EXHIBIT 10.25
CAPITAL GROWTH FINANCIAL
THE COMBINATION TO YOUR FINANCIAL SUCCESS
October 16, 2003
Biofield Corporation
0000 Xxxx Xxxxx Xxxxx, Xxxxx X
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx Xx. M.D., PhD.
Gentlemen:
This will confirm our agreement that CGP Securities, LLC ("CGP") shall, for the
term of this agreement, from the date hereof through December 31, 2003 (unless
extended by mutual agreement), render its services to Biofield Corporation (the
"Company") as financial advisor and exclusive investment banker regarding the
Company's intention to raise funds on terms described on the Term Sheet attached
(the "Financing").
1. The Financing. As soon as practicable after preparation of suitable
and mutually agreeable offering materials and subject to continued due
diligence, CGF shall use its best efforts to arrange the Financing
with accredited or sophisticated investors acceptable to the Company.
The Financing will consist of up to $700,000 one year, 12% (payable
monthly) debt plus shares of the Common Stock of the Company all as
described on the Term Sheet attached hereto and made part hereof.
2. Placement Fees. The Company shall pay CGF, as compensation for its
services, 10% of the gross proceeds of the Financing, payable in cash,
as financing proceeds are received by the Company. This placement fee
will apply to any proceeds received during the term of this agreement
and within 12 months of the termination of the term of this agreement
from sources introduced to the company by CGF during the term of this
agreement. The Company shall issue to CGF and/or its designees five
year cashless warrants to purchase a number of shares equal to 10% of
the number of shares issued in the Financing, exercisable at a price
per share equal to the average closing bid price for the 20 trading
days prior to the date of the Offering document. The Company shall pay
the placement fees due CGF upon each closing. In the event the Company
refuses or otherwise fails to complete the Financing despite
performance by CGF, if sufficient arrangements shall have been made by
CGP so that the Financing contemplated hereby is in a position to be
consummated, then the Company shall pay to CGP a "break-up" fee as
compensation for services and as liquidated damages, in lieu of any
and all other damages, and in addition to any advances paid pursuant
to this agreement, in the amount of twenty five thousand dollars
($25,000) together with reasonable doctrine expenses, which amount the
partial view as a reasonable estimated of CGF's compensation for
damages which otherwise be difficult to ascertain.
CGF Securities, LLC
a Capital Growth Financial Company
000 XX Xxxxxx Xxxx., Xxxxx 000 * Xxxx Xxxxx, XX 00000
Tel: 000-000-0000 * Fax 000-000-0000
xxx.xxxxxxxxxxxxx.xxx
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3. Cooperation. The Company and CGF shall cooperate with one another
fully in order to consummate the Financing contemplated herein as
expeditiously as practicable. In particular, the Company will prepare
such offering and supporting materials as CGF may reasonable request.
Further, on a monthly basis, The Company will provide to CGF financial
information to include profit and loss statement and cash position and
cash outflows in the previous month.
4. Expenses. The Company agrees to pay or to reimburse CGF for all
reasonable expenses related to the Financing (including CGF legal fees
and expenses). All expenses in excess of $1,000 are to be approved in
writing by the Company (except for legal fees and expenses up to
$5,000).
5. Confidentiality. CGF will not disclose to any other person, firm or
corporation, nor use for its own benefit during or after the term of
this agreement, any trade secrets or other information designated as
confidential by the Company which is acquired by CGF in the course
performing services hereunder. (A trade secret is information not
generally known to the trade, which gives the Company an advantage
over its competitors. Trade secrets can include, by way of example,
products or services under development, production methods and
processes, sources of supply customer lists, and marketing plans). Any
financial advice rendered by CGF pursuant to this agreement may not be
disclosed publicly in any manner without the prior written approval of
CGF. At the conclusion of this engagement and upon request by the
Company, CGP shall return all material deemed confidential, supplied
by the Company and confirm that any and all copies of such material
have been destroyed.
6. Indemnification. The Company hereby agrees to indemnify, defend and
hold harmless CGF and its affiliates, the respective directors,
officers, agents and employees of CGF and its affiliates and each
other person, if any, controlling CGF or any of its affiliates from
and against any losses claims, damages or liabilities (or actions,
including shareholder actions, in respect thereof) arising out of the
engagement of CGF by the Company pursuant to the terms hereof or in
connection therewith, and will reimburse CGF, and any other party
entitled to be indemnified hereunder for all expenses (including
attorneys fees) threatened litigation in which CGF or any of its
affiliates is a party. The Company will not, however, be responsible
for any claims, liabilities, losses, damages or expenses, which have
resulted from CGF's misconduct or gross negligence. The Company also
agrees that neither CGF, nor any of its affiliates, nor any person
controlling CGF, or any of its affiliates, shall have any liability to
the Company for or in connection with the engagement pursuant to the
terms hereof, except for any such liability for losses, claims,
damages or expenses incurred by the Company that result from CGF's
misconduct or negligence. The foregoing agreement shall be in addition
to any rights that CGF or any indemnified payer may have at a common
law or otherwise, including, but not limited to, any right to
contribution. The Company hereby consents to personal jurisdiction,
services of process and venue in any court in which any claim subject
to this indemnification provision is brought against CGF or any other
indemnified party, only with respect to any other claim that may be
made against the Company. The obligation to indemnify CGF pursuant to
the terms of this paragraph shall survive and remain in full force and
effect following the completion of any transaction contemplated herein
or the expiration or termination of this agreement. CGF herby agrees
to indemnify, defend and hold harmless the Company and its affiliates,
the respective directors, officers, agents and employees of the
Company and its affiliates and each other person, if any, controlling
the Company or any of its affiliates, from and against any losses,
claims, damages or liabilities (or actions, including shareholder
actions in respect thereof) incurred as a result of claims asserted by
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third parties arising out of misconduct or gross negligence of CGF in
connection the engagement of CGF hereunder for all expenses (including
attorneys fees) as they are incurred by the Company, or any other
indemnified party in connection with investigating, preparing or
defending any such action or claim, whether or not in connection with
investigating, preparing or defending any such action or claim,
whether or not in connection with pending or threatened litigation in
which the Company, or any of its affiliates is a party. CGF agrees
that neither the company, nor any of its affiliates, nor any person
for or in connection with CGF's engagement pursuant to the terms
hereof, except for any liability for losses, claims, damages,
liabilities or expenses that result from the Company's misconduct or
gross negligence. The foregoing agreement shall be in addition to any
rights that any indemnified party may have at common law or otherwise
including, but not limited to any right of contribution. CGF hereby
consents to personal jurisdiction, service of process and venue in any
court in which any claim subject to this indemnification provisions
brought against the company, or any other indemnified party, only with
respect to any other claim that may be brought against CGF. CGF's
obligation to indemnify the Company, and others pursuant to the terms
of this paragraph shall survive and remain in full force and effect
following the completion of any transaction contemplated herein or the
expiration or termination of this agreement. Jurisdiction and Venue of
any legal proceeding shall be governed by Paragraph 9.
7. Operating Matters. Any transaction between the Company or any of its
affiliates, on the one hand, and any other affiliates of any the
officers, directors and controlling persons of the company shall be on
terms and conditions that are no less favorable to the Company, or any
of its affiliates that the terms and conditions that would be
available in dealings with independent third parties.
8. Governing Law. The internal laws of the State of Florida shall govern
this agreement. Any dispute arising out of this agreement shall be
adjudicated in the courts of the State of Florida or in the federal
courts sitting in the Southern District of the State of Florida.
9. Due Authority. The Company and CGF each represents to the other that
it has due authority to enter into this agreement and that the officer
executing this agreement has full authority to do so.
10. If any legal action or other proceeding is brought in connection with
the interpretation or enforcement of any of the provisions of this
agreement, the prevailing party shall be entitled to recover its
reasonable attorney's fees and other costs incurred in an action or
proceeding in addition to any other relief to which the party may be
entitled.
Please confirm that the foregoing correctly sets forth our understanding by
signing the enclosed copy of this letter where provided and returning it to us
at your earliest convenience.
Very truly yours, Accepted and agreed:
CGF SECURITIES, LLC Biofield Corporation
By: XXXX XXXXXX By: XXXXX X. XXXX, XX.
---------------- ----------------------------
Xxxx Xxxxxx Xxxxx X. Xxxx Xx. M.D., PhD
Chairman and CEO Chairman and CEO
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Biofield Corporation
Term Sheet
CGF Terms and Conditions
Amount of Financing- $700,000
Form of Investment- Bridge loan to be repaid in one year or
earlier out of proceeds of any subsequent
financing or series of financings of at
least $2,500,000 in gross proceeds, with
interest at 12% per annum, payable monthly,
plus a number of shares of Common Stock
equal to the gross amount of the loan
divided by the average closing bid price for
the 20 trading days prior to the date of the
Offering document.
Conversion Rights- Investors in the Financing to have the
option to convert the Notes into the next
round financing at a 25% discount to the
next round equity valuation.
Registration Rights- Registration statement to be filed by the
Company within 60 days of completion or
termination of the Offering. If not
effective within 90 days of filing, 10%
additional shares to be issued for each 30
days of delay. Registration statement to be
kept effective for 24 months. After 24
months, shares issued in connection with the
Financing to be subject to "piggy-back"
registration rights.
Resale of Shares- Shares to be issued in connection with the
Financing to be subject to limitation on
resale as follows:
a) all shares may be sold as part of
an underwritten distribution.
b) all shares may be sold in private
sales
c) for 12 months following the
effective date of the registration
statement, shares not sold in an
underwritten distribution or sold
privately may only be sold in any
calendar month to the extent of 20%
of the trading volume in the prior
calendar month.
Non Payment Penalty- If the loan is not repaid in or within one
year, loan becomes payable on demand with
interest at the rate of 1.5% per month,
payable monthly, plus the one time issuance
of additional shares of Common Stock equal
to 50% of the number of shares issued at the
time of the original loan.
Closing Date- As soon as possible with initial prompt
closing of $300,000 and subsequent closing
as funds are received no later than December
31, 2003.
FDA Filing- The Company expects to file a 510(k)
application with the FDA within 120 to 150
days from the first closing. If the Company
does not file a 510(k) application and such
additional documents as may be required
under the application with the FDA within
180 days of the first dosing the Company
will issue additional shares to the
investors in the Financing equal to 10% of
the number of shares issued at the time of
the original loan for each 30 days of delay
in filing.
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