THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT, dated as of November 29, 2006, is made by and
between In Veritas Medical Diagnostics, Inc., a Colorado corporation
("Company"), and Triumph Small Cap Fund Inc. ( the "Purchaser").
WHEREAS, in September 2005, the Company issued to Triumph Research Partners
secured convertible debentures which have an outstanding principal amount, plus
accrued interest, of $165,000 (the "Old Debentures"); and
WHEREAS, the Purchaser is a designee of Triumph Research Partners; and
WHEREAS, the Company and the Purchaser wish to provide for the terms and
conditions pursuant to which (i) the Purchaser shall receive, in exchange for
the Old Debentures, a secured subordinated convertible debenture (the "New
Debenture") of the Company in an outstanding principal amount of $165,000 which
is convertible into common stock of the Company at a conversion price of $0.05
per share;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties agree as
follows:
1. Exchange of Old Debentures for New Debentures. The Company and the
Purchaser hereby agree that the Old Debentures shall be exchanged for a New
Debenture in an outstanding principal amount of $165,000 which is convertible
into common stock at a conversion price of $0.05 per share.
2. Closing. At the Closing, the Purchaser shall deliver the Old Debentures,
and the Company shall deliver the New Debenture to the Purchasers.
3. Further Assurances. In connection with the exchange of the Old
Debentures, the Purchaser, by entering into this Exchange Agreement, agrees to
execute all agreements and other documents as reasonably requested by the
Company.
4. Company Representations and Warranties and Covenants. The Company
represents, warrants and covenants to the Purchaser as follows:
a. Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Colorado and has all requisite
corporate power and authority to own its properties and carry on its business as
now being conducted.
b. Capitalization. As of the date of this Agreement, the authorized
capital stock of the Company consists of 500,000,000 shares of common stock,
$.001 par value per share, 58,178,467 shares of which are validly issued and
outstanding and 50,000,000 shares of preferred stock, $.001 par value per share,
34,343,662 of which are validly issued and outstanding.
c. Authority; Enforceability. The Company has the requisite corporate
power and authority to execute and deliver this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as (a) enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, moratorium or similar
laws from time to time in effect affecting creditors' rights generally and (b)
the availability of equitable remedies may be limited by equitable principles of
general applicability.
d. Third Party Consents. No consent, authorization, order or approval
of, or filing or registration with, any governmental authority or other person
is required for the execution and delivery of this Agreement or the consummation
by the Company of any of the transactions contemplated hereby.
e. Common Stock. All shares of the Company's Common Stock to be issued
pursuant to this Agreement will be, when issued, free from liens, duly
authorized, validly issued, fully paid and non-assessable.
f. Most Favored Nation Exchange. From the date hereof until the date
three (3) years after the date hereof, if the Company consummates an equity
financing, including an equity-linked financing such as, but not limited to, a
convertible notes financing or a unit financing of notes plus warrants (a
"Subsequent Financing"), the Purchaser shall have the right to exchange the
principal amount of the New Debenture for any of the securities issued in the
Subsequent Financing at the Subsequent Financing price.
g. No Other Representations or Warranties. Except as set forth above in
this Section 4, no other representations or warranties, express or implied, are
made in this Agreement by the Company to the Purchaser.
5. Purchaser Representations and Warranties and Covenants. The Purchaser
represents, warrants and covenants to the Company as follows:
a. Investment Representation. Purchaser acknowledges that the Note is a
restricted security, that Purchaser is acquiring the Note for its own account
with the present intention of holding the Note for purposes of investment and
not with a view to distribution within the meaning of the Securities Act of
1933, as amended and that the Note will bear a legend to such effect. Purchaser
has relied solely on its independent investigation in making the decision to
purchase the Note.
b. Accredited Investor. The Purchaser represents that the Purchaser is
an "accredited investor" as such term is defined in Rule 501 of Regulation D
("Regulation D") promulgated under the Securities Act
c. Registration Rights. The Purchasers shall not accept, and the Company
shall not pay, any payments that may have been or may be required to be made by
the Company to the Purchasers under the terms of the certain Registration Rights
Agreement between the Company and the Purchasers, dated September 7, 2005, that
arises from the failure of the Company to file timely, or the Securities and
Exchange Commission to declare effective timely, any registration statement
required to be filed by the Company for the benefit of any Purchaser.
d. No Other Representations or Warranties. Except as set forth above in
this Section 4, no other representations or warranties of any kind, express or
implied, are made in this Agreement by Purchaser to the Company.
6. Miscellaneous.
a. Survival of Representations, Warranties and Agreements. The
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Closing
and shall not be limited or affected by any investigation by or on behalf of any
party hereto.
b. Further Assurances. Each of the Company and Purchaser will use its,
as the case may be, best reasonable efforts to take all action and to do all
things necessary, proper or advisable on order to consummate and make effective
the transactions contemplated by this Agreement.
c. Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents, exhibits and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements, and
understandings and communications, both written and oral, among the parties with
respect to the subject matter hereof, and (b) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
d. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable principles of conflicts of law.
e. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same document.
f. Amendment and Modification. This Agreement may not be amended or
modified except by an instrument in writing signed by each of the parties
hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
IN VERITAS MEDICAL DIAGNOSTICS, INC.
By: /s/ Xxxxxx Xxxxx
-----------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
TRIUMPH SMALL CAP FUND INC.
By: /s/ Xxxxxxx Xxx
----------------
Name: Xxxxxxx Xxx
Title: President
