Repayment Agreement between
Material Technologies, Inc.
and
The Trustees of the University of Pennsylvania
This Repayment Agreement is made between Material Technologies, Inc.
("MATECH") and the The Trustees of the University of Pennsylvania ("PENN") in
reference to the Sponsored Research Agreement effective October 15, 1993
("SRA") between Tensiodyne Scientific Corporation ("SPONSOR") and PENN and is
made effective as of the date of the last signature executing this Repayment
Agreement.
BACKGROUND
WHEREAS, pursuant to the terms and conditions of the SRA, SPONSOR agreed to
sponsor the research of Xx. Xxxxxxx Xxxxx of PENN's School of Engineering in
fatigue properties of metals by payment of costs incurred in such research in
an amount of $200,000 ("OBLIGATIONS").
WHEREAS, SPONSOR has not made payments as required under the SRA.
WHEREAS, Material Technologies, Inc. ("MATECH") is a successor as to
SPONSOR's business, and therefore, is obligated to perform the obligations of
SPONSOR under the SRA and this REPAYMENT AGREEMENT thereto.
WHEREAS, PENN and MATECH wish to provide for the repayment of the OBLIGATION
on the following terms:
NOW, THEREFORE, the parties agree as follows:
1. Unless other wise defined in the Repayment Agreement, all capitalized
terms shall have the same meaning as set forth in the SRA.
2. MATECH hereby represents and warrants that it is the lawful successor to
SPONSOR's rights and obligations under the AGREEMENT.
3. MATECH agrees that the amount outstanding and due to PENN under the SRA is
$200,000.00.
4. MATECH shall pay the OBLIGATION in accordance with the following terms:
5. The entire obligation with accrued interest at the rate of 1.5% per month
beginning June 30, 1997 shall be paid to PENN no later than four (4) years
from the date of the last signature executing this agreement.
6. In the event that MATECH secures any proceeds in the form of an equity
investment, debt, or any other capital with the exception of funds provided by
any public sector entity ("FUNDING"), MATECH will immediately remit to PENN
30% of such FUNDING until OBLIGATION is paid in full. However, such remittance
to PENN will be subsequent to the last signature executing this AGREEMENT.
7. In the event that MATCH remits payment or other consideration to Xx.
Xxxxxxx X. Xxxxxxxxx in partial or full satisfaction of any dept owned by
MATECH to Xx. Xxxxxxxx MATECH will remit to PENN, within five (5) working
days after such payment is made, cash equal to such payment, until the
OBLIGATION is fully repaid to PENN. The foregoing provision shall not apply to
monies which MATECH repays to Xx. Xxxxxxxxx which were and/or are used by
MATECH as Working Capital. As used herein, the term Working Capital is
defined by the Generally Accepted Accounting Principles of the Federal
Accounting Standards Board, except that Working Capital shall not include any
form of payment to Xx. Xxxxxxxxx and/or Xx. Xxxxxxxxx'x Family other than the
salary described in Section 8 of this AGREEMENT.
8. MATECH will not remit to Xx. Xxxxxxxxx an annual salary, or any other
consideration in lieu of a salary, exceeding $150,000 per annum until
OBLIGATION is paid in full.
9. PENN will have the right to review or audit all the books and records of
MATECH. If in the course of such a review or audit, PENN determines in good
faith that it SPONSOR has not met any of the duties defined in paragraph 5, 6,
7 and above, PENN will, by written notice, notify MATECH that PENN has
determined that it determines that MATECH has not met a duty (duties). If
MATECH determines in good faith that MATECH has met all of the duties defined
in paragraphs 5, 6, 7 and 8 above then MATECH and PENN shall choose a mutually
agreeable independent auditor to review or audit all the books and records and
records of MATECH at PENN'S expense. If such an auditor determines that MATECH
has not met any of the duties in paragraphs 5, 6, 7 and 8, the entire unpaid
OBLIGATION together with the accrued interest shall become immediately due and
payable. Such payment will not forgive MATECH of any of the duties as defined
in paragraphs 5, 6, 7 and 8 above. If such an auditor determines that MATECH
has not met all of the duties defined in paragraphs 5, 6, 7 and 8 MATECH will
reimburse PENN for all costs associated with such review or audit.
10. Notwithstanding anything to the contrary contained in this REPAYMENT
AGREEMENT, MATECH shall pay any balance remaining on the OBLIGATION no later
than four (4) years from last signature executing this AGREEMENT.
11. The parties agree that no default and/or breach under the Repayment
Agreement by MATECH shall be construed as, or shall result in a default and/or
breach under the License Agreement made effective as of October 15, 1993
between Tensiodyne Scientific Corporation and PENN. Notwithstanding the
foregoing, it is understood and agreed that this agreement does no modify,
alter or amend the License Agreement in any manner and that by entering into
the Agreement, Penn does not and shall not waive any default and/or breach by
MATECH of that License Agreement.
IN WITNESS THEREOF, the parties have executed this Repayment Agreement through
their duly authorized representatives as set forth below, and the Repayment
Agreement shall be attached to, and shall become a part of. the SRA between
the parties
THE TRUSTEES OF THE
UNIVERSITY of PENNSYLVANIA MATERIAL TECHNOLOGIES INC.
By: /s/ Xxxxx X Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------- -----------------------
Name: Xxxxx X Xxxxxxxx Name: Xxxxxx X. Xxxxxxxxx
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Title: Managing Director - Center Title: President
for Technology Transfer ---------
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Date: 12/17/97 Date:12/19/97
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ACKNOWLEDGEMENT
I have read the terms of the Agreement and the Amendment (Amendment 1).
By: /s/ Xxxxxxxx Xxxxx
--------------------
Name: Xxxxxxxx Xxxxx
---------------
Title: Professor
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Date: 12/17/97
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