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research.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    RESEARCH
AGREEMENT

     

    THIS RESEARCH AGREEMENT
(“Agreement”) is entered into on June ___, 2008 (the “Effective Date”) by and
between SHRINK Technologies, Inc. a California Corporation, with an office at
2038 Corte Del Nogal, Suite 110, Carlsbad, CA 92011, (“Sponsor”) and The Regents
of the University of California, a California public corporation, acting on
behalf of the University of California, Merced (“UCM”) and having a place of
business at 5200 N. Lake Road, Merced, CA 95343.

     

    RECITALS

     

    UCM,
through the School of Engineering, has valuable experience and skill, and
ability in “Development of 3D-Stacked Polystyrene Microchips for Biomedical
Application and Optoelectronics.”

     

    Sponsor
desires to have UCM undertake a research project in accordance with the scope of
work described in Exhibit A, “Statement of Work and Tasks” (the
“Research”).

     

    The
research program contemplated by this Agreement is of mutual interest and
benefit to UCM and Sponsor, and will further UCM’s instructional and research
objectives in a manner consistent with its status as a non-profit, tax exempt
educational institution.

     

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

     

    
      	
              1.  

            	
              STATEMENT
      OF WORK.  UCM agrees to perform the research project described
      in Exhibit A (“the Statement of Work and Associated Tasks”), which Exhibit
      is incorporated herein.  Access to work carried on in UCM’s
      laboratories in the course of the Research shall be entirely under the
      supervision, direction, and control of UCM
  personnel.

            

    

     

    UCM shall
not contract any consultant or contractor (“Subcontractor”) to perform any
portion of the Research without Sponsor’s prior written consent.

     

    
      	
              2.  

            	
              KEY
      PERSONNEL.

            

    

     

    
      	
              (A)  

            	
              In
      addition to appropriate staffing levels necessary to complete the
      Research, the following individual is identified as a key personnel for
      the performance of the Research at
UCM:

            

    

     

    Michelle
Khine, Principal Investigator

     

    
      	
              3.  

            	
              PERIOD
      OF PERFORMANCE.  This Agreement is effective for the period
      commencing on the Effective Date and continuing until the later of (a)
      four (4) years after the Effective Date, or (b) completion of the Research
      and may be extended only by written agreement of the
      parties.  If, prior to the end of such four (4) year period,
      Sponsor agrees in writing to continue to sponsor the Research with a
      financial commitment substantially similar to that contained herein, then
      this Agreement shall continue for an additional period of up to four (4)
      years based on the level of Sponsor’s
  commitment.

            

    

     

    
      	
              4.  

            	
              REIMBURSEMENT
      OF COSTS.  UCM shall be reimbursed by the Sponsor for all direct
      and indirect costs incurred in connection with the Research up to the
      amount of $ 651,855.61 in accordance with the budget attached as
      Exhibit B.  While it is estimated that this amount is sufficient
      to conduct the Research, UCM may submit to the Sponsor a revised budget
      requesting additional funds.  UCM shall not be obligated to
      expend funds in excess of those provided under this Agreement to conduct
      the Research.

            

    

     

    PAYMENT
TERMS

     

    Sponsor
shall advance the following amount (“Advance Payment”) upon submission of an
invoice from UCM at the time shown:

     

               Amount
Due                                                                           Date
Due

     

    
      	
               
      

            	
              First
      quarterly installment

            	
              Within
      five (5) days following the Effective
Date

            

    

     

    During
the project period, UCM shall invoice the Sponsor each three (3) months, for the
next quarterly installment in accordance with Exhibit B.  Payment of
such invoices shall be due no later than thirty (30) days after the approval of
the invoice.

     

    Payment
shall be made by wire transfer to the following
account:  _____________________

     

    
      	
              5.  

            	
              TITLE
      TO EQUIPMENT.

            

    

     

    In the
event that UCM purchases equipment, title to such equipment will vest in UCM
upon acquisition.

     

    
      	
              6.  

            	
              INTELLECTUAL
      PROPERTY.

            

    

     

    
      	
              (A)  

            	
              All
      rights to inventions or discoveries conceived and reduced to practice in
      the performance of Research conducted under this Agreement (the
      “Additional IP”) shall belong to The Regents of the University of
      California and shall be disposed of in accordance with University of
      California Office of the President and UCM’s intellectual property
      policies and as set forth in this
Agreement.

            

    

     

    
      	
              (B)  

            	
              Subject
      to UCM’s legal ability to do so, the Sponsor, acting with its appointed
      legal counsel, and in accordance with the provisions of the following
      paragraph, shall be given a time-limited first right to negotiate an
      exclusive royalty-bearing license to make, use, sell, offer for sale and
      import any products and practice any methods claimed by the Additional IP
      (with the right to sublicense, subject to reasonable approval from UCM)
      until expiration of all corresponding patents. Sponsor shall have this
      first right to negotiate with respect to each Additional IP for a period
      of one year after the disclosure of the applicable Additional IP in
      accordance with terms of Section 6.  Sponsor shall be
      responsible for all costs associated with filing, prosecuting and
      maintaining patents claiming Additional IP for the duration of the
      license.  If Sponsor exercises its right during such period by
      providing written notice to UCM, then the negotiations regarding the terms
      of the license agreement will be carried out in the University of
      California Office of the President, Office of Technology Transfer
      (University of California Office of the President).  For the
      avoidance of doubt, Sponsor’s exercise of such right prior to the
      completion of the Research shall not terminate the Research, and the
      Research and Sponsor’s funding obligations shall continue in accordance
      with this Agreement.  If Sponsor exercises its right during such
      period, UCM will not offer a commercial license to any other party while
      the parties are negotiating the exclusive-royalty-bearing
      license.

            

    

     

    
      	
              (C)  

            	
              The
      exclusive license agreement will contain only the following financial
      terms, in addition to other non-financial terms to be negotiated by the
      parties:

            

    

     

    
      	
              1.  

            	
              Earned
      royalties to be paid to UCM shall be from one to five percent (1-5%) of
      the net sale of product to end users.  For the avoidance of
      doubt, if a product is covered by multiple license agreements resulting
      from this Agreement, only one royalty would be owing (calculated using the
      highest applicable royalty rate).

            

    

     

    
      	
              2.  

            	
              A
      non-creditable, non-refundable, upfront fee that is commensurate with the
      value of the technology covered by patent rights claiming the elected
      subject invention.  This fee will be in the range of $15,000 to
      $30,000.

            

    

     

    
      	
              3.  

            	
              Following
      the first commercial sale, Sponsor will pay minimum annual royalties of
      $15,000, which will be creditable against earned royalties that are owed
      to UCM during the same calendar year.  The Sponsor will pay the
      minimum annual royalties on the dates and in the amounts established by
      the parties during good-faith negotiations.  Minimum annual
      royalties will be due to UCM in the year of first commercial
      sale.

            

    

     

    
      	
              (D)  

            	
              University
      shall promptly disclose to Sponsor any Additional IP made under this
      Agreement.  Sponsor shall hold such disclosure on a confidential
      basis and will not disclose the information to any third party, other than
      its actual or prospective investors, on a confidential basis without
      consent of UCM.  Sponsor shall advise UCM in writing within the
      period described in Section 6(B) 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 a patent(s)
      issues.

            

    

     

    
      	
              (E)  

            	
              Sponsor
      and UCM shall negotiate in good faith for no less than ninety (90) days
      from the date of election to conclude a license agreement with
      UCM.  Said license shall contain reasonable terms, shall be
      royalty-bearing (but only include the financial terms described in Section
      6(C) above) 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 costs.  If
      Sponsor does not elect to secure such license within period described in
      Section 6(B), rights to the inventions disclosed hereunder shall be
      disposed of in accordance with University policies, with no further
      obligations to the Sponsor.

            

    

     

    
      	
              (F)  

            	
              Ownership
      of any software first created in the performance of the Research shall
      belong to the employer of the author of such software and shall be
      determined in accordance with U.S. Copyright law.  Upon receipt
      of a copy of such software, Sponsor shall have a ninety (90) day period,
      extendible upon the mutual consent of both parties, to negotiate the terms
      of a license agreement and UCM agrees to negotiate these license terms in
      good faith.  During this period, UCM will not offer a commercial
      license to any other party.

            

    

     

    
      	
              7.  

            	
              PUBLICATION.  UCM
      agrees to provide Sponsor, in confidence, with an advanced copy of any
      publication resulting from the Research not less than thirty (30) days
      prior to the submission to a journal or any other public
      disclosure.  At the request of the Sponsor, UCM agrees to delay
      the publication for a period of not more than ninety (90) days from the
      date the publication was originally provided to the Sponsor for the
      purpose of filing relevant patent applications to protect any new
      data.

            

    

     

    
      	
              8.  

            	
              CONFIDENTIALITY.

            

    

     

    
      	
              (A)  

            	
              Unless
      otherwise required by law, Sponsor will safeguard from disclosure
      information, oral or written, provided to it by the UCM (“Confidential
      Information”) and will only disclose to its actual or prospective
      investors in confidence.

            

    

     

    
      	
              (B)  

            	
              Confidential
      Information does not include information
which:

            

    

     

    
      	
              1.  

            	
              was
      known to Sponsor prior to the disclosure
  hereunder;

            

    

     

    
      	
              2.  

            	
              was
      received from a third party not under an obligation of confidence to
      UCM;

            

    

     

    
      	
              3.  

            	
              is
      in the public domain at the time of disclosure hereunder or subsequently
      entered the public domain without the fault of the
  Sponsor;

            

    

     

    
      	
              4.  

            	
              is
      independently known prior to receipt thereof or is discovered
      independently by an employee of Sponsor without the use of the information
      supplied by UCM under this Agreement;
or

            

    

     

    
      	
              5.  

            	
              is
      required to be disclosed by law.

            

    

     

    
      	
              (C)  

            	
              The
      obligations of confidentiality under this paragraph shall survive and
      continue for five (5) years after the expiration of or early termination
      of this Agreement.

            

    

     

    
      	
              9.  

            	
              REPORTS.  UCM
      shall hold monthly meetings with Sponsor during the term of this Agreement
      summarizing the work conducted.  A final report setting forth
      the accomplishments and significant research findings shall be prepared by
      UCM and submitted to the Sponsor within ninety (90) days of the expiration
      or early termination of this
Agreement.

            

    

     

    
      	
              10.  

            	
              TERMINATION.  This
      Agreement may be terminated by either party at any time upon the receipt
      of ninety (90) days written notice to the other party.  The
      following Provisions shall survive such early termination:  6,
      8, 10, 13, and 14.  In addition, if Sponsor fails to make any
      payment required hereunder, this agreement shall terminate on the
      thirtieth (30th)
      day after UCM mails notice of such failure, unless payment is received
      before such thirtieth (30th)
      day.  UCM may also terminate immediately if there is a Force
      Majuere event as detailed in Provision 15 below.  Upon
      notification, UCM shall proceed in an orderly fashion to limit or
      terminate any outstanding commitments and/or to conclude the
      research.  All costs associated with termination shall be
      allowable, including non-cancelable commitments incurred prior to receipt
      of termination notice and all expenses which have not been reimbursed to
      UCM by Sponsor.  In the event of termination, UCM shall submit
      to Sponsor a final financial report in accordance with Paragraph 4 of this
      Agreement.  Any costs and commitments incurred in excess of
      funds provided will be invoiced to Sponsor and will be payable by Sponsor
      within thirty (30) days.  Any funds remaining from the advanced
      payment under Section 4 shall be returned to Sponsor within thirty (30)
      days.

            

    

     

    
      	
              11.  

            	
              NOTICES.  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
UCM:

    Thea
Vicari, Director

    Sponsored
Projects Office

    University
of California, Merced

    SHRINK
Technologies,
Inc.                                 5200
N. Lake Road

    2038
Corte Del Nogal, Suite
110                           Kolligian
Library, Room 222

    Carlsbad,
CA
92011                                                 Merced,
CA 95343

    (760)
804-8844
(Telephone)                                    (209)
228-4318 (Telephone)

    

    
      	
              12.  

            	
              PUBLICITY.  Neither
      party shall use the name, tradenames or trademarks of the other party or
      the other party’s employees in connection with any products, promotion, or
      advertising without the prior written permission of an authorized
      representative of the other party.  The foregoing shall not,
      however, preclude any legally required disclosure, reports generated in
      the normal course of business, or acknowledgement of sponsorship as
      required by the guidelines of an academic
  organization.

            

    

     

    
      	
              13.  

            	
              USE
      OF RESEARCH RESULTS AND PRODUCT LIABILITY.  To the extent it
      would otherwise be liable under applicable law,  Sponsor agrees
      to hold harmless, indemnify and defend UCM from all liabilities, demands,
      damages, expenses and losses arising out of use by the Sponsor, or by any
      party acting on behalf of or under authorization from the Sponsor, or out
      of any use, sale of other disposition by the Sponsor, or by any party
      acting on behalf of or under authorization from the Sponsor, of products
      made by use of the results of the Research performed
      hereunder.  The provisions of this paragraph shall survive
      termination.

            

    

     

    
      	
              14.  

            	
              INDEMNIFICATION.  To
      the extent it would otherwise be liable under applicable law, Sponsor
      hereby waives and agrees to indemnify, defend, and hold harmless The
      Regents of the University of California, it’s officers, trustees, agents,
      employees and students from any loss, claim of damages, or liability of
      any kind, including legal fees, court costs and other expenses in
      litigation or settlement of any claims, arising out of or in connection
      with this Agreement., except to the extent resulting from a breach of this
      Agreement by UCM.  The provisions of this paragraph shall
      survive termination of this
Agreement.

            

    

     

    
      	
              15.  

            	
              FORCE
      MAJEURE.  Neither Party shall be liable for any failure to
      perform as required by this Agreement, to the extent such failure to
      perform is caused by any reason beyond their control, or by reason of any
      of the following occurrences: labor disturbances or labor disputes of any
      kind, accidents, failure of any governmental approval required for full
      performance, civil disorders or commotion’s, acts of aggression, floods,
      earthquakes, acts of God, energy or other conservation measures,
      explosion, failure of utilities, material shortages, disease, or other
      such occurrences.

            

    

     

    
      	
              16.  

            	
              ASSIGNMENT.  This
      Agreement is personal to the Sponsor.  The Sponsor may not
      assign or transfer this Agreement, without The Regents’ prior written
      consent; provided, however, that Sponsor may, without such consent, assign
      this Agreement and its rights and obligations hereunder in connection with
      the transfer or sale of all or substantially all of its business or
      assets, or in the event of its merger, consolidation, change in control or
      other similar transaction.  Any other attempted assignment by
      Sponsor without the written consent of The Regents will be null and
      void.  This Agreement is binding upon and will inure to the
      benefit of The Regents, its successors and
  assigns.

            

    

     

    
      	
              17.  

            	
              SEVERABILITY.  In
      the event a court of competent jurisdiction holds any provision of this
      Agreement to be invalid, such holding shall have no effect on the
      remaining provisions of this Agreement, and they shall continue in full
      force and effect.

            

    

     

    
      	
              18.  

            	
              INDEPENDENT
      CONTRACTOR.  Each party shall be deemed to be an independent
      contractor of the other party, and neither shall be considered an agent,
      employee, joint venture or partner of the other, except to the extent that
      Dr. Michelle Khine is an employee of UCM and a shareholder of Shrink
      Technologies, Inc.  Neither party shall have authority to make
      warranties or representations or enter agreements on behalf of the other,
      nor shall either party be bound by the acts, statements or conduct of the
      other.

            

    

     

    
      	
              19.  

            	
              INDEPENDENT
      INQUIRY.  Nothing in this Agreement shall be construed to limit
      the freedom of researchers who are participants in this Agreement, whether
      paid under this Agreement, or not, from engaging in similar research
      inquiries made independently under other grants, contracts or agreements
      with parties other than the
Sponsor.

            

    

     

    
      	
              20.  

            	
              HEADINGS.  The
      paragraph headings herein are for convenience only and shall not affect
      the construction or interpretation of this
  Agreement.

            

    

     

    
      	
              21.  

            	
              ENTIRE
      AGREEMENT CHANGES.  This Agreement and its appendices, together
      with the Option Agreement entered into between the parties of even date
      herewith and any license agreements that result from this Agreement,
      contain the entire agreement between the parties, and supersede any prior
      agreements between the parties, written or oral regarding the subject
      matter thereof.  No amendments or changes to this Agreement
      shall be effective unless made in writing and signed by authorized
      representatives of University of California Office of the President, UCM
      and Sponsor.  All correspondence regarding terms of this
      Agreement shall be sent as specified in Provision
  11.

            

    

     

    
      	
              22.  

            	
              GOVERNING
      LAW.  This Agreement will be governed and construed by the laws
      of the State of California.

            

    

     

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement in duplicate by proper persons
thereunto duly authorized.

     

    SHRINK
Technologies,
Inc.                                     The
Regents of the University of California

    

    By:                                                                By:                                                              

    

    Name:                                                                Name:  Samuel J.
Traina

    

    Title:                                                                Title:   Vice Chancellor
for Research

    

    Date:                                                                Date:                                                              

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    

    Statement
of Work and Tasks

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    

    Project
Budget

    

    

    
      	
              Cash

            	
              Year
      1

            	
              Year
      2

            	
              Year
      3

            	
              Year
      4

            	
              Total

            
	
                  Direct
      Costs

            	
              $126,030.00

            	
              $118,602.00

            	
              $113,407.00

            	
              $111,663.00

            	
              $469,702.00

            
	
                  Indirect
      Costs

            	
              $42,773.49

            	
              $44,827.22

            	
              $47,098.61

            	
              $47,454.28

            	
              $182,153.61

            
	
                  Total
      Cash Contributed

            	
              $168,803.49

            	
              $163,429.22

            	
              $160,505.61

            	
              $159,117.28

            	
              $651,855.61

            
	
              50%
      In-Kind

            	
              $0.00

            	
              $0.00

            	
              $0.00

            	
              $0.00

            	
              $0.00

            
	
              Voluntary
      2% Cash Contribution

            	 
      	 
      	 
      	 
      	
              $0.00

            
	
              Total
      Contribution

            	 
      	 
      	 
      	 
      	
              $651,855.61

            

    

    

    Each
three month period commencing on the Effective Date during the term of this
Agreement, Sponsor shall pay 1/4th of the applicable Total Cash Contributed
amount set forth above for the applicable contract year.sublease.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    OFFICE
SPACE SUBLEASE

    

    This office space sublease (the
“Sublease”) is made between Shrink Technologies, Inc., a California corporation
(“Tenant”) and Business Consulting Group Unlimited, Inc.
(“Sublessor”).

    

    Recitals

    

    A.           Sublessor
leases, the building commonly identified as 2038 Corte del Nogal, Suite 110,
Carlsbad, California 92011 (the “Premises”).

    

    B.           Sublessor
desires to sublease certain office space and improvements (the “Executive Office
Space”) situated within the Premises.

    

    C.           Tenant
desires to rent the Executive Office Space.

    

    D.           The
Executive Office Space shall include the following furnishings &
accessories:

    

    1.           Internet,
phone and fax systems, satellite T.V. connections, office furniture and all
office, storage, common restroom, kitchen and designated parking
areas.

    

    NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sublessor and Tenant agree upon the terms and conditions set forth
herein.

    

    Section
1

    Term
and Required Notice

    

    (a)           Sublessor
hereby subleases to Tenant, and Tenant hereby subleases from Sublessor the
Executive Office Space commencing as of May 28, 2009 and one year
thereafter.   Holding over by Tenant at the expiration of the
Sublease Term shall create a month to month tenancy.  All other terms
and conditions herein shall remain in full force and effect.

    

    Section
2

    Rent,
Expenses and Payment

    

    (a)           
Tenant agrees to pay to Sublessor without set-off, abatement, credit, deduction
or claim of off-set, monthly ("Rent") for the Executive Office Space of six
thousand dollars ($6,000) per month.  Rent shall be payable in
advance, on the first day of each month during the Sublease Term, at the address
of the Premises set forth above or at  such other address as Sublessor
may from time to time designate by notice to Tenant.  In the event the
Sublease Term commences or expires on any day other than the first or last day
of a month, respectively, then the Rent for such month shall be prorated
accordingly.

    

    (b)           In
addition to the payment of Rent, Tenant agrees to pay to Sublessor the following
office expenses which shall be itemized and calculated on a monthly basis by
Sublessor, including, but not limited to:

    

    
      	
              1.  

            	
              Phone;

            

    

    
      	
              2.  

            	
              Internet
      connection;

            

    

    
      	
              3.  

            	
              Fax
      charges including ink cartridges and
paper;

            

    

    
      	
              4.  

            	
              Satellite
      T.V.;

            

    

    
      	
              5.  

            	
              Postage
      & Overnight delivery;

            

    

    
      	
              6.  

            	
              Copying;

            

    

    
      	
              7.  

            	
              Electricity;

            

    

    
      	
              8.  

            	
              Stationary
      and office supplies; and

            

    

    
      	
              9.  

            	
              Cleaning
      and janitorial.

            

    

    

    Section
3

    No
Assignment or Subletting

    

    Tenant
shall not sublet the Premises, or any portion thereof, or assign this Sublease,
in whole or in part, without the prior written consent of
Sublessor.

    

    Section
4

    Lease
Provisions

    

    Except as
otherwise expressly herein provided or modified by this Sublease (including,
without limitation, the limitations on Tenant's monetary obligations under this
Sublease), Tenant hereby assumes and agrees to fully adhere to, perform and
comply with the covenants, agreements, duties and  obligations of the
Lessee under the rules and regulations of the master lease, attached as Exhibit
A.  Each of such covenants, agreements, duties and obligations is
incorporated as if fully rewritten herein.

    

    Section
5

    Condition
of Premises

    

    Tenant
agrees and acknowledges that it is accepting the Executive Office Space from
Sublessor in its present condition and that Sublessor is not presently obligated
to make any improvements for Tenant.

    

    Section
6

    Subordination

    

    Tenant
acknowledges and agrees that this Sublease is, and at all times shall be,
expressly subordinate to the Lease, and all present or future (i) ground and
underlying leases of all or any portion of the Premises now or hereafter
existing, (ii) mortgages or trust deeds affecting all or any portion of the
Premises, (iii) advances under such mortgages or trust deeds and (iv) renewals,
modifications, replacements and extensions of any such leases, mortgages or
trust deeds.

    

    Section
7

    Indemnification

    

    Tenant
hereby agrees to indemnify, defend and hold harmless Sublessor and its agents,
employees, officers, directors, attorneys, licensees, representatives, and
contractors harmless from and against any and all claims, actions, demands,
suits, losses, expenses  (including attorney's fees), judgments and
liabilities arising out of or in any way relating to the operation of
Tenant’s:  business, rental of the Executive Office Space, breach of
or failure to perform any of its obligations hereunder, negligence or misconduct
by Tenant or any of its licensees, agents, officers, directors, employees,
officers, directors, attorneys or contractors.  The scope of this
indemnification, defense and hold harmless obligation shall, at the indemnified
party's option, include, but not be limited to, defense
with  attorneys satisfactory to such party, of any action, suit, claim
or proceeding that may be filed, instituted or  brought against the
indemnified party or to which such party may be made a party.

    

    Section
8

    Insurance

    

    Tenant
shall not be required to provide insurance documentation.

    

    Section
9

    Notices

    

    Any
notice, communication or demand required or permitted hereunder shall be in
writing and shall be given when personally delivered and receipted or deemed
given, whether or not actually received, two  days after deposit in
the United States mail, by certified or registered mail, postage prepaid, return
receipt  requested, in either case addressed to the party to receive
such notice at the address shown below or such  other address as such
party may, by notice, hereafter furnish to the other: at the Executive Office
Space.

    

    Section
10

    Default

    

    (a)           
If Tenant fails to perform any of the terms, covenants, agreements or conditions
on its  part to be performed under this Sublease and such failure
continues uncorrected for 3 days after notice thereof from Sublessor, unless
otherwise specified herein, this Sublease may be terminated by Sublessor at its
option.  If Sublessor exercises such right to terminate this Sublease,
it shall be entitled to receive all costs and expenses it incurs in connection
with such termination.

    

    (b)           
If at any time or times, Tenant defaults in the payment of Rent and such default
continues  for a period of 3 days after notice thereof to Tenant or if
Tenant defaults in the due and full observance or performance of any other
covenant, provision or  condition herein required to be kept,
performed or observed by Tenant, and if any such default  continues
for a period of 3 days after written notice to Tenant  thereof,
Sublessor may at any  time during the continuance of such default by
notice to Tenant, terminate this Sublease.

    

     (c)           
In addition to the right to terminate this Sublease upon the occurrence of a
default hereunder  and expiration of any applicable notice and cure
periods, the non-defaulting party shall be entitled to  pursue all
available remedies at law or in equity, including, without limitation,
injunctive relief.

    

    Section
11

    Conflicts

    

    In the
event of a conflict between the terms of this Sublease and the terms of the
Lease, the terms of this Sublease shall prevail.

    

    Section
12

    Parking
and Signage

    

    (a)           Tenant
and/or its employees or customers shall not park vehicles in Subleasor’s marked
“client” parking spaces in the front of the Premises.

    

    (b)           Tenant
shall not erect or display any signage or advertisement on or about the
Executive Office Space or Premises.

    

    Section
13

    Termination

    

    Either
party may terminate this Sublease with sixty days written notice.

    

    Section
14

    Miscellaneous

    

    This
Sublease:  (i) shall be binding upon and inure to the benefit of the
parties hereto and their  respective successors and assigns; (ii)
contains the entire agreement of the parties with respect to the subject matter
hereof; (iii) is a product of the joint negotiation and drafting of the parties
hereto and shall  be construed accordingly; (iv) shall be construed in
accordance with the laws of the State of California and the venue for any action
shall be  San Diego County, State of California.  The
invalidity or unenforceability of any provision hereof shall not impair or
invalidate the remainder of this Sublease; (v) may be executed in several
counterparts, in one or more separate documents, all of which together shall
constitute one of the same instrument, with the same force and effect as though
all the parties had executed the same document; and (vi) shall not be limited by
paragraph titles or captions contained herein which are inserted only as a
matter of convenience and for reference, and in no way define, limit, extend, or
describe the scope of this Sublease.

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Sublease as of the date first above
written.

    

    
      	
              SUBLEASOR:

               

               

              __________________________________

              By:

              Its:

            	
              TENANT:

               

               

              ____________________________________

              By:

              Its:

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