Exhibit 10.20
FIRST AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT (the
"Amendment"), dated as of May 4, 2004, by and between MICROISLET, INC., a Nevada
corporation (the "Company"), and FUSION CAPITAL FUND II, LLC (together with its
permitted assigns, the "Buyer"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings given them in the Common Stock Purchase
Agreement.
WHEREAS, the parties hereto are parties to a Common Stock Purchase
Agreement dated as of April 1, 2003 (the "Common Stock Purchase Agreement");
WHEREAS, pursuant to the Common Stock Purchase Agreement, the Buyer has
agreed to purchase, and the Company has agreed to sell up to $12,000,000 of the
Common Stock all in accordance with the terms and conditions of the Common
Stock Purchase Agreement;
WHEREAS, the parties desire to (i) amend the Company's right to
increase the Daily Purchase Amount, and (ii) provide the Company with an option
to sell up to an additional $12,000,000 of Common Stock to the Buyer, as set
forth herein;
NOW, THEREFORE, in consideration of the agreements, covenants and
considerations contained herein, the parties hereto agree as follows:
1. Section 1(c)(iii) of the Common Stock Purchase Agreement is
hereby amended and restated in its entirety as follows:
(iii) COMPANY'S RIGHT TO INCREASE THE DAILY PURCHASE AMOUNT.
The Company shall have the right (but not the obligation) to increase
the amount of the Daily Purchase Amount in accordance with the terms
and conditions set forth in this Section 1(c)(iii) by delivering
written notice to the Buyer stating the new amount of the Daily
Purchase Amount (a "Daily Purchase Amount Increase Notice"). A Daily
Purchase Amount Increase Notice shall be effective five (5) Trading
Days after receipt by the Buyer. The Company shall always have the
right at any time to increase the amount of the Daily Purchase Amount
up to the Original Daily Purchase Amount. With respect to increases in
the Daily Purchase Amount above the Original Daily Purchase Amount, as
the market price for the Common Stock increases the Company shall have
the right from time to time to increase the Daily Purchase Amount as
follows. For every $0.25 increase in Threshold Price above $1.00
(subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction), the Company shall have the right to increase the Daily
Purchase Amount by up to an additional $10,000 in excess of the
Original Daily Purchase Amount. "Threshold Price" for purposes hereof
means the lowest Sale Price of the Common Stock during the five (5)
consecutive Trading Days immediately prior to the submission to the
Buyer of a Daily Purchase Amount Increase Notice (subject to equitable
adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction). For example, if the Threshold Price is $3.00, the Company
shall have the right to increase the Daily Purchase Amount to up to
$100,000 in the aggregate. If the Threshold Price is $3.50, the Company
shall have the right to increase the Daily Purchase Amount to up to
$120,000 in the aggregate. Any increase in the amount of the Daily
Purchase Amount shall continue in effect until the delivery to the
Buyer of a Daily Purchase Amount Decrease Notice. However, if at any
time during any Trading Day the Sale Price of the Common Stock is below
the applicable Threshold Price, such increase in the Daily Purchase
Amount shall be void and the Buyer's obligations to buy Purchase Shares
hereunder in excess of the applicable maximum Daily Purchase Amount
shall be terminated, Thereafter, the Company shall again have the right
to increase the amount of the Daily Purchase Amount as set forth herein
by delivery of a new Daily Purchase Amount Increase Notice only if the
Sale Price of the Common Stock is above the applicable Threshold Price
on each of five (5) consecutive Trading Days immediately prior to such
new Daily Purchase Amount Increase Notice.
* * *
2. The Common Stock Purchase Agreement is hereby amended by
inserting immediately after Section 1(f) of the common stock
purchase agreement a new Section 1(g), as follows: A
(g) OPTION TO INCREASE THE AVAILABLE AMOUNT. The Company may, in its
sole discretion, at any time after the date hereof and until 30 days
after such date as the Available Amount is equal to $0 (the "Available
Amount Increase Expiration Date"), deliver an irrevocable written
notice (the "Available Amount Increase Notice") to the Buyer stating
that the Company elects to increase the Available Amount by an
additional $12,000,000. It is agreed and acknowledged by the parties
hereto that increasing the Available Amount shall be at the option of
the Company in its sole discretion until such time as the Company shall
have delivered the Available Amount Increase Notice to the Buyer. The
Buyer shall not be obligated to purchase any portion of the increased
Available Amount unless the Company has (i) delivered the Available
Amount Increase Notice prior to the Available Amount Increase
Expiration Date, (ii) re-made the representations and warranties made
under Section 3 hereof, as of the date of the Available Amount Increase
Notice, (iii) satisfied each of the conditions of the Buyer to Commence
Purchases of Common Stock as set forth under Section 7 hereof and (iv)
issued to the Buyer within three (3) Trading Days of the date the
Available Amount Increase Notice is delivered, additional Commitment
Shares ("Additional Commitment Shares") in an amount equivalent to the
number of Commitment Shares issued pursuant to Section 4(f) of this
Agreement. The Additional Commitment Shares shall be treated for all
purposes hereunder as Commitment Shares. The Available Amount shall be
increased by an additional $12,000,000, on the date that is 10 Trading
Days after receipt
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by the Buyer of the Available Amount Increase Notice, provided the
Company has satisfied each of clauses (i) - (iv) above. The Maturity
Date shall be extended 18 months from the date that the Available
Amount is increased pursuant to this Section 1(g).
3. EFFECT OF AMENDMENT/INCORPORATION OF CERTAIN PROVISIONS.
Except as amended as set forth above, the Common Stock
Purchase Agreement shall continue in full force and effect.
The provisions set forth in Section 11 of the Common, Stock
Purchase Agreement are hereby incorporated by reference into
this Amendment.
* * * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this First
Amendment to Common Stock Purchase Agreement to be duly executed as of the date
first written above.
THE COMPANY:
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MICROISLET, INC.
By: /S/ X. Xxxxxxxxxx
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Name: X. Xxxxxxxxxx
Title: President
BUYER:
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FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS,
LLC
BY: SGM HOLDINGS CORP.
By: /S/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
TITLE: President
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