EXHIBIT 10.24
WARRANT EXCHANGE AGREEMENT
This Warrant Exchange Agreement (this "Agreement") is entered into as of
the date set forth on the signature page hereof by and between InforMedix
Holdings, Inc. a Nevada corporation (the "Company"), and the undersigned
investor (together with its successors and permitted assigns, the "Investor").
In consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
TERMS OF THE OFFERING
1.8 The Company is offering (the "Offering") to the undersigned Investor
and all other existing holders of Warrants ("MA Warrants")
originally issued to ▇▇▇▇▇▇ Associates, L.P. ("MA"), in connection
with the 2004 Private Placement of the Company's securities
("Warrantholders") shares of Common Stock, $.001 par value ("Common
Stock") of the Company. The Offering shall terminate at 11:59 p.m.
Eastern Time on February 24, 2005 (the "Termination Date"), unless
mutually extended by the Company and ▇▇▇▇▇▇ Associates L.P., its
financial consultant and advisor. The Offering is being made only to
Investors who qualify as "accredited investors" as such term is
defined in Rule 501 of Regulation D under the Securities Act of
1933, as amended (the "Securities Act"). The shares of Common Stock
issuable upon the exchange of the MA Warrants are collectively
referred to herein as the "Securities."
Subject to the terms and conditions of this Agreement, the Investor
desires to exchange (the "Exchange Offer") all MA Warrants owned by
the Investor and the Company desires to issue to the Investor, the
number of shares of Common Stock set forth upon the signature page
hereof (the "Securities") at an exchange rate (the "Exchange Rate")
set forth therein, and on the other terms and conditions set forth
in this Agreement.
1.9 The undersigned, Investor intending to be legally bound, hereby
irrevocably subscribes to exchange all MA Warrants owned by the
Investor as set forth on the signature page hereof, as calculated
below, for Shares of Common Stock equal to 45% of the shares of
Common Stock otherwise issuable upon exercise of the MA Warrants
currently held by the Investor. By way of example, each Unit
issuable upon exercise of the MA Warrants consists of 135,136 shares
of Common Stock, Class A Warrants to purchase 135,136 shares of
Common Stock and Class B Warrants to purchase 67,568 shares of
Common Stock, or an aggregate of 337,840 shares of Common Stock per
Unit multiplied by 45%, or an Exchange Rate of 152,028 shares of
Common Stock issuable for each Unit issuable upon exercise of the MA
Warrants. Investors will only be eligible to participate in this
offering to the extent that they surrender 100% of all MA Warrants
held. This Offering will be made on a "best efforts" basis. However,
at least 70% of all of MA Warrants must be exchanged before there
will be a Closing. However, there shall be no partial participation.
Investors that hold fractional units shall be permitted to
participate proportionately by multiplying the respective numbers
for one full Unit by the fraction held.
1.10 An executed and properly completed copy of this Agreement together
with the other documents set forth above under "Subscription
Instructions" should be delivered, to ▇▇▇▇▇▇ Associates, L.P.
("MA"), ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇.
1.11 If this Agreement is accepted by the Company, in whole or in part,
and subject to the conditions set forth in Section 2.2 of this
Agreement, the Company shall issue the Common Stock subscribed for
hereby, dated the date of closing of the Offering of such Agreement
(the "Closing") and return to the Investor a fully executed copy of
this Agreement. The Investor hereby authorizes and directs the
Company to deliver certificates representing the Securities to be
issued to such Investor pursuant to this Agreement to the Escrow
Agent unless otherwise notified by the Investor that he is
exercising his registration rights.
1.12 The undersigned may not withdraw this subscription or any amount,
paid pursuant thereto, except as otherwise provided below.
1.13 If the Investor is not a United States person, such Investor hereby
represents that it has satisfied itself as to the full observance of
the laws of its jurisdiction in connection with any invitation to
subscribe for the Securities or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase
of the Securities, (ii) any foreign exchange restrictions applicable
to such purchase, (iii) any governmental or other consents that may
need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Securities. Such Investor's
subscription and payment for, and his or her continued beneficial
ownership of the Securities, will not violate any applicable
securities or other laws of the Investor's jurisdiction.
ARTICLE II
EXCHANGE OF WARRANTS
In consideration of the mutual promises contained herein and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
of this Agreement agree as follows:
2.4 Exchange Offer. Subject to the terms and conditions of this
Agreement:
(v) Each Investor agrees to purchase at the Closing (as defined
below) and the Company agrees to sell and issue to each
Investor at the Closing that aggregate number of shares of
Common Stock set forth opposite such Investor's name on the
signature page hereof as shall be equal to 45% of the shares
of Common Stock underlying all MA Warrants held by the
undersigned Investor. An Investor will only be eligible to
participate in this Offering to the extent he exchanges 100%
of all MA Warrants owned. There shall be no partial exchange
of MA Warrants. Investors that hold fractional MA Warrants
shall be permitted to participate proportionately.
(vi) Upon the Exchange Offer and the Closing occurring, the shares
of Common Stock issued shall be delivered to the Company's
Securities Counsel, ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP to act as escrow agent
(the "Escrow Agent"). These shares have been previously
registered with the Securities and Exchange Commission (the
"SEC"). However, these shares will only become free trading
upon filing of a new registration statement (the "Registration
Statement"), describing this Offering, which the Company shall
do within ten days of the Closing. These shares of Common
Stock held in escrow shall be released upon the effective date
of the registration statement or sooner if the Investor
request such shares and waives his registration rights and
elects to receive restricted Common Stock.
(vii) The undersigned agrees to forfeit all rights, title and
interest to, and surrender all MA Warrants owned, in exchange
for the Securities set forth in subparagraph (i) above.
(viii) By way of example, for each MA Warrant issued pursuant to the
InforMedix Private Placement Memorandum dated October 20, 2003
("2003-2004 InforMedix Private Placement"), an Investor
received a warrant to purchase 135,136 shares of common stock,
135,136 Class A Warrants exercisable into 135,136 shares of
common stock at $.44 per share, and 135,136 Class B Warrants
exercisable into 67,568 shares of common stock at $.56 per
share. Under the terms of this Agreement, an Investor holding
one MA Warrant to purchase one Unit consisting of an aggregate
of 337,840 shares of Common Stock would surrender his MA
Warrant and the Company would issue the Investor an aggregate
of 152,028 shares of restricted common stock (the
"Securities") as consideration for the Exchange Rate for one
MA Warrant. All shares of restricted Common Stock shall be
delivered to the Escrow Agent and held in escrow until
registered on the Registration Statement as described in
Article VII below.
2.5 Conditions of Offering. It is understood and agreed that this
Agreement is made subject to the following terms and conditions:
(v) The Company and MA shall have the right to accept or reject
this Agreement in whole. Unless this subscription is accepted
in whole by the Company prior to the Termination Date, this
Agreement shall be deemed rejected in whole. Agreements
accepted in whole by the Company shall be irrevocable, except
as otherwise provided by law. Agreements need not be accepted
in the order received.
(vi) At the date of the Closing, MA shall have been furnished with
such information, documents, certificates, and opinions as it
may reasonably require to evidence the accuracy, completeness,
or satisfaction of the representations, warranties, covenants,
agreements, and conditions herein contained or as it otherwise
may reasonably request.
(vii) The Investor acknowledges that the Company may, in its sole
and absolute discretion, reduce the Investor's Exchange Offer
for Securities to any number of MA Warrants that does not
exceed the number of MA Warrants set forth on the signature
page hereof, or that the Company may reject the Investor's
subscription in its entirety, in each case without prior
notice to or consent by the Investor. Upon acceptance of the
Investor's Exchange Offer for Securities, the Company shall
issue the Securities to the Investor at the Exchange Rate,
subject to the terms and conditions of this Agreement. The
Closing of the Offering is set forth in Section 2.3 hereof.
The Company and the Investor shall each bear their own
expenses in connection with the Offering.
(viii) The Company and the Investors agree that warrant exchanges by
officers, directors, their affiliates and other insiders may
be made in this Offering.
2.6 Closing; Deliver.
(iv) The "Closing" shall mean such date, after all the conditions
precedent in Section 2.2 and Article V are fulfilled or waived
in writing, as the case may be, prior to the Termination Date
(the "Initial Closing"). On each Closing, exchange of the
Warrants shall take place at such time and place as the
Company and the Investors mutually agree upon, orally or in
writing. The Investors shall not be liable to any party,
including, but not limited to, the Company, in the event any
Closing does not take place owing to the conditions set out in
Section 2.2 and Article V not being fulfilled or waived as the
case may be.
(v) At each Closing, the Company shall deliver to the Escrow Agent
the relevant Securities to be purchased by each Investor at
the Closing against delivery of counterpart signature pages to
this Agreement and the relevant MA Warrant Certificate, with
the executed Assignment Form.
(vi) The Securities will be delivered to the Escrow Agent
simultaneously with each Closing unless contrary instructions
are received form the Investor and the Company. As described
in Section 2.1 above, the Securities will be held in escrow
with the Escrow Agent until such time as the shares of Common
stock are registered on the Registration Statement.
Notwithstanding the foregoing, at any time an Investor may
elect to waive his registration rights and receive his
securities from the Company or the Escrow Agent. Delivery of
the Securities to be issued to each Investor shall be made by
the Company following the effective date of the applicable
Registration Statement by delivery to the Investor of
certificates for the total number of Securities to be issued
to the Investor hereunder registered in the name of the
Investor or such other person as the Investor may have
designated. This Agreement shall terminate and be of no
further force and effect if the Initial Closing does not occur
on or before February 25, 2005 unless extended by mutual
consent of the Company and MA.
ARTICLE III
REPRESENTATION AND WARRANTIES OF INVESTORS
Each Investor represents and warrants to the Company that:
3.26 Such Investor has full power and authority to enter into this
Agreement. This Agreement, when executed and delivered by the
Investor, will constitute a valid and legally binding obligation of
the Investor, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors' rights generally,
and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies.
3.27 This Agreement is made with the Investor in reliance upon the
Investor's representation to the Company, which by the Investor's
execution of this Agreement, the Investor hereby confirms, that the
Securities to be acquired by the Investor will be acquired for
investment for the Investor's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part
thereof as at the date of this Agreement, and that the Investor has
no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the
Investor further represents that the Investor does not presently
have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or
to any third person, with respect to any of the Securities. The
Investor has not been formed for the specific purpose of acquiring
any of the Securities.
3.28 The Investor acknowledges receipt and careful review of this
Agreement and all exhibits thereto and other documents furnished in
connection with this transaction (collectively, the "Offering
Documents") and hereby represents that he has been furnished by the
Company during the course of this transaction with all information
regarding the Company which he has requested or desires to know; and
that such information and documents have, in his opinion, afforded
the Investor with all of the same information that would be provided
him in a registration statement filed under the Act; that he has
been afforded the opportunity to ask questions of and receive
answers from duly authorized officers or other representatives of
the Company concerning the terms and conditions of the offering, and
any additional information which he had requested.
3.29 The Investor recognizes that the purchase of Securities involves a
high degree of risk in that (i) an investment in the Company is
highly speculative and only Investors who can afford the loss of
their entire investment should consider investing in the Company and
the Securities; (ii) he may not be able to liquidate his investment;
(iii) transferability of the Securities is extremely limited; and
(iv) an Investor could suffer the loss of his entire investment, as
well as other risk factors as more fully set forth herein.
3.30 The Investor represents and warrants that he is still an "accredited
investor" as such term in defined in Rule 501 of Regulation D
promulgated under the Act, as indicated by his prior responses to
the Purchaser Questionnaire and Statement ("Purchaser
Questionnaire"), and that he is able to bear the economic risk of an
investment in the Securities. The Investor further represents and
warrants that the information furnished in the Purchaser
Questionnaire remains accurate and complete in all material
respects.
3.31 The Investor acknowledges that he has prior investment experience,
including investment in non-listed and non-registered securities, or
he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available
by the Company both to him and to all other prospective Investors in
the Securities and to evaluate the merits and risks of such an
investment on his behalf, and that he recognizes the highly
speculative nature of this investment.
3.32 The Investor acknowledges that this offering of Securities may
involve tax consequences and that the contents of the Offering
Documents do not contain tax advice or information. The Investor
acknowledges that he must retain his own professional advisors to
evaluate the tax and other consequences of an investment in the
Securities. The Investor acknowledges that he has had an opportunity
to consult with counsel of his choice and that he must retain his
own legal advisor. The Investor has not relied on the Company, it
officers, directors, or professional advisors for advise as to such
consequences.
3.33 The Investor acknowledges that this Offering has not been reviewed
by the SEC because of the Company's representations that this is
intended to be a nonpublic offering pursuant to Sections 4(2), 4(6)
or 3(b) of the Act and Rule 506 of Regulation D promulgated
thereunder. The Investor represents that the Securities are is being
purchased for his own account, for investment and not with a view
to, or for resale in connection with, their distribution within the
meaning of the Act. The Investor agrees that he will not sell or
otherwise transfer the Securities unless it is registered under the
Act or unless an exemption from such registration is available.
3.34 The Investor understands that, except as set forth in Article VII,
the Securities have not been, and will not be, registered under the
Act, by reason of a specific exemption from the registration
provisions of the Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the
Investor's representations as expressed herein. In this connection,
the Investor understands that it is the position of the SEC that the
statutory basis for such exemption would not be present if his
representation merely meant that his present intention was to hold
such securities for a short period, such as the capital gains period
of tax statutes, for a deferred sale, for a market rise, assuming
that a market develops, or for any other fixed period. The Investor
realizes that, in the view of the SEC, a purchase now with an intent
to resell would represent a purchase with an intent inconsistent
with his representation to the Company, and the SEC might regard
such a sale or disposition as a deferred sale to which such
exemptions are not available.
The Investor understands that the Securities are "restricted
securities" under applicable U.S. federal and state securities laws
and that, pursuant to these laws, the Investor must hold the
Securities indefinitely unless they are registered with the SEC and
qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The
Investor acknowledges that the Company has no obligation to register
or qualify the Securities for resale other than as set forth in
Article VII herein and as set forth in Exhibit V attached hereto.
The Investor further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on
various requirements including, but not limited to, the time and
manner of sale, the holding period for the Securities, and on
requirements relating to the Company which are outside of the
Investor's control, and which the Company is under no obligation and
may not be able to satisfy.
3.35 The Investor understands that no public market now exists for the
Warrants and only a limited market for the underlying Common Stock.
3.36 The Investor understands that the Securities, and any securities
issued in respect thereof or exchange therefor, may bear one or all
of the following legends:
(i) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(ii) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the
certificate so legended.
3.37 The Investor understands that Rule 144 ("Rule 144") promulgated
under the Act requires, among other conditions, a one-year holding
period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the
registration requirements under the Act. The Investor understands
that the Company makes no representation or warranty regarding its
fulfillment in the future of any reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
its dissemination to the public of any current financial or other
information concerning the Company, as is required by Rule 144 as
one of the conditions of its availability. The Investor understands
and hereby acknowledges that the Company is under no obligation to
register the Securities under the Act, with the exception of certain
registration rights set forth in Article VII herein. The Investor
consents that the Company may, if it desires, permit the transfer of
the Securities out of his name only when his request for transfer is
accompanied by an opinion of counsel reasonably satisfactory to the
Company that neither the sale nor the proposed transfer results in a
violation of the Act or any applicable state "blue sky" laws
(collectively "Securities Laws"). The Investor agrees to hold the
Company and its directors, officers and controlling persons and
their respective heirs, representatives, successors and assigns
harmless and to indemnify them against all liabilities, costs and
expenses incurred by them as a result of any misrepresentation made
by him contained herein or in the Purchaser Questionnaire or any
sale or distribution by the undersigned Investor in violation of any
Securities Laws.
3.38 The Investor understands that the Company will review this Agreement
and the Purchaser Questionnaire and otherwise review the financial
standing of the Investor, and it is agreed that the Company reserves
the unrestricted right to reject or limit any subscription.
3.39 The Investor hereby represents that the address of Investor
furnished by him at the end of this Agreement is the undersigned's
principal residence if he is an individual or its principal business
address if it is a corporation or other entity. If a natural person,
the Investor is at least 21 years of age and legally competent to
execute this Agreement.
3.40 The Investor acknowledges that if he is a Registered Representative
of an NASD member firm, he must give such firm the notice required
by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
3.41 The Investor acknowledges that at such time, if ever, as the
Securities are registered, sales of such securities will be subject
to state securities laws, including those of states which may
require any securities sold therein to be sold through a registered
broker-dealer or in reliance upon an exemption from registration.
3.42 Investor hereby agrees that prior to the Closing Date of this
Offering, he will not sell short any shares of the Company's Common
Stock or otherwise sell any shares of the Company's Common Stock
that Investor does not own, or engage in any sale that is
consummated by the delivery of the Company's shares borrowed by or
from the Investor or his affiliates.
3.43 If the undersigned Investor is a partnership, corporation, trust or
other entity, such partnership, corporation, trust or other entity
further represents and warrants that: (i) it was not formed for the
purpose of investing in the Company; (ii) it is authorized and
otherwise duly qualified to purchase and hold the Securities; and
(iii) that this Agreement has been duly and validly authorized,
executed and delivered constitutes the legal, binding and
enforceable obligation of the undersigned.
3.44 Each recipient of this Agreement understands that the fact that the
Company is undertaking this offering, as well as certain information
contained in this Agreement, may be considered to be material,
non-public information under Regulation FD (Fair Disclosure)
promulgated under the Exchange Act. Each recipient expressly agrees
to maintain such information in confidence until such time as public
disclosure of same is made.
3.45 The undersigned understands that MA does not make any
representations or warranty concerning the accuracy or completeness
of any information, relating to the Company or its operations to be
delivered to prospective Investors in connection with the Offering.
3.46 It never has been represented, guaranteed or warranted by any
broker, the Company, MA, any of the Company's or MA's officers,
directors, stockholders, partners, employees or agents, or any other
persons, whether expressly or by implication, that: (i) the Company
or the undersigned will realize any given percentage of profits
and/or amount or type of consideration, profit or loss as a result
of the Company's activities or the undersigned's investment in the
Company; or (ii) the past performance or experience of the
management of the Company, or of any other person, will in any way
indicate the predictable results of the ownership of the Securities
or of the Company's activities. 3.47 No oral or written
representations have been made other than as stated in this
Agreement, and no oral or, written information furnished to the
undersigned or the undersigned's advisor(s) in connection with the
Offering were in any way inconsistent with the information stated in
this Agreement.
3.48 The undersigned is not entering into this Exchange Agreement as a
result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, posted on the Internet,
or presented at any seminar or meeting, or any solicitation of a
subscription by a person other than a representative of MA or the
Company with which the undersigned had a pre-existing relationship
in connection with investments in securities generally.
3.49 The undersigned understands that the net proceeds from this Offering
(after deduction for expenses of the Offering, including the fees
and expenses payable to MA) will be used in all material respects
for the purposes set forth under "Use of Proceeds" in this
Agreement.
3.50 The undersigned acknowledges that the representations, warranties
and agreements made by the undersigned herein shall survive the
execution and delivery of this Agreement and the purchase of the
Securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Investor on the
date hereof and at the Closing Date. The Company is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Nevada and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed
to be conducted. The Company is duly qualified to transact business
and is in good standing in each jurisdiction in which the failure so
to qualify would have a material adverse effect on its business or
properties.
4.10 This Agreement, the Registration Rights Agreement, the Warrants, and
the stock issuable upon exchange of the Warrants, have been duly
authorized by the Board of Directors of the Company and its
shareholders. This Agreement and the Registration Rights Agreement,
shall constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their
respective terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and
other laws of general application affecting enforcement of
creditors' rights generally, and as limited by laws relating to the
availability of specific performance, injunctive relief, or other
equitable remedies. 4.11 The execution, delivery and performance of
this Agreement by the Company will have been duly approved by the
Board of Directors of the Company and all other actions required to
authorize and effect the offer and sale of the Securities contained
herein will have been duly taken and approved.
4.12 The Securities have been duly and validly authorized and when issued
and paid for in accordance with the terms hereof, will be duly and
validly issued, fully paid and non-assessable and will not be issued
in violation of any preemptive or other rights of stockholders known
to the Company except that with respect to any Warrants not
exchanged the Company makes no representation or warranty as to the
effect of this Offering on the anti-dilution provisions of the
currently issued and outstanding Warrants.
4.13 The Company has obtained, or is in the process of obtaining, all
licenses, permits and other governmental authorizations necessary to
the conduct of its business; such licenses, permits and other
governmental authorizations obtained are in full force and effect;
and the Company is in all material respects complying therewith.
4.14 The Company knows of no pending or threatened legal or governmental
proceedings to which the Company is a party, which could materially
adversely affect the business, property, financial condition or
operations of the Company.
4.15 The Company is not in violation of or default under, nor will the
execution and delivery of this Agreement, the issuance of the
Securities, and the incurrence of the obligations herein and therein
set forth and the consummation of the transactions herein or therein
contemplated, result in a violation of, or constitute a default
under, the Company's articles of incorporation or by-laws, any
material obligations, agreement, covenant or condition contained in
any bond, debenture, note or other evidence of indebtedness or in
any material contract, indenture, mortgage, loan agreement, lease,
joint venture or other agreement or instrument to which the Company
is a party or by which it or any of its properties may be bound or
any material order, rule, regulation, writ, injunction, or decree of
any government, governmental instrumentality or court, domestic or
foreign. 4.16 The authorized capital stock of the Company consists
of 4,500,000 shares of preferred stock, par value $.001 per share
(the "Preferred Stock"), and 80,000,000 shares of Common Stock, par
value $.001 per share. There are no outstanding shares of Preferred
Stock. Each outstanding share of Common Stock is duly authorized,
validly issued, fully paid and non assessable. Except as set forth
in the Company's filings with the SEC there are no options, warrants
or other derivative securities, voting trusts or other agreements or
understandings to which the Company is a party with respect to the
transfer, voting, issuance, purchase, redemption, repurchase or
registration of the capital stock of the Company. The Company does
not own or have any contract to acquire, any equity securities or
other securities of any person or any, direct or indirect, equity or
ownership interest in any other business.
4.17 Except for a Form D filing with the SEC and any required blue sky
filings, no consent, authorization, approval, order, license,
certificate or permit of or from, or declaration or filing with, any
federal, state, local or other governmental authority or any court
or any other tribunal is required by the Company for the execution,
delivery or performance by the Company of this Agreement or the
execution, issuance, sale or delivery of the Securities.
4.18 No consent of any party to any material contract, agreement,
instrument, lease, license, arrangement or understanding to which
the Company is a party or to which any of its properties or assets
are subject is required for the execution, delivery or performance
by the Company of this Agreement, or the execution, issuance, sale
or delivery of the Securities.
ARTICLE V
CONDITIONS TO CLOSING
5.3 Conditions of the Investors' Obligations at Closing.
(a) Conditions of the Investors' Obligations at Each Closing. The
obligations of each Investor to the Company to exchange MA Warrants at the
Closing in accordance with the provisions of this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following
conditions, unless otherwise waived:
(i) Representations and Warranties. The representations and
warranties of the Company contained in Article IV shall be true on
and as of each Closing with the same effect as though such
representations and warranties had been made on and as of the date
of each Closing.
(ii)Qualifications. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the
lawful issuance and sale of the Securities pursuant to this
Agreement shall be obtained and effective as of the Initial Closing.
(iii) Receipt of Securities. The Investors and/or the Escrow Agent
shall have received such Securities and the executed Agreement duly
executed by the Company and acceptable in all respects to the
Investors.
(iv) Corporate Proceedings; Consents, etc. All consents and other
proceedings to be taken and all waivers and consents to be obtained
in connection with the transactions contemplated by the Agreements
shall have been taken or obtained.
5.4 Conditions of the Company's Obligations at Closing. The obligations
of the Company to each Investor under this Agreement are subject to
the fulfillment, on or before both the Closing, of each of the
following conditions, unless otherwise waived:
(a) Representations and Warranties. The representations and
warranties of each Investor contained in Article III shall be true
on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of such
Closing.
(b) Qualifications. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the
lawful issuance and sale of the Securities pursuant to this
Agreement shall be obtained and effective as of each Closing.
ARTICLE VI
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Securities
offered hereby.
ARTICLE VII
REGISTRATION RIGHTS
The Company has agreed to file a new registration statement on Form SB-2
or S-3, if available, within 10 days of the final Closing Date concerning the
shares of Common Stock previously registered underlying the MA Warrants.
The Company will respond to all SEC comments within 10 business days of
receipt of said comments. The Company shall permit the Registration Statement to
be declared effective within 5 business days after receipt of a "no review"
notice from SEC. If the registration statement is not filed as indicated above,
or declared effective within 120 days following the filings, the Company will
pay investors within 5 calendar days of the end of each month the Company is in
violation of the forgoing liquidated damages of 2% of the dollar amount invested
(pro-rated for partial months) for a maximum of four months commencing on the
scheduled filing date and/or 90 days thereafter. The payments can be made in
cash or Common Stock at the Company's option. If the payment is made in stock,
it shall be payable at the Exchange Price.
ARTICLE VIII
RISK FACTORS
An investment in the securities offered hereby is highly speculative and
involves a high degree of risk and should be made only by investors who can
afford to lose their entire investment. Prospective Investors, prior to making
any investment decision should carefully consider along with other matters
referred to herein the following risk factors.
Risks Relating to Our Financial Condition
Need for proceeds of this Offering.
As of December 20, 2004, we had cash of approximately $15,000 on hand.
Subsequent thereof, we raised approximately $454,000 for the exchange offer with
investors in our 2004 Private Placement for which the MA Warrants were issued.
We require the proceeds from the Exercise Offer plus additional financing to
implement the stated business plan attached as Exhibit A to this Memorandum.
Management can give no assurance that we will obtain sufficient funds to fully
implement the business plan, or that implementation of such business plan will
result in InforMedix's profitability. If we are unable to complete other
financing, we may have to curtail or suspend our operations, and you could lose
your entire investment in our company.
If InforMedix continues to incur negative cash flow from its operations, it may
exhaust our capital resources.
No net positive cash flow has been generated from InforMedix's operations since
its inception. InforMedix has been primarily a development stage company, to
date, and has invested the majority of its resources in the R&D of the product
and its patents, with minimal investment for the commercialization of its
product. InforMedix had a net loss of $1,820,503 for the nine months ended
September 30, 2004; a net loss of $1,949,621 on zero sales for the year ended
December 31, 2003; a net loss of $2,265,677 on net sales of $22,759 for the year
ended December 31, 2002; and a cumulative loss from inception through September
30, 2004, of $15,780,865.
InforMedix has funded its operating activities primarily through sales of equity
securities to its founders, individual accredited investors, corporate
investors, private investment lenders and equity issued for services in the
amount of approximately $16,238,000 as of September 30, 2004. In addition, from
inception to December 31, 2002, InforMedix borrowed $725,000 from its Chief
Executive Officer, directors and private investors all of which has been
converted into equity, an additional $65,000 in 2003, and completed a $400,000
debt bridge financing in September 2003. Between December 2003 and February
2004, we raised an additional $5.0 million under the Equity Offering which was
then terminated. InforMedix anticipates negative cash flow from operations to
continue for some time. We do not anticipate that this form of shareholder and
executive officer funding will continue. Accordingly, we can give no assurance
that we will be able to operate profitably or be able to produce positive cash
flow from operations in the future. Our efforts to operate profitably and obtain
positive cash flow from operations will depend on, among other things:
o Developing the InforMedix brand, marketing and other promotional
activities of he Med-e Monitor System;
o Expanding general and administrative functions to support growth
that may occur; and
o Establishing and developing relationships in the healthcare
industry, particularly with pharmaceutical and biotechnology
manufacturers, contract research organization (CROs) and academic
research centers.
Qualified financial statements based on operating losses and a capital deficit
question InforMedix's ability to continue in business.
InforMedix's accountants issued a qualified report on our financial statements
as at and for the year ended December 31, 2003. The report states that
InforMedix is currently in the development stage and there is no guarantee
whether the Company will be able to generate enough revenue and/or raise capital
to support current operations and expand sales. This raises substantial doubt
about InforMedix's ability to continue as a going concern. See "Independent
Auditor' Report" and "Note 13 of Notes to InforMedix Consolidated Financial
Statements" included in the Annual Report on Form 10-K for December 31, 2003,
attached as Exhibit C to this Memorandum.
If we fail to establish the Med-e Monitor System brand or to attract repeat
customers, InforMedix may not be able to increase its revenues sufficiently to
fund its operations.
We must develop, establish and strengthen the InforMedix brand for the Med-e
Monitor System, particularly because of the early stage of our development and
the highly competitive nature of our business. If we fail to establish the Med-e
Monitor System brand, we will be at a competitive disadvantage and may lose the
opportunity to obtain, and thereafter maintain, a sufficient number of
customers. The development of the Med-e Monitor System brand will depend largely
on the success of InforMedix's marketing efforts and its ability to provide
consistent, high quality customer experiences. We cannot be certain that the
Med-e Monitor System brand promotion activities will be successful, or will
result in increased revenues. If increased revenues are achieved, there can be
no assurance that these revenues will be sufficient to offset the expenditures
incurred in establishing the Med-e Monitor System brand.
InforMedix is obligated to comply with government regulation and its failure to
do so could result in significant liability and curtailment or suspension of
operations.
The technology used in the monitoring of clinical drug trial protocols is
regulated by the Food and Drug Administration (FDA). No FDA approval is required
for the Med-eMonitor System and the FDA currently does not require the
documentation of regulatory compliance. However, if in the future the FDA
requires InforMedix to document regulatory compliance and it fails to do so,
because of a lack of funds, or otherwise, the Company may be required to curtail
or suspend its operations.
We will lack business diversification.
As a result of our limited resources, the prospects for our initial success will
be entirely dependent upon the future performance of a single product and a
single business. Unlike certain entities that have the resources to consummate
several business combinations or entities operating in multiple industries or
multiple segments of a single industry, we will not have the resources to
diversify our operations or benefit from the possible spreading of risks or
offsetting of losses.
We were recently organized and went public and have a limited operating history
upon which you can base an investment decision.
We were organized on January 27, 1997, completed our reverse merger and became a
public company in May 2003, and have a limited operating history upon which you
can make an investment decision, or upon which we can accurately forecast future
sales. You should, therefore, consider us subject to all of the business risks
associated with a new business. The likelihood of our success must be considered
in light of the expenses, difficulties and delays frequently encountered in
connection with the formation and initial operations of a new and unproven
business.
Offering Risks
Discretion in use of funds.
InforMedix anticipates applying the net proceeds of this Offering solely for
working capital purposes and not for debt repayment. We have no material
restrictions on our use of the proceeds from the sale of the Securities. As
such, management of InforMedix shall have broad discretion, subject to their
fiduciary duties, in the application of the proceeds from the sale of the
Securities. See "Use of Proceeds."
No minimum commitment.
The Offering is being made on a "best efforts" rather than a "firm commitment"
basis, and no assurance can be given that any number of Warrants will be
exchanged. Accordingly, the Company may receive only nominal proceeds, and need
additional financing immediately thereafter.
Securities Risks
InforMedix's CEO, President and directors may have the ability to control almost
all matters of the Company.
The officers and directors of InforMedix and their affiliates, beneficially own
approximately 14% of the issued and outstanding shares of common stock of
InforMedix prior to this Offering. Therefore, management will have significant
influence over the election of InforMedix's directors and to control the outcome
of other issues submitted to stockholders of InforMedix. This includes their
ability to amend the Certificate of Incorporation, approve a merger or
consolidation of InforMedix with another company or approve the sale of all or
substantially all of the assets of InforMedix without the agreement of the
warrantholders who exercise warrants offered hereby.
Restrictions on transferability will prevent investors in this Offering from
selling the securities offered hereby.
This Offering of the Securities is being made pursuant to Sections 4(2) and 4(6)
of the Securities Act and Rule 506 of Regulation D promulgated under the
Securities Act, solely to Accredited Investors who are existing Warrantholders
of the Company. The shares of Common Stock underlying the Warrants have been
registered under the Securities Act; however, a post-effective amendment
describing this Offering must be declared effective before the Securities can be
sold, transferred, pledged, assigned, hypothecated or otherwise disposed of
under the Securities Act and such state laws, unless in the opinion of counsel
satisfactory to InforMedix, any such sale, transfer, assignment, pledge or
hypothecation will not violate the registration requirements under the
Securities Act or state securities laws. As a result, an investor must bear the
economic risk of an investment in InforMedix for an indefinite period of time.
If we do not keep our existing registration statement current, you will not be
able to receive registered stock under this Offering.
We must file a post-effective amendment to our existing registration statement
with the SEC or file a second registration statement covering the shares of
Common stock issuable in exchange for the Warrants surrendered under this
Offering in order for you to have registered Common Stock. We may not be able to
maintain a registration statement in effect throughout the period during which
you wish to sell Securities. Maintaining an effective registration statement
requires substantial continuing expenses for legal and accounting fees and we
cannot guarantee our ability to keep the registration statement effective.
Your resale of Securities you acquire in this Offering may be limited.
The sale of Securities may only be made in the states where the initial
warrantholders reside. We have been unable to obtain registration for the
issuance of the underlying securities and/or the resale of the underlying
securities in the state where you live during the period when the Warrants are
exercisable. Therefore, you cannot sell securities issuable to you in this
Offering unless either (a) the securities issuable upon exchange of the Warrants
are registered in your state or (b) an exemption from registration is available.
We may not be able to qualify the resale of the Securities, in your state.
Preferred Stock as an anti-takeover device.
InforMedix is authorized to issue 4,500,000 shares of preferred stock, $.001 par
value. The preferred stock may be issued in series from time to time with such
designation, voting and other rights, preferences and limitations as the Board
of Directors of InforMedix may determine by resolution. Unless the nature of a
particular transaction and applicable statutes require such approval, the Board
of Directors has the authority to issue these shares without shareholder
approval subject to approval of the holders of the Preferred Stock. The issuance
of preferred stock may have the effect of delaying or preventing a change in
control of InforMedix without any further action by shareholders.
Interests of Financial Advisor in InforMedix; Possible Restriction on "Marketing
Making" Activities in InforMedix's Securities; Illiquidity.
Including shares underlying presently exercisable warrants, MA, our Financial
Advisor and Placement Agent for the 2005-2004 Private Placement and its
principals beneficially own, in the aggregate, 10,279,862 shares of Common
Stock, or approximately 30.9% of the outstanding shares. Notwithstanding the
foregoing, MA has entered into a Voting Agreement with us dated August 21, 2003,
pursuant to which the Placement Agent gave Management of InforMedix a voting
proxy over all of its shares on all matters for generally one year from the last
closing of this Offering in March 2004. Such interests should be considered by
potential investors when evaluating an investment in the Units because a
potential conflict of interest may exist.
Limited Transferability of Securities; Lack of Trading Market.
Purchasers of the Securities offered hereby must be aware of the long-term
nature of their investment and be able to bear the economic risks of their
investment for an indefinite period of time. The right of any Investor to sell,
transfer, pledge or otherwise dispose of the Securities included therein will be
limited by the Securities Act and state securities laws and the regulations
promulgated thereunder. Accordingly, under the Securities Act, the shares of
Common Stock may not be resold unless a registration statement is filed and
becomes effective or an exemption from registration is available. Although the
shares of Common Stock underlying the Warrants have been registered with the
SEC, a PE Amendment needs to be filed to describe this Offering within 10 days
following the Final Closing and/or a new Registration Statement covering the
additional shares of Common Stock received upon exchange of the Warrants, there
can be no assurance that any registration statement covering such securities
will become effective. Further, even if a registration does become effective,
there can be no assurance that a liquid market for the Common Stock will be
sustained. Rule 144 promulgated under the Securities Act requires, among other
conditions, a one-year holding period prior to the resale (in limited amounts)
of securities acquired in a non-public offering without having to satisfy the
registration requirements of the Securities Act. There can be no assurance that
we will fulfill in the future any reporting requirements under the Exchange Act,
or disseminate to the public any current financial or other information
concerning InforMedix, as required by Rule 144 as one of the conditions of its
availability.
Difficulty of Trading and Obtaining Quotations for Common Stock.
InforMedix's Common Stock is currently quoted on the NASD's Over-the-Counter
Bulletin Board ("OTCBB") under the symbol "IFMX." Our Common Stock is not
actively traded, and the bid and asked prices for our Common Stock have
fluctuated significantly. As a result, an investor may find it difficult to
dispose of, or to obtain accurate quotations of the price of, our securities.
This severely limits the liquidity of the Common Stock, and would likely have a
material adverse effect on the market price of the Common Stock and on our
ability to raise additional capital.
▇▇▇▇▇ Stock regulation is expected to adversely affect the market for the
Company's securities.
The trading of the our Common Stock is currently subject to Rule 15g-9
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), as
amended for non-Nasdaq and non-exchange listed securities. Under such rule,
brokers-dealers who recommend such securities to persons other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
a transaction prior to sale. Securities are exempt from this rule if the market
price is at least $5.00 per share.
The Commission has adopted regulations that generally define a "▇▇▇▇▇ stock" to
be an equity security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share subject to certain exceptions. Such
exceptions include equity securities listed on Nasdaq and equity securities
issued by an Company that has (i) net tangible assets of at least $2,000,000, if
such Company has been in continuous operation for more than three years, or (ii)
net tangible assets of at least $5,000,000, if such Company has been in
continuous operation for less than three years, or (iii) average revenue of at
least $6,000,000 for the preceding three years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a ▇▇▇▇▇ stock, of a risk disclosure schedule explaining the ▇▇▇▇▇
stock market and the risks associated therewith.
Our Common Stock is currently a ▇▇▇▇▇ stock as defined in the Exchange Act and
as such, the market liquidity for the Common Stock is limited to the ability of
broker-dealers to sell Common Stock in compliance with the above-mentioned
disclosure requirements.
Risk Factors Affecting InforMedix's Business Operations.
InforMedix could be subject to fines, facility shutdowns and possible
exclusion from participation in providing information technology services to
clinical drug trade if it fails to comply with the laws and regulations
applicable to its business or if those laws and regulations change.
InforMedix is subject to regulations such as compliance and record-keeping
requirements under the Health Insurance Portability and Accountability Act
(HIPAA) and the Food, Drug and Cosmetic Act. In addition, the provision of
services, pharmaceuticals and equipment is subject to strict licensing and
safety requirements. If InforMedix is deemed to have violated these laws and
regulations, InforMedix could be subject to fines and/or facility shutdowns.
Government officials and the public will continue to debate healthcare reform.
Changes in healthcare law, new interpretations of existing laws, or changes in
payment methodology for pharmaceuticals may have a dramatic effect on
InforMedix's business and results of operations.
Continued pressure could reduce InforMedix's margins and limit InforMedix's
ability to maintain or increase its market share.
Certain competitors of InforMedix may have or may obtain significantly greater
financial and marketing resources than InforMedix. As a result, InforMedix could
encounter increased competition in the future that may increase pricing pressure
and limit its ability to maintain or increase its market share.
If we lost the services of ▇▇. ▇▇▇▇▇ ▇▇▇▇, InforMedix's CEO, or ▇▇▇▇▇ ▇▇▇▇▇,
InforMedix's Senior Vice President of Business Development and Operations, we
might not be able to execute InforMedix's current business in accordance with
our current plans.
InforMedix's future success depends significantly on the skills, experience and
efforts of its chief executive officer, ▇▇. ▇▇▇▇▇ ▇▇▇▇, and its Senior Vice
President of Business Development and Operations, ▇▇▇▇▇ ▇▇▇▇▇, and other key
personnel. These individuals would be difficult to replace. ▇▇. ▇▇▇▇ or ▇▇.
▇▇▇▇▇ have developed, and are engaged in carrying out, InforMedix's strategic
business plan. The loss of the services of ▇▇. ▇▇▇▇ or ▇▇. ▇▇▇▇▇ could seriously
harm InforMedix's ability to implement its strategy. A failure to implement
InforMedix's business strategy could result in the cessation of InforMedix's
operations which would have a material adverse effect on our company and on your
investment.
If InforMedix is unable to adequately protect or enforce its rights to its
intellectual property, InforMedix may lose valuable rights, experience reduced
market share, if any, or incur costly litigation to protect such rights.
InforMedix generally requires its employees, consultants, advisors and
collaborators to execute appropriate confidentiality agreements with it. These
agreements typically provide that all materials and confidential information
developed or made known to the individual during the course of the individual's
relationship with InforMedix is to be kept confidential and not disclosed to
third parties except in specific circumstances. These agreements may be
breached, and in some instances, InforMedix may not have an appropriate remedy
available for breach of the agreements. Furthermore, InforMedix's competitors
may independently develop substantial equivalent proprietary information and
techniques, reverse engineer information and techniques, or otherwise gain
access to InforMedix's proprietary technology. In addition, the laws of some
foreign countries may not protect proprietary rights to the same extent as U.S.
law. InforMedix may be unable to meaningfully protect its rights in trade
secrets, technical know-how and other non-patented technology.
InforMedix may have to resort to litigation to protect its rights for certain
intellectual property, or to determine their scope, validity or enforceability.
Enforcing or defending InforMedix's rights is expensive and may distract
management from its development of the business if not properly managed. Such
efforts may not prove successful. There is always a risk that patents, if
issued, may be subsequently invalidated, either in whole or in part, and this
could diminish or extinguish protection for any technology InforMedix may
license. Any failure to enforce or protect InforMedix's rights could cause it to
lose the ability to exclude others from using its technology to develop or sell
competing products.
InforMedix may be sued by third parties who claim that InforMedix's product
infringes on their intellectual property rights. Defending an infringement
lawsuit is costly and InforMedix may not have adequate resources to defend. Any
settlement or judgment against us could harm our future prospects.
InforMedix may be exposed to future litigation by third parties based on claims
that its technology, product or activity infringes on the intellectual property
rights of others or that InforMedix has misappropriated the trade secrets of
others. This risk is compounded by the fact that the validity and breadth of
claims covered in technology patents in general and the breadth and scope of
trade secret protection involves complex legal and factual questions for which
important legal principles are unresolved. Any litigation or claims against
InforMedix, whether or not valid, could result in substantial costs, could place
a significant strain on InforMedix's financial and managerial resources, and
could harm InforMedix's reputation. In addition, intellectual property
litigation or claims could force InforMedix to do one or more of the following:
o Cease selling, incorporating or using any of InforMedix's technology
and/or product that incorporates the challenged ntellectual
property, which could adversely affect InforMedix's revenue;
o Obtain a license from the holder of the infringed intellectual
property right, which may be costly or may not be available on
reasonable terms, if at all; or
o Redesign InforMedix's product, which would be costly and time
consuming.
We may not be able to manufacture our planned product in sufficient quantities
at an acceptable cost, or at all, which could harm our future prospects.
InforMedix is in the initial phase of product commercialization. InforMedix does
not presently own any manufacturing facilities. Accordingly, if InforMedix's
planned product becomes available for widespread sale, we may not be able to
arrange for the manufacture of our planned product in sufficient quantities at
an acceptable cost, or at all, which could materially adversely affect
InforMedix's future prospects.
The market for InforMedix's planned product is rapidly changing and competitive.
New products may be developed by others which could impair our ability to
develop, grow or maintain our business and be competitive.
InforMedix's industry is subject to substantial technological change.
Developments by others may render InforMedix's technology and planned product
noncompetitive or obsolete, or it may be unable to keep pace with technological
developments or other market factors. Competition from other companies,
universities, government research organizations and others diversifying into the
field is intense and is expected to increase. Many of these entities have
significantly greater research and development capabilities and budgets than
InforMedix does, as well as substantially more marketing, manufacturing,
financial and managerial resources. These entities could represent significant
competition for InforMedix. InforMedix is a development-stage enterprise and as
such its resources are limited and it may experience technical challenges
inherent in developing its technology. Competitors have developed or are in the
process of developing technologies that are, or in the future may be, the basis
for competition.
InforMedix's planned product could be exposed to significant product liability
claims which could be time consuming and costly to defend, divert management
attention and adversely affect InforMedix's ability to obtain and maintain
insurance coverage. If InforMedix incurred a material liability for which it is
not adequately insured, it might be rendered insolvent.
The testing, manufacture, marketing and sale of InforMedix's planned product
will involve an inherent risk that product liability claims will be asserted
against it. We currently have a general liability policy with an annual
aggregate limit of $1 million with a $1 million limit per occurrence and product
liability insurance with an aggregate limit of $1 million. This insurance may
prove inadequate to cover claims and/or litigation costs. Product liability
claims or other claims related to InforMedix's planned product, regardless of
their outcome, could require us to spend significant time and money in
litigation or to pay significant settlement amounts or judgments. Any successful
product liability or other claim may prevent InforMedix from obtaining adequate
liability insurance in the future on commercially desirable or reasonable terms.
In addition, product liability coverage may cease to be available in sufficient
amounts or at an acceptable cost. Any inability to obtain sufficient insurance
coverage at an acceptable cost or otherwise to protect against potential product
liability claims could prevent or inhibit the sale of InforMedix's planned
product.
InforMedix faces the risk of liability resulting from claims made directly by
patients. InforMedix currently has property, general liability and product
liability insurance in amounts that we believe to be adequate, but InforMedix
can give no assurance that such insurance will remain available at a reasonable
price or that any insurance policy would offer coverage sufficient to meet any
liability arising as a result of a claim. We can give no assurance that
InforMedix will be able to obtain or maintain adequate insurance on reasonable
terms or that, if obtained, such insurance will be sufficient to protect against
such potential liability or at a reasonable cost. The obligation to pay any
substantial liability claim could render InforMedix insolvent and could force it
to curtail suspend operations, which would have a material adverse effect on our
company and your investment in our company.
ARTICLE IX
MISCELLANEOUS
9.13 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail,
return receipt requested, addressed to the Company, at its
registered office, Georgetowne Office Park, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇, CEO, and to the
Investor at his address indicated on the signature page of this
Agreement. Notices shall be deemed to have been given on the date of
mailing, except notices of change of address, which shall be deemed
to have been given when received.
9.14 This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged, and this Agreement may
not be discharged except by performance in accordance with its terms
or by a writing signed by the party to be charged.
9.15 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
9.16 Notwithstanding the place where this Agreement may be executed by
any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with
and governed by the law of the State of Nevada. The parties hereby
agree that any dispute which may arise between them arising out of
or in connection with this Agreement shall be adjudicated before a
court located in New York, New York and they hereby submit to the
exclusive jurisdiction of the courts of the State of New York
located in New York, New York, and of the federal courts in the
Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any
objection they now or hereafter may have respecting the venue of any
such action or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum, relating to or
arising out of this Agreement or any acts or omissions relating to
the sale of the securities hereunder, and consent to the service of
process in any such action or legal proceeding by means of
registered or certified mail, return receipt requested, in care of
the address set forth below or such other address as the undersigned
shall furnish in writing to the other.
9.17 This Agreement may be executed in counterparts. Upon the execution
and delivery of this Agreement by the Investor, this Agreement shall
become a binding obligation of the Investor with respect to the
purchase of the purchased Securities as herein provided; subject,
however, to the right hereby reserved to the Company to enter into
the same agreements with other subscribers and to add and/or to
delete other persons as subscribers.
9.18 The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full
force and effect.
9.19 It is agreed that a waiver by either party of a breach of any
provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.
9.20 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent
of this Agreement.
9.21 The Company agrees not to disclose the names, addresses or any other
information about the Investors, except as required by law,
provided, that the Company may use information relating to the
Investor in any registration statement under the Act with respect to
the Securities.
9.22 Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed
facsimile, or 48 hours after being deposited in the U.S. mail as
certified or registered mail with postage prepaid, if such notice is
addressed to the party to be notified at such party's address or
facsimile number as set forth below or as subsequently modified by
written notice.
9.23 Each party represents that it neither is nor will be obligated for
any finder's fee or commission in connection with this transaction.
Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature
of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which each Investor or any
of its officers, employees, or representatives is responsible. The
Company agrees to indemnify and hold harmless each Investor from any
liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible. 9.24 This
Agreement, and the documents referred to herein constitute the
entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral
agreements, including any term sheet or memorandum of understanding
relating to the transaction contemplated by this Agreement, existing
between the parties hereto are expressly canceled.
9.14 Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement
(except as provided in Sections 9.3 and 9.13); provided, that MA
shall be entitled, to rely on, and shall be a third party
beneficiary of, the representations, warranties and agreements
contained in this Agreement.
ARTICLE X
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this Agreement are certain statements which are not
historical or current fact and constitute "forward-looking statements" within
the meaning of such term in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
could cause the actual financial or operating results of the Company to be
materially different from the historical results or from any future results
expressed or implied by such forward-looking statement. Such forward-looking
statements are based on our best estimates of future results, performance or
achievements, based on current conditions and the most recent results of the
Company. In addition to statements which explicitly describe such risks and
uncertainties, readers are urged to consider statements labeled with the terms
"may," "will," "potential," "opportunity," "believes," "belief," "expects,"
"intends," "estimates," " anticipates" or "plans" to be uncertain and
forward-looking. The forward-looking statements contained herein are also
subject generally to other risks and uncertainties that are described from time
to time in the Company's reports and registration statements filed with the
Securities and Exchange Commission. Consequently, all of the forward-looking
statements made in this Agreement are qualified by these cautionary statements
and there can be no assurance that the actual results anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on the Company or its business or
operations.
ARTICLE XI
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith, files reports, proxy statements and other
information with the SEC. Such reports, proxy statements and other information
filed by the Company with the SEC can be inspected and copied at the public
reference facilities maintained by the SEC at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇.▇. and at the World Wide Web site (▇▇▇▇://▇▇▇.▇▇▇.▇▇▇) maintained by the SEC.
Copies of such material can be obtained from the Public Reference Section of the
SEC at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ at prescribed rates.
ARTICLE XII
BLUE SKY LEGENDS
NASAA UNIFORM LEGEND
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
IN WITNESS WHEREOF, the parties have executed this Warrant Exchange
Agreement as of the day and year set forth below.
(a)
----------------------------------- ------------------------------------
Signature of Investor Signature of Co-Investor
----------------------------------- ------------------------------------
Printed Name of Investor Printed Name of Co-Investor
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
Address of Investor Address of Co-Investor
----------------------------------- ------------------------------------
Social Security Number of Investor Social Security Number of Co-Investor
(b) If Entity Investor:
By:
------------------------------------------
Name:
Title:
------------------------------------------
------------------------------------------
------------------------------------------
Address of Investor
------------------------------------------
Taxpayer Identification Number of Investor
(c) X 337,840 x .45% $
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Number of MA Warrants Owned Number of Shares of Common
Stock to be Issued
*If Investor is a Registered Representative with an Subscription Accepted:
NASD member firm, have the following acknowledgement
signed by the appropriate party: InforMedix Holdings, Inc.
The undersigned NASD member firm acknowledges receipt
of the notice required by Rule 3050 of the NASD
Conduct Rules. By:
---------------------
▇▇▇▇▇ ▇ ▇▇▇▇, CEO
------------------------------------
Name of NASD Member Firm
By:
------------------------------------
Authorized Officer
EXHIBIT IV
ASSIGNMENT
To Be Executed by the Holder
in Order to Assign Warrants
FOR VALUE RECEIVED,
_________________________________________________ hereby sells, assigns and
transfers unto InforMedix Holdings, Inc.
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
--------------------------------------------------------
--------------------------------------------------------
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[please print or type name and address]
All of the MA Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints _______________________________________
Attorney to transfer this MA Warrant Certificate on the books of the Company,
with full power of substitution in the premises.
Dated: , 2005 x
------------------------------- ------------------------------
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS CLASS A WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.