Document:

matechexh10_1.htm

    
      

    

    Exhibit
10.1

     

    LICENSE
AGREEMENT

    BETWEEN

    TENSIODYNE
CORPORATION

     

    AND

     

    THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

    (JULY
___, 1993)

     

     

    TECHNOLOGY
AREA:   METAL FATIGUE MEASUREMENT

     

     

    TABLE OF
CONTENTS

     

    
      
        	RECITALS	 1
	 	 
	ARTICLE 1 -
      DEFINITIONS	
                2

              
	 	 
	ARTICLE 2 - LICENSE
      GRANT	 4
	 	 
	ARTICLE 3 -
      ROYALTIES, RECORDS AND ACCOUNTING	 5
	 	 
	ARTICLE 4 -
      IMPROVEMENTS	 8
	 	 
	ARTICLE 5 -
      CONFIDENTIALITY	 8
	 	 
	ARTICLE 6 - TERM AND
      TERMINATION	 9
	 	 
	ARTICLE 7 - PATENT
      MAINTENANCE	 10
	 	 
	ARTICLE 8 -
      INFRINGEMENT AND LITIGATION	 11
	 	 
	ARTICLE 9 -
      DISCLAIMER OF WARRANTIES; INDEMNIFICATION	 12
	 	 
	 ARTICLE 10 -
      USE OF PENN'S NAME; INDEPENDENCE	
                14

              
	 	 
	 ARTICLE 11 -
      COMPLIANCE WITH LAWS; EXPORT CONTROL	14
	 	 
	 ARTICLE 12 -
      ASSIGNMENT	14
	 	 
	 ARTICLE 13 -
      NOTICES	15
	 	 
	 ARTICLE 14 -
      JURISDICTION; ENTIRE AGREEMENT - DISPUTE RESOLUTION	15

      

       

    

     

    
      
         

      

      
        
        

        
          
 

      

      
         

      

    

     

    LICENSE
AGREEMENT

     

    BETWEEN

     

    TENSIODYNE
CORPORATION

     

    AND

     

    THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

    (JULY __,
1993)

     

     

    This
License Agreement ("AGREEMENT") is made by and between The Trustees of the
University of Pennsylvania, a Pennsylvania not for profit corporation,
having an
office at 3700 Market Street, Suite 300, Philadelphia, Pennsylvania 19104-3147
("PENN") and Tensiodyne Corporation having a place of business at 11835
West Olympic Boulevard, East Tower, Suite 705, Los Angeles, California
90064
("LICENSEE").

     

    This
AGREEMENT is effective as of July __, 1993 ("EFFECTIVE DATE").

     

    RECITALS

     

    WHEREAS,
PENN is the sole and exclusive owner and proprietor of certain inventions
and improvements together with technical information and proprietary
rights
developed by Drs.  Campbell Laird and Li Yuan-Feng relating to
electrochemical
methods and devices to determine metal fatigue; and,

     

    WHEREAS,
PENN is the owner of application(s) for United States and foreign letters
patent(s) in Appendix 1 attached hereto relating to the foregoing inventions
and improvements of Drs. Laird and Yuan-Feng; and,

     

    WHEREAS,
PENN, through the continuing work of Dr. Laird or such other PRINCIPAL
INVESTIGATOR as may be designated by the parties in accordance with the
SPONSORED RESEARCH AGREEMENT between the parties of even date herewith, may
make
additional inventions and improvements and may develop

     

     

    
      
         

      

      
        
        

        
          
 

      

      
         

      

    

     

    additional
technical information and proprietary rights relating to electrochemical
methods and devices to determine metal fatigue; and,

     

    WHEREAS,
LICENSEE desires to secure the exclusive right and license to use, develop,
manufacture, market and exploit any inventions and improvements of Dr.
Laird
and/or any other PRINCIPAL INVESTIGATOR, owned by PENN as set forth in
Appendix
1 hereto and to use, develop, manufacture, market and exploit the additional
inventions, improvements, technical information and proprietary rights
relating to electrochemical methods and devices to determine metal fatigue;
and,

     

    WHEREAS,
PENN has determined that the exploitation of the inventions and improvements
of Drs.  Laird and Yuan-Feng and/or any other PRINCIPAL INVESTIGATOR
is in the best interest of PENN and is consistent with its educational
and research missions and goals; and,

     

    WHEREAS,
PENN and LICENSEE have entered into a SPONSORED RESEARCH AGREEMENT on even
date herewith providing support for the continuing work of Dr. Laird
[together
with a STOCK PURCHASE AGREEMENT providing for the issuance to PENN and
Drs.  Laird
and Yuan-Feng of shares of LICENSEE's Common Stock in partial consideration
of the exclusive license granted hereunder];

     

    NOW,
THEREFORE, in consideration of the premises and of the promises and covenants
contained herein and intending to be legally bound hereby, the parties
agree as
follows:

     

    ARTICLE -
DEFINITIONS

     

    1.1  AFFILIATE
means, when used with reference to LICENSEE, any ENTITY directly
or indirectly controlling, controlled by or under common control with
LICENSEE.  For
purposes of this AGREEMENT, "control" means the direct or indirect
ownership of over 50% of the outstanding voting securities of an ENTITY,
or the right to receive over 50% of the profits or earnings of an ENTITY,
or the power to direct or cause the direction of the management
and

     

     

    
      
         

      

      
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    policies
of an ENTITY, whether through the ownership of voting securities, by
contract,
or otherwise.

     

    1.2  BANKRUPTCY
EVENT means the ENTITY in question becomes insolvent, or voluntary
or involuntary proceedings by or against such ENTITY are instituted in
bankruptcy
or under such insolvency law, or a receiver or custodian is appointed
for such
ENTITY, or proceedings are instituted by or against such ENTITY for corporate
reorganization or the dissolution of such ENTITY, which proceedings,
if
voluntary, shall not have been dismissed within ninety (90) days after the
date of
filing, or such ENTITY makes an assignment for the benefit of creditors,
or
substantially all of the assets of such ENTITY are seized or attached and not
released
within sixty (60) days thereafter.

     

    1.3  CALENDAR
QUARTER means each three-month period, or any portion thereof,
beginning on January 1, April 1, July 1 and October 1.

     

    1.4  CALENDAR
YEAR means a period of twelve (12) months beginning on January 1
and ending on December 31.

     

    1.5  ENTITY
means a corporation, an association, a joint venture, a partnership,
a trust, a business, an individual, a government or political subdivision
thereof, including an agency, or any other organization which can exercise
independent legal standing.

     

    1.6  FAIR
MARKET VALUE means the gross sales price which LICENSEE would realize
from an unaffiliated, unrelated buyer in an arm's length sale of an identical
item sold in the same quantity and at the same time and place of the
transaction.

     

    1.7  FIELD
OF USE means the field of the use or application of PENN PATENT RIGHTS or
PENN TECHNICAL INFORMATION to obtain electrochemical data on metals to
determine
the fatigue status of such metals.

     

    1.8  LICENSEE
shall include LICENSEE and its AFFILIATES together with any other
business ENTITY in which LICENSEE or any of its AFFILIATES own a controlling
interest or over which LICENSEE or any of its AFFILIATES

     

     

    
      
         

      

      
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    possesses,
directly or indirectly, the power to direct or cause the direction of
the
management and policies of an ENTITY, whether through the ownership of
voting
securities, by contract or otherwise.

     

    1.9  NET
SALES means gross revenues, whether or not invoiced, billed, or received
by LICENSEE from a third party, attributable to LICENSEE's use, SALE,
lease, or
transfer of any PENN LICENSED PRODUCT(S) or SERVICES, less qualifying
costs
directly attributable to such use, SALES, lease, or transfer and actually
allowed,
identified on the invoice, and borne by LICENSEE.

     

             1.9.1     Such
qualifying costs shall be limited to costs of the

    following:

     

    1.9.1.1   Discounts,
in amounts customary in the trade, for quantity
purchases, cash payments, prompt payments, wholesalers, and
distributors.

     

    1.9.1.2   Credits
or refunds, not exceeding the original or customary
billing or invoice amount, for claims or returns.

     

    1.9.1.3   Prepaid
transportation insurance premiums.

     

    1.9.1.4   Prepaid
outbound transportation expenses.

     

    1.9.1.5   Sales
and use taxes, separately billed or invoiced, and borne by
LICENSEE, imposed by a government agency an such use, SALES,
lease or transfer.

     

    1.10 PENN
LICENSED PRODUCT(S) means products which in the absence of this AGREEMENT
would infringe at least one claim of PENN PATENT RIGHTS or products which are
made using a process or machine covered by a claim of PENN PATENT RIGHTS,
or products made, at least in part, using PENN TECHNICAL
INFORMATION.

     

    1.11 PENN
PATENT RIGHTS means those United States and foreign patent applications
listed in Appendix 1 hereto together with any and all patents issuing
thereupon, including continuation, divisional and re-issue applications
and

     

     

    
      
         

      

      
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    continuation-in-part
applications thereof based upon inventions and improvements discovered
by PENN through Dr. Campbell Laird, Dr. Li Yuan-Feng and/or any other
PRINCIPAL
INVESTIGATOR as a result of the SPONSORED RESEARCH AGREEMENT between
the
parties.

     

    1.12 PENN
TECHNICAL INFORMATION means research and development information, unpatented
inventions, know-how, trade secrets, and technical data in the possession
of PENN at the EFFECTIVE DATE of this AGREEMENT and/or becomes known
through
the Sponsored Research Agreement, which are needed to produce to PENN
LICENSED
PRODUCTS and/or SERVICES.

     

    1.13
PRINCIPAL INVESTIGATOR(S) is as defined in the SPONSORED RESEARCH AGREEMENT
executed between the parties.

     

    1.14 SALE
means a transaction for which consideration is received or expected
by LICENSEE for the use or transfer of PENN LICENSED PRODUCT(S).  A
SALE of
PENN LICENSED PRODUCT(S) shall be deemed completed at the time LICENSEE
receives
payment for such PENN LICENSED PRODUCT(S).

     

    1.15
SERVICES means and includes services, testing, and evaluation of metal
fatigue
performed by LICENSEE which includes or uses PENN TECHNICAL INFORMATION
or PENN
LICENSED PRODUCTS, or which, without the benefit of this License Agreement,
would infringe a claim of the PENN PATENT RIGHTS.

     

    1.16
SPONSORED RESEARCH AGREEMENT means the document appended as Appendix
2.

     

    ARTICLE 2
- LICENSE GRANT

     

    2.1  PENN
grants to LICENSEE for the term of this AGREEMENT an exclusive, world-wide
right and license, with the right to grant sublicenses, to

     

     

    
      
         

      

      
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    make,
have made, use and sell PENN LICENSED PRODUCT(S) in the FIELD OF
USE.  No other
rights or licenses are granted hereunder.

     

    2.2  The
license grant of this Article 2 is exclusive but for the reserved right OF
PENN to use and permit the use of by nonprofit organizations, the PENN
PATENT
RIGHTS and the PENN TECHNICAL INFORMATION solely for educational and
research
purposes on a non-commercial basis.

     

    2.3  Any
license granted to LICENSEE pursuant to Article 2 hereof shall be subject
to the rights of the United States government reserved under Public Laws
96-517,
97-256 and 98-620, codified at 35 U.S.C. 200-212, and any regulations
issued
thereunder, to the extent funded, in whole or in part, by the United
States
government.

     

    2.4  The
right to sublicense conferred upon LICENSEE under this AGREEMENT is
subject to the following conditions:

     

    2.4.1 In
each sublicense, the sublicensee shall be prohibited from further
sublicensing and shall be subject to the terms and conditions of the
license
granted to LICENSEE under this AGREEMENT.

     

    2.4.2
LICENSEE shall forward to PENN, within thirty (30) days of execution,
a complete and accurate copy written in the English language of each
sublicense
granted hereunder.  PENN's receipt of such sublicense shall not
constitute
an approval of such sublicense or a waiver of any of PENN's rights or
LICENSEE's
obligations hereunder.

     

    2.4.3 If
LICENSEE becomes subject to a BANKRUPTCY EVENT, all payments then or
thereafter due and owing to LICENSEE from its sublicensees shall upon
notice
from PENN to any such sublicensee become payable directly to PENN for the
account
of LICENSEE; provided however, that PENN shall remit to LICENSEE the
amount by
which such payments exceed the amounts owed by LICENSEE to
PENN.

     

    2.4.4
Notwithstanding any such sublicense, LICENSEE shall remain primarily
liable to PENN for all of the LICENSEE'S duties and
obligations

     

     

    
      
         

      

      
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    contained
in this AGREEMENT, and any act or omission of a sublicensee which would be
a breach of this AGREEMENT if performed by LICENSEE shall be deemed to
be a
breach by LICENSEE of this AGREEMENT.

     

    ARTICLE 3
- ROYALTIES, RECORDS AND ACCOUNTING

     

    3.1  In
partial consideration of the exclusive license granted herein and in lieu
of a license initiation fee, LICENSEE shall issue to PENN upon execution
of this AGREEMENT, a non-refundable of five percent (5%) of the common
stock of LICENSEE, to be distributed by LICENSEE as follows: (a) approximately
2.5 percent (2.5%) of the common stock of LICENSEE directly to Penn; and
(b) approximately 1.25 percent (1.25%) of the common stock of LICENSEE
directly to Dr. Campbell Laird; and (c) approximately 1.25 percent (1.25%)
of the common stock of LICENSEE directly to Dr. Li Yuan-Feng.  The
issuance
of such stock shall be in accordance with a Stock Agreement which is
attached
to this Agreement as Appendix 3.

     

    3.2  In
further consideration of the exclusive licenses grant herein, LICENSEE
shall pay to PENN a royalty of five percent (5%) of all NET SALES of
PENN
LICENSED PRODUCTS and two-and-one-half percent (2.5%) royalty of NET SALES
of
SERVICES made, made for, used or sold by LICENSEE taken together with all
sublicensees
in any CALENDAR YEAR.

     

    3.2.1 For
sublicenses, LICENSEE shall pay to PENN the above scheduled royalty
on the NET SALES for such PENN LICENSED PRODUCTS and/or SERVICES sold by
such
sublicensee.  Any noncash consideration received by the LICENSEE from
sublicensees
in lieu of a license fee or on account of sales of PENN LICENSED PRODUCT
and/or SERVICES shall be valued at its FAIR MARKET VALUE as of the date
of
receipt.

     

    3.2.2 NET
SALES of any PENN LICENSED PRODUCT or SERVICES shall not be subject
to more than one assessment of the scheduled royalty due
PENN.

     

     

    
      
         

      

      
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    3.3  LICENSEE
agrees to the following performance milestones:

     

    3.3.1  LICENSEE
shall make the first commercial sale of PENN LICENSED PRODUCTS
and/or SERVICES within twenty-four (24) months of completion of commercial
development of a PENN LICENSED PRODUCT.

     

    3.3.2  LICENSEE
shall pay to PENN annual minimum royalties of $20,000.00
(twenty thousand dollars) due and payable on each anniversary of the
EFFECTIVE
DATE of this AGREEMENT commencing one year after the first commercial
sale of
PENN LICENSED PRODUCTS and/or SERVICES.  If the LICENSEE sponsors
research
in the FIELD OF USE at PENN during that year, the full amount of research
funding paid may be applied as a credit against license maintenance fees due
that year.

     

    3.3.3  Minimum
royalty payments due hereunder shall be paid on the due date
listed.  Upon termination of this AGREEMENT, such amounts shall be
applied pro rata
to any shorter period.

     

    3.3.4  A
minimum royalty payment paid under Section 3.3.2 herein shall serve as
an advanced payment against royalties due under Section 3.2 herein solely
for the CALENDAR YEAR for which such minimum royalty payment was
paid.

     

    3.4  LICENSEE
shall deliver to PENN within sixty (60) days after the end of each
CALENDAR QUARTER a report, certified by the chief financial officer of
LICENSEE
setting forth in reasonable detail the calculation of the royalties due
to PENN
for such CALENDAR QUARTER, including, without limitation:

     

    3.4.1  NET
SALES amounts.

     

    3.4.2  Royalties
due, broken down by category, including earned, pass-through,
and minimum royalty categories.

     

    3.4.3  Earned
royalty amounts credited against minimum royalty amounts.

     

     

    
      
         

      

      
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    3.4.4  Gross
consideration amounts, including sales price or fees, revenues,
or monies invoiced, billed, or received for all PENN LICENSED
PRODUCT(S) and/or SERVICES.

     

    3.4.5  Qualifying
costs, as defined in Section 1.13 by category of cost,
deducted from gross consideration to derive NET SALES.

     

    3.4.6  Number
of PENN LICENSED PRODUCT(S) and/or SERVICES used, leased,
or transferred in each country.

     

    3.4.7  NET
SALES broken down by country.

     

    3.4.8  Date
LICENSEE or an AFFILIATE used, leased, or otherwise transfers
each PENN LICENSED PRODUCT and/or SERVICE.

     

    3.4.9  A
profit and loss statement showing LICENSEE'S activity during the
reporting period.

     

    3.5  Royalties
payable under Section 3.2 hereof shall be paid within ninety (90) days
following the last day of the calendar quarter in which the royalties
accrue.

     

    3.6  All
dollar amounts referred to in this AGREEMENT are expressed in United
States dollars.  All payments to PENN under this AGREEMENT shall be
made in United
States dollars by check payable to "The Trustees of the University of
Pennsylvania."

     

    3.6.1  If
LICENSEE receives revenues from SALES of PENN LICENSED PRODUCTS
and/or SERVICES in currency other than United States dollars, royalties
shall be
converted into United States dollars at the conversion rate for the foreign
currency as published in the eastern edition of THE WALL STREET JOURNAL
as of the
last business day of the applicable CALENDAR QUARTER.

     

    3.6.2  Amounts
that are not paid when due shall accrue interest from the due
date until paid, at a rate equal to then prevailing United States prime
rate

     

     

    
      
         

      

      
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    of
interest as published in the eastern edition of THE WALL STREET JOURNAL plus
two
percent (2%).

     

    3.7  LICENSEE
will maintain and cause its sublicensees to maintain, complete
and accurate books and records which enable the royalties payable hereunder
to be verified.  The records for each CALENDAR QUARTER shall be
maintained
for five years after the submission of each report under Article 3 hereof.  Upon
reasonable prior notice to LICENSEE, PENN and its accountants shall
have access to the books and records relating to the SALES of PENN LICENSED
PRODUCTS and SERVICES by LICENSEE and its sublicensees to conduct a review or
audit thereof.  Such access shall be available not more than once each
CALENDAR
YEAR, during normal business hours, and for each of three years after
the
expiration or termination of this AGREEMENT.  If PENN determines that
LICENSEE
has underpaid royalties by 5% or more, LICENSEE will pay the costs and
expenses
of PENN and its accountants in connection with its review or
audit.

     

    ARTICLE 4
- IMPROVEMENTS

     

    4.1  Title
to all intellectual property created or conceived by individuals owing
duty to assign to PENN, including PENN TECHNICAL INFORMATION, shall remain
in
PENN.

     

    4.2  Inventions
made during the performance of the SPONSORED RESEARCH AGREEMENT
shall be governed by the provisions of the SPONSORED RESEARCH AGREEMENT.

     

    ARTICLE 5
- CONFIDENTIALITY

     

    5.1  CONFIDENTIAL
INFORMATION means any information or material in tangible form that
is marked as confidential or proprietary to PENN at the time it is delivered
to LICENSEE, and any other information that is furnished orally
if

     

     

    
      
         

      

      
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    PENN
identifies such information as confidential or proprietary when it is
disclosed
and confirms such designation in writing within thirty (30) days after
such
disclosure.

     

    5.2  CONFIDENTIALITY

     

    5.2.1
LICENSEE agrees to maintain in confidence and not to disclose to any third
party any CONFIDENTIAL INFORMATION of PENN received pursuant to this
AGREEMENT.  The
foregoing obligation shall not apply to:

     

    5.2.1.1   information
that is known to LICENSEE or independently developed
by LICENSEE prior to the time of disclosure, in each case, to the extent
evidenced by written records promptly disclosed to PENN upon receipt of
the
CONFIDENTIAL INFORMATION;

     

    5.2.1.2   information
disclosed to LICENSEE by a third party that has a
right to make such disclosure;

     

    5.2.1.3   information
that becomes patented, published or otherwise
part of the public domain as a result of acts by PENN or a third person
obtaining such information as a matter of right; or

     

    5.2.1.4   information
that is required to be disclosed by order of the
FDA or similar authority or a court of competent jurisdiction; provided
that the
LICENSEE shall use its best efforts to obtain confidential treatment of
such
information by the agency or court.

     

    5.3  LICENSEE
agrees to take all reasonable steps to protect the CONFIDENTIAL
INFORMATION of PENN with the same degree of care that LICENSEE uses to
protect its own confidential or proprietary information.  Without
limiting the
foregoing, LICENSEE agrees to ensure that all of its employees having access
to the
CONFIDENTIAL INFORMATION are on need-to-know basis and are obligated (in
writing)
to abide by LICENSEE's obligations hereunder.

     

     

    
      
         

      

      
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    5.4  PENN
shall not be obligated to accept any confidential information from
LICENSEE.  PENN bears no institutional responsibility for maintaining
the confidentiality
of any confidential information of LICENSEE.

     

    5.5
LICENSEE agrees that it shall utilize all such CONFIDENTIAL INFORMATION
solely for furthering the objectives of this AGREEMENT and it will not,
either during the term of this AGREEMENT or at any time subsequent to the
termination
of this AGREEMENT, otherwise use such information for its own benefit
or for the benefit of others; nor will LICENSEE publish or otherwise
disclose
such CONFIDENTIAL INFORMATION to any other individual or entity.  This
paragraph
shall not restrict LICENSEE's disclosure to the extent required by all
pertinent
securities laws, rules and regulations.

     

    5.6  PENN's
placement of a copyright notice on any portion of a document, software,
or CONFIDENTIAL INFORMATION shall not be construed to mean that such
portion
has been published and will not release LICENSEE from its obligation of
confidence
hereunder.

     

    ARTICLE 6
- TERM AND TERMINATION

     

    6.1  This
AGREEMENT, unless sooner terminated as provided herein, shall terminate
upon the expiration of the last to expire or become abandoned of the
PENN
PATENT RIGHTS, subject to the provisions of paragraph 6.3
hereof.

     

    6.2  LICENSEE
may, at its option, terminate this AGREEMENT at any time by doing all
of the following:

     

    6.2.1
Cease making, having made, using and selling any PENN LICENSED
PRODUCT and SERVICES; and

     

    6.2.2  Revokes
all sublicenses causing all sublicensees to cease making,
having made, using and selling any PENN LICENSED PRODUCT and SERVICES;
and

     

     

    
      
         

      

      
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    6.2.3  Gives
sixty (60) days notice to PENN of such cessation and of LICENSEE
intent to terminate; and

     

    6.2.4  Tenders
payment of all accrued royalties.

     

    6.3  PENN
may terminate this AGREEMENT if any of the following occur:

     

    6.3.1  LICENSEE
becomes more than sixty days in arrears in payment of royalties
or expenses due pursuant to this AGREEMENT and LICENSEE does not provide
full payment immediately upon demand; or

     

    6.3.2
LICENSEE becomes subject to a BANKRUPTCY EVENT; or

     

    6.3.3
LICENSEE breaches this AGREEMENT and does not cure within-sixty(60)
days written notice thereof; or

     

    6.3.4
LICENSEE has not made a commercial sale of PENN LICENSED PRODUCT or
SERVICE within twenty-four (24) months of the completion of commercial
development
of a PENN LICENSED PRODUCT.

     

    6.4  If
LICENSEE becomes subject to a BANKRUPTCY EVENT, all duties of PENN and all
rights (but not duties) of LICENSEE under this AGREEMENT shall immediately
terminate without the necessity of any action being taken either by PENN or
by LICENSEE.  In the event of entry by LICENSEE into bankruptcy or
reorganization,
PENN shall be considered to be a preferred creditor and lienholder
against all stocks of PENN LICENSED PRODUCT.  PENN is also granted a
security
interest in and shall be considered to be a preferred creditor of LICENSEE
with respect to PENN TECHNICAL INFORMATION and PENN PATENT
RIGHTS.

     

    6.5  Upon
termination of this AGREEMENT, LICENSEE shall, at PENN's request, return to
PENN all data, formulas, drawings, specifications, literature and other
technical information comprising PENN TECHNICAL

     

     

    
      
         

      

      
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    INFORMATION
fixed in any tangible medium of expression as well as any data generated
by LICENSEE during the term of this AGREEMENT which will facilitate the
development of the technology licensed hereunder.

     

    6.6  LICENSEE's
obligation to pay royalties accrued under Article 3 hereof shall
survive termination of this AGREEMENT.  In addition, the provisions of
Sections
4.1 and 7.2 and Articles 5, 6, 9, 10, and 14 shall survive such termination.

     

    ARTICLE 7
- PATENT MAINTENANCE

     

    7.1  PENN
shall prosecute and maintain PENN PATENT RIGHTS as set forth in Appendix
1 hereto as the same may be supplemented from time to time in accordance
with Article 4, provided however, that such prosecution, and maintenance
fees shall not exceed $10,000.00 as provided for in Section
7.2.

     

    7.2  LICENSEE
shall promptly reimburse PENN for all documented attorneys fees,
expenses, official fees and other charges incident to the preparation,
prosecution
and maintenance of PENN PATENT RIGHTS, including patents and patent applications
in the United States and in countries foreign to the United States on
developments set forth in foregoing Sections 4.2. LICENSEE's obligation to
reimburse
PENN's documented patent expenses, under this Section 7.2, shall not
exceed
$10,000.  PENN shall provide LICENSEE with itemized statements
reflecting these
expenses and LICENSEE shall reimburse PENN for such expenses within thirty
(30) days
after receipt of such statement.

     

    7.2.1  LICENSEE
may provide advice to PENN regarding preparation, filing,
and prosecution of any U.S. Patent Applications developed under this
Agreement
and/or the Sponsored Research Agreement with Dr. Laird (see Attachment
B).

     

    7.2.2 
LICENSEE shall have the first option, for a period not to exceed

    ten (10)
months from the date of filing a U.S. patent application, to
support

    and pay
for foreign applications of any U.S. Patent Application licensed
under

    this
Agreement.  If LICENSEE notifies PENN, in writing, of its desire to
have

    PENN

     

     

    
      
         

      

      
        - 14
-

        
          
 

      

      
         

      

    

     

    file any
particular U.S. Patent Application in foreign venues, then PENN will
diligently
file and prosecute such applications after consultation with LICENSEE.  Such
foreign patent preparation, filing, and prosecution fees and expenses
shall not be subject to the reimbursement limitations ($10,000 limit)
of
LICENSEE set forth in Section 7.2. If LICENSEE does not advise PENN that it
will
support the foreign filing of a particular U.S. Patent Application, then
PENN
shall be free to pursue such foreign filings at PENN's own expense; provided
that PENN notifies LICENSEE of its intention to so file a foreign application
and LICENSEE does not itself file such application with sixty (60) days of
said notice.  Such foreign filings which are made by PENN shall not be
included
as part of this Agreement and PENN shall be free to license such foreign
patents to other third parties without further obligation to
LICENSEE.

     

    7.3  LICENSEE
and its sublicensees shall comply with all Federal and foreign
jurisdiction laws in respect of patent marking, if any, but the selection,
location and particulars of such marking shall be at LICENSEE'S discretion.

     

    ARTICLE 8
- INFRINGEMENT AND LITIGATION

     

    8.1  Both
PENN and LICENSEE are responsible for notifying the other of any infringement
of PENN PATENT RIGHTS or JOINT PATENT RIGHTS which may come to their
attention.  PENN and LICENSEE shall consult concerning any suspected
infringement
in an effort to agree upon terms and conditions for instigation and maintenance
of litigation activities or forbearance from same.

     

    8.2  To
the extent litigation is mutually agreed upon, LICENSEE shall have the
right, but not the obligation to prosecute such infringement at its own
expense.  In
such event, PENN shall cooperate with LICENSEE, at
LICENSEE'S

    expense.  LICENSEE
shall not settle or compromise any such suit in a manner that poses any
obligations or restrictions on PENN or grants any rights to the PENN
TECHNICAL
INFORMATION or the PENN PATENT RIGHTS, without PENN's written permission.

     

     

    
      
         

      

      
        - 15
-

        
          
 

      

      
         

      

    

     

    8.3  Financial
recoveries from any such litigation will first be applied to reimburse
LICENSEE for its litigation expenditures with additional recoveries being
paid to LICENSEE, subject to a royalty due PENN based on the provisions of
Article 3
hereof.

     

    8.4  Such
rights of Section 8.2 shall be subject to the continuing right of PENN to
intervene at PENN's own expense and join LICENSEE in any claim or suit
for
infringement of the PENN PATENT RIGHTS.  Any consideration received by
LICENSEE
in settlement of any claim or suit shall be shared between PENN and LICENSEE
in proportion with their share of the litigation expenses in such infringement
action.  If counsel chosen by LICENSEE is reasonably acceptable to
PENN, for
these purposes its litigation expenses should not be deemed to include
counsel
fees.

     

    8.5  In
any infringement suit to enforce any of the PENN PATENT RIGHTS or the JOINT
PATENT RIGHTS, either party, at the request and expense of the other
party
shall cooperate in all respects and, to the fullest extent reasonably
possible,
shall have its employees testify when requested and shall make available
relevant records, papers, information, samples, specimens, and the like.  This
provision shall not be construed to require either party to undertake
any activities, including legal discovery, at the request of any third
party
except as may be required by lawful process of a court of competent jurisdiction.

     

    ARTICLE 9
- DISCLAIMER OF WARRANTIES; INDEMNIFICATION

     

    9.1  THE
LICENSED TECHNOLOGY IS PROVIDED ON AN "AS IS" BASIS AND PENN MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PENN
TECHNICAL
INFORMATION OR THE PENN LICENSED PRODUCTS.  BY WAY OF EXAMPLE BUT NOT
OF
LIMITATION, PENN MAKES NO REPRESENTATIONS OR WARRANTIES (i) OF COMMERCIAL
UTILITY,
(ii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR (iii)
THAT THE
USE OF THE PENN TECHNICAL INFORMATION WILL NOT INFRINGE ANY PATENT, COPYRIGHT
OR TRADEMARK OR OTHER PROPRIETARY RIGHT OR PROPERTY RIGHTS OF OTHERS.
PENN
SHALL

     

     

    
      
         

      

      
        - 16
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    NOT BE
LIABLE TO LICENSEE, LICENSEE'S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY
WITH
RESPECT TO ANY CLAIM ON ACCOUNT OF, OR ARISING FROM, THE USE OF PENN
TECHNICAL
INFORMATION IN CONNECTION WITH THE LICENSED TECHNOLOGY SUPPLIED HEREUNDER
OR THE MANUFACTURE, USE OR SALE OF PENN LICENSED PRODUCTS OR ANY OTHER
MATERIAL
DERIVED THEREFROM.  PENN SHALL NOT BE LIABLE TO LICENSEE OR ANY OTHER
PERSON
FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR INTERRUPTION OF BUSINESS, OR
FROM ANY
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND INCURRED BY LICENSEE
OR ANY OTHER PERSON WHETHER UNDER THIS AGREEMENT OR OTHERWISE, EVEN IF
PENN HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS.

     

    9.2  LICENSEE
will defend, indemnify and hold harmless PENN, its trustees, officers,
agents and employees (collectively, the "Indemnified Parties"), from
and
against any and all liability, loss, damage, action, claim or expense
suffered
or incurred by the Indemnified Parties (including attorney's fees) (individually,
a "Liability", and collectively, the "Liabilities") which results from or
arises out of: (a) the development, use, manufacture, promotion, sale
or

    other
disposition, of any PENN LICENSED PRODUCTS and/or SERVICES by LICENSEE,
its
AFFILIATES, assignees, sublicensees, vendors or other third parties; (b)
breach by
LICENSEE of any covenant or agreement contained in this AGREEMENT; and
(c) the
enforcement by an Indemnified Party of its rights under this Section.
The
indemnification obligation under clause (a) shall apply regardless of any
contributory
negligence of the Indemnified Party.  Without limiting the
foregoing,
LICENSEE will defend, indemnify and hold harmless the indemnified Parties
from and against any Liabilities resulting from:

     

    9.2.1  any
product liability or other claim of any kind related to the use by a
third party of a PENN LICENSED PRODUCT and/or SERVICE that was manufactured,
sold or otherwise disposed by LICENSEE, its AFFILIATES, assignees, sublicensees,
vendors or other third parties;

     

    9.2.2  a
claim by a third party that the PENN TECHNICAL INFORMATION or the
design, composition, manufacture, use, sale or other

     

     

    
      
         

      

      
        - 17
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    disposition
of any PENN LICENSED PRODUCT and/or SERVICE infringes or violates any
patent, copyright, trademark or other intellectual property rights of such
third
party; and

     

    9.3  The
Indemnified Party shall promptly notify LICENSEE of any claim or action
giving rise to Liabilities subject to the provisions of the foregoing
Section.  LICENSEE
shall have the right to defend any such claim or action, at its cost
and expense.  LICENSEE shall not settle or compromise any such claim
or action in
a manner that imposes any restrictions or obligations on the University
or grants any rights to the PENN TECHNICAL INFORMATION.  If LICENSEE
fails or
declines to assume the defense of any such claim or action within thirty
(30) days after notice thereof, PENN may assume the defense of such claim
or action
for the account and at the risk of LICENSEE, and any Liabilities related
thereto shall be conclusively deemed a liability of
LICENSEE.  LICENSEE shall pay
promptly to the Indemnified Party any Liabilities to which the foregoing
indemnity relates, as incurred.  The indemnification rights of PENN or
other
Indemnified Party contained herein are in addition to all other rights
which
such Indemnified Party may have at law or in equity or
otherwise.

     

    9.4  LICENSEE
shall maintain general liability insurance, including contractual
liability, and, if commercially available at standard rates product liability
insurance in amounts not less than $2,000,000 per incident and $2,000,000
in the aggregate, issued by an insurance company rated A or better and
naming PENN as an additional insured for ten (10) years after LICENSEE
ceases
manufacturing and marketing the PENN LICENSED PRODUCTS and/or SERVICES.
The
minimum insurance amounts specified herein shall not be deemed a limitation
on
LICENSEE's indemnification liability under this AGREEMENT.  LICENSEE
shall provide
PENN with copies of the endorsements to such policies, upon request of
PENN.  LICENSEE
shall notify PENN at least thirty (30) days prior to cancellation
of any such coverage.  PENN shall receive a royalty on any
insurance
award constituting compensation to LICENSEE for lost profits on the sale of
PENN LICENSED PRODUCTS.

     

     

    
      
         

      

      
        - 18
-

        
          
 

      

      
         

      

    

     

    ARTICLE
10 - USE OF PENN'S NAME; INDEPENDENCE

     

    10.1
LICENSEE and its employees and agents shall not use and LICENSEE shall
not
permit its sublicensees to use PENN's name, any adaptation thereof, any PENN
logotype,
trademark, service mark or slogan or the name mark or logotype of any
PENN
representative or organization in any way without the prior, written
consent
of PENN, except as required by law.  In this regard, PENN acknowledges
and
agrees that the LICENSEE may use PENN's name in various documents used by
LICENSEE
for capital raising and financing purposes, provided that PENN grants
prior
written approval of such use, which approval shall not be unreasonably
withheld.

     

    10.2 PENN
and LICENSEE are independent entities and contractors and neither is an
agent of the other.  LICENSEE shall take no action which would suggest
to a
reasonable person that an agency relationship exists between LICENSEE and
PENN.

     

    10.3
Neither party shall use directly or by implication the name of the other or
any staff member, faculty member, student or employee of the other in
connection
with any products, publicity, promotion, financing or advertising without
the prior written permission of the other party, except as required by
law.

     

    ARTICLE
11 - COMPLIANCE WITH LAWS; EXPORT CONTROL

     

    11.1
LICENSEE shall comply with all prevailing laws, rules and regulations
pertaining
to the development, testing, manufacture, marketing, sale, use, import or
export of products.  Without limiting the foregoing, it is
understood

    that PENN
is subject to United States laws and regulations controlling the export of
technical data, computer software, laboratory prototypes and other commodities,
articles and information, including the Arms Export Control Act as amended
in the Export Administration Act of 1979, and that its obligations hereunder
are contingent upon compliance with applicable United States export laws and
regulations.  The transfer of certain technical data and commodities
may
require

     

     

    
      
         

      

      
        - 19
-

        
          
 

      

      
         

      

    

     

    a license
from the cognizant agency of the United States Government and/or written
assurances by LICENSEE that LICENSEE shall not export data or commodities
to certain foreign countries without prior approval of such agency. PENN
neither represents that a license is not required nor that, if required, it
will
issue.

     

    ARTICLE
12 - ASSIGNMENT

     

    12.1 This
AGREEMENT and the rights and duties appertaining thereto may not be
assigned by either party other than to an Affiliate without first obtaining
the
express written consent of the other party.  Any such purported
assignment, without
the written consent of the other party, shall be null and of no
effect.

     

    ARTICLE
13 - NOTICES

     

    13.1
Notices, payments, statements, reports and other communications under
this
AGREEMENT shall be in writing and shall be deemed as having been received
as of the
date dispatched if sent by public courier (e.g. Federal Express) or by
express mail, receipt requested and addressed as follows:

     

    If for
PENN:

     

    University
of Pennsylvania

    Center
for Technology Transfer

    3700
Market Street, Suite 300

    Philadelphia,
PA 19104

    Attention:
Director

     

    with a
copy to:

     

    Office of
General Counsel

    University
of Pennsylvania

    221
College Hall

    Philadelphia,
PA  19104-6303

    Attention:  General
Counsel

     

     

    
      
         

      

      
        - 20
-

        
          
 

      

      
         

      

    

     

    If for
LICENSEE:

     

    Tensiodyne
Corporation

    11835
West Olympic Boulevard

    East
Tower, Suite 705

    West Los
Angeles, CA 90064

     

    with a
copy to:

     

    Stephen
M. Goodman, Esquire

    Wolf,
Block, Schorr and Solis-Cohen

    12th
Floor Packard Building

    S.E.
Corner 15th & Chestnut Streets

    Philadelphia,
PA 19102-2678

     

    Either
party may change its official address upon notice to the other
party.

     

    ARTICLE
14 - JURISDICTION; ENTIRE AGREEMENT - DISPUTE RESOLUTION

     

    14.1 This
AGREEMENT shall be interpreted in accordance with the laws of the Commonwealth
of Pennsylvania.  Jurisdiction and venue shall be proper in the
Commonwealth
of Pennsylvania.

     

    14.2 This
AGREEMENT and the SPONSORED RESEARCH AGREEMENT (Appendix 2 hereto)
[and the STOCK PURCHASE AGREEMENT (Appendix 3 hereto)] are being entered
into
simultaneously and each is related to the other in setting forth the entire
agreement
of the parties.  Any modification of this AGREEMENT shall be in
writing
and signed by an authorized representative of each party.

     

    14.3 In
the event that a party to this AGREEMENT perceives the existence of a dispute
with the other party concerning any right or duty provided for herein,
the
parties shall, as soon as practicable, confer in an attempt to resolve the
dispute.  In
the event that resolution of the dispute is not forthcoming, the parties
shall

     

     

    
      
         

      

      
        - 21
-

        
          
 

      

      
         

      

    

     

    consult
with a view toward submitting the dispute to mediation or arbitration
under
mutually-acceptable terms.  There is no enforceable obligation to
enter into
mediation or arbitration conferred by this paragraph.

     

    IN
WITNESS WHEREOF the parties, intending to be legally bound, have caused
this
AGREEMENT to be executed by their duly authorized
representatives.

     

     

    THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

     

    DATE: August
26,
1993                                                                 

     

    SIGNATURE: /s/
Stephen M.
Sammut                                         

     

    TYPED NAME: Stephen
M.
Sammut                                           

     

    TITLE:      Managing
Director                                                       

     

     

    LICENSEE

     

    DATE: 9/9/93                                                                                   

     

    SIGNATURE: /s/
Robert M.
Bernstein                                        

     

    TYPED NAME: Robert
M.
Bernstein                                          

     

    TITLE:      PRES.                                                                              

     

     

     

    
      

      
        
           

        

        
          - 22
-matechexh10_2.htm

    
      
 

    Exhibit
10.2

     

    SPONSORED
RESEARCH AGREEMENT

     

    between

     

    TENSIODYNE
CORPORATION

    (SPONSOR)

     

    and

     

    THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

    (PENN)

     

     

     

     

    TABLE OF
CONTENTS

     

    
      	
              RECITALS

            	
              1

            
	
              ARTICLE
      1.  Definitions

            	
              1

            
	
              ARTICLE
      2.  Sponsored Research

            	
              2

            
	
              ARTICLE
      3.  Term of Agreement

            	
              3

            
	
              ARTICLE
      4.  Reimbursement of Costs, Payment

            	
              3

            
	
              ARTICLE
      5.  Intellectual Property

            	
              3

            
	
              ARTICLE
      6.  Confidentiality

            	
              4

            
	
              ARTICLE
      7.  Publication, Use of Name

            	
              4

            
	
              ARTICLE
      8.  Termination

            	
              5

            
	
              ARTICLE
      9.  Disclaimer of Warranties, Indemnification

            	
              6

            
	
              ARTICLE
      10. Additional Provisions

            	
              7

            
	ATTACHMENT
      A	
              11

            

    

     

     

    
      
         

      

      
         

        
          
 

      

      
         

      

    

     

    SPONSORED
RESEARCH AGREEMENT

     

     

    This
Sponsored Research Agreement ("AGREEMENT") is made by and between The Trustees
of the University of Pennsylvania, a Pennsylvania nonprofit corporation
("PENN"), with offices located at Suite 300, 133 South 36th Street,
Philadelphia, PA 19104-3246, and Tensiodyne Corporation, a corporation organized
and existing under the laws of Delaware ("SPONSOR"), having a place of business
at Los Angeles, California.

     

    This
AGREEMENT is effective as of the ____day of July, 1993 ("EFFECTIVE
DATE").

     

    RECITALS

     

    WHEREAS,
the SPONSOR desires to fund the research of Dr. Campbell Laird of PENN's School
of Engineering in fatigue properties of metals;

     

    WHEREAS,
the Sponsor desires to support such research conducted by PENN in accordance
with the terms and conditions of this AGREEMENT;

     

    WHEREAS,
the research program contemplated by this AGREEMENT is of mutual interest to
SPONSOR and PENN and furthers the educational, scholarship and research
objectives of PENN as a nonprofit, tax-exempt educational institution and may
benefit both SPONSOR and PENN through the creation or discovery of new
inventions;

     

    NOW,
THEREFORE, in consideration of the premises and of the promises and mutual
covenants contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:

     

    ARTICLE
1. DEFINITIONS

     

    1.1  CONFIDENTIAL
INFORMATION means PENN INTELLECTUAL PROPERTY and any information or materials in
tangible form that is marked as confidential or proprietary to PENN at the time
it is delivered to SPONSOR, and any other information that is furnished orally
if PENN identifies such information as confidential or proprietary when it is
disclosed and promptly confirms such designation in writing within thirty (30)
days after such disclosure.

     

    1.2.  EFFECTIVE
DATE means the first date written above.

     

     

    
      
         

      

      
        - 1
-

        
          
 

      

      
         

      

    

     

    1.3  LICENSE
AGREEMENT means the License Agreement between the SPONSOR and PENN of even date
herewith.

     

    1.4  PENN
INTELLECTUAL PROPERTY means and includes all technical information, inventions,
trade secrets, developments, discoveries, software, know-how, methods,
techniques, formulae, data, processes and other proprietary ideas, whether or
not patentable or copyrightable, that are first conceived, discovered, developed
or reduced to practice in the conduct of the SPONSORED RESEARCH.

     

    1.5  PRINCIPAL
INVESTIGATOR is Dr. Campbell Laird who has agreed to serve as PRINCIPAL
INVESTIGATOR for the SPONSORED RESEARCH and shall be responsible for the
administration and supervision of the SPONSORED RESEARCH.

     

    1.6  SPONSORED
RESEARCH means the research program described in Attachment A to this
AGREEMENT.

     

    ARTICLE
2. SPONSORED RESEARCH

     

    2.1  PENN
shall commence the SPONSORED RESEARCH promptly after the EFFECTIVE DATE of this
AGREEMENT and upon payment by SPONSOR of any funds owed, and shall use
reasonable efforts to conduct such SPONSORED RESEARCH substantially
in accordance with the terms and conditions of this AGREEMENT. SPONSOR
acknowledges that PENN and the PRINCIPAL INVESTIGATOR shall have the freedom to
conduct and supervise the SPONSORED RESEARCH in a manner consistent with PENN's
research mission.  This AGREEMENT shall not be construed to limit the
freedom of individuals participating in the SPONSORED RESEARCH to engage in any
other research.

     

    2.2  If
the services of the PRINCIPAL INVESTIGATOR become unavailable to PENN for any
reason, PENN shall be entitled to designate another member of its faculty who is
acceptable to both parties to serve as the PRINCIPAL INVESTIGATOR of the
SPONSORED RESEARCH.  If a substitute PRINCIPAL INVESTIGATOR has not
been designated within sixty (60) days after the original PRINCIPAL INVESTIGATOR
ceases his or her services under this AGREEMENT, either party may terminate this
AGREEMENT upon written notice thereof to the other party, subject to the
provisions of Article 7.

     

     

    
      
         

      

      
        - 2
-

        
          
 

      

      
         

      

    

     

    ARTICLE
3. TERM OF AGREEMENT

     

    3.1  The
initial term of this AGREEMENT shall begin on the EFFECTIVE DATE of this
AGREEMENT and shall end on July _, 1995 unless terminated sooner pursuant to
Sections 2.2 or 8.1 hereof.  This AGREEMENT may be extended or renewed
only by the parties' mutual written agreement, which shall be incorporated as an
attached to this AGREEMENT.

     

    ARTICLE
4. REIMBURSEMENT OF COSTS, PAYMENTS

     

    4.1  SPONSOR
agrees to reimburse PENN for all direct and indirect costs incurred in the
conduct of the SPONSORED RESEARCH in an amount not to exceed the total amount of
$200,000.00 as set forth in Attachment A. SPONSOR acknowledges that this amount
is a good faith estimate only and not a guarantee of the cost to conduct the
SPONSORED RESEARCH.  If at any time PENN determines that it will
require additional funds for the SPONSORED RESEARCH, it shall notify SPONSOR and
provide an estimate of the additional amount.  SPONSOR shall not be
liable for any costs in excess of the amount of $200,000.00 as set forth in
Attachment A unless it has agreed in writing to provide additional
funds.

     

    4.2  SPONSOR
agrees to make payments to PENN at the rate of $11,112 per month for eighteen
months beginning October 15, 1995.  All payments are to be made by
check payable in United States dollars, to "The Trustees of the University of
Pennsylvania", and sent to the address set forth in Section 10.5.

     

    4.3  PENN
shall maintain accurate records and books of account relating to this AGREEMENT
in accordance with accepted accounting practices, and shall make such records
and books available to SPONSOR upon reasonable notice during PENN's normal
business hours, but not more frequently than once each calendar
year.

     

    4.4  SPONSOR
agrees that title to any equipment, laboratory animals, or any other materials
made or acquired with funds provided under this AGREEMENT shall vest in PENN,
and such equipment, animals, or materials shall remain the property of PENN
following termination of this AGREEMENT.

     

    ARTICLE
5. INTELLECTUAL PROPERTY

     

    5.1  Prosecution
of Patent Applications and Maintenance of Patents

     

    5.1.1  PENN
agrees to provide promptly to SPONSOR a complete written disclosure of any PENN
INTELLECTUAL PROPERTY reasonably considered

     

     

    
      
         

      

      
        - 3
-

        
          
 

      

      
         

      

    

     

    patentable.  SPONSOR
agrees to advise PENN, no later than thirty (30) days after receipt of such
disclosure, whether it requests PENN to file and prosecute a United States
patent application related to such PENN INTELLECTUAL PROPERTY.  If
SPONSOR does not request PENN to file and prosecute a patent application,
PENN

    may
proceed with such preparation and prosecution at its own cost and expense; but
such patent applications shall be excluded from SPONSOR's right under the
License Agreement.

     

    5.1.2  The
mutual rights and obligations of the parties with respect to filing, maintenance
and prosecution of patents and patent applications respecting PENN's
INTELLECTUAL PROPERTY shall be as set forth in the LICENSE
AGREEMENT.

     

    5.2  The
preparation, prosecution, and maintenance of copyright, trademark and other
intellectual property applications for the PENN INTELLECTUAL PROPERTY shall be
subject to the provisions of Section 5.1.

     

    5.3  PENN
shall retain all right, title and interest in and to the PENN INTELLECTUAL
PROPERTY and any patents, copyrights and other intellectual property protections
related thereto, regardless of which party prepares and prosecutes the
applications associated therewith, or maintains any resulting patents,
copyrights or other intellectual property protections, subject to any express
license granted to SPONSOR under the LICENSE AGREEMENT.

     

    ARTICLE
6. CONFIDENTIALITY

     

    The
rights and obligations of the parties respecting Confidential Information of the
parties received pursuant to this Agreement shall be as set forth in the License
Agreement.

     

    ARTICLE
7. PUBLICATION, USE OF NAME

     

    7.1  SPONSOR
acknowledges that the basic objective of research activities at PENN is the
generation of new knowledge and its expeditious dissemination. To further that
objective, PENN retains the right, at its discretion, to demonstrate, publish or
publicize a description of the results of the SPONSORED RESEARCH, subject to the
provisions of Section 8.2 below.

     

    7.2  Should
the PRINCIPAL INVESTIGATOR desire to disclose publicly, in writing or by oral
presentation, the results of the SPONSORED RESEARCH, the PRINCIPAL INVESTIGATOR
shall notify SPONSOR and PENN in writing of his or her intention at least thirty
(30) days before such disclosure.  The PRINCIPAL INVESTIGATOR shall
include with such notice a description of the oral presentation or, in the case
of a manuscript or other proposed written disclosure, a current draft of such
written disclosure.  SPONSOR may request PENN, no later than thirty
(30) days following the receipt of such

     

     

    
      
         

      

      
        - 4
-

        
          
 

      

      
         

      

    

     

    notice,
to file a patent, copyright or other application related to PENN INTELLECTUAL
PROPERTY contained in such disclosure.  All such filings shall be
subject to the provisions of ARTICLE 5 of this Agreement.  Upon
receipt of such request, PENN and the PRINCIPAL INVESTIGATOR shall arrange a
short delay in publication not to exceed sixty (60) days, to permit filing of a
patent application, copyright or other application by PENN.

     

    7.3  PENN
agrees not to use the SPONSOR's name without the SPONSOR's prior written consent
except that PENN may acknowledge the SPONSOR's funding of this SPONSORED
RESEARCH in scientific publications and in listings of SPONSORED RESEARCH
projects.  SPONSOR agrees not to use PENN's name, or the name of any
trustee, officer, faculty member, student or employee thereof, except in a
manner consistent with the provisions of the LICENSE AGREEMENT.

     

    ARTICLE
8. TERMINATION

     

    8.1  In
addition to the termination right set forth in Section 2.2 hereof, either party
may terminate this AGREEMENT effective upon written notice to the other party,
if the other party breaches any of the terms or conditions of this AGREEMENT and
fails to cure such breach within sixty (60) days after receiving written notice
thereof.

     

    8.2  This
AGREEMENT shall automatically terminate upon the occurrence of a Bankruptcy
Event, as defined in the LICENSE AGREEMENT.

     

    8.3  In
addition, either party may terminate this AGREEMENT for any reason upon ninety
(90) days prior written notice to the other party.

     

    8.4  In
the event of termination of this AGREEMENT prior to its stated term whether for
breach or for any other reason whatsoever, PENN shall be entitled to retain from
the payments made by SPONSOR prior to termination PENN's reasonable costs of
concluding the work in progress.  Allowable costs include, without
limitation, all costs or noncancellable commitments incurred prior to the
receipt, or issuance, by PENN of the notice of termination, and the full cost of
each student and faculty member supported hereunder through the end of such
commitments.  In
the event of termination, PENN shall submit a final report of all costs incurred
and all funds received under this AGREEMENT within sixty (60) days after the
effective termination date.  The report shall be accompanied by a
check in the amount of any excess of funds advanced over costs and allowable
commitments incurred.  In case of a deficit of funds, the SPONSOR
agrees to pay PENN the amount needed to cover costs and allowable commitments
incurred by PENN under this AGREEMENT.

     

    8.5  Termination
of this AGREEMENT shall not affect the rights and obligations of the parties
accrued prior to termination hereof.  The provisions of
ARTICLES

     

     

    
      
         

      

      
        - 5
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    5,
entitled "Intellectual Property"; 9, entitled "Disclaimer of Warranties,
Indemnification"; and 10, entitled "Additional Provisions", shall survive such
termination.

     

    ARTICLE
9. DISCLAIMER OF WARRANTIES, INDEMNIFICATION

     

    9.1  PENN
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING,
WITHOUT LIMITATION, WARRANTIES WITH RESPECT TO THE CONDUCT, COMPLETION, SUCCESS
OR PARTICULAR RESULTS OF THE SPONSORED RESEARCH, OR THE CONDITION OF ANY
INVENTION(S) OR PRODUCT(S), WHETHER TANGIBLE OR INTANGIBLE, CONCEIVED,
DISCOVERED, OR DEVELOPED UNDER THIS AGREEMENT, OR THE OWNERSHIP,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE SPONSORED RESEARCH
OR ANY SUCH INVENTION OR PRODUCT.  PENN SHALL NOT BE LIABLE FOR ANY
DIRECT, CONSEQUENTIAL,
PUNITIVE OR OTHER DAMAGES SUFFERED BY SPONSOR OR ANY OTHER PERSON RESULTING FROM
THE SPONSORED RESEARCH OR THE USE OF ANY SUCH INVENTION OR
PRODUCT.

     

    9.2  SPONSOR
agrees to defend, indemnify and hold harmless PENN, the PRINCIPAL INVESTIGATOR
and any of PENN's faculty, students, employees, trustees, officers, affiliates
and agents (hereinafter referred to collectively as the "INDEMNIFIED PERSONS")
from and against any and all liability, claims, lawsuits,

    losses,
damages, costs or expenses (including documented attorneys' fees), which the
INDEMNIFIED PERSONS may hereafter incur, suffer or be required to pay as a
result of SPONSOR'S use of the results of SPONSORED RESEARCH or any PENN
INTELLECTUAL PROPERTY or as a result any breach of this AGREEMENT or any
wrongful act or omission of SPONSOR, its employees, affiliates, contractors,
licensees or agents.  PENN shall notify SPONSOR upon learning of the
institution or threatened institution of any such liability, claims, lawsuits,
losses, damages, costs and expenses and PENN shall cooperate with SPONSOR in
every proper way in the defense or settlement thereof at SPONSOR'S request and
expense.

     

     

    
      
         

      

      
        - 6
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    ARTICLE
10.  ADDITIONAL PROVISIONS

     

    10.1 In
the event that a party to this AGREEMENT perceives the existence of a dispute
with the other party concerning any right or duty provided for herein, the
parties shall, as soon as practicable, confer in an attempt to resolve the
dispute.  In the event that resolution of the dispute is not
forthcoming, the parties shall consult with a view toward submitting the dispute
to mediation or arbitration under mutually acceptable terms.  There is
no enforceable obligation to enter into mediation or arbitration conferred by
this paragraph.

     

    10.2 No
rights hereunder may be assigned by SPONSOR, directly or by merger or other
operation of law, except in a manner consistent with the terms of the LICENSE
AGREEMENT limiting such assignments.  Any prohibited assignment of
this AGREEMENT or the rights hereunder shall be null and void.  No
assignment shall relieve SPONSOR of responsibility for the performance of any
accrued obligations which it has prior to such assignment.  This
AGREEMENT shall inure to the benefit of permitted assigns of
SPONSOR.

     

    10.3 A
waiver by either party of a breach or violation of any provision of this
AGREEMENT will not constitute or be construed as a waiver of any subsequent
breach or violation of that provision or as a waiver of any breach or violation
of any other provision of this AGREEMENT.

     

    10.4
Nothing herein shall be deemed to establish a relationship of principal and
agent between PENN and SPONSOR, nor any of their agents or employees for any
purpose whatsoever.  This AGREEMENT shall not be construed as
constituting PENN and SPONSOR as partners, or as creating any other form of
legal association or arrangement which would impose liability upon one party for
the act or failure to act of the other party.

     

    10.5
Notices, payments, statements, reports and other communications under this
AGREEMENT shall be writing and shall be deemed to have been received as of the
date dispatched if sent by public courier (e.g. Federal Express) or by express
mail, return receipt requested and addressed as follows:

     

    If to
PENN:

     

    Office of
Research Administration

    University
of Pennsylvania

    133 South
36th Street, Suite 300

    Philadelphia,
PA 19104-3246

    Attn:   Executive
Director

     

     

    
      
         

      

      
        - 7
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      Office of
General Counsel

       221
College Hall

      University
of Pennsylvania

      Philadelphia,
PA 19104-6303

      Attn:
General Counsel

    

     

    If to
SPONSOR:

     

    Tensiodyne
Corporation

    11835
West Olympic Boulevard

    East Tower,
Suite 705

    West Los
Angeles, California 90064

     

    cc:  Stephen
M. Goodman, Esquire

          
Wolf,
Block, Schorr and Solis-Cohen

          
12th
Floor Packard Building

          
S.E. Cor.
15th & Chestnut Streets

          
Philadelphia,
PA 19102-2678

     

    10.6 This
AGREEMENT embodies the entire understanding between the parties relating to the
subject matter hereof and supersedes all prior understandings and agreements,
whether written or oral.  This AGREEMENT may not be varied except by a
written document signed by duly authorized representatives of both
parties.

     

    10.7 Any
of the provisions of this AGREEMENT which are determined to be invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability in such jurisdiction, without rendering invalid
or unenforceable the remaining provisions hereof or affecting the validity or
unenforceability of any of the terms of this AGREEMENT in any other
jurisdiction.

     

    10.8 The
headings and captions used in this AGREEMENT are for convenience of reference
only and shall not affect its construction or interpretation.

     

    10.9
Nothing in this AGREEMENT, express or implied, is intended to confer on any
person other than the parties hereto or their permitted assigns, any benefits,
rights or remedies.

     

    10.10
This AGREEMENT shall be construed and governed in accordance with the laws of
the Commonwealth of Pennsylvania, without giving effect to conflict of law
provisions.

     

     

    
      
         

      

      
        - 8
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    10.11
PENN and SPONSOR shall not discriminate against any employee or applicant for
employment because of race, color, sex, sexual or affectional preference, age,
religion, national or ethnic origin, or handicap.

     

    10.12
Neither party shall be liable for any failure to perform as required by this
AGREEMENT to the extent such failure to perform is due to circumstances
reasonably beyond such party's control, including, without limitation, labor
disturbances or labor disputes of any kind, accidents, failure of any
governmental approval required for full performance, civil disorders or
commotions, acts of aggression, acts of God, energy or other conservation
measures imposed by law or regulation, explosions, failure of utilities,
mechanical breakdowns, material shortages, disease, or other such
occurrences.

     

    10.13 All
rights granted to SPONSOR by this AGREEMENT are contingent upon compliance with
United States laws and regulations controlling the export of technical data,
computer software, laboratory prototypes, and all other export controlled
commodities.  These laws include, but are not limited to, the Arms
Export Control Act and the Export Administration Act as they may be amended.
SPONSOR shall not, directly or indirectly, export any export controlled
commodities, which are subject to this AGREEMENT, unless the required
authorization and/or license is obtained from the proper government agency(ies)
prior to export.  By granting rights in this AGREEMENT, PENN does not
represent that export authorization or an export license will not be necessary
or, if necessary, that such authorization or export license will be
granted.

     

    IN
WITNESS WHEREOF, the duly authorized representatives of the parties hereby
execute this AGREEMENT as of the date first written above.

     

     

    
      
        	
                THE
      TRUSTEES OF THE

                UNIVERSITY
      OF PENNSYLVANIA

              	 	 	[SPONSOR]	 
	 	 	 	 	 
	
                By: /s/
      Stephen M.
      Sammut                                      
      

              	 	 	
                By: /s/
      Robert M.
      Bernstein                                
      

              	 
	 	 	 	 	 
	
                Name:   Stephen
      M.
      Sammut                                    
      

              	 	 	
                Name:  Robert
      M.
      Bernstein                               
      

              	 
	 	 	 	 	 
	
                Title:  Managing
      Director                                         
      

              	 	 	
                Title: PRES.                                                           
      

              	 
	 	 	 	 	 
	Date: August
      26,
      1993                                              
      	 	 	Date:  9/9/93                                                          
      	 
	 	 	 	 	 

      

    

     

     

    (signatures
continued on next page)

     

     

    
      
         

      

      
        - 9
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    Acknowledged
and Agreed to by

    PRINCIPAL
INVESTIGATOR:

     

    By: /s/
Campbell
Laird                     

     

    Date: Aug
31,
93                              

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        - 10
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    Attachment
A

     

    Summary
of SPONSORED RESEARCH

     

    Work
Scope

     

    1)   Details
of Program - See Attachment B

     

    PRINCIPAL
INVESTIGATOR Campbell Laird

     

    Representative
of SPONSOR

     

    1)   Name:
Robert M. Bernstein

     

    2)   Phone
Number: (310) 208-5589

     

    Period of
Performance August 1, 1993 to July 31, 1995

     

    Report
Schedule Every sixty (60) days

     

    Final
report within thirty (30) days after termination

     

    Budget:  See
Attachment C

     

     

     

     

     

     

     

     

    
      
         

      

      
        - 11
-

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