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Title: |
Private Equity Credit Agreement |
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Entities: |
BioPulse International Inc.; Hunts Drive, LLC |
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Date: |
2001 |
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Size: |
Preview shows 19KB of 98KB total |
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Price: |
$50 |
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ID: |
#285895 |
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PRIVATE EQUITY CREDIT AGREEMENT
BY AND BETWEEN
BIOPULSE INTERNATIONAL, INC.,
a Nevada corporation
AND
HUNTS DRIVE, LLC,
a Cayman Islands limited liability company
Dated as of January 24, 2001
{PAGE}
This PRIVATE EQUITY CREDIT AGREEMENT is entered into as of the 24th
day of January, 2001 (this "AGREEMENT"), by and between Hunts Drive, LLC, a
Cayman Islands limited liability company ("INVESTOR"), and BioPulse
International, Inc., a Nevada corporation (the "COMPANY").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company may issue and sell to Investor,
from time to time as provided herein, and Investor shall purchase, shares
of the Common Stock (as defined below) with an aggregate purchase price not
to exceed $10,000,000; and
WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) ("SECTION 4(2)") of the Securities Act of 1933 and the
rules and regulations promulgated thereunder (the "SECURITIES ACT"), and/or
upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of the
investments in Common Stock to be made hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings specified or indicated (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined)
"AFFILIATE" shall mean, with respect to the Person referred to,
any officer, director, or employee of the Person, and any Person who
controls that Person within the meaning of Section 20 of the Exchange Act
and Section 15 of the Securities Act.
"AGREEMENT" shall have the meaning specified in the preamble
hereof.
"BID PRICE" shall mean the closing bid price of the Common Stock
on the Principal Market.
{PAGE}
"BY-LAWS" shall have the meaning specified in Section 4.8.
"CERTIFICATE" shall have the meaning specified in Section 4.8.
"CLAIM NOTICE" shall have the meaning specified in Section
9.3(a).
"CLOSING" shall mean one of the closings of a purchase and sale
of shares of Common Stock pursuant to Section 2.3.
"CLOSING DATE" shall mean, with respect to a Closing, the
eleventh (11th) Trading Day following the Put Date related to such Closing,
or such earlier date as the Company and Investor shall agree, provided all
conditions to such Closing have been satisfied on or before such Trading
Day.
"COMMITMENT PERIOD" shall mean the period commencing on the
earlier to occur of (a) the Effective Date, or (b) such earlier date as the
Company and Investor shall agree in writing, and expiring on the earlier to
occur of (i) the date on which Investor shall have purchased Common Stock
for an aggregate purchase price of $10,000,000, (ii) the date this
Agreement is terminated pursuant to Section 2.6 or 2.7 hereof, or Section
2(c) of the Registration Rights Agreement, or (iii) the date occurring one
(1) year from the date of commencement of the Commitment Period.
"COMMON STOCK" shall mean the Company's common stock, par value
$0.001 per share, and any shares of any other class of common stock whether
now or hereafter authorized, having the right to participate in the
distribution of dividends (as and when declared) and assets (upon
liquidation of the Company).
"COMMON STOCK EQUIVALENTS" shall mean any securities that are
convertible into or exchangeable for Common Stock or any warrants, options
or other rights to subscribe for or purchase Common Stock or any
such convertible or exchangeable securities.
"COMPANY" shall have the meaning specified in the preamble to
this Agreement.
"CONDITION SATISFACTION DATE" shall have the meaning specified in
Section 7.2.
"DAMAGES" shall mean any loss, claim, damage, liability, costs
and expenses (including, without limitation, reasonable attorneys' fees and
disbursements and costs and expenses of expert witnesses and
investigation).
"DISCOUNT" shall mean fifteen percent (15%).
"DISPUTE PERIOD" shall have the meaning specified in Section
9.3(a).
2
{PAGE}
"DTC" shall have the meaning specified in Section 2.3.
"DWAC" shall have the meaning specified in Section 2.3.
"EFFECTIVE DATE" shall mean the date on which the SEC first
declares effective a Registration Statement registering resale of the
Registrable Securities as set forth in Section 7.2(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder.
"FAST" shall have the meaning specified in Section 2.3.
"INDEMNIFIED PARTY" shall have the meaning specified in Section
9.3(a).
"INDEMNIFYING PARTY" shall have the meaning specified in Section
9.3(a).
"INDEMNITY NOTICE" shall have the meaning specified in Section
9.3(b).
"INITIAL REGISTRATION STATEMENT" shall have the meaning specified
in the Registration Rights Agreement.
"INVESTMENT AMOUNT" shall mean the dollar amount (within the
range specified in Section 2.2(a)) to be invested by Investor to purchase
Put Shares with respect to any Put Date as notified by the parties in
accordance with Section 2.2 and 2.5.
"INVESTOR" shall have the meaning specified in the preamble to
this Agreement.
"LEGEND" shall have the meaning specified in Section 8.1.
"MARKET PRICE" on any given date shall mean the average of the
three (3) lowest Bid Prices (not necessarily consecutive) during the ten
(10) Trading Day period immediately following the Put Date.
"MATERIAL ADVERSE EFFECT" shall mean any effect on the business,
operations, properties, prospects or financial condition of the Company
that is material and adverse to the Company and such other entities
controlling or controlled by the Company, taken as a whole, and/or any
condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to enter into and
perform its obligations under either of (a) this Agreement or (b) the
Registration Rights Agreement.
"MAXIMUM COMMITMENT AMOUNT" shall mean Ten Million Dollars
($10,000,000), subject to increase as agreed to by the Company and
Investor.
3
{PAGE}
"MAXIMUM PUT AMOUNT" shall mean, with respect to any Put, the
lesser of (a) Five Hundred Thousand Dollars ($500,000) Dollars, or (b) one
hundred twenty five percent (125%) of the Weighted Average Daily Volume for
the twenty (20) Trading Days prior to the Put Date, subject to adjustment
as agreed by the Company and Investor.
"MINIMUM CALL OPTION AMOUNT" shall mean with respect to any Put,
Thirty Seven Thousand Five Hundred Dollars ($37,500), subject to decrease
as agreed to in writing by the Company and Investor.
"MINIMUM PUT AMOUNT" shall mean, with respect to any Put, Seventy
Five Thousand Dollars ($75,000), subject to decrease as agreed to by the
Company and Investor.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"OUTSTANDING" shall mean, with respect to the Common Stock, at
any date as of which the number of shares of Common Stock is to be
determined, all issued and outstanding shares of Common Stock, including
all shares of Common Stock issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common Stock;
provided, however, that Outstanding shall not include any shares of Common
Stock then directly or indirectly owned or held by or for the account of
the Company.
"PERSON" shall mean an individual, a corporation, a partnership,
an association, a trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"PRINCIPAL MARKET" shall mean the NASD OTCBB, Nasdaq National
Market, the Nasdaq SmallCap Market, the American Stock Exchange or the New
York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock.
"PURCHASE PRICE" shall mean, with respect to a Put, the Market
Price on the applicable Put Date less the product of the Discount and the
Market Price.
"PUT" shall mean each occasion that the Company elects to
exercise its right to tender a Put Notice requiring Investor to purchase
shares of Common Stock, subject to the terms and conditions of this
Agreement.
"PUT DATE" shall mean the Trading Day during the Commitment
Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).
"PUT NOTICE" shall mean a written notice, substantially in the
form of Exhibit B hereto, to Investor setting forth the Investment Amount
with respect to which the Company intends to require Investor to purchase
shares of Common Stock pursuant to the terms of this Agreement.
4
{PAGE}
"PUT SHARES" shall mean all shares of Common Stock issued or
issuable pursuant to a Put that has been exercised or may be exercised in
accordance with the terms and conditions of this Agreement and all shares
of Common Stock issued or issuable pursuant to a Call Option that has been
exercised or may be exercised in accordance with Section 2.5.
"REGISTRABLE SECURITIES" shall mean the Put Shares and the
Warrants and any securities issued or issuable with respect to any of the
foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a Registration Statement has been declared
effective by the SEC and such Registrable Securities have been disposed of
pursuant to a Registration Statement, (ii) such Registrable Securities have
been sold under circumstances under which all of the applicable conditions
of Rule 144 are met, (iii) such time as such Registrable Securities have
been otherwise transferred to holders who may trade such shares without
restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing
a restrictive legend or (iv) in the opinion of counsel to the Company,
which counsel shall be reasonably acceptable to Investor, such Registrable
Securities may be sold without registration under the Securities Act or the
need for an exemption from any such registration requirements and without
any time, volume or manner limitations pursuant to Rule 144(k) (or any
similar provision then in effect) under the Securities Act.
"REGISTRATION RIGHTS AGREEMENT" shall mean the registration
rights agreement in the form of Exhibit A hereto.
"REGISTRATION STATEMENT" shall mean a registration statement on
Form SB-2 (if use of such form is then available to the Company pursuant
to the rules of the SEC and, if not, on such other form promulgated by the
SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the resale of
the Registrable Securities to be registered thereunder in accordance with
the provisions of this Agreement and the Registration Rights Agreement and
in accordance with the intended method of distribution of such securities),
for the registration of the resale by Investor of the Registrable
Securities under the Securities Act.
"REGULATION D" shall mean Regulation D under the Securities Act.
"RULE 144" shall mean Rule 144 under the Securities Act or any
similar provision then in force under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"SECTION 4(2)" shall have the meaning specified in the recitals
of this Agreement.
"SECURITIES ACT" shall have the meaning specified in the recitals
of this Agreement.
5
{PAGE}
"SEC DOCUMENTS" shall mean, as of a particular date, all reports
and other documents filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since the beginning of the Company's then most recently
completed fiscal year as of the time in question (provided that if the date
in question is within ninety days of the beginning of the Company's fiscal
year, the term shall include all documents filed since the beginning of the
second preceding fiscal year).
"SUBSCRIPTION DATE" shall mean the date on which this Agreement
is executed and delivered by the Company and Investor.
"THIRD PARTY CLAIM" shall have the meaning specified in Section
9.3(a).
"TRADING CUSHION" shall mean a minimum of fifteen (15) Trading
Days between Put Dates, unless a shorter period is agreed to by the Company
and Investor.
"TRADING DAY" shall mean any day during which the Principal
Market shall be open for business.
"TRANSACTION DOCUMENTS" means this Private Equity Credit
Agreement, the Registration Rights Agreement, the Warrant, Closing
Certificate, and the Transfer Agent Instructions.
"TRANSFER AGENT" shall mean the transfer agent for the Common
Stock (and any substitute or replacement transfer agent for the Common
Stock upon the Company's appointment of any such substitute or replacement
transfer agent).
"UNDERWRITER" shall mean any underwriter participating in any
disposition of the Registrable Securities on behalf of Investor pursuant to
a Registration Statement.
"VALUATION EVENT" shall mean an event in which the Company at any
time during a Valuation Period takes any of the following actions:
(a) subdivides or combines the Common Stock;
(b) pays a dividend in shares of Common Stock or makes any
other distribution of shares of Common Stock, except
for shares issued pursuant to this transaction;
(c) issues any warrants, options or other rights to
subscribe for or purchase shares of Common Stock and
the price per share for which shares of Common Stock
may at any time thereafter be issuable pursuant to
such warrants, options or other rights shall be less
than the Bid Price in effect immediately prior to such
issuance;
(d) issues any securities convertible into or exchangeable
for shares of Common Stock and the consideration per
share for which shares of Common Stock may at any time
thereafter be issuable pursuant to the terms of such
convertible or exchangeable securities shall be less
than the Bid Price in effect immediately prior to such
issuance;
6
{PAGE}
(e) issues shares of Common Stock otherwise than as
provided in the foregoing subsections (a) through (d),
at a price per share less, or for other consideration
lower, than the Bid Price in effect immediately prior
to such issuance, or without consideration;
(f) makes a distribution of its assets or evidences of
indebtedness to the holders of Common Stock as a
dividend in liquidation or by way of return of capital
or other than as a dividend payable out of earnings or
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