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Accommodation Agreement

 

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Title:

Accommodation Agreement

Entities:

BioPulse International Inc.; Kauser Partners, L.P.; Hunts Drive, LLC

Date:

2001

Size:

Preview shows 8KB of 21KB total

Price:

$39

ID:

#285887

 

 

► Miscellany ► Agreements ► Misc. Agreements ► Accommodation Agreements
► Biotechnology & Drugs

 

 

Start of Preview


                             ACCOMMODATION AGREEMENT



ACCOMMODATION AGREEMENT dated as of July __, 2001 (the "Agreement"), by
and between KAUSER PARTNERS, L.P., a Delaware limited partnership ("Buyer"), and
BIO PULSE INTERNATIONAL, INC., a Nevada corporation with its principal place of
business at 10421 South Jordan Gateway, Suite 500, Salt Lake City, Utah 84095
(the "Company").

Recitals

A. The parties to the Agreement previously have entered into a Securities
Purchase Agreement dated as of November 21, 2000 (the "Purchase Agreement").

B. Under the Purchase Agreement, Buyer agreed to purchase from the Company
and the Company agreed to issue to Buyer a total of 353,636 shares (the
"Shares") of the Company's restricted common stock, par value $0.001 per share
("Common Stock"), and a warrant (the "Warrant") to purchase up to 189,318 shares
of Common Stock (the Common Stock issuable upon exercise of the Warrants being
referred to herein as the "Warrant Shares" and the Warrant Shares and the Shares
being referred to collectively as the "Registrable Securities").

C. Under the Purchase Agreement, the Company granted to Buyer certain
registration rights under which it is obligated to prepare, file and have
declared effective by the Securities and Exchange Commission ("SEC") a
registration statement (the "Original Registration Statement") covering all of
the Registrable Securities, which Original Registration Statement was filed by
the Company originally in December 2000, and was amended in February 2001. The
Original Registration Statement was not subsequently amended and has not been
declared effective by the SEC as of the date of this Agreement.

D. On January 24, 2001, the Company entered into a Securities Purchase
Agreement (the "Series B Agreement") with Hunts Drive, LLC, a Cayman Islands
limited liability company ("Hunts Drive"), under which the Company issued and
sold 3,000 shares of the Company's 7% Cumulative Convertible Redeemable
Preferred Stock, Series B (the "Series B Preferred") which are convertible into
Common Stock on the terms indicated therein. Simultaneously with its execution
of the Series B Agreement, the Company entered into a Registration Rights
Agreement with Hunts Drive pursuant to which the Company agreed to prepare and
file with the SEC a registration statement covering the Common Stock issuable
upon conversion of the Series B Preferred. The Company sought to register such
shares by amending the Original Registration Statement to include such shares,
which amendment was filed in February 2001. The Original Registration Statement
was not subsequently amended and has not been declared effective by the SEC as
of the date of this Agreement.

E. Pursuant to the Purchase Agreement, the Company is required to pay
damages to Buyer in the event that the Original Registration Statement was not
effective within the time periods specified in the Registration Rights
Agreement, and such Original Registration Statement was not declared effective
within such time period and is not effective as of the date hereof.




{PAGE}

F. Pursuant to the Purchase Agreement, the Buyer obtained certain
anti-dilution rights that have been implicated by the Company's issuance of the
Series B Preferred.

G. Because of insufficient financing, the Company is not presently able to
proceed with further amendment to the Original Registration Statement.

H. Hunts Drive has agreed to provide $500,000 of debt financing to the
Company in the form of a promissory note (the "Note"), which financing will
allow the Company to proceed with amending the Original Registration Statement,
provided that the Company and Buyer execute and deliver this Agreement.

Agreement

NOW, THEREFORE, in consideration of the covenants and mutual promises
below and other good and valuable consideration, the receipt and legal
sufficiency of which the parties acknowledge by their signatures appearing
below, and intending to be legally bound hereby, the parties to this Agreement
hereby agree as follows:

1. Issuance of Accommodation Shares. In exchange for Buyer's execution
and delivery of this Agreement, and its waiver or amendment of or other
accommodations in relation to certain of the Company's covenants and obligations
under the Purchase Agreement, all as set forth herein, the Company agrees to
issue a total of Two Million (2,000,000) shares of restricted common stock (the
"Accommodation Shares") to Buyer upon the closing of the transactions
contemplated by this Agreement. Certificates representing the Accommodation
Shares shall be delivered to Buyer upon execution and delivery of this Agreement
by all parties.

a. Securities Law Compliance. Buyer acknowledges and agrees that the
Accommodation Shares are being issued without registration under the
Securities Act of 1933, as amended (the "Securities Act"), and are being
issued in reliance on an exemption from the registration requirements of
the Securities Act. To facilitate the availability of such exemption, and
recognizing that the Company will rely on the accuracy thereof, Buyer
represents and warrants as follows:

i. Buyer is acquiring the Accommodation Shares for Buyer's own
account for investment only and not as nominee or agent and not with a
view to, or for sale in connection with, a distribution of the
Accommodation Shares and with no present intention of selling,
transferring, granting a participation in or otherwise distributing,
the Accommodation Shares, all within the meaning of the Securities Act
and any applicable state, securities or blue sky laws.

ii. Buyer is not a party or subject to or bound by any contract,
undertaking, agreement or arrangement with any person to sell,
transfer or pledge the Accommodation Shares to any person, and has no
present intention to enter into such a contract, undertaking,
agreement or arrangement.



-2-
{PAGE}

iii. The Company has advised Buyer that the Accommodation Shares
have not been registered under the Securities Act or under the laws of
any state on the basis that the issuance thereof is exempt from such
registration, and the Company's reliance on the availability of such
exemption is, in part, based upon the accuracy and truthfulness of
Buyer's representations contained herein.

iv. Buyer understands and acknowledges that the Common Stock is
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and that the Company files quarterly, annual and other
reports under the Exchange Act containing financial and other
information about the Company. Buyer has had an opportunity to obtain
such reports and other information as it has deemed appropriate
respecting the Company, its business, plans and financial condition,

 

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