I have not read any posts here yet but Altvater can surely feel comfortable with this contract.
"g. Intellectual Property. Apart from the HotZone product line, any intellectual property, technology, and/or product developed by Altvater subsequent to this Agreement, shall be the exclusive property of Altvater, to which GlobeTel shall have no rights, unless otherwise provided for in this Agreement. Any intellectual Property paid for by GlobeTel to Altvater for the any development, repair or maintenance of the HotZone Product Line will be the exclusive property of GlobeTel."
I would go for this, give them what they want, develop something new (technology) in conjuction with the terms of contract, use this newly developed tech to earn a new contract or go elsewhere. He is truly in the drivers seat on this one.