Exhibit 10.01
STOCK PURCHASE AGREEMENT
Between
HUMAN BIOSYSTEMS ("TARGET COMPANY")
and
XXXXXXX PARK INVESTMENTS PLC
July 29, 2004
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS 1
1.1 Certain Definitions 1
ARTICLE II PURCHASE AND SALE OF SHARES 4
2.1 Purchase and Sale; Purchase Price 4
2.2 Execution and Delivery of Documents; The Closing 5
ARTICLE III REPRESENTATIONS AND WARRANTIES 5
3.1 Representations, Warranties and Agreements of the Target Company 5
3.2 Representations and Warranties of Xxxxxxx 8
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES 11
4.1 Manner of Offering 11
4.2 Notice of Certain Events 12
4.3 Blue Sky Laws 12
4.4 Integration 12
4.5 Furnishing of Rule 144(c) Materials 12
4.6 Solicitation Materials 12
4.7 Listing of Common Stock 13
4.8 Indemnification 13
4.9 Sale of Xxxxxxx Shares 15
4.10 Lock Up by Xxxxxxx 15
4.11 London Stock Exchange 15
ARTICLE V MISCELLANEOUS 15
5.1 Fees and Expenses. 15
5.2 Entire Agreement 15
5.3 Notices. 15
5.4 Amendments; Waivers 16
5.5 Headings 16
5.6 Successors and Assigns. 16
5.7 No Third Party Beneficiaries 17
5.8 Governing Law; Venue; Service of Process. 17
5.9 Survival. 17
5.10 Counterpart Signatures. 17
5.11 Publicity. 17
5.12 Severability. 17
5.13 Limitation of Remedies. 17
LIST OF SCHEDULES:
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization and Registration Rights
Schedule 3.1(d) Equity and Equity Equivalent Securities
Schedule 3.1(e) Conflicts
Schedule 3.1(f) Consents and Approvals
Schedule 3.1(g) Litigation
Schedule 3.1(h) Defaults and Violations
LIST OF EXHIBITS:
Exhibit A Escrow Agreement
Exhibit B Officer's Certificate
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
July 29, 2004, between Human BioSystems, a corporation organized and existing
under the laws of the State ofCalifornia (the "Target Company"), and Xxxxxxx
Park Investments PLC, a corporation organized under the laws of England and
Wales with its offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ( "Xxxxxxx").
WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Target Company desires to issue and sell to Xxxxxxx and Xxxxxxx desires to
acquire from the Target Company the shares of the Target Company's common stock,
no par value (the "Common Stock") for the Total Purchase Price (as defined
herein). The consideration to be paid by Xxxxxxx for the Common Stock shall be
subject to certain downside price protection (the "Downside Price Protection")
provided in Section 2 of the Escrow Agreement.
IN CONSIDERATION of the mutual covenants contained in this Agreement, the Target
Company and Xxxxxxx agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" means, with respect to any Person, any Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or
otherwise.
"Agreement" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"Attorney-in-Fact" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, 00
Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Business Day" means any day except Saturday, Sunday, any day which shall be a
legal holiday or a day on which banking institutions in the State of New York
are authorized or required by law or other government actions to close.
"Change of Control" means the acquisition, directly or indirectly, by any
Person of ownership of, or the power to direct the exercise of voting power
with respect to, a majority of the issued and outstanding voting shares of the
Target Company.
"Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"Closing Bid Price" shall mean the closing bid price for a share of Common
Stock on such date on the OTCBB (or such other exchange, market, or other
system that the Common Stock is then traded on), as reported on Bloomberg,
L.P. (or similar organization or agency succeeding to its functions of
reporting prices).
"Closing Date" shall have the meaning set forth in Section 2.2(a) hereof.
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"Closing Price" shall be the closing bid price of the Common Stock on the day
of Closing.
"Common Stock" shall have the meaning in the recital.
"Consideration Stock" shall have the meaning set forth in Section 2.1(a)
hereof.
"Control Person" shall have the meaning set forth in Section 4.8(a) hereof.
"Default" means any event or condition which constitutes an Event of Default
or which with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Disclosure Documents" means the Target Company's reports filed under the
Exchange Act with the SEC.
"Downside Price Protection" shall have the meaning in the recital.
"Escrow Agent" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, 00 Xxxxx,
Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Escrow Agreement" means the escrow agreement, dated the date hereof, by and
among the Target Company, Xxxxxxx and the Escrow Agent annexed hereto as
Exhibit A.
[not used here].
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Execution Date" means the date of this Agreement first written above.
"Indemnified Party" shall have the meaning set forth in Section 4.8(b) hereof.
"Indemnifying Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"G&P" means Gottbetter & Partners, LLP.
"Xxxxxxx" shall have the meaning in the introductory paragraph.
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"Xxxxxxx Consideration Shares" shall have the meaning in Section 2.1(c)
hereof.
"Xxxxxxx Escrow Shares" means the Xxxxxxx Consideration Shares deposited into
escrow by the Target Company under the terms of the Escrow Agreement in
Exhibit A.
"Xxxxxxx Protection Shares" means the Xxxxxxx Escrow Shares that the Target
Company is required to sell to Xxxxxxx under the terms of the Escrow Agreement
in Exhibit A.
"Xxxxxxx Shares" shall mean ordinary shares of 1.0p each in Xxxxxxx.
"Losses" shall have the meaning set forth in Section 4.8(a) hereof.
"Material" shall mean having a financial consequence in excess of $25,000.
"Material Adverse Effect" shall have the meaning set forth in Section 3.1(a).
"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market, Inc.
"OTCBB" shall mean the NASD over-the counter Bulletin Board .
"Per Share Market Value" of the Common Stock means on any particular date (a)
the last sale price of shares of Common Stock on such date or, if no such sale
takes place on such date, the last sale price on the most recent prior date,
in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading, or
(b) if the Common Stock is not then listed or admitted to trading on any
national securities exchange, the closing bid price per share as reported by
Nasdaq, or (c) if the Common Stock is not then listed or admitted to trading
on the Nasdaq, the closing bid price per share of the Common Stock on such
date as reported on the OTCBB or if there is no such price on such date, then
the last bid price on the date nearest preceding such date, or (d) if the
Common Stock is not quoted on the OTCBB, the closing bid price for a share of
Common Stock on such date in the over-the-counter market as reported by the
Pinksheets LLC (or similar organization or agency succeeding to its functions
of reporting prices) or if there is no such price on such date, then the last
bid price on the date nearest preceding such date, or (e) if the Common Stock
is no longer publicly traded, the fair market value of a share of the Common
Stock as determined by an appraiser selected in good faith by Xxxxxxx and the
Target Company.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such
as a deposition), whether commenced or threatened.
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"Reporting Issuer" means a company that is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
"Required Approvals" shall have the meaning set forth in Section 3.1(f).
"Securities" means the Common Stock and stock of any other class into which
such shares may hereafter have been reclassified or changed.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a).
"Target Company" shall have the meaning set forth in the introductory
paragraph.
"Total Purchase Price" shall have the meaning set forth in Section 2.1(b).
"Trading Day" means (a) a day on which the Common Stock is quoted on Nasdaq,
the OTCBB or the principal stock exchange on which the Common Stock has been
listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or any
stock exchange, a day on which the Common Stock is quoted in the over-the-
counter market, as reported by the Pinksheets LLC (or any similar organization
or agency succeeding its functions of reporting prices).
"Transaction Documents" means this Agreement and all exhibits and schedules
hereto and all other documents, instruments and writings required pursuant to
this Agreement.
"U.S." means the United States.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale; Purchase Price.
(a) Subject to the terms and conditions set forth herein, the Target
Company shall issue and sell and Xxxxxxx shall purchase seven million
(7,000,000) shares of the Target Company's Common Stock (the
"Consideration Stock").
(b) The total purchase price (the "Total Purchase Price") shall be the
number of shares of Consideration Stock multiplied by the average of the
Closing Bid Price per share of Common Stock during the ten (10) Trading
Days immediately preceding July 30, 2004.
(c) The Total Purchase Price shall be paid by delivery to the Target
Company of the number of Xxxxxxx Shares (the "Xxxxxxx Consideration
Shares") equal to the Total Purchase Price divided by the conversion
rate of the British Pound Sterling to purchase US Dollars determined
below. The Xxxxxxx Shares shall have a value of U.K. $1 per share.
The number of Xxxxxxx Shares to be issued will be based on the
conversion rate of the British Pound Sterling to the US Dollar in effect
as of the close of business on July 30, 2004 , as quoted by Xxxxxx & Co.
as the commercial rate it gives to purchase US Dollars. For example, if
the effective conversion rate is $1.80/U.K. $ 1 and the Total Purchase
Price is $8,000,000, then the number of Xxxxxxx Shares the Target
Company will receive shall equal $8,000,000/$1.80, or 4,444,444 Xxxxxxx
Shares. The Xxxxxxx Consideration Shares shall be subject to the
"Downside Price Protection" provided in Section 2 of the Escrow
Agreement.
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2.2 Execution and Delivery of Documents; The Closing.
(a) The Closing of the purchase and sale of the shares of Consideration
Stock (the "Closing") shall take place within sixty (60) days from the
date hereof (the "Closing Date"). On the Closing Date,
(i) the Target Company shall execute and deliver to the Escrow Agent
a certificate in the name of Xxxxxxx representing shares of
Consideration Stock;
(ii) the Target Company shall execute and deliver to Xxxxxxx a
certificate of its President, in the form of Exhibit B annexed hereto,
certifying that attached thereto is a copy of resolutions duly adopted
by the Board of Directors of the Target Company authorizing the Target
Company to execute and deliver the Transaction Documents and to enter
into the transactions contemplated thereby;
(iii) the Target Company, Xxxxxxx and the Escrow Agent shall execute
and deliver to each other the Escrow Agreement;
(iv) Xxxxxxx shall deliver the Xxxxxxx Consideration Shares to the
Escrow Agent; and
(v) the Target Company shall wire the monies owed to G&P pursuant to
Section 5.1 hereof for legal fees with the following wire
instructions:
Citibank, N.A. 000 Xxxxxxx Xxxxxx Xxx Xxxx, XX ABA
Routing No.: 000000000 Account Name: Gottbetter &
Partners, LLP Account No. 00000000 Reference:
[Target Company]
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Target Company. The
Target Company hereby makes the following representations and warranties to
Xxxxxxx, all of which shall survive the Closing:
(a) Organization and Qualification. The Target Company is a corporation,
duly incorporated, validly existing and in good standing under the laws
of the State of California, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. The Target Company has no subsidiaries
other than as set forth on Schedule 3.1(a) attached hereto (collectively,
the "Subsidiaries"). Each of the Subsidiaries is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the full corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. Each of the Target Company and the
Subsidiaries is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the
aggregate, have a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Target Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) Authorization, Enforcement. The Target Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated hereby and by each other Transaction Document
and to otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other
Transaction Documents by the Target Company and the consummation by it of
the transactions contemplated hereby and thereby has been duly authorized
by all necessary action on the part of the Target Company. Each of this
Agreement and each of the other Transaction Documents has been or will be
duly executed by the Target Company and when delivered in accordance with
the terms hereof or thereof will constitute the valid and binding
obligation of the Target Company enforceable against the Target Company
in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable
principles of general application.
(c) Capitalization. The authorized, issued and outstanding capital stock
of the Company is set forth on Schedule 3.1(c). No shares of Common
Stock are entitled to preemptive or similar rights, nor is any holder of
the Common Stock entitled to preemptive or similar rights arising out of
any agreement or understanding with the Target Company by virtue of this
Agreement. Except as disclosed in Schedule 3.1(c), there are no
outstanding options, warrants, script, rights to subscribe to,
registration rights, calls or commitments of any character whatsoever
relating to securities, rights or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Target Company or any
Subsidiary is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. Neither the Target Company nor any Subsidiary is in
violation of any of the provisions of its Articles of Incorporation,
bylaws or other charter documents.
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(d) Issuance of Securities. The shares of Consideration Stock have been
duly and validly authorized for issuance, offer and sale pursuant to this
Agreement and, when issued and delivered as provided hereunder against
payment in accordance with the terms hereof, shall be valid and binding
obligations of the Target Company enforceable in accordance with their
respective terms.
(e) No Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Target Company and
the consummation by the Target Company of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of its Articles of Incorporation or bylaws (each as amended
through the date hereof) or (ii) be subject to obtaining any consents
except those referred to in Section 3.1(f), conflict with, or constitute
a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Target Company is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to
which the Target Company or its Subsidiaries is subject (including, but
not limited to, those of other countries and the federal and state
securities laws and regulations), or by which any property or asset of
the Target Company or its Subsidiaries is bound or affected, except in
the case of clause (ii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect. The
business of the Target Company and its Subsidiaries is not being
conducted in violation of any law, ordinance or regulation of any
governmental authority.
(f) Consents and Approvals. Except as specifically set forth in Schedule
3.1(f), neither the Target Company nor any Subsidiary is required to
obtain any consent, waiver, authorization or order of, or make any filing
or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Target Company of this Agreement and each
of the other Transaction Documents (together with the consents, waivers,
authorizations, orders, notices and filings referred to in Schedule
3.1(f), the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed in
Schedule 3.1(g), there is no action, suit, notice of violation,
proceeding or investigation pending or, to the best knowledge of the
Target Company, threatened against or affecting the Target Company or any
of its Subsidiaries or any of their respective properties before or by
any court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) relates to or
challenges the legality, validity or enforceability of any of the
Transaction Documents or the shares of Consideration Stock, (ii) could,
individually or in the aggregate, have a Material Adverse Effect or (iii)
could, individually or in the aggregate, materially impair the ability of
the Target Company to perform fully on a timely basis its obligations
under the Transaction Documents.
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(h) No Default or Violation. Except as set forth in Schedule 3.1(h)
hereto, neither the Target Company nor any Subsidiary (i) is in default
under or in violation of any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or
any of its properties is bound, except such conflicts or defaults as do
not have a Material Adverse Effect, (ii) is in violation of any order of
any court, arbitrator or governmental body, except for such violations as
do not have a Material Adverse Effect, or (iii) is in violation of any
statute, rule or regulation of any governmental authority which could
(individually or in the aggregate) (a) adversely affect the legality,
validity or enforceability of this Agreement, (b) have a Material
Adverse Effect or (c) adversely impair the Target Company's ability or
obligation to perform fully on a timely basis its obligations under this
Agreement.
(i) Disclosure Documents. The Disclosure Documents are accurate in all
material respects and do not contain any untrue statement of material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
(j) Non-Registered Offering. Neither the Target Company nor any Person
acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Target Company
under circumstances which would require the integration of such offering
with the offering of the Securities under the Securities Act) which might
subject the offering, issuance or sale of the Securities to the
registration requirements of Section 5 of the Securities Act.
(k) Placing Agent. The Target Company accepts and agrees that Dungarvon
Associates, Inc. ("Dungarvon") is acting for Xxxxxxx and does not regard
any person other than Xxxxxxx as its customer in relation to this
Agreement, and that it has not made any recommendation to the Target
Company, in relation to this Agreement and is not advising the Target
Company, with regard to the suitability or merits of the Xxxxxxx Shares
and in particular Dungarvon has no duties or responsibilities to the
Target Company for the best execution of the transaction contemplated by
this Agreement.
(l) Private Placement Representations. The Target Company (i) has
received and carefully reviewed such information and documentation
relating to Xxxxxxx that the Target Company has requested, including,
without limitation, Xxxxxxx'x Confidential Private Offering Memorandum
dated June 17, 2004; (ii) has had a reasonable opportunity to ask
questions of and receive answers from Xxxxxxx concerning the Xxxxxxx
Shares, and all such questions, if any, have been answered to the full
satisfaction of the Target Company; (iii) has such knowledge and
expertise in financial and business matters that it is capable of
evaluating the merits and risks involved in an investment in the Xxxxxxx
Shares; (iii) understands that Xxxxxxx has determined that the exemption
from the registration provisions of the Securities Act of 1933, as
amended (the "Securities Act"), provided by Section 4(2) of the
Securities Act is applicable to the offer and sale of the Xxxxxxx Shares,
based, in part, upon the representations, warranties and agreements made
by the Target Company herein; and (iv) except as provided herein and in
the Private Placement Memorandum, dated June 17, 2004, no representations
or warranties have been made to the Target Company by Xxxxxxx or any
agent, employee or affiliate of Xxxxxxx and in entering into this
transaction the Target Company is not relying upon any information, other
than the results of independent investigation by the Target Company.
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Xxxxxxx acknowledges and agrees that the Target Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of Xxxxxxx. Xxxxxxx hereby represents
and warrants to the Target Company as follows:
(a) Organization; Authority. Xxxxxxx is a corporation, duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its formation with the requisite power and authority to enter into and
to consummate the transactions contemplated hereby and by the other
Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The acquisition of the shares of Consideration
Stock to be purchased by Xxxxxxx hereunder has been duly authorized by
all necessary action on the part of Xxxxxxx. This Agreement has been
duly executed and delivered by Xxxxxxx and constitutes the valid and
legally binding obligation of Xxxxxxx, enforceable against it in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to, or affecting generally the enforcement of,
creditors rights and remedies or by other general principles of equity.
(b) Investment Intent. Xxxxxxx is acquiring the shares of Consideration
Stock to be purchased by it hereunder, for its own account for investment
purposes only and not with a view to or for distributing or reselling
such shares of Consideration Stock, or any part thereof or interest
therein, without prejudice, however, to Xxxxxxx'x right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose
of all or any part of such shares of Consideration Stock in compliance
with applicable federal and state securities laws.
(c) Experience of Xxxxxxx. Xxxxxxx, either alone or together with its
representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the
merits and risks of an investment in the shares of Consideration Stock to
be acquired by it hereunder, and has so evaluated the merits and risks of
such investment.
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(d) Ability of Xxxxxxx to Bear Risk of Investment. Xxxxxxx is able to
bear the economic risk of an investment in the Securities to be acquired
by it hereunder and, at the present time, is able to afford a complete
loss of such investment.
(e) Access to Information. Xxxxxxx acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Target
Company concerning the terms and conditions of the Securities offered
hereunder and the merits and risks of investing in such securities; (ii)
access to information about the Target Company and the Target Company's
financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its
investment in the Securities; and (iii) the opportunity to obtain such
additional information which the Target Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify
the accuracy and completeness of the information that it has received
about the Target Company.
(f) Reliance. Xxxxxxx understands and acknowledges that (i) the shares
of Consideration Stock being offered and sold to it hereunder are being
offered and sold without registration under the Securities Act in a
private placement that is exempt from the registration provisions of the
Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that the Target
Company will rely upon the accuracy and truthfulness of, the foregoing
representations and Xxxxxxx hereby consents to such reliance.
(g) Regulation X. Xxxxxxx understand and acknowledge that (A) the shares
of Consideration Stock have not been registered under the Securities Act,
are being sold in reliance upon an exemption from registration afforded
by Regulation S; and that such shares of Consideration Stock have not
been registered with any state securities commission or authority; (B)
pursuant to the requirements of Regulation S, the shares of Consideration
Stock may not be transferred, sold or otherwise exchanged unless in
compliance with the provisions of Regulation S and/or pursuant to
registration under the Securities Act, or pursuant to an available
exemption hereunder; and (C) Xxxxxxx is under no obligation to register
the shares of Consideration Stock under the Securities Act or any state
securities law, or to take any action to make any exemption from any such
registration provisions available.
Xxxxxxx is not a U.S. person and is not acquiring the shares of
Consideration Stock for the account of any U.S. person; (B) no
director or executive officer of Xxxxxxx is a national or citizen of
the United States; and (C) it is not otherwise deemed to be a "U.S.
Person" within the meaning of Regulation X.
Xxxxxxx was not formed specifically for the purpose of acquiring the
shares of Consideration Stock purchased pursuant to this Agreement.
Xxxxxxx is purchasing the shares of Consideration Stock for its own
account and risk and not for the account or benefit of a U.S. Person
as defined in Regulation S and no other person has any interest in or
participation in the shares of Consideration Stock or any right,
option, security interest, pledge or other interest in or to the
shares of Consideration Stock. Xxxxxxx understands, acknowledges and
agrees that it must bear the economic risk of its investment in the
shares of Consideration Stock for an indefinite period of time and
that prior to any such offer or sale, the Target Company may require,
as a condition to effecting a transfer of the shares of Consideration
Stock, an opinion of counsel, acceptable to the Target Company, as to
the registration or exemption therefrom under the Securities Act and
any state securities acts, if applicable.
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Xxxxxxx will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge
or otherwise transfer the shares of Consideration Stock only in
accordance with Regulation S, or pursuant to an available exemption
under the Securities Act and, in any case, in accordance with
applicable state securities laws. The transactions contemplated by
this Agreement have neither been pre-arranged with a purchaser who is
in the U.S. or who is a U.S. Person, nor are they part of a plan or
scheme to evade the registration provisions of the United States
federal securities laws.
The offer leading to the sale evidenced hereby was made in an
"offshore transaction." For purposes of Regulation S, Xxxxxxx
understands that an "offshore transaction" as defined under
Regulation S is any offer or sale not made to a person in the United
States and either (A) at the time the buy order is originated, the
purchaser is outside the United States, or the seller or any person
acting on his behalf reasonably believes that the purchaser is
outside the United States; or (B) for purposes of (1) Rule 903 of
Regulation S, the transaction is executed in, or on or through a
physical trading floor of an established foreign exchange that is
located outside the United States or (2) Rule 904 of Regulation S,
the transaction is executed in, on or through the facilities of a
designated offshore securities market, and neither the seller nor any
person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.
Neither Xxxxxxx nor any affiliate or any person acting on Xxxxxxx'x
behalf, has made or is aware of any "directed selling efforts" in the
United States, which is defined in Regulation S to be any activity
undertaken for the purpose of, or that could reasonably be expected
to have the effect of, conditioning the market in the United States
for any of the shares of Consideration Stock being purchased hereby.
Xxxxxxx understands that the Target Company is the seller of the
shares of Consideration Stock which are the subject of this
Agreement, and that, for purpose of Regulation S, a "distributor" is
any underwriter, dealer or other person who participates, pursuant to
a contractual arrangement, in the distribution of securities offered
or sold in reliance on Regulation S and that an "affiliate" is any
partner, officer, director or any person directly or indirectly
controlling, controlled by or under common control with any person in
question. Xxxxxxx agrees that Xxxxxxx will not, during the
Restricted Period set forth under Rule 903(b)(iii)(A), act as a
distributor, either directly or though any affiliate, nor shall it
sell, transfer, hypothecate or otherwise convey the shares of
Consideration Stock other than to a non-U.S. Person.
Xxxxxxx acknowledges that the shares of Consideration Stock will bear
a legend in substantially the following form:
-11-
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.
The Target Company acknowledges and agrees that Xxxxxxx makes no representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Securities are being issued pursuant to section
4(2) of the Securities Act and Regulation S thereunder. The Xxxxxxx
Consideration Shares are being issued pursuant to section 4(2) of the
Securities Act and Rule 506 of Regulation D thereunder.
4.2 Notice of Certain Events. The Target Company shall, on a continuing
basis, (i) advise Xxxxxxx promptly after obtaining knowledge of, and, if
requested by Xxxxxxx, confirm such advice in writing, of (A) the issuance by
any state securities commission of any stop order suspending the
qualification or exemption from qualification of the shares of Consideration
Stock, for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, or (B) any event that makes any statement of a
material fact made by the Target Company in Section 3.1 or in the Disclosure
Documents untrue or that requires the making of any additions to or changes
in Section 3.1 or in the Disclosure Documents in order to make the
statements therein, in the light of the circumstances under which they are
made, not misleading, (ii) use its best efforts to prevent the issuance of
any stop order or order suspending the qualification or exemption from
qualification of the Securities under any state securities or Blue Sky laws,
and (iii) if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
from qualification of the Securities under any such laws, and use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
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4.3 Blue Sky Laws. The Target Company agrees that it will execute all
necessary documents and pay all necessary state filing or notice fees to
enable the Target Company to sell the Securities to Xxxxxxx.
4.4 Integration. The Target Company shall not and shall use its best
efforts to ensure that no Affiliate shall sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer
or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to Xxxxxxx.
4.5 Furnishing of Rule 144(c) Materials. The Target Company shall, for so
long as any of the Securities remain outstanding and during any period in
which the Target Company is not subject to Section 13 or 15(d) of the
Exchange Act, make available to any registered holder of the Securities
("Holder" or "Holders") in connection with any sale thereof and any
prospective purchaser of such Securities from such Person, such information
in accordance with Rule 144(c) promulgated under the Securities Act as is
required to sell the Securities under Rule 144 promulgated under the
Securities Act.
4.6 Solicitation Materials. The Target Company shall not (i) distribute any
offering materials in connection with the offering and sale of the shares of
Consideration Stock other than the Disclosure Documents and any amendments
and supplements thereto prepared in compliance herewith or (ii) solicit any
offer to buy or sell the shares of Consideration Stock by means of any form
of general solicitation or advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become listed
on the OTCBB or on another exchange, the Target Company shall (a) use its
best efforts to maintain the listing of its Common Stock on the OTCBB or
such other exchange on which the Common Stock is then listed until two years
from the date hereof, and (b) shall provide to Xxxxxxx evidence of such
listing.
4.8 Indemnification.
(a) Indemnification.
(i) The Target Company shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless
Xxxxxxx and its officers, directors, agents, employees and affiliates,
each Person who controls or Xxxxxxx (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) (each such Person,
a "Control Person") and the officers, directors, agents, employees and
affiliates of each such Control Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by the Target Company
under this Agreement or any other Transaction Document.
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(ii) Xxxxxxx shall, notwithstanding termination of this Agreement and
without limitation as to time, indemnify and hold harmless the Target
Company, its officers, directors, agents and employees, each Control
Person and the officers, directors, agents and employees of each Control
Person, to the fullest extent permitted by application law, from and
against any and all Losses, as incurred, arising out of, or relating to,
a breach or breaches of any representation, warranty, covenant or
agreement by Xxxxxxx under this Agreement or the other Transaction
Documents.
(iii) The Target Company and Xxxxxxx acknowledge that in the SEC's
opinion, directors, officers and persons controlling a company subject
to the Securities Act can not be indemnified for liabilities arising
under the Securities Act by such company.
(b) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying Party") in writing,
and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent
that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has
agreed to pay such fees and expenses; or (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and
to employ counsel reasonably satisfactory to such Indemnified Party in
any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense of the claim
against the Indemnified Party but will retain the right to control the
overall Proceedings out of which the claim arose and such counsel
employed by the Indemnified Party shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for
any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in
respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such
Proceeding.
All fees and expenses of the Indemnified Party to which the Indemnified
Party is entitled hereunder (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section)
shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party.
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No right of indemnification under this Section shall be available as to
a particular Indemnified Party if the Indemnifying Party obtains a non-
appealable final judicial determination that such Losses arise solely
out of the negligence or bad faith of such Indemnified Party in
performing the obligations of such Indemnified Party under this
Agreement or a breach by such Indemnified Party of its obligations
under this Agreement.
(c) Contribution. If a claim for indemnification under this Section is
unavailable to an Indemnified Party or is insufficient to hold such
Indemnified Party harmless for any Losses in respect of which this Section
would apply by its terms (other than by reason of exceptions provided in
this Section), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying
Party on the one hand and the Indemnified Party on the other and the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether there was a judicial determination that such
Losses arise in part out of the negligence or bad faith of the Indemnified
Party in performing the obligations of such Indemnified Party under this
Agreement or the Indemnified Party's breach of its obligations under this
Agreement. The amount paid or payable by a party as a result of any Losses
shall be deemed to include any attorneys' or other fees or expenses incurred
by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party.
(d) Non-Exclusivity. The indemnity and contribution agreements contained in
this Section are in addition to any obligation or liability that the
Indemnifying Parties may have to the Indemnified Parties.
4.9 Sale of Xxxxxxx Consideration Shares. Xxxxxxx shall assist the Target
Company in setting up and maintaining a trading account at a registered
broker in the United Kingdom to facilitate the sale of the Xxxxxxx
Consideration Shares. Broker's commissions in the trading account shall not
exceed one half percent (0.5%).
4.10 Lock Up by Xxxxxxx. Xxxxxxx shall not sell, transfer or assign all or
any of the shares of Consideration Stock for a period of two (2) years
following the Closing, without the written consent of the Target Company,
which consent may be withheld in the Target Company's sole discretion.
-15-
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each party
shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this
Agreement. The Target Company shall pay all stamp and other taxes and duties
levied in connection with the issuance of the shares of Consideration Stock
pursuant hereto. Xxxxxxx shall be responsible for any taxes payable by
Xxxxxxx that may arise as a result of the investment hereunder or the
transactions contemplated by this Agreement or any other Transaction
Document. The Target Company agrees to pay Xxxxxxx'x counsel a total of
$7,500 for legal fees associated with the transactions contemplated by this
Agreement at Closing. The Target Company shall pay all costs, expenses, fees
and all taxes incident to and in connection with: (A) the issuance and
delivery of the Securities, (B) the exemption from registration of the
Securities for offer and sale to Xxxxxxx under the securities or Blue Sky
laws of the applicable jurisdictions, and (C) the preparation of certificates
for the Securities (including, without limitation, printing and engraving
thereof), and (D) all fees and expenses of counsel and accountants of the
Target Company.
5.2 Entire Agreement This Agreement, together with all of the Exhibits
annexed hereto, and any other Transaction Document contains the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement shall be deemed to have been drafted
and negotiated by both parties hereto and no presumptions as to
interpretation, construction or enforceability shall be made by or against
either party in such regard.
5.3 Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business
Day during normal business hours where such notice is to be received)
whichever shall first occur. The addresses for such communications shall be:
If to the Target Company: Human BioSystems
Attn: Xxxxx Xxxxxx
President and CEO
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000 ) 000-0000
With copies to: Silicon Valley Law Group
Attn: Xxxxxxx X. Xxxxx, Esq.
00 Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Xxxxxxx: Xxxxxxx Park Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
With copies to: Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
-16-
or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.
5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment,
by both the Target Company and Xxxxxxx, or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any other provision, condition or requirement hereof, nor shall any delay
or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. The assignment by a party of this Agreement or any rights hereunder
shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The
parties hereto agree that the internal laws of the State of New York shall
govern this Agreement and the exhibits hereto, including, but not limited to,
all issues related to usury. Any action to enforce the terms of this
Agreement or any of its exhibits, or any other Transaction Document shall be
brought exclusively in the state and/or federal courts situated in the County
and State of New York. If and only if New York declines jurisdiction within
the State of New York, such action shall be brought in the State and County
where the Target Company's principal place of business is situated. Service
of process in any action by Xxxxxxx or the Target Company to enforce the
terms of this Agreement may be made by serving a copy of the summons and
complaint, in addition to any other relevant documents, by commercial
overnight courier to the other party at its principal address set forth in
this Agreement.
-17-
5.9 Survival. The representations and warranties of the Target Company and
Xxxxxxx contained in Article III and the agreements and covenants of the
parties contained in Article IV and this Article V shall survive the Closing.
5.10 Counterpart Signatures. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
5.11 Publicity. The Target Company and Xxxxxxx shall consult with each other
in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without
the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed, unless counsel for the disclosing party
deems such public statement to be required by applicable federal and/or state
securities laws. Except as otherwise required by applicable law or
regulation, the Target Company will not disclose to any third party
(excluding its legal counsel, accountants and representatives) the names of
Xxxxxxx.
5.12 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision which shall be a reasonable
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
5.13 Limitation of Remedies. With respect to claims by the Target Company or
any person acting by or through the Target Company, or by Xxxxxxx or any
person acting through Xxxxxxx, for remedies at law or at equity relating to
or arising out of a breach of this Agreement, liability, if any, shall, in no
event, include loss of profits or incidental, indirect, exemplary, punitive,
special or consequential damages of any kind.
[ SIGNATURE PAGE FOLLOWS ]
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first indicated above.
Target Company:
Human BioSystems
By: /s/ Xxxxx Xxxxxx
--------------------
Name: Xxxxx Xxxxxx
Title: President and CEO
Xxxxxxx:
Dungarvon Associates, Inc. on behalf of
Xxxxxxx Park Investments Plc.
By: /s/Xxxxx Xxxxx
-------------------
Name: Xxxxx Xxxxx
Title: Administrative Director
-19-
NOTE: EXHIBIT 'A' and EXHIBIT 'B' OF THIS AGREEMENT
HAVE BEEN FILED AS EXHIBIT 10.02
