Exhibit 4.5
DATED AS OF 17 October, 2002
METAL STORM LIMITED ACM 064 270 006
("MS")
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
("SAIC")
MODIFICATION NO. 1
TO
AGREEMENT DATED 17 OCTOBER 1998
This Modification No. 1 to the Agreement dated 17 October 1998 (hereinafter
"Agreement") is made effective 17 October 2002
BETWEEN: METAL STORM LIMITED ACN 064 270 006 of Xxxxx 00, Xxxxxxx Xxxxx One,
345 Queen Street, Brisbane, Queensland, Australia ("MS")
AND: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION having an address at
McLean, Virginia, United States of America ( "SAIC")
RECITALS:
A. In accordance with Article 2.1.2 of the Agreement, the duration of the
original Core Technology License expires 16 October 2002.
B. MS and SAIC desire to continue the relationship established in the
Agreement but on a non-exclusive basis.
C. As consideration for the reduction in rights to SAIC, MS agrees to
eliminate some of the reporting requirements.
THIS AGREEMENT WITNESSES that in consideration of, among other things, the
mutual promises contained in this Agreement the parties agree to the following
modifications:
1. Article 2, CORE TECHNOLOGY LICENCE, is hereby replaced in its entirety by
the following:
2. CORE TECHNOLOGY LICENCE
Grant of Core Technology Licence.
MS grants to SAIC for the period 17 October 1998 to 16 October 2002
the exclusive right and licence, and, for a period of three years
after 16 October 2002, the non-exclusive right and licence, including
the right to sub-license others, within the United States of America,
Europe, and the United Kingdom to practice the Core Technology only in
connection with:
bids and potential bids for R&D Programmes; and
the conduct of R&D Programmes that have been approved by MS
For the purposes of this Agreement, the right to practice means the
right to make, have made, use, sell, offer to sell, reproduce, prepare
derivative works, distribute copies to the public by sale or
otherwise, to perform and to publicly display the Core Technology but
only for the purposes of paragraph (a) and (b).
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The exclusive and non-exclusive right and licence set out above does
not prevent MS, either by itself or through others, exploiting the
Core Technology.
2.1.2 Duration of Core Technology License.
The non-exclusive license granted by MS to SAIC above shall be
extended for an additional three years if mutually agreed by the
parties in a bi-lateral, written modification to this agreement thirty
(30) days prior to the termination date of 16 October 2005:
2. Article 4. PRECONDITIONS TO BIDDING R&D PROGRAMMES is hereby replaced in its
entirety by the following:
4. PRECONDITIONS TO BIDDING R&D PROGRAMMES
SAIC will seek approval from MS prior to the submission of a bid
for, or the conduct of, any R&D Programme. MS' approval is
subject to the financial arrangements for any R&D Programme being
agreed upon.
The procedures for accomplishing the requirements of this clause
are included in Schedule 4, entitled "SAIC/Metal Storm Procedures
to Give Effect to the Operation of Clause 4.1 in Their Teaming
Agreement," attached hereto.
MS may as a prime submit bids for any programmes. For any
contract then awarded to MS to the extent possible, MS will use
SAIC as a subcontractor subject to any requirements made by a
Government or commercial entity.
SAIC may, at any time, decide that it does not intend to lodge a
bid for an R&D Programme. SAIC will, where possible. inform MS
within 48 hours of Its decision not to lodge a bid.
3. Article 7, QUARTERLY REPORTS requirement is hereby deleted and replaced with
the following.
7. MONTHLY MEETINGS
The Parties agree to meet monthly, to discuss the status of the
marketing activities. The default time for the meetings will be
the first Monday of each month. It is recognized that the meeting
day may need to be adjusted to accommodate the members'
schedules.
4. Article 8, APPOINTMENT OF SAIC AS MARKETER OF TECHNOLOGY is hereby replaced
in its entirety with the following:
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8. APPOINTMENT OF SAIC AS MARKETER OF TECHNOLOGY
Appointment
(a) MS hereby grants SAIC an exclusive right to market the
Technology to any commercial and government entities located
in the Territory for a period of 17 October 1998 through 16
October 2002. MS hereby grants SAIC a non-exclusive right to
market the Technology to any commercial and government
entities located in the Territory for a period of 17 October
2002 through 16 October 2005 and for a further period of
time of the same duration as any extension of the
non-exclusive license granted by MS to SAIC as set forth in
section 2.1.2.
(b) MS and SAIC will use their best efforts to coordinate their
marketing activities as facilitated by the Article 7 monthly
meetings.
5. Article 16. NOTICES is hereby replaced in its entirety with the following:
16. NOTICES
Notices are to be sent by facsimile transmittal and certified
mail and are effective as of the date sent if actually received
and addressed as follows:
METAL STORM PTY LTD
0000 X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxx
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
00000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
c/o 0000 XXXX Xxxxx, X/X 0-0-0
XxXxxx, XX 00000
Attention: Xx. Xxxxx X. XxXxxxx
SIGNED for and on behalf of
METAL STORM LIMITED )
by a duly authorized signatory )
/s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
------------------------
Title: Chief Corporate Officer
------------------------------
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SIGNED for and on behalf of )
SCIENCE APPLICATIONS )
INTERNATIONAL CORPORATION )
by a duly authorized signatory )
/S/ XXXXX X. XXXXXXX
---------------------
Name: Xxxxx X. XxXxxxx
-----------------------
Title: Deputy Group Director of Contracts
-----------------------------------------
and Vice President for Administration
--------------------------------------------
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SCHEDULE 4
SAIC/Metal Storm Procedures to Give Effect to the Operation of Clause 4.1 In
Their Teaming Agreement
The procedures which will satisfy the requirements of Clause 4.1 are set out
below.
These procedures are intended to operate in an environment of absolute
transparency between SAIC and Metal Storm (MS) in respect of all aspect,
including the financial arrangements, and the entire process, of a proposal.
This is the overarching spirit of the arrangement between SAIC and Metal Storm.
The intention of this agreed procedure is:
.. to provide an efficient operational mechanism which is accepted by SAIC and
Metal Storm as satisfying the requirements of Clause 4.1;
.. to make Clause 4.1 as workable as possible within the overarching
constraint that the rights of MS to provide approval to "finalise a program
contract" by SAIC are reserved until MS has accepted the final financial
arrangements on the program.
Each element of the procedures is of equal importance and weight, and each is to
be met in conjunction with every other procedure if they are to give proper
effect to Clause 4.1.
The procedures are these:
1. Metal Storm will provide "approvals" of two types:
. a "rolling" approval;
. an approval to finalise a program contract.
2. It is recognised that many proposals may be begun by SAIC as "marketing"
type exercises. These are already advised to Metal Storm regularly, as part
of the discussions in the monthly marketing meetings, and that will
continue.
3. Where any proposal appears likely to lead to a program MS and SAIC must
give that program a name.
4. SAIC may assume that MS provides approval to continue with the program as
part of the rolling approval process.
5. SAIC will provide preliminary Statements of Work (SOWs) for itself and for
contractors and sub contractors to MS as soon as is possible after
notifying the naming of a program. Templates and formats for SOWS will be
agreed between the parties and will be standardised as much as possible.
6. Each variation of any SOW will be dated and the most recent date will be
taken to be the SOW on which both SAIC and MS are operating.
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7. The "rolling" approval given by MS will be to continue to proceed based
upon the disclosure and knowledge that Metal Storm has had provided to it,
up until that time.
8. SAIC will provide to MS detailed schedules of works which will as early as
possible identify the work which SAIC might do. MS may request that the
work mix be altered to allow MS to provide a greater proportion of the
input in circumstances where it has the capacity to do that, or for any
other reason, including a review of the equity of the profit amount, which
is available from the program to each party. MS will provide the same
reciprocal arrangement to SAIC.
9. MS and SAIC will each provide a single contact who will have the
information and resources to enable decisions to be made about xxxxxxx
levels and profit spilt between SAIC and MS. It is anticipated that that
person will need to have experience across the working elements of the
whole program.
10. MS will flag as early as possible, any likely element or event, which may
cause the withdrawal of its ongoing approval. It will provide two points of
contact either of who can provide verbal agreement, which can be obtained
within 24 hours of issues being put with subsequent confirmation in
writing. Those two persons shall be Xxxxxxx Xxxxxx and Xxxxxxx Xxxx until
otherwise advised in writing.
However, it is understood between SAIC and MS that there may be some issues
pertaining to the financial arrangement of any proposal that are so
fundamental to clause 4.1 such as to require MS board approval, which will
be provided within four (4) working days.
11. Inclusions and parameters within the templates and contractors can be
subject to change up to and into the commencement of the program. Changes,
however, must be agreed between MS and SAIC. Where they are not agreed the
changes are not to be given effect.
12. SAIC must notify MS in writing four (4) working days, if possible, prior to
its intention to sign off on any program and request MS's approval to
finalise. In all cases, MS will be sent a copy of the proposal
(appropriately sanitized as to SAIC's proprietary cost data) on the same
day as the proposal is submitted to the customer.
13. As soon as possible after that request, but in any event within four (4)
working days of the request, MS will advise its intention to issue an
approval to finalize or not to approve the program. Where a program is not
approved by MS then it is not approved within the meaning of Clause 4.1.
It is acknowledged and recognized by MS and SAIC that the outcome at Step
13 above should have been flagged as part of the process of communication
prior to the request being made. Put simply, it is the intention of the
parties that any potential difficulties in the financial or other
arrangements of a program will be dealt with as they arise and both SAIC
and MS will attempt in good faith to resolve these difficulties as a matter
of utmost urgency. Notwithstanding this where a difficulty has arisen and
has not been resolved in the manner set out in this procedure, the
"rolling" approval will be withdrawn, until the
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difficulty has been resolved.
Where, in an extreme or unusual situation, a proposal is required to be
submitted in a time frame that does not enable proper consideration by MS
so as to give an effective approval by MS after the exercise of its
independent business judgement, SAIC may with MS's prior written consent
submit the proposal. MS shall then be entitled to consider the proposal and
form its judgement as to whether the proposal ought to be approved or not
approved pursuant to the provisions of clause 4.1. MS may then within four
(4) business days of receipt of the proposal from SAIC, as submitted,
advise SAIC in writing as to whether the proposal is approved or not. If
the proposal is not approved, SAIC shall forthwith withdraw the proposal.
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