CONFIDENTIAL
BIOPHAN TECHNOLOGIES, INC.
AMP-BIOPHAN LICENSE AGREEMENT
This License Agreement is dated and effective February 24, 2005 ("Effective
Date"), and is between aMRIs Patent GmbH ("Licensor"), a German company with an
office at Xxxxxxx. 00, X-00000 Xxxxxxx-Xxxxxx, Xxxxxxx and Biophan Technologies,
Inc. ("Biophan"), a Nevada company with an office at 000 Xxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxx Xxxxxxxxx, XX 00000.
Background. Licensor entered into a license agreement with aMRIs GmbH ("AMR"), a
German company with an office at Xxxxxxx. 00, X-00000 Xxxxxxx-Xxxxxx, Xxxxxxx,
relating to magnetic resonance imaging and safety and image compatibility
technologies (the "AMP-AMR License"). The AMP-AMR License has been cancelled as
of the Effective Date, and AMR has no further interest in the Patent Rights,
Know-how, and Clinical IP. Consequently, AMP is willing, subject to the terms
and conditions hereof, to license exclusively to Biophan and its Affiliates (and
permit Biophan to sublicense) the Patent Rights, Know-how and Clinical IP.
Therefore, in consideration of the premises and promises in this Agreement, the
parties agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
1.1 Affiliate means an entity that controls, is controlled by, or is
under common control with a Licensee. For this purpose, "control" means
(i) the power to direct or cause the direction of the management and
affairs of the entity, whether by direct or indirect ownership of voting
stock, positions on the board of directors, contract, or otherwise; or
(ii) ownership of fifty percent (50%) or more of the equity or other
ownership interest of such entity, even if such ownership does not result
in the power to direct or cause the direction of the management, affairs,
or policies of such entity. For the avoidance of doubt, AMR is a Biophan
Affiliate.
1.2 Clinical IP means all pre-clinical and clinical protocols,
studies, data and results and study-related forms, materials and reports
(e.g., investigator brochures, informed consent forms, data safety
monitoring board related documents, patient recruitment related materials,
biocompatibility studies, animal studies, safety studies, and
manufacturing and control data) used in or resulting from any pre-clinical
or clinical study or trial of any Licensed Product/Process, any audit
thereof, and any regulatory applications and approvals regarding the same.
1.3 Confidential Information means all business, financial and
technical information, reports, data, documents and other materials,
whether in electronic or physical form or orally disclosed, provided by
one party ("Discloser") to the other party ("Receiver"), but shall exclude
any part of the Confidential Information to the extent that: (a) Receiver
is required to disclose it under governmental law, regulation, court
order, or for filings with the FDA; or (b) Receiver can demonstrate (i)
was public knowledge at the time of disclosure to Receiver, (ii) became
public knowledge without fault by Receiver; (ii) was rightfully known by
or in the possession of Receiver prior its disclosure by Discloser;
*** Indicates where material is omitted pursuant to a confidential treatment
request and filed separately with the Commission.
(iii) was disclosed to Receiver on an unrestricted basis from a source not
known to be under a duty of confidentiality to Discloser; or (iv) is
appropriate to disclose under reasonable confidentiality restrictions to
any prospects and their financial, legal, and other advisors in connection
with a merger, acquisition or other business transaction.
1.4 FDA means the United States Food and Drug Administration.
1.5 Field means systems, devices, components, compositions and
processes for magnetic resonance imaging that provide or enhance cost,
safety, effectiveness, applicability, ease of use, useful life, image
quality, or image compatibility.
1.6 Invention means any invention or discovery, whether or not
reduced to practice.
1.7 Joint Invention means any invention that (i) is related to or
covered by any Patent Right, and (ii) includes co-inventors from Licensor,
Biophan, and/or AMR.
1.8 Know-how means all technical information, processes, formulae,
compounds, devices, specifications, records, manufacturing information,
materials, designs, drawings and data, whether or not patentable and
whether in electronic, written or verbal form, useful or related to the
Patent Rights.
1.9 Licensed Product/Process means (i) stents or other medical
devices with resonant circuits to enhance imaging, (ii) xxxx xxxx filters,
(iii) guidewires, and (iv) all other products or processes, the
manufacture, use, importation or sale of which is covered by a Valid
Claim.
1.10 Licensee means Biophan, Affiliates, and Sublicensees.
1.11 Net Sales means amounts received for Licensed
Products/Processes by Biophan and its Affiliates (whether for use, sale,
lease or otherwise) less: (i) payments made or credits allowed to
customers for promotional purposes, (ii) customary allowances, rebates,
and trade, quantity, or cash discounts, including discounts, rebates or
other payments required under Medicaid, Medicare or other governmental
medical assistance programs, to the extent actually allowed and taken;
(iii) amounts repaid or credited for rejections or returns; (iv) to the
extent separately stated on invoices or other documents of sale, taxes and
other governmental charges levied on the production, sale, transportation,
delivery, or use of a Licensed Product/Process which is paid by or on
behalf of Biophan or the applicable Affiliate; and (v) outbound
transportation costs prepaid or allowed and costs of insurance in transit.
1.12 Patent Rights means: (i) the patents and patent applications
listed on Exhibit A; (ii) reissues, reexaminations, renewals, extensions,
divisions, continuations, and continuations-in-part of (i); (iii) foreign
counterparts of (i) and (ii); and (iv) Joint Inventions.
1.13 Revenues means Biophan's and its Affiliates' gross license
fees, milestone payments, minimum royalties, and running royalty revenues
received from Sublicenses, but excludes revenues to support research and
development efforts and reimbursement of out-of-pocket expenses.
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1.14 Sublicense means any sublicense or other agreement permitting
the commercial exploitation of any Patent Right(s), Know-how or Clinical
IP by a third party.
1.15 Valid Claim means: (i) a claim of an issued and unexpired
patent of the Patent Rights which has not been disclaimed, revoked or held
invalid or unenforceable by an unappealed or unappealable decision of a
court or governmental body, and (ii) one or more claims of a patent
application being prosecuted in good faith, for two (2) years following
the first commercial sale or use of a Licensed Product/Process which is a
Licensed Product/Process solely as a result of the claim(s).
All Exhibits are incorporated by reference into this Agreement, and any
reference to "include" or "including" means "including but not limited to," and
any reference to "and" means "and/or" unless the context clearly means
otherwise.
2. LICENSE GRANT.
2.1 Grant to Biophan. Licensor hereby grants to Biophan and its
Affiliates the exclusive, world-wide, royalty-bearing, right and license
under the Patent Rights, Know-how and Clinical IP to develop, make, have
made, use, sell, offer to sell, import, export, lease, and perform
Licensed Products/Processes in the Field.
2.2 Sublicenses. Biophan may grant Sublicenses only in compliance
with the provisions of this Section 2.2 and Section 4.2 below, and not
otherwise. No Sublicense shall be granted (including but not limited to
any Affiliate) unless the Payment and Shares, each as defined in Section
3.8.1, have been paid as required hereunder to Licensor without condition
or escrow. All Sublicense agreements require the written approval of
either Xx. Xxxxxx or Xx. Xxxxxx, on behalf of AMP. Without limitation to
the foregoing, Sublicenses shall require reasonable due diligence in
development and commercialization of Licensed Products/Processes. Biophan
and AMP will cooperate to pursue appropriate remedies if any Sublicensee
defaults. Any Sublicense may continue in effect notwithstanding
termination of this Agreement. Biophan may grant Sublicenses, for research
and development purposes only, to AMR and any other third party without
payment.
2.3 No Challenges. Licensor shall not bring or authorize or assist a
third party to bring any action under any other intellectual property now
or in the future owned or licensed by Licensor to prevent a Licensee from
exercising those rights granted by Licensor to Biophan and its Affiliates
hereunder. Licensor shall impose this covenant on any assignee of any
Patent Rights.
3. COMPENSATION.
3.1 Royalties. Biophan shall pay Licensor a royalty of:
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3.1.1 [***]; and
3.1.2 twenty-five percent (25%) of Revenues.
3.2 Minimum Royalties. Biophan shall pay minimum royalties to
Licensor at the rate of (i) [***] for the first year of the term of this
Agreement ("Term"); (ii) [***] for the second year of the Term (it being
understood that the second year of the Term commences on the first
anniversary of the Effective Date); and (iii) [***]; minimums may be
credited against amounts due under Section 3.1, but only for [***] after
each minimum payment is made. Minimums are payable quarterly on the first
day of each calendar quarter, commencing with the calendar quarter ending
[***].
3.3 Pro-Ration.
3.3.1 Royalties. If Biophan or any of its Affiliates licenses
intellectual property from one or more third parties ("Third
Parties") which also covers any Licensed Product/Process of
Biophan or the Affiliate, the royalty rate applied under
Section 3.1.1 as to Net Sales derived from that Licensed
Product/Process will be [***]**
3.3.2 Revenues. If Biophan includes in any Sublicense one or
more sublicenses of intellectual property of one or more Third
Parties which covers any Licensed Product/Process, the
percentage of Revenues payable by Biophan under Section 3.1.2
as to that Licensed Product/Process will be: [***].
3.4 Non-Cash Consideration. In the event that consideration in
addition to or in lieu of money is received by Biophan, an Affiliate or
other Licensee for the sale, use or distribution of Licensed
Product/Process in an arms-length transaction, the fair market value of
such consideration (as of the date it is received by Biophan, the
Affiliate or other Licensee) shall be included in the determination of Net
Sales and Revenue, as applicable, for such sale, use or distribution
transaction. To the extent that Licensed Product/Process are sold,
licensed, used, or distributed in other than an arms-length transaction,
Net Sales and Revenue, as applicable, for such transaction shall be the
average sales price of Licensed Product/Process during the applicable
calendar quarter in the country in which the non-arms-length transaction
occurred.
3.5 Payment Terms. Royalties are payable quarterly within forty-five
(45) days after each calendar quarter. Payments hereunder shall be
considered to be made as of the day on which they are received at
Licensor's designated bank. If any amount collected or owed is stated in a
currency other than United States Dollars, then, for purposes of
calculating the amount due Licensor hereunder, such amount shall be
converted into United States Dollars at the exchange rate between those
two currencies published in The Wall Street Journal for the last business
day of the applicable calendar quarter for which such payments are being
paid. If no such exchange rate for a currency in a country has been quoted
in The Wall Street Journal during the twelve (12) month period preceding
the date on which such amount becomes due to Licensor under this
Agreement, such amount payable for the country per unit of Licensed
Product/Process shall be the average amount most recently paid by the
Licensee for each unit of the Licensed Product/Process in the country with
the largest sales volume of the applicable Licensed Product/Process for
which a currency conversion to United States Dollars is published in The
Wall Street Journal.
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
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3.6 Royalty Term. Royalties are payable for each Licensed
Product/Process, on a country by country basis, [***].
3.7 Tax Withholding. If Biophan or any of its Affiliates is
required, under the laws of any country, to withhold any tax with respect
to any payment to Licensor, the tax will be deducted and paid to the
taxing authority. Biophan or the applicable Affiliate will notify Licensor
and promptly furnish Licensor with original receipts of any tax
certificate or other available documentation evidencing the tax withheld.
Biophan and its Affiliates will use commercially reasonable efforts to
minimize any withholding.
3.8 Additional Compensation.
3.8.1 As a one-time fee, Biophan will (i) pay Licensor Xxx
Xxxxxxx Xxxxxx-Xxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars ($185,000)
(the "Payment"); and (ii) issue to Licensor 200,000 shares of
restricted common stock of Biophan, par value $.005 per share
(the "Shares"). The Shares are to be issued subject to the
terms and conditions set forth in Exhibit B.
3.8.2 A wire transfer for [***] of the Payment shall be made
to the bank account designated by Licensor within two business
days after Biophan has received wire transfer instructions
from Licensor. Biophan shall issue a certificate for [***] to
Licensor no later than April 30, 2005; however, Licensor shall
not transfer the Initial Shares until the remaining [***] of
the Shares are received. [***]
3.8.3 Licensor shall have until December 31, 2005, to meet the
condition of Section 3.8.2. If the condition has not been met
by that date, Biophan may, at its election, grant additional
[***] extensions of time to meet the condition or terminate
this Agreement. Notwithstanding any other provision contained
in this Agreement, if the Payment and Shares have not been
received by Licensor by December 31, 2005, Licensor shall have
the right to terminate this Agreement without recourse or
liability and such right shall continue until the remaining
[***] of the Payment and [***] of the Shares are received;
provided, however, that if Licensor exercises its termination
right under this Section 3.8.3, it shall simultaneously
reimburse to Biophan the initial [***] of the Payment received
and assign the Initial Shares to Biophan.
4. DUE DILIGENCE.
4.1 Diligence. Biophan will use commercially reasonable diligent
efforts to complete the development and commercialization of Licensed
Products/Processes through Sublicenses, subject to Sections 2.2 and 4.2.
Biophan may, but is not obligated to, develop, manufacture, and market
Licensed Products/Processes itself. Biophan will provide an annual
research, development and commercialization plan to Licensor.
*** Material omitted pursuant to a confidential treatment request and filed
seperately with the Commission.
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4.2 Sublicense Terms and Conditions. Each Sublicense shall be
subject to the requirements of Section 2.2 and no Sublicense shall be
entered into by Biophan or any Affiliate other than in strict compliance
with the terms and conditions of Section 2.2. Without limitation to the
foregoing, each Sublicense shall be for one or more exclusive or
non-exclusive fields of use, with upfront license fees, minimum
pre-commercialization quarterly R&D payments, and minimum
post-commercialization quarterly royalty payments.
4.3 Assistance of AMR. If, as a result of an introduction initiated
with the assistance of Xx. Xxxxxx or Xx. Xxxxxx, Biophan enters into any
intellectual property license agreement which does not cover Patent
Rights, Know-how or Clinical IP, Biophan will pay AMR a finder's fee of
[***] from time to time from the licensee under each such agreement,
excluding from the computation any reimbursement of expenses and research
and development payments for bona fide research and development services
performed by or on behalf of Biophan, except that Biophan will pay AMR a
finder's fee of [***] of the research and development payments received
and used by Biophan for such research and development.
5. REPORTS/RECORDS.
5.1 Progress. After the second and fourth calendar quarters of each
year, at the time royalty payments are due, Biophan shall report progress
against marketing plans and milestones.
5.2 Books and Records. Each Licensee shall keep accurate books of
account adequate to show amounts payable under this Agreement and the
performance of Licensee's other obligations hereunder for three (3) years
after each applicable year.
5.3 Audit Request. Each Licensee will permit an independent,
certified public accountant appointed and paid by Licensor (or as to
Sublicenses, paid for by Biophan and initiated at the request of either
Licensor or Biophan) and reasonably acceptable to Licensee, upon ten (10)
days' notice and no more often than once per calendar year, to examine and
make copies of applicable records and other documents for the purpose of
verifying amounts and reports due from, and obligations to be performed
by, Licensee. The results of each examination will be made available to
Licensor, Biophan, and any applicable Licensee, and shall be considered
Confidential Information. Should the audit discover an underpayment equal
to the greater of five percent (5%) or Twenty Five Thousand Dollars
($25,000), the applicable Licensee shall pay the cost of the audit.
5.4 Late Charge. All overdue payments will be paid promptly with a
late charge of two percent (2%) per annum above the prime rate of X.X.
Xxxxxx Chase Manhattan Bank, N.A., as reported by The Wall Street Journal
for the first business day of the month(s) for which the payment is
overdue. Interest is payable from the date the payment was due.
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
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6. PATENT PROSECUTION; JOINT INVENTIONS.
6.1 Prosecution. Licensor shall grant to Biophan a power-of-attorney
to prosecute and maintain Patent Rights through attorneys of Biophan's
choice. Biophan will diligently apply for, prosecute, and maintain the
Patent Rights as Biophan deems best. Biophan will keep Licensor informed
of the status of all patent matters by an oral quarterly summary and an
annual written summary. Licensor will cooperate with Biophan in patent
prosecution as requested. All information learned by Licensor pursuant to
this Section 6.1 will be Confidential Information.
6.2 Patent Costs. Biophan will pay all legal fees and out-of-pocket
costs relating to the filing, prosecution, and maintenance of Patent
Rights from the Effective Date until sixty (60) days after termination of
this Agreement. Thereafter, the obligations will be Licensor's
responsibility. Biophan may elect not to pay any such cost, in which case
the applicable patent or patent application shall not be part of the
Patent Rights and Licensor may assume the prosecution or maintenance, at
Licensor's expense. If Licensor learns of any fees payable in connection
with the Patent Rights, Licensor will promptly notify Biophan.
6.3 Joint Inventions. This Agreement is partially a "joint research
agreement" among Licensor, Biophan, and AMR, as such an agreement is
defined under the CREATE Act, 35 U.S.C. Section 103(c), under which
Biophan will carry out some of its obligations pursuant to Section 4.
Intellectual property developed in the fields of (i) stents and other
medical devices with resonant circuits to enhance imaging, (ii) devices
and methods to determine the position of a stent and other positionable
objects, (iii) xxxx xxxx filters, (iv) guidewires, (iv) positioning
methods, (vi) blood vessel filters, and (vii) any other technologies that
are within the scope of the Patent Rights will be deemed made as a result
of activities undertaken within the scope of the joint research agreement
and subject to the CREATE Act.
7. INFRINGEMENT.
7.1 Notice. Each party shall inform the other promptly of any
infringement of Patent Rights or misappropriation of Know-how.
7.2 Enforcement. If any Patent Rights are infringed, Biophan, after
consultation with Licensor, shall have the right, but not the obligation,
to bring a patent infringement suit, at its expense, and to join Licensor
in the suit. If Biophan declines to bring any suit, Licensor may proceed
with a suit at its expense with Biophan's consent.
7.3 Declaratory Judgment Suits. If a declaratory judgment suit is
brought against Licensor or any Licensee, alleging invalidity,
unenforceability, or non-infringement of any Patent Right, Biophan, at its
option, shall have the right, within thirty (30) days after commencement
of the suit, to assume the defense of the suit at its expense.
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7.4 Third Party Infringement Suits. Licensor shall cooperate with
Licensee in connection with its defense of third-party claims of or suits
for infringement or misappropriation related to the manufacture, use or
sale of Licensed Products/Processes. Licensor shall, have the right to
join and be represented in any such suit, at its expense, by counsel of
its choice. All out-of-pocket costs and expenses incurred by Licensee and
any and all damages and other sums payable by it in the suit shall be
deducted from sums otherwise payable to Licensor. Licensee shall have the
right to settle any such claim or suit, subject to Licensor's written
consent, which will not be unreasonably withheld or delayed.
7.5 Recovery. Any amount received as an award in a suit or as a
result of a license or settlement agreement entered into pursuant to any
claim or suit under Section 7.2, 7.3 or 7.4 shall be distributed first, to
reimburse the parties, pro rata, for their actual out-of-pocket legal fees
and expenses incurred in connection with the suit. The balance shall be
paid (i) seventy five percent (75%) to Biophan, and (ii) twenty-five
percent (25%) to Licensor. Payments shall be made within thirty (30) days
after funds are received and shall be accompanied by a report detailing
the computation of the payments.
8. REPRESENTATIONS/WARRANTIES.
Licensor represents and warrants to Licensee as follows:
8.1 Ownership. Licensor owns all right, title and interest in and to
the Patent Rights and the Clinical IP and has the right to practice the
Know-how, free and clear of liens, security interests, charges and other
encumbrances, and no third party has any license, covenant not to xxx,
claim of ownership or other interest therein. No Patent Right has been
abandoned. To Licensor's knowledge, Licensee's practice of the Patent
Rights and Know-how will not infringe any patent or other right of any
third party, and the Patent Rights are valid and enforceable. Except for
amounts due under Section 3, no statutory or other amount is or will be
owed to any current or prior owner, shareholder, inventor, or other person
in connection with any Patent Right(s), Clinical IP, or Know-how.
8.2 No Claims. No claim has been asserted or threatened by any
third-party alleging that (i) any of the Patent Rights is invalid or
unenforceable, or (ii) the development, manufacture, use or sale of
Licensed Products/Processes infringes the rights of any third person.
8.3 AMR Rights. The AMP-AMR License is cancelled as of the Effective
Date. All rights of AMR, if any, in Patent Rights, Know-how and Clinical
IP as of the Effective Date have been assigned to AMP in their entirety.
8.4 No Other License. No rights with respect to the Patent Rights,
Know-how, and Clinical IP have been granted except pursuant to this
Agreement.
9. INDEMNIFICATION; INSURANCE.
9.1 Licensees. Any Licensee that manufactures or performs any
Licensed Product/Process, shall indemnify, defend, and hold harmless
Licensor (and, in the case of Sublicensees, Biophan also) and their
respective Affiliates, officers, employees, agents, successors, and
assigns (the "Indemnitees"), against any claim, demand, liability, damage,
loss, or expense (including reasonable attorneys' fees and expenses,
whether incurred as the result of a third party claim or a claim to
enforce this provision) incurred by or imposed upon any of the Indemnitees
in connection with any third party claims, suits, or judgments arising out
of any theory of liability (including tort, warranty, or strict liability
suits or claims and whether or not such suit or claim has a factual basis)
concerning any Licensed Product/Process (collectively, "Claims"), except
to the extent that the damages claimed were caused by Licensor (or, if
applicable, Biophan) or anyone under its direction or control.
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9.2 Procedure. The Indemnitees shall provide Licensee with prompt
written notice of any Claim for which indemnification is sought. Licensee,
at its expense, shall defend any such Claim. The Indemnitees shall
cooperate fully in such defense and permit Licensee to conduct and control
the defense and the disposition of the Claim (including all decisions
relative to appeal, and settlement); provided, however, that any
Indemnitee shall have the right to retain its own counsel at the
Indemnitee's expense. Licensee shall keep Licensor (or, if applicable,
Biophan) informed of the progress in the defense and disposition of any
Claim and shall consult with Licensor (or, if applicable, Biophan) with
regard to any proposed settlement. Licensee shall obtain the written
consent of Licensor (or, if applicable, Biophan) to any settlement which
would adversely affect Licensor (or, if applicable, Biophan).
9.3 Insurance. If any Licensee manufactures, sells or performs a
Licensed Product/Process, it shall maintain in full force and effect at
all times with a reputable commercial insurance carrier commercial general
liability insurance of a type as may be necessary to protect their
interests and fulfill its obligations under this Agreement (and, if
applicable, under its Sublicense), including without limitation
contractual liability insurance, covering the marketing, sale,
distribution, use and performance of Licensed Products/Process in an
amount of at least Five Million Dollars ($5,000,000) per occurrence and
Ten Million Dollars ($10,000,000) in the aggregate. Such insurance (i)
shall be issued by an insurer licensed to practice in, as to Biophan, the
State of New York and otherwise in the State(s) in which Licensee
undertakes activities in connection with the exercise of its rights, or an
insurer pre-approved by Licensor (or Biophan, if applicable), such
approval not to be unreasonably withheld, (ii) shall be endorsed to
include product liability coverage, and (iii) shall require thirty (30)
days' written notice to Licensor (or Biophan, if applicable) before any
cancellation or material change. Licensee shall, upon request, provide
Licensor (or Biophan, if applicable) with Certificates of Insurance and
the underlying policy(ies) evidencing compliance with this Section 9.3.
Biophan and each such Licensee shall maintain such insurance five (5)
years after termination of this Agreement or any Sublicense, whichever
occurs last.
10. CONFIDENTIALITY.
10.1 Confidential Information. During and for three (3) years after
the Term, Receiver will use commercially reasonable efforts, but no less
than the protection given to its own confidential information, to maintain
in confidence all Confidential Information. Receiver will only disclose
the Confidential Information to individuals who reasonably need to know
such Information for Receiver to perform its obligations or otherwise
conduct its activities hereunder, including Receiver's legal, financial
and business advisors.
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10.2 Use of Name. No party may at any time use the name or variant
thereof of another party without the prior written consent of other party,
which consent will not be unreasonably delayed or withheld.
Notwithstanding the foregoing, Biophan may state that the Patent Rights
are licensed from Licensor.
11. TERMINATION.
11.1 Termination by Licensor. Licensor may terminate this Agreement
and the rights granted to Biophan hereunder upon the happening of any of
the following events:
(i) Biophan breaches any material provision of this Agreement and
has not cured such breach within thirty (30) days after notice from
Licensor specifying the nature of such breach or default in reasonable
detail;
(ii) Biophan generally ceases to conduct its business as it has
generally conducted such business; or
(iii) a bankruptcy petition is filed by or against Biophan, Biophan
enters into creditor's arrangement or comparable proceeding, or a receiver
is appointed for substantially all of the assets or business of Biophan,
and such petition, proceeding, or appointment is not dismissed or vacated
within ninety (90) days from the date of such filing, proceeding, or
appointment.
11.2 Termination by Biophan. Biophan may terminate this Agreement:
(i) without cause on thirty (30) days' written notice to Licensor
but only by payment simultaneous with such termination of the Termination
Payment (as defined below), and following such termination, Biophan will
remain liable for, without limitation, all payments due Licensor before
the end of the 30-day notice period; or
(ii) if Licensor breaches any material provision of this Agreement
and has not cured the breach within thirty (30) days after notice
specifying the nature of the breach in reasonable detail.
"Termination Payment" means (a) at any time prior to the end of the second
year of the Term, as a lump-sum payment, the balance of any payments due
under Section 3.2 for the second year of the Term determined as if the
Agreement had not been terminated; (b) at any time following the end of
the second year of the Term where Biophan has satisfied its obligations
under Section 3.2 with respect to the second year of the Term and to the
extent due as of the notice of termination, any payments under Section 3.2
with respect to the third year or fourth year of the Term, as a lump-sum
payment, fifty percent (50%) of the balance of any payments due under
Section 3.2 for the third year or fourth year of the Term, whichever is
the year of termination, determined as if the Agreement had not been
terminated; and (c) after the fourth year of the Term, zero.
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11.3 Bankruptcy. All rights and licenses granted under or pursuant
to this Agreement by Licensor to Licensee are, for all purposes of Section
365(n) of Title 11 of the United States Code ("Title 11") or other
relevant bankruptcy or insolvency law (collectively, "Law"), licenses of
rights to "intellectual property" as defined in Title 11 or such other
Law. During the Term Licensor shall, to the extent practicable, create and
maintain current copies of all such intellectual property. If a bankruptcy
proceeding is commenced by or against Licensor under Title 11 or other
Law, Licensee shall be entitled to a copy of any and all such intellectual
property and all embodiments of such intellectual property, and the same,
if not in the possession of Licensee, shall be promptly delivered to it
(a) upon Licensee's written request following the commencement of such
bankruptcy proceeding, unless Licensor or its respective trustee or
receiver, elects within thirty (30) days to continue to perform all of its
obligations under this Agreement, or (b) if not delivered as provided
under clause (a) above, upon Licensee's request following the rejection of
this Agreement by or on behalf of Licensor. If Licensee has taken
possession of all applicable embodiments of the intellectual property of
Licensor pursuant to this Section 11.3 and the trustee in bankruptcy of
Licensor does not reject this Agreement, Licensee shall return such
embodiments upon request. If Licensor seeks or involuntarily is placed
under Title 11 or other provision under comparable Law and the trustee
rejects this Agreement as contemplated under 11 U.S.C. 365(n)(1) or other
comparable Law, Licensee hereby elects, pursuant to Section 365(n) or
other comparable Law, to retain all rights granted to Licensee under this
Agreement to the extent permitted by law.
11.4 Effect of Termination. Upon termination of this Agreement for
any reason, nothing herein will be construed to release any party from any
obligation that matured prior to the effective date of the termination.
Subject to the foregoing, Sections 3 (but only as to Sublicenses then
outstanding), 5 (but for no longer than the period provided in Section
5.2), and 9 through 14 will survive any such termination. Licensee may,
however, after the effective date of such termination, sell all Licensed
Products then in existence, and complete Licensed Products in the process
of manufacture at the time of such termination and sell the same, provided
Licensee makes the payments and delivers the reports to Licensor as
required by this Agreement. Upon termination, Biophan will assign its
rights under all Sublicenses to Licensor, and Licensor shall assume
Biophan's rights and obligations under the Sublicenses.
11.5 Return of Information. Upon termination of this Agreement,
Receiver will return all information (including Confidential Information)
and other material supplied to Receiver directly or indirectly by
Discloser, including all copies thereof in whole or in part made by or on
behalf of Receiver, except that Receiver may keep one archival copy of
such materials.
12. NOTICES.
Any notices required or permitted by this Agreement shall be in
writing, and personally delivered or sent by prepaid express courier
service (signature required). Notices shall be effective upon receipt.
Notices shall be sent to the addresses of the parties specified on the
first page of this Agreement or such other address as changed by notice.
In the event of notice to Licensor, a copy shall be provided in like
manner to: Xxxxxxx Xxxxxxxxx, Esq., Xxxxxx Breed Xxxx & Xxxxxxx, PC, 000
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
11
13. GENERAL COMPLIANCE WITH LAWS.
13.1 Compliance with Laws. Licensee shall comply with all local,
state, federal, and international laws and regulations relating to its
performance under this Agreement and, as applicable, its performance under
any Sublicense to which it is at any time a party, including but not
limited to the development, manufacture, use, and sale of any Licensed
Product/Process, including export control laws. Without limiting the
generality of this Section 13.1, Licensee shall be responsible for the
preparation and submission of all applications relating to any required
regulatory approval of any Licensed Product/Process, whether by the FDA or
other regulatory body.
13.2 Marking of Products. Licensee shall xxxx all of its Licensed
Products that are manufactured or sold under this Agreement with the
number of each applicable patent of the Patent Rights that applies to the
Licensed Products. Licensee shall annually provide Licensor with notice of
compliance with this Section 13.2.
14. MISCELLANEOUS.
14.1 Entire Agreement. This Agreement contains the entire agreement
of the parties with respect to its subject matter, and supersedes all
previous negotiations, agreements and commitments with respect thereto,
written or oral. It may be changed only by a writing signed by the party
or parties against whom enforcement of any waiver, modification, extension
or discharge is sought. Neither party may assign its rights or obligations
hereunder without the prior written consent of the other, and this
Agreement is binding upon the parties and their representatives,
successors, and permitted assigns.
14.2 Counterparts. This Agreement may be signed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
14.3 Headings. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
14.4 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, without reference to
principles of conflict of laws thereof. No provision of this Agreement
will be applied or construed in a manner inconsistent with applicable
federal laws and regulations. Courts located in the County of Monroe,
State of New York and Boston, Massachusetts shall each have non-exclusive
jurisdiction over claims or disputes involving this Agreement, and the
parties consent to the irrevocable exclusive jurisdiction of the state and
federal courts located in both locations. Licensor agrees that service of
process may be made upon it by delivering any pleadings or other documents
to Licensor's counsel as specified in Section 12. If such service is made,
Licensor shall not assert that it has not been adequately served and will
not raise any related defense or other objection with respect thereto.
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement through
their duly authorized representatives.
aMRIs Patente GmbH Biophan Technologies, Inc.
BY: __________________________ BY: __________________________
Xx. Xxxxxxx Xxxxxx Xxxx Xxxxxxx
Per power-of-attorney granted by Per power-of-attorney granted by the
Geschaftsfuhrer of aMRIs Patente GmbH CEO of Biophan Technologies, Inc.
Xx. Xxxxxxx Xxxxxx ("Xxxxxx") and Xx. Xxxxxxx Xxxxxx ("Xxxxxx"), both of whom
control Licensor, hereby agree from and after the Effective Date to execute such
documents and perform such acts as are necessary or desirable to effect the full
intent and purposes of this Agreement, including Section 3.8, and agree not to
do anything inconsistent with effecting such intent and purposes. Without
limiting the foregoing, if any Patent Right(s) is(are) not licensable by
Licensor to Biophan and its Affiliates because the transfer of any Patent
Right(s) to Licensor was not legally valid, Xxxxxx and Xxxxxx, on behalf of
themselves and any entity either or both own or control, including without
limitation "Xx. Xxxxxxx Xxxxxx Patenthalte GbR", herewith license the Patent
Right(s) to Biophan and its Affiliates on the applicable terms set forth in this
Agreement.
------------------------------ ------------------------------
Xx. Xxxxxxx Xxxxxx Xx. Xxxxxxx Xxxxxx
AMR is a party to this Agreement for the purposes of Sections 6.3 and 8.3. AMR
agrees to (1) the applicable terms and conditions of Sections 6.3 and 8.3, and
(2) execute such documents and perform such acts as Biophan may request to
effect the intent and purposes of those Sections.
aMRIs GmbH
BY: __________________________
ITS: Geschaftsfuhrer
13
EXHIBIT A
Patent Rights
[***]
Applicant Inventors Assignment Assignment Assignment Registered
Inventors to to Xxxxxx GBR GBR to AMP Owner
--------
[***] [***] [***] [***]
[***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***]
[***] [***]
[***]
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
[***]
Applicant Inventor Assignment Assignment Assignment Registered
Inventors to to Xxxxxx GBR GBR to AMP Owner
--------
[***] [***] [***]
[***]
[***]
[***]
[***]
[***]
[***] [***]
[***] [***]
[***] [***]
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
[***]
Applicant Inventor Assignment Assignment Assignment Assignment Registered
Inventor to Siemens to Xxxxxx GBR to Owner
Siemens GBR AMP
[***] [***] [***] [***]
[***] [***] [***]
* Per Xx. Xxxxxx.
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
[***]
Applicant Inventor Assignment Assignment Assignment Assignment Registered
Inventor to Siemens to Xxxxxx GBR to Owner
-------- GBR AMP
[***] [***] [***] [***] [***]
[***]
* Per Xx. Xxxxxx.
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
[***]
Applicant Inventor Assignment Assignment Assignment Registered
Inventor to to Xxxxxx GBR to Owner
-------- GBR AMP
[***] [***] [***]
[***] [***] [***] [***]
* Per Xx. Xxxxxx.
[***]
Applicant Inventor Assignment Assignment Assignment Registered
Inventor to to Xxxxxx GBR to Owner
Siemens GBR AMP
--------
[***] [***] [***]
* Per Xx. Xxxxxx.
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
[***]
Applicant Inventor Assignment Assignment Assignment Registered
Inventors to to Xxxxxx GBR to Owner
-------- GBR AMP
[***] [***] [***]
[***]
[***] [***]
[***]
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
EXHIBIT B
Share Terms, Conditions, Restrictions, and Benefits
EXHIBIT B
Share Terms, Conditions, Restrictions and Benefits
1. Definitions. In addition to capitalized terms that are defined in
context, the following terms shall have the meanings set forth below.
1.1 Biophan Shares. "Biophan Shares" shall mean the Shares and any
other securities of Biophan issued in exchange for the Shares, as a
dividend on the Shares or in connection with a stock split or other
reorganization transaction affecting the Shares.
1.2 Exchange Act. "Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
1.2 Holders. "Holders" shall mean Licensor and any person to whom
Biophan Shares are transferred in accordance with the terms of this
Exhibit B.
1.3 Securities Act. "Securities Act" means the United States
Securities Act of 1933, as amended.
2. Representations of Holders. Each Holder represents and warrants
to Biophan that:
2.1 Such Holder has received all the information it considers
necessary or appropriate for deciding whether to acquire the Biophan
Shares. Such Holder has had an opportunity to ask questions and receive
full answers from Biophan concerning, among other things, Biophan, its
financial condition, its management, its prior activities and any other
information which such Holder considers relevant or appropriate in
connection with making an investment in the Biophan Shares.
2.2 Such Holder acknowledges that Biophan Shares may be
characterized as "restricted securities" under U.S. federal securities
laws inasmuch as they are being acquired from Biophan in a transaction not
involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act, only in certain limited circumstances. Such Holder accepts
and is able to bear the risks of holding Biophan Shares indefinitely. Such
Holder, together with any advisors of such Holder, is capable of assessing
the risks of an investment in Biophan Shares and is fully aware of the
economic risks thereof.
2.3 Such Holder is acquiring Biophan Shares for investment for such
Holder's own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and such Holder has no
present intention of selling, granting any participation in, or otherwise
distributing the same. Such Holder does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
grant participations to any person with respect to any of Biophan Shares.
Such Holder has not been organized for the purpose of acquiring the
Biophan Shares.
2.4 Such Holder is not a United States resident and/or a United
States citizen (and at the time such Holder made a decision to acquire
Biophan Shares, such Holder was outside of the United States (including
its territories and possessions, any of the several States of the United
States and the District of Columbia), and such Holder has satisfied itself
as to the full observance of the laws of any jurisdiction applicable to
such Holder in connection with the purchase of Biophan Shares. Such
Holder's investment in and such Holder's continued beneficial ownership
of, Biophan Shares will not cause such Holder to violate any applicable
securities or other laws of any jurisdiction applicable to such Holder.
2.5 Such Holder's residence is outside the United States (including
its territories and possessions, any of the several States of the United
States and the District of Columbia), and such Holder is not a U.S. Person
as defined in Rule 902(k) of Regulation S under the Securities Act. Such
Holder has not taken any actions that would cause the offer and sale of
Biophan Shares to such Holder not to be made in an offshore transaction
(as defined in Rule 902(h) of Regulation S), no directed selling efforts
(as defined in Rule 902(c) of Regulation S) were made by such Holder in
the United States, and such Holder is not acquiring Biophan Shares for the
account or benefit of any U.S. Person. Such Holder understands and
acknowledges that Biophan Shares may be issued in a transaction not
subject to registration under the Securities Act by virtue of Regulation S
promulgated under the Securities Act.
3. Representations of Biophan. Biophan represents and warrants to
each Holder that:
3.1. Capitalization. Biophan's authorized capital stock consists of
125,000,000 shares of common stock, $.005 par value per share ("Buyer
Common Stock"), of which 74,017,832 shares were issued and outstanding as
of January 13, 2005. Biophan's stock option plan provides for the granting
of options to Biophan's employees, directors, consultants and advisors, to
purchase an aggregate of up to 13,000,000 shares of Buyer Common Stock. As
of February 29, 2004, Biophan had outstanding options and warrants to
purchase an aggregate of 7,800,529 shares of Buyer Common Stock. Except
for shares of Buyer Common Stock described in this Section 3.1 or issued
after January 13, 2005, options and warrants described in this Section 3.1
or granted after February 29, 2004, as of the date of this Agreement (i)
there are no outstanding subscriptions, options, conversion rights,
warrants, or other agreements or commitments of any nature whatsoever
(either firm or conditional) obligating Biophan to issue, deliver, sell,
or cause to be issued, delivered, or sold, any Biophan Common Stock or any
additional shares or other equity interests in Biophan or obligating
Biophan to grant, extend, or enter into any such agreement or commitment,
and (ii) there are no rights of first refusal, pre-emptive rights, or
other similar agreements obligating Biophan to offer Biophan Shares or any
other shares of Biophan's share capital to any person.
2
3.2. Duly Issued Shares. The Shares have been duly authorized and
when issued in accordance with this Agreement will be validly issued,
fully paid and non-assessable.
3.3 Securities Laws. Biophan has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy
any securities of Biophan which would subject the offer, issuance or sale
of the Shares, as contemplated by this Agreement, to the registration
provisions of Section 5 of the Securities Act. Neither Biophan nor any of
its affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Securities Act) which will be integrated
with the sale of the Shares in a manner that would require the
registration of the Shares under the Securities Act, or (ii) engaged in
any form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) in connection with the
offering of the Shares. Subject to the accuracy of the representations and
warranties contained in Section 2, the issuance of the Shares hereunder is
exempt from the registration and prospectus delivery requirements of the
Securities Act.
3.4 SEC Filings. Since January 1, 2003, Buyer has filed all reports
(collectively, the "SEC Reports") required to be filed by it with the
Securities and Exchange Commission by the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The SEC Reports: (i) were prepared in
accordance with the requirements of the Exchange Act in all material
respect s, and (i) as of their respective dates, did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
4. Covenants of Holders. Each Holder covenants and agrees as
follows:
4.1 Each Holder acknowledges and understands that Biophan Shares are
"restricted securities" as defined in Rule 144 promulgated under the
Securities Act. Each Holder hereby agrees not to offer or sell (as such
terms are defined in the Securities Act and the rules and regulations
promulgated thereunder) any Biophan Shares unless such offer or sale is
made (i) pursuant to an effective registration of Biophan Shares under the
Securities Act and/or applicable state securities laws, (ii) pursuant to
an available exemption from the registration requirements of the
Securities Act and/or applicable state securities laws, or (iii) in
accordance with Regulation S promulgated under the Securities Act. Each
Holder agrees that it will not engage in hedging transactions with regard
to Biophan Shares other than in compliance with the Securities Act and the
rules promulgated thereunder. Each certificate representing Biophan Shares
shall contain the following legend:
3
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES LAWS. THESE SHARES MAY NOT BE OFFERED OR SOLD UNLESS
SUCH OFFER OR SALE IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION OF
THESE SHARES UNDER THE SECURITIES ACT AND/OR APPLICABLE STATE SECURITIES
LAWS, (ii) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND/OR STATE SECURITIES LAWS, OR (iii)
IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE SECURITIES ACT.
HEDGING TRANSACTIONS INVOLVING THESE SHARES MAY NOT BE CONDUCTED EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT AND THE RULES PROMULGATED THEREUNDER.
4.2 If at any time or from time to time after the sale of any
Biophan Shares has been registered under the Securities Act, Biophan
notifies the Holders in writing that the registration statement or the
prospectus forming a part thereof (taking into account any prior
amendments or supplements thereto) pursuant to which the sale of such
Biophan Shares was registered contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, the Holders shall not offer or sell any Biophan Shares or
engage in any other transaction involving or relating to Biophan Shares,
from the time of the giving of notice with respect to such untrue
statement or omission until the Holders receive written notice from
Biophan that such untrue statement or omission no longer exists or has
been corrected or disclosed in an effective post-effective amendment to
such registration statement or a valid prospectus supplement to the
prospectus forming a part thereof.
4.3 In connection with any sale of Biophan Shares registered under
the Securities Act, the Holders shall (i) deliver to the purchaser thereof
the prospectus forming a part of the applicable registration statement and
all relevant supplements thereto which have been provided by Biophan to
the Holders on or prior to the applicable delivery date, all in accordance
with the requirements of the Securities Act and the rules and regulations
promulgated thereunder and any applicable blue sky laws, and (ii) with the
provisions of Regulation M promulgated under the Exchange Act.
4.4 Biophan may refuse to register (or permit its transfer agent to
register) any transfer of any Biophan Shares not made in accordance with
this Section 4 and for such purpose may place stop order instructions with
its transfer agent with respect to Biophan Shares. Any transfer of Biophan
Shares other than in connection with an offer or sale registered under the
Securities Act will require the Holder to deliver an opinion in a form
reasonably acceptable to Biophan from counsel reasonably acceptable to
Biophan that the offer or sale of Biophan Shares is exempt from
registration under the Securities Act or complies with the requirements of
Regulation S promulgated under the Securities Act.
4
4.5 The Holders will cooperate with Biophan in all respects in
connection with the performance by Biophan of its obligations under
Section 5, including timely supplying all information reasonably requested
by Biophan (which shall include all information regarding the Holders, and
any person who beneficially owns Biophan Shares held by the Holders within
the meaning of Rule 13d-3 promulgated under the Exchange Act, and the
proposed manner of sale of Biophan Shares required to be disclosed in any
registration statement in which any Biophan Shares are included) and
executing and returning all documents reasonably requested in connection
with the registration and sale of Biophan Shares. Each Holder hereby
consents to be named as an underwriter in each registration statement in
which such Holder's Biophan Shares are included, if applicable, in
accordance with current Commission policy and, if necessary, to join in
the request of Biophan for the acceleration of the effectiveness of such
Registration Statement.
4.6 No Holder nor any entity controlling any Holder, under such
Holder's control or under common control with such Holder has, prior to
the execution of this Agreement, and will not, for a period of eighteen
(18) months following the execution of this Agreement, carry a net short
position in the common stock of Biophan, participate in any short selling
activities, recommendations, or collusion, directly or indirectly, as such
activities relate to the common stock of Biophan. A net short position
will include any derivative instruments such as a put option, collar, swap
or any other instrument which would result in a net short position.
5. Registration of Biophan Shares.
5.1 Subject to Section 5.2, if Biophan for itself or any of its
security holders shall at any time or times after the date hereof
determine to register under the Securities Act any shares of its capital
stock or other securities (other than: (i) the registration of an offer,
sale or other disposition of securities solely to employees of, or other
persons providing services to, Biophan, or any subsidiary pursuant to an
employee or similar benefit plan; or (ii) relating to a merger,
acquisition or other transaction of the type described in Rule 145 under
the Securities Act or a comparable or successor rule, registered on Form
S-4 or similar or successor forms), on each such occasion Biophan will
notify each Holder then owning Biophan Shares of such determination at
least thirty (30) days prior to the filing of such registration statement,
and upon the request of any Holder given in writing within twenty (20)
days after the receipt of such notice, Biophan will cause any of Biophan
Shares specified by any such Holder to be included in such registration
statement to the extent such registration is permissible under the
Securities Act and subject to the conditions of the Securities Act (an
"Incidental Registration"). The Holders shall be deemed to have so-called
piggy-back registration rights by virtue of this Section 5.1 with respect
to the Shares.
5
5.2 If an Incidental Registration is an underwritten registration,
and the managing underwriters shall give written advice to Biophan that,
in their opinion, market conditions dictate that no more than a specified
maximum number of securities as to all holders thereof (the "Underwriter's
Maximum Number") could successfully be included in such Registration,
then: (i) Biophan shall be entitled to include in such registration that
number of securities which Biophan proposes to offer and sell for its own
account in such registration and which does not exceed the Underwriter's
Maximum Number; and (ii) Biophan may include in such registration that
number of securities which shall have been requested by the holders
thereof demanding such registration by proper exercise of so-called demand
registration rights, (iii) Biophan will be obligated and required to
include in such registration that number of Shares which shall have been
requested by the Holders thereof and that number of securities which have
been requested to be included by the holders thereof who are exercising
so-called piggy-back registration rights (such Shares and other securities
collectively, "Pari Passu Securities") to the full extent of the remaining
portion of the Underwriter's Maximum Number, and (iv) Biophan may
thereafter include in such registration any additional securities which
have been requested to be included by the holders thereof having no
contractual registration rights to the extent of the remaining portion of
the Underwriter's Maximum Number. If less than all of the Pari Passu
Securities requested to be included in any such registration can be so
included due to these priority requirements, then the Pari Passu
Securities so included will be allocated among the holders of Pari Passu
Securities pro rata in accordance with the number of Pari Passu Securities
sought to be included in such registration by such holders.
5.3 As used herein, the term "Registration Statement" means a
registration statement on such applicable form as determined by Biophan.
Biophan may withdraw a Registration Statement at any time whether or not
it has been declared effective and may de-register any Biophan Shares
included in a Registration Statement so long as all securities included in
the Registration Statement in which such Biophan Shares are included as
simultaneously de-registered. The Holders' rights under this Section 5
shall expire on the first anniversary of the date on which the Shares are
issued.
5.4 Biophan shall furnish to the Holders with respect to Biophan
Shares registered under a Registration Statement (and to each underwriter,
if any, of such Biophan Shares) such number of copies of prospectuses and
such other documents as the Holders may reasonably request, in order to
facilitate the public sale or other disposition of all or any of Biophan
Shares by the Holders pursuant to such Registration Statement.
5.5 Biophan shall file or cause to be filed such documents as are
required to be filed by Biophan for normal blue sky clearance in states
specified in writing by the Holders; provided, however, that Biophan shall
not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so
consented.
6
5.6 With a view to making available to the Holders the benefits of
Rule 144, Biophan agrees that so long as a Holder owns Biophan Shares
purchased pursuant to this Agreement, to:
(i) comply with the provisions of paragraph (c)(1) of Rule
144; and
(ii) file with the Commission in a timely manner all reports
and other documents required to be filed by Biophan pursuant
to Section 13 or 15(d) under the Exchange Act; and, if at any
time it is not required to file such reports but in the past
had been required to or did file such reports, it will, upon
the request of the Holders, make available other information
as required by, and so long as necessary to permit sales of
its Biophan Shares pursuant to, Rule 144.
5.7 Biophan shall bear all expenses incurred by it in connection
with the procedures in paragraphs 5.1 through 5.6 of this Section 5 and
the registration of Biophan Shares pursuant to each Registration
Statement. Biophan shall not be responsible for any expenses incurred by
any Holder in connection with its sale of Biophan Shares or its
participation in the procedures in paragraphs 5.1 through 5.6 of this
Section 5 including, without limitation, any fees and expenses of counsel
or other advisers to the Holders and any underwriting discounts, brokerage
fees and commissions incurred by the Holders.
5.8 The rights of Holders under this Section 5 are not transferable
except that Licensor may transfer its rights under this Section 5 to its
shareholders in connection with a distribution of Shares to such
shareholders; provided, such shareholders shall in connection with such
transfer make the representations and warranties of Holders and agree to
comply with the provisions of this Exhibit B applicable to Holders.
5.9 Information Available. So long as a Registration Statement is
effective covering the resale of Biophan Shares then still owned by the
Holders, Biophan will furnish to the Holders:
(a) as soon as practicable after available, copies of (i) its Annual
Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting
principles by a firm of certified public accountants), (ii) upon written
request, its Annual Report on Form 00-X xx 00-XXX, (xxx) upon written
request, its Quarterly Reports on Form 10-Q or 10-QSB, (iv) upon written
request, its Current Reports on Form 8-K, and (v) a full copy of each
Registration Statement (the foregoing, in each case, excluding exhibits);
and
(b) upon the written request of the Holders, all exhibits excluded
by the parenthetical to subparagraph (a)(v) of this Section 5.9.
6. Indemnification.
6.1. Indemnification of Biophan. Each Holder will indemnify, defend,
and hold harmless Biophan and its officers, directors, shareholders,
representatives, agents, and affiliates (collectively, "Biophan
Indemnified Parties") from, against, and in respect of all claims,
liabilities, actions, suits, proceedings, assessments, judgments, losses,
damages, costs, and expenses (including interest, penalties, and
reasonable accountants', experts', and attorneys' fees and disbursements,
whether incurred in a third party action or an action to enforce this
provision) (collectively, "Damages"), arising out of, relating to, or
resulting from (i) any inaccuracy or breach of any of the written
representations or warranties of such Holder made in this Exhibit B; or
(ii) the breach of any covenant, obligation, or agreement of such Holder
to be performed, fulfilled, or complied with pursuant to this Exhibit B.
7
6.2 Indemnification of Holders. Biophan will indemnify, defend, and
hold harmless each Holder and its officers, directors, shareholders,
representatives, agents, and affiliates (collectively, the "Holder
Indemnified Parties") from, against, and in respect of all Damages arising
out of, relating to, or resulting from (i) any inaccuracy or breach of any
of the written representations or warranties of Biophan made in this
Exhibit B; or (ii) the breach of any covenant, obligation, or agreement of
Biophan to be performed, fulfilled, or complied with pursuant to this
Exhibit B.
6.3. Legal Nature and Survival of Representations, Warranties,
Covenants and Indemnification. As used in this Exhibit B, the terms
"representation", "warranty" and the verbs "to represent" and "to warrant"
refer to separate promises of guarantee. The representations and
warranties set forth in the this Exhibit B will survive the issuance of
the Shares and any investigation at any time made by or on behalf of
Biophan or the Holders, as applicable, and will survive perpetually. The
representations and warranties of the Holders shall not be affected or
deemed waived by reason of any investigation made by or on behalf of
Biophan (including but not limited to by any of their respective advisors,
consultants or representatives) or by reason of the fact that Biophan or
any of such advisors, consultants or representatives know or should have
known that any such representation or warranty is or might be inaccurate.
6.4. Limitation on Indemnification Obligations of Holders. The
provisions of Section 6.1 shall be subject to the following provisions:
(a) In no event shall either Holder have any indemnification
obligation under Section 6.1 or otherwise in excess of the sum of 50% of
the sum of (a) US $200,000, plus (b) the portion of the Payment received
by Licensor under Section 3.8.1 of the attached License Agreement;
provided, however, the foregoing limitation shall not apply in the event
that the breach of a representation under clause (i) of Section 6.1 is
based on the conduct of a Holder which is finally determined by a final
judgment of a court of competent jurisdiction to have constituted fraud by
either Holder committed with an actual intent to deceive Biophan ("Fraud
Finding");
(b) In no event shall either Holder have any liability for
indemnification or otherwise under Section 6.1 until the total of all
Damages with respect to such indemnification matters exceeds US $25,000.00
(the "Claim Threshold"), and then only for the total amount of all Losses
in excess of the Claim Threshold; provided that the Claim Threshold will
not apply in the event of a Fraud Finding;
8
(c) Biophan agrees, for itself and each of the other Biophan
Indemnified Parties that the sole and exclusive remedy for any breach of
this Exhibit B by Holders for any Damages arising herefrom or related
hereto, including without limitation, any misrepresentation, breach of
covenant or warranty, shall be the right of indemnification as and to the
extent set forth in this Section 6, and in all events subject to all of
the limitations herein, Biophan waiving all and each other available
remedy, at law or in equity, except that any right to specific performance
and such other rights and remedies as may be available in the event of a
breach based on a Fraud Finding are hereby reserved;
(d) Biophan on behalf of itself and each of the other Biophan
Indemnified Parties, agrees that with respect to any Damages for which it,
she or he is entitled to indemnification hereunder, it shall first seek
indemnity or reimbursement, as applicable, under any policy or policies of
insurance which provides coverage against the loss that is the subject
matter of such Damages, if any, before being entitled to any recovery from
the Holders, with the Holders' indemnity obligations being limited to that
portion of the Damages which is not covered by such insurance (i.e. any
deductibles or excess exposure);
(e) the Holders' indemnification undertakings in this Section 6 are
personal to the Biophan and each of the other Biophan Indemnified Parties
as they exist as of the Effective Date and may not be enforced by any
other person; and
(f) In no instance will either of the Holders ever be liable to any
of the Biophan Indemnified Parties for consequential, special, or indirect
damages arising out of, related to, or in any way connected to this
Exhibit B.
6.5. Limitation on Indemnification Obligation of Biophan. The
provisions of Section 6.2 shall be subject to the following provisions:
(a) In no event shall Biophan have any liability for indemnification
or otherwise under Section 6.2 until the total of all Damages with respect
to such indemnification matters exceeds the Claim Threshold, and then only
for the total amount of all Losses in excess of the Claim Threshold;
provided that the Claim Threshold will not apply in the event that (1) the
breach of a representation under clause (i) of Section 6.2 is based on the
conduct of a Holder which is finally determined by a final judgment of a
court of competent jurisdiction to have constituted fraud by either Holder
committed with an actual intent to deceive Biophan ("Biophan Fraud
Finding"), or (2) the breach of a covenant under clause (ii) of Section
6.2 is based on Biophan's failure to comply with its obligations under
Section 5.1 or Section 5.2 ("Piggy-back Rights Covenants");
(b) Each Holder agrees, for itself and each of the other Holder
Indemnified Parties that the sole and exclusive remedy for any breach of
this Exhibit B by Biophan, for any Damages arising herefrom or related
hereto, including without limitation, any misrepresentation, breach of
covenant or warranty, shall be the right of indemnification as and to the
extent set forth in this Section 6, and in all events subject to all of
the limitations herein, Holders waiving all and each other available
remedy, at law or in equity, except that any right to specific performance
and such other rights and remedies as may be available to it in the event
of a breach based on a Biophan Fraud Finding are hereby reserved and any
right to specific performance is also reserved in the event of a breach of
the Piggy-back Rights Covenants;
9
(c) Each Holder, on behalf of itself and each of the other Holder
Indemnified Parties, agrees that with respect to any Damages for which it,
she or he is entitled to indemnification hereunder, it shall first seek
indemnity or reimbursement, as applicable, under any policy or policies of
insurance which provides coverage against the loss that is the subject
matter of such Damages, if any, before being entitled to any recovery from
Biophan, with Biophan's indemnity obligations being limited to that
portion of the Damages which is not covered by such insurance (i.e. any
deductibles or excess exposure);
(d) Biophan's indemnification undertakings in this Section 6 are
personal to the Holders and each of the other Holder Indemnified Parties
as they exist as of the Effective Date and may not be enforced by any
other person; and
(e) In no instance will Biophan ever be liable to any of the Holder
Indemnified Parties for consequential, special, or indirect damages
arising out of, related to, or in any way connected to this Exhibit B.
6.6. Registered Sale of Biophan Shares. For the purpose of this
Section 6.6:
(i) the term "Holders' Affiliate" shall mean any person who
controls either of the Holders within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act;
and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to a Registration Statement referred to in Section 5.
(a) Subject to the provisions of Section 6.5, Biophan agrees to
indemnify and hold harmless the Holders and each Holders' Affiliate,
against any losses, claims, damages, liabilities or expenses, joint or
several, to which such Holders or such Holders' Affiliate may become
subject, under the Securities Act, the Exchange Act, or any other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of Biophan), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in a
Registration Statement, as amended as of the date the applicable
Registration Statement is declared effective (the "Effective Date"),
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule
434 promulgated under the Securities Act, or the prospectus, in the form
first filed with the Commission pursuant to Rule 424(b) of the
Regulations, or filed as part of such Registration Statement at the time
of effectiveness if no Rule 424(b) filing is required (the "Prospectus"),
or any amendment or supplement thereto, and
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(ii) the omission or alleged omission to state in such Registration
Statement as of the applicable Effective Date a material fact required to
be stated therein or necessary to make the statements in such Registration
Statement or any post-effective amendment or supplement thereto, or in the
Prospectus or any amendment or supplement thereto, not misleading, in each
case in the light of the circumstances under which the statements
contained therein were made, and will reimburse the Holders and each such
Holders' Affiliate for any legal and other expenses as such expenses which
are reasonably incurred by the Holders or such Holders' Affiliate in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided,
however, that Biophan will not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or
is based upon (w) an untrue statement or alleged untrue statement or
omission or alleged omission made in a Registration Statement, the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to Biophan by any Holder
expressly for use therein, or (x) the failure of any Holder to comply with
the covenants and agreements contained in Section 4 of this Exhibit B
respecting the sale of Biophan Shares, or (y) the inaccuracy of any
representations made by any Holder herein or (z) any statement or omission
in any Prospectus that is corrected or disclosed in any subsequent
Prospectus that was delivered to the Holders prior to the pertinent sale
or sales by the Holders.
(b) Subject to the provisions of Section 6.4, each Holder will
indemnify and hold harmless Biophan, each of its directors, each of its
officers who signed a Registration Statement and each person, if any, who
controls Biophan within the meaning of the Securities Act and the Exchange
Act, against any losses, claims, damages, liabilities or expenses to which
Biophan, each of its directors, each of its officers who signed such
Registration Statement or controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent
of such Holder) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out
of or are based upon (i) any failure to comply with the covenants and
agreements contained in Section 4 hereof respecting the sale of Biophan
Shares, or (ii) any (x) untrue or alleged untrue statement of any material
fact contained in such Registration Statement, the Prospectus, or any
amendment or supplement thereto, or (y) omission or alleged omission to
state in such Registration Statement, the Prospectus or any amendment or
supplement thereto a material fact required to be stated therein or
necessary to make the statements in such Registration Statement or any
amendment or supplement thereto, or in the Prospectus or any amendment or
supplement thereto, not misleading, in each case in the light of the
circumstances under which they were made; provided, that such Holder's
indemnification obligation under this clause (ii) shall apply to the
extent, and only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in such
Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information
furnished to Biophan by such Holder expressly for use therein, and will
reimburse Biophan, each of its directors, each of its officers who signed
such Registration Statement or controlling person for any legal and other
expense reasonably incurred by Biophan, each of its directors, each of its
officers who signed such Registration Statement or controlling person in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action.
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(c) Promptly after receipt by an indemnified party under this
Section 6.6 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 6.6, promptly notify the
indemnifying party in writing thereof; provided, the omission so to notify
the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution (except as provided in
Section 6.6(d)) or otherwise than under the indemnity agreement contained
in this Section 6.6 or to the extent it is not prejudiced as a result of
such failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from
an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all
other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval
by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 6.6 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless the indemnified party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in which case the reasonable fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 6.6 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under
paragraphs (a) or (b) of this Section 6.6 in respect to any losses,
claims, damages, liabilities or expenses referred to herein (subject to
the limitation of Section 6.6(c)), then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses
referred to herein (i) in such proportion as is appropriate to reflect the
relative benefits received by Biophan and the Holders from the sale of
Biophan Shares as contemplated by this Exhibit B or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but the relative fault of Biophan and the
Holders in connection with the statements or omissions or inaccuracies in
the representations and warranties in this Exhibit B that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of Biophan on the
one hand and the Holders on the other shall be determined by reference to,
among other things, whether the untrue or alleged statement of a material
fact or the omission or alleged omission to state a material fact or the
inaccurate or the alleged inaccurate representation and/or warranty
relates to information supplied by Biophan or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement, omission or inaccuracy. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 6.6(c), any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth
in Section 6.6(c) with respect to the notice of the threat or commencement
of any threat or action shall apply if a claim for contribution is to be
made under this Section 6.6(d); provided, however, that no additional
notice shall be required with respect to any threat or action for which
notice has been given under Section 6.6(c) for purposes of
indemnification. Biophan and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 6.6 were determined
solely by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
paragraph. Notwithstanding the provisions of this Section 6.6, the Holders
shall not be required to contribute any amount in excess of the amount by
which the sale price of Biophan Shares sold exceeds the amount of any
damages that the Holders have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
6.7 Remedies. Each Holder, in addition to being entitled to exercise all
rights provided to it herein, be entitled to specific performance of its rights
under Section 5 but only to the extent such Holder is in compliance with such
Holder's obligations under Section 4.
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