Document:

tess_8K_Ex10_1_9_4_2015

		
			EXHIBIT 10.1
		

		
			 
		

		
			TENTH MODIFICATION AGREEMENT
		

		
			 
		

		
			THIS TENTH MODIFICATION AGREEMENT (this "Agreement") is made effective as of  September 24, 2015, by and among (a) TESSCO TECHNOLOGIES INCORPORATED, a Delaware corporation (“TESSCO”), TESSCO SERVICE SOLUTIONS, INC., a Delaware corporation, TESSCO INCORPORATED, a Delaware corporation, TESSCO COMMUNICATIONS INCORPORATED, a Delaware corporation, WIRELESS SOLUTIONS INCORPORATED, a Maryland corporation, TESSCO BUSINESS SERVICES, LLC, a Delaware limited liability company, TESSCO INTEGRATED SOLUTIONS, LLC, a Delaware limited liability company, GW SERVICE SOLUTIONS, INC., a Delaware corporation, and TCPM, INC., a Delaware corporation (the aforementioned entities, including TESSCO, being hereinafter called collectively the “Borrowers”); (b) SUNTRUST BANK  and WELLS FARGO BANK, NATIONAL ASSOCIATION (successor in interest to Wachovia Bank, National Association, as Lenders) (in such capacity, the “Lenders”); and (c) SUNTRUST BANK, as Administrative Agent (in such capacity, the “Agent”). 
		

		
			RECITALS
		

		
			 
		

		
			Pursuant to a Credit Agreement dated as of May 31, 2007 by and among certain of the Borrowers and other then existing borrowers, the Lenders, and the Agent (as the same has been or may from time to time be amended, restated, supplemented, or otherwise modified, the “Credit Agreement”), the Lenders agreed to make available to such Borrowers and other then existing borrowers a revolving credit facility pursuant to which the Lenders would make loans and other credit accommodations (collectively, the “Loans”) to or for the benefit of such Borrowers and other then existing borrowers in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding (as increased or decreased, the “Revolving Credit Facility”).  The obligation to repay the Loans with interest was initially evidenced by the Borrowers’ Revolving Credit Note dated May 31, 2007 from certain of the Borrowers and the other then existing borrowers made payable to the Lenders, then in the principal amount of up to $50,000,000 (as the same has been or may from time to time be amended, restated, supplemented, or otherwise modified, the “Note”). 
		

		
			 
		

		
			As used herein, the term "Loan Documents" means collectively, the Credit Agreement, the Note, and all other documents heretofore, now or hereafter executed and delivered by the Borrowers or any other party or parties to evidence, secure, or guarantee, or in connection with, the Revolving Credit Facility. 
		

		
			 
		

		
			Pursuant to a First Modification Agreement dated as of June 30, 2008, the parties agreed to make certain changes to the Credit Agreement.  
		

		
			 
		

		
			Pursuant to a Second Modification Agreement dated as of November 26, 2008, the parties agreed to amend certain financial covenants and make certain other changes to the Credit Agreement.
		

		
			 
		

		
			With the knowledge and consent of the Lenders, certain previously existing borrowers engaged in an internal restructuring which resulted in TESSCO Integrated Solutions, L.P., a Delaware limited partnership, being converted into a Delaware limited liability company, now known as TESSCO Integrated Solutions, LLC, and pursuant to which TESSCO Supply Chain Services, LLC and TESSCO Product Solutions, LLC, each a Delaware limited liability company, each merged into TESSCO Service Solutions, Inc., a Delaware corporation, thereby terminating the existence of the two limited liability companies.
		

		
			 
		

		
			Pursuant to a Third Modification Agreement dated as of July 22, 2009, the parties agreed (a) to decrease the maximum principal amount of the Revolving Credit Facility to $35,000,000, (b) to modify certain financial covenants, and (c) to make certain additional modifications to the Loan Documents (including modifications providing for the extension of the term of the Revolving Credit Facility).
		

		
			 
		

		
			 
		

		

		

		 

		

			 

		

 

		Pursuant to a Fourth Modification Agreement dated as of April 28, 2010, the parties agreed to amend certain covenants and make certain other changes to the Credit Agreement.
		

		
			 
		

		
			The Borrowers subsequently, in accordance with the terms of the Credit Agreement, notified Lenders of the formation of TCPM Inc. and requested that the Lenders and the Agent permit TCPM, Inc. to assume, jointly and severally, with the other Borrowers the obligations of the other Borrowers under the Loan Documents, and the Lenders and the Agents agreed to do so, subject to and upon the terms and conditions of a Joinder, Assumption, and Fifth Modification Agreement effective as of May 20, 2011.
		

		
			 
		

		
			Pursuant to a Sixth Modification Agreement dated as of December 30, 2011, the Borrowers, the Lenders, and the Agent agreed to amend certain other terms and conditions of the Loan Documents (including modifications providing for further extension of the term of the Revolving Credit Facility).
		

		
			 
		

		
			Pursuant to a Seventh Modification Agreement dated as of November 30, 2012, the Lenders and the Agent agreed to permit a special dividend to shareholders.
		

		
			 
		

		
			Pursuant to an Eighth Modification Agreement dated as of December 21, 2012, the Lenders and the Agent agreed to further extend the maturity of the Revolving Credit Facility.
		

		
			 
		

		
			Pursuant to a Ninth Modification Agreement dated as of October 16, 2013, the Lenders and the Agent agreed, among other things, to further extend the maturity of the Revolving Credit Facility.
		

		
			 
		

		
			The Borrowers have now requested that the Lenders and the Agent further extend the maturity of the Revolving Credit Facility and amend certain other terms and conditions of the Credit Agreement, and the Lenders and the Agent have agreed to do so, subject to and upon the terms and conditions hereinafter set forth. 
		

		
			 
		

		
			AGREEMENTS
		

		
			 
		

		
			Now, therefore, in consideration of the premises and the mutual agreements herein contained, and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
		

		
			 
		

		
			1.Recitals; Defined Terms.  The parties hereto acknowledge that the above Recitals are true and correct and agree that the same are incorporated herein.  Unless the context clearly indicates otherwise, each term used in this Agreement which is defined in the Recitals shall have the meaning given to such term in the Recitals, and each capitalized term used herein which is not otherwise defined herein shall have the meaning given to such term in the Credit Agreement.
		

		
			 
		

		
			2.Amendments to Loan Documents.  
		

		
			 
		

		
			(a)Effective as of the date hereof, the definition of “Debt Service” appearing in Section 1.1 of the Credit Agreement is hereby deleted, and the following is inserted in lieu thereof:
		

		
			 
		

		
			““Debt Service” means, for any Person, for any period of measurement, (a) interest expense for such period, plus (b) current maturities of long term debt (except for the balloon payment due upon maturity of that certain term loan made available pursuant to that certain Credit Agreement dated as of June 30, 2004 by and among (i) certain of the Borrowers, (ii) the Lenders, (iii) Wells Fargo Bank, National Association as successor in interest to Wachovia Bank, National Association, as Administrative Agent 
		

		

		

		 

		

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			for the Lenders, and (iv) SunTrust Bank, as Arrangement Agent) and payments due under capital leases for such period.”
		

		
			 
		

		
			(b)Effective as of the date hereof, the definition phrase “seventy-one percent (71%)” in the definition of “Required Lenders” appearing in Section 1.1 of the Credit Agreement is hereby deleted, and the phase “seventy-seven percent (77%)” is inserted in lieu thereof.
		

		
			 
		

		
			(c)Effective as of the effective date of this Agreement, the date “October 1, 2016” appearing in Section 2.6 of the Credit Agreement is hereby deleted, and the date “October 1, 2018” is hereby inserted in lieu thereof.  The Scheduled Maturity Date of the Revolving Credit Facility is hereby extended accordingly.
		

		
			 
		

		
			(d)Effective as of the effective date of this Agreement, the following new section is added immediately after existing Section 2.7 of the Credit Agreement:
		

		
			 
		

		
			(i)the aggregate principal amount of all such Incremental Commitments made pursuant to this Section shall not exceed $10,000,000 (the principal amount of each such Incremental Commitment, an “Incremental Commitment Amount”); 
		

		
			(ii)one or more of the Lenders shall, in their discretion, agree to increase the Aggregate Commitments by such Incremental Commitment Amount;
		

		
			(iii)  the Borrowers shall execute and deliver such documents and instruments and take such other actions as may be reasonably required by the Agent in connection with and at the time of any such proposed increase, including, without limitation, an amended and restated Revolving Credit Note, updated entity certificates and resolutions, and opinions of counsel;  
		

		
			(iv)  at the time of and immediately after giving effect to any such proposed increase, no Default or Event of Default shall exist, all representations and warranties of each obligor set forth in the Loan Documents shall be true and correct in all material respects; and
		

		
			(v)  all other terms and conditions with respect to any such Incremental Commitments shall be reasonably satisfactory to the Agent and the Lenders.  
		

		
			From and after the effective date of any such increase, all fees calculated on the basis of the amount of the Revolving Credit Facility shall be calculated on the basis of the Revolving Credit Facility as so increased.”
		

		
			(e)Effective as of the effective date of this Agreement, the phrase “twenty (20) days” appearing in Section 7.4 of the Credit Agreement is hereby deleted, and the phrase “thirty (30) days” is inserted in lieu thereof.
		

		
			(f)Effective as of the effective date of this Agreement, existing Section 9.2 is hereby deleted, and the following is inserted in lieu thereof:
		

		
			““SECTION 9.2Minimum Cash Flow Coverage to Debt Service Ratio. Maintain a ratio of Cash Flow to Debt Service, as measured at the end of each of
		

		

		

		 

		

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			 the Borrowers’ fiscal quarters on a trailing four-fiscal quarter basis, of not less than (a) 1.50:1.00 when measured at the end of any fiscal quarter ending at any time on or before March 31, 2016, and (b) 1.75:1:00 when measured at the end of any fiscal quarter ending thereafter.”
		

		
			(g)Effective as of the date of this Agreement, the ratio “2.50:1.00” appearing in Section 9.4 is hereby deleted, and the ratio “3.00:1;00” is inserted in lieu thereof.
		

		
			(h)Effective as of the effective date of this Agreement, the number “$8,000,000” appearing in Section 10.7 of the Credit Agreement is hereby deleted, and the number $9,000,000” is inserted in lieu thereof.
		

		
			(i)Effective as of the effective date of this Agreement, Section 3 of the Note is hereby deleted, and the following is inserted in lieu thereof:
		

		
			 “3.Repayment.  Accrued interest shall be payable monthly on the first (1st) day of each month, commencing on July 1, 2007.  The entire unpaid principal balance of this Note, together with all accrued and unpaid interest thereon, shall be due and payable on October 1, 2018.
		

		
			 
		

		
			3.Representations and Warranties.  In order to induce the Lenders and the Agent to enter into this Agreement, the Borrowers represent and warrant to the Lenders and the Agent that as of the date hereof (a) no Event of Default exists under the provisions of the Loan Documents, (b) except as to matters of which the Borrowers have advised the Agent in a writing and which have been acknowledged by the Agent, all of the representations and warranties of the Borrowers in the Loan Documents are true and correct on the date hereof as if the same were made on the date hereof (provided that any representation or warranty that speaks “as of the Closing Date” or as of any other specific date shall continue to speak as of such date, notwithstanding), (c) no material adverse change has occurred in the business, financial condition, prospects or operations of the Borrowers since the date of the most recent financial statement of the Borrowers furnished to the Lenders and the Agent in accordance with the provisions of the Loan Documents, and (d) this Agreement constitutes the legal, valid and binding obligation of the Borrowers, jointly and severally enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.  If any of the foregoing representations and warranties shall prove to be false, incorrect or misleading in any material respect, the Lenders and the Agent may, in their absolute and sole discretion, declare that a default has occurred and exists under the provisions of the Loan Documents, and the Lenders and the Agent shall be entitled to all of the rights and remedies set forth in the Loan Documents as the result of the occurrence of such default.
		

		
			 
		

		
			4.Ratification and No Novation.  The Borrowers hereby ratify and confirm all of their obligations, liabilities and indebtedness under the provisions of the Credit Agreement, the Note, and the other Loan Documents, as the same may be amended and modified by this Agreement.  The Lenders, the Agent, and the Borrowers agree that it is their intention that nothing herein shall be construed to extinguish, release or discharge or constitute, create or effect a novation of, or an agreement to extinguish any of the obligations, indebtedness and liabilities of the Borrowers or any other party under the provisions of the Loan Documents.  The Borrowers agree that all of the provisions of the Credit Agreement and the other Loan Documents shall remain and continue in full force and effect as the same may be modified and amended by this Agreement.  In the event of any conflict between the provisions of this Agreement and the provisions of the Loan Documents, the provisions of this Agreement shall control.
		

		
			 
		

		
			5.Fees, Costs and Expenses.  In consideration of the agreement of the Lenders to enter into this Agreement, the Borrowers  (a) shall pay to the Agent for the ratable benefit of the Lenders an amendment 
		

		

		

		 

		

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			fee in the amount of $52,500, and (b) shall pay to the Agent and the Lenders on demand all costs and expenses both now and hereafter paid or incurred with respect to the preparation, negotiation, execution, administration and enforcement of this Agreement and all documents related thereto, including, without limitation, reasonable attorney's fees and expenses, recording costs and costs of record searches.
		

		
			 
		

		
			6.Applicable Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Maryland.
		

		
			 
		

		
			7.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Lenders, the Agent, and the Borrowers, and their respective successors and assigns.
		

		
			 
		

		
			[Remainder of Page Intentionally Left Blank]
		

		

		

		 

		

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			IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed and sealed, the day and year first above written.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TESSCO TECHNOLOGIES INCORPORATED

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President and Chief Executive Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TESSCO SERVICE SOLUTIONS, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TESSCO INCORPORATED

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President and Chief Executive Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TESSCO COMMUNICATIONS INCORPORATED

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By:

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						WIRELESS SOLUTIONS INCORPORATED

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
						 

					
						[Signatures continue on succeeding page]

					
						 

				

		 

		

			6

		

 

			
					
						 

					
					
						 

					
					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						TESSCO BUSINESS SERVICES, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TESSCO INTEGRATED SOLUTIONS, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President 

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						GW SERVICE SOLUTIONS, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						TCPM, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By:

					
					
						/s/ Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						Robert B. Barnhill, Jr.

				
	
					
						 

					
					
						 

					
					
						President and Chief Executive Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 [Signatures continue on succeeding page]
		

		

		

		 

		

			7

		

 

		
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						LENDERS:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						WELLS FARGO BANK, NATIONAL ASSOCIATION, (successor to

				
	
					
						 

					
					
						WACHOVIA BANK, NATIONAL ASSOCIATION)

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Cheryl R. Lind

				
	
					
						 

					
					
						 

					
					
						Name:  Cheryl R. Lind

				
	
					
						 

					
					
						 

					
					
						Title:    Vice President 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 SUNTRUST BANK

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Daniel L. Nichols

				
	
					
						 

					
					
						 

					
					
						Name:  Daniel L. Nichols

				
	
					
						 

					
					
						 

					
					
						Title:    Vice President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						AGENT:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						SUNTRUST BANK

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						/s/

					
					
						By: 

					
					
						/s/ Daniel L. Nichols

				
	
					
						 

					
					
						 

					
					
						Name:  Daniel L. Nichols

				
	
					
						 

					
					
						 

					
					
						Title:    Vice President

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		 

		

			8Exhibit 10.1

 

RESEARCH
AGREEMENT

 

Between

 

THE
REGENTS OF THE UNIVERSITY OF CALIFORNIA

UNIVERSITY
OF CALIFORNIA, SANTA BARBARA

 

And

 

HyperSolar,
Inc.

 

This Research
Agreement (“Agreement”) is entered into on this 16th day of February, 2012 by and between THE REGENTS OF
THE UNIVERSITY OF CALIFORNIA, a California Constitutional corporation, on behalf of its Santa Barbara campus, hereinafter called
“University,” and, HyperSolar, Inc., a Nevada corporation, having a principal place of business at 629 State St. Santa
Barbara, CA 93101, hereinafter called “Sponsor.”

 

WHEREAS,
University is a non-profit organization dedicated, in part, to engaging in high quality research activities for the advancement
of knowledge and benefit of the public; and

 

WHEREAS,
the research project contemplated by this Agreement is of mutual interest and benefit to both the University and Sponsor, and
is consistent with the research and educational objectives of the University.

 

NOW THEREFORE,
in consideration of the premises and mutual covenants herein contained, the parties agree as follows:

 

1.          Statement
of Work

 

			University,
                                         through its Principal Investigator(s), shall use reasonable efforts to perform the research
                                         activities set forth in the Statement of Work attached hereto as Exhibit A, which is
                                         hereby incorporated in full by reference. Sponsor acknowledges and agrees that University
                                         cannot guarantee the results of any of its research activities, and that minor deviations
                                         from the Statement of Work may occur to further the scientific goals of the Statement
                                         of Work.

 

2.          Deliverables

 

			Deliverables
                                         under this Agreement are described in and will be submitted to Sponsor in accordance
                                         with Exhibit A hereof, which is hereby incorporated in full by reference.

 

3.          Period
of Performance and Term of the Agreement

 

			The
                                         Period of Performance and the Term of this Agreement shall be from 2/01/2012 through 01/31/2013.

 

4.          Cost
to Sponsor

 

			The
                                         cost to Sponsor for University’s performance hereunder shall not exceed $124,727.
                                         This Agreement shall be performed on a “cost reimbursement” basis. When expenditures
                                         reach the above amount, Sponsor will not be required to fund, and University will not
                                         be required to perform, additional work hereunder unless by mutual agreement of the parties.

 

    	 	 -1-	 

     

    

 

5.          Payment

 

			Quarterly
                                         advance payment will be made to University by Sponsor in accordance with Exhibit B hereof,
                                         which is hereby incorporated in full by reference. To ease administrative burden, please
                                         note that no invoice will be sent by University to prompt the payments due under this
                                         Agreement, unless Sponsor so requests in a separate letter addressed to the Manager,
                                         Accounting and Financial Services. Checks shall be made payable to The Regents of the
                                         University of California and shall be sent to:

 

Cashier’s
Office

SAASB Building, Room 1212

Santa Barbara, California 
93106-2003

 

			Payments
                                         should refer to both the Principal Investigator’s last name and Sponsor’s
                                         name.

 

6.          Principal
Investigator

 

			University’s
                                         performance hereunder will be under the direction of Professor Eric McFarland who will
                                         serve as Principal Investigator(s) (“Principal Investigator”). In the event
                                         that the Principal Investigator becomes unable or unwilling to continue work under this
                                         Agreement and an alternate Principal Investigator is not agreeable to Sponsor, Sponsor
                                         will have the option to terminate this Agreement in accordance with Article 16 hereof.
                                         Sponsor understands and agrees that Principal Investigator and/or Project Director is
                                         the scientific contact for University but is not authorized to amend, modify or terminate
                                         the terms and conditions of this Agreement. Requests to amend, modify or terminate the
                                         terms of this Agreement must be directed to University’s Office of Technology &
                                         Industry Alliances and must comply with the notice requirements of this Agreement.

 

7.          Rights
in Data

 

			University
                                         will have the unrestricted right to publish, disclose, disseminate and use, in whole
                                         and in part, any data or information developed by University under this Agreement or
                                         received in the performance of this Agreement except as set forth in Article 11 (“Confidentiality”)
                                         hereof. Except as set forth in Section 9 (“Patents and Inventions”) and Section
                                         10 (“Copyright”), Sponsor will have the right to publish and use any technical
                                         reports and information specified to be delivered hereunder. It is agreed, however, that
                                         under no circumstances will Sponsor state or imply in any publication, other published
                                         announcement, or otherwise, that University has tested, endorsed or approved any product,
                                         service or company. SPONSOR UNDERSTANDS AND AGREES THAT SUCH DATA IS PROVIDED “AS
                                         IS” AND THUS, SPONSOR USES SUCH DATA AT ITS OWN RISK. UNIVERSITY EXTENDS NO WARRANTIES
                                         OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
                                         MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

8.          Supplies
and Equipment

 

			In
                                         the event that University purchases supplies or equipment hereunder, title to such supplies
                                         and equipment will vest in University.

 

    	 	 -2-	 

     

    

 

9.          Patents
and Inventions

 

9.1
Inventorship and ownership of patentable developments or discoveries first conceived and actually reduced to practice in the performance
of this Agreement (“Subject Inventions”) will be determined in accordance with applicable U.S. Patent Law and University
policy.

 

If
Subject Inventions are jointly owned, then Sponsor will have the option to use its own choice of attorneys for patent protection
activities. Within sixty (60) days after disclosure by University to Sponsor of a Joint Invention, Sponsor will prepare and file
patent applications(s) disclosing and claiming Joint Inventions, and shall prosecute and maintain such joint patent rights in
the US and other countries at Sponsor’s discretion and sole cost, either by Sponsor’s in-house counsel or by using
a law firm mutually agreed upon by the Parties. Sponsor will ensure that “The Regents of the University of California”
are co-assignees of any patents issued in any country disclosing and claiming patent rights to any Joint Inventions and University
employees shall assign their rights to University. 

 

Sponsor
shall provide University with drafts of all relevant patent documents sufficiently in advance of any deadline to allow a meaningful
opportunity to review and provide comments. Sponsor shall use reasonable efforts to amend any patent application to include claims
or other modification reasonably requested by University. Neither party will assign its undivided interest in patent rights to
Joint Inventions, or abandon prosecution of any patent application (except for purposes of filing continuing applications) or
maintenance of any issued patent to Joint Inventions without prior written notice to the other party at least ninety (90) days
in advance of the applicable deadline. University may assume, at its own cost, to continue prosecution or maintenance of any patent
or patent application in the Joint Inventions, if Sponsor elects to abandon prosecution of such patent rights in Joint Invention(s).

 

9.2 To
the extent that University will have the legal right to do so, and provided Sponsor pays all direct and indirect costs of the
Statement of Work including a proportionate share of all researcher salaries and benefits, Sponsor will have a time-limited first
right to negotiate a license to the University’s interest in any Subject Invention.

 

9.3 University
shall promptly disclose to Sponsor any Subject Inventions. Sponsor shall hold this disclosure on a confidential basis and will
not disclose the information to any third party without the prior written consent of University. Sponsor will notify University
in writing within thirty (30) days of notice of such disclosure to Sponsor whether or not it wishes to secure an option or license
to University’s interest in the disclosed Subject Invention (“Election Period”). Sponsor will have ninety (90)
days from the date of election to conclude such option or license agreement with University (“Negotiation Period”).
Said option or license will contain reasonable terms, will require diligent performance by Sponsor for the timely commercial development
and early marketing of all Subject Inventions subject to the license, and will include Sponsor's obligation to reimburse University's
patent costs for all Subject Inventions subject to the option or license. In the event it is necessary in the opinion of University
to file any patent applications to protect a Subject Invention during the Election or Negotiation Periods, Sponsor will reimburse
patent costs incurred by University during such period(s). If such option or license negotiation is not concluded within the Negotiation
Period or if Sponsor does not notify University of its wish to secure an option or license within the Election Period, neither
party will have any further obligation to the other with respect to University’s interest in the Subject Invention and the
rights to such Subject Invention will be disposed of in accordance with University’s policies.

 

9.4 Nothing
in this Agreement is or shall be construed as conferring by implication, estoppel, or otherwise any license or rights under any
patents or other rights of The Regents.

 

    	 	 -3-	 

     

    

 

10.          Copyright

 

			Copyright
                                         in original works of authorship, including computer software, first created and fixed
                                         in a tangible medium of expression by University in the performance of this Agreement
                                         will vest in University. At Sponsor’s request and to the extent that University
                                         has the legal right to do so, University will grant to Sponsor a license to University’s
                                         interest in such works on reasonable terms and conditions, including reasonable royalties,
                                         as the parties mutually agree in a separate writing.

 

11.          Confidentiality

 

During
the course of this Agreement, Sponsor may provide University with certain proprietary business or technical information or materials
(“Confidential Information”). Except as required by law, and as long as all written disclosures of Confidential Information
are clearly marked “Confidential” and all oral disclosures of Confidential Information are both identified as confidential
at the time of disclosure and are thereafter reduced to a writing that is clearly marked “Confidential” within fourteen
(14) days of such oral disclosure, University will hold Confidential Information in confidence and agrees to prevent its disclosure
to third parties using the same degree of care that the University uses with its own information of like kind. Confidential Information
shall be provided only to University’s Principal Investigator and only on a “need to know” basis. This obligation
shall continue in effect for three (3) years after expiration or termination of this Agreement.

 

Information
and materials disclosed by Sponsor shall not be considered confidential which: (1) is now public knowledge or subsequently becomes
such through no breach of this Agreement; (2) is rightfully in University’s possession prior to Sponsor’s disclosure
as shown by written records; (3) is rightfully disclosed to University by a third party; or, (4) is independently developed by
or for University without reliance upon confidential information received by Sponsor.

 

Because
University is a public, non-profit educational institution and does not have identified resources to sustain liability for disclosure
of information, Sponsor agrees that no financial liability shall attach to University in the event such disclosure occurs.

 

12.          Publication

 

			University
                                         shall have the right, at its discretion, to release any information or to publish any
                                         material resulting from its performance hereunder. University will furnish Sponsor with
                                         a copy of any proposed written or oral publication (including manuscripts, abstracts,
                                         and oral presentations) at least thirty (30) days prior to submission for publication
                                         (“Review Period”). Upon written notification by Sponsor within the Review
                                         Period, University agrees to delete any of Sponsor’s Confidential Information that
                                         appears in the publication. If it is determined that a patent application should be filed,
                                         University will delay publishing such proposed publication for a maximum of an additional
                                         thirty (30) days in order to protect the potential patentability of any invention described
                                         therein.

 

    	 	 -4-	 

     

    

 

13.          Export
Control

 

			The
                                         parties acknowledge that, because University is an institution of higher education and
                                         has many foreign persons who are students, employees and visitors, University conducts
                                         its research activities as “fundamental research” under export control regulations
                                         (as set forth in ITAR 120.10(5) and 120.11, and EAR 15 C.F.R. 734(b)(3) and 734.7 through
                                         734.11). Accordingly, the parties agree that Sponsor shall not provide University with
                                         any export-controlled proprietary data or technology.

 

14.          Applicable
Law

 

			This
                                         Agreement will be governed by the laws of the State of California, United States of America,
                                         without regard to the conflict of law’s provisions thereof.

 

15.          Notice

 

			Whenever
                                         any notice is to be given hereunder, it will be in writing and sent to the Authorized
                                         Representative for the receiving party indicated below by certified mail or overnight
                                         courier, at following address:

 

	 	University:	University
    of California, Santa Barbara
	 	 	Office
    of Technology & Industry Alliances
	 	 	342
    Lagoon Road, Mail Code 2055
	 	 	Santa
    Barbara, California 93106-2055
	 	 	Attn:
    Industry Contract Officer
	 	 	 
	 	Sponsor:	HyperSolar,
    Inc.
	 	 	629
    State Street
	 	 	Santa
    Barbara, CA 93101
	 	 	Attn:
    Tim Young, CEO

			

 

16.          Termination

 

			Either
                                         University or Sponsor may terminate this Agreement by giving sixty (60) days written
                                         notice to the other. Sponsor will pay University actual direct and indirect costs and
                                         noncancellable commitments incurred prior to the date of termination and fair close-out
                                         related costs. If the total of such costs is less than the total funds advanced, the
                                         balance will be returned to Sponsor.

 

17.          Publicity

 

Neither
party will use the name, trade name, trademark or other designation of the other party in connection with any products, promotion,
or advertising, without the prior written permission of the other party. However, nothing in this Article is intended to restrict
either party from disclosing the existence of and nature of this Agreement (including the name of the other party) or from including
the existence of and nature of this Agreement in the routine reporting of its activities.

 

    	 	 -5-	 

     

    

 

18.          Indemnification

 

			Sponsor
                                         shall defend, indemnify, and \hold University, its officers, employees, and agents harmless
                                         from and against any and all liability, loss, expense (including reasonable attorney's
                                         fees), or claims for injury or damages arising out of its performance of this Agreement
                                         but only in proportion to and to the extent such liability, loss, expense, attorney's
                                         fees, or claims for injury or damages are caused by or result from the negligent or intentional
                                         acts or omissions of Sponsor, its officers, agents, or employees.

 

			University
                                         shall defend, indemnify, and hold Sponsor, its officers, employees, and agents harmless
                                         from and against any and all liability, loss, expense (including reasonable attorney's
                                         fees), or claims for injury or damages arising out of its performance of this Agreement
                                         but only in proportion to and to the extent such liability, loss, expense, attorney's
                                         fees, or claims for injury or damages are caused by or result from the negligent or intentional
                                         acts or omissions of University, its officers, agents, or employees.

 

			This
                                         Article shall survive the termination or expiration of this Agreement.

 

19.          Excusable
Delays

 

			University
                                         will be excused from performance hereunder if a delay is caused by inclement weather,
                                         fire, flood, strike, or other labor dispute, acts of God, acts of governmental officials
                                         or agencies, terrorism, or any other cause beyond the control of University. The excusable
                                         delay is allowed for the period of time affected by the delay. If a delay occurs, the
                                         parties will revise the performance period or other provisions hereunder as appropriate.

 

20.          Assignment

 

			Neither
                                         party will assign its rights or duties under this Agreement to another without the prior
                                         express written consent of the other party; provided, however, that Sponsor may assign
                                         this Agreement to a successor in ownership of all or substantially all its business assets
                                         in the field to which this Agreement relates if such successor will expressly assume
                                         in writing the obligation to perform in accordance with the terms and conditions of this
                                         Agreement. Any other purported assignment will be void.

 

21.          Amendments

 

			No
                                         agreements, modifications, or waivers to this Agreement shall be valid unless in writing
                                         and signed by the Authorized Representatives of the parties.

 

22.          Miscellaneous

 

22.1 Not
a Partnership or Joint Venture. It is understood and agreed by the parties that the University is performing this contract
as an independent contractor. The parties, by this Agreement, do not intend to create a partnership, principal/agent, master/servant,
or joint venture relationship and nothing in this Agreement shall be construed as creating such a relationship between the parties.

 

22.2 Severability.
If any term or provision of this Agreement shall be held to be invalid or illegal, such term or provision shall not affect the
validity or enforceability of the remaining terms and provisions of this Agreement.

 

    	 	 -6-	 

     

    

 

22.3 Recitals
& Headings. The recitals herein constitute an integral part of the Agreement reached and are to be considered as such.
However, the captions and headings contained in this Agreement have been inserted for reference and convenience only and in no
way define, limit, or describe the text of this Agreement or the intent of any provision.

 

22.4 No
Waiver. The wavier by either party of a breach or default of any provision of this Agreement shall not constitute a waiver
of any succeeding breach, nor shall any delay or omission on the part of either party to exercise any right that it has under
this Agreement operate as a waiver of such right, unless the terms of this Agreement sets forth a specific time limit for the
exercise thereof.

 

23.          Entire
Agreement

 

			This
                                         Agreement, and Exhibits A through B, constitute the entire agreement and understanding
                                         between the parties and supersedes all previous agreements and understandings on the
                                         subject matter of this Agreement, if any.

 

	HYPERSOLAR
    IN.	 	THE
    REGENTS OF THE UNIVERSITY OF CALIFORNIA
	 		 	 	
	By:	/s/
    Tim Young	 	By:	/s/
    Sherylle Mills Englander 
	Name:	Tim Young	 	Name:	Sherylle Mills
    Englander
	Title:	CEO	 	Title:	Director, Sponsored
    Projects
	Date:	2/23/12	 	Date:	2/23/12

 

    	 	 -7-	 

     

    

 

EXHIBIT
B

 

Quarterly
Payment Schedule

 

	Date	 	Amount	 
	02/28/2012	 	$	30,000.00	 
	 	 	 	 	 
	06/28/2012	 	$	31,
576.00	 
	 	 	 	 	 
	09/28/2012	 	$	31,576.00	 
	 	 	 	 	 
	12/28/2012	 	$	31,575.00

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