delivery of such shares of
stock, and said dismissal as herein provided, Xenonics shall own, free from all
claims of Lightrays, all right, title and interest in and to the intellectual
property transferred pursuant to this Agreement, including but not limited to
U.S. Patent #5,036,444, together with any and all improvements, refinements,
adoptions, developments or other information that has been generated or
developed in any research or development program pertaining to the subject
matter of this Agreement whether by Xenonics, or Lightrays, or any other
predecessor agreements, whereupon Lightrays shall cause to be executed and
delivered to Xenonics, an assignment thereof in form acceptable to Xenonics.
(e) Xenonics' books of account and business records, which in
any way relate to the verification of the transactions covered by this Agreement
shall be open for audit or inspection by Lightrays authorized representatives at
its expense during Xenonics' regular business hours. Should Lightrays conduct
such an audit for any year, and Royalties computed shown by Xenonics' statement
for any such year should be found to be understated by more than six percent
(6%) of the amount so stated, then Xenonics shall pay to Lightrays the cost of
such audit, plus the amount of the understatement and applicable interest.
Lightrays will keep such audit information confidential.
2. Each party warrants to the other that it has the authority and power to
enter into this amendment and the person executing it has been duly authorized
to execute it on its behalf.
3. During the term hereof, Xenonics shall cause the designee of Lightrays
to be elected to its Board of Directors to serve without compensation.
4. In the event either party defaults on its obligations provided herein,
the non-default party shall give the other party written notice specifying the
default. If the defaulting party does not cure said default and notify the other
party of such cure, or commencement thereof, within thirty (30) days after
receipt of said notice, the party giving notice of default may terminate this
Agreement; provided however, if default relates to the non-payment of royalties,
the cure period shall be ten (10) business days.
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5. Any controversy or dispute involving the construction or application of
any of the terms, provisions, or conditions of this Agreement, including any
giving rise to termination by either party, shall be referred to mediation on
the written request of either party to a mediator mutually acceptable to both
parties. Should the parties not be able to mutually agree to the appointment of
such a mediator, such mediation shall be as appointed by the presiding judge of
the Superior Court of the North County Division of the San Diego County Superior
Court. Each party shall be responsible for half of such mediator's fees and
costs.
In the event such mediation does not resolve such controversy or dispute,
the matter shall be submitted to binding arbitration upon written request of
either party. Arbitration shall comply with and be governed by the then
applicable provisions of the California Arbitration Act subject to the
following:
(a) Each party shall appoint one person and such person so
appointed shall appoint a third impartial arbitrator whose decision shall be
final and binding on both parties; and
(b) The cost of arbitration shall be borne by the parties in
such proportions as the impartial arbitrator shall determine.
6. Except as changed or modified by this amendment, all other terms and
provisions of the Agreement as amended are hereby ratified and confirmed.
7. This amendment may be executed in two or more counterparts and when so
executed shall be effective for all purposes.
IN WITNESS WHEREOF this Amendment has been executed and is effective as of
the date first above appearing.
LIGHTRAYS XENONICS
LIGHTRAYS, LTD., a California limited XENONICS, INC., a Delaware corporation
partnership by Xyster, LLC, its General
Partner
By:_______________________________ By:______________________________
Xxxxxx X. Xxxx Xxxxxxx X. Xxxxxxx
President
By:_______________________________ By:______________________________
Xxxxxx X. Xxxx Secretary
By:_______________________________
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