EXHIBIT 10(l)
GRANT AGREEMENT
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This Grant Agreement (the "Agreement") is made and entered into by and
between the STATE OF OHIO, DEPARTMENT OF DEVELOPMENT (hereinafter referred to as
the "Grantor"), and SUPERCONDUCTIVE COMPONENTS, INC. DBA SCI ENGINEERED
MATERIALS (hereinafter referred to as the "Grantee"). This Agreement shall have
the ODOD Agreement Control Number of TECH 04-034.
STATEMENT OF THE AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants hereinafter set forth, the parties hereby agree as
follows:
1. Grant of Funds. Grantor hereby grants funds to Grantee from the
Third Frontier Action Fund (TFAF) in the amount of One Million One Hundred
Seventy Five Thousand Three Hundred Twenty One and NoI100 Dollars
($1,175,321.00) (the "Funds"), for the purposes set forth in Exhibit I, the
Grantee's Proposal, as amended (hereinafter referred to as the "Project") which
is not attached hereto but `Which is incorporated herein as referenced,
submitted in response to the Request for Proposal for the Third Frontier Action
Funds which closed on July 23, 2003, Exhibit II, which is attached hereto and
made a part hereof (hereinafter referred to as the "RFP"). Of the total funds
granted herein, the amount of One Hundred Seventeen Thousand Five Hundred Thirty
Two and No/100 Dollars ($117,532.00), which shall represent ten percent (10%) of
the total amount of this Agreement, shall be payable to Grantee in a lump sum
upon the signing of this Agreement and approval of the Grantee's request for
payment and Grantor obtaining the advance written approval of its Chief of
Budget. The remainder of the Funds shall be paid to Grantee on a reimbursement
basis upon receipt and approval by Grantor of Grantee's quarterly reports and
approval of invoices and other documentation setting forth the expenditure of
the Funds in accordance with Exhibit I. Notwithstanding the foregoing, a final
payment in the amount of One Hundred Seventeen Thousand Five Hundred Thirty Two
and No/100 Dollars ($117,532.00), which shall represent ten percent (10%) of the
total amount of this Agreement, shall be contingent upon Grantor's approval of
the final report submitted by Grantee. The Grantee shall not pledge the Funds as
security for any loan or debt of any kind other than described in this
Agreement.
2. Use of Funds. Grantee shall use the Funds granted pursuant to this
Agreement and any and all program income, including all fees and interest income
generated through the Project, for obligations incurred in the performance of
the Agreement. The expenditures shall be supported by contracts, invoices,
vouchers, and other data as appropriate, evidencing the costs incurred. If
Grantee does not expend the Funds in accordance with the terms, conditions and
time period set forth in this Agreement or if the total amount of the Funds and
any and all program income exceeds the eligible costs of the Project, Grantee
shall return the amounts improperly expended or not expended to Grantor within
thirty (30) days after the expiration or termination of this Agreement.
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3. Budget Alterations. Grantee may make alterations to any budget line
item appearing in Exhibit I that is funded in whole or in part by the Funds
granted under this Agreement so long as the changes do not exceed 10% of the
total amount granted on a cumulative basis and do not conflict with any other
terms or conditions set forth in this Agreement. If the Grantee wishes to alter
any such line item, Grantee shall request Grantor's written approval by
providing sufficient detail and justification for the requested alteration to
the Grantor. Grantor shall not unreasonably withhold such approval. Should the
Grantee wish to transfer any portion of the funds into a line item riot
previously funded in whole or part with Funds granted under this Agreement, or
create a new line item, then the Grantee must request a formal amendment to the
Agreement prior to making any expenditures related to the line item in question.
Alterations to any line item shall not increase the amount of funds granted
under this Agreement as set forth in Section 1. Grantor shall respond to the
Grantee's request in writing within a reasonable period of time.
4. Conditions. Grantee shall undertake the activities in accordance
with Exhibit I and Exhibit II. Grantor and Grantee agree that Exhibit I and
Exhibit II, where applicable, shall govern the authorization of payment under
this Agreement. In addition, Grantee shall be responsible for the following:
a. Performing the Project as set forth in Exhibit I;
b. Maintaining its headquarters and/or a substantial portion of its
workforce in the State of Ohio during the Term of this Agreement;
c. Collaborating with other State of Ohio Programs and State of Ohio
Program Grantees that are not in direct competition with the
Grantee that provide similar and related activities, as outlined in
Exhibit I and Exhibit II;
d. Utilizing the Funds to realize an economic benefit for the State of
Ohio, as outlined in Exhibit I and Exhibit II.
Should the Grantee fail to perform any of the items listed above, the Grantee
shall be required to repay the Funds to the Grantor, as determined by the
Grantor, and as more fully set forth in Section 16. These provisions are not
intended to restrict any other terms and conditions set forth in this Agreement.
5. Intellectual Property. The Grantor does not retain any rights or
title to intellectual property emanating from this Project.
6. Cost Share Commitments and Expenditures. The minimum Cost Share
requirement for this Project is $1 of Cost Share for every $2 provided by the
Grantor. The Cost Share, as defined in Exhibit III, "Cost Share Guidelines,"
which is attached hereto and made a part hereof, may be either cash or in-kind
and must be included in Exhibit I of this Agreement. The amount of Cost Share
listed in Exhibit I of this Agreement will be those costs identified and
obligated as Cost Share as part of the Project. The Cost Share does not have to
flow through the
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books of the Grantee. However, the Grantee is responsible for documenting and
ensuring that all the resources pledged to the Project are delivered. All Cost
Share commitments shall be in accordance with the guidelines set forth in
Exhibit III. If the Grantee determines or has reason to believe that a Cost
Share commitment will not be honored as set forth under the terms of this
Agreement, the Grantee shall notify the Grantor. If the Grantee is not able to
provide the complete Cost Share commitment in accordance with Exhibit I, Grantor
may terminate this Agreement pursuant to Section 16 of this Agreement or reduce
the amount of Funds granted to the Grantee under this Agreement.
7. Accounting of Funds. The Funds and any and all program income
therefrom shall be deposited and maintained in a separate account upon the books
and records of Grantee (the "Account"). Grantee shall keep all records of the
Account in a manner consistent with generally accepted accounting principles.
All disbursements from the Account shall be for obligations incurred in the
performance of this Agreement and shall be supported by contracts,, invoices,
vouchers, and other data, as appropriate, evidencing the necessity of such
expenditure. Failure to comply with this requirement may allow Grantor to
withhold payment allocation requests until such compliance is demonstrated.
8. Project Completion. The Project shall be completed not later than
December 15, 2005, (the "Project Completion Date"). If it is anticipated that
the Grantee will not have completed the Project by the Project Completion Date,
Grantee must request an extension of time for the Project Completion Date at
least sixty (60) days before the Project Completion Date, unless otherwise
agreed upon by Grantor. It will be within the. sole discretion of the Grantor to
grant such extension of time.
9. Term. The parties agree that the term of this Agreement shall be
from December 15, 2003 to three (3) years from the date of final approval by the
Grantor of the Final Report required in section 13c. of this Agreement (the
"Term of the Agreement") unless either date is changed or the Agreement is
terminated in accordance with the provisions of this Agreement. The Grantor
shall not unreasonably withhold approval of the Final Report.
10. Maintenance of Records. Grantee shall establish and maintain for at
least three (3) years from the expiration or termination of this Agreement such
records as are required by Grantor, including but not limited to, financial
reports, intake and participant information, and all other relevant information.
The parties further agree that records required by Grantor with respect to any
questioned costs, audit disallowances, litigation or dispute between Grantor and
Grantee shall be maintained for the time needed for the resolution of said
question and that in the event of early termination of this Agreement, or if for
any other reason Grantor shall require a review of the records related to the
Project, Grantee shall, at its own cost and expense, segregate all such records
related to the Project from its other records of operation.
11. Access and Audit. At any time during normal business hours upon
three (3) days written notice and as often as Grantor may deem necessary and in
a manner as not to unreasonably interfere with the normal business operation of
Grantee, Grantee shall make available to Grantor or its designee, for
examination, and to appropriate state agencies, officials or designees, all of
its records with respect to matters covered by this Agreement. Grantee shall
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permit Grantor or its designee to audit, examine and make excerpts or
transcripts from such records.
12. Property and Equipment Purchases. All items with a useful life of
more than one year and a value greater than $1,000.00 purchased by Grantee from
the Funds granted herein are and shall remain the property of Grantee unless
Grantee defaults in the performance of the terms and conditions of this
Agreement and/or this Agreement is terminated pursuant to Section 16 of this
Agreement. If Grantee defaults in the performance of the terms and conditions of
this Agreement and/or this Agreement is terminated pursuant to Section 16 of
this Agreement, all property and equipment with a useful life of one year and a
value greater than $1,000.00 purchased by Grantee with any funds herein granted
shall revert to Grantor. Grantee shall provide for the security and safekeeping
of all items obtained through this Agreement.
13. Reports. Grantee shall submit the following reports to Grantor:
a). Quarterly Progress Reports. Grantee shall deliver to the Grantor
within thirty (30) days after the end of each calendar year quarter of
this Agreement a progress report covering the Grantee's activities on
the Project during the preceding quarter, including the goals
accomplished and milestones met, and progress on those items set forth
in Section 4 of this Agreement.
b). Quarterly Financial Reports. Grantee shall deliver to the Grantor
within thirty (30) days after the end of each calendar year quarter of
this Agreement, a financial statement of its sources and uses of funds,
including the use of applicable matching funds for such quarterly
period and the Project to date;
c). Final Report. A final report shall be submitted by Grantee thirty
(30) days after the Project Completion Date. Grantor may determine that
the concluding quarterly progress report constitutes a final report.
d). Annual Reports after Project Completion Date. Grantee shall deliver
to the Grantor an annual follow-up report of the Project due on the
30th of September every year thereafter starting the first year after
the Project Completion Date and for two years thereafter. This report
will cover the prior calendar year's activities of the Grantee.
e). Format of Reports. Grantor reserves the right to design the format
for the submission of the reports required within this Section.
f). Additional Information. Grantor reserves the right to require any
other documentation that may supplement the explanation or tracking of
data as it relates to the activities set forth in Exhibit I. Such
documentation may include, but is not limited to, reports, spreadsheets
and databases whether in electronic or paper form. With reasonable
promptness Grantee shall supply Grantor with such other data and
information pertaining to the Grantee's activities as from time to time
may be reasonably requested. It is agreed that any reasonable cost
incurred in connection with the preparation and delivery of such
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requested data and other information as mentioned herein shall
constitute eligible costs, but shall not constitute the matching funds
commitment on the Grantee's behalf.
14. Notice of Default. In the event Grantee fails to perform any
requirements of this Agreement or fails to complete the Project as set forth in
Exhibit I, the Grantor shall terminate this Agreement after providing Grantee
with written notice, in accordance with the notice provisions of this Agreement,
(the "Notice"). The Notice shall itemize the defaults and provide Grantee with a
forty-five (45) day period (the "Cure Period") to cure any and all defaults
under this Agreement as set forth in the Notice. During the Cure Period, Grantee
shall incur only those obligations or expenditures, which are pre-approved by
Grantor, and, which are necessary to enable Grantee to continue its operation
and achieve compliance as set forth in the Notice. If, during the Cure Period,
the Grantee determines that it will be unable to complete the Project as set
forth in Exhibit I, and the Grantee has not received all of the Funds, the
Grantee may, prior to the expiration of the Cure Period, present to the Grantor
its proposed changes to the Project (hereinafter the Project with proposed
changes shall be referred to as the "Revised Project").
15. Consideration of Revised Project. If Grantee submits a Scope of
Work for the Revised Project prior to the expiration of the Cure Period, the
Grantor, in its sole discretion, shall either approve or reject the Revised
Project.
(A) If the Revised Project is approved by the Grantor, then such
approval shall be deemed to Constitute a cure of the default by the
Grantee, and an amendment shall be executed between the Grantor and the
Grantee acknowledging that this Agreement shall be for the payment of
Funds for completion of the Revised Project.
(B) If the Revised Project is rejected by the Grantor, then this
Agreement shall be terminated as set forth in Section 16.
16. Failure to Cure Default; Termination. In the event that Grantee is
not able to cure the defaults as itemized in the Notice in accordance with
Section 14, or if the Revised Project is rejected by Grantor in accordance with
Section 15(B), then this Agreement shall be terminated, and the Grantee shall
(a) forfeit any unused balance of the Funds; (b) repay the Funds already
disbursed to Grantee plus interest at the per annum rate equal to three percent
(3%) over that rate of interest from time to time announced by Bank One N.A. as
its "prime rate", to the Grantor; and (c) provide to Grantor within sixty (60)
days after termination of this Agreement, a Closeout Report setting forth the
total expenditure of the Funds by Grantee and the status of the Project at the
time of termination. In no event shall Grantee be required to return an amount
in excess of the total Funds granted under this Agreement.
17. Termination by Grantee. Upon written approval by the Grantor,
Grantee may terminate this Agreement upon ninety (90) days written notice to the
Grantor if circumstances beyond its control preclude continuation of the
Project. Within sixty (60) days after termination of this Agreement under this
section, Grantee shall provide Grantor with a Closeout Report setting forth the
total expenditure of the Funds by Grantee and the status of the Project at the
time of termination. In addition, the Grantor shall reimburse Grantee for all
allowable expenses
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as set forth in. Exhibit I as well as noncancellable commitments incurred as of
the date of termination but not to exceed the total amount of the Funds.
18. Forbearance Not a Waiver. No act of forbearance or failure to
insist on the prompt performance by Grantee of its obligations under this
Agreement, either express or implied, shall be construed as a waiver by Grantor
of any of its rights hereunder.
19. Equal Employment Opportunity. In performing this Agreement, Grantee
shall not discriminate against any employee, applicant for employment or other
person because of race, religion, color, sex, national origin, disability, age,
veteran status, or ancestry. Grantee will take affirmative action to ensure that
applicants are employed and that employees are treated during their employment
without regard to race, religion, color, sex, national origin, disability, age,
veteran status, or ancestry. Grantee shall incorporate the foregoing
requirements of this paragraph in all of its contracts for any of the work
prescribed herein (other than subcontracts for standard commercial supplies or
raw materials), and will require all of its subcontractors for any part of such
work to incorporate such requirements in all such subcontracts.
20. Certification of Funds Available. None of the rights, duties, and
obligations described in this Agreement shall be binding upon either party until
all statutory provisions of the Ohio Revised Code, including but not limited to
Section 126.07, have been complied with, and until such time as all necessary
funds have actually been made available and forthcoming from the appropriate
state agencies.
21. Conflict of Interest. No personnel of Grantee, any subcontractor of
Grantee, public official, employee or member of the governing body of the
particular locality where this Agreement shall be completed, who exercises any
functions or responsibilities in connection with the review or approval of the
work completed under this Agreement, shall prior to the completion of said work,
voluntarily or involuntarily acquire any personal interest, direct or indirect,
which is incompatible or in conflict with the discharge or fulfillment of his
functions or responsibilities with respect to the completion of the work
contemplated under this Agreement. Any person who, prior to or after the
execution of this Agreement, acquires any personal interest, involuntarily or
voluntarily, shall immediately disclose his interest to Grantor in writing.
Thereafter, such person shall not participate in any action affecting the work
under this Agreement unless Grantor determines that, in light of the personal
interest disclosed, his participation in any such action would not be contrary
to the public interest.
22. Indemnification. To the extent permitted by law, Grantee agrees to
hold Grantor harmless from any and all liabilities or claims caused by or
resulting from Grantee's performance of the obligations or activities in
furtherance of the Project. Grantee will reimburse Grantor for any judgments
arising from Grantee's actions or inaction, which may be obtained against
Grantor, including, but not limited to, judgments for infringements of patents
or copyrights. Grantee agrees to reimburse Grantor for all costs incurred by
Grantor in defending any such claims or legal actions if called upon by Grantor
to do so.
23. Adherence to State and Federal Laws, Regulations. Grantee agrees to
comply with all applicable federal, state, and local laws in the performance of
the Project. Grantee
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accepts full responsibility for payments of all unemployment compensation,
insurance premiums, workers' compensation premiums, all income tax deductions,
social security deductions, and any and all other taxes or payroll deductions
required for all employees engaged by Grantee on the performance of the work
authorized by this Agreement.
24. Outstanding Liabilities. Grantee affirmatively covenants that it
does not owe: (1) any delinquent taxes to the State of Ohio (the "State") or a
political subdivision of the State; (2) any moneys to the State or a state
agency for the administration or enforcement of any environmental laws of the
State; and (3) any other moneys to the State, a state agency or a political
subdivision of the State that are past due, whether the amounts owed are being
contested in a court of law or not.
25. Falsification of Information. Grantee affirmatively covenants that
it has made no false statements to Grantor in the process of obtaining this
grant of Funds. If Grantee has knowingly made a false statement to Grantor to
obtain this grant of Funds, Grantee shall be required to return all Funds
immediately pursuant to Ohio Revised Code Section 9.66(C)(2) and shall be
ineligible for any future economic development assistance from the State, any
state agency or a political subdivision pursuant to O.R.C. Section 9.66(C)(1).
Any person who provides a false statement to secure economic development
assistance may be guilty of falsification, a misdemeanor of the first degree,
pursuant to O.R.C. 2921.13(D)(1), which is punishable by a fine of not more than
$1,000.00 and/or a term of imprisonment of not more than six months.
26. Unresolved Findings. Grantee warrants that it is not subject to an
unresolved finding for recovery under O.R.C. 9.24. If this warranty is deemed to
be false, this Agreement is void ab initio and the Grantee must immediately
repay to the Grantor any funds paid under this Agreement.
27. Miscellaneous.
a). Governing Law. This Agreement shall be governed by the laws of the
State of Ohio as to all matters, including but not limited to matters
of validity, construction, effect and performance.
b). Forum and Venue. All actions regarding this Agreement shall be
forumed and venued in a court of competent subject matter jurisdiction,
in Franklin County, Ohio.
c). Entire Agreement. This Agreement and its exhibits and any documents
referred to herein constitute the complete understanding of the parties
and merge and supersede any and all other discussions, agreements and
understandings, either oral or written, between the parties with
respect to the subject matter hereof.
d). Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law,
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such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provisions of this Agreement.
e). Confidentiality. All information submitted to Grantor shall be
considered public information and shall be released if requested unless
a statutory exception prohibits its release. Grantee hereby
acknowledges and agrees that Grantor may, during the life of this
Agreement and thereafter, acquire information from Grantee which may be
a trade secret as defined in Ohio Revised Code Section 1333.61. Grantor
shall comply with all provisions of R.C. 1333.61 in its use of any
information acquired from Grantee.
f). Subcontractors/Subgrantees. At Grantee's election, Grantee may
subcontract and/or subgrant portions of the work or activities
described in Exhibit I, "Scope of Work." All subcontracts or subgrants
shall be bound by the terms of this Agreement. However, in any event,
Grantee shall be solely responsible for performance of the work and
activities set forth herein.
g). Survival. All indemnities, covenants, agreements representations
and guaranties made in this Agreement and in any certificates or other
documents delivered pursuant hereto shall survive the execution of this
Agreement and shall benefit the respective permitted successors and
assigns of the parties hereto, unless superseded by another section of
this Agreement.
h). Publication. Grantee reserves the right to publish the results of
any work performed under this Agreement. Any publication, study or
report prepared by the Grantee or its agents as part of this Grant or
using information generated through this Grant shall include the
following disclaimer statement: "This publication (study or report) was
prepared under contract with the State of Ohio with financial support
from the Ohio Department of Development. The content reflects the views
of Superconductive Components dba SCI Engineered Materials and does not
necessarily reflect the views of the State of Ohio, Department of
Development."
i.) Record Retention. Subject to any State laws or regulations,
including but not limited to, Chapters 149 and 1347 of the Revised
Code, Grantor agrees to, upon expiration or termination of this
Agreement, return to Grantee any confidential documents or certify to
Grantee that such confidential documents have been destroyed.
j). Notices. All notices, consents, demands, requests and other
communications which may or are required to be given hereunder shall be
in writing and shall be deemed duly given if personally delivered or
sent by United States mail, registered or certified, return receipt
requested, postage prepaid, to the addresses set forth hereunder or to
such other address as the other party hereto may designate in written
notice transmitted in accordance with this provision.
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1). In case of Grantor, to:
Grants Administration
Ohio Department of Development
Technology Division
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2). In case of Grantee, to:
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President & CEO
Superconductive Components, Inc.
dba SCI Engineered Materials
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k). Amendments or Modifications. Either party may at any time during
the term of this Agreement request amendments or modifications.
Requests for amendment or modification of this Agreement shall be in
writing and shall specify the requested changes and the justification
of such changes. The parties shall review the request for modification
in terms of the regulations and goals relating to the Project. Should
the parties consent to modification of the Agreement, then an amendment
shall be drawn, approved, and executed in the same manner as the
original agreement.
1). Pronouns. The use of any gender pronoun shall be deemed to include
all the other genders, and the use of any singular noun or verb shall
be deemed to include the plural, and vice versa, whenever the context
so requires.
m). Headings. Section headings contained in this Agreement are inserted
for convenience only and shall not be deemed to be a part of this
Agreement.
n). Assignment. Neither this Agreement nor any rights, duties, or
obligations described herein shall be assigned or subcontracted by
Grantee without the prior express written consent of Grantor.
o). Travel Expenses. If contemplated under this Agreement, Grantee, its
employees or agents, shall be reimbursed for travel expenses in amounts
not to exceed the maximum rates as determined by Ohio Administrative
Code Section 126-1-02.
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IN WITNESS WHEREOF, the parties hereto have executed this Grant Agreement on the
last date set forth below.
GRANTEE: GRANTOR:
Superconductive Components, Inc. State of Ohio
dba SCI Engineered Materials Department of Development
By: By:
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Title: Director
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Date: Date:
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