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It is unclear from the record how many contingencies needed
to be satisfied before petitioner was required to pay the accrued
royalties to Matrix. According to the report of the shareholders
meeting, petitioner had to have either positive cash-flow or
financial performance which would enable it to obtain financing
from a U.S. bank before the payments were to be made. Added to
these contingencies is a third and fourth contingency that
petitioner be sufficiently profitable and have sufficient working
capital to meet other financial obligations. Petitioner does not
dispute that payment of the royalties was contingent upon: (1)
Achieving goals set for petitioner, and (2) obtaining sufficient
working capital and whatever cash reserves it needed to meet
other financial obligations.8 We find that the nonpayment of the
royalties, which have accrued since 1983, the testimony of all
parties involved, and the minutes of Matrix's shareholder
agreement are determinative of the fact that the royalty payments
were contingent from the inception of the Marketing agreement.
In order to find that there is a contingency such that "all
the events" creating the liability have not occurred in the
8Respondent, in a request for confirmation of answers to
questions posed to petitioner in a discovery conference, asked
petitioner to confirm, among other things, the following
question: "What criteria would Omar Sultan use to decide when
Restore, Inc. should start paying the royalties to Matrix?"
Petitioner answered by stating: "The royalties would be paid
when the goals of the joint venture were achieved, provided it
had sufficient working capital and whatever cash reserves it
would require to meet its obligations."
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