UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 19, 2019

Clinigence Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware 000-53862 11-3363609

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

55 Ivan Allen Jr. Blvd. NW, #875

Atlanta, Georgia

30308
(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (678) 607-6393

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class  

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.001 par value   IGMBD   OTCMKTS

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 1.01 Entry into a Material Definitive Agreement.

Private Placement of 10% Unsecured Convertible Notes and Warrants

On November 19, 2019, Clinigence Holdings, Inc. (the “Company”) entered into private placement subscription agreements (each, a “Subscription Agreement”) with several accredited investors (the “Investors”), pursuant to which the Company agreed to sell an aggregate principal amount of $ 2,275,000 of (1) 10% interest-bearing, unsecured convertible promissory notes, which are convertible, at any time at the discretion of the Investors, into shares of the Company’s Common Stock at a conversion price of $5.56 per share (the “Convertible Notes”) and (2) warrants to purchase up to 255,813 warrants at the exercise price of $5.56 per share (each, a “Warrant” and, collectively, the “Warrants”). The Warrants are exercisable at any time on or before October 31, 2025 at the election of the holders thereof. Some of the investors are existing holders of equity and/or affiliates of the Company. In addition, 204,651 Warrants were issued to Emerson Equity LLC, the placement agent, at an exercise price of $5.56 per share.

The Convertible Notes mature on October 31, 2020, unless accelerated due to an event of default. The Convertible Notes contain standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the Convertible Notes, the breach of any material representation or warranty contain therein or the bankruptcy or insolvency of the Company. If any event of default occurs, subject to any cure period, the full principal amount, together with interest (including default interest of 15% per annum) and other amounts owing in respect thereof to the date of acceleration shall become, at the Investors’ election, immediately due and payable in cash.

The Convertible Notes, the Warrants and the shares of Common Stock issuable upon conversion of the Convertible Notes and upon exercise of such Warrants (the “Underlying Securities”), have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and were issued and sold to accredited investors in reliance upon the exemption from registration contained in Regulation D promulgated under the Securities Act. The Convertible Notes, Warrants and Underlying Securities may not be offered or sold in the absence of an effective registration statement or exemption from the registration requirements under the Securities Act.

The foregoing summaries of the form of Subscription Agreement, the form of Convertible Note and the form of Warrant do not purport to be complete and are qualified in its entirety by reference to the full text of the Subscription Agreement, the form of Convertible Note and the form of Warrant, which are included as Exhibits 10.1,10.2 and 10.3, respectively, and are incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information required by this Item 2.03 is included under Item 1.01 of this Current Report on Form 8-K.

Item 3.02. Unregistered Sales of Equity Securities.

The information required by this Item 3.02 is included under Item 1.01 of this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits. 

(d) Exhibits.

The exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.

Exhibit
No.
  Description
10.1   Form of Subscription Agreement, dated as of November 19, 2019
10.2   Form of 10% Convertible Promissory Note, dated as of November 19, 2019
10.3   Form of  Warrant, dated as of November 19, 2019

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    Clinigene Holdings, Inc.
     
Date: November 22, 2019 By:   /s/ Elisa Luqman
    Elisa Luqman
  Chief Financial Officer

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EXHIBIT INDEX

 

Exhibit
No.
  Description
10.1   Form of Subscription Agreement, dated as of November 19, 2019
10.2   Form of 10% Convertible Promissory Note, dated as of November 19, 2019
10.3   Form of  Warrant, dated as of November 19, 2019

 

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CONFIDENTIAL

CLINIGENCE HOLDINGS, INC.

SUBSCRIPTION AGREEMENT

November 19, 2019

THE SECURITIES OFFERED HEREBY ARE BEING OFFERED ONLY TO “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). SEE “PLAN OF DISTRIBUTION – INVESTOR SUITABILITY REQUIREMENTS.”

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE “RISK FACTORS”

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If you would like to invest in Units (as defined below) of Clinigence Holdings, Inc., please complete and return the attached documents to the following:

Clinigence Holdings, Inc.
55 Ivan Allen Jr. Blvd. NW, #875, Atlanta, GA 30308
Attn: Jacob Margolin

Before you invest, please consult with your broker, investment adviser, attorney, accountant or other advisers regarding an investment in the Company and its suitability for you. Your purchase of the Interest does not pay for or reimburse you for the fees and/or expenses you incur for these professional services.

Remember to complete all applicable sections of this Subscription Agreement along with a copy of your valid passport. If not completed in full, this Subscription Agreement may be returned and rejected.

You must pay the subscription amount at the time of Subscription to Clinigence Holdings, Inc. Unless the Company otherwise agrees, payment of the subscription amount must be made by check or wire transfer in a single lump sum payment from a single account (rather than two or more separate payments from one or more accounts) through or from a U.S. bank or a non-U.S. banking institution organized within a country or territory that is a member of, or a country or territory that belongs to a regional organization that is a member of, the Financial Action Task Force (the “FATF”). A list of FATF members is available on the FATF web site: www.fatf-gafi.org.

(a)       Send a check in payment for the amount subscribed (as indicated on the signature page of this Subscription Agreement) payable to “Clinigence Holdings, Inc.” to:

Clinigence Holdings, Inc.

55 Ivan Allen Jr. Blvd. NW, #875

Atlanta, GA 30308
Attention: Jacob Margolin

OR

(b)       Wire transfer that amount to:

Routing No.: 122016066

Account No.: 075-296-355

Bank: City National Bank

Address: 3484 Central Ave., Riverside, CA 92506

Account Name: Clinigence Holdings, Inc.

 

This Subscription Agreement will be irrevocable by the prospective investor, unless the subscription is rejected or the Offering is withdrawn, the subscriber will become an investor in the Offering. We or the Placement Agent may reject subscriptions for failure to conform to the requirements of the Offering, incomplete or illegible documentation, oversubscription of the Offering or any such other reason, whatsoever, as we and the Placement Agents, in their sole discretion, may determine.

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Please complete and return the applicable paperwork based on the registration type below:

Corporate Account (Domestic)
Certification of Accredited Investor
Corporate Resolution
Investor Information
Valid government issued photo ID with signature
W9
Corporate Account (International)
Certification of Accredited Investor
Certification for Non US Person Representations
Corporate Minutes in English
Corporate Resolution
Investor Information
Valid passport, including photo and signature
W8-BEN
Individual Account (Domestic)
Certification of Accredited Investor
Investor Information
Valid government issued photo ID with signature
W9
Individual Account (International)
Certification of Accredited Investor
Certification for Non US Person Representations
Investor Information
Valid passport with photo and signature
W8-BEN
Individual Retirement Account (IRA)
Certification of Accredited Investor
Investor Information
Valid government issued photo ID with signature
W9
Joint Account (2 or more investors)
Certification of Accredited Investor
Investor Information
Valid government issued photo ID with signature
W9 for each investor
Trust Account
Certification of Accredited Investor
Investor Information
Trust Agreement, including names of trustees and signature pages
Valid government issued photo ID with signature
W9

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I, the undersigned (the “Subscriber”), hereby irrevocably subscribe for investment units (each, a “Unit”) of Clinigence Holdings, Inc., a Delaware corporation (the “Company”), with each Unit consisting of: (a) a 10% interest-bearing, unsecured, convertible promissory note in the aggregate principal amount of $5,000 convertible into Conversion Shares at the Conversion Price, and (b) a six-year warrant to purchase up to 2,500 Warrant Shares at the Exercise Price (the “Offering”). As used in this Subscription Agreement, “Units” refers to the Units themselves and any shares of Common Stock, notes or warrants issued or issuable as part of or underlying the Units, in each case as the context requires. Capitalized terms used and not otherwise defined in this Subscription Agreement have the meanings respectively ascribed to them in the Confidential Private Placement Memorandum dated October 23, 2019 (including the Appendices and Exhibits thereto, the “Memorandum”) relating to the Company and the Offering.

I understand that investment in the Units is an illiquid investment. In particular, I recognize that: (i) I must bear the economic risk of investment in the Units for an indefinite period of time, since the Units have not been registered under the Securities Act of 1933 (the “Securities Act”) and therefore cannot be sold unless either they are subsequently registered under the Securities Act or an exemption from such registration is available and a favorable opinion of counsel for the Company to that effect is obtained (if requested by the Company); (ii) the Units will be “restricted securities” as that term is defined in Rule 144 under the Securities Act and, accordingly, that the Subscriber must hold the Units indefinitely unless they are subsequently registered or qualified under the Securities Act and any other applicable securities law or exemptions from such registration and qualification are available; (iii) no established market will exist and it is possible that no public market for the Units, or any part thereof or any security underlying any part thereof, will develop; and (iv) Rule 144 is not currently available for any sale of Units and will not be available for an extended period. I consent to the affixing by the Company of such legends on certificates representing the Units (or any part thereof) as any applicable federal or state securities law or any securities law of any other applicable jurisdiction may require from time to time, including, without limitation, legends stating that the Units have not been registered or qualified under the Securities Act or any other securities law and setting forth the limitations on dispositions imposed hereby.

I represent and warrant to the Company that: (i) The financial information provided in this subscription agreement (the “Subscription Agreement”) is complete, true and correct; (ii) I and my Investment Managers, if any, have carefully reviewed and understand the risks of, and other considerations relating to, a purchase of Units, including, but not limited to, the risks set forth under “Risk Factors” in the Memorandum; (iii) I and my Investment Managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information set forth in the Memorandum and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the offering and sale of the Units and anything set forth in the Memorandum; (iv) neither I nor my Investment Managers, if any, have been furnished any offering literature by the Company or any of its affiliates, associates or agents other than the Memorandum, and the agreements referenced therein; and (v) I am acquiring the Units for which I am subscribing for my own account, as principal, for investment and not with a view to the resale or distribution of all or any part of the Units.

I acknowledge that the Company may be precluded from relying on Rule 506 under the Securities Act if a beneficial owner of 20% or more of the Fund’s voting securities is subject to a disqualifying event provided in Rule 506(d) (each, a “Disqualifying Event”). I further represent and warrant to the Company that if (1) the Subscriber or any beneficial owner of its Units is or is reasonably likely to become subject to any Disqualifying Event, the Subscriber shall promptly notify the Company, regardless of how many Units the Subscriber owns, (2) the Company notifies the Subscriber that its ownership is over or approaching the 20% threshold, the Subscriber shall promptly provide any information reasonably requested by the Company to determine whether the Subscriber or any beneficial owner of its Units is subject to any Disqualifying Event, and (3) at any time the Subscriber or any beneficial owner of its Units holds 20% or more of the Company’s voting securities, regardless of whether it is so notified, the Subscriber hereby agrees to waive such portion of the Subscriber’s voting, consent or similar rights sufficient to reduce its percentage of such rights to less than 20%.

I acknowledge that I may receive or have access to confidential proprietary information concerning the Company, including, without limitation, customers, suppliers, contracts, information regarding potential investments, financial information, trade secrets and the like (collectively, “Confidential Information”), which is proprietary in nature and non-public. I agree that I shall not disclose or cause to be disclosed any Confidential Information to any person or use any Confidential Information for my own purposes or my own account, except in connection with my investment in the Company, and except as otherwise required by any regulatory authority, law or regulation, or by legal process. Furthermore, I represent and warrant to the Company that I have not reproduced, duplicated or delivered the Memorandum or this Subscription Agreement to any other person, except my professional advisers or as instructed by the Company. Notwithstanding the foregoing, I (and each of my employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of (1) the Company and (2) any of its transactions, and all materials of any kind (including opinions or other tax analyses) that are provided to the Subscriber relating to such tax treatment and tax structure.

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I understand that the purchase price per Unit does not reimburse for any costs incurred by me for legal, tax, accounting or financial advice, including fees paid to my purchaser representative, if any.

The undersigned, if a corporation, partnership, trust or other form of business entity, (i) is authorized and otherwise duly qualified to purchase and hold the Units, (ii) has obtained such additional tax and other advice that it has deemed necessary, (iii) has its principal place of business at its residence address set forth in this Subscription Agreement, and (iv) has not been formed for the specific purpose of acquiring the Units (although this may not necessarily disqualify the subscriber as a purchaser). The persons executing this Subscription Agreement, as well as all other Agreements related to the Offering, represent that they are duly authorized to execute all such Agreements on behalf of the entity. (If the undersigned is one of the aforementioned entities, it agrees to supply any additional written information that may be required.)

All of the information which I have furnished to the Company and which is set forth in this Subscription Agreement is correct and complete as of the date of this Subscription Agreement. If any material change in this information should occur prior to my subscription being accepted, I will immediately furnish the revised or corrected information. I further agree to be bound by all of the terms and conditions of the Offering described in the Memorandum, this Subscription Agreement and the other documents and agreements related thereto. I am the only person with a direct or indirect interest in the Units subscribed for by this Subscription Agreement. I agree to indemnify and hold harmless the Company and its officers, directors and affiliates from and against all damages, losses, costs and expenses (including reasonable attorneys’ fees) that they may incur by reason of the failure of the undersigned to fulfill any of the terms or conditions of this Subscription Agreement or by reason of any breach of the representations and warranties made by the undersigned herein or in any Agreement provided by the undersigned to the Company. This Subscription Agreement is not transferable or assignable by me without the written consent of the Company. If more than one person is executing this Subscription Agreement, the obligations of each shall be joint and several and the representations and warranties contained in this Subscription Agreement shall be deemed to be made by, and be binding upon, each of these persons and his or her heirs, executors, administrators, successors and assigns. This Subscription Agreement, upon acceptance by the Company, shall be binding upon my heirs, executors, administrators, successors and assigns. This Subscription Agreement shall be construed in accordance with and governed in all respects by the laws of the State of California.

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Units in this Offering will be sold only to “Accredited Investors,” as defined in Regulation D under the 1933 Act, and under other applicable securities laws and regulations, to purchase Units in this Offering. Please indicate by initialing the category or categories that accurately describe the Subscriber’s situation [initial all applicable blanks]:

 

___ (1) A natural person (not an entity) [initial appropriate blank(s)]:
___ (a) whose individual net worth, or joint net worth with his or her spouse, at the time of his or her purchase exceeds $1,000,000, excluding from the net worth calculation both the fair market value of that person's primary residence and the amount of any debt secured by such residence up to its fair market value but including in that person’s liabilities the amount of any increase in the last 60 days in the debt secured by such residence (accordingly, both the portion of any debt secured by such primary residence that exceeds its fair market value and the amount of any increase in such debt in the last 60 days must be deducted, without double counting, in calculating the person's net worth), or
___ (b) who had individual income in excess of $200,000 in each of the two most recent years or joint income with his or her spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
___ (2) An employee benefit plan within the meaning of ERISA Title I [initial appropriate blank]: (a) if the investment decision is made by a Plan fiduciary, as defined in ERISA Section 3(21), which is (i) ___ a bank, (ii) ___ a savings and loan association, (iii) ___ an insurance company or (iv) ___ a registered investment adviser, or (b) ___ if the Plan has total assets in excess of $5,000,000, or (c) ___ if the Plan is a self-directed plan, with investment decisions made solely by persons that are accredited investors;
___ (3) A trust, other than a revocable trust described in category (4) below, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities of the Company being offered, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment in the Company;
___ (4) A revocable trust (i.e., a trust that may be amended or revoked by its grantors), of which all of the grantors are “accredited investors” (provided that any person claiming accredited investor status based on an individual net worth (or joint net worth with his or her spouse) in excess of $1,000,000 makes such net worth calculation in accordance with the formula in category (1) above);
___ (5) A bank as defined in 1933 Act Section 3(a)(2) or a savings and loan association or other institution as defined in 1933 Act Section 3(a)(5)(A), whether acting in its individual or fiduciary capacity;
___ (6) A broker or dealer registered pursuant to 1934 Act Section 15;
___ (7) An insurance company as defined in 1933 Act Section 2(13);
___ (8) An investment company registered under the ICA or a business development company as defined in ICA Section 2(a)(48);
___ (9) A small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;
___ (10) A private business development company as defined in Advisers Act Section 202(a)(22);
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___ (11) An organization described in Code Section 501(c)(3), corporation, Massachusetts or similar business trust, partnership or limited liability company, not formed for the specific purpose of acquiring the securities of the Company being offered, or a plan established or maintained by a state or its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, in any such case with total assets in excess of $5,000,000 (in case of an organization described in Code Section 501(c)(3), such total assets include endowment, annuity and life income funds and are to be determined according to the Subscriber’s most recent audited financial statements);
___ (12) A manager, director, executive officer or general partner of the Company or the Company; or
___ (13) An entity in which all the equity owners are accredited investors.

Special Note for Categories (2)(c), (4) or (13): If the Subscriber has indicated category (2)(c), (4) or (13) above, please list below the names and categories of accreditation of each person making the investment decisions on behalf of the self-directed plan (category (2)(c)), each grantor of a revocable trust (category 4) or each equity owner (category (13)) (attach additional pages if necessary):

Person Making Investment Decision, Grantor or Equity Owner Accredited
Investor
Category
 
 
 
 
 
 
 
 

Special Note for Trusts, Limited Liability Companies, Partnerships and Certain Retirement Plans: The application of the “accredited investor” categories to trusts (including Massachusetts or similar business trusts), limited liability companies, partnerships and self-employed individual retirement plans is subject to complex regulatory interpretations and may differ under state and federal law. Accordingly, such an entity attempting to qualify may be required to deliver additional information, including a satisfactory opinion of its counsel.

I certify that I am an Accredited Investor.

Name   Name
     
Signature   Signature
     
Name and Title of Signatory (if the Investor is an entity):   Name and Title of Signature (if the Investor is an entity)

 

DEFINITIONS USED IN THIS SUBSCRIPTION AGREEMENT

For the purposes of this Subscription Agreement, the following terms shall have the meanings set forth below:

Commodity Interests” means commodity futures contracts, options on commodity futures contracts, and options on physical commodities traded on or subject to the rules of:

(i) any contract market designated for trading such transactions under the Commodity Exchange Act, as amended (“CEA”) and the rules thereunder; or
(ii) any board of trade or exchange outside the United States, as contemplated in Part 30 of the rules under the CEA.

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Family Company” means a company, partnership or trust that owns not less than $5,000,000 in “investments” and that is owned directly or indirectly by or for two or more natural persons who are related as siblings or spouse (including former spouses), or direct lineal descendants by birth or adoption, spouses of such persons, the estates of such persons, or foundations, charitable organizations or trusts established for the benefit of such persons.

Financial Contract” means any arrangement that:

(i) takes the form of an individually negotiated contract, agreement, or option to buy, sell, lend, swap, or repurchase, or other similar individually negotiated transaction commonly entered into by participants in the financial markets;
(ii) is in respect of securities, commodities, currencies, interest or other rates, other measures of value, or any other financial or economic interest similar in purpose or function to any of the foregoing; and
(iii) is entered into in response to a request from a counterparty for a quotation, or is otherwise entered into and structured to accommodate the objectives of the counterparty to such arrangement.

Individual income” means “adjusted gross income” as reported for Federal income tax purposes, exclusive of any income attributable to a spouse or to property owned by a spouse:

(1) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended, (the Code)
(2) the amount of the losses claimed as a limited partner in a limited partnership (as reported on Schedule E of IRS Form 1040)
(3) any deduction claimed for depletion under Section 611, et seq. of the Code and
(4) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Sections 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

Investments” means:

(1) Securities, other than securities of an issuer that controls, is controlled by, or is under common control with, the investor that owns such securities, unless the issuer of such securities is:
(i) an investment company or a company that would be an investment company but for the exclusions provided by Sections 3(c)(1) through 3(c)(9) of the Investment Company Act or the exemptions provided by Rule 3a-6 or 3a-7 promulgated under the Investment Company Act, or a commodity pool; or
(ii) a Public Company (as defined below); or
(iii) a company with shareholders’ equity of not less than $50,000,000 (determined in accordance with generally accepted accounting principles) as reflected on the company’s most recent (and in any event not more than sixteen months old) financial statements;
(2) Real estate held for investment purposes;
(3) Commodity Interests (as defined below) held for investment purposes;
(4) Physical Commodities (as defined below) held for investment purposes;
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(5) To the extent not securities, Financial Contracts (as defined below) entered into for investment purposes;
(6) In the case of an investor that is a company that would be an investment company but for the exclusions provided by Section 3(c)(1) or 3(c)(7) of the Investment Company Act, or a commodity pool, any amounts payable to such investor pursuant to a firm agreement or similar binding commitment pursuant to which a person has agreed to acquire an interest in, or make capital contributions to, the investor upon the demand of the investor; and
(7) Cash and cash equivalents held for investment purposes.

Real estate that is used by the investor or a Related Person (as defined below) of the investor for personal purposes, or as a place of business, or in connection with the conduct of the trade or business of such investor or a Related Person of the investor, will NOT be considered real estate held for investment purposes, provided that real estate owned by an investor who is engaged primarily in the business of investing, trading or developing real estate in connection with such business may be deemed to be held for investment purposes. However, residential real estate will not be deemed to be used for personal purposes if deductions with respect to such real estate are not disallowed by section 280A of the U.S. Internal Revenue Code of 1986, as amended.

A Commodity Interest or Physical Commodity owned, or a Financial Contract entered into, by the investor who is engaged primarily in the business of investing, reinvesting, or trading in Commodity Interests, Physical Commodities or Financial Contracts in connection with such business may be deemed to be held for investment purposes.

For purposes of determining the amount of investments owned by an investor that is a company, there may be included investments owned by majority-owned subsidiaries of the investor and investments owned by a company (the “Parent Company”) of which the investor is a majority-owned subsidiary, or by a majority-owned subsidiary of the investor and other majority-owned subsidiaries of the Parent Company.

In determining whether a natural person is an accredited investor, there may be included in the amount of such person’s investments any investment held jointly with such person’s spouse, or investments in which such person shares with such person’s spouse a community property or similar shared ownership interest. In determining whether spouses who are making a joint investment in the [fund] are accredited investors, there may be included in the amount of each spouse’s investments any investments owned by the other spouse (whether or not such investments are held jointly). There shall be deducted from the amount of any such investments any amounts specified by paragraph 2(a) of Annex B incurred by such spouse.

In determining whether a natural person is an accredited investor, there may be included in the amount of such person’s investments any investments held in an individual retirement account or similar account the investments of which are directed by and held for the benefit of such person.

Joint income” means “adjusted gross income” as reported for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, and increased by the following amounts:

(1) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”)
(2) the amount the losses claimed as a limited partner in a limited partnership (as reported on Schedule E of IRS Form 1040)
(3) any deduction claimed for depletion under Section 611 et. seq. of the Code and
(4) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue code as it was in effect prior to enactment of the Tax Reform Act of 1986.

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Physical Commodities” means any physical commodity with respect to which a Commodity Interest is traded on a market specified in the definition of Commodity Interests above.

Public Company” means a company that:

(i) files reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended from time to time; or
(ii) has a class of securities that are listed on a Designated Offshore Securities Market, as defined by Regulation S of the Securities Act of 1933, as amended.

Related Person” means a person who is related to the investor as a sibling, spouse or former spouse, or is a direct lineal descendant or ancestor by birth or adoption of the investor, or is a spouse of such descendant or ancestor, provided that, in the case of a Family Company, a Related Person includes any owner of the Family Company and any person who is a Related Person of such an owner.

VALUATION OF INVESTMENTS

The general rule for determining the value of investments in order to ascertain whether an investor is an accredited investor is that the value of the aggregate amount of investments owned and invested on a discretionary basis by the investor shall be their fair market value on the most recent practicable date or their cost. This general rule is subject to the following provisos:

(1) In the case of Commodity Interests, the amount of investments shall be the value of the initial margin or option premium deposited in connection with such Commodity Interests; and
(2) In each case, there shall be deducted from the amount of investments owned by the investor the following amounts:
(a) The amount of any outstanding indebtedness incurred to acquire the investments owned by the investor.
(b) A Family Company, in addition to the amounts specified in clause (a) above, shall have deducted from the value of such Family Company’s investments any outstanding indebtedness incurred by an owner of the Family Company to acquire such investments.

CORPORATE ACCOUNT

Please certify that the corporate account is an accredited investor by initializing where applicable:

______  ______ An employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association, insurance company or registered investment adviser; or

______   ______ An employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; or

______   ______ Each of its shareholders, partners, or beneficiaries meets at least one of the following conditions described above under Section IV, A, Individual Accounts. Please also CHECK the appropriate space in that section; or

______  ______ The plan is a self-directed employee benefit plan and the investment decision is made solely by a person that meets at least one of the conditions described above under Section IV, A, Individual Accounts. Please also CHECK the appropriate space in that section; or

______  ______ A corporation, a partnership or a Massachusetts or similar business trust with total assets in excess of $5,000,000.

TRUST ACCOUNT

______  ______ Please certify that the trust account is an accredited investor by initializing where applicable:

______  ______ The trust has total assets in excess of $5,000,000 and the investment decision has been made by a “sophisticated person;”

______  ______ The trustee making the investment decision on its behalf is a bank (as defined in Section 3(a)(2) of the Act), a saving and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, acting in its fiduciary capacity; or

______  ______ The grantor(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the (each) grantor(s).

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CERTIFICATION FOR NON-US PERSON REPRESENTATIONS

At the time of (a) the offer by the Company and (b) the acceptance of the offer by such person or entity, of the Units, such person or entity was outside the United States. The term “Units,” for the purposes of this Subscription Agreement, refers to the Units themselves and any shares of Common Stock, notes or warrants issued or issuable as part of or underlying the Units, in each case as the context requires.

Such person or entity is acquiring the Units for its own account, for investment and not for distribution or resale to others and is not purchasing the Units for the account or benefit of any U.S. person, or with a view towards distribution to any U.S. person, in violation of the registration requirements of the Securities Act.

Such person or entity will make all subsequent offers and sales of the Units either (x) outside of the United States in compliance with Regulation S; (y) pursuant to a registration under the Securities Act; or (z) pursuant to an available exemption from registration under the Securities Act. Specifically, such person or entity will not resell the Units to any U.S. person or within the United States prior to the expiration of a period commencing on the closing date of the Offering and ending on the date that is one year thereafter (the “Distribution Compliance Period”), except pursuant to registration under the Securities Act or an exemption from registration under the Securities Act.

Such person or entity has no present plan or intention to sell the Units in the United States or to a U.S. person at any predetermined time, has made no predetermined arrangements to sell the Units and is not acting as a Distributor of such securities (as Distributor is defined under the Securities Act).

Neither such person or entity, its affiliates nor any person or entity acting on behalf of such person or entity, has entered into, has the intention of entering into, or will enter into any put option, short position or other similar instrument or position in the U.S. with respect to the Units at any time after the closing date of the Offering through the Distribution Compliance Period except in compliance with the Securities Act.

Such person or entity consents to the placement of a legend on any certificate or other document evidencing the Units.

Such person or entity is not acquiring the Units in a transaction (or an element of a series of transactions) that is part of any plan or scheme to evade the registration provisions of the Securities Act.

Such person or entity has sufficient knowledge and experience in finance, securities, investments and other business matters to be able to protect such person’s or entity’s interests in connection with the transactions contemplated by this Subscription Agreement.

Such person or entity has consulted, to the extent that it has deemed necessary, with its tax, legal, accounting and financial advisors concerning its investment in the Units.

Such person or entity understands the various risks of an investment in the Units and can afford to bear such risks for an indefinite period of time, including, without limitation, the risk of losing its entire investment in the Units.

Such person or entity has had access to the Company’s publicly filed reports with the Securities and Exchange Commission and has been furnished during the course of the transactions contemplated by this Subscription Agreement with all other public information regarding the Company that such person or entity has requested and all such public information is sufficient for such person or entity to evaluate the risks of investing in the Units.

Such person or entity has been afforded the opportunity to ask questions of and receive answers concerning the Company and the terms and conditions of the issuance of the Units.

Such person or entity is not relying on any representations and warranties concerning the Company made by the Company or any officer, employee or agent of the Company, other than those contained in this Subscription Agreement.

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Such person or entity will not sell or otherwise transfer the Units unless either (A) the transfer of such securities is registered under the Securities Act or (B) an exemption from registration of such securities is available.

Such person or entity represents that the address furnished in this Subscription Agreement is the principal residence if he or she is an individual or its principal business address if it is a corporation or other entity.

Such person or entity understands and acknowledges that the Units have not been recommended by any federal or state securities commission or regulatory authority, that the foregoing authorities have not confirmed the accuracy or determined the adequacy of any information concerning the Company that has been supplied to such person or entity and that any representation to the contrary is a criminal offense.

Name          
Signature       /   /20     
Name          
Signature       /   /20     

 

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SUBSCRIBER QUESTIONNAIRE

Subscriber Name     Country of Citizenship  
Investment Amount $   USD  

 

Source of funds for this investment ☐ Annuity (ies) ☐ Gift ☐ Income from earnings
  ☐ Inheritance ☐ Insurance Proceeds ☐ Investment Proceeds
  ☐ Legal Settlement ☐ Lottery/Gaming ☐ Pension/IRA/Retirement
  ☐ Sale of business ☐ Spouse/Parent ☐ Other __________

 

Is this account a private banking account defined under the USA Patriot Act? ☐ Yes ☐ No

Is this an account for a foreign bank as defined under the USA Patriot Act? ☐ Yes ☐ No

 

Contact Information (This address will be used for mailing unless you indicate otherwise):

INDIVIDUAL CONTACT INFORMATION:

           
Street Address          
           
City, State   Zip Code   Country  
           
Home Phone Number   Fax Number      
           
Email Address          
ENTITY CONTACT INFORMATION:        
           
Name of Company          
           
Contact Name   Email Address      
           
Street Address   Suite/Floor      
           
City, State   Zip Code   Country  
           
Business Phone Number   Fax Number      

 

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SUBSCRIBER QUESTIONNAIRE

Income $ USD Source of income

Occupation Industry

Education If retired, former occupation

Employer Name

No. of Years

Employer Address

Marital Status [_] S   [_] M   [_] D   [_] DP   [_] W Dependents [_] 0   [_] 1   [_] 2   [_] >2

Investment & Product Experience Current Portfolio

Alternative Investments [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Annuities [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Bank CDs [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Bonds [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Cash or Cash Equivalent [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Hedge Funds [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Margin [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Mutual Funds-Exchange Traded [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Options [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Private Placements [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Real Estate [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

Stocks [_] None [_] < 2 years [_] 2 – 5 years [_] > 5 years $

 

Investable Asset

[_] < $50,000 [_] $50,001 – $100,000 [_] $100,001 – $250,000 [_] $250,001 – $500,000

[_] $500,001 – $750,000 [_] $750,001 – $1,000,000 [_] $1,000,001 – $2,500,000

[_] $2,500,001 – $5,000,000 [_] $5,000,001 – $7,500,000 [_] $7,500,001 – $25,000,000

[_] > $25,000,001

Liquid Net Worth (excluding primary residence)

[_] < $50,000 [_] $50,001 – $100,000 [_] $100,001 – $250,000 [_] $250,001 – $500,000

[_] $500,001 – $750,000 [_] $750,001 – $1,000,000 [_] $1,000,001 – $2,500,000

[_] $2,500,001 – $5,000,000 [_] $5,000,001 – $7,500,000 [_] $7,500,001 -$25,000,000

[_] >$25,000,001

Total Net Worth (excluding primary residence)

[_] < $50,000 [_] $50,001 – $100,000 [_] $100,001 – $250,000 [_] $250,001 – $500,000

[_] $500,001 – $750,000 [_] $750,001 – $1,000,000 [_] $1,000,001 – $2,500,000

[_] $2,500,001 – $5,000,000 [_] $5,000,001 – $7,500,000 [_] $7,500,001 – $25,000,000

[_] >$25,000,001

Annual Expenses (recurring)

[_] $50,000 and under [_] $50,001-100,000 $100,001-250,000 [_] $250,001-500,000

[_] > $500,000

Special Expenses (future, non-recurring)

[_] None [_] $50,000 and under [_] $50,001-100,000 [_] $100,001-250,000

[_] > $250,000

Timeframe for Special Expenses

[_] Within 1 year [_] 2 – 3 years [_] 3 – 5 years [_] 6 – 8 years [_] > 8 years
[_] None or Never

Investor Initial ________ _______

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Are you or anyone with an interest in this account either: (1) a senior military, governmental, or political official in a non-US country, or (2) closely associated with an immediate family member of such an official?

Yes No If yes, identify the name of the official, office held, and country

 


BROKER DEALER AFFILIATIONS

Are you an employee of Emerson Equity LLC? [_] Yes [_] No
Are your related to an employee of Emerson Equity LLC? [_] Yes [_] No If yes, specify relationship to the employee ___________
Are you an employee of another broker dealer? [_] Yes [_] No If yes, name of the broker dealer _________________
Are you related to an employee of another broker dealer? [_] Yes [_] No If yes, specify relationship to the employee ___________
Are you maintaining other brokerage accounts? [_] Yes [_] No If yes, specify financial institution ______________
Are you or any member of your immediate family affiliated with or employed by a member a stock exchange or the FINRA? [_] Yes [_] No If yes, employer authorization is required.
Are you a senior officer, director, or 10% or more shareholder of a public company? [_] Yes [_] No If yes, specify company

 

I acknowledge that purchasing this investment product that has certain fees and risks. My registered investment professional has reviewed and explained, where applicable.

CLINIGENCE HOLDINGS, INC. $______________________USD

 

INVESTOR INITIALS

I have been given a full and complete Memorandum for Clinigence Holdings, Inc. I have been advised by my registered representative that I may have this document translated for my convenience and understanding. I attest that I am proficient in English and do not require the Memorandum to be translated into another language. I have read and understand the Memorandum.

I have reviewed and understand the risk sections of the Offering documents.

I understand that the investment is NOT GUARANTEED, MAY LOSE PRINCIPAL.

I understand that the investment is not liquid.

I understand that my registered representative will earn a commission in connection with this investment.

I am sophisticated in financial and business affairs and am able to evaluate the risks and merits of the Offering.

I understand that the Offering is HIGH RISK. The inherit risks include lack of liquidity, leverage, lack of diversification and tax complexity. Success or failure of the investment is dependent on the investment sponsor and is outside the control of the investors. While potential loss is limited to the amount investment, such loss is possible.

I have reviewed the Memorandum and understand the risk sections. I understand that this investment is an indirect interest in Clinigence Holdings, Inc. and NOT a direct investment in Clinigence Holdings, Inc. securities.

I currently [_] own [_] do not own private placements in my portfolio.
They are worth approximately $ .

I understand that it is not advisable to invest more than 10% of my liquid net worth in private placements, I am willing to accept the added exposure and risk.

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ARBITRATION DISCLOSURES

 

THIS SUBSCRIPTION AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT THE PARTIES AGREE AS FOLLOWS:

 

ALL PARTIES TO THIS SUBSCRIPTION AGREEMENT ARE GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED.
ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY’S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.
THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS, AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS.
THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD UNLESS, IN AN ELIGIBLE CASE, A JOINT REQUEST FOR AN EXPLAINED DECISION HAS BEEN SUBMITTED BY ALL PARTIES TO THE PANEL AT LEAST 20 DAYS PRIOR TO THE FIRST SCHEDULED HEARING DATE.
THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT.
THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS SUBSCRIPTION AGREEMENT.

ARBITRATION AGREEMENT 

ANY CONTROVERSY BETWEEN YOU AND US SHALL BE SUBMITTED TO ARBITRATION BEFORE THE NEW YORK STOCK EXCHANGE, INC., ANY OTHER NATIONAL SECURITIES EXCHANGE ON WHICH A TRANSACTION GIVING RISE TO THE CLAIM TOOK PLACE (AND ONLY BEFORE SUCH EXCHANGE), OR THE FINANCIAL INDUSTRY REGULATORY AUTHORITY. NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTIONS TO ARBITRATION, NOR SEEK TO ENFORCE ANY PREDISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL; (I) THE CLASS CERTIFICATION IS DENIED; (II) THE CLASS IS DECERTIFIED; OR (III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS SUBSCRIPTION AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.

The Memorandum and Subscription Agreement contain risk disclosures, various statements and representations. Subscribers should carefully review in its entirety before signing.

The undersigned acknowledge that Clinigence Holdings, Inc. makes no recommendation with respect thereto. Clinigence Holdings, Inc. has made no investigation regarding any other person or entity involved in the Offering.

BY SIGNING, I ACKNOWLEDGE THAT I HAVE CAREFULLY REVIEWED THE TRANSACTION DOCUMENTS RELATED TO THIS INVESTMENT AND AM BOUND BY THE TERMS OF THE TRANSACTION DOCUMENTS AND THIS SUBSCRIPTION AGREEMENT.

Subscriber Signature       Date   /   /20___
Subscriber Signature       Date   /   /20___

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EXHIBIT A

FORM OF CONVERTIBLE PROMISSORY NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS

CLINIGENCE HOLDINGS, INC.

CONVERTIBLE PROMISSORY NOTE

$_____________________ November 19, 2019

FOR VALUE RECEIVED, the undersigned, CLINIGENCE HOLDINGS, INC., a Delaware corporation (the “Company”), promises to pay to the order of _______________________________________ or its registered assigns (the “Holder”), the principal sum of ________________ Dollars ($__________________), with interest from the date hereof at the rate of 10% per annum on the unpaid balance hereof until paid. Notwithstanding anything to the contrary in this Note, following the effective date of the Merger (as defined in Section 4), all references to the Company in this Note shall mean Parent (as defined in Section 4), to the extent applicable.

1.                  Principal. If not earlier converted pursuant to Section 4 hereof, the outstanding principal of this Note and all accrued but unpaid interest shall be payable on October 31, 2020 (the “Maturity Date”).

2.                  Interest. Subject to Section 10, the Note will bear simple interest at a rate of 10% per year. Interest (including additional interest, if any) will be paid quarterly in arrears commencing on December 31, 2019.

Interest will be paid to the person in whose name a note is registered at the close of business on the date that is ten days prior to the applicable interest payment date (whether or not the day is a business day), immediately preceding the relevant interest payment date. Interest on this Note will be computed on a 360-day year comprised of twelve 30-day months and will accrue from the date of the original issuance of this Note. If any interest payment date falls on a date that is not a business day, such payment of interest (or principal in the case of the Maturity Date or any earlier repurchase date for this Note) will be made on the next succeeding business day, and no interest or other amount will be paid as a result of any such delay. For purposes herein, an “Event of Default” exists if the Company fails to make a payment required by Section 1 or 2 hereof, and such failure is not cured within 10 days following written notice from the Holder.

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3.                  Issuance of Warrants. Concurrently with the issuance of this Note, the Company shall issue to the Holder a warrant to purchase up to ___________________ (__________) [Enter amount providing for 50% coverage] shares (the “Warrants”) of the Company’s common stock, par value $0.00001 per share (“Common Stock”), substantially in the form attached hereto as Exhibit B. The exercise price of the Warrants shall be One Dollar and 25/100 Cents ($1.25) per share, subject to adjustment for stock splits, stock dividends, reclassifications and other similar recapitalization transactions that occur after the date of issuance of the Warrants. Following the effective time of the Merger, the Warrants shall be subject to Section 3.3(b) of the Merger Agreement.

4.                  Conversion Events and Mechanics of Conversion.

(a.)             Certain Definitions. For purposes of this Note, the following terms have the meanings specified below:

(i)                 “Conversion Price” means, prior to the effective time of the Merger, One Dollar and 25/100 Cents ($1.25) and, after the effective time of the Merger, the amount equal to the quotient obtained by dividing (A) One Dollar and 25/100 Cents ($1.25) by (B) the Exchange Ratio, in each case subject to adjustment for stock splits, stock dividends, reclassifications and other similar recapitalization transactions that occur after the date of this Note.

(ii)              “Conversion Shares” means, prior to the effective time of the Merger, shares of Common Stock and, after the effective time of the Merger, shares of common stock of Parent.

(iii)            “Exchange Ratio” has the meaning ascribed to such term in the Merger Agreement.

(iv)             “Merger” means the merger of Merger Sub with and into the Company pursuant to the Merger Agreement, following which the Company will be a wholly owned subsidiary of Parent.

(v)               “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of August 8, 2019, by and among the Company, Parent, HealthDatix, Inc. (“Merger Sub”) and John Salerno.

(vi)             “Parent” means iGambit, Inc., a Delaware corporation.

(b.)             Conversion. If this Note has not previously been repaid in full, then the Holder shall have the option to convert all or any portion of the unpaid principal and interest outstanding under this Note into Conversion Shares at the Conversion Price.

(c.)             Mechanics of Conversion. The Holder shall provide written notice to the Company of its conversion of all or any part of this Note in the form of notice attached hereto as Exhibit A. The Company shall not be obligated to issue certificates evidencing the Conversion Shares issuable upon the conversion of this Note unless this Note is either delivered to the Company, duly endorsed, at the office of the Company, or the Holder notifies the Company that this Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with this Note. After delivery of this Note, or delivery of an agreement and indemnification in the case of a lost Note, the Company shall issue and deliver to the Holder a certificate or certificates for the Conversion Shares, and a check payable to the Holder in the amount equal to the cash amounts payable as a result of a conversion into fractional shares of such Common Stock. Any conversion of this Note shall be deemed to have occurred immediately prior to the close of business on the date of such conversion, and the Holder entitled to receive the Conversion Shares shall be treated for all purposes as the record holder of such Conversion Shares on such date.

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(d.)             Fractional Shares. No fractional Conversion Shares shall be issued upon conversion of this Note. In lieu of any fractional shares to which the Holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the Conversion Price.

5.                  Prepayment. This Note may not be prepaid, in whole or in part, before the Maturity Date other than by and through a conversion pursuant to Section 4.

6.                  Transfer Restrictions. The Holder shall not transfer this Note or the Conversion Shares until (a) it has first given written notice to the Company, describing briefly the manner of any such proposed transfer; and (b)(i) the Company, at its own expense, has received from counsel satisfactory to the Company an opinion that such transfer can be made without compliance with the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), and applicable state securities laws, or (ii) a registration statement filed by the Company under the 1933 Act and applicable state securities laws is declared effective by the Securities and Exchange Commission and state securities commissions having jurisdiction. In connection with any such sale or transfer, the Company will if necessary promptly obtain, at its own expense, an opinion of its counsel to the effect that the Conversion Shares may be registered without legend or restriction for sale or transfer under an exemption from such registration. If the Rule 144 exemption is not available, public sale without registration will require compliance with an exemption under the 1933 Act. The Company shall instruct its transfer agent to accept any such opinion(s) and will process the sale or transfer within ten business days at the Company’s expense. If either the Company or its transfer agent, individually or jointly, fails or refuses without cause or reason to register on its books the sale or transfer of the Conversion Shares within 20 business days after receipt of the written request to do so, the Company shall pay a penalty to the Holder in an amount of additional restricted shares in the amount of l% of the restricted shares in the original written request for each day after the date of receipt of the written request until the Holder receives the unrestricted shares, provided that the Holder has promptly provided all information and certificates requested by the Company or its transfer agent.

7.                  Currency; Payments. All references herein to “dollars” or”$” are to U.S. dollars, and all payments of principal of, and interest on, this Note shall be made in lawful money of the United States of America in immediately available funds. If the date on which any such payment is required to be made pursuant to the provisions of this Note occurs on a Saturday or Sunday or legal holiday observed in the State of California, such payments shall be due and payable on the immediately succeeding date which is not a Saturday or Sunday or legal holiday so observed.

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8.                  Representations and Warranties of Holder. The Holder hereby represents and warrants that:

(a.)             Securities Not Registered. The Holder is acquiring this Note, the Conversion Shares and the Warrants (collectively, the “Securities”) for its own account, not as an agent or nominee, and not with a view to, or for sale in connection with, any distribution thereof in violation of applicable securities laws. By executing this Note, the Holder further represents that Holder does not have any present contract, undertaking, understanding or arrangement with any person to sell, transfer or grant participations to such persons or any third person, with respect to any of the Securities.

(b.)             Access to Information. The Company has made available to the Holder the opportunity to ask questions of and to receive answers from the Company’s officers, directors and other authorized representatives concerning the Company and its business and prospects, and Holder has been permitted to have access to all information which it has requested in order to evaluate the merits and risks of the purchase of this Note and the issuance of the other Securities.

(c.)             Investment Experience. The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in this Note and the issuance of the other Securities, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in this Note and the issuance of the other Securities, and, at the present time, is able to afford a complete loss of such investment.

(d.)             Regulation D. The Holder is an “accredited investor” as defined in Rule 501 under the 1933 Act. In the normal course of business, the Holder invests in or purchases securities similar to the Securities and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of purchasing this Note and the issuance of the other Securities.

(e.)             Securities are Unregistered. The Holder has been advised that (i) none of the Securities have been registered under the 1933 Act or other applicable securities laws, (ii) the Securities may need to be held indefinitely, (iii) the Holder will continue to bear the economic risk of the investment in the Securities after they are subsequently registered under the 1933 Act or an exemption from such registration is available, and (iv) when and if the Securities may be disposed of without registration in reliance on Rule 144 promulgated under the 1933 Act, such disposition may be made only in amounts in accordance with the terms and conditions of such Rule in effect at that time.

(f.)              Pre-Existing Relationship, Financial Experience. The Holder has either a pre-existing personal or business relationship with the Company or any of its officers, directors or controlling persons, or by his/its business or financial experience or the business or financial experience of his/its financial advisors who are unaffiliated with and who are not compensated by the Company, directly or indirectly, could be reasonably assumed to have the capacity to protect his/its own interest in connection with the acquisition of this Note and the issuance of the other Securities.

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(g.)             No Advertisement. The Holder acknowledges that the offer and sale of this Note or the other Securities was not accomplished by the publication of any advertisement.

(h.)             No Review. The Holder understands that no arbitration board or panel, court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, has passed upon or made any recommendation or endorsement of the common stock into which it converts.

(i.)               Legal Representation. The Holder has had the opportunity to confer with legal counsel of its choosing regarding the issuance of this Note, any other Securities and any related transactions.

(j.)               Legend. The Holder understands that the Conversion Shares shall bear a restrictive legend in substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED UNDER AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

9.                  Survival of Representation and Warranties. All representations and warranties made by the Holder shall survive the Maturity Date, and shall remain effective and enforceable until the date on which claims based thereon shall have been barred by the applicable statutes of limitation.

10.              Default Rate. If the Company fails to pay the outstanding principal amount and all accrued interest under this Note within 30 days after the Maturity Date, the interest rate payable on this Note shall be adjusted to 15% per annum.

11.              Usury Savings Clause. The Company and the Holder intend to comply at all times with applicable usury laws. If at any time such laws would render usurious any amounts due under this Note under applicable law, then it is the Company’s and the Holder’s express intention that the Company not be required to pay interest on this Note at a rate in excess of the maximum lawful rate, that the provisions of this Section 11 shall control over all other provisions of this Note which may be in apparent conflict hereunder, that such excess amount shall be immediately credited to the principal balance of this Note (or, if this Note has been fully paid, refunded by the Holder to the Company), and the provisions hereof shall be immediately reformed and the amounts thereafter decreased, so as to comply with the then applicable usury law, but so as to permit the recovery of the fullest amount otherwise due under this Note. Any such crediting or refund shall not cure or waive any default by the Company under this Note. To the extent applicable, Holder and the Company are relying on an exemption from applicable usury laws pursuant to Section 25118 of the California Corporations Code. In furtherance thereof, the Holder and the Company each acknowledge and agree that, by reason of its or his own business and financial experience or that of its or his professional advisers, it or he could reasonably be assumed to have the capacity to protect its or his own interests in connection with the transactions contemplated by this Note.

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12.              Waiver. The Company expressly waives presentment, protest, demand, notice of dishonor, notice of nonpayment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, and diligence in collection.

13.              Attorneys’ Fees and Costs. In the event of any legal proceedings in connection with this Note, all expenses in connection with such legal proceedings of the prevailing party, the non-prevailing party upon demand shall reimburse including reasonable legal fees and applicable costs and expenses. This provision shall not merge with any enforcement order or judgment on this Note and shall be applicable to any proceeding to enforce or appeal any judgment relating to this Note.

14.              Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

15.              Successors and Assigns. This Note shall inure to the benefit of the Holder and its successors and permitted assigns and shall be binding upon the undersigned and its successors and permitted assigns. As used herein, the term “Holder” shall mean and include the successors and permitted assigns of the Holder.

16.              Governing Law. The parties acknowledge and agree that this Note and the rights and obligations of all parties hereunder shall be governed by and construed under the laws of the State of Delaware, without regard to conflict of laws principles.

17.              Modification. This Note may not be modified or amended orally, but only by an agreement in writing signed by the party against whom such agreement is sought to be enforced.

18.              Entire Agreement. This Note constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior written or oral agreements and understandings with respect to the matters covered hereby.

Signature page follows

  6  

 

 

    CLINIGENCE HOLDINGS, INC.
    a Delaware corporation
     
  By:    
  Its:    
  Address:    

 

  7  

 

EXHIBIT A
TO
NOTE

NOTICE OF EXERCISE

To Be Executed by the Holder

in Order to Exercise the Note

The undersigned Holder hereby elects to purchase ________ Conversion Shares pursuant to the attached Note, and requests that certificates for securities be issued in the name of:


(Please type or print name and address)

 

 


(Social Security or Tax Identification Number)

and delivered

to:


(Please type or print name and address if different from above)

If such number of Conversion Shares being purchased hereby shall not be all the Conversion Shares that may be purchased pursuant to the attached Note, a new Note for the balance of such Shares shall be registered in the name of, and delivered to, the Holder at the address set forth below.

In full payment of the purchase price with respect to the Conversion Shares purchased and transfer taxes, if any, the undersigned hereby tenders payment of $_________ by check, money order or wire transfer payable in United States currency to the order of [_____________________]

HOLDER:

Dated: By:/s/
Name:
Title:

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EXHIBIT B
TO
NOTE

FORM OF WARRANT

11229\002\8539365.v2

EXHIBIT B

FORM OF WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

STOCK PURCHASE WARRANT

To Purchase ___________________ Shares of Common Stock

No. 2019A-_____       Issue Date: November 19, 2019

THIS CERTIFIES that, for value received, _____________ (the “Holder”), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase, from CLINIGENCE HOLDINGS, INC., a Delaware corporation (the “Company”), of ______________________ (_______) fully paid non-assessable shares of the Company’s common stock, $0.00001 par value per share (“Common Stock”), at a purchase price of $1.25 per share, provided that such right will terminate, if not terminated earlier in accordance with the provisions hereof, at 5:00 p.m. (Georgia time) on October 31, 2025 (the “Expiration Date”).

The purchase price and the number of shares for which this warrant (the “Warrant”) is exercisable are subject to adjustment, as provided herein.

This Warrant was issued in connection with the Company’s private offering (the “Offering”) of investment units of the Company consisting of a Convertible Promissory in the original principal amount of $5,000 and a warrant to purchase 2,500 shares of Common Stock pursuant to a Confidential Private Offering Memorandum dated October 23, 2019 (the “Memorandum”) and is subject to the terms of a Subscription Agreement (the “Subscription Agreement”) to which the initial Holder is a party. Capitalized terms used and not otherwise defined herein will have the respective meanings ascribed to such terms in the Memorandum.

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a)               “Company” means Clinigence Holdings, Inc. and any corporation that shall succeed or assume the obligations of Clinigence Holdings, Inc. hereunder.

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(b)               “Exchange Ratio” has the meaning ascribed to such term in the Merger Agreement.

(c)               “Exercise Price” shall be $1.25 per Warrant Share, subject to adjustment pursuant to the Merger Agreement or Section 11 hereof.

(d)               “Merger” means the merger of Merger Sub with and into the Company pursuant to the Merger Agreement, following which the Company will be a wholly owned subsidiary of Parent.

(e)               “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of August 8, 2019, by and among the Company, Parent, HealthDatix, Inc. (“Merger Sub”) and John Salerno.

(f)                “Parent” means iGambit, Inc., a Delaware corporation.

(g)               “Warrant Shares” means (i) the Company’s Common Stock and (ii) any Other Securities into which or for which any of the Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

(h)               “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities. From and after the effective time of the Merger, the Other Securities shall be shares of common stock of Parent.

This Warrant, if it is outstanding immediately prior to or issued after the effective time of the Merger, whether or not then vested or exercisable, shall be, by virtue of the Merger and without any action on the part of the Holder or Parent, be assumed by Parent and shall be converted into a Parent warrant in accordance with Section 3.3(b) of the Merger Agreement. Each such Parent warrant as so assumed and converted shall continue to have, and shall be subject to, the same terms and conditions as applied to this Warrant immediately prior to the effective time of the Merger or, if this Warrant is issued after the effective time of the Merger, as of the date of issuance. From and after such effective time, each such Parent warrant as so assumed and converted shall be a warrant to acquire that number of whole shares of Parent common stock (rounded down to the nearest whole share) equal to the product of: (i) the number of shares of Common Stock subject to this Warrant; and (ii) the Exchange Ratio, at an exercise price per share of Parent common stock (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (A) $1.25 by (B) the Exchange Ratio.

1.                  Number of Shares Issuable upon Exercise. Unless sooner terminated in accordance herewith, from and after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, the number of shares of Common Stock of the Company set forth on the first page of this Warrant, subject to adjustment pursuant hereto, by delivery of an original or fax copy of the exercise notice attached hereto as Exhibit A (the “Notice of Exercise”), at least 61 days’ prior to the date of exercise, along with payment to the Company of the Exercise Price. To validly exercise this Warrant, the Notice of Exercise must be received by the Company no later than 61 days before the Expiration Date.

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2.                  Exercise of Warrant.

(a)               The purchase rights represented by this Warrant are exercisable by the registered Holder hereof, in whole at any time or in part from time to time by delivery of the Notice of Exercise duly completed and executed at the principal executive office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company), and upon payment of the Exercise Price of the Warrant Shares thereby purchased (cash, bank wire transfer, or by certified or official bank check payable to the order of the Company in an amount equal to the Exercise Price of the shares thereby purchased); whereupon the Holder of this Warrant shall be entitled to receive a certificate for the number of Warrant Shares so purchased; provided that the Company will place on each certificate a legend substantially the same as that appearing on this Warrant, in addition to any legend required by any applicable state or federal law. If this Warrant is exercised in part, the Company will issue to the Holder hereof a new Warrant upon the same terms as this Warrant but for the balance of Warrant Shares for which this Warrant remains exercisable. The Company agrees that upon proper exercise of this Warrant the Holder shall be deemed to be the record owner of the shares issued upon such proper exercise as of the close of business on the date on which this Warrant shall have been exercised as aforesaid (after taking into account, and following the termination of, any applicable notice period). This Warrant will be surrendered at the time of exercise or if lost, stolen, misplaced or destroyed, the Holder will comply with Section 7 below. Certificates for shares purchased hereunder shall be delivered to the Holder hereof within a reasonable time after the date on which this Warrant shall have been exercised as aforesaid.

(b)               The Company covenants that all Warrant Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all preemptive rights, taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue which shall be paid by the Company in accordance with Section 4 below).

3.                  No Fractional Shares. The Company shall not be required to issue fractional Warrant Shares upon the exercise of this Warrant or to deliver Warrant Certificates that evidence fractional Warrant Shares. In the event that a fraction of a Warrant Share would, except for the provisions of this Section 3, be issuable upon the exercise of this Warrant, the Company shall, upon such exercise, round down to the nearest whole number the number of shares of Common Stock to be issued upon such exercise.

4.                  Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant, or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder of this Warrant, this Warrant, when exercised, shall be accompanied by the Assignment Form attached hereto as Exhibit B (the “Assignment Form”) duly executed by the Holder hereof; and provided further, that upon any transfer involved in the issuance or delivery of any certificates for Warrant Shares, the Company may require, as a condition thereto, that the transferee execute an appropriate investment representation as may be reasonably required by the Company.

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5.                  No Rights as Shareholders. This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof.

6.                  Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender hereof by the registered Holder at the above mentioned office or agency of the Company, for a new Warrant or Warrants aggregating the total Warrant Shares of the surrendered Warrant of like tenor and dated as of such exchange. The Company shall maintain at the above mentioned office or agency a registry showing the name and address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

7.                  Loss; Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor (but with no additional rights or obligations) and dated as of such cancellation, in lieu of this Warrant.

8.                  Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

9.                  Cash Distributions. No adjustment on account of cash dividends or interest on the Company’s Common Stock or Other Securities that may become purchasable hereunder will be made to the Exercise Price under this Warrant.

10.              Consolidation, Merger or Sale of the Company. If the Company is a party to a consolidation, merger or transfer of assets that reclassifies or changes its outstanding Common Stock, the successor corporation (or corporation controlling the successor corporation or the Company, as the case may be) shall by operation of law assume the Company’s obligations under this Warrant.

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11.              Adjustments in the Exercise Price. Subject to the terms of the Merger Agreement, the number of shares and class of capital stock purchasable under this Warrant are subject to adjustment from time to time as set forth in this Section 11.

(a)               Adjustment for change in capital stock. If the Company:

(i)                 pays a dividend or makes a distribution on its Common Stock, in each case, in shares of its Common Stock;

(ii)              subdivides its outstanding shares of Common Stock into a greater number of shares;

(iii)            combines its outstanding shares of Common Stock into a smaller number of shares;

(iv)             makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or

(v)               issues by reclassification of its shares of Common Stock any shares of its capital stock;

then the number and classes of shares purchasable upon exercise of each Warrant in effect immediately prior to such action shall be adjusted so that the holder of any Warrant thereafter exercised may receive the number and classes of shares of capital stock of the Company which such holder would have owned immediately following such action if such holder had exercised the Warrant immediately prior to such action.

For a dividend or distribution the adjustment shall become effective immediately after the record date for the dividend or distribution. For a subdivision, combination or reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination or reclassification.

If after an adjustment the Holder, upon exercise of a Warrant, may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall in good faith determine the allocation of the adjusted Exercise Price between or among the classes of capital stock. After such allocation, that portion of the Exercise Price applicable to each share of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Warrant. Notwithstanding the allocation of the Exercise Price between or among shares of capital stock as provided by this Section 11(a), a Warrant may only be exercised in full by payment of the entire Exercise Price currently in effect.

(b)               Except as otherwise provided in the Merger Agreement or with respect to any actions taken in connection with or in furtherance of the Merger, the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 11 and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holders of this Warrant against impairment.

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12.              Certificate as to Adjustments. In each case (other than as a result of the Merger) of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant agent of the Company (appointed pursuant to Section 15 hereof).

13.              Reservation of Stock Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.

14.              Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered Holder hereof (a “Transferor”) with respect to any or all of the shares underlying this Warrant. On the surrender or exchange of this Warrant, with the Transferor’s duly executed Assignment Form and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the Transferor’s counsel that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Assignment Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of Warrant Shares called for on the face or faces of the Warrant so surrendered by the Transferor; and provided further, that upon any such transfer, the Company may require, as a condition thereto, that the Transferee execute an appropriate investment representation as may be reasonably required by the Company.

15.              Warrant Agent. The Company may, by written notice to each Holder of a Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 2, exchanging this Warrant pursuant to Section 14, and replacing this Warrant pursuant to Section 7, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

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16.              Notices, etc. All notices shall be in writing signed by the party giving such notice, and delivered personally or sent by overnight courier or messenger or sent by registered or certified mail (air mail if overseas), return receipt requested, or by telex, facsimile transmission, telegram or similar means of communication. Notices shall be deemed to have been received on the date of personal, telex, facsimile transmission, telegram or similar means of communication, or if sent by overnight courier or messenger, shall be deemed to have been received on the next delivery day after deposit with the courier or messenger, or if sent by certified or registered mail, return receipt requested, shall be deemed to have been received on the third business day after the date of mailing. Notices shall be sent to the addresses set forth below each party’s signature on the Subscription Agreement.

17.              Notices of Record Date.

In case, other than in connection with the Merger,

(a)               The Company takes a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive a dividend, distribution or any other rights; or

(b)               There is any capital reorganization of the Company, reclassification of the capital stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock), or consolidation or merger of the Company with or into another corporation where the Company is not the surviving entity; or

(c)               There is a voluntary or involuntary dissolution, liquidation or winding up of the Company;

then, and in any such case, the Company shall cause to be mailed to the Holder, at least 5 business days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding up.

18.              Amendments and Supplements.

(a)               The Company may from time to time supplement or amend this Warrant without the approval of any Holders in order to cure any ambiguity or to be correct or supplement any provision contained herein which may be defective or inconsistent with any other provision, or to make any other provisions in regard to matters or questions herein arising hereunder which the Company may deem necessary or desirable and which shall not materially adversely affect the interest of the Holder. All other supplements or amendments to this Warrant must be signed by the party against whom such supplement or amendment is to be enforced.

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(b)               Notwithstanding Section 18(a), the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

19.              Investment Intent. Holder represents and warrants to the Company that Holder is acquiring the Warrant for investment and with no present intention of distributing or reselling all or any part of the Warrant.

20.              Certificates to Bear Language. The Warrant Shares issuable upon exercise thereof shall bear the following legend by which Holder shall be bound:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT of 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE of SUCH REGISTRATION OR AN OPINION of COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.”

Certificates for Warrants or Warrant Shares without such legend shall be issued if such Warrants or Warrant Shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “1933 Act”), or if the Company has received an opinion from counsel reasonably satisfactory to counsel for the Company, that such legend is no longer required under the 1933 Act.

21.              Representations and Warranties of Holder. The Holder hereby represents and warrants that on the date hereof and on each date of exercise of this Warrant:

(a)               Securities Not Registered. The Holder is acquiring this Warrant and the Warrant Shares (collectively, the “Securities”) for its own account, not as an agent or nominee, and not with a view to, or for sale in connection with, any distribution thereof in violation of applicable securities laws. By accepting this Warrant, the Holder further represents that the Holder does not have any present contract, undertaking, understanding or arrangement with any person to sell, transfer or grant participations to such persons or any third person, with respect to any of the Securities.

(b)               Access to Information. The Company has made available to the Holder the opportunity to ask questions of and to receive answers from the Company’s officers, directors and other authorized representatives concerning the Company and its business and prospects, and Holder has been permitted to have access to all information which it has requested in order to evaluate the merits and risks of the purchase of the Securities.

(c)               Investment Experience. The Holder is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of the Securities.

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(d)               Regulation D. The Holder is an “accredited investor” as defined in Rule 501 under the 1933 Act. In the normal course of business, the Holder invests in or purchases securities similar to the Securities and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of purchasing the Securities. The Holder is not a registered broker dealer or an affiliate of any broker or dealer registered under Section 15(a) of the Exchange Act of 1934, as amended, or a member of the FINRA or a Person engaged in the business of being a broker dealer.

(e)               Securities are Unregistered. The Holder has been advised that (i) none of the Securities have been registered under the 1933 Act or other applicable securities laws, (ii) the Securities may need to be held indefinitely, (iii) the Holder will continue to bear the economic risk of the investment in the Securities after they are subsequently registered under the 1933 Act or an exemption from such registration is available, and (iv) when and if the Securities may be disposed of without registration in reliance on Rule 144 promulgated under the 1933 Act, such disposition may be made only in amounts in accordance with the terms and conditions of such Rule in effect at that time.

(f)                Pre-Existing Relationship. The Holder has a pre-existing personal or business relationship with the Company or any of its officers, directors or controlling persons, or by his/its business or financial experience or the business or financial experience of his/its financial advisors who are unaffiliated with and who are not compensated by the Company, directly or indirectly, could be reasonably assumed to have the capacity to protect his/its own interest in connection with the acquisition of the Securities.

(g)               No Advertisement. The Holder acknowledges that the offer and sale of the Securities was not accomplished by the publication of any advertisement.

(h)               No Review. The Holder understands that no arbitration board or panel, court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, has passed upon or made any recommendation or endorsement of the common stock into which it converts.

(i)                 Legal Representation. The Holder has had the opportunity to confer with legal counsel of its choosing regarding the issuance of the Securities and any related transactions.

22.              Survival of Representation and Warranties. All representations and warranties made by the Holder shall survive the earlier of the Expiration Date and shall remain effective and enforceable until the earlier to occur of the Expiration Date or the date on which claims based thereon shall have been barred by the applicable statutes of limitation.

23.              Miscellaneous.

(a)               This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. The parties submit to the jurisdiction of the Courts of the County of Fulton, State of Georgia or a Federal Court empaneled in the State of Georgia for the resolution of all legal disputes arising under the terms of this Warrant, including, but not limited to, enforcement of any arbitration award. The Company and the Holder agree to submit to the jurisdiction of such courts and waive trial by jury.

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(b)               If any action or proceeding is brought by the Company on the one hand or by the Holder on the other hand to enforce or continue any provision of this Warrant, the prevailing party’s costs and expenses, including its reasonable attorney’s fees, in connection with such action or proceeding shall be paid by the other party.

(c)               In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision, which may prove invalid or unenforceable under any law, shall not affect the validity or enforceability of any other provision of this Warrant.

(d)               The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first written above.

 

    CLINIGENCE HOLDINGS, INC.
    a Delaware corporation
     
  By:    
    Jacob Margolin
    Chief Executive Officer

 

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EXHIBIT A
TO
WARRANT

NOTICE OF EXERCISE

(To Be Executed by the Holder in Order to Exercise the Warrant)

The undersigned Holder hereby elects to purchase ________ Shares pursuant to the attached Warrant, and requests that certificates for securities be issued in the name of :


(Please type or print name and address)

 

 


(Social Security or Tax Identification Number)

and delivered

to:                                 


(Please type or print name and address if different from above)

If such number of Shares being purchased hereby shall not be all the Shares that may be purchased pursuant to the attached Warrant, a new Warrant for the balance of such Shares shall be registered in the name of , and delivered to, the Holder at the address set forth below.

In full payment of the purchase price with respect to the Shares purchased and transfer taxes, if any, the undersigned hereby tenders payment of $_________ by check, money order or wire transfer payable in United States currency to the order of [_____________________]

HOLDER:

Dated: By:                                
Name:                                  
Title:                                    

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EXHIBIT B
TO
WARRANT

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto _________________ the right represented by the within Warrant to purchase _______ shares of Common Stock of Clinigence Holdings, Inc., a Delaware corporation, to which the within Warrant relates, and appoints ______________________ Attorney to transfer such right on the books of Clinigence Holdings, Inc., a Delaware corporation, with full power of substitution of premises.

Dated: By:                             
Name:                           
Title:                            

(signature must conform to name of holder as specified on the fact of the Warrant)

Address:

Signed in the presence of :

Dated: