Exhibit 99.1
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement ("Agreement"), dated Aug 13, 2003, is
made by and between Xxxx X. Xxxxxx, an individual ("Consultant"), and Biophan
Technologies, Inc., a Nevada corporation ("Client") having its principal place
of business at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxx, Xxx Xxxx,
00000 (individually, a "Party", and, collectively, the "Parties").
WHEREAS, Client is a publicly held corporation with its common stock
trading on the Over the Counter Bulletin Board under the ticker symbol "BIPH"
and desires to further develop its business and customers; and
WHEREAS, Consultant has extensive background in the area of business
consulting and management advisory services; and
WHEREAS, Client desires to engage Consultant to provide information,
evaluation and consulting services to Client in Consultant's area of knowledge
and expertise on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration for the services Consultant provides to
Client, the Parties agree as follows:
1. Services of Consultant.
Consultant agrees to perform for Client all necessary services required in
providing general business consulting and management advisory services to
Client, as more specifically set forth in Exhibit A attached hereto. The
services to be provided by Consultant will not be in connection with the offer
or sale of securities in a capital-raising transaction and will not directly
or indirectly promote or maintain a market for Client's securities.
2. Consideration.
Client agrees to pay Consultant, as his fee and as consideration for
services provided or to be provided, an option to purchase a total of one
million shares of free trading common stock in Client under Client's Stock
Incentive Plan, exercisable as follows:
* The exercise price shall be equal to 80% of the close price of the
Client's common stock for the trading day immediately preceding
the date of the Exercise Notice (as defined in the Option
Agreement) as reported by Bloomberg Financial L.P. (based on a
trading day from 9:30 am EST to 4:00 pm EST).
* The option shall be exercised by the Consultant's delivering his
Notice of Exercise (see "Exhibit B").
* The Consultant may not exercise his option to purchase more than
250,000 shares per calendar quarter without the prior written
consent of the Client.
* Upon expiration or termination of this Agreement for any reason,
all unexercised options granted pursuant to this Agreement shall
expire.
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As soon as reasonably possible after the execution and delivery of this
Agreement, the shares underlying this option shall be registered on a Form S-8
Registration Statement filed with and declared effective by the U.S.
Securities and Exchange Commission.
3. Confidentiality.
Each Party agrees that during the course of this Agreement and for a
period of 18 months thereafter, that information that is confidential or of a
proprietary nature may be disclosed to the other Party, including, but not
limited to, product and business plans, software, technical processes and
formulas, source codes, product designs, sales, costs and other unpublished
financial information, advertising revenues, usage rates, advertising
relationships, projections, and marketing data ("Confidential Information").
Confidential Information shall not include information that the receiving
party can demonstrate (a) is, as of the time of its disclosure, or thereafter
becomes part of the public domain through a source other than the receiving
party, (b) was known to the receiving party as of the time of its disclosure,
(c) is independently developed by the receiving party, or (d) is subsequently
learned from a third party not under a confidentiality obligation to the
providing party.
4. Expenses.
Consultant shall bear his out-of-pocket costs and expenses incident to
perform the consulting services, without a right of reimbursement from the
Client unless such expenses are pre-approved in writing by the Client. The
Consultant anticipates that his expenses for the entire term of this Agreement
shall not exceed $2,000. The Client anticipates that the Consultant will make
at least one site visit to the Client's headquarters and that the Client will
pay for the reasonable business expenses incurred by the Consultant during the
site visit.
5. Indemnification.
(a) Client.
Client agrees to indemnify, defend, and hold harmless Consultant, his
attorneys and agents, and to defend any action brought against said parties
with respect to any and all claims, demands, causes of action, debts or
liabilities, including reasonable attorneys' fees, to the extent that such an
action arises out of the gross negligence or willful misconduct of Client.
(b) Consultant.
Consultant agrees to indemnify, defend, and shall hold harmless Client,
its directors, officers, employees, attorneys, and agents, and defend any
action brought against same with respect to any claim, demand, cause of
action, debt or liability, including reasonable attorneys' fees, to the extent
that such an action arises out of the gross negligence or willful misconduct
of Consultant.
(c) Notice.
In claiming any indemnification hereunder, the indemnified party shall
promptly provide the indemnifying party with written notice of any claim,
which the indemnified party believes falls within the scope of the foregoing
paragraphs. The indemnified party may, at its expense, assist in the defense
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if it so chooses, provided that the indemnifying party shall control such
defense, and all negotiations relative to the settlement of any such claim.
Any settlement intended to bind the indemnified party shall not be final
without the indemnified party's written consent, which shall not be
unreasonably withheld.
6. Limitation of Liability.
Consultant shall have no liability with respect to Consultant's
obligations under this Agreement or otherwise for consequential, exemplary,
special, incidental, or punitive damages even if Consultant has been advised
of the possibility of such damages.
Client shall have no liability with respect to Client's obligations under
this Agreement or otherwise for consequential, exemplary, special, incidental,
or punitive damages even if Client has been advised of the possibility of such
damages.
7. Representations by the Consultant. As an incentive for Client to enter
into this Agreement, Consultant hereby represent, warrants and covenants to
Client, as of the date of this agreement and at all times so long as this
Agreement remains in effect, the following:
(a) Neither Consultant nor any entity under his control 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 shares of Client, participate in any short selling activities,
recommendations, or collusion, directly or indirectly, as such activities
related to the common shares of Client. 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.
(b) Consultant has no prior existing legally binding obligations that are
in conflict with his entering into this Agreement.
(c) Consultant shall not offer or make payment of any consideration to
brokers, dealers or others for the purposes of inducing the purchase, making
of a market or recommendation for the purchase of Client's securities.
(d) Consultant has not been and is not currently the subject of an
investigation or inquiry by the Securities and Exchange Commission, the NASD,
or any state securities commission.
(e) Consultant agrees to notify Client immediately if, at any time, any of
the representations an warranties made by Consultant herein are no longer true
and correct or if a breach of any of the representations and warranties made
by Consultant herein occurs.
8. Representations by the Client. As an incentive for Consultant to enter
into this Agreement, Client hereby represents warrants and covenants to
Consultant the following:
(a) Client is not currently the subject of an investigation or inquiry by
the Securities and Exchange Commission, the NASD, or any state securities
commission.
(b) Client is in good standing in its state of incorporation.
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(c) Client has no prior existing legally binding obligations that are in
conflict with its entering into this Agreement.
9. Termination and Renewal.
(a) Term.
This Agreement shall become effective on the date appearing next to the
signatures below and shall terminate one year thereafter. Unless otherwise
agreed to in writing by Consultant and Client, this Agreement shall not
automatically be renewed beyond its Term.
(b) Termination.
Either Party may terminate this Agreement on thirty (30) calendar days'
written notice, or if prior to such action, the other Party materially
breaches any of its representations, warranties or obligations under this
Agreement. Except as may be otherwise provided in this Agreement, such breach
by either Party will result in the other Party being responsible to reimburse
the non-defaulting Party for all costs incurred directly as a result of the
breach of this Agreement, and shall be subject to such damages as may be
allowed by law, including all attorneys' fees and costs of enforcing this
Agreement.
(c) Termination and Payment.
Upon any termination or expiration of this Agreement, Client shall pay all
unpaid and outstanding fees through the effective date of termination or
expiration of this Agreement. Upon such termination, Consultant shall provide
and deliver to Client any and all outstanding services due through the
effective date of this Agreement.
10. Miscellaneous.
(a) Independent Contractor.
This Agreement establishes an "independent contractor" relationship
between Consultant and Client.
(b) Rights Cumulative; Waivers.
The rights of each of the Parties to this Agreement are cumulative. The
rights of each of the Parties hereunder shall not be capable of being waived
or varied other than by an express waiver or variation in writing. Any
failure to exercise or any delay in exercising any of such rights shall not
operate as a waiver or variation of that or any other such right. Any
defective or partial exercise of any of such rights shall not preclude any
other or further exercise of that or any other such right. No act or course
of conduct or negotiation on the part of any Party shall in any way preclude
such Party from exercising any such right or constitute a suspension or any
variation of any such right.
(c) Benefit; Successors Bound.
This Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights, and benefits hereof shall be binding upon,
and shall inure to the benefit of, the undersigned parties and their heirs,
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executors, administrators, representatives, successors, and permitted assigns.
(d) Entire Agreement.
This Agreement contains the entire agreement between the Parties with
respect to the subject matter hereof. There are no promises, agreements,
conditions, undertakings, understandings, warranties, covenants or representa-
tions, oral or written, express or implied, between them with respect to this
Agreement or the matters described in this Agreement, except as set forth in
this Agreement. Any such negotiations, promises, or understandings shall not
be used to interpret or constitute this Agreement.
(e) Assignment.
Neither this Agreement nor any other benefit to accrue hereunder shall be
assigned or transferred by either Party, either in whole or in part, without
the written consent of the other Party, and any purported assignment in
violation hereof shall be void.
(f) Amendment.
This Agreement may be amended only by an instrument in writing executed by
all the Parties hereto.
(g) Severability.
Each part of this Agreement is intended to be severable. In the event
that any provision of this Agreement is found by any court or other authority
of competent jurisdiction to be illegal or unenforceable, such provision shall
be severed or modified to the extent necessary to render it enforceable, and,
as so severed or modified, this Agreement shall continue in full force and
effect.
(h) Section Headings.
The Section headings in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
(i) Construction.
Unless the context otherwise requires, when used herein, the singular
shall be deemed to include the plural, the plural shall be deemed to include
each of the singular, and pronouns of one or no gender shall be deemed to
include the equivalent pronoun of the other or no gender.
(j) Further Assurances.
In addition to the instruments and documents to be made, executed and
delivered pursuant to this Agreement, the Parties hereto agree to make,
execute and deliver or cause to be made, executed and delivered, to the
requesting Party such other instruments and to take such other actions as the
requesting Party may reasonably require to carry out the terms of this
Agreement and the transactions contemplated hereby.
(k) Notices.
Any notice which is required or desired under this Agreement shall be
given in writing and may be sent by personal delivery or by mail (either (a)
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United States mail, postage prepaid, or (b) Federal Express or similar
generally recognized overnight carrier), addressed as follows (subject to the
right to designate a different address by notice similarly given):
To Client:
Biophan Technologies, Inc.
Attn: Xxxxxxx X. Xxxxxx, CEO
150 Xxxxxx Xxxxxx Drive, Suite 000
Xxxx Xxxxxxxxx, Xxx Xxxx 00000
To Consultant:
Xxxx X. Xxxxxx
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
(l) Governing Law.
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York without reference to its conflicts of laws rules
or principles. Each of the Parties consents to the exclusive jurisdiction of
the federal courts of the County of New York, State of New York in connection
with any dispute arising under this Agreement and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based
on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions.
(m) Consents.
The person signing this Agreement on behalf of each Party hereby
represents and warrants that he has the necessary power, consent and authority
to execute and deliver this Agreement on behalf of such Party.
(n) Survival of Provisions.
The provision(s) contained in paragraph(s) 3 of this Agreement shall
survive the termination of this Agreement.
(o) Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and have agreed to and accepted the terms herein on the date written above.
Date: August 14, 2003
Biophan Technologies, Inc.
_____________________________
BY: Xxxxxxx Xxxxxx
ITS: Chief Executive Officer
Consultant
_____________________________
Xxxx X. Xxxxxx
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EXHIBIT A
SERVICES
Consultant shall perform the following services pursuant to the terms of
this Agreement:
(1) General management consulting services, including, but not limited to:
(a) advising on corporate structure;
(b) advising on marketing;
(c) assessing & developing strategic alliances; and
(d) advising on pricing & revenue model design.
(2) Consulting on matters of the board of directors of the Company,
including, but not limited to:
(a) assisting the board of directors in developing policies and
procedures; and
(c) assisting the board of directors of the Company in mergers,
acquisitions, and other business combinations.
The above services will be further defined and delineated by the Company's
board of directors from time to time as necessary. Consultant shall not
perform any services in connection with the offer or sale of Company
securities, financings, or any services in connection with securities or which
directly or indirectly promote or maintain a market for Client's securities.
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EXHIBIT B
NOTICE OF EXERCISE OF OPTION
The undersigned hereby irrevocably elects to exercise the right, represented
by the Option Agreement dated as of ______________, 2003, to purchase
(________) shares of the common stock of Biophan Technologies, Inc, a Nevada
corporation, at a price of ____ per share and tenders herewith payment in
accordance with Section 2 of said Option Agreement.
CASH: $ = (Exercise Price x Exercise Shares)
Payment is being made by:
- enclosed check
- wire transfer
- other
Net number of Option Shares to be issued to Holder : ____________
Please deliver the stock certificate to:
Dated:
______________________________
[Name of Holder]
By: __________________________
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