AMENDMENT AGREEMENT
EXHIBIT
10.99
THIS
AMENDMENT AGREEMENT (this “Agreement”), dated as
of December 31, 2008 is entered into by and between Imaging Diagnostic Systems,
Inc., a Florida corporation (the “Company”), Whalehaven
Capital Fund Limited (“Whalehaven”) and
Alpha Capital Anstalt (“Alpha” and
collectively with Whalehaven, the “Holders”).
WHEREAS, the Company and
Whalehaven are parties to that certain Securities Purchase Agreement (the “August Purchase
Agreement”), dated August 1, 2008, pursuant to which the Company issued
to Whalehaven a 8% Senior Secured Convertible Debentures due, subject to the
terms therein, August 1, 2009 (the “August Debenture”)
with an aggregate principal amount of $400,000 and common stock purchase
warrants (the “Warrants”) to
purchase up to 22,222,222 shares of Common Stock, of which 22,222,222 shares of
Common Stock in the individual amounts set forth on Schedule A attached
hereto remain outstanding (the “Existing
Warrants”);
WHEREAS, on November 26, 2008,
Whalehaven sold a portion of the August Debenture and the Warrants to Alpha
pursuant to the Securities Purchase Agreement, dated as of such date, by and
among Whalehaven and Alpha, and, as a result, Alpha and Whalehaven are holders
of the August Debenture and the Warrants;
WHEREAS, the Company and the
Holders are parties to that certain Securities Purchase Agreement (the “November Purchase
Agreement” and together with the August Purchase Agreement, the “Purchase
Agreements”), dated November 20, 2008, pursuant to which the Company
issued to the Holders 8% Senior Secured Convertible Debentures due, subject to
the terms therein, November 20, 2009 (the “November Debentures”
and together with the August Debenture, the “Debentures”) with an
aggregate principal amount of $400,000;
WHEREAS, the Company has
requested that the Holders agree to certain waivers and amendments under the
Transaction Documents, and the Holders have agreed to such request, subject to
the terms and conditions of this Agreement; and
WHEREAS, capitalized terms
used herein, but not otherwise defined, shall have the meanings ascribed to such
terms as set forth in the Purchase Agreements.
NOW, THEREFORE, in
consideration of the terms and conditions contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:
1. Reduction in Exercise Price
of the Existing Warrants. Immediately prior to the
consummation of the transactions contemplated hereunder, the Exercise Price (as
defined in the Existing Warrants) shall be reduced to equal $0.005, subject to adjustment
therein (the “Warrant
Reload”).
2. Exercise of Existing
Warrants. Each Holder hereby agrees, severally and not jointly
with the other Holders, to exercise the number of such Holder’s Existing
Warrants set forth on Schedule B hereto, at
an exercise price of $0.005 per share, for aggregate
cash proceeds to the Company from all Holders equal to $56,000, otherwise pursuant to
the terms of the Existing Warrants. The cash exercise price to be
paid by each Holder for such Existing Warrants shall be referred to as such
Holder’s “Exercise
Amount”. Each Holder shall execute and deliver such Holder’s
Exercise Amount to the bank account designated in writing by the Company set
forth on Schedule
C attached hereto; provided, however, that a
Holder shall not be required to exercise such certain portion of its Existing
Warrant to the extent that Section 2(d) of the Existing Warrants is violated by
the resulting Common Stock issuance of such certain portion.
3. Issuance of New
Warrants. Each Holder shall be issued new warrants (the “New Warrants” and
together with the Existing Warrants, the “Warrants”) otherwise
in the form of the Existing Warrant issued pursuant to the August Purchase
Agreement as follows: a Warrant registered in the name of such Holder
to purchase up to a number of shares of Common Stock equal to the number of
shares underlying the Existing Warrants being exercised by such Holder as set
forth on Schedule
B hereto, with an exercise price equal to $0.005, subject to adjustment
therein. The shares of Common Stock underlying such New Warrants
shall be referred to herein as the “Warrant Shares”. The date of the closing of
the exercise of the Existing Warrants, the issuance of the New Warrants and
other transactions contemplated hereunder shall be referred to as the “Closing”.
4. Registration
Rights. The Company shall include all of the Warrant Shares
for which there is not currently an effective Registration Statement on the
Registration Statement that the Company is required to file pursuant to Section
2 of the Registration Rights Agreement, dated as of November 20, 2008, by an
among the Company and the Holders (the “Registration Rights
Agreement”) and such Warrant Shares shall become “Registrable Securities”
pursuant to the Registration Rights Agreement. Each Holder hereby waives any
breach of Section 6(b) of the Registration Rights Agreement as a result of this
paragraph 4.
5. Representations and
Warranties of the Company. The Company hereby makes the
representations and warranties set forth below to the Holders as of the date of
its execution of this Agreement:
i. Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection therewith other than in connection
with the Required Approvals. This Agreement has been duly executed by
the Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable
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principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
ii. No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby or thereby to which it is a party do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or 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 Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
iii. Other Representations,
Warranties and Covenants. The representations, warranties and covenants
of the Company with respect to the Warrants and Warrant Shares shall be
identical in all respects to the representations, warranties and covenants of
the Company with respect to the Existing Warrants (and shares of Common Stock
underlying the Existing Warrants) issued pursuant to the Purchase Agreements and
other Transaction Documents (as defined under the Purchase Agreements) and the
Company hereby makes such representations, warranties and covenants as though
fully set forth herein as of the date hereof, and all such representations,
warranties and obligations are incorporated herein by reference.
iv. Capitalization. The
Company is a duly organized and validly existing corporation in good standing
under the laws of the State of Florida, authorized to issue an aggregate
of 950,000,000 shares of Common Stock and no other shares of capital
stock. Immediately following the issuance of the New Warrants
hereunder, there will be issued and outstanding 405,723,338 shares of
Common Stock, all of which such issued and outstanding shares will be validly
issued, fully paid and nonassessable. The New Warrants, the Warrants
and Warrant Shares, when issued in accordance with the terms of
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this
Agreement and the Warrants, will be duly authorized, validly issued, fully paid
and nonassessable. Except as described in this Section or as set forth on Schedule 5(iv), there
are no issued or outstanding securities and no issued or outstanding options,
warrants or other rights, or commitments or agreements of any kind, contingent
or otherwise, to purchase or otherwise acquire shares of Common Stock or any
issued or outstanding securities of any nature convertible into shares of Common
Stock. There is no proxy or any other agreement, arrangement or
understanding of any kind authorized, effective or outstanding which restricts,
limits or otherwise affects the right to vote any shares of Common
Stock.
6. Representations and
Warranties of the Holders. Each of the Holders hereby makes
the representation and warranty set forth below to the Company as of the date of
its execution of this Agreement. Each Holder represents and warrants that (a)
the execution and delivery of this Agreement by it and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary
action on its behalf and (b) this Agreement has been duly executed and delivered
by such Holder and constitutes the valid and binding obligation of such Holder,
enforceable against it in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
7. Closing Conditions to
Holders’ Obligations. The respective obligations of the
Holders hereunder in connection with the Closing are subject to the following
conditions being met:
(a) the
accuracy in all material respects on the date of the Closing of the
representations and warranties of the Company contained herein;
(b) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing shall have been performed;
(c) all
parties to the Purchase Agreements shall have agreed to the terms and conditions
of this Agreement, including exercising their respective Existing Warrants
pursuant to this Agreement;
(d) there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof;
[(e) the
delivery of an opinion of counsel to the Company regarding this Agreement and
the issuance of the Warrants hereunder, in form and substance reasonably
acceptable to the Holders; and]
(f) from
the date hereof to the Closing, trading in the Common Stock shall not have been
suspended by the Commission (except for any suspension of trading of
limited
4
duration
agreed to by the Company, which suspension shall be terminated prior to the
Closing), and, at any time prior to the Closing, trading in securities generally
as reported by Bloomberg Financial Markets shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of each Holder, makes it
impracticable or inadvisable to consummate the transactions
hereunder.
8. Filing of Form 8-K and
Prospectus Supplement. On or before 8:30 am (NY time) on the
Trading Day immediately following the date hereof, the Company shall file a
Current Report on Form 8-K, reasonably acceptable to the Holders disclosing the
material terms of the transactions contemplated hereby and attaching this
Agreement as an exhibit thereto. The Company shall consult with the Holders in
issuing any other press releases with respect to the transactions contemplated
hereby. In addition, within one Trading Day of the date hereof, the Company
shall file a prospectus supplement under Rule 424 under the Securities Act to
Registration Statement number 333-154798, disclosing the terms of the
transactions hereunder.
9. Effect on Transaction
Documents. Except as expressly set
forth above, all of the terms and conditions of the Transaction Documents shall
continue in full force and effect after the execution of this Agreement and
shall not be in any way changed, modified or superseded by the terms set forth
herein, including, but not limited to, any other obligations the Company may
have to the Holders under the Transaction Documents. Notwithstanding the
foregoing, this Agreement shall be deemed for all purposes as an amendment to
any Transaction Document as required to serve the purposes hereof, and in the
event of any conflict between the terms and provisions of any other Transaction
Document, on the one hand, and the terms and provisions of this Agreement, on
the other hand, the terms and provisions of this Agreement shall
prevail.
10. Termination. This
Agreement may be terminated by any Holder, as to such Holder’s obligations
hereunder, by written notice to the other parties, if the Closing has not been
consummated on or before January 2, 2008.
11. Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders.
12. Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in each of the Purchase
Agreements.
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13. Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties; provided, however, that no
party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties
hereto.
14. Execution and
Counterparts. 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 or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
15. Fees and
Expenses. Except as expressly set forth herein, the Company
shall pay the fees and expenses of advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by the parties incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement.
16. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision of the Purchase Agreements.
17. Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
18. Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise this Agreement and, therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments hereto. In addition, each and every reference to share prices in
this Agreement shall be subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement.
19. Entire
Agreement. The Agreement, together with the exhibits and
schedules thereto, contain 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, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
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20. Independent Nature of
Holders’ Obligations and Rights. The obligations of each
Holder hereunder are several and not joint with the obligations of any other
Holders hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto, shall be deemed to constitute the
Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holders are in any way acting in
concert with respect to such obligations or the transactions contemplated by
this Agreement. Each Holder shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it
shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
21. Survival. All
warranties and representations (as of the date such warranties and
representations were made) made herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by the parties hereto and shall survive the issuance of
the New Warrants.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.
IMAGING
DIAGNOSTIC SYSTEMS, INC.
By: /s/ Xxxxx X.
Xxxxxx
Name: Xxxxx X. Xxxxxx
Title:
Chief Executive Officer
********************
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR HOLDERS FOLLOWS]
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[HOLDER’S
SIGNATURE PAGE TO IMDS AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name of
Holder: Whalehaven
Capital Fund Limited
Signature of Authorized Signatory of
Holder: /s/
Xxxx Xxxxxxxx
Name of
Authorized Signatory: Xxxx
Xxxxxxxx
Title of
Authorized Signatory: Partner
Address
for Notice of Holder:
000
Xxxxxx Xxx. 0xx
Xxxxx
Xxxxxxxxx
Xxxxxx, XX 00000
Address
for Delivery of Securities for Holder (if not same as above):
Xxxxx
Xxxxxxxx, CFO
Whalehaven
Capital Fund Limited
000
Xxxxxx Xxx. 0xx
Xxxxx
Xxxxxxxxx
Xxxxxx, XX 00000
Existing
Warrants to be exercised: 11,200,000
New
Warrants with an exercise price of $0.005, subject to adjustment
therein
[SIGNATURE
PAGES CONTINUE]
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[HOLDER’S
SIGNATURE PAGE TO IMDS AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name of
Holder: Alpha Capital
Anstalt
Signature of Authorized Signatory of
Holder: /s/ Xxxxxx
Xxxxxxxx
Name of
Authorized Signatory: Xxxxxx Xxxxxxxx
Title of
Authorized Signatory: Director
Address
for Notice of Holder:
Alpha Capital Anstalt
Pradafant 7, 9490
Furstentums
Vaduz, Liechtenstein
Address
for Delivery of Securities for Holder (if not same as above):
Alpah Capital Anstalt
c/o LH Financial Services
Corp.
000 Xxxxxxx Xxxx Xxxxx, 0xx
Xxxxx
Xxx Xxxx, XX 00000
Existing
Warrants to be exercised: 0
New
Warrants with an exercise price of $0.005, subject to adjustment
therein 3,555,555
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Schedule
A
Existing
Warrants
|
Name
of Holder
|
Number
of Existing Warrants
|
|
Whalehaven
Capital Fund Limited
|
11,666,667
|
|
Alpha
Capital Anstalt
|
3,555,555
|
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Schedule
B
Existing
Warrants to be Exercised
|
Name
of Holder
|
Number
of Existing Warrants to be Exercised
|
|
Whalehaven
Capital Fund Limited
|
11,200,000
|
|
Alpha
Capital Anstalt
|
-0-
|
12
Schedule
C
Bank
Account for Exercise Amount
[to be
completed by the company]
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