matechexh10_5.htm


    
      
        

      
Exhibit 10.5

    TEAMING
AGREEMENT

    


    


    THIS
AGREEMENT, entered into this 6th day of June, 2008, e-RADLIK, Inc. a Delaware corporation
with a principal place of business at 252 Denison Hill Road, North Stonington,
CT 06359 (hereinafter “e-R”) and Material Technologies, Inc., a
corporation located at 11661 San Vincente Blvd., Suite 707, Los Angeles,
CA  90049 (hereinafter “MATECH”) (individually, a “Party”;
collectively, the “Parties” or the “Team”).

    


    RECITALS

    


    WHEREAS,
e-R has extensive experience and contacts, as well as technical expertise, in
shipbuilding metal fatigue sensing requirements;

    


    WHEREAS,
MATECH has experience in metal fatigue technology system, support and
integration and has been exploring and evaluating such systems; and

    


    WHEREAS,
General Dynamics Corp. may be interested in pursuing a program for the
development of improved technology and methodology relating to ship yard and
ship building applications as a supplement to or alternative to current
radiograph practices for the sensing of metal fatigue and related structural
examination (“THE PROGRAM”);

    


    WHEREAS,
each Party further believes that their combined experience and technology
related to THE PROGRAM will permit them to design, develop and/or produce the
technology to achieve the desired performance, cost and schedule parameters for
shipbuilding metal fatigue sensing; and

    


    WHEREAS,
each Party will work together to develop a business plan to support the
commercialization and post Program resale of the THE PROGRAM and related
technology for shipbuilding metal fatigue sensing and monitoring.

    


    NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises,
covenants and conditions set forth herein, the Parties agree as
follows:

    


    1.            
INCORPORATION OF
RECITALS

    


    All
recitals set forth above are hereby incorporated by reference and form a part of
this Agreement between the Parties.

    


    
      	
              2.

            	
              CONTRACTOR-SUBCONTRACTOR
      RELATIONSHIPS

            


    

    


    The
Parties agree to participate, under a teaming arrangement as that term is
defined in Federal Acquisition Regulation (FAR) 9.601(2), in order to submit
proposals to, and, if successful, perform contracts with commercial customers,
prime contractors or governments related to THE PROGRAM and its use as a
stand-alone system or integrated into a larger system. In any such proposal
efforts and resulting contracts, it is understood and agreed
that


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    e-R shall
serve as prime contractor for the Team and that MATECH shall serve as its
subcontractor for that portion of the effort under THE PROGRAM falling under
MATECH’s area of responsibility as identified in Exhibit A attached
hereto and made a part hereof.

    


    
      	
              3.

            	
              RESPONSIBILITY OF THE
      PARTIES

            


    

    


    
      	
               
      

            	
              A.

            	
              e-R’s
      Responsibilities

            


    

    


    
      	
               
      

            	
              1)

            	
              Notify
      MATECH of any contacts received from any commercial customer, prime
      contractor, or the government concerning THE PROGRAM and provide MATECH
      with copies of any correspondence when such contacts have been in writing.
      MATECH shall also be notified of, and allowed the opportunity to
      participate in, any meetings with any commercial customer, prime
      contractor, or the government concerning the Parties’ efforts in
      developing THE PROGRAM and the feasibility of obtaining a contract or
      contracts from any commercial customer, prime contractor or the government
      for THE PROGRAM either as a stand-alone system or as a component of a
      larger integrated system.

            


    

    


    
      	
               
      

            	
              2)

            	
              Exercise
      its best efforts to secure a prime contract or contracts for THE PROGRAM
      which includes the work identified in Exhibit A as
      falling within MATECH’s area of responsibility and to secure acceptance of
      MATECH as subcontractor for that
effort.

            


    

    


    
      	
               
      

            	
              3)

            	
              Furnish
      MATECH with a copy of all procurement solicitations issued to e-R relating
      to THE PROGRAM.

            


    

    


    
      	
               
      

            	
              4)

            	
              Issue
      to MATECH a solicitation(s) for that portion of any solicitation(s) from
      any commercial customer, prime contractor, or the government for THE
      PROGRAM that relate to MATECH’s area of responsibility as set forth in
      Exhibit A
      herein.

            


    

    


    
      	
               
      

            	
              5)

            	
              Prepare
      and submit proposals or bids, as applicable, on behalf of the Team for the
      development and/or integration requirements for all phases of THE PROGRAM
      to all commercial customers, prime contractors, or the government, with
      such proposals or bids to include the work identified as falling within
      MATECH’s area of responsibility as defined in Exhibit A and
      to include, unmodified, the provisions of MATECH’s proposal input relative
      to those areas of responsibility.

            


    

    


    
      	
               
      

            	
              6)

            	
              If
      and when awarded a prime contract or contracts relating to THE PROGRAM,
      award a subcontract to MATECH for the work identified as falling within
      MATECH’s area of responsibility as defined in Exhibit A,
      subject to agreement following good faith negotiations as to delivery
      schedules, price and other terms and conditions. Any such subcontract
      shall be the same contract type as the prime contract (for example, Cost
      Plus Fixed Fee, Cost Plus Incentive Fee, Firm Fixed Price, etc.) and
      include those terms

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              and
      conditions which are required by government regulations to be flowed down
      to major subcontractors.

            


    

    


    
      	
               
      

            	
              7)

            	
              If
      and when awarded a prime contract or contracts related to THE PROGRAM,
      provide overall Program Management.

            


    

    


    
      	
               
      

            	
              8)

            	
              Cooperate
      with MATECH in a reasonable and practicable manner to facilitate the
      successful competition of the Team for all contracts relative to THE
      PROGRAM.

            


    

    


    
      	
               
      

            	
              B.

            	
              MATECH’s
      Responsibilities

            


    

    


    
      	
               
      

            	
              1)

            	
              Provide
      qualified personnel to participate in any meetings e-R may hold with: (i)
      any contractor seeking or acting in a role of prime contractor concerning
      the use of THE PROGRAM as a part of a related system or bid; or (ii) a
      commercial customer or the government concerning the feasibility of
      obtaining a contract or contracts with such contractor, commercial
      customer, or the government related to providing the requirements for all
      phases of THE PROGRAM.

            


    

    


    
      	
               
      

            	
              2)

            	
              Respond
      in a timely manner to all solicitations received from e-R relating to
      MATECH’s area of responsibility for THE
PROGRAM.

            


    

    


    
      	
               
      

            	
              3)

            	
              Provide
      qualified personnel, as requested, to assist e-R in any discussions and
      negotiations with prospective or actual commercial customers, prime
      contractors, or the government relating to the development, submittal or
      negotiation of proposals relating to the requirements for THE
      PROGRAM.

            


    

    


    
      	
               
      

            	
              4)

            	
              Accept
      subcontracts from e-R for the work identified in Exhibit A as
      falling within MATECH’s area of responsibility, subject to agreement
      following good faith negotiations as to delivery schedules, price, and
      other terms and conditions. Any such subcontract shall be the same
      contract type as the prime contract (for example, Cost Plus Fixed Fee,
      Cost Plus Incentive Fee, Firm Fixed Price, etc.), and include those terms
      which are required by government regulations to be flowed down to major
      subcontractors. MATECH’s commitment is further subject to the
      following:

            


    

    


    
      	
               
      

            	
              a)

            	
              In
      the event that any prime contract awarded omits more than 10% of the work
      identified in Exhibit A as
      falling within MATECH’s area of responsibility, MATECH shall have the
      option of: (i) negotiating a subcontract for such lesser effort; or (ii)
      terminating this Agreement, as it relates to that prime contract effort
      only, upon written notice to e-R.

            


    

    


    
      	
               
      

            	
              b)

            	
              Termination
      of this Agreement, in whole or in part, as provided in this paragraph,
      shall not relieve the Parties from their obligations with respect to the
      other Party’s proprietary information and
such

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              obligations
      to survive such termination. Excepting this limitation, upon termination
      of any part of THE PROGRAM efforts hereunder, either Party may pursue that
      program effort so terminated independent of the
  other.

            


    

    


    
      	
               
      

            	
              5)

            	
              Cooperate
      generally with e-R, in a reasonable and practicable manner, to facilitate
      the successful competition of the Team for all contracts relative to all
      phases of THE PROGRAM.

            


    

    


    
      	
              4.

            	
              RELATIONSHIP OF THE
      PARTIES

            


    

    


    
      	
               
      

            	
              A.

            	
              To
      encourage the exchange of proprietary information between the Parties and
      a mutual dedication of effort to accomplishing the objectives of this
      Agreement, each Party agrees that it will not participate with any other
      party in pursuit of THE PROGRAM contemplated by this Agreement. As a team,
      each of the Parties hereto agrees to offer its fullest support and
      cooperation to preserve in good faith the spirit of the teaming concept
      evidenced by this Agreement. It is understood, however, that neither Party
      shall be precluded from its normal marketing efforts in connection with
      the sale of its standard products and services. It is further understood
      and agreed that, should any prospective or actual commercial customer or
      prime contractor identify or define its system requirements so as to
      require only products/technology fully within one of the Parties’ area of
      expertise, then either Party may terminate this Agreement as to that prime
      contractor, and the Parties shall be free to pursue contracts with that
      prime contractor independently, subject only to the provisions of
      paragraph 6 below concerning proprietary
  information.

            


    

    


    
      	
               
      

            	
              B.

            	
              This
      Agreement is not intended to constitute, create, give effect to, or
      otherwise recognize a joint venture, partnership, or formal business
      entity of any kind. Each Party shall act as an independent contractor and
      neither Party shall act as an agent or partner of the other Party. The
      rights and obligations of the Parties under this Agreement are limited to
      those expressly set forth herein.

            


    

    


    
      	
               
      

            	
              C.

            	
              Nothing
      contained in this Agreement is to be construed as providing for the
      sharing of profits or losses arising out of the efforts of either or both
      Parties. Neither Party will be liable to the other for any costs,
      expenses, risks, or liabilities arising out of the other Party’s efforts
      in connection with this Agreement or the preparation and submission of any
      proposal(s) for THE PROGRAM.

            


    

    


    
      	
              5.

            	
              EXPENSES

            


    

    


    Except
for the compensation which may be paid to the Parties in accordance with any
contract or subcontract relating to THE PROGRAM, each Party shall bear its own
expenses incurred in its respective participation in meetings between the
Parties and/or with prospective prime contractors or the government, as well as
any proposal preparation, submission and negotiation activities.

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    6.            
LICENSES

    


    Unless
otherwise stated in this Agreement, no license to the other Party under any
patents or copyrights is granted or implied by conveying proprietary or other
information to that Party. None of such information which may be transmitted or
exchanged by the respective Parties shall constitute any representation,
warranty, assurance; guaranty or inducement by either Party to the other with
respect to the infringement of patents or other rights of others.

    


    
      	
              7.

            	
              INTELLECTUAL PROPERTY
      RIGHTS

            


    

    


    A.           For
purposes of this Section 7, the following terms are defined as
follows:

    


    
      	
               
      

            	
              i.

            	
              “Background
      Intellectual Property Rights” shall mean, with respect of each
      Party, the Intellectual Property Rights, excluding Foreground Intellectual
      Property owned by, used by, or otherwise in the possession or control of
      that Party, as of the date of this Agreement and which relates to, is or
      will be used in connection with or on THE
  PROGRAM.

            


    

    


    
      	
               
      

            	
              ii.

            	
              “Documentation”
      shall mean all written text including, but not limited to, manuals,
      brochures, specifications and hardware or software descriptions, in
      electronic, printed and/or camera ready form and related materials
      customarily needed to use, provide service for, or otherwise support THE
      PROGRAM.

            


    

    


    
      	
               
      

            	
              iii.

            	
              “Foreground
      Intellectual Property” shall mean all Intellectual Property Rights
      resulting from the work undertaken by MATECH and e-R under this
      Agreement.

            


    

    


    
      	
               
      

            	
              iv.

            	
              “Intellectual Property
      Rights” means all intellectual property rights worldwide arising
      under statutory or common law, whether or not perfected, including without
      limitation, the following:

            


    

    


    
      	
               
      

            	
              (a)

            	
              all
      patents, patent applications and patent rights, including divisions,
      continuations, renewals, reissues, continuing prosecution, and extensions
      of the foregoing (as and to the extent applicable) now existing, hereafter
      filed, issued or acquired;

            


    

    


    
      	
               
      

            	
              (b)

            	
              all
      rights associated with works of authorship including copyrights, copyright
      applications, copyright registrations, mask works, mask work applications,
      and mask work registrations;

            


    

    


    
      	
               
      

            	
              (c)

            	
              all
      rights relating to the protection of trade secrets and confidential
      information; and

            


    

    


    
      	
               
      

            	
              (d)

            	
              all
      rights related to utility models, database rights, design rights, service
      marks, conductor topography rights, moral rights, logos (in all cases
      whether registered or not and all applications or rights
  of

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              application
      for any of the foregoing), and Know-How, whenever and however
      arising.

            


    

    


    
      	
               
      

            	
              v.

            	
              “Know-How” shall
      mean information, data, inventions, trade secrets, or experience, whether
      patentable or not, including, but not limited to, all design or
      manufacturing techniques, operating instructions, machinery designs, raw
      material or product specifications, formula, recipes, drawings, blueprints
      and any other technical and commercial information relating to research,
      design, development, manufacture, assembly, use or
  sale.

            


    

    


    
      	
               
      

            	
              B.

            	
              e-RADLIK Background
      Intellectual Property Rights.  e-R grants to MATECH a
      non-exclusive, non-assignable royalty free license to use e-R’s Background
      Intellectual Property Rights strictly insofar as may be necessary to
      enable MATECH to carry out its obligations under this
      Agreement.  MATECH shall not use the e-R Background Intellectual
      Property Rights for any purpose other than the performance of MATECH’s
      obligations under this Agreement.

            


    

    


    
      	
               
      

            	
              C.

            	
              MATECH Background
      Intellectual Property Rights.  Prior to MATECH utilizing
      any of its Background Intellectual Property Rights in THE PROGRAM, MATECH
      will notify e-R that it intends to do so.  e-R will then have
      the option of accepting the Background Intellectual Property Rights,
      suggesting an alternative to such use, or terminating the
      Agreement.  If e-R accepts the utilization of MATECH Background
      Intellectual Property Rights for THE PROGRAM, MATECH will grant a license
      of the utilized Background Intellectual Property Rights in accordance with
      terms to be agreed upon at that
time.

            


    

    


    
      	
               
      

            	
              D.

            	
              Foreground
      Intellectual Property.  Taking into account MATECH and
      e-R’s Background Intellectual Property Rights, the Parties do not
      anticipate the creation of substantial Foreground Intellectual Property
      during the term of this Agreement.  If at anytime MATECH feels
      that Foreground Intellectual Property is being created, MATECH shall
      notify e-R of such development.  All Foreground Intellectual
      Property shall be wholly owned by e-R.  e-R grants to MATECH a
      non-exclusive, non-assignable royalty free license to use the Foreground
      Intellectual Property subject to e-R approval and review to ensure that
      the proposed use does not conflict or compete with any of e-R’s current or
      future applications of its Intellectual Property Rights, such approval not
      to be unreasonably withheld.

            


    

    


    
      	
               
      

            	
              E.

            	
              Ownership of THE
      PROGRAM.  e-R shall own all right, title and interest in
      the proposed aviation system, excluding any MATECH Background Intellectual
      Property Rights therein.  MATECH shall execute such documents,
      render such assistance, and take such other action as e-R may reasonably
      request, at e-R's expense, to apply for, register, perfect, confirm, and
      protect e-R's rights therein.

            


    

    


    
      	
               
      

            	
              F.

            	
              Ownership of
      Foreground Intellectual Property Rights.  e-R shall own
      all right, title and interest in the Foreground Intellectual Property
      Rights in the proposed aviation system including any derivatives,
      improvements or modifications of THE PROGRAM made by MATECH for e-R under
      this Agreement.  MATECH
shall

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              execute
      such documents, render such assistance, and take such other action as e-R
      may reasonably request, at e-R's expense, to apply for, register, perfect,
      confirm, and protect e-R's rights
therein.

            


    

    


    
      	
               
      

            	
              G.

            	
              Infringement on Third
      Party Intellectual Property. If a Party believes that any
      activities within this Agreement infringe any Intellectual Property Rights
      of a third party, that Party will promptly notify the other Party, and
      will seek to agree upon the appropriate response to be
    taken.

            


    

    


    8.            
TERMINATION

    


    This
Agreement shall terminate upon the first occurrence of the following
events:

    


    
      	
               
      

            	
              A.

            	
              Mutual
      consent of both Parties by execution of a rescission
      agreement;

            


    

    


    
      	
               
      

            	
              B.

            	
              Inability
      of the Parties negotiating in good faith to reach agreement on the terms
      of a subcontract;

            


    

    


    
      	
               
      

            	
              C.

            	
              Upon
      award of a subcontract to MATECH based substantially upon MATECH’s
      proposal for THE PROGRAM, but only as to the subject matter and customer
      identified in that subcontract only.  This Agreement is to
      remain in effect for any other potential customers for the same phase of
      THE PROGRAM and/or resultant system, as well as with respect to all
      customers for any follow-on development and/or production contracts for
      the requirements of THE PROGRAM;

            


    

    


    
      	
               
      

            	
              D.

            	
              Ten
      years after the effective date of this Agreement;
  or

            


    

    


    
      	
               
      

            	
              E.

            	
              Material
      breach of this Agreement, at the option of the non-breaching
      Party.

            


    

    


    
      	
              9.

            	
              MUTUAL
      INDEMNIFICATION

            


    

    


    Each
Party (the “Indemnifying Party”) agrees to indemnify, defend, and hold harmless
the other Party (the “Indemnified Party”) from and against any and all claims,
damages, and liabilities, including any and all expense and costs, legal or
otherwise, caused by the negligent act or omission of the Indemnifying Party,
its subcontractors, agents, or employees, incurred by the Indemnified Party in
the investigation and defense of any claim, demand, or action arising out of the
work performed under this Agreement; including breach of the Indemnifying Party
of this Agreement.  The Indemnifying Party shall not be liable for any
claims, damages, or liabilities caused by the sole negligence of the Indemnified
Party, its subcontractors, agents, or employees.

    


    The
Indemnified Party shall notify promptly the Indemnifying Party of the existence
of any claim, demand, or other matter to which the Indemnifying Party’s
indemnification obligations would apply, and shall give them a reasonable
opportunity to settle or defend the same at their own expense and with counsel
of their own selection, provided that the Indemnified Party shall at all times
also have the right to fully participate in the defense.  If the
Indemnifying Party, within a reasonable time after this notice, fails to take
appropriate


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    steps to
settle or defend the claim, demand, or the matter, the Indemnified Party shall,
upon written notice, have the right, but not the obligation, to undertake such
settlement or defense and to compromise or settle the claim, demand, or other
matter on behalf, for the account, and at the risk, of the Indemnifying
Party.

    


    The
rights and obligations of the Parties under this Article shall be binding upon
and inure to the benefit of any successors, assigns, and heirs of the
Parties.

    


    
      	
              10.

            	
              PUBLICITY

            


    

    


    All
publicity and advertising in connection with THE PROGRAM will be subject to
prior approval by both e-R and MATECH.  Further, all publicity and
advertising concerning the existence of this Agreement will be subject to the
mutual prior agreement of the Parties prior to publication, except that this
Agreement may be disclosed by either Party to any governmental entity, including
all required filings with the Securities and Exchange Commission.

    


    
      	
              11.

            	
              ENTIRE AGREEMENT AND
      AMENDMENT

            


    

    


    This
Agreement and the exhibit hereto contain the entire agreement between the
Parties, which supersedes any prior oral or written agreements, commitments,
understandings, or communications with respect to teaming in pursuit of THE
PROGRAM. This Agreement shall be subject at any time to amendment upon the
written agreement of both Parties.

    


    
      	
              12.

            	
              APPLICABLE
      LAW

            


    

    


    This
Agreement and the rights of the Parties hereunder shall be governed by and
construed in accordance with the laws of the State of Delaware including all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws.

    


    
      	
              13.

            	
              EXCLUSIVE JURISDICTION
      AND VENUE

            


    

    


    The
Parties agree that the Courts of the State of Delaware shall have sole and
exclusive jurisdiction and venue for the resolution of all disputes arising
under the terms of this Agreement and the transactions contemplated
herein.

    


    
      	
              14.

            	
              ATTORNEYS’
      FEES

            


    

    


    In the
event any Party hereto shall commence legal proceedings against the other to
enforce the terms hereof, or to declare rights hereunder, as the result of a
breach of any covenant or condition of this Agreement, the prevailing party in
any such proceeding shall be entitled to recover from the losing party its costs
of suit, including reasonable attorneys’ fees, as may be fixed by the
court.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    15.           CONFORMITY OF
LAW


    In
furtherance of this Agreement, both Parties shall comply with all U.S.
government laws and regulations, including conformity with the Foreign Corrupt
Practices Act.

    


    
      	
              16.

            	
              POINTS OF
      CONTACT

            


    

    


    For all
purposes of coordination and communications required by this Agreement, the
Parties will be represented as set forth below. The persons named may be changed
by either Party providing written notice of such changes to the other
Party.

     

    
      	
               
      

            	
              

                e-RADLIK:

                 
Name: 

                Title:
      

                  Phone:
      

                    Email:

                  

                

              

            	
               

               

              Samuel
      A. Kovnat

              Chairman
      & CEO 

                (860)
      884-1609 

                  samkovnat@aol.com

                

              

            	
              

                MATECH:

                 
Name: 

                Title:
      

                  Phone:
      

                    Fax:

                  

                

              

            	
               

               

              Robert
      Bernstein

              CEO
      

                (310)
      208-5589 

                  (310)
      473-3177

                

              

            


    

    
    

    
    

    
    

    


    
      	
              17.

            	
              ASSIGNMENT

            


    

    


    This
Agreement may not be assigned or otherwise transferred by either Party in whole
or in part without the express prior written consent of the other Party, which
consent will not unreasonably be withheld.

    


    18.           EFFECTIVE
DATE

     

    
      	
               
      

            	
              The
      effective date of this Agreement is the last date of execution shown
      below.

            


    

    


    


    IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.

     

    
      	
               
      

            	
              

                e-RADLIK:

                 
by: /s/
      Samuel Kovnat

            	
              

                MATECH:

                 
by: /s/
      Robert Bernstein

            


    

    
      	
               
      

            	
              Name:  Samuel
      Kovnat

              Title:    CEO

              Date:    June
      5, 2008

            	
              Name:
      Robert Bernstein 

                Title:   CEO
      

                  Date:

                

              

            


    

    
    

    
    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    


    MATECH
will participate and support and have a major scope of work in:

    


    
      	
               
      

            	
              ·

            	
              Definition
      of operational requirements for metal fatigue testing in shipbuilding
      applications;

            


    

    


    
      	
               
      

            	
              ·

            	
              Metal
      fatigue technology trade off studies for applications of metal fatigue
      sensing in shipbuilding;

            


    

    


    
      	
               
      

            	
              ·

            	
              Metal
      fatigue technology integration with shipyard and shipbuilding testing and
      monitoring software systems &
displays;

            


    

    


    
      	
               
      

            	
              ·

            	
              Shipbuilding
      test and evaluation procedures; and

            


    

    


    
      	
               
      

            	
              ·

            	
              Development
      of sustainment documentation and materials for logistics management,
      training development and integrated maintenance and diagnostics necessary
      to achieve initial operational capability (IOC) milestones for metal
      fatigue sensing and monitoring in shipbuilding
    applications.