REPAYMENT AGREEMENT BETWEEN TENSIODYNE SCIENTIFIC CORPORATION AND THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
Exhibit
10.4
REPAYMENT
AGREEMENT BETWEEN
TENSIODYNE
SCIENTIFIC CORPORATION
AND
THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
This
Repayment Agreement is made between Material Technology, Inc. ("MATECH") and 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 ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 ("OBLIGATION").
WHEREAS,
SPONSOR has not made payments as required under the SRA.
WHEREAS,
Material Technology, Inc. ("MATECH"), is a successor as of February 1994, to
SPONSOR's business, and therefore, is obligated to perform the obligations of
SPONSOR under the SRA and this REPAYMENT AGREEMENT thereto.
WHEREAS,
neither SPONSOR nor MATECH has made payments on OBLIGATION,
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
otherwise 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 LICENSEE'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 shall be paid to PENN no later than four
(4) years from the date of the last signature executing this
AGREEMENT.
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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 first $150,000.00 of such FUNDING raised by
SPONSOR after the date of the last signature executing this
AGREEMENT. The provisions of this paragraph 6 shall take precedence
over the provisions of Amendment 1, paragraph 5 of the SRA.
7. In
the event that MATECH remits payment or other consideration to ▇▇. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, currently President of Tensiodyne Scientific Corporation
("▇▇▇▇▇▇▇▇▇") in partial or full satisfaction of any debt owed by MATECH to
▇▇▇▇▇▇▇▇▇ (a "▇▇▇▇▇▇▇▇▇ PAYMENT"), MATECH will remit to PENN, within five (5)
working days after such payment is made, an amount equal to such payment (each
such payment to PENN an "EQUIVALENT PAYMENT"), until the OBLIGATION is fully
repaid to PENN. Notwithstanding the foregoing, any monies which
MATECH pays to ▇▇▇▇▇▇▇▇▇ which are used by MATECH in agreement with ▇▇▇▇▇▇▇▇▇ as
MATECH Working Capital, shall not be considered a ▇▇▇▇▇▇▇▇▇
PAYMENT. As used herein, the term Working Capital shall mean "working
capital" as 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 ▇▇▇▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇▇▇▇'▇ family other
than the salary described in Section 6 of this AGREEMENT. In addition
to the foregoing, in the event that ▇▇▇▇▇▇▇▇▇ provides additional monies to
MATECH in the form of Working Capital within ninety (90) days after the date of
the last signature executing this AGREEMENT, MATECH may repay ▇▇▇▇▇▇▇▇▇ up to
one hundred thousand dollars ($100,000) of such additional monies without being
obligated to remit an EQUIVALENT PAYMENT to PENN.
8. MATECH
will not remit to ▇▇▇▇▇▇▇▇▇ an annual salary, or any other consideration in lieu
of a salary, exceeding $150,000 per annum until OBLIGATION is paid in
full.
9. Effective
June 30, 1997, MATECH will owe to PENN, on an accrued basis, interest amounting
to 1.5% per month of the outstanding balance of the OBLIGATION.
10. 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
paragraphs 3, 4, 5, and 6 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 3, 4, 5, and 6 above then MATECH and PENN shall
choose a mutually agreeable independent auditor to review or audit all the books
and records of MATECH at MATECH's expense. If such an auditor
determines that MATECH has not met any of the duties defined in paragraphs 3, 4,
5, and 6, 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 3, 4, 5, and 6 above. If
such an auditor determines that MATECH has met all of the duties defined in
paragraphs 3, 4, 5, and 6, PENN will reimburse MATECH for all costs associated
with such review or audit.
11.
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.
IN
WITNESS THEREOF, the parties have executed this Repayment Agreement through
their duly authorized representatives as set forth below, and this Repayment
Agreement shall be attached to, and shall become a part of, the SRA between the
parties.
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THE
TRUSTEES OF THE
UNIVERSITY
of PENNSYLVANIA
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MATERIAL TECHNOLOGY INC. | |||
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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| Date: | Date: |
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ACKNOWLEDGEMENT
I have
read and agree to abide by the terms of the Agreement and this Amendment
(Amendment 1).
| By: | ||
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Name:
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| Title: | ||
| Date: |
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