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
0000 Xxxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, (“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 0000 X. Xxxx Xxxx, Xxxxxx, XX 00000.
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:
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1.
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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.
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UCM shall
not contract any consultant or contractor (“Subcontractor”) to perform any
portion of the Research without Sponsor’s prior written consent.
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2.
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KEY
PERSONNEL.
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(A)
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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:
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Xxxxxxxx
Xxxxx, Principal Investigator
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3.
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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.
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4.
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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.
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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
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First
quarterly installment
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Within
five (5) days following the Effective
Date
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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: _____________________
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5.
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TITLE
TO EQUIPMENT.
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In the
event that UCM purchases equipment, title to such equipment will vest in UCM
upon acquisition.
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6.
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INTELLECTUAL
PROPERTY.
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(A)
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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.
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(B)
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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.
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(C)
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The
exclusive license agreement will contain only the following financial
terms, in addition to other non-financial terms to be negotiated by the
parties:
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1.
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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).
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2.
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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.
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3.
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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.
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(D)
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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.
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(E)
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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.
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(F)
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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.
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7.
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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.
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8.
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CONFIDENTIALITY.
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(A)
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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.
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(B)
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Confidential
Information does not include information
which:
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1.
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was
known to Sponsor prior to the disclosure
hereunder;
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2.
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was
received from a third party not under an obligation of confidence to
UCM;
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3.
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is
in the public domain at the time of disclosure hereunder or subsequently
entered the public domain without the fault of the
Sponsor;
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4.
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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
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5.
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is
required to be disclosed by law.
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(C)
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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.
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9.
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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.
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10.
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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.
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11.
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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:
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For
Sponsor: For
UCM:
Xxxx
Xxxxxx, Director
Sponsored
Projects Office
University
of California, Merced
SHRINK
Technologies,
Inc. 0000
X. Xxxx Xxxx
0000
Xxxxx Xxx Xxxxx, Xxxxx
000 Xxxxxxxxx
Library, Room 222
Xxxxxxxx,
XX
00000 Xxxxxx,
XX 00000
(000)
000-0000
(Telephone) (000)
000-0000 (Telephone)
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12.
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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.
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13.
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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.
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14.
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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.
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15.
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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.
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16.
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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.
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17.
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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.
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18.
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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
Xx. Xxxxxxxx Xxxxx 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.
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19.
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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.
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20.
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HEADINGS. The
paragraph headings herein are for convenience only and shall not affect
the construction or interpretation of this
Agreement.
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21.
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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.
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22.
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GOVERNING
LAW. This Agreement will be governed and construed by the laws
of the State of California.
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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: Xxxxxx X.
Xxxxxx
Title: Title: Vice Chancellor
for Research
Date: Date:
EXHIBIT
A
Statement
of Work and Tasks
EXHIBIT
B
Project
Budget
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Cash
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Year
1
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Year
2
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Year
3
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Year
4
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Total
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Direct
Costs
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$126,030.00
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$118,602.00
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$113,407.00
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$111,663.00
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$469,702.00
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Indirect
Costs
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$42,773.49
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$44,827.22
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$47,098.61
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$47,454.28
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$182,153.61
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Total
Cash Contributed
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$168,803.49
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$163,429.22
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$160,505.61
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$159,117.28
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$651,855.61
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50%
In-Kind
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$0.00
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$0.00
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$0.00
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$0.00
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$0.00
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Voluntary
2% Cash Contribution
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$0.00
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Total
Contribution
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$651,855.61
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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.
