EXHIBIT 10.2
ROYALTY AGREEMENT
This Royalty Agreement is dated November 6, 1992 and serves as a portion
of the consideration for the Asset Purchase Agreement ("Purchase Agreement")
dated November 6, 1992, by and among I/O Sensors, Inc., a Delaware
corporation, ("Sensors"), Triton Energy Corporation, a Texas corporation
("Triton") and Triton Technologies, Inc., a Texas corporation ("TTI").
This Royalty Agreement will become effective when executed and delivered
upon closing of the transactions contemplated in the Purchase Agreement and
will constitute a termination of the License Agreement entered into by TTI
and Input/Output, Inc. effective January 1, 1988 ("License Agreement"),
supplanting and replacing the License Agreement in its entirety.
W I T N E S S E T H
WHEREAS, Sensors desires to purchase the assets of TTI under the terms
of the Purchase Agreement;
WHEREAS, Sensors, TTI and Triton have agreed that a portion of the
consideration paid by Sensors and received by TTI under the Purchase
Agreement shall be in the form of royalty payments as set forth below; and
WHEREAS, Sensors, Triton and TTI have agreed that this Royalty Agreement
will terminate and replace the License Agreement.
NOW, THEREFORE, in consideration of the mutual undertakings and
covenants between the parties, it is agreed as follows:
ARTICLE I
DEFINITIONS
As used in this Royalty Agreement, the defined terms below will have the
following meanings, equally applicable to both singular and plural form of
terms:
1.1. "SENSOR/ACCELEROMETER DEVICES" shall mean and refer to a bulk
micro-machined transducer to measure acceleration, the rights to which have
been assigned by TTI to Sensors under the Purchase Agreement.
1.2. "FIELD OF THIS AGREEMENT" shall mean and refer to sale of
Sensor/Accelerometer Devices.
1.3. "PAYOUT" shall mean the payment of royalties under this Royalty
Agreement equal to an aggregate amount of ten million dollars
($10,000,000.00).
1.4. "NET SALES" shall mean and refer to the invoiced price after
deduction of regular and customary trade and quantity discounts (including,
but not limited to, freight allowances, cash discounts and sales
commissions), but before deduction of any other items. When utilized
commercially other than by sale, Net Sales shall mean and refer to the price
at which products of similar kind and quality are sold or are being offered
for sale in similar quantities. Credit against Net Sales shall be allowed for
products which are returned for credit.
1.5. "ROYALTY BEARING PRODUCTS" shall mean Sensor/Accelerometer Devices
which, as sold or otherwise disposed of, (i) come within any claim of an
unexpired patent, or patent application that issues as a patent, assigned by
TTI to Sensors under the Purchase Agreement or (ii) are made by use of a
process or equipment which, at the time of such making, comes within any claim
of an unexpired patent, or patent application that issues as a patent,
assigned by TTI to Sensors under the Purchase Agreement.
ARTICLE II
ROYALTIES
Sensors hereby agrees to make unto TTI, or its assignee, periodic
royalty payments during the term of this Royalty Agreement as follows:
(a) for geophysical applications,
(i) at the rate of five percent (5.0%) of Sensors's or its
licensees' Net Sales of Royalty Bearing Products until
Payout; and
(ii) following Payout, at the rate of three percent (3%) of
Sensors's or its licensees' Net Sales of Royalty Bearing
Products; and
(b) following Payout, for all applications other than geophysical, at
the rate of five percent (5%) of Sensor's or its licensee's Net
Sales of Royalty Bearing Products.
ARTICLE III
REPORTS, PAYMENTS, AND AUDITS
3.1. REPORTS. Each royalty payment shall be accompanied by a written
report setting forth the requisite information needed to calculate the
royalties accrued.
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3.2. PAYMENTS. The periodic royalty payments due and accrued hereunder
shall be paid quarterly for each calendar quarter within 45 days of the end
of such calendar quarter and forwarded to TTI along with the Section 3.1
report.
3.3. AUDITS. TTI shall have the right, no more than once during any
calendar year, to have an independent certified public accountant inspect the
relevant records of Sensors on 30 business days' notice and during regular
business hours to verify the reports and payments required to be made
hereunder. The cost of such inspection shall be borne by TTI.
ARTICLE IV
GENERAL PROVISIONS
4.1. TERM. This Royalty Agreement shall expire on the earlier of (i)
December 31, 2010 or (ii) the date of expiration of the last patent, or
patent application which issues as a patent, assigned by TTI to Sensors under
the Purchase Agreement.
4.2. CANCELLATION OF LICENSE AGREEMENT. The License Agreement is
terminated effective as of the effective date of this Purchase Agreement and
shall thereupon have no further force or effect.
4.3. NOTICE. Any notice provided or permitted to be given under this
Agreement must be in writing, but may be served by deposit in the mail,
addressed to the party to be notified, postage prepaid, and registered or
certified, with a return receipt requested. Notice given by registered mail
shall be deemed delivered and effective on the date of delivery shown on the
return receipt. Notice may be served in any other manner, including telex,
telecopy, telegram, etc., but shall be deemed delivered and effective as of
the time of actual delivery. For purposes of notice the addresses of the
parties shall be as follows:
If to Sensors:
Xxxxxx X. Xxxxxxxx
Input/Output, Inc.
00000 Xxxx Xxxxx Xx.
Xxxxxxxx, Xxxxx 00000
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With a copy to:
Xxxx Xxxxxxxxx
Xxxxxx and Xxxxx, L.L.P.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to TTI:
Xxxxxxx X. Xxxxxxx
Triton Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to Triton:
Xxxxxxx X. Xxxxxxx
Triton Energy Corporation
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Each party may change its address for notice by giving notice.
4.4 ENTIRE AGREEMENT. This Agreement, which incorporates all prior
understandings relating to its subject matter, contains the entire agreement
of the parties with respect to its subject matter and shall not be modified
except by written instrument executed by each party.
4.5 WAIVER. The failure of a party to insist upon strict performance
of any provision of this Agreement shall not constitute a waiver of, or
estoppel against asserting, the right to require performance in the future.
A waiver or estoppel in any one instance shall not constitute a waiver or
estoppel with respect to a later breach.
4.6 SEVERABILITY. If any of the terms and conditions of this
Agreement are held by any court of competent jurisdiction to contravene, or
to be invalid under, the laws of any political body having jurisdiction over
this subject matter, that contravention or invalidity shall not invalidate
the entire Agreement. Instead, this Agreement shall be construed as if it did
not contain the particular provision or provisions held to be invalid, the
rights and obligations of the parties shall be construed and enforced
accordingly, and this Agreement shall remain in full force and effect.
4.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal law, and not the law of conflicts, of the
State of Texas.
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4.8 CONSTRUCTION. The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any other provision hereof. Whenever the context requires, the gender of all
words used in this Agreement shall include the masculine, feminine, and
neuter, and the number of all words shall include the singular and the plural.
4.9 COUNTERPART EXECUTION. This Agreement may be executed in any
number of counterparts with the same effect as if all the parties had signed
the same document. All counterparts shall be construed together and shall
constitute one and the same instrument.
4.10 SUCCESSORS AND ASSIGNS. Except as otherwise provided, this
Agreement shall apply to, and shall be binding upon, the parties hereto, their
respective successors and assigns, and all persons claiming by, through, or
under any of these persons.
4.11 CUMULATIVE RIGHTS. The rights and remedies provided by this
Agreement are cumulative, and the use of any right or remedy by any party
shall not preclude or waive its right to use any or all other remedies.
These rights and remedies are given in addition to any other rights a party
may have by law, statute, in equity or otherwise.
4.12 NO THIRD PARTY BENEFICIARY. Any agreement to pay an amount or
any assumption of liability herein contained, express or implied, shall be
only for the benefit of the undersigned parties and their permitted
successors and assigns, and such agreements and assumption shall not inure to
the benefit of the obligees of any other party, whomsoever, it being the
intention of the undersigned that no one shall be deemed to be a third party
beneficiary of this Agreement.
4.13 DRAFTING PARTY. This Agreement expresses the mutual intent of
the parties to this Agreement. Accordingly, regardless of the party preparing
any document, the rule of construction against the drafting party shall have
no application to this Agreement.
4.14 RELIANCE. All covenants, agreements, representations and
warranties made in this Agreement shall be conclusively considered to have
been relied upon by the parties in entering into this Agreement.
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IN WITNESS WHEREOF, the parties have intended and hereby intend to be
bound hereby causing this Royalty Agreement to be executed by their duly
authorized officers as set forth below.
I/O SENSORS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
TRITON TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------
Title: Assistant Treasurer
---------------------------------
TRITON ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------
Title: Vice President and Treasurer
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Input/Output, Inc. ratifies Section 4.2 of this Agreement, cancelling the
License Agreement.
INPUT/OUTPUT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------
Title: Chief Financial Officer
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