Document:

ex1016.htm

RESEARCH AGREEMENT NO. STI-50121

This agreement (“Agreement”) is entered into this 14th day of  September 2010, by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, on behalf of its Irvine campus ("University") and Shrink Technologies, Inc., a California corporation, with offices at 2038 Corte Del Nogal, Suite 110, Carlsbad, CA 92011 ("Sponsor").  University and Sponsor shall be collectively referred to as the Parties and agree as follows:

	
1.

	
SCOPE OF WORK.  The work to be performed under this Agreement shall be in accordance with the statement of work, for the research project entitled "High-Content Screening of Developing Embryoid Bodies in Microfluidic Devices" ("Research Project"), attached hereto and incorporated herein as Exhibit A. Dr. Charless Fowlkes and Dr. Michelle Khine are the University's Co-Principal Investigators and will be responsible for the direction of all effort hereunder in accordance with applicable University policies.

	
 2.

	
PERIOD OF PERFORMANCE.  The work under this Agreement shall be performed during the period beginning 09/01/10 and ending 11/31/10 unless extended by mutual written agreement.

	
 3.

	
BUDGET.  Sponsor will pay all direct and indirect costs of Research Project, including an amount equivalent to a pro-rata share of the Principal Investigator's salary, up to a total estimated cost of Sixty-Seven Thousand and Forty Dollars ($67,040).  If at any time University has reason to believe that the cost of Research Project will be greater than estimated, University shall notify Sponsor in writing to that effect, giving a revised budget of the cost to complete Research Project.  Sponsor shall not be obligated to reimburse University for the costs incurred in excess of the amount referenced above unless and until Sponsor has notified University in writing that additional funds will be provided.  Upon expenditure of the agreed upon amount of this award, University's obligation to continue performance of the project shall cease.

	
 4.

	
PAYMENT.  Sponsor shall advance the following amount (“Advance Payment”) upon submission of an invoice with reasonable detail from University at the time shown:

	
  

	 

Amount Due                                                                Date Due

$5,000                                                                Upon Receipt of Invoice

	
  

	
During the project period, beginning thirty (30) days subsequent to the execution of the Agreement, University shall invoice the Sponsor each month for actual costs incurred in the performance of the Research Project.  Payment of such invoices shall be due no later than thirty (30) days after Sponsor’s receipt of the invoice.

Checks shall be made payable to "The Regents of the University of California" and shall reference this Agreement number.  Payments shall be forwarded to Rebecca Tangen, Manager/Principal Accountant, Contracts and Grants Accounting, BioSci III, Suite 1400, University of California, Irvine, California  92697-1050.

 

	
 5.

	
CONFIDENTIALITY.

University acknowledges that it may be necessary for Sponsor to disclose information which Sponsor considers confidential in order to accomplish the work under this Agreement.

It is agreed that Sponsor shall disclose only information necessary to the work and, if any such information is considered confidential, it shall be clearly marked "Confidential Information" and sent by Sponsor in writing only to the Principal Investigator or if orally disclosed, reduced to writing by Sponsor within thirty (30) days of disclosure (hereinafter “Confidential Information”).  University shall inform Principal Investigator that for a period of one year from the end of the Agreement, Confidential Information shall not be used or disclosed to others, to the extent permitted by law, except in furtherance of this Agreement unless Confidential Information: (i) is or shall have been known to the Principal Investigator before his receipt thereof; (ii) is disclosed to the Principal Investigator by a third party; (iii) is required to be disclosed by law; or (iv) is or shall have become known to the public through no fault of the Principal Investigator.

[Suggest the following as possible text for a separate non-disclosure agreement between the P.I. and Sponsor.  Do not include in the Research Agreement.  UC should not agree to hold any information as confidential after the expiration or termination of the Research Agreement.]

The Principal Investigator agrees, to the extent permitted by law, that Confidential Information shall remain the property of Sponsor and, for a period of one year from the end of the Agreement, Confidential Information shall not be used or disclosed to others except in furtherance of this Agreement, provided, however, that the foregoing obligation of non-use and non-disclosure shall not apply to any portion of the Confidential Information which:  (i) is or shall have been known to the Principal Investigator before his receipt thereof; (ii) is disclosed to the Principal Investigator by a third party; or (iii) is or shall have become known to the public through no fault of the Principal Investigator.

	
 6.

	
RIGHTS IN DATA AND REPORTS.

6.1  University shall own all technical reports, data and information developed under this Agreement and shall have the right to copyright, publish, disclose, disseminate and use, in whole or in part, any data and information collected, or developed under this Agreement.

 

6.2  University shall submit to Sponsor a comprehensive final report within ninety (90) days of termination or completion of the Research Project.

6.3  Sponsor shall have the right to use the technical reports, data and information delivered hereunder by University.

6.4  Sponsor agrees that it will not use the names of University or its employees, or allude to the University or its employees, in any advertisement, press release or publicity with reference to this Agreement without the prior written approval of University. University shall have the right to acknowledge Sponsor's support of the research performed under this Agreement in scientific publications and other scientific communications.

	
 7.

	
PUBLICATION.  For the purpose of identifying patentable inventions not covered by pre-existing patents, University shall submit a copy of all proposed publications, papers, and any other written disclosure of such data or information to Sponsor at least thirty (30) days prior to submission for publication or disclosure to a third party.  In the event Sponsor determines patentable subject matter is disclosed in such data or information, it shall immediately notify University and, if University concurs, publication or disclosure will be withheld (a) for a period not to exceed ninety (90) days to permit preparation and filing of appropriate patent application(s), or (b) until a patent application thereon has been prepared and filed, or (c) until University and Sponsor mutually agree in writing that no patent application(s) shall be prepared or filed, whichever of (a), (b) or (c) is earlier in time.

	
 8.

	
PATENT RIGHTS.

8.1                 All rights to inventions, discoveries or other commercially useful research products conceived and first reduced to practice in the direct performance of the scope of work under this Agreement shall belong to University and shall be disposed of in accordance with University policy.  To the extent that the University has the legal right to do so and to the extent that Sponsor pays all direct and indirect costs of the research project, including a proportionate share of the Principal Investigator's salary, Sponsor, in accordance with the provisions of 8.2, shall be given a time-limited first right to negotiate an exclusive, royalty-bearing license to make, use, and sell any patentable invention conceived and first actually reduced to practice in the direct performance of the Research Project under this Agreement (hereinafter “Invention”).

8.2                 University shall promptly disclose to Sponsor in writing any Inventions arising under this Agreement. Sponsor shall hold such disclosure on a confidential basis and will not disclose the information to any third party without consent of the University. Sponsor shall advise University in writing within sixty (60) days of disclosure to Sponsor whether or not it wishes to secure a commercial license.  If Sponsor elects to secure a license, Sponsor shall assume all costs associated with securing and maintaining patent protection for such Invention(s), whether or not Letters Patent issue.  Sponsor shall have ninety (90) days from the date of election to conclude a license agreement with University.  Said license shall contain reasonable terms, and shall require diligent performance by Sponsor for the timely commercial development and early marketing of such Inventions, and include Sponsor's continuing obligation to pay patent cost.  If such license agreement is not concluded in said period, University has no further obligations to Sponsor.  If Sponsor does not elect to secure such license, rights to the Inventions disclosed hereunder shall be disposed of in accordance with University policies with no further obligation to Sponsor.

 

8.3                 Nothing contained in this Agreement shall be deemed to grant either directly or by implication, estoppel, or otherwise any license under any patents, patent applications or other proprietary interests of any other invention, discovery or improvement of either party.

	
 9.

	
COPYRIGHTS. All rights to copyrightable works created in the performance of Research, including without limitation, any software, shall belong to University and shall be disposed of in accordance with University policies.  University shall, if requested by Sponsor, negotiate in good faith an appropriate license on reasonable terms and conditions to allow Sponsor to use such copyrightable works within its organization and/or for commercial purposes.

	
  

	
10. EQUIPMENT.  In the event that University purchases equipment under this Agreement, title to such equipment shall vest in University.

	
11.

	
INDEMNIFICATION. Sponsor agrees to defend, indemnify and hold University, its officers, employees and agents, harmless from and against any and all liability, loss, expense, attorneys' fees, or claims for injury or damages arising out of the performance of this Agreement but only in proportion to and to the extent such liability, loss, expense, attorneys' 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  agrees to defend, indemnify and hold Sponsor, its officers, employees and agents, harmless from and against any and all liability, loss, expense, attorneys' fees, or claims for injury or damages arising out of the performance of this Agreement but only in proportion to and to the extent such liability, loss, expense, attorneys' 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.

	
12.

	
COMPLIANCE WITH LAWS. Parties agree to comply with all applicable United States laws, rules, regulations and standards of care (Federal, state, local, or otherwise) in the performance of this Agreement (hereinafter “Applicable Laws”), including but not limited to applicable state and federal privacy laws.

	
  

	
13. NOTICE.  Any notices given under this Agreement shall be in writing and delivered by certified or registered return receipt mail, postage prepaid, or by facsimile addressed to the parties as follows:

 

For Sponsor:                                                                For UCI:

Mark L. Baum, Esq.                                                     Ben Holstein

SHRINK Nanotechnologies, Inc.                             University of California, Irvine

2038 Corte Del Nogal, Suite 110                                 5171 California Ave., Suite 150

Carlsbad, CA 92011                                                      Irvine, CA  92697-7600

                                      

	
14.

	
TERMINATION.  This Agreement may be terminated by University or Sponsor upon the giving of forty-five (45) days prior written notice to the other if either party determines, in its discretion, that Research Project is no longer academically, technically, or commercially feasible.  Upon receipt of such notice of termination, University shall exert its reasonable efforts to limit or terminate any outstanding financial commitments for which Sponsor is to be liable.  Sponsor shall reimburse University for all costs incurred by it for the Research Project, including without limitation, all uncancelable obligations.

	
15.

	
APPLICABLE LAW.  This Agreement shall be governed by the laws of the State of California, without regard to its conflicts of laws provisions.

	
16.

	
ENTIRE AGREEMENT.  This Agreement represents the entire understanding of the Parties with respect to the subject matter.  No change, modification, extension, termination or waiver of this Agreement, or any of the provisions herein contained, shall be valid unless made in writing and signed by duly authorized representatives of the Parties hereto.

IN WITNESS WHEREOF duly authorized representatives of the Parties have entered into this Research Agreement as of the date first written above.

THE REGENTS OF THE UNIVERSITY                                                                           SHRINK TECHNOLOGIES, INC.

OF CALIFORNIA

	
  

	
(signature)

	
(signature)

By                    Ben Holstein                                                                                                      By      

Title             Principal Contract and Grant Officer                                                               Title

Date                                                                                                                                    Dateex1018.htm

LABRUM CAPITAL ADVISORS, L.L.C.

5650 El Camino Real, Suite 230

Carlsbad, CA 92008

Phone: (760) 707-5555 Fax: (760) 707-5556

Shrink Nanotechnologies, Inc.

2038 Corte del Nogal, Suite 110

Carlsbad, CA 92011

	
  

	
Re:

	
Business and Financial Advisory Agreement

Dear Mr. Baum:

The purpose of this letter agreement (the “Agreement”) is to confirm and set forth the terms and conditions of Shrink Nanotechnologies, Inc.’s, a Delaware corporation (the “Company”), engagement of Labrum Capital Advisors, L.L.C., a California limited liability company (the “Advisor”) to render business and financial advisory services to the Company for the purpose of assisting the Company’s growth and development.

The Company desires to develop due diligence materials, financial models and strategies, and make its material information available to appropriate parties.  The Company desires Advisor to prepare presentations of its business to be delivered to underwriters and other financial sources.  The Company also desires Advisor to establish commercial and strategic partnerships and joint venture relationships. The services rendered by Advisor, to the Company, shall be subject to the following terms and conditions:

1.           Engagement.

The Company hereby engages Advisor to act as its non-exclusive business and financial advisor on a best efforts basis upon the terms and conditions set forth in this Agreement.  Advisor accepts this engagement.  During the terms of its engagement, Advisor will, when requested, consult with the Company in developing due diligence materials, financial models and strategies.  The Advisor will assist the Company in organizing its due diligence materials, preparing Company presentations and making the Company’s material information available to appropriate parties.  Appropriate parties are, but not limited to, potential underwriters, merger and acquisition candidates, commercial and strategic partnerships and joint venture relationships. Advisor may perform other services as agreed by the parties. While Advisor has relationships and contacts with various investors, broker/dealers, underwriters, and investment funds, Advisor’s participation in the offer or sale of the Company’s securities shall be limited to that of an advisor to the Company and as a locator of investors, broker/dealers and funds.  The Company acknowledges and agrees that the solicitation and consummation of any purchases of the Company’s securities shall be handled by the Company or by one or more FINRA members firms engaged by the Company.

 

2.           Compensation to the Advisor.

a) Compensation1 for Services.  The Company will compensate Advisor as follows:

	
(i)  

	
The Company will pay Advisor an engagement fee (the “Engagement Fee”) of $5,000 upon execution of this Agreement.

	
(ii)  

	
In addition to the Engagement Fee, the Company will pay Advisor an additional fee of up to $175,000 (“Cash Fee”) which shall be paid in installments from time to time.

	
(iii)  

	
In addition to the Engagement Fee and Cash Fee, the Company will pay Advisor an additional fee of up to 500,000 shares of Common Stock (“Equity Fee”), of the Company.

	
(iv)  

	
All shares issued under this Agreement shall be subject to certain restrictions and limitations and the issued shares shall have a legend reading substantially as follows:

THESE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE (OR ANY SHARES INTO WHICH THE SAME ARE CONVERTIBLE INTO OR EXCHANGED FOR) MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED, IN WHOLE OR IN PART PRIOR TO SEPTEMBER 1, 2011, ABSENT CONSENT OF THE MAJORITY OF THE BOARD OF DIRECTORS OF THE COMPANY; PROVIDED, HOWEVER, THAT SAID SHARES MAY BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED FOR GIFT, ESTATE PLANNING, CHARITABLE, OR SIMILAR PURPOSES, ONLY SUBJECT TO ACCEPTANCE AND THEREOF AND AGREEMENT THERETO IN WRITING BY THE RECIPIENTS OF THE TERMS OF THIS LOCK UP PROVISION. 

b) Reimbursement of Expenses.  The Company agrees to pay all out-of-pocket expenses, including legal fees, travel expenses, and other business related disbursements, incurred by Advisor in acting on the Company’s behalf.  Prior to incurring any expense the Advisor shall submit such expense in advance to the Company, in writing, for approval.

c) Compensation under Rule 701.  The Company acknowledges and agrees that all compensation received by Advisor pursuant to this Agreement shall be in consideration of the Advisor’s consulting services.  It is further acknowledged and agreed that no compensation was paid Advisor in connection with the offer and sale of securities in a capital-raising transaction and that no compensation is subject to the consummation of any transactions.  In addition, the Company acknowledges and agrees that this agreement constitutes a written contract relation to the compensation of Advisor pursuant to the requirements of Rule 701 of the Securities & Exchange Commission.

	
3.  

	
Obligations of the Company

	
a) 

	
      Corporate Authorization.  The Company agrees to take all necessary and

appropriate steps to authorize all actions required by this agreement.

	
b)  

	
Furnishing of information.  The Company will furnish to Advisor all information Advisor may reasonably request to facilitate Advisor’s performance of advisory services, including, but not limited to, access to company facilities, members of the management, and copies of management reports, budgets and the like.  Said information shall be kept confidential by Advisor.

	
4.  

	
Representations and Warranties of the Company.

The Company represents and warrants that any information furnished to Advisor for use in any due diligence materials, financial models and strategies, and/or Business Arrangement(s) will, to the best of the Company’s knowledge and belief, contain no untrue statement of any material fact nor omit any material fact which would make the information misleading.  The Company further warrants that if the circumstances relating to information or documents furnished to Advisor change at any time, the Company will inform Advisor promptly of the changes and immediately deliver to Advisor documents or information necessary to ensure the continued accuracy and completeness of all information and documents.

	
5.  

	
Representations and Warranties of Advisor.

Advisor represents to the Company that it will not, to the best of Advisor’s officers’ knowledge and belief, make any untrue statement of material fact.  Advisor further represents and warrants to the Company that, to the best of Advisor’s officers’ knowledge and belief, all actions taken by it, on behalf of the Company, in connection with its’ advisory services will be conducted in compliance with all applicable state and federal laws.  Further Advisor shall comply with any procedures that might be reasonably imposed by the Company or its legal counsel to ensure compliance with such laws.

6.           Review and Approval of Documentation.  The Company shall review and approve, prior to distribution, the content of any due diligence materials, financial models and strategies, funding strategies or disclosure or offering documents prepared by Advisor.

7.           Cooperation of Parties.  The Company and its counsel shall cooperate with Advisor and its counsel with respect to the preparation of any due diligence investigation of the Company. In addition, the Company shall cooperate with Advisor in preparing any Company due diligence materials, financial models and strategies, and any other related documentation, as may be required in the rendering of advisory services to the Company.

  

1 The amount of the additional Cash Fee and Equity Fee shall be an amount subsequently determined together by the parties to this Agreement, but in no case shall exceed the amounts set out in Paragraph 2(a). The Engagement Fee shall remain fixed at $5,000.

 

	
8.  

	
No Obligation to Consummate Transactions.

The Company shall not be obligated to enter into any Business Arrangement presented to it by Advisor.  Advisor shall have no authority to make any representations on behalf of the Company or to otherwise bind the Company.  If the Company elects to consummate a transaction presented to it by or as a result of the efforts of Advisor, the final terms of the transaction shall be subject to negotiation by the Company and its legal counsel.  The parties understand and acknowledge that neither party has represented to or assured the other that a Business Arrangement will actually be entered into as a result of Advisor’s services hereunder.

	
9.  

	
Term and Termination of Agreement.

This Agreement shall remain in full force and effect for 6 months from the date of execution.  During the term of this Agreement, Advisor shall be a non-exclusive financial advisor to the Company.

10.           Compliance with Rule 701.  The Company shall use its best efforts to ensure that all offers and sales of equity securities to Advisor, shall comply with Rule 701 of the Securities & Exchange Commission.  The Company will cooperate with Advisor in taking all action necessary or required to ensure that these securities are entitled to the benefits of Rule 701.  Further, the Company will not cause or permit the sale of securities, of the Company, in such a manner as to restrict or prevent the sale or transfer of those securities of the Company held by Advisor.

11.           Rights of Parties.  Advisor shall be entitled to assign all of its rights and obligations hereunder to a designee reasonably acceptable to the Company.  An assignment shall be effective upon the execution by the assignee of a counterpart of this Agreement.  Upon assignment, the term “Advisor”, as used herein, shall refer to the assignee.  Except as otherwise provided above, no party shall be entitled to transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other party.  This Agreement shall be binding upon and inure to the benefit of, the parties and their respective successors and assigns.

12.           Good Faith and Fair Dealing. The parties hereto and their successors and assigns shall exercise good faith and fair dealing in the performance and interpretation of this Agreement.

 

13           Acknowledgement as to Counsel.  The parties acknowledge and agree that the Company’s legal counsel has been involved in preparing this Agreement and the other documents contemplated hereby as legal counsel to the Company and not as counsel to Advisor and that the Advisor has been advised and given opportunity to retain its own counsel at its own expense. Ambiguities in this Agreement shall not be interpreted against the Company on the basis that the Agreement was substantially drafted by the Company.

14.           Acknowledgments and Assent.  The parties, and each of them, acknowledge that to have been given sufficient time to consider the terms and conditions of this Agreement; and have been advised to consult with an attorney prior to signing this Agreement and has in fact consulted with counsel of his own choosing prior to executing this Agreement.  The parties, and each of them, agree to have read this Agreement and understand the content herein, and freely and voluntarily assents to all of the terms herein.

             15.     Governing Law.  This Agreement shall be interpreted in accordance with the laws of the State of California.

 16.    Attorneys’ Fees.  Should it become necessary to enforce any provision of this

Agreement the prevailing party shall be entitled to recover fees and costs including but not limited to reasonable attorneys’ fees.

 17.           Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, representations and statements, if any, whether oral or written.  No modification of this Agreement shall be valid or binding unless in writing and signed by both parties.

 18.           Headings.  The headings used in this Agreement have been inserted for convenience only and are not to be considered in construing the meaning of the Agreement.

If the foregoing is in accordance with the Company’s understanding, please sign and return the enclosed copy of this letter, whereupon this Agreement shall constitute a binding agreement between the Company and Advisor.

Sincerely yours,

LABRUM CAPITAL ADVISORS, L.L.C.

	
  

	 	
Jason Labrum

	
  

	 	
Managing Member

This Business and Financial Advisory Agreement is acknowledged and agreed to by the undersigned as of this ___ day of December 2009.

Shrink Nanotechnologies

By: Mark L. Baum, Esq.

Its: CEO

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