Document:

Unassociated Document

PLACEMENT AGENCY AGREEMENT

 

June 8, 2011

MDB Capital Group, LLC

401 Wilshire Boulevard

Suite 1020

Santa Monica, CA 90401

Attention: Bob Clifford

 

Ladies and Gentlemen:

ZBB Energy Corporation, a Wisconsin corporation (the “Company”), proposes, subject to the terms and conditions of Stock Purchase Agreements to be entered into between the Company and the various Purchasers named therein (the “Purchase Agreements”), to issue and sell shares (the “Shares”) of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”) directly to the Purchasers, whether introduced to the Company by MDB Capital Group, LLC (“MDB”) on a best efforts basis or introduced by other registered broker-dealers or to certain officers, directors and existing stockholders of the Company  (the “Offering”). For purposes of this Agreement, “Closing” means the consummation of the purchase and sale of the Shares by the Purchasers and the Company, respectively, and “Closing Date” means the date upon which Closing occurs.

The Company hereby confirms and clarifies its agreement with MDB as follows:

	
Section 1.

	
Placement Agency Services, Compensation and Expenses.

	
  

	
(a)

	
Subject to the terms and conditions set forth herein, the Company hereby retains MDB to act as a non-exclusive  placement agent to the Company during the Contract Period (as defined in Section 1(g) below), and MDB hereby agrees to be so retained.

 

	
  

	
(b)

	
During the Contract Period (as defined in Section 1(g) below), as the non-exclusive placement agent to the Company, MDB will have the non-exclusive right to identify for the Company prospective purchasers (collectively, the “Purchasers” and each individually, a “Purchaser”) in the Offering of Shares on terms as mutually agreed to by the Company and the Purchasers (the “Securities”).

 

	
  

	
(c)

	
Terms of the Offering shall be as set forth in subscription documents, including any stock purchase agreement, escrow agreement, and/or other documents to be executed and delivered in connection with the Offering (collectively, the “Subscription Documents”).  The Shares issued in the Offering will be registered under the Securities Act of 1933, as amended (the “Securities Act”).

 

	
  

	
(d)

	
MDB will act on a best efforts basis and will have no obligation to purchase any of the Shares. During the Contract Period, MDB shall have the non-exclusive right to arrange for sales of Shares, including without limitation the non-exclusive right to identify potential buyers for the Shares.  All sales of Shares in the Offering shall be subject to the approval of the Company, which approval may be withheld in the Company’s sole discretion.

 

  

1

  

	
  

	
(e)

	
The Company shall pay MDB the following fees at the Closing:

 

	
  

	
i.

	
For all Purchasers introduced to the Offering by MDB, 6% of gross Offering proceeds received from such Purchasers.

 

	
  

	
ii.

	
For Purchasers for whom Marathon Capital Management acts as investment advisor (the “Marathon Purchasers”), 3% of gross Offering proceeds.

 

	
  

	
iii.

	
For all other Purchasers, Zero (0%) percent.

 

	
  

	
iv.

	
Reimbursement of MDB’s legal expenses in an amount up to $5,000.

 

	
  

	
v.

	
In no event shall the sum of the foregoing items, including amounts paid to another placement agent under sub-item (e)(iii) above, exceed 8% of gross Offering proceeds. The Company agrees not to pay any other person a placement fee in excess of 6% of gross Offering proceeds with respect to Purchasers introduced to the Company by such other person.

 

	
  

	
(f)

	
Except as required by law or regulation or applicable listing rules, (1) the Company shall keep confidential this Agreement and the terms of this Agreement, as well as all exhibits and attachments hereto, if any and (2) the Company shall keep confidential all information and documents provided to the Company by MDB, including, but not limited to, the identity of any potential investor, and the contents of any term sheet, solicitation, investor list, investor indication of interest, road show list, and any similar document.

 

	
  

	
(g)

	
MDB shall act as the Company’s non-exclusive placement agent under this Agreement for a period commencing on the date hereof and expiring two months from the date hereof unless terminated by either Party upon 10 days notice to the other Party (the “Contract Period”).

 

	
  

	
(h)

	
MDB will only receive compensation pursuant to this Agreement with respect to investors who have executed subscription or purchase agreements during the Contract Period, whether or not such purchases have closed within such Contract Period.

 

	
  

	
(i)

	
In accordance with the Purchase Agreement:

 

	
  

	
i.

	
The Company will deliver, or cause to be delivered, to MDB the Shares (the “DPP Shares”) to be purchased by the Marathon Purchasers and Purchasers for whom Goldberg Capital Management acts as investment advisor (the “Goldberg Purchasers”) by authorizing the release of the DPP Shares to MDB’s clearing firm via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) prior to the release of the federal funds wire to the Company for payment of such shares.

 

  

2

  

	
  

	
ii.

	
MDB will deliver, or cause to be delivered, to (1) each Marathon Purchaser and Goldberg Purchaser, such Purchaser’s DPP Shares in accordance with the instructions provided by such Purchaser on its executing broker’s account versus payment for such shares and (2) the Company, the aggregate purchase price for the DPP Shares, minus applicable fees and disbursements.

 

	
Section 2.

	
Representations and Warranties of the Company.

Each of the representations and warranties (together with any related disclosure schedules thereto) made to the Purchasers in the Purchase Agreement is hereby incorporated herein by reference (as though fully restated herein) and is hereby made to, and in favor of, MDB.

	
Section 3.

	
Covenants of the Company.

	
  

	
(a)

	
Opinion of Counsel for the Company. On the Closing Date of the Offering, MDB shall receive and the Company shall cause to be delivered to MDB the opinion of legal counsel to the Company filed as Exhibit 5.1 to the Registration Statement, dated the Closing Date, and either addressed to MDB or delivered with a reliance letter addressed to MDB. MDB shall also be entitled to rely on any legal opinion delivered to any Purchaser.

 

	
  

	
(b)

	
Accuracy of Representations and Warranties. The representations and warranties made by the Company in Section 2 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date as so qualified, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date as so qualified, and, the representations and warranties made by the Company in Section 2 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

 

	
  

	
(c)

	
NYSE Amex Listing.  The Company shall file with Amex a listing application for the Shares.

 

	
Section 4.

	
Indemnification.

The Company agrees to indemnify MDB and related persons in accordance with the indemnification agreement attached as Exhibit A, which is incorporated herein by this reference.  The provisions of Exhibit A shall survive any termination or expiration of this Agreement..

	
Section 5.

	
Representations, Warranties and Covenants of MDB

MDB hereby represents, warrants and covenants to the Company as of the date hereof, and as of the Closing Date of the Offering, as follows:

	
  

	
(a)

	
Authority; Enforceability; No Conflict.  It has full power and authority to enter into this Agreement and to perform its obligations hereunder.  This Agreement is enforceable against MDB in accordance with its terms, subject to applicable laws governing bankruptcy, insolvency and creditors’ rights generally.  The Agreement does not conflict with, violate, cause a default, right of termination, or acceleration (whether through the passage of time or otherwise) under any contract, agreement, or understanding binding upon MDB.

 

  

3

  

	
  

	
(b)

	
Regulatory Compliance. MDB has complied and will comply with Regulation M, applicable FINRA rules and regulations and any other rules and regulations setting forth restrictions on the dissemination of research reports and the activities of analysts in connection with this Offering, and is registered as a broker/dealer under the Securities Exchange Act of 1934 and a member in good standing with FINRA and any applicable state licensing authorities.

 

	
  

	
(c)

	
No Unauthorized Distribution of Materials. MDB has not distributed and will not distribute any offering material in connection with the Offering and sale of the Shares other than copies of the SEC Filings and the form of Purchase Agreement as otherwise instructed by the Company.

 

	
Section 6.

	
Representations and Indemnities to Survive Delivery.

The respective indemnities, agreements, representations, warranties and other statements of the Company or any person controlling the Company, including its officers and directors, and of MDB set forth in or made pursuant to this Agreement, including, but not limited to the indemnity agreement contained in Section 4 above, will remain in full force and effect, regardless of (i) any investigation made by or on behalf of MDB or any person controlling MDB, the Company, its directors or officers or any persons controlling the Company; and (ii) any termination of this Agreement. A successor to MDB, or to the Company, its directors or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity and reimbursement agreements contained in Sections 1 and 4 above.

	
Section 7.

	
Notices.

All communications to the parties hereto hereunder shall be in writing and shall be mailed, hand delivered or sent by facsimile, with confirmation of receipt by the intended recipient confirmed as follows:

 

If to MDB:

MDB Capital Group, LLC

401 Wilshire Boulevard

Suite 1020

Santa Monica, CA 90401

Attention: Bob Clifford

 

If to the Company:

ZBB Energy Corporation

N93 W14475 Whittaker Way

Menomonee Falls, WI 53051

Attention:  Eric Apfelbach, CEO

  

4

  

 

With a copy to (which shall not constitute notice):

K&L Gates LLP

214 North Tryon Street, 47th Floor

Charlotte, NC 28202

Attention: Mark Busch

Any party hereto may change the address for receipt of communications by giving written notice to the others.

	
Section 8.

	
Successors; Third Party Beneficiaries.

This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of their respective employees, officers and directors and controlling persons, and to their respective successors, and personal representatives, and no other person will have any right or obligation hereunder. Neither the Company nor MDB shall be entitled to assign their rights, or delegate their responsibilities, hereunder without the prior written consent of the other party hereto.

	
Section 9.

	
Partial Unenforceability.

The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

	
Section 10.

	
Governing Law Provisions.

	
  

	
(a)

	
Governing Law. This agreement shall be governed by and construed in accordance with the internal laws of the state of Wisconsin applicable to agreements made and to be performed in such state.

 

	
  

	
(b)

	
Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles (with the exception of claims to enforce the indemnity provision contained herein, which may, at the option of the party seeking relief, be submitted either to arbitration or to any court of competent jurisdiction).  The arbitration shall be administered either by FINRA Dispute Resolution pursuant to its Code of Arbitration Procedure, or if FINRA cannot or does not accept the arbitration, by JAMS pursuant to its Streamlined Arbitration Rules and Procedures.  Judgment on the Award may be entered in any court having jurisdiction.  This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.  The arbitrator may, in the Award, allocate all or part of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party.  The parties hereby agree that this Section 10 shall survive the termination and/or expiration of this Agreement.

 

  

5

  

	
Section 11.

	
Nature of Relationship.

The Parties intend that MDB’s relationship to the Company and the relationship of each director, officer, employee or agent of MDB to the Company shall be that of an independent contractor and not as an employee of the Company or an affiliate thereof.  Nothing contained in this Agreement shall constitute or be construed to be or create a partnership or joint venture between MDB and the Company or their respective successors or assigns.  Neither MDB nor any director, officer, employee or agent of MDB shall be considered to be an employee of the Company by virtue of the services provided hereunder.  MDB’s responsibility to the Company is solely contractual in nature and that MDB does not owe the Company or any other person or entity, including but not limited to its shareholders, any fiduciary or similar duty as a result of the engagement or otherwise.

	
Section 12.

	
Other Transactions; Disclaimers.

The Company acknowledges that MDB is engaged in a wide range of investing, investment banking and other activities (including investment management, corporate finance, securities issuance, trading and research and brokerage activities) from which conflicting interests or duties, or the appearance thereof, may arise.  Information held elsewhere within MDB but not accessible (absent a breach of internal procedures) to its investment banking personnel providing services to the Company will not under any circumstances affect MDB’s responsibilities to the Company hereunder.  The Company further acknowledges that MDB and its affiliates have and may continue to have investment banking, broker-dealer and other relationships with parties other than the Company pursuant to which MDB may acquire information of interest to the Company.  MDB shall have no obligation to disclose to the Company or to use for the Company’s benefit any such non-public information or other information acquired in the course of engaging in any other transaction (on MDB’s own account or otherwise) or otherwise carrying on the business of MDB.  The Company further acknowledges that from time to time MDB’s independent research department may publish research reports or other materials, the substance and/or timing of which may conflict with the views or advice of MDB’s investment banking department and/or which may have an adverse effect on the Company’s interests in connection with the transactions contemplated hereby or otherwise.  In addition, the Company acknowledges that, in the ordinary course of business, MDB may trade the securities of the Company for its own account and for the accounts of its customers, and may at any time hold a long or short position in such securities.  MDB shall nonetheless remain fully responsible for compliance with federal securities laws in connection with such activities.   It is expressly understood and agreed that MDB has not provided nor is undertaking to provide any advice to the Company relating to legal, regulatory, accounting, or tax matters.  The Company acknowledges and agrees that it has relied and will continue to rely on the advice of its own legal, tax and accounting advisors in all matters relating to any Offering contemplated hereunder.

	
Section 13.

	
General Provisions.

This Agreement constitutes the entire agreement of MDB and the Company with respect to the Offering, and supersedes all prior or contemporaneous written or oral agreements, understandings and negotiations with respect to the subject matter hereof.

This Agreement may be executed in two or more counterparts (including via facsimile or by emailed document in PDF format), each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

[The remainder of this page has been intentionally left blank. Signature page follows.]

  

6

  

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

	
Very truly yours,

	  
	
ZBB ENERGY CORPORATION

	  	  
	
By:  

	

/s/ Eric Apfelbach

	  	
Name: Eric Apfelbach

	  	
Title:   President and CEO

 

The foregoing Placement Agency Agreement is hereby confirmed and accepted by MDB as of the date first above written.

	

MDB CAPITAL GROUP, LLC

	  	  
	
By:  

	

/s/ Anthony Digiandomenico

	  	
Name: Anthony Digiandomenico

	  	
Title:   Principal

  

7

  

EXHIBIT A

MDB CAPITAL GROUP LLC

401 Wilshire Boulevard, Suite 1020

Santa Monica, California 90401

Ladies and Gentlemen:

In further consideration of the engagement by ZBB Energy Corporation (the “Company”) of MDB Capital Group LLC ("MDB") to act as the Company’s non-exclusive placement agent in connection with a potential Offering or Offerings of securities, as such engagement is described in that letter agreement between us of even date (the “Engagement Agreement”), the Company agrees to indemnify MDB and certain other persons provided for herein, as follows:

A.           Indemnification Generally.  The Company hereby agrees to indemnify and hold harmless MDB Capital, its directors, officers, agents, employees, members, affiliates, subsidiaries, counsel, and each other person or entity who controls MDB or any of its affiliates within the meaning of Section 15 of the Securities Act (collectively, the “Indemnified Parties”) to the fullest extent permitted by law from and against any and all losses, claims, damages, expenses, or liabilities (or actions in respect thereof) (“Losses”), joint or several, to which they or any of them may become subject under any statute or at common law, and to reimburse such Indemnified Parties for any reasonable legal or other expense (including but not limited to the cost of any investigation, preparation, response to third party subpoenas) incurred by them in connection with any litigation or administrative or regulatory action (“Proceeding”), whether pending or threatened, and whether or not resulting in any liability, insofar as such losses, claims, liabilities, or litigation arise out of or are based upon (1) the Offering of Company Securities contemplated by the Engagement Agreement or subsequent agreement between the Company and MDB;  (2) any untrue statement or alleged untrue statement of any material fact contained in the private placement memorandum, offering materials, registration statement, or other offering or selling document (as may be amended or supplemented and including any information incorporated therein by reference, the “Company Documentation”), or in any other written or oral communication provided by or on behalf of the Company to any actual or prospective purchaser of Securities (as that term is defined in the Engagement Agreement), unless such untrue statement or alleged untrue statement arises solely from information supplied by any members, officers, agents or employees of MDB, in writing specifically for use therein; or (3) the  omission or alleged omission to state in the Company Documentation a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the indemnity provisions herein shall not apply to (i) amounts paid in settlement of any such litigation if such settlement is effected without the consent of the Company, which consent will not be unreasonably withheld, or (ii) Losses arising from the willful misconduct or gross negligence of Indemnified Parties; and provided that the Company will not be responsible for the fees and expenses of more than one counsel to all Indemnified Parties, in addition to appropriate local counsel, unless in the reasonable judgment of any Indemnified Party there exists a potential conflict of interest which would make it inappropriate for one counsel to represent all such Indemnified Parties.

B.           Reimbursement.  The Company will reimburse all Indemnified Parties for all reasonable expenses (including, but not limited to, reasonable fees and disbursements of counsel for the Indemnified Parties) incurred by any such Indemnified Parties in connection with investigating, preparing, and defending any such action or claim, whether or not in connection with pending or threatened litigation in connection with the transaction to which an Indemnified Parties is a party, promptly as such expenses are incurred or paid (unless the Indemnified Parties request they be paid in advance pursuant to Subsection C below).

  

A-1

  

C.           Advances.  Notwithstanding any other provision hereof or any other agreement between the parties, the Company shall advance, to the extent not prohibited by law, all expenses reasonably anticipated to be incurred by or on behalf of the Indemnified Parties in connection with any Proceeding, whether pending or threatened, within fifteen (15) days of receipt of a statement or statements (“Statement(s)”) from the Indemnified Parties, or any of them, requesting such advances from time to time.  This advancement obligation shall include any refundable retainers of counsel retained by Indemnified Parties (as selected by Indemnified Parties in their sole and absolute discretion), subject to the restriction that the Company shall not be required to advance legal fees of the Indemnified Persons with respect to more than one (1) law firm that is representing the Indemnified Parties. If, due to conflict or other issues, the Indemnified Persons engage more than one law firm to represent them (or any of them), the Company’s indemnification obligations under this Schedule A shall only apply as against one law firm representing MDB or the majority of the Indemnified Parties. Any Statement requesting advances shall evidence the expenses anticipated or incurred by the Indemnified Parties with reasonable particularity and may include only those expenses reasonably expected to be incurred within the 180-day period following each Statement.  In the event some portion of the amounts advanced pursuant to this Section C are unused, or in the event a court of ultimate jurisdiction determines that the Indemnified Parties are not entitled to be indemnified against certain expenses, Indemnified Parties shall return the unused or disallowed portion of any advances within ninety (90) days of the final disposition of any Proceeding to which such advances pertain, together with interest thereon at an annual percentage rate of 6%.

D. Contribution. If such indemnification is for any reason not available or insufficient to hold an Indemnified Party harmless, the Company agrees promptly to contribute to the Losses involved in such proportion as is appropriate to reflect the relative benefits received (or anticipated to be received) by the Company, on the one hand, and by MDB, on the other hand, with respect to the Engagement or, if such allocation is determined by a court or arbitral tribunal to be unavailable, in such proportion as is appropriate to reflect other equitable considerations such as the relative fault of the Company on the one hand and of MDB on the other hand; provided, however, that, to the extent permitted by applicable law, the Indemnified Parties shall not be responsible for amounts which in the aggregate are in excess of the amount of all cash fees, exclusive of costs, actually received by MDB from the Company at the Closing in connection with the Engagement. Relative benefits to the Company, on the one hand, and to MDB, on the other hand, with respect to the Engagement shall be deemed to be in the same proportion as (i) the total value received or proposed to be received by the Company in connection with the Offering, whether or not consummated, bears to (ii) all fees received or proposed to be received by MDB in connection with the engagement. Relative fault shall be determined, in the case of Losses arising out of or based on any untrue statement or any alleged untrue statement of a material fact or omission or alleged omission to state a material fact, by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company to MDB and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

E.           No Liability Without Gross Negligence or Misconduct.  The Company agrees that no Indemnified Party shall have any liability to the Company or its respective owners, successors, heirs, parents, affiliates, security holders or creditors for any Losses, except to the extent such Losses are determined, by a final, non-appealable judgment by a court or arbitral tribunal of competent jurisdiction, to have resulted solely from such Indemnified Person’s gross negligence or willful misconduct.

F.           Notice.  MDB agrees, promptly upon receipt, to notify the Company in writing of the receipt of written notice of the commencement of any action against it or against any other Indemnified Parties, in respect of which indemnity may be sought hereunder; however, the failure so to notify the Company will not relieve it from liability under Sections A above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the Company of substantial rights or defenses.

G.           Settlement.  The Company will not, without MDB's prior written consent, settle, compromise, or consent to the entry of any judgment in or otherwise seek to terminate any pending Proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Party is a party therein) unless the Company has given MDB reasonable prior written notice thereof and such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Party from any liabilities arising out of such Proceeding.  The Company will not permit any such settlement, compromise, consent or termination to include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an Indemnified Party, without such Indemnified Party's prior written consent. No Indemnified Party seeking indemnification, reimbursement or contribution under this Agreement will, without the Company's prior written consent, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any Proceeding referred to herein.

  

A-2

  

H.           Survival; Successors.  The indemnity, contribution and expense reimbursement obligations set forth herein shall be in addition to any liability the Company may have to any Indemnified Party at common law or otherwise, and shall remain operative and in full force and effect notwithstanding the termination of this Agreement, the closing of the contemplated Offering, and any successor of MDB or any other Indemnified Parties shall be entitled to the benefit of the provisions hereof.  Prior to entering into any agreement or arrangement with respect to, or effecting, any merger, statutory exchange or other business combination or proposed sale or exchange, dividend or other distribution or liquidation of all or a significant portion of its assets in one or a series of transactions or any significant recapitalization or reclassification of its outstanding securities that does not directly or indirectly provide for the assumption of the obligations of the Company set forth herein, the Company will promptly notify MDB in writing thereof and, if requested by MDB, shall arrange in connection therewith alternative means of providing for the obligations of the Company set forth herein, including the assumption of such obligations by another party, insurance, surety bonds or the creation of an escrow, in each case in an amount and on terms and conditions reasonably satisfactory to MDB.

I.           Consent to Jurisdiction; Attorneys’ Fees.  Solely for the purpose of enforcing the Company's obligations hereunder, the Company consents to personal jurisdiction, service and venue in any court proceeding in which any claim subject to this Agreement is brought by or against any Indemnified Party other than MDB.  In any action for enforcement of this indemnity provision, the prevailing party shall be entitled to recover all costs, including reasonable attorneys’ fees, of bringing such an action.

	
ZBB ENERGY CORPORATION

	  
	
/s/  Eric Apfelbach

	
By:  Eric Apfelbach

	
Its:  President and CEO

  

A-3LICENSE AGREEMENT

 

This Patent License Agreement (“the Agreement”) is effective this 12 day of May, 2010 between:

 

Altman Enterprises, LLC (“Owner”), having an address at P.O. Box 1332, Hermitage, Pennsylvania 16148; and :

 

Premier Biomed, Inc. (“Licensee”), a Nevada corporation, having an office at: 1362 Springfield Church Rd., Jackson Center, Pa. 16133. 

 

The parties intending to be legally bound agree as follows.

 

ARTICLE 1 — GRANT OF LICENSES

 

1.1 Grant. Subject to the terms of this Agreement, Owner grants to Licensee exclusive, nontransferable licenses for:

 

	
  

	
a.

	
the Applications and the Patents; and

 

	
  

	
b.

	
the Trademarks.

 

1.2 Duration. Subject to the terms of this Agreement, all licenses granted herein:

 

a) under any Patents or Applications shall continue for the entire unexpired term of such patent or for as much of such term as the Owner has the right to grant; and

 

	
  

	
b.

	
under any Trademark shall continue in perpetuity or for as much of such term as the Owner has the right to grant, except that the license shall revert to Owner if Licensee ceases commercial use of the Trademark for a continuous period of at least one year. 

 

1.3 Scope. The licenses granted herein are licenses to:

 

	
  

	
a.

	
make, have made, use, lease, sell and import Licensed Products for the legal purposes of researching, developing, manufacturing, assembling, distributing, and selling the Licensed Products;

	
  

	
b.

	
make, have made, use and import machines, tools, materials and other instrumentalities, insofar as such machines, tools, materials and other instrumentalities are involved in or incidental to the research, development, manufacture, testing or repair of Licensed Products which are or have been made, used, leased, owned, sold or imported by the Licensee; and

	
  

	
c.

	
convey to any customer of the Licensee, with respect to any Licensed Product which is sold or leased to such customer, rights to use and resell such Licensed Product as sold or leased by Licensee (whether or not as part of a larger combination); provided, however, that no rights may be conveyed to customers with respect to any Invention which is directed to (i) a combination of such Licensed Product (as sold or leased) with any other product, (ii) a method or process which is other than the inherent use of such Licensed Product itself (as sold or leased), or (iii) a method or process involving the use of a Licensed Product to manufacture (including associated testing) any other product.

  

  

  

Licenses granted herein are solely for products in the form sold by the Licensee and are not to be construed either (i) as consent by the Owner to any act which may be performed by the Licensee, except to the extent impacted by a patent licensed herein to the Licensee, or (ii) to include licenses to contributorily infringe or induce infringement under U.S. law or a foreign equivalent thereof.

 

The grant of each license hereunder includes the right to grant sublicenses to Related Companies for so long as it remains a Related Companies. Any such sublicense may be made effective retroactively, but not prior to the effective date hereof, nor prior to the sublicensee's becoming a Related Companies.

 

1.4 Ability to Provide Licenses. Owner warrants that, upon execution hereof by him and as of the effective date hereof, there are no known commitments or restrictions which limit the licenses and rights which are purported to be granted hereunder by him.

 

1.5 Publicity. Nothing in this Agreement shall be construed as conferring upon either party or its Related Companies any right to include in advertising, packaging or other commercial activities related to a Licensed Product, any reference to the other party (or any of its Related Companies), its trade names, trademarks or service marks in a manner which would be likely to cause confusion or to indicate that such Licensed Product is in any way certified by the other party hereto or its Related Companies.

 

1.6 Good Faith. Licensee understands that this Agreement is not predicated on any specific grant of patent or trademark registration. Owner shall have no liability for a failure to pursue or obtain any specific patent or trademark. 

 

ARTICLE 2 — ROYALTY AND PAYMENTS

 

2.1 Royalty Calculation. Licensee shall pay a royalty to Owner.

 

	
  

	
a.

	
Licensee shall pay Owner a royalty of 5% of Fair Market Value of:

	
  

	
i.

	
Licensed Product that is sold, leased or put into use by the Licensee or any Related Companies in the preceding calendar quarter; and

	
  

	
ii.

	
any service performed by Licensee or any Related Companies that directly or indirectly uses Licensed Product.

	
  

	
b.

	
This License does not include a minimum annual royalty payable by Licensee to Owner.

  

  

  

2.2 Accrual. 

 

	
  

	
a.

	
Obligations to pay royalties shall survive termination of this License and the expiration of any Patent, except the accrual of royalties shall cease upon termination of this License or the expiration of the subject Intellectual Property.

	
  

	
b.

	
When a company ceases to be a Related Company of the Licensee, royalties which have accrued with respect to any products of such company, but which have not been paid, shall become payable with the Licensee's next scheduled royalty payment.

	
  

	
c.

	
Notwithstanding any other provisions, royalty shall accrue and be payable only to the extent that enforcement of the Licensee's obligation to pay such royalty would not be prohibited by applicable law.

 

2.3 Records and Adjustments.

 

	
  

	
a.

	
The Licensee shall keep full, clear and accurate records with respect to all Licensed Products and shall furnish any information which Owner may reasonably request from time to time to enable Owner to ascertain the proper royalty due on account of (a) Licensed Products sold, leased and put into use by the Licensee or any of its Related Companies, and (b) services performed by Licensee or any of its Related Companies that directly or indirectly uses Licensed Product. Owner shall have the right through its accredited auditors to make an examination, during normal business hours, of all records and accounts bearing upon the amount of royalty payable to him. Prompt adjustment shall be made to compensate for any errors or omissions disclosed by such examination.

	
  

	
b.

	
Independent of any such examination, Owner will credit to the Licensee the amount of any overpayment of royalties made in error only if Licensee identifies and fully explains in a written notice to Owner delivered within twelve (12) months after the due date of the payment which included such alleged overpayment, provided that Owner is able to verify, to its own satisfaction, the existence and extent of the overpayment.

	
  

	
c.

	
No refund, credit or other adjustment of royalty payments shall be made by Owner except as provided in this Section 2.3. Rights conferred by this Section 2.3 shall not be affected by any statement appearing on any check or other document, except to the extent that any such right is expressly waived or surrendered by a party having such right and signing such statement.

2.4 Reports and Payments.

 

	
  

	
a.

	
Within thirty (30) days after the end of each quarterly period ending on March 31st, June 30th, September 30th, or December 31st, commencing with the quarterly period during which this Agreement becomes effective, the Licensee shall furnish to Owner at the address specified by Section 7.5 a statement certified by a responsible official of the Licensee showing in a manner acceptable to Owner:

 

  

  

  

	
  

	
i.

	
all Licensed Products which were sold, leased or put into use during such quarterly period by the Licensee or any of its Related Companies, the gross sales received for the Licensed Products, and the Fair Market Values of such Licensed Products;

	
  

	
ii.

	
all services performed by Licensee or any of its Related Companies that directly or indirectly used Licensed Product, the gross sales received by the services, and the Fair Market Value of such services;

	
  

	
iii.

	
the amount of royalty payable thereon, and

	
  

	
iv.

	
if no Licensed Product has been so sold, leased or put into use or if no services have been performed, the statement shall show that fact.

	
  

	
b.

	
Within such thirty (30) days, the Licensee shall pay in United States dollars to Owner at the address specified by Section 7.5 the royalties payable in accordance with such statement. Any conversion to United States dollars shall be at the prevailing rate for bank cable transfers as quoted for the last day of such quarterly period by leading United States banks in New York City dealing in the foreign exchange market.

	
  

	
c.

	
Overdue payments hereunder shall be subject to a late payment charge calculated at an annual rate of three percent (3%) over the prime rate or successive prime rates (as posted in New York City) during delinquency. If the amount of such charge exceeds the maximum permitted by law, such charge shall be reduced to such maximum.

2.5 Intellectual Property Rights. Owner shall have no obligation to license or assign any future patents, trademarks, or trade secrets except as specifically and explicitly granted by this Agreement.

 

2.6 Return of Royalty. Except as provided by Section 2.3(b), Owner shall have no duty to return to Licensee any prior payments.

 

ARTICLE 3 – INTELLECTUAL PROPERTY PROSECUTION AND COSTS

 

3.1 Costs. Licensee shall reimburse Owner for all IP Costs incurred on behalf of Licensee. Licensee shall also be liable for pre-paid IP Costs incurred prior to the Effective Date of this Agreement, including the costs of provisional and non-provisional applications that are filed to preserve Intellectual Property. Reimbursement for pre-paid IP Costs shall occur within 12 months of the Effective Date or within 3 months of the Effective Date, whichever is greater.

 

3.2 Extension of Application. By written notice to Owner and at least ninety (90) days before the non-extendable due date for the filing of a national phase application of an Application, Licensee shall elect those countries or authorities in which it desires to file a patent application based on the Application. Intellectual Property rights in an unelected country shall revert to Owner.

  

  

  

3.3 Notice to Licensee. Before payment of any IP Cost, Owner shall notify Licensee for a time period being the lesser of (i) at least sixty (60) days before the IP Cost is due or (ii) as soon as is practicable after receiving knowledge of the IP Cost. The notice will identify (i) the Application, Patent, or Trademark, (ii) the country, (iii) the reason for the IP Cost, and (iv) the Due Date for payment. Licensee shall then affirm or deny payment. Affirmation of payment must be received by Owner within fourteen (14) days of the mailing date of the notice or the Licensee shall be deemed to have denied payment.

 

	
  

	
a.

	
If Licensee affirms a payment, Licensee shall reimburse Owner for all IP Costs arising from the payment and shall then retain its license for the Application, Patent or Trademark in that country.

	
  

	
b.

	
If Licensee denies payment, Licensee shall have no obligation to pay IP Costs associated with the Application, Patent or Trademark in that country, but the license and all associated rights for that Application, Patent or Trademark shall revert to Owner.

3.4 Reimbursement by Licensee. Licensee shall prepay Owner for any affirmed IP Cost before payment is to be made by Owner. Owner shall have no duty to pay an IP Cost for which Owner does not receive prepayment. If Licensee does not pay Owner by the Due Date, the Application, Patent or Trademark shall revert to Owner as if Licensee had denied payment under section 3.3(b).

 

3.5 Reversion of License. If a reversion occurs under this Article, the license in that country in which reversion has occurred will be terminated, and Licensee shall have no further right in the Application, Patent or Trademark for that country. The right shall revert to Owner who will then have the right to pursue protection for the reverted Application, Patent or Trademark. Owner has no further duty to Licensee for a reverted Application, Patent or Trademark. 

 

ARTICLE 4 – TRADEMARK 

 

4.1 Use of Trademark. Licensee shall prominently use the Trademark on Licensed Products. 

 

4.2 Owner Approval. In order to protect and preserve Owner’s rights in the Trademarks, Licensee understands, acknowledges, and agrees that (i) prior to the first date of Licensee's use of the Trademarks in connection with Licensed Product, Licensee shall obtain Owner’s approval of all aspects of such use; and (ii) once Licensee's use of the Trademarks in connection with the Licensed Products is initially approved by Owner, any subsequent alteration, modification, or change in such use must be reviewed and approved by Owner prior to implementation of such alteration, modification, or change.

 

4.3 Trademark Format. Owner retains the right to specify, from time to time, the format in which Licensee shall use and display the Trademarks, and Licensee shall only use or display the Trademarks in a format approved by Owner.

  

  

  

4.4 Proper Notice and Acknowledgment. Every use of the Trademarks by Licensee shall incorporate in an appropriate manner the legal status of the Trademarks, that is, a superscript “TM” for unregistered marks and an "R" enclosed by a circle or the phrase "Reg. U.S. Pat. & Tm Off." for registered marks.

 

4.5 Impairment of Owner's Rights. Licensee shall not at any time, whether during or after the term of this Agreement, do or cause to be done any act or thing challenging, contesting, impairing, invalidating, or tending to impair or invalidate any of Owner's rights in the Trademarks or any registrations derived from such rights.

 

4.6 Owner's Rights and Remedies. Licensee acknowledges and agrees that Owner has, shall retain, and may exercise, both during the term of this Agreement and thereafter, all rights and remedies available to Owner, whether derived from this Agreement, from statute, or otherwise, as a result of or in connection with Licensee's breach of this Agreement, misuse of the Trademarks, or any other use of the Trademarks by Licensee which is not expressly permitted by this Agreement.

 

4.7 Owner’s Right to Inspect. Owner shall have the right to inspect, upon reasonable notice, the use of the Trademarks by the Licensee and the quality and type of goods on which Licensee uses the Trademarks. Owner may, at its sole discretion, require Licensee to remove the mark from the goods.

 

ARTICLE 5 – INDEMNIFICATION,VALIDITY, AND INSURANCE

 

5.1 Validity. Licensee agrees that the Patents are valid and enforceable.

 

5.2 Enforceability. Licensee and its Related Companies shall take no action, directly or indirectly, that challenges, contests, impairs, invalidates, or tends to impair or invalidate any of Owner's rights in the Patents.

 

5.3 Indemnification. Licensee shall indemnify and hold harmless Owner, and its Member(s), officers, directors, managers, owners, employees, medical and professional staff, agents, successors, and assigns (“Indemnitee(s)”) to the fullest extent permitted by law in any Lawsuit by Licensee, Related Companies, or a third party (or third parties). Indemnification shall include any and all Litigation Costs. Licensee shall pay the Litigation Costs in advance of the final disposition of such action, suit, or proceeding, in accordance with Section 5.4 herein. Licensee shall require its sublicensees to indemnify, and hold harmless Owner and all Indemnitee(s) under the same terms as stated in this Article 5. Owner and its Member(s), officers, directors, managers, owners, employees, medical and professional staff, agents, successors, and assigns shall not be liable for any indirect, special, consequential, or other damages whatsoever, whether grounded in tort (including negligence), strict liability, contract or otherwise. Owner and all Indemnitees shall not have any responsibilities or liabilities whatsoever with respect to Licensed Product(s).

 

5.4 Payment of Litigation Costs. Litigation Costs shall be paid by Licensee promptly, in advance of the final disposition of any Lawsuit, and in any event within thirty (30) days, upon the written request of Owner, or any Indemnitee. In the event Litigation Costs include a court ordered payment, Owner can submit the court order to Licensee and Licensee shall pay the court ordered payment to Owner.

  

  

  

5.5 Insurance Coverage. 

 

a) Beginning at the time and in each country where the Licensed Product or

 

Intellectual Property, or any modification thereof, process, or any service relating to, or developed pursuant to, this Agreement, is being clinically tested with human subjects, administered to humans, manufactured, or commercially distributed or sold, whichever comes first, by Licensee, an affiliate or agent of Licensee, or by a sublicensee, Licensee shall, at its sole cost and expense, procure and maintain in effect a policy or policies of comprehensive general liability insurance and shall name Owner and each of its Member(s), officers, directors, managers, owners, employees, professional staff, agents, successors, and assigns as additional insured parties. Such comprehensive general liability insurance shall provide minimum comprehensive general liability coverage in amounts not less than ten million dollars ($10,000,000) per incident and ten million dollars ($10,000,000) annual aggregate for death, personal injury, bodily injury, illness or property damage. Further, coverage shall protect at least against acts of Licensee’s employees and officers; injuries to the public resulting from faulty products or services; contractual agreements under which liability of others is assumed; comprehensive general liability; and broad form contractual liability coverage for Licensee's indemnification obligations under Article 5 of this Agreement. Such insurance shall be written to cover claims incurred, discovered, manifested, or made during or after the expiration of this Agreement and shall be placed with carriers with ratings of at least A- as rated by A.M. Best. The minimum amounts of insurance coverage required shall not be construed to create a limit of Licensee’s liability with respect to its indemnification under this Agreement.

 

	
  

	
b.

	
Licensee shall provide Owner with written evidence of such insurance and related endorsements upon request of Owner. Licensee shall provide Owner with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if Licensee does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, Owner shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period without notice or any additional waiting periods.

 

	
  

	
c.

	
Licensee shall maintain such comprehensive general liability insurance and products liability insurance beyond the expiration or termination of this Agreement during the period that any Licensed Product is being commercially distributed or sold by Licensee, an affiliate or agent of Licensee, or by a sublicensee and a reasonable period after the period referred to above, which in no event shall be less than fifteen (15) years.

  

  

  

ARTICLE 6 — TERMINATION AND LEGAL FEES

 

6.1 Breach. In the event of a breach of this Agreement by either party, the other party may, in addition to any other remedies that it may have, at any time terminate all licenses and rights granted by it hereunder by not less than one (1) month’s written notice specifying such breach, unless within the period of such notice all breaches specified therein shall have been remedied. The failure of a party to notify a breaching party shall not be considered a waiver.

 

6.2 Insolvency or Dissolution. Owner, at its sole discretion, may terminate this Agreement if:

 

	
  

	
a.

	
Licensee becomes insolvent, declares bankruptcy, has a petition in bankruptcy filed for or against it, or fails to make any payment required by this Agreement within thirty (30) days of its due date;

	
  

	
b.

	
Licensee dissolves or attempts to dissolve either voluntarily or involuntarily;

	
  

	
c.

	
Licensee becomes a wholly owned subsidiary of another business entity and Owner’s written consent is not first obtained;

	
  

	
d.

	
Licensee has a corporate merger with another business entity and Owner’s written consent is not first obtained; or

	
  

	
e.

	
There is a liquidation, dissolution, or winding up of Licensee. A reorganization or other consolidation, or merger of Licensee with or into another Corporation or entity shall be deemed to be a liquidation, dissolution or winding up of Licensee and this license Agreement will terminate if the prior written consent of Owner has not been obtained.

6.3 Stock. Owner may terminate this Agreement if Licensee devalues or attempts to devalue the stock, including any class of stock, or any stock options, or warrants (collectively, the “Stock”) that is ever, or was ever, issued by Licensee to Owner, or any of Owner’s Member(s). Devalue means (a) cancelling the Stock, (b) impairing the right to sell or leverage the Stock, or (c) implementing a reverse split of Licensee’s common shares or any other class of Licensee’s stock, if Owner has not provided its written consent. Further, until six (6) months from the effective date of this Agreement, no share of capital stock of Licensee, option or warrant for any such share, right to subscribe to or purchase any such share, or security convertible into, or exchangeable or exercisable for, any such share, shall be issued or sold by the Licensee, with the exception of Licensee corporate transactions with respect to which written consent has been received from Owner; and nonperformance of this covenant by Licensee will be a material breach of this Agreement. 

  

  

  

6.4 Effect of Termination. Upon any termination of this Agreement:

 

	
  

	
a.

	
all rights shall immediately revert to Owner free of any lien, security interest, or other encumbrance;

	
  

	
b.

	
Licensee may, for up to 60 days continue to sell and offer for sale its remaining inventory of Licensed Products, and on the 61st day destroy or offer for sale to Owner such remaining inventory;

	
  

	
c.

	
Licensee shall pay royalties per Article 2, and shall pay all royalties within 90 days of the termination date;

	
  

	
d.

	
Licensee shall provide Owner with all copies of research data, records, notes, memorandum, and reports that were obtained from research or development efforts arising from the Applications, Patents, Intellectual Property, or Licensed Product.

 

6.5 Dispute Costs. In the event of a dispute between Owner, or any of its Member(s), and Licensee, Licensee shall pay any and all costs and expenses arising from the dispute. Dispute costs can include, but are not limited to, attorneys’ fees and costs, prosecution fees, travel expenses, court costs, fines, penalties, expert witness fees, and any settlement. Such costs and expenses shall be paid by Licensee promptly, in advance of the final disposition of such dispute, and in any event within thirty (30) days, upon the written request of Owner or any of Owner’s Member(s).

 

6.6 Public Company. Owner has the option of terminating this Agreement if Licensee’s stock is not publically traded on the open market on a financial exchange by October 30, 2011 and/or does not continue to be publicly traded on the open market on a financial exchange as of October 30, 2011. This termination option shall survive for so long as this condition persists.

 

6.7 Duty of Diligence. Licensee shall exercise reasonable diligence to affect the introduction of Licensed Products into the commercial market. Licensee further agrees to ensure proper, safe, fair, lawful and reasonable development and exploitation of the commercial market for Licensed Products. Failure of Licensee to materially comply with the provisions of this paragraph shall be considered a material breach of this Agreement.

 

6.8 Premier Biomed, Inc. Litigation. Should Licensee, or any of its Directors or Officers, by reason of the fact that he or she is a Director or Officer of Licensee, become a party to an action, litigation or arbitration with another corporation, business entity, or involving a Court Appointed Receiver; or become the subject of any Securities and Exchange Commission action, prior to March 1, 2013, this License Agreement may be terminated at the option of Owner.

 

ARTICLE 7 — MISCELLANEOUS PROVISIONS 

 

7.1 Disclaimer. Owner does not make any representations, extend any warranties of any kind, assume any responsibility or obligations whatever, or confer any right by implication, estoppel or otherwise, other than the licenses, rights and warranties herein expressly granted. Owner makes no warranties whether express, implied or statutory, written or oral.

  

  

  

Owner expressly DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. Owner also disclaims any warranty arising from (a) a claim against an Application, Patent or Trademark, or (b) a course of dealing or trade usage.

 

7. 2 Representations, Warranties, and Agreements by Licensee.

 

	
  

	
a.

	
Licensee is a corporation duly organized, validity existing and in good standing under the laws of Nevada with full power and authority to own, lease, use, and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Licensee has all requisite corporate power and authority to enter into and perform this Agreement and to consummate and effect the transactions contemplated by this Agreement. 

	
  

	
b.

	
All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with, any governmental authority required on the part of Licensee in connection with the valid execution and delivery of this Agreement, the offer, sale or issuance of any stock to Owner, or the consummation of any other transactions contemplated hereby shall have been obtained. 

	
  

	
c.

	
Subject to and in accordance with Security and Exchange Commission regulations, and other legal regulations and laws, Licensee will support the timely removal of the restriction on the shares of Licensee stock that Owner may own, or any Member may own. Licensee, at Licensee’s expense, will make a reasonable effort to provide within ten business days of Owner’s request, or any Member’s request, an opinion of corporate counsel and any other documentation that may be required to remove the restriction in accordance with applicable laws and regulations. Licensee will not in any way inhibit the lawful transfer of the Licensee stock held by Owner, or by any Member, manager, consultant, or employee of Owner. 

	
  

	
d.

	
Licensee agrees that as of October 30, 2011, and continuing thereafter, to at all times:

	
  

	
1.

	
make and keep public information available to its stockholders, as those terms are understood and defined in SEC Rule 144, after 90 days after the effective date of the first registration filed by Licensee for an offering of its securities to the general public, and Licensee will provide this current information no later than October 30, 2011; and

	
  

	
2.

	
file with the SEC in a timely manner all reports and other documents required of Licensee under the Securities and Exchange Act (at any time after Licensee has become subject to such reporting requirements).

  

  

  

 

	
  

	
e.

	
Licensee represents and warrants that there will be no reverse or forward stock split to the corporate shares of Licensee, including all classes of shares of Licensee, without first obtaining the written consent of Owner.

	
  

	
f.

	
  The representations and warranties of Licensee, contained in this Agreement, shall have been true in all material respects when made, and, in addition, shall be true and correct in all material respects as of the Effective Date, and except for changes contemplated and permitted by this Agreement, with the same force and effect as if made as of the Effective Date. 

 

7.3 DELETED 

 

7.4 Nonassignability. The parties have entered into this agreement in contemplation of personal performance, each by the other, and intend that the licenses and rights granted hereunder to a party not be extended to entities other than such party's Related Companies without the other party's express written consent. All of Owner's rights, title and interest in this agreement and any licenses and rights granted to it hereunder may be assigned to any direct or indirect successor to the business of Owner, which successor shall thereafter be deemed substituted for Owner as the party hereto, effective upon such assignment; but neither this agreement nor any licenses or rights hereunder shall be otherwise assignable or transferable (in insolvency proceedings, by reason of a corporate merger, or otherwise) by either party without the express written consent of the other party.

 

7.5 Addresses/Accounts. Any notice, payments, or other communication shall be sufficiently given to a party when sent by:

 

	
  

	
a.

	
Certified mail or overnight courier to the address written above. 

	
  

	
b.

	
Facsimile to Owner at______________ or to Licensee at___________________.

	
  

	
c.

	
Email to Owner at______________ or to Licensee at___________________.

 

A party may change its address, facsimile number, or email address only by express written notice to the other party.

 

7.6 Taxes. Licensee shall pay any tax and any related interest or penalty, however designated, imposed as a result of the existence or operation of this Agreement, including any tax which the Licensee is required to withhold or deduct from payments to Owner, except any income tax imposed upon Owner by the United States or any governmental entity within the United States. Licensee shall furnish Owner with such evidence as may be required by United States taxing authorities to establish that any such tax has been paid.

 

7.7 Choice of Law. Any dispute arising with respect to this Agreement shall be construed according to the law, exclusive of its conflict of law provisions, of the state in which the Owner is domiciled at the time the complaint is filed. If such state cannot be determined, the law of the Commonwealth of Pennsylvania, exclusive of conflict of law provisions, shall govern this Agreement.

  

  

  

7.8 Integration. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions between them. Neither party shall be bound by any warranties, understandings or representations with respect to such subject matter other than as expressly provided herein or in a writing signed with or subsequent to execution hereof by an authorized representative of the party to be bound thereby.

 

7.9 Outside the United States

 

	
  

	
a.

	
There are countries in which the owner of an invention is entitled to compensation, damages or other monetary award for another's unlicensed manufacture, sale, lease, use or importation involving such invention prior to the date of issuance of a patent for such invention but on or after a certain earlier date, hereinafter referred to as the invention's “protection commencement date.” For the purposes of this agreement, an invention which has a protection commencement date in any such country shall be deemed to have had a patent issued therefor in such country on such date.

	
  

	
b.

	
There may be countries in which the Licensee may have, as a consequence of this Agreement, rights against an infringer of a Licensed Product. Licensee hereby waives any such right it may have by reason of any third party’s infringement or alleged infringement of Intellectual Property.

	
  

	
c.

	
Licensee agrees to register or cause to be registered, to the extent required by applicable law, and without expense to Owner, any agreements wherein sublicenses are granted by it under the Applications or Patents. Licensee waives any and all claims or defenses, arising by virtue of the absence of such registration, that might otherwise limit or affect its obligations to Owner.

 

7.10 Counterparts. This Agreement is executed in one or more counterparts as the parties deem desirable, each of which shall be deemed an original, but all of which shall constitute the same instrument. No action or suit shall require the production of all such copies.

 

7.11 Export Control Laws. Licensee shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Product(s), and related technical data, to foreign countries, including, without limitation, export administration regulations.

 

7.12 Licensee Able to Perform. Licensee has had full disclosure and had opportunity to do due diligence to the extent it determined to be necessary and reasonable in regard to the Owner's Applications, Patent(s), Trademarks, Licensed Product(s), technology and business. Licensee acknowledges that Owner has made no representation other than is contained herein. Licensee represents that it is capable of researching, developing, obtaining regulatory approvals, and manufacturing the Licensed Products, and is aware of the difficulties inherent in the regulatory aspects, research, development, manufacturing, sale and distribution of the licensed products. Licensee acknowledges that Owner shall have no liability in regard to Licensee's success or failure of the anticipated sales or sublicense.

  

  

  

7.13 Confidentiality. Except as otherwise agreed in writing or as required by government statute or court order, Licensee shall not appropriate, use or disclose, directly or indirectly, for its own benefit or otherwise, any information, materials, trade secrets, documents, correspondence, or other tangible or intangible property of Owner, to which it shall have obtained access hereunder or in contemplation of this Agreement, or which shall otherwise in any way relate to the Intellectual Property. Any of the aforesaid which is or comes into the possession of Licensee shall be held in trust for Owner and remain the sole and exclusive property of Owner, subject to the rights of License by Licensee as provided herein. The provisions of this Paragraph shall survive the termination of this Agreement.

 

7.14 No Joint Venture. The parties acknowledge that nothing set forth in this Agreement nor the transactions contemplated herein shall constitute a joint venture, partnership, agency or any relationship other than Licensee as a licensee and Owner as a licensor of the Intellectual Property. 

 

7.15 Unauthorized Use. Licensee agrees to notify Owner immediately and in writing of all circumstances surrounding the unauthorized possession or use of the Intellectual Property by any entity including, but not limited to, an individual, governmental authority, corporation, limited liability company, partnership, or trust. Owner shall have the sole right and discretion to institute and prosecute a claim against any third party for infringement of Intellectual Property. This Agreement imposes no duty on Owner to file any claim.

 

7.16 Severability. If any term or provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remainder of the provisions shall continue in full force and effect as if this Agreement had been executed with the invalid or unenforceable portion thereof eliminated and the parties shall endeavor to replace such invalid or unenforceable portion with a similar but valid and enforceable provision.

 

7.17 Force Majeure. No party shall be deemed to be in default of any provision of this Agreement, or for any failure in performance, resulting from acts or events beyond the reasonable control of such party, including acts of God, acts of civil or military authority, civil disturbance, war, strikes, natural catastrophes or other “force majeure” events. 

 

7.18 Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof. 

  

  

  

IN WITNESS WHEREOF, each of the parties has caused this agreement to be executed in duplicate originals by its duly authorized representatives on the Effective Date written above.

 

Altman Enterprises LLC Premier Biomed, Inc.

 

	
Signature: 

	
/s/ Mitchell S. Felder

	  	
Signature: 

	
/s/ William A. Hartman

	 	 	 	 	 
	
Name:

	
Mitchell S. Felder, M.D.

	  	
Name:

	
William A. Hartman

	 	 	 	 	 
	
Title:

	
Member

	  	
Title:

	
President/CEO

 

APPENDIX 

 

“Applications” means PCT/US2009/062895, entitled Medication and Treatment for Disease.

 

all applications of the United States and foreign countries that claim priority to the above PCT applications, including any non-provisionals, continuations, continuations-in-part, divisions, reissues, re-examinations or extensions thereof. 

 

“Due Date” means a date set by the Owner that would permit it a reasonable time period to respond to an official action. The Due Date will be at least two (2) business days before any official due date exclusive of any permitted extensions of time. 

 

“Effective Date” means the date indicated as the effective date at the top of page 1 of this Agreement. 

 

“Fair Market Value” means, with respect to any Licensed Product sold, leased or put into use, the Selling Price actually obtained in an arm’s length transaction for a product comprising a Licensed Product in the form in which the product is sold, whether or not assembled and without excluding any components or subassemblies thereof which are included in such Selling Price. “Selling price" shall exclude:

  

  

  

	
  

	
a.

	
usual trade discounts actually allowed to unaffiliated persons or entities;

	
  

	
b.

	
packing costs;

	
  

	
c.

	
costs of transportation and transportation insurance; and

	
  

	
d.

	
import, export, excise, sales and value added taxes, and custom duties.

 

“Intellectual Property” means any and all Applications, Patents, Trademarks, copyrights and trade secrets, that are owned in whole or in part by Owner and arise from the Applications, Patents or Trademarks. 

 

“IP Cost” means any and all expenses arising from obtaining or maintaining Intellectual Property in the U.S. and foreign countries, including, but not limited to, government fees, attorneys’ fees, translation fees, maintenance fees, annuities, penalties, and interests. 

 

“Lawsuit” means any action at law or equity, including, but not limited to, any and all claims for death, illness, personal injury, property damages, damages, expenses, losses, costs, and improper business practices, arising from or related to:

 

	
  

	
a.

	
the manufacture, use, license, sublicense, research, sale, offer for sale, other disposition of the Intellectual Property, or regulatory action involving the Intellectual Property;

	
  

	
b.

	
any challenge by a third party to the ownership or other rights of Owner in the Intellectual Property; or

	
  

	
c.

	
Owner or any Member being made a party or threatened to be made a party to, or otherwise involved (including involvement as a witness) in any action, suit or

 

proceeding, whether civil, criminal, administrative or investigative (i) by reason of the fact that Owner, or any Member, is or was affiliated with the Intellectual Property, or (ii) by reason of the fact that a Member, employee, or agent of Owner is or was serving at the request of Licensee as a director, officer, employee, consultant, manager, representative, or agent of Licensee or other business entity or enterprise. 

 

“Licensed Product” means any product that incorporates the Intellectual Property. 

 

“Litigation Cost(s)” means any and all expenses, losses, and liabilities, arising from a Lawsuit, including, but not limited to, prosecution fees, attorneys’ fees, and expenses, loss of anticipated royalties or profits, any other business losses, litigation fees, fines, penalties, interests, travel expenses, court costs, expert witness fees, settlements, judgments, personal injuries, costs of collection,and government fees. 

 

“Member(s)” means a member, an owner, or co-owner of Owner. 

  

  

  

“Patents” means all patents (including utility models but excluding design patents and design registrations) issued in any country that (a) claim substantially the same subject matter as at least one Application and (b) claim priority to that Application. 

 

“Related Companies” means (a) a subsidiary of the Licensee of which Licensee owns more than 80% of the subsidiary’s outstanding common stock, and (b) any other company so designated in a writing signed by Owner and the Licensee. 

 

“Trademarks” mean FeldetrexTM, including US Trademark Application No. 77/601,101 and any identical marks later filed in countries other than the United States of America.

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