AMENDMENT NO. 2 TO LINE OF CREDIT AGREEMENT
AMENDMENT
NO. 2
TO
This
Amendment No. 2 (the “Amendment”)is
made
as of September 23, 2008, by and between Biophan Technologies, Inc., a Nevada
corporation (the "Borrower")
and
Biomed
Solutions, LLC, a New York limited liability company (the "Lender").
Whereas
the Borrower and the Lender are parties to a certain Line of
Credit
Agreement dated as of January 24, 2006, and amended on October 11, 2006 (as
amended, the "Agreement"),
pursuant to which the Lender agreed to lend to the Borrower an amount of up
to
$5,000,000 (the "Line
of Credit");
Whereas,
the Borrower issued to the Lender a Convertible Promissory Note in the original
principal amount of $5,000,000 (the "Note")
to
evidence advances made to the Borrower’s under the Agreement;
Whereas,
the Borrower entered into a Securities Purchase Agreement dated as of the date
hereof October 11, 2006, which was amended on October 3, 2007 (as amended,
the
"SPA")
among
the Borrower and the Purchasers named therein (the "Purchasers"),
pursuant to which the Purchasers extended credit to the Borrower;
Whereas,
as a condition to the SPA, the Purchasers requested certain amendments to the
Agreement that were made in the October 11th
Amendment of the Agreement; and
Whereas,
there are certain intercompany xxxxxxxx due and owing from Lender to Borrower
for services provided by the Borrower for the benefit of the Lender in the
amount of $78,480.10 (the “Xxxxxxxx”);
Whereas,
the Lender and the Borrower have determined that it is in their mutual best
interests to extend the maturity date for repayment of the Line of Credit,
and
the Note evidencing advances in respect thereof;
Now,
therefore, in consideration of ten dollars ($10.00), the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:
1.
Provided that Borrower is not contractually prohibited by the SPA or the terms
of the ancillary agreements executed in connection therewith, the Xxxxxxxx
shall
be allowed in full as a credit against, and repayment of, the Line of Credit
and
principal balance of the Note. However, if Borrower remains contractually
prohibited by the SPA or the terms of the ancillary agreements executed in
connection therewith from making payments on account of the Line of Credit
and/or the Note, then the terms of the October 11th
Amendment shall remain in effect and unmodified by this Amendment.
2.
Provided that Borrower is not contractually prohibited by the SPA or the terms
of the ancillary agreements executed in connection therewith, all future
intercompany xxxxxxxx due and owing from Lender to Borrower for services
provided by the Borrower for the benefit of the Lender shall be allowed in
full
as a credit against, and repayment of, the Line of Credit and principal balance
of the Note. However, if Borrower remains contractually prohibited by the SPA
or
the terms of the ancillary agreements executed in connection therewith from
making payments on account of the Line of Credit and/or the Note, then the
terms
of the October 11th
Amendment shall remain in effect and unmodified by this Amendment.
3.
At
such time as Borrower no longer is prohibited by the holders of its senior
secured notes from making payments on account of the Line of Credit, Borrower
promptly will begin making monthly payments to Lender on account of the Line
of
Credit and the principal balance of (and accrued interest under) the Note,
on
the first day of each month, in the amount of $15,000 (the “Monthly
Payments”),
to be
applied to principal and accrued interest on a pro rata basis.
4.
Interest on the unpaid principal balance of the Note will continue to accrue
at
the rate of 8% per annum until the principal amount of the Note is repaid in
full.
5.
The
term of repayment of the Line of Credit and the Note will be extended for a
period of three years, commencing on December 31, 2009.
6.
If
Borrower secures new financing in an amount that exceeds $5 million, and
Borrower is not then contractually prohibited (by the terms of such financing
or
otherwise) from making payments on account of the Line of Credit, then Borrower
shall commence or continue the Monthly Payments, as the case may be, and shall
increase the amount of the Monthly Payments from $15,000 per month to $20,000
per month and, additionally, shall repay ratably over three months following
the
closing (and funding) of such financing all accrued but unpaid interest under
the Line of Credit and the Note.
7.
Except
as expressly amended hereby, the Agreement and the Note shall remain full force
and effect without any other alteration or change.
In
witness
whereof, the parties have executed this Amendment as of the date first above
written.
| BIOMED SOLUTIONS, LLC | BIOPHAN TECHNOLOGIES, INC. | ||
| By: /s/ Xxxxxxx X. Xxxxxx | By: /s/ Xxxxxxxx X. Xxxxxxx | ||
|
Xxxxxxx X. Xxxxxx, Manager |
Xxxxxxxx X. Xxxxxxx, Chief Financial Officer |
||
