Exhibit 10.50
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 1st day of October,
2003, by and between Biophan Technologies, Inc. (the "Company"), a
corporation organized under the laws of the State of Nevada, with its
principal offices at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxx, Xxx
Xxxx 00000, and SBI Brightline Consulting, LLC, a California limited
liability company with its principal offices at 0000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and the Purchaser hereby agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms
and conditions of this Agreement, the Company may issue and sell to the
Purchaser and the Purchaser shall purchase from the Company up to 11,000,000
shares of the Company's Common Stock (the "Shares"), par value $.005 per
share (the "Common Stock"). The Company has authorized and has reserved and
covenants to continue to reserve, free of preemptive rights and other similar
contractual rights of stockholders, a sufficient number of its authorized but
unissued shares of its Common Stock to cover the Shares which may be issued
pursuant to the terms of this Agreement.
SECTION 2. Agreement to Purchase the Shares.
2.1 Schedule 2.1 attached hereto defines six (6) tranches of Shares
that the Purchaser has agreed to purchase from the Company (each, a
"Tranche") and, with respect to each Tranche, sets forth the number of Shares
constituting such Tranche (the "Tranche Shares") and the purchase price per
share for the Tranche Shares in such Tranche (the "Tranche Purchase Price").
2.2 The Company may, in its sole discretion, elect to sell the
Tranche Shares of any Tranche to the Purchaser at any time after the date on
which the Registration Statement (as defined in Section 7.1) of the Company
covering the Shares is declared effective (the "Effective Date"); provided,
however, (i) the Company must elect to sell all of the Tranche Shares
included in a Tranche if it elects to sell any of the Tranche Shares in such
Tranche; and (ii) the Company must elect to sell the Tranche Shares in the
order that the Tranches are listed on Schedule 2.1. The Company may elect to
sell Tranche Shares included in more than one Tranche at the same time. To
effect its election to sell Shares, the Company must give written notice
thereof (an "Election Notice") to the Purchaser. The Election Notice shall
specify the Tranche or Tranches with respect to which the election is being
made and the date on which the closing of the sale and purchase of the
Tranche Shares shall occur; provided, such date shall be a business day and
shall not be earlier than five days after the date such Election Notice is
given to the Purchaser. An Election Notice shall be irrevocable except as
provided in Section 3.5.
SECTION 3. Closing of the Purchase of the Shares.
3.1 Subject to the satisfaction or waiver of the conditions
precedent set forth in Sections 3.2 and 3.3, the closing of a purchase of
Tranche Shares by the Purchaser pursuant to this Agreement (each, a
"Closing") shall occur at 10:00 a.m. on the date specified in the Election
Notice delivered by the Company with respect to such Tranche Shares unless
the Company and the Purchaser have mutually agreed on a different time or
date with respect to such Closing (the time and date of the Closing of a
particular Tranche is referred to herein as the "Tranche Closing Date").
Unless otherwise agreed by the Company and the Purchaser, each Closing shall
occur at the offices of Xxxxx Xxxxxxx, LLP, Rochester, New York.
3.2 The obligation of the Purchaser to purchase Tranche Shares at a
Closing shall be subject to the satisfaction of the following conditions, or
the waiver of such conditions by the Purchaser, at or prior to the applicable
Tranche Closing Date:
(a) the representations and warranties of the Company set forth in
Section 4 of this Agreement shall be true and correct with the same force and
effect as though expressly made on and as of such Tranche Closing Date,
except for representations or warranties made as of a particular date which
representations and warranties shall be true and correct as of such date;
(b) the Company shall have complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Tranche Closing Date;
(c) the Company shall have delivered to the Purchaser a certificate
executed by the Chairman of the Board or President and the chief financial or
accounting officer of the Company, dated the applicable Tranche Closing Date,
to the effect that the conditions in clauses (a) and (b) have been satisfied;
(d) the Registration Statement shall have been declared effective
and shall not have been withdrawn, no stop order suspending the effectiveness
of the Registration Statement shall be in effect, and no proceedings for the
suspension of the effectiveness of the Registration Statement shall have been
instituted or threatened by the Securities and Exchange Commission (the
"Commission");
(e) Xxxxx Peabody LLP, counsel to the Company, shall have delivered
its legal opinion to the Purchaser that the Tranche Shares being issued on
such Tranche Closing Date will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable.
3.3 The obligation of the Company to sell Tranche Shares at a
Closing shall be subject to the satisfaction of the following conditions, or
the waiver of such conditions by the Company, at or prior to the applicable
Tranche Closing Date:
(a) the representations and warranties of the Purchaser set forth in
Section 5 of this Agreement shall be true and correct with the same force and
effect as though expressly made on and as of such Tranche Closing Date,
except for representations or warranties made as of a particular date which
representations and warranties shall be true and correct as of such date;
(b) the Purchaser shall have complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Tranche Closing Date;
(c) the Purchaser shall have delivered to the Company a certificate
executed by a duly authorized officer of the Purchaser, dated the applicable
Tranche Closing Date, to the effect that the conditions in clauses (a) and
(b) have been satisfied; and
(d) no stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for the suspension of the
effectiveness of the Registration Statement shall have been instituted or
threatened by the Commission.
3.4 At each Closing, (i) each of the Company and the Purchaser shall
deliver to the other, as applicable, any documents required to be delivered
by Sections 3.2 or 3.3 which have not been delivered prior to such Closing,
(ii) the Purchaser shall pay to the Company, by wire transfer of immediately
available funds to an account designated in writing by the Company at or
prior to the Closing, the applicable Tranche Purchase Price for the Tranche
Shares being purchased at the Closing, and (iii) the Company shall deliver to
the Purchaser a stock certificate representing the Tranche Shares being
purchased or shall cause the Tranche Shares being purchased to be
electronically transferred to the Purchaser.
3.5 If a Closing does not occur on a proposed Tranche Closing Date
because the conditions specified in Sections 3.3 and 3.4 were not satisfied
at the time of the applicable proposed Tranche Closing Date, the Election
Notice with respect to the Tranche or Tranches proposed to be sold on such
proposed Tranche Closing Date shall automatically be revoked; provided,
however, such revocation shall not impair the right of the Company to give
another Election Notice with respect to the Tranche or Tranches covered by
the revoked Election Notice or to compel the Purchaser to purchase any
Tranche Shares included in such Tranche or Tranches on a subsequent Tranche
Closing Date on which the conditions specified in Section 3.2 are satisfied.
SECTION 4. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser as follows:
4.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and the Company is qualified to do business as
a foreign corporation in each jurisdiction in which qualification is
required, except where the failure to so qualify would not individually or in
the aggregate have a material adverse effect on the financial condition,
results of operations, properties or business of the Company taken as a
whole.
4.2 Subsidiaries. As of the date hereof, the Company does not have
any subsidiaries other than LTR Antisense Technology, Inc., a New York
corporation and MRIC Drug Delivery Systems, LLC, a New York limited liability
company. As used in this Section 4, the term "the Company" shall include
such subsidiary.
4.3 Authorized and Outstanding Capital Stock. The Company has
authorized the issuance of 80,000,000 shares of Common Stock, of which
approximately 42,000,000 shares are issued and outstanding as of the date of
this Agreement. The Company's stock option plan provides for the granting of
options to the Company's employees, directors, consultants and advisors, to
purchase an aggregate of up to 7,000,000 shares of Common Stock, of which as
of the date of this Agreement, options to purchase an aggregate of 5,479,995
shares of Common Stock were outstanding. In addition, the Company has
granted warrants to purchase an aggregate of 4,785,673 shares of Common Stock
as of the date of this Agreement. Except for shares of Common Stock, options
and warrants described in this Section 4.3 and certain rights of Biomed
Solutions, LLC to convert a debt owed to it by the Company, there are no
authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase any capital stock of the Company or
any equity or debt securities convertible into or exchangeable or exercisable
for capital stock of the Company.
4.4 Issuance, Sale and Delivery of the Shares. The Shares have been
duly authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be duly authorized, validly issued, fully paid
and nonassessable. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Shares by the
Company pursuant to this Agreement. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for
the issuance and sale of the Shares to be sold by the Company as contemplated
herein
4.5 Due Execution, Delivery and Performance of the Agreements. The
Company has full legal right, corporate power and authority to enter into
this Agreement and to perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company.
The execution, delivery and performance of this Agreement by the Company and
the consummation of the transactions herein contemplated will not violate any
provision of the organizational documents of the Company and will not result
in the creation of any lien, charge, security interest or encumbrance upon
any assets or property of the Company pursuant to the terms or provisions of,
or will not conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the Company is a
party or by which the Company or any of its assets or properties may be bound
or affected or any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency
or other governmental body applicable to the Company or any of its
properties. No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body is required
for the execution, delivery and performance of this Agreement or the
consummation by the Company of the transactions contemplated hereby, except
for compliance with the Blue Sky laws and federal securities laws applicable
to the offering of the Shares. Assuming the valid execution hereof by the
Purchaser, this Agreement will constitute the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and except as enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as the indemnification agreements
of the Company in Section 7.3 hereof may be legally unenforceable.
4.6 No Actions. There are no legal or governmental actions, suits
or proceedings pending or, to the Company's knowledge, threatened to which
the Company is or may be a party which seeks to prevent or restrain the
transactions contemplated by this Agreement or to recover damages as a result
of the consummation of such transactions.
4.7 Investment Company. The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940,
as amended.
4.8 Conflicting Registration Rights. No stockholder of the Company
has any right (which has not been waived or has not expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement) to request or require the Company to register the
sale of any shares owned by such stockholder under the Securities Act of
1933, as amended (the "Securities Act"), on the Registration Statement.
4.9 Brokers. There is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's fee or other
fee or commission as a result of any transactions contemplated by this
Agreement.
4.10 Books and Records. The books, records and accounts of the
Company accurately and fairly reflect, in reasonable detail, the transactions
in, and dispositions of, the assets of, and the results of operations of, the
Company, all to the extent required by generally accepted accounting
principles. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
4.11 Sole Representations and Warranties. Except for the
representations and warranties contained in this Section 4, the Company makes
no representation or warranty to the Purchaser, express or implied, in
connection with the transactions contemplated by this Agreement.
SECTION 5. Representations, Warranties and Covenants of the
Purchaser. The Purchaser represents and warrants to the Company as follows:
5.1 Organization and Qualification. The Purchaser is a company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
5.2 Due Execution, Delivery and Performance of the Agreements. The
Purchaser has full legal right, power and authority to enter into this
Agreement and to perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Purchaser.
The execution, delivery and performance of this Agreement by the Purchaser
and the consummation of the transactions herein contemplated will not violate
any provision of the organizational documents of the Purchaser and will not
result in the creation of any lien, charge, security interest or encumbrance
upon any assets or property of the Purchaser pursuant to the terms or
provisions of, or will not conflict with, result in the breach or violation
of, or constitute, either by itself or upon notice or the passage of time or
both, a default under any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the
Purchaser is a party or by which the Purchaser or any of its assets or
properties may be bound or affected or any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory
body, administrative agency or other governmental body applicable to the
Purchaser or any of its properties. No consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
governmental body is required for the execution, delivery and performance of
this Agreement or the consummation by the Purchaser of the transactions
contemplated hereby. Assuming the valid execution hereof by the Company, this
Agreement will constitute the legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and except
as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law) and except as the indemnification agreements of the Purchaser in Section
7.3 hereof may be legally unenforceable.
5.3 No Actions. There are no legal or governmental actions, suits
or proceedings pending or, to the Purchaser's knowledge, threatened to which
the Purchaser is or may be a party which seeks to prevent or restrain the
transactions contemplated by this Agreement or to recover damages as a result
of the consummation of such transactions. The Purchaser has not been and is
not currently the subject of an investigation or inquiry by the Securities
and Exchange Commission, the NASD, or any state securities commission.
5.4 Nature of Purchaser. The Purchaser is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in shares representing an investment decision
like that involved in the purchase of the Shares, including investments in
securities issued by the Company. The Purchaser is an "accredited investor"
within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act and would be considered a large, institutional accredited
investor. SBI USA, LLC, which owns at least 80% of the outstanding equity
securities of the Purchaser, is a "qualified institutional buyer" (as such
term is defined in Rule 144A(a)(1) of the Securities Act). Based on the
nature of the Purchaser and the amount of its investments as of the date
hereof for its own account and on a discretionary basis for qualified
institutional buyers; if the purchase of all of the Shares were consummated
on the terms set forth in this Agreement prior to the date hereof, the
Purchaser would qualify on the date of this Agreement as a qualified
institutional buyer. The Purchaser is not a "dealer" within the meaning of
the Securities Act or a "broker" or "dealer" within the meaning of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Purchaser is able to bear the economic risk of loss of the Purchaser's entire
investment in the Shares.
5.5 Access to Information. The Purchaser has requested, received,
reviewed and considered all information it deems relevant in making an
informed decision to purchase the Shares. The Purchaser understands that the
Company is still in the development stage and does not have operating
revenues.
5.5 Investment Intent. The Purchaser is acquiring the Shares in the
ordinary course of its business and for its own account for investment only
and with no present intention of distributing any of such Shares or entering
into any arrangement or understanding with any other person regarding the
distribution of such Shares (it being understood that the foregoing does not
limit the Purchaser's right to sell Shares pursuant to the Registration
Statement). Neither Purchaser nor any entity under its control has, prior to
the execution of this Agreement, and will not, for a period of eighteen (18)
months following the execution of this Agreement, carry a net short position
in the common shares of Company, participate in any short selling activities,
recommendations, or collusion, directly or indirectly, as such activities
relate to the common shares of Company. A net short position will include
any derivative instruments such as a put option, collar, swap or any other
instrument which would result in a net short position.
5.6 Sole Representations and Warranties. Except for the
representations and warranties contained in this Section 5, the Purchaser
makes no representation or warranty to the Company, express or implied, in
connection with the transactions contemplated by this Agreement.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein and in the certificates delivered pursuant hereto shall
survive the execution of this Agreement, the delivery to the Purchaser of the
Shares being purchased and the payment therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities
Act.
7.1 Registration Procedures and Expenses.
(a) As soon as practicable, but in any event no later than forty-
five (45) days following the date of this Agreement, the Company shall
prepare and file with the Commission a registration statement on Form SB-2 or
other applicable form as determined by the Company (the "Registration
Statement") for the purpose of registering the sale of the Shares by the
Purchaser from time to time on the facilities of any securities exchange or
trading system on which the Common Stock is then traded or in privately-
negotiated transactions, which Registration Statement shall contain all
material non-public information disclosed to the Purchasers by the Company in
connection with the issuance and sale of the Shares. For purposes of this
Section 7.1, the term "Shares" shall include any other securities of the
Company issued in exchange for the Shares, as a dividend on the Shares or in
connection with a stock split or other reorganization transaction affecting
the Shares. The Company shall use its commercially reasonable efforts to
cause the Registration Statement to become effective as soon as practicable.
(b) The Company shall prepare and file with the Commission such
amendments and supplements to the Registration Statement and the prospectus
forming a part thereof as may be necessary to keep the Registration Statement
effective until the earliest date, after the date on which all of the Shares
have been purchased pursuant to this Agreement or the obligation of the
Purchaser to purchase the Shares pursuant to this Agreement has been
terminated, on which (i) all the Shares have been disposed of pursuant to the
Registration Statement, (ii) all of the Shares then held by the Purchaser may
be sold under the provisions of Rule 144 without limitation as to volume,
whether pursuant to Rule 144(k) or otherwise, or (iii) the Company has
determined that all Shares then held by the Purchaser may be sold without
restriction under the Securities Act and has removed any stop transfer
instructions relating to such Shares and offered to cause to be removed any
restrictive legends on the certificates, if any representing such Shares (the
period between the Effective Date and the earliest of such dates is referred
to herein as the "Registration Period"). At any time after the end of the
Registration Period, the Company may withdraw the Registration Statement and
its obligations under this Section 7 (other than its obligations under
Section 7.3) shall automatically terminate.
(c) The Purchaser agrees to comply with all federal and state
securities laws and the rules and regulations promulgated thereunder in
connection with any sale by it of the Shares, whether or not such sale is
pursuant to the Registration Statement. In connection with the sale of any
Shares pursuant to the Registration Statement, but without limiting the
generality of the foregoing sentence, the Purchaser shall (i) comply with the
provisions of Regulation M promulgated under the Exchange Act, and (ii)
deliver to the purchaser of Shares the prospectus forming a part of the
Registration Statement and all relevant supplements thereto which have been
provided by the Company to the Purchaser on or prior to the applicable
delivery date.
(d) The Company shall not be obligated to prepare and file a post-
effective amendment or supplement to the Registration Statement or the
prospectus constituting a part thereof during the continuance of a Blackout
Event. A "Blackout Event" means any of the following: (a) the possession by
the Company of material information that is not ripe for disclosure in a
registration statement or prospectus, as determined in good faith by the
Chief Executive Officer or the Board of Directors of the Company or that
disclosure of such information in the Registration Statement or the
prospectus constituting a part thereof would be detrimental to the business
and affairs of the Company; or (b) any material engagement or activity by the
Company which would, in the good faith determination of the Chief Executive
Officer or the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement or prospectus at such time.
(e) At least two (2) days prior to the filing with the Commission of
the Registration Statement (or any amendment thereto) or the prospectus
forming a part thereof (or any supplement thereto), the Company shall provide
draft copies thereof to the Purchaser and shall consider incorporating into
such documents such comments as the Purchaser (and its counsel) may propose
to be incorporated therein. Notwithstanding the foregoing, no prospectus
supplement, the form of which has previously been provided to the Purchaser,
need be delivered in draft form to the Purchaser.
(f) The Company shall promptly notify the Purchaser upon the
occurrence of any of the following events in respect of the Registration
Statement or the prospectus forming a part thereof: (i) receipt of any
request for additional information from the Commission or any other federal
or state governmental authority during the Registration Period, the response
to which would require any amendments or supplements to the Registration
Statement or related prospectus; (ii) the issuance by the Commission or any
other federal or state governmental authority of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; or (iii) receipt of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(g) The Company shall furnish to the Purchaser with respect to the
Shares registered under the Registration Statement (and to each underwriter,
if any, of such Shares) such number of copies of prospectuses and such other
documents as the Purchaser may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Shares by the Purchaser
pursuant to the Registration Statement.
(h) The Company shall file or cause to be filed such documents as are
required to be filed by the Company for normal blue sky clearance in states
specified in writing by the Purchaser; provided, however, that the Company
shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented.
(i) With a view to making available to the Purchaser the benefits of
Rule 144, the Company agrees, throughout the Registration Period and so long
as the Purchaser owns Shares purchased pursuant to this Agreement, to:
(i) comply with the provisions of paragraph (c)(1) of Rule 144;
and
(ii) file with the Commission in a timely manner all reports
and other documents required to be filed by the Company pursuant to Section
13 or 15(d) under the Exchange Act; and, if at any time it is not required to
file such reports but in the past had been required to or did file such
reports, it will, upon the request of the Purchaser, make available other
information as required by, and so long as necessary to permit sales of its
Shares pursuant to, Rule 144.
(j) The Company shall bear all expenses incurred by it in connection
with the procedures in paragraphs (a) through (i) of this Section 7.1 and the
registration of the Shares pursuant to the Registration Statement. The
Company shall not be responsible for any expenses incurred by the Purchaser
in connection with its sale of the Shares or its participation in the
procedures in paragraphs (a) through (i) of this Section 7.1 including,
without limitation, any fees and expenses of counsel or other advisers to the
Purchaser and any underwriting discounts, brokerage fees and commissions
incurred by the Purchaser.
7.2 Covenants of the Purchaser.
(a) The Purchaser acknowledges and understands that the Shares are
"restricted securities" as defined in Rule 144. The Purchaser hereby agrees
not to offer or sell (as such terms are defined in the Securities Act and the
rules and regulations promulgated thereunder) any Shares unless such offer or
sale is made (a) pursuant to an effective registration of the Shares under
the Securities Act, or (b) pursuant to an available exemption from the
registration requirements of the Securities Act. The Purchaser agrees that
it will not engage in hedging transactions with regard to the Shares other
than in compliance with the Securities Act. A proposed transfer shall be
deemed to comply with this Section 7.2(a) if the Purchaser delivers to the
Company a legal opinion in form and substance satisfactory to the Purchaser
from counsel satisfactory to the Purchaser to the effect that such transfer
complies with this Section 7.2(a).
(b) If at any time or from time to time after the Effective Date,
the Company notifies the Purchaser in writing that the Registration Statement
or the prospectus forming a part thereof (taking into account any prior
amendments or supplements thereto) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they are made,
not misleading, the Purchaser shall not offer or sell any Shares or engage in
any other transaction involving or relating to the Shares (other than
purchases of Shares pursuant to this Agreement), from the time of the giving
of notice with respect to such untrue statement or omission until the
Purchaser receives written notice from the Company that such untrue statement
or omission no longer exists or has been corrected or disclosed in an
effective post-effective amendment to the Registration Statement or a valid
prospectus supplement to the prospectus forming a part thereof.
(c) In connection with the sale of any Shares pursuant to the
Registration Statement, the Purchaser shall deliver to the purchaser thereof
the prospectus forming a part of the Registration Statement and all relevant
supplements thereto which have been provided by the Company to the Purchaser
on or prior to the applicable delivery date, all in accordance with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder and any applicable blue sky laws.
(d) The Company may refuse to register (or permit its transfer agent
to register) any transfer of any Shares not made in accordance with this
Section 7.2 and for such purpose may place stop order instructions with its
transfer agent with respect to the Shares.
(e) The Purchaser will cooperate with the Company in all respects in
connection with the performance by the Company of its obligations under
Section 7.1, including timely supplying all information reasonably requested
by the Company (which shall include all information regarding the Purchaser,
and any person who beneficially owns Shares held by the Purchaser within the
meaning of Rule 13d-3 promulgated under the Exchange Act, and the proposed
manner of sale of the Shares required to be disclosed in the Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Shares. The Purchaser
hereby consents to be named as an underwriter in the Registration Statement,
if applicable, in accordance with current Commission policy and, if
necessary, to join in the request of the Company for the acceleration of the
effectiveness of the Registration Statement.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser Affiliate" shall mean any person who
controls the Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in
Section 7.1.
(a) The Company agrees to indemnify and hold harmless the Purchaser
and each Purchaser Affiliate, against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchaser or such
Purchaser Affiliate may become subject, under the Securities Act, the
Exchange Act, or any other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company), insofar
as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, as amended as of the Effective Date, including
any information deemed to be a part thereof as of the time of effectiveness
pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434 promulgated
under the Securities Act, or the prospectus, in the form first filed with the
Commission pursuant to Rule 424(b) of the Regulations, or filed as part of
the Registration Statement at the time of effectiveness if no Rule 424(b)
filing is required (the "Prospectus"), or any amendment or supplement
thereto, (ii) the omission or alleged omission to state in the Registration
Statement as of the Effective Date a material fact required to be stated
therein or necessary to make the statements in the Registration Statement or
any post-effective amendment or supplement thereto, or in the Prospectus or
any amendment or supplement thereto, not misleading, in each case in the
light of the circumstances under which the statements contained therein were
made, or (iii) any inaccuracy in the representations and warranties of the
Company contained in this Agreement, or any failure of the Company to perform
its obligations hereunder, and will reimburse the Purchaser and each such
Purchaser Affiliate for any legal and other expenses as such expenses which
are reasonably incurred by the Purchaser or such Purchaser Affiliate in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon (i) an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by the Purchaser expressly for
use therein, or (ii) the failure of the Purchaser to comply with the
covenants and agreements contained in Section 7.2 hereof respecting the sale
of the Shares, or (iii) the inaccuracy of any representations made by the
Purchaser herein or (iv) any statement or omission in any Prospectus that is
corrected or disclosed in any subsequent Prospectus that was delivered to the
Purchaser prior to the pertinent sale or sales by the Purchaser.
(b) The Purchaser will indemnify and hold harmless the Company, each
of its directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of the
Securities Act and the Exchange Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person may
become subject, under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of such Purchaser) insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any failure to comply
with the covenants and agreements contained in Section 7.2 hereof respecting
the sale of the Shares, (ii) the inaccuracy of any representation made by the
Purchaser herein, or (iii) any (x) untrue or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or (y) omission or alleged omission to state
in the Registration Statement, the Prospectus or any amendment or supplement
thereto a material fact required to be stated therein or necessary to make
the statements in the Registration Statement or any amendment or supplement
thereto, or in the Prospectus or any amendment or supplement thereto, not
misleading, in each case in the light of the circumstances under which they
were made; provided, that the Purchaser's indemnification obligation under
this clause (iii) shall apply to the extent, and only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by the Purchaser expressly for
use therein, and will reimburse the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person for
any legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.
(c) Promptly after receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.3, promptly notify the indemnifying
party in writing thereof; provided, the omission so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party for contribution (except as provided in paragraph
(d)) or otherwise than under the indemnity agreement contained in this
Section 7.3 or to the extent it is not prejudiced as a result of such
failure. In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with all other indemnifying
parties similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 7.3 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless the
indemnified party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of action, in which case the reasonable
fees and expenses of counsel shall be at the expense of the indemnifying
party.
(d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a) or (b) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein (subject to the limitation of
paragraph (c) of this Section 7.3), then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Purchaser from the placement of the
Common Stock contemplated by this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but the relative fault of the Company and the
Purchaser in connection with the statements or omissions or inaccuracies in
the representations and warranties in this Agreement that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Purchaser on the other shall be deemed to be
in the same proportion as the amount paid by the Purchaser to the Company
pursuant to this Agreement for the Shares purchased by the Purchaser that
were sold pursuant to the Registration Statement bears to the difference (the
"Difference") between the amount such Purchaser paid for the Shares that were
sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of the Company on the one hand
and the Purchaser on the other shall be determined by reference to, among
other things, whether the untrue or alleged statement of a material fact or
the omission or alleged omission to state a material fact or the inaccurate
or the alleged inaccurate representation and/or warranty relates to
information supplied by the Company or by the Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement, omission or inaccuracy. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (c) of this Section 7.3, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 7.3 with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for contribution
is to be made under this paragraph (d); provided, however, that no additional
notice shall be required with respect to any threat or action for which
notice has been given under paragraph (c) for purposes of indemnification.
The Company and each Purchaser agree that it would not be just and equitable
if contribution pursuant to this Section 7.3 were determined solely by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, the Purchaser shall not
be required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7.4 Information Available. So long as the Registration Statement is
effective covering the resale of Shares then still owned by the Purchaser,
the Company will furnish to the Purchaser:
(a) as soon as practicable after available, one copy of (i) its
Annual Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting
principles by a firm of certified public accountants), (ii) upon written
request, its Annual Report on Form 10-KSB, (iii) upon written request, its
Quarterly Reports on Form 10-QSB, (iv) upon written request, its Current
Reports on Form 8-K, and (v) a full copy of the Registration Statement (the
foregoing, in each case, excluding exhibits); and
(b) upon the written request of the Purchaser, all exhibits excluded
by the parenthetical to subparagraph (a)(v) of this Section 7.4.
SECTION 8. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
Biophan Technologies, Inc.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxxxx, Xxx Xxxx 00000
Phone: 000.000.0000
Facsimile: 585.427.9049
Attn: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxx Peabody LLP
Clinton Square
X.X. Xxx 00000
Xxxxxxxxx, Xxx Xxxx 00000-0000
Phone: 000.000.0000
Facsimile: 585.263.1600
Attn.: Xxxxxxx X. Xxxxxx, Esq.
or to such other person at such other place as the Company shall
designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth above or at such
other address or addresses as may have been furnished to the Company in
writing.
SECTION 9. Assignment. Neither party hereto may assign or delegate
any of such party's rights or obligations under or in connection with this
Agreement, and any attempted assignment or delegation of such rights or
obligations shall be void. Except as expressly provided in Section 7.3 with
respect to Purchaser Affiliates, directors and controlling persons of the
Company and officers of the Company who signed the Registration Statement, no
person, including without limitation any person who purchases or otherwise
acquires or receives any Shares from the Purchaser, is an intended third
party beneficiary of this Agreement, and no party to this Agreement shall
have any obligation arising under this Agreement to any person other than the
other party hereto and, to the extent expressly provided in Section 7.3,
Purchaser Affiliates, directors and controlling persons of the Company and
officers of the Company who signed the Registration Statement.
SECTION 10. Changes. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchaser.
SECTION 11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not
be deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to its conflicts of law principles and the federal law of the United States
of America.
SECTION 14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year
first above written.
Biophan Technologies, Inc.
By:
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
SBI Brightline Consulting, LLC
By:
Name: Xxxxxx Xxxxxxx
Title:
SCHEDULE 2.1
TRANCHES
Tranche Purchase Price
Number of Tranche Shares per Tranche Share (U.S.
Tranche No. Included in Tranche Dollars)
----------------------------------------------------------------------------
1 2,000,000 $0.15
2 2,000,000 $0.20
3 2,000,000 $0.25
4 2,000,000 $0.30
5 2,000,000 $0.35
6 1,000,000 $0.40
