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; (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.
*** Indicates where material is omitted pursuant to a confidential treatment
request and filed separately with the Commission.
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 [***]
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
separately 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.
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.
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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.
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.
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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
Geschaftsfuhrer of aMRIs Patente GmbH the 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
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Applicant Inventors Assignment Assignment Assignment Registered
Inventors to to Xxxxxx GBR GBR to AMP Owner
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Applicant Inventor Assignment Assignment Assignment Registered
Inventors to to Xxxxxx GBR GBR to AMP Owner
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Applicant Inventor Assignment Assignment Assignment Assignment Registered
Inventor to Siemens Siemens to Xxxxxx GBR GBR to AMP Owner
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* Per Xx. Xxxxxx.
*** Material omitted pursuant to a confidential treatment request and filed
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Applicant Inventors Assignment Assignment Assignment to Assignment GBR Registered
Inventors to Siemens Xxxxxx GBR to AMP Owner
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* Per Xx. Xxxxxx.
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Applicant Inventor Assignment Assignment to Assignment GBR to AMP Registered
Inventors to Xxxxxx GBR Owner
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Applicant Inventor Assignment Assignment Assignment GBR to AMP Registered
Inventors to to Xxxxxx GBR Owner
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* Per Xx. Xxxxxx.
*** Material omitted pursuant to a confidential treatment request and filed
separately with the Commission.
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Applicant Inventor Assignment Assignment Assignment GBR Registered
Inventors to to Xxxxxx GBR to AMP Owner
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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.
5.2 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-
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.
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.
-6-
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;
(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;
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(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;
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(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 (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.
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(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.
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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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