Document:

Unassociated Document

    
      EXHIBIT
        10.10

    

    
WARRANT

     

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
      SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
      SAID
      ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION
      WITH A BONA FIDE MARGIN ACCOUNT.

     

    IQ
      MEDICAL CORP.

     

    Warrant
      To Purchase Common Stock

     

    
      
        	Warrant No.: CCP-001 	
                Number
                  of Shares:
                  100,000

              

      

    

     

    Date
      of
      Issuance: August 12, 2005

    

    IQ
      Medical Corp., a Colorado corporation (the “Company”),
      hereby certifies that, for Ten United States Dollars ($10.00) and other good
      and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Cornell
      Capital Partners, LP
      (“Cornell”),
      the
      registered holder hereof or its permitted assigns, is entitled, subject to
      the
      terms set forth below, to purchase from the Company upon surrender of this
      Warrant, at any time or times on or after the date hereof, but not after
      11:59 P.M. Eastern Time on the Expiration Date (as defined herein) One
      Hundred Thousand (100,000) fully paid and nonassessable shares of Common Stock
      (as defined herein) of the Company (the “Warrant
      Shares”)
      at the
      exercise price per share provided in Section 1(b) below or as subsequently
      adjusted; provided, however, that in no event shall the holder be entitled
      to
      exercise this Warrant for a number of Warrant Shares in excess of that number
      of
      Warrant Shares which, upon giving effect to such exercise, would cause the
      aggregate number of shares of Common Stock beneficially owned by the holder
      and
      its affiliates to exceed 4.99% of the outstanding shares of the Common Stock
      following such exercise, except within sixty (60) days of the Expiration Date.
      For purposes of the foregoing proviso, the aggregate number of shares of Common
      Stock beneficially owned by the holder and its affiliates shall include the
      number of shares of Common Stock issuable upon exercise of this Warrant with
      respect to which the determination of such proviso is being made, but shall
      exclude shares of Common Stock which would be issuable upon (i) exercise of
      the remaining, unexercised Warrants beneficially owned by the holder and its
      affiliates and (ii) exercise or conversion of the unexercised or
      unconverted portion of any other securities of the Company beneficially owned
      by
      the holder and its affiliates (including, without limitation, any convertible
      notes or preferred stock) subject to a limitation on conversion or exercise
      analogous to the limitation contained herein. Except as set forth in the
      preceding sentence, for purposes of this paragraph, beneficial ownership shall
      be calculated in accordance with Section 13(d) of the Securities
      Exchange

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Act
      of
      1934, as amended. For purposes of this Warrant, in determining the number of
      outstanding shares of Common Stock a holder may rely on the number of
      outstanding shares of Common Stock as reflected in the Securities Purchase
      Agreement of even date herewith, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or its
      transfer agent setting forth the number of shares of Common Stock outstanding.
      Upon the written request of any holder, the Company shall promptly, but in
      no
      event later than one (1) Business Day following the receipt of such notice,
      confirm in writing to any such holder the number of shares of Common Stock
      then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall
      be determined after giving effect to the exercise of Warrants (as defined below)
      by such holder and its affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported.

     

    Section
      1.  

     

    (a)  This
      Warrant is the common stock purchase warrant (the “Warrant”)
      issued
      pursuant to the Securities Purchase Agreement dated the date hereof by and
      between the Company and Cornell.

     

    (b)  Definitions.
      The
      following words and terms as used in this Warrant shall have the following
      meanings:

     

    (i)  “Approved
      Stock Plan”
means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company’s securities may be issued to any
      employee, officer or director for services provided to the Company.

     

    (ii)  “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      the City of New York are authorized or required by law to remain
      closed.

     

    (iii)  “Closing
      Bid Price”
means
      the closing bid price of Common Stock as quoted on the Principal Market (as
      reported by Bloomberg Financial Markets (“Bloomberg”)
      through its “Volume at Price” function).

     

    (iv)  “Common
      Stock”
means
      (i) the Company’s common stock, par value $0.0001 per share, and
      (ii) any capital stock into which such Common Stock shall have been changed
      or any capital stock resulting from a reclassification of such Common
      Stock.

     

    (v)  “Excluded
      Securities”
means,
      provided such security is issued at a price which is greater than or equal
      to
      the arithmetic average of the Closing Bid Prices of the Common Stock for the
      ten
      (10) consecutive trading days immediately preceding the date of issuance, any
      of
      the following: (a) any issuance by the Company of securities in connection
      with
      a strategic partnership or a joint venture (the primary purpose of which is
      not
      to raise equity capital), (b) any issuance by the Company of securities as
      consideration for a merger or consolidation or the acquisition of a business,
      product, license, or other assets of another person or entity and (c) options
      to
      purchase shares of Common Stock pursuant to a bona fide Employee Stock Option
      Plan of no more than 15% of the Company’s outstanding shares of Common Stock as
      of the date hereof, provided (I) such options are issued after the date of
      this
      Warrant to employees of the Company within thirty (30) days of such employee’s
      starting his employment with the Company, and (II) the exercise price of such
      options is not less than the Closing Bid Price of the Common Stock on the date
      of issuance of such option.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (vi)  “Expiration
      Date”
means
      the date three (3) years from the Issuance Date of this Warrant or, if such
      date
      falls on a Saturday, Sunday or other day on which banks are required or
      authorized to be closed in the City of New York or the State of New York or
      on
      which trading does not take place on the Principal Exchange or automated
      quotation system on which the Common Stock is traded (a “Holiday”),
      the
      next date that is not a Holiday.

     

    (vii)  “Issuance
      Date”
means
      the date hereof.

     

    (viii)  “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities. 

     

    (ix)  “Other
      Securities”
means
      (i) those options and warrants of the Company issued prior to, and
      outstanding on, the Issuance Date of this Warrant, (ii) the shares of Common
      Stock issuable on exercise of such options and warrants, provided such options
      and warrants are not amended after the Issuance Date of this Warrant and
      (iii) the shares of Common Stock issuable upon exercise of this Warrant.

     

    (x)  “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    (xi)  “Principal
      Market”
means
      the New York Stock Exchange, the American Stock Exchange, the Nasdaq National
      Market, the Nasdaq SmallCap Market, whichever is at the time the principal
      trading exchange or market for such security, or the over-the-counter market
      on
      the electronic bulletin board for such security as reported by Bloomberg or,
      if
      no bid or sale information is reported for such security by Bloomberg, then
      the
      average of the bid prices of each of the market makers for such security as
      reported in the “pink sheets” by the National Quotation Bureau,
      Inc.

     

    (xii)  “Securities
      Act”
means
      the Securities Act of 1933, as amended. 

     

    (xiii)  “Warrant”
means
      this Warrant and all Warrants issued in exchange, transfer or replacement
      thereof. 

     

    (xiv)  “Warrant
      Exercise Price”
shall
      be $0.001 or as subsequently adjusted as provided in Section 8 hereof.

     

    (xv)  “Warrant
      Shares”
means
      the shares of Common Stock issuable at any time upon exercise of this Warrant.
      

     

    (c)  Other
      Definitional Provisions. 

     

    (i)  Except
      as
      otherwise specified herein, all references herein (A) to the Company shall
      be deemed to include the Company’s successors and (B) to any applicable law
      defined or referred to herein shall be deemed references to such applicable
      law
      as the same may have been or may be amended or supplemented from time to time.
      

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (ii)  When
      used
      in this Warrant, the words “herein”,
      “hereof”,
      and
“hereunder”
      and
      words of similar import, shall refer to this Warrant as a whole and not to
      any
      provision of this Warrant, and the words “Section”,
      “Schedule”,
      and
“Exhibit”
shall
      refer to Sections of, and Schedules and Exhibits to, this Warrant unless
      otherwise specified. 

     

    (iii)  Whenever
      the context so requires, the neuter gender includes the masculine or feminine,
      and the singular number includes the plural, and vice versa. 

     

    Section
      2.  Exercise
      of Warrant.
      Subject
      to the terms and conditions hereof, this Warrant may be exercised by the holder
      hereof then registered on the books of the Company, pro rata as hereinafter
      provided, at any time on any Business Day on or after the opening of business
      on
      such Business Day, commencing with the first day after the date hereof, and
      prior to 11:59 P.M. Eastern Time on the Expiration Date, by
      (i) delivery of a written notice, in the form of the subscription notice
      attached as Exhibit
      A
      hereto
      (the “Exercise
      Notice”),
      of
      such holder’s election to exercise this Warrant, which notice shall specify the
      number of Warrant Shares to be purchased, (ii) payment to the Company of an
      amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares
      being purchased, multiplied by the number of Warrant Shares (at the
      applicable Warrant Exercise Price) as to which this Warrant is being
      exercised (plus any applicable issue or transfer taxes) (the “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds and (iii) the surrender
      of
      this Warrant (or an indemnification undertaking with respect to this Warrant
      in
      the case of its loss, theft or destruction) to a common carrier for overnight
      delivery to the Company as soon as practicable following such date. In the
      event
      of any exercise of the rights represented by this Warrant in compliance with
      this Section 2(a), the Company shall on the fifth (5th) Business Day
      following the date of receipt of the Exercise Notice, the Aggregate Exercise
      Price and this Warrant (or an indemnification undertaking with respect to this
      Warrant in the case of its loss, theft or destruction) and the receipt of the
      representations of the holder specified in Section 6 hereof, if requested by
      the
      Company (the “Exercise
      Delivery Documents”),
      and
      if the Common Stock is DTC eligible credit such aggregate number of shares
      of
      Common Stock to which the holder shall be entitled to the holder’s or its
      designee’s balance account with The Depository Trust Company; provided, however,
      if the holder who submitted the Exercise Notice requested physical delivery
      of
      any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
      then the Company shall, on or before the fifth (5th)
      Business Day following receipt of the Exercise Delivery Documents, issue and
      surrender to a common carrier for overnight delivery to the address specified
      in
      the Exercise Notice, a certificate, registered in the name of the holder, for
      the number of shares of Common Stock to which the holder shall be entitled
      pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
      Exercise Price referred to in clause (ii) above the holder of this Warrant
      shall be deemed for all corporate purposes to have become the holder of record
      of the Warrant Shares with respect to which this Warrant has been exercised.
      In
      the case of a dispute as to the determination of the Warrant Exercise Price,
      the
      Closing Bid Price or the arithmetic calculation of the Warrant Shares, the
      Company shall promptly issue to the holder the number of Warrant Shares that
      is
      not disputed and shall submit the disputed determinations or arithmetic
      calculations to the holder via facsimile within one (1) Business Day of receipt
      of the holder’s Exercise Notice. If the holder and the Company are unable to
      agree upon the

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    determination
      of the Warrant Exercise Price or arithmetic calculation of the Warrant Shares
      within one (1) day of such disputed determination or arithmetic calculation
      being submitted to the holder, then the Company shall immediately submit via
      facsimile (i) the disputed determination of the Warrant Exercise Price or the
      Closing Bid Price to an independent, reputable investment banking firm or (ii)
      the disputed arithmetic calculation of the Warrant Shares to its independent,
      outside accountant. The Company shall cause the investment banking firm or
      the
      accountant, as the case may be, to perform the determinations or calculations
      and notify the Company and the holder of the results no later than forty-eight
      (48) hours from the time it receives the disputed determinations or
      calculations. Such investment banking firm’s or accountant’s determination or
      calculation, as the case may be, shall be deemed conclusive absent manifest
      error.

     

    (a)  Unless
      the rights represented by this Warrant shall have expired or shall have been
      fully exercised, the Company shall, as soon as practicable and in no event
      later
      than five (5) Business Days after any exercise and at its own expense, issue
      a
      new Warrant identical in all respects to this Warrant exercised except it shall
      represent rights to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant exercised, less the number
      of Warrant Shares with respect to which such Warrant is exercised.

     

    (b)  No
      fractional Warrant Shares are to be issued upon any pro rata exercise of this
      Warrant, but rather the number of Warrant Shares issued upon such exercise
      of
      this Warrant shall be rounded up or down to the nearest whole
      number.

     

    (c)  If
      the
      Company or its Transfer Agent shall fail for any reason or for no reason to
      issue to the holder within ten (10) days of receipt of the Exercise
      Delivery Documents, a certificate for the number of Warrant Shares to which
      the
      holder is entitled or to credit the holder’s balance account with The Depository
      Trust Company for such number of Warrant Shares to which the holder is entitled
      upon the holder’s exercise of this Warrant, the Company shall, in addition to
      any other remedies under this Warrant or the Placement Agent Agreement or
      otherwise available to such holder, pay as additional damages in cash to such
      holder on each day the issuance of such certificate for Warrant Shares is not
      timely effected an amount equal to 0.025% of the product of (A) the sum of
      the
      number of Warrant Shares not issued to the holder on a timely basis and to
      which
      the holder is entitled, and (B) the Closing Bid Price of the Common Stock for
      the trading day immediately preceding the last possible date which the Company
      could have issued such Common Stock to the holder without violating this
      Section 2.

     

    (d)  If
      within
      ten (10) days after the Company’s receipt of the Exercise Delivery Documents,
      the Company fails to deliver a new Warrant to the holder for the number of
      Warrant Shares to which such holder is entitled pursuant to Section 2 hereof,
      then, in addition to any other available remedies under this Warrant or the
      Placement Agent Agreement, or otherwise available to such holder, the Company
      shall pay as additional damages in cash to such holder on each day after such
      tenth (10th)
      day
      that such delivery of such new Warrant is not timely effected in an amount
      equal
      to 0.25% of the product of (A) the number of Warrant Shares represented by
      the portion of this Warrant which is not being exercised and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Warrant to
      the
      holder without violating this Section 2.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      3.  Covenants
      as to Common Stock.
      The
      Company hereby covenants and agrees as follows:

     

    (a)  This
      Warrant is, and any Warrants issued in substitution for or replacement of this
      Warrant will upon issuance be, duly authorized and validly issued.

     

    (b)  All
      Warrant Shares which may be issued upon the exercise of the rights represented
      by this Warrant will, upon issuance, be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.

     

    (c)  During
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved at least one hundred
      percent (100%) of the number of shares of Common Stock needed to provide for
      the
      exercise of the rights then represented by this Warrant and the par value of
      said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price. If at any time the Company does not have a sufficient number
      of
      shares of Common Stock authorized and available, then the Company shall call
      and
      hold a special meeting of its stockholders within sixty (60) days of that
      time for the sole purpose of increasing the number of authorized shares of
      Common Stock.

     

    (d)  If
      at any
      time after the date hereof the Company shall file a registration statement,
      the
      Company shall include the Warrant Shares issuable to the holder, pursuant to
      the
      terms of this Warrant and shall maintain, so long as any other shares of Common
      Stock shall be so listed, such listing of all Warrant Shares from time to time
      issuable upon the exercise of this Warrant; and the Company shall so list on
      each national securities exchange or automated quotation system, as the case
      may
      be, and shall maintain such listing of, any other shares of capital stock of
      the
      Company issuable upon the exercise of this Warrant if and so long as any shares
      of the same class shall be listed on such national securities exchange or
      automated quotation system.

     

    (e)  The
      Company will not, by amendment of its Articles 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 by
      it
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      the provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilution or other
      impairment, consistent with the tenor and purpose of this Warrant. The Company
      will not increase the par value of any shares of Common Stock receivable upon
      the exercise of this Warrant above the Warrant Exercise Price then in effect,
      and (ii) will take all such actions as may be necessary or appropriate in
      order that the Company may validly and legally issue fully paid and
      nonassessable shares of Common Stock upon the exercise of this
      Warrant.

     

    (f)  This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation or acquisition of all or substantially all of the Company’s
      assets.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Section
      4.  Taxes.
      The
      Company shall pay any and all taxes, except any applicable withholding, which
      may be payable with respect to the issuance and delivery of Warrant Shares
      upon
      exercise of this Warrant.

     

    Section
      5.  Warrant
      Holder Not Deemed a Stockholder.
      Except
      as otherwise specifically provided herein, no holder, as such, of this Warrant
      shall be entitled to vote or receive dividends or be deemed the holder of shares
      of capital stock of the Company for any purpose, nor shall anything contained
      in
      this Warrant be construed to confer upon the holder hereof, as such, any of
      the
      rights of a stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether any reorganization, issue of stock,
      reclassification of stock, consolidation, merger, conveyance or otherwise),
      receive notice of meetings, receive dividends or subscription rights, or
      otherwise, prior to the issuance to the holder of this Warrant of the Warrant
      Shares which he or she is then entitled to receive upon the due exercise of
      this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on such holder to purchase any securities (upon
      exercise of this Warrant or otherwise) or as a stockholder of the Company,
      whether such liabilities are asserted by the Company or by creditors of the
      Company. Notwithstanding this Section 5, the Company will provide the holder
      of
      this Warrant with copies of the same notices and other information given to
      the
      stockholders of the Company generally, contemporaneously with the giving thereof
      to the stockholders.

     

    Section
      6.  Representations
      of Holder.
      The
      holder of this Warrant, by the acceptance hereof, represents that it is
      acquiring this Warrant and the Warrant Shares for its own account for investment
      only and not with a view towards, or for resale in connection with, the public
      sale or distribution of this Warrant or the Warrant Shares, except pursuant
      to
      sales registered or exempted under the Securities Act; provided, however, that
      by making the representations herein, the holder does not agree to hold this
      Warrant or any of the Warrant Shares for any minimum or other specific term
      and
      reserves the right to dispose of this Warrant and the Warrant Shares at any
      time
      in accordance with or pursuant to a registration statement or an exemption
      under
      the Securities Act. The holder of this Warrant further represents, by acceptance
      hereof, that, as of this date, such holder is an “accredited investor” as such
      term is defined in Rule 501(a) of Regulation D promulgated by the
      Securities and Exchange Commission under the Securities Act (an “Accredited
      Investor”).
      Upon
      exercise of this Warrant the holder shall, if requested by the Company, confirm
      in writing, in a form satisfactory to the Company, that the Warrant Shares
      so
      purchased are being acquired solely for the holder’s own account and not as a
      nominee for any other party, for investment, and not with a view toward
      distribution or resale and that such holder is an Accredited Investor. If such
      holder cannot make such representations because they would be factually
      incorrect, it shall be a condition to such holder’s exercise of this Warrant
      that the Company receive such other representations as the Company considers
      reasonably necessary to assure the Company that the issuance of its securities
      upon exercise of this Warrant shall not violate any United States or state
      securities laws.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      7.  Ownership
      and Transfer.

     

    (a)  The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee. The Company may treat the person in whose
      name any Warrant is registered on the register as the owner and holder thereof
      for all purposes, notwithstanding any notice to the contrary, but in all events
      recognizing any transfers made in accordance with the terms of this
      Warrant.

     

    Section
      8.  Adjustment
      of Warrant Exercise Price and Number of Shares.
      The
      Warrant Exercise Price and the number of shares of Common Stock issuable upon
      exercise of this Warrant shall be adjusted from time to time as
      follows:

     

    (a)  Adjustment
      of Warrant Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      If and
      whenever on or after the Issuance Date of this Warrant, the Company issues
      or
      sells, or is deemed to have issued or sold, any shares of Common
      Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
      which are issued or deemed to have been issued by the Company in connection
      with
      an Approved Stock Plan or upon exercise or conversion of the Other Securities)
      for a consideration per share less than a price (the “Applicable
      Price”)
      equal
      to the Warrant Exercise Price in effect immediately prior to such issuance
      or
      sale, then immediately after such issue or sale the Warrant Exercise Price
      then
      in effect shall be reduced to an amount equal to such consideration per share.
      Upon each such adjustment of the Warrant Exercise Price hereunder, the number
      of
      Warrant Shares issuable upon exercise of this Warrant shall be adjusted to
      the
      number of shares determined by multiplying the Warrant Exercise Price in effect
      immediately prior to such adjustment by the number of Warrant Shares issuable
      upon exercise of this Warrant immediately prior to such adjustment and dividing
      the product thereof by the Warrant Exercise Price resulting from such
      adjustment.

     

    (b)  Effect
      on Warrant Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Warrant Exercise Price under Section 8(a)
      above, the following shall be applicable:

     

    (i)  Issuance
      of Options.
      If
      after the date hereof, the Company in any manner grants any Options and the
      lowest price per share for which one share of Common Stock is issuable upon
      the
      exercise of any such Option or upon conversion or exchange of any convertible
      securities issuable upon exercise of any such Option is less than the Applicable
      Price, then such share of Common Stock shall be deemed to be outstanding and
      to
      have been issued and sold by the Company at the time of the granting or sale
      of
      such Option for such price per share. For purposes of this Section 8(b)(i),
      the
      lowest price per share for which one share of Common Stock is issuable upon
      exercise of such Options or upon conversion or exchange of such Convertible
      Securities shall be equal to the sum of the lowest amounts of consideration
      (if
      any) received or receivable by the Company with respect to any one share of
      Common Stock upon the granting or sale of the Option, upon exercise of the
      Option or upon conversion or exchange of any convertible security issuable
      upon
      exercise of such Option. No further adjustment of the Warrant Exercise Price
      shall be made upon the actual issuance of such Common Stock or of such
      convertible securities upon the exercise of such Options or upon the actual
      issuance of such Common Stock upon conversion or exchange of such convertible
      securities.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (ii)  Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any convertible securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion or exchange thereof is less than the Applicable Price, then such
      share of Common Stock shall be deemed to be outstanding and to have been issued
      and sold by the Company at the time of the issuance or sale of such convertible
      securities for such price per share. For the purposes of this
      Section 8(b)(ii), the lowest price per share for which one share of Common
      Stock is issuable upon such conversion or exchange shall be equal to the sum
      of
      the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to one share of Common Stock upon the issuance or sale
      of
      the convertible security and upon conversion or exchange of such convertible
      security. No further adjustment of the Warrant Exercise Price shall be made
      upon
      the actual issuance of such Common Stock upon conversion or exchange of such
      convertible securities, and if any such issue or sale of such convertible
      securities is made upon exercise of any Options for which adjustment of the
      Warrant Exercise Price had been or are to be made pursuant to other provisions
      of this Section 8(b), no further adjustment of the Warrant Exercise Price shall
      be made by reason of such issue or sale. 

     

    (iii)  Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion or exchange of any convertible
      securities, or the rate at which any convertible securities are convertible
      into
      or exchangeable for Common Stock changes at any time, the Warrant Exercise
      Price
      in effect at the time of such change shall be adjusted to the Warrant Exercise
      Price which would have been in effect at such time had such Options or
      convertible securities provided for such changed purchase price, additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold and the number of Warrant Shares issuable
      upon
      exercise of this Warrant shall be correspondingly readjusted. For purposes
      of
      this Section 8(b)(iii), if the terms of any Option or convertible security
      that
      was outstanding as of the Issuance Date of this Warrant are changed in the
      manner described in the immediately preceding sentence, then such Option or
      convertible security and the Common Stock deemed issuable upon exercise,
      conversion or exchange thereof shall be deemed to have been issued as of the
      date of such change. No adjustment pursuant to this Section 8(b) shall be
      made if such adjustment would result in an increase of the Warrant Exercise
      Price then in effect.

     

    (c)  Effect
      on Warrant Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Warrant Exercise Price under
      Sections 8(a) and 8(b), the following shall be applicable:

     

    (i)  Calculation
      of Consideration Received.
      If any
      Common Stock, Options or convertible securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefore will
      be
      deemed to be the net amount received by the Company therefore. If any Common
      Stock, Options or convertible securities are issued or sold for a consideration
      other than cash, the amount of such consideration received by the Company will
      be the fair value of such consideration, except where such consideration
      consists of marketable securities, in which case the amount of consideration
      received by the Company will be the market price of such securities on the
      date
      of receipt of such securities. If any Common Stock, Options or convertible
      securities are issued to the owners of the non-surviving entity in connection
      with any merger in which the Company is the surviving entity, the amount of
      consideration therefore will be deemed to be the fair value of such portion
      of
      the net assets and business of the non-surviving entity as is

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     attributable
      to such Common Stock, Options or convertible securities, as the case may be.
      The
      fair value of any consideration other than cash or securities will be determined
      jointly by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding. If such parties are unable to reach agreement within ten (10)
      days after the occurrence of an event requiring valuation (the “Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding. The determination of such appraiser shall be final and binding
      upon
      all parties and the fees and expenses of such appraiser shall be borne jointly
      by the Company and the holders of Warrants.

     

    (ii)  Integrated
      Transactions.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $.01.

     

    (iii)  Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time does not include
      shares owned or held by or for the account of the Company, and the disposition
      of any shares so owned or held will be considered an issue or sale of Common
      Stock.

     

    (iv)  Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (1) to receive a dividend or other distribution payable in
      Common Stock, Options or in convertible securities or (2) to subscribe for
      or purchase Common Stock, Options or convertible securities, then such record
      date will be deemed to be the date of the issue or sale of the shares of Common
      Stock deemed to have been issued or sold upon the declaration of such dividend
      or the making of such other distribution or the date of the granting of such
      right of subscription or purchase, as the case may be.

     

    (d)  Adjustment
      of Warrant Exercise Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Warrant subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Warrant Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of shares of Common
      Stock obtainable upon exercise of this Warrant will be proportionately
      increased. If the Company at any time after the date of issuance of this Warrant
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its outstanding shares of Common Stock into a smaller number of shares,
      any
      Warrant Exercise Price in effect immediately prior to such combination will
      be
      proportionately increased and the number of Warrant Shares issuable upon
      exercise of this Warrant will be proportionately decreased. Any adjustment
      under
      this Section 8(d) shall become effective at the close of business on the
      date the subdivision or combination becomes effective.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (e)  Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement or other similar transaction)
      (a
“Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such
      case:

     

    (i)  any
      Warrant Exercise Price in effect immediately prior to the close of business
      on
      the record date fixed for the determination of holders of Common Stock
      entitled to
      receive the Distribution shall be reduced, effective as of the close of business
      on such record date, to a price determined by multiplying such Warrant Exercise
      Price by a fraction of which (A) the numerator shall be the Closing Sale Price
      of the Common Stock on the trading day immediately preceding such record date
      minus the value of the Distribution (as determined in good faith by the
      Company’s Board of Directors) applicable to one share of Common Stock, and (B)
      the denominator shall be the Closing Sale Price of the Common Stock on the
      trading day immediately preceding such record date; and

     

    (ii)  either
      (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall
      be increased to a number of shares equal to the number of shares of Common
      Stock
      obtainable immediately prior to the close of business on the record date fixed
      for the determination of holders of Common Stock entitled to receive the
      Distribution multiplied by the reciprocal of the fraction set forth in the
      immediately preceding clause (i), or (B) in the event that the Distribution
      is
      of common stock of a company whose common stock is traded on a national
      securities exchange or a national automated quotation system, then the holder
      of
      this Warrant shall receive an additional warrant to purchase Common Stock,
      the
      terms of which shall be identical to those of this Warrant, except that such
      warrant shall be exercisable into the amount of the assets that would have
      been
      payable to the holder of this Warrant pursuant to the Distribution had the
      holder exercised this Warrant immediately prior to such record date and with
      an
      exercise price equal to the amount by which the exercise price of this Warrant
      was decreased with respect to the Distribution pursuant to the terms of the
      immediately preceding clause (i).

     

    (f)  Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 8
      but not expressly provided for by such provisions (including, without
      limitation, the granting of stock appreciation rights, phantom stock rights
      or
      other rights with equity features), then the Company’s Board of Directors will
      make an appropriate adjustment in the Warrant Exercise Price and the number
      of
      shares of Common Stock obtainable upon exercise of this Warrant so as to protect
      the rights of the holders of the Warrants; provided, except as set forth in
      section 8(d),that no such adjustment pursuant to this Section 8(f) will increase
      the Warrant Exercise Price or decrease the number of shares of Common Stock
      obtainable as otherwise determined pursuant to this Section 8.

     

    (g)  Notices.

     

    (i)  Immediately
      upon any adjustment of the Warrant Exercise Price, the Company will give written
      notice thereof to the holder of this Warrant, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (ii)  The
      Company will give written notice to the holder of this Warrant at least ten
      (10)
      days prior to the date on which the Company closes its books or takes a record
      (A) with respect to any dividend or distribution upon the Common Stock,
      (B) with respect to any pro rata subscription offer to holders of Common
      Stock or (C) for determining rights to vote with respect to any Organic
      Change (as defined below), dissolution or liquidation, provided that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to such holder.

     

    (iii)  The
      Company will also give written notice to the holder of this Warrant at least
      ten
      (10) days prior to the date on which any Organic Change, dissolution or
      liquidation will take place, provided that such information shall be made known
      to the public prior to or in conjunction with such notice being provided to
      such
      holder.

     

    Section
      9.  Purchase
      Rights; Reorganization, Reclassification, Consolidation, Merger or
      Sale.

     

    (a)  In
      addition to any adjustments pursuant to Section 8 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of Common Stock (the “Purchase
      Rights”),
      then
      the holder of this Warrant will be entitled to acquire, upon the terms
      applicable to such Purchase Rights, the aggregate Purchase Rights which such
      holder could have acquired if such holder had held the number of shares of
      Common Stock acquirable upon complete exercise of this Warrant immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    (b)  Any
      recapitalization, reorganization, reclassification, consolidation, merger,
      sale
      of all or substantially all of the Company’s assets to another Person or other
      transaction in each case which is effected in such a way that holders of Common
      Stock are entitled to receive (either directly or upon subsequent liquidation)
      stock, securities or assets with respect to or in exchange for Common Stock
      is
      referred to herein as an “Organic
      Change.”
Prior
      to the consummation of any (i) sale of all or substantially all of the Company’s
      assets to an acquiring Person or (ii) other Organic Change following which
      the
      Company is not a surviving entity, the Company will secure from the Person
      purchasing such assets or the successor resulting from such Organic Change
      (in
      each case, the “Acquiring
      Entity”)
      a
      written agreement (in form and substance satisfactory to the holders of Warrants
      representing at least two-thirds (iii) of the Warrant Shares issuable upon
      exercise of the Warrants then outstanding) to deliver to each holder of Warrants
      in exchange for such Warrants, a security of the Acquiring Entity evidenced
      by a
      written instrument substantially similar in form and substance to this Warrant
      and satisfactory to the holders of the Warrants (including an adjusted warrant
      exercise price equal to the value for the Common Stock reflected by the terms
      of
      such consolidation, merger or sale, and exercisable for a corresponding number
      of shares of Common Stock acquirable and receivable upon exercise of the
      Warrants without regard to any limitations on exercise, if the value so
      reflected is less than any Applicable Warrant Exercise Price immediately prior
      to such consolidation, merger or sale). Prior to the consummation of any other
      Organic Change, the Company shall make appropriate provision (in form and
      substance satisfactory to the holders of Warrants representing a
      majority of
      the
      Warrant Shares issuable upon exercise of the Warrants then outstanding) to
      insure that each of the holders of the Warrants will thereafter have the right
      to 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    acquire
      and receive in lieu of or in addition to (as the case may be) the Warrant Shares
      immediately theretofore issuable and receivable upon the exercise of such
      holder’s Warrants (without regard to any limitations on exercise), such
      shares of stock, securities or assets that would have been issued or payable
      in
      such Organic Change with respect to or in exchange for the number of Warrant
      Shares which would have been issuable and receivable upon the exercise of such
      holder’s Warrant as of the date of such Organic Change (without taking into
      account any limitations or restrictions on the exercisability of this
      Warrant).

     

    Section
      10.  Lost,
      Stolen, Mutilated or Destroyed Warrant.
      If this
      Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
      on
      receipt of an indemnification undertaking (or, in the case of a mutilated
      Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
      this Warrant so lost, stolen, mutilated or destroyed.

     

    Section
      11.  Notice.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of receipt
      is received by the sending party transmission is mechanically or electronically
      generated and kept on file by the sending party); or (iii) one Business Day
      after deposit with a nationally recognized overnight delivery service, in each
      case properly addressed to the party to receive the same. The addresses and
      facsimile numbers for such communications shall be:

     

    
      	
              If
                to Cornell:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention: Mark
                A. Angelo

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	
              With
                Copy to:

            	
              Troy
                Rillo, Esq.

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	 	 
	
              If
                to the Company, to:

            	
              IQ
                Medical Corp.

            
	 	
              500
                Australian Avenue South - Suite 700

            
	 	
              West
                Palm Beach, Florida 33401

            
	 	
              Attention: Robert
                V. Rudman

            
	 	
              Telephone: (561)
                514-0018

            
	 	
              Facsimile: (561)
                514-0195

            
	 	 

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              With
                a copy to:

            	
              Gunster
                Yoakley & Stewart, P.A.

            
	 	
              Broward
                Financial Centre - Suite 1400

              500
                East Broward Blvd.

            
	 	
              Fort
                Lauderdale, Florida 33394

            
	 	
              Attention: Robert
                C. White, Jr. Esq.

            
	 	
              Telephone: (954)
                468-1360

            
	 	
              Facsimile: (954)
                888-2037

            

    

    

    If
      to a
      holder of this Warrant, to it at the address and facsimile number set forth
      on
Exhibit C
      hereto,
      with copies to such holder’s representatives as set forth on Exhibit C,
      or at
      such other address and facsimile as shall be delivered to the Company upon
      the
      issuance or transfer of this Warrant. Each party shall provide five days’ prior
      written notice to the other party of any change in address or facsimile number.
      Written confirmation of receipt (A) given by the recipient of such notice,
      consent, facsimile, waiver or other communication, (or (B) provided by a
      nationally recognized overnight delivery service shall be rebuttable evidence
      of
      personal service, receipt by facsimile or receipt from a nationally recognized
      overnight delivery service in accordance with clause (i), (ii) or (iii) above,
      respectively.

     

    Section
      12.  Date.
      The
      date of this Warrant is set forth on page 1 hereof. This Warrant, in all
      events, shall be wholly void and of no effect after the close of business on
      the
      Expiration Date, except that notwithstanding any other provisions hereof, the
      provisions of Section 8(b) shall continue in full force and effect after
      such date as to any Warrant Shares or other securities issued upon the exercise
      of this Warrant.

     

    Section
      13.  Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the holders of Warrants representing at least two-thirds
      of
      the Warrant Shares issuable upon exercise of the Warrants then outstanding;
      provided that, except for Section 8(d), no such action may increase the Warrant
      Exercise Price or decrease the number of shares or class of stock obtainable
      upon exercise of any Warrant without the written consent of the holder of such
      Warrant.

     

    Section
      14.  Descriptive
      Headings; Governing Law.
      The
      descriptive headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only and do not constitute a part of this Warrant.
      The
      corporate laws of the State of Nevada shall govern all issues concerning the
      relative rights of the Company and its stockholders. All other questions
      concerning the construction, validity, enforcement and interpretation of this
      Agreement shall be governed by the internal laws of the State of New Jersey,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of New Jersey or any other jurisdictions) that would
      cause
      the application of the laws of any jurisdictions other than the State of New
      Jersey. Each party hereby irrevocably submits to the exclusive jurisdiction
      of
      the state and federal courts sitting in Hudson County and the United States
      District Court for the District of New Jersey, for the adjudication of any
      dispute hereunder or in connection herewith or therewith, or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    action
      or
      proceeding, any claim that it is not personally subject to the jurisdiction
      of
      any such court, that such suit, action or proceeding is brought in an
      inconvenient forum or that the venue of such suit, action or proceeding is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      

     

    Section
      15.  Waiver
      of Jury Trial.
      AS
      A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
      PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed as of the date first set forth
      above.

     

    
      	 	 	 
	 	
              IQ
                MEDICAL CORP.

            
	 
 	 
 	 
 
	 	By:  	/s/ Robert
              V.
              Rudman
	 	
              

              Name: Robert
                V. Rudman

            
	 	Title:
              CFO

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A TO WARRANT

     

    EXERCISE
      NOTICE

     

    TO
      BE EXECUTED 

    BY
      THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

     

    IQ
      MEDICAL CORP.

     

    The
      undersigned holder hereby exercises the right to purchase ______________ of
      the
      shares of Common Stock (“Warrant
      Shares”)
      of IQ
      Medical Corp., a ______ corporation (the “Company”),
      evidenced by the attached Warrant (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

     

    1. Form
      of Warrant Exercise Price.
      The
      Holder intends that payment of the Warrant Exercise Price shall be made on
      a
      Cash Basis with respect to ______________ Warrant Shares.

     

    2. Payment
      of Warrant Exercise Price.
      The
      holder shall pay the sum of $______________ to the Company in accordance with
      the terms of the Warrant. 

     

    3. Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    Date:
      _______________ __, ______

    

    

    Name
      of
      Registered Holder

    

    By:     

    Name:                                                
       

    Title:                                                 
         

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B TO WARRANT

     

    FORM
      OF WARRANT POWER

     

    FOR
      VALUE RECEIVED,
      the
      undersigned does hereby assign and transfer to ________________, Federal
      Identification No. __________, a warrant to purchase ____________ shares of
      the capital stock of IQ Medical Corp., a Colorado corporation, represented
      by
      warrant certificate no. _____, standing in the name of the undersigned on
      the books of said corporation. The undersigned does hereby irrevocably
      constitute and appoint ______________, attorney to transfer the warrants of
      said
      corporation, with full power of substitution in the premises.

     

    
      	Dated:                                                     	 	 	 
	 	 	 	 
	 	 	 By:	 
	 	 	 	
              

            
	 	 	 	Name
Title
More
              Title

    

     

    
      
        
        

      

      
        B-1EXHIBIT
      10.11

     

    MANAGEMENT
      AGREEMENT

     

    THIS
      AGREEMENT
      is
      effective as of the 1st
      day of
      October, 2005 (the “Effective Date”).

     

    BETWEEN:

     

    I.Q.
      MICRO INC.,
      a
      company duly incorporated pursuant to the laws of the state of Colorado, having
      an office at 500 Australian Avenue, Suite 700, West Palm Beach, Florida, U.S.A.,
      33401.

     

    (hereinafter
      referred to as the “Company”)

     

    OF
      THE FIRST PART

     

    AND:

     

    JOCHRI
      CONSULT AS,
      a
      company duly incorporated pursuant to the laws of Norway, having an office
      at
      Spurvestien 24, 3189 Horten, Norway.

     

    (hereinafter
      referred to as the “Manager”)

     

    OF
      THE SECOND PART

     

    RECITALS

     

    WHEREAS
      the
      Company is a publicly traded corporation in the United States and the parent
      company, Osmotex A/S is a Norwegian, private corporation holding approximately
      85% of the total issued shares of the Company;

     

    WHEREAS
      Osmotex
      has developed and patented certain technologies in the field of microfluidics
      and Osmotex has granted a worldwide, exclusive sales and marketing license
      to
      the Company;

     

    WHEREAS
      the
      Company has established a wholly-owned subsidiary, IQ Micro (USA) Inc. that
      functions as the operating business of the Company and this subsidiary shares
      office space with its parent company in West Palm Beach, Florida;

     

    WHEREAS
      the
      Company has requested the assistance of the Manager and in particular, one
      of
      its employees, Johnny Christiansen in providing certain management services
      to
      the Company and its wholly-owned subsidiary as hereinafter described,
      and;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS
      the
      Manager has agreed to provide such assistance and services to the Company in
      accordance with the terms and conditions herein set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing recitals and the mutual covenants set forth
      below, the parties hereto agree as follows:

     

    1.  DUTIES
      AND DEVOTION OF TIME

     

    1.1  Duties.
      During
      the term of this Agreement the Manager shall be responsible for the duties
      contained in Schedule “A” attached hereto and incorporated herein by this
      reference (the “Duties’).

     

    1.2  Devotion
      of Time.
      The
      parties hereto acknowledge and agree that the work of the Manager is and shall
      be of such a nature that regular business hours will not apply to his Duties.
      The Manager agrees that the consideration set forth herein shall be in full
      and
      complete satisfaction for such work and services, regardless of when and where
      such work and services are performed. The Company agrees that so long as the
      Manager properly discharges his duties hereunder, the Manager may devote the
      remainder of his time and attention to other non-competing business and personal
      pursuits.

     

    1.3  Business
      Opportunities the Property of the Company.
      The
      Manager agrees to communicate immediately to the Company all business
      opportunities, inventions and improvements in the nature of the business of
      the
      Company which, during the term of this Agreement, the Manager may conceive,
      make
      or discover, become aware of, directly or indirectly, or have presented to
      him
      in any manner which relates in any way to the Company, either as it is now
      or as
      it may develop, and such business opportunities, inventions or improvements
      shall become the exclusive property of the Company without any obligation on
      the
      part of the Company to make any payments in addition to the management fee
      to
      the Manager.

     

    1.4  No
      Personal Use.
      The
      Manager shall not use any of the work the Manager shall perform for the Company
      for any personal purposes without first obtaining the prior written consent
      of
      the Company.

     

    2.  MANAGEMENT
      FEES AND INCENTIVE STOCK OPTIONS

     

    2.1  Management
      Fees.
      In
      consideration of the Manager providing the services referred to herein, the
      Company agrees to pay the Manager a monthly management fee (the “Monthly
      Management Fee”) of eight thousand dollars, ($8,000.00) U.S.

     

    2.2  Incentive
      Stock Options.
      As a
      condition of this Agreement and to form part of this Agreement as attached
      Schedule “C”, Johnny Christiansen will be offered and will accept participation
      in an incentive stock option plan that will provide him with the opportunity
      to
      purchase either existing or new shares in the Company on terms acceptable to
      the
      Manager.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    3.  REIMBURSEMENT
      OF EXPENSES

     

    3.1  Reimbursement
      of Expenses.
      The
      Manager shall be reimbursed for all reasonable out-of-pocket expenses incurred
      by the Manager in or about the execution of the Duties contained herein,
      including without limiting the generality of the foregoing, all reasonable
      travel and promotional expenses payable or incurred by the Manager in connection
      with the Duties under this Agreement. All payments and reimbursements shall
      be
      made within two (2) weeks of submission by the Manager of vouchers, bills or
      receipts for such expenses.

     

    4.  CONFIDENTIAL
      INFORMATION

     

    4.1  Confidential
      Information.
      The
      Manager shall not, either during the term of this Agreement or under the
      provisions of Section 5.3, without specific consent in writing, disclose or
      reveal in any manner whatsoever to any other person, firm or corporation, nor
      will he use, directly or indirectly, for any purpose other than the purposes
      of
      the Company, the private affairs of the company or any confidential information
      which he may acquire during the term of this Agreement with relation to the
      business and affairs of the directors and shareholders of the Company, unless
      the Manager is ordered to do so by a court of competent jurisdiction or unless
      required by any statutory authority.

     

    4.2  Non-Disclosure
      Provisions.
      The
      foregoing provision shall be subject to the further non-disclosure provisions
      contained in Schedule “B” attached hereto and incorporated hereinafter by this
      reference.

     

    4.3  Provisions
      Survive Termination.
      The
      provisions of this section shall survive the termination of this Agreement
      for a
      period of three years.

     

    5.  TERM

     

    5.1  Term.
      This
      Agreement shall remain in effect until terminated in accordance with any of
      the
      provisions contained in this Agreement.

     

    6.  TERMINATION

     

    6.1  Termination
      by Manager.
      Notwithstanding any other provision contained herein, the parties hereto agree
      that the Manager may terminate this Agreement, with or without cause, by giving
      ninety (90) days written notice of such intention to terminate.

     

    6.2  Resignation
      or Cessation of Duties.
      In the
      event that the Manager ceases to perform all of the Duties contained herein,
      other than by reason of Christiansen’s death or disability, or if he resigns
      unilaterally and on his own initiative from all of his positions this Agreement
      shall be deemed to be terminated by the Manager as of the date of such cessation
      of Duties or such resignation, and the Company shall have no further obligations
      under Section 2 hereof.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    6.3  Termination
      by Company.
      The
      Company may terminate this Agreement at any time for just cause without further
      obligation. In the event of termination for any reason other than for just
      cause, the Company will continue to pay the management fee under Clause 2.1
      for
      three (3) additional months. Any stock options that have been granted but that
      have not yet vested shall immediately vest at the date of the final payment,
      and
      may be exercised for a period of 30 days only after the final
      payment.

     

    6.4  Death.
      In the
      event of the death of Christiansen during the term of this Agreement, this
      Agreement shall be terminated as of the date of such death, and the Manager
      shall be entitled to the termination allowance stated in Section 6.3
      hereof.

     

    6.5  Disability.
      In the
      event that Christiansen will during the term of this Agreement by reason of
      illness or mental or physical disability or incapacity be prevented from or
      incapable of performing the Duties hereunder, then the Manager shall be entitled
      to receive the remuneration provided for herein at the rate specified
      hereinbefore for the period during which such illness, disability or incapacity
      will continue, but not exceeding three (3) successive months. If such illness,
      disability or incapacity continues or will continue for a period longer than
      three (3) successive months, then this Agreement may, at the option of the
      Directors of the Company, forthwith be terminated, and the Manager shall be
      entitled to the termination allowance stated in Section 6.3 hereof.

     

    6.6  Termination
      Payments.
      Any
      payments made by the Company to the Manager upon the termination of this
      Agreement shall be made in cash, or, if the Company does not have available
      funds, in equal monthly cash installments over one year. All payments required
      to be made by the Company to the Manager pursuant to Section 6 hereof shall
      be
      made in full.

     

    7.  RIGHTS
      AND OBLIGATIONS UPON TERMINATION

     

    7.1  Rights
      and Obligations.
      Upon
      termination of this Agreement, the Manager shall deliver up to the Company
      all
      documents, papers, plans, materials and other property of or relating to the
      affairs of the Company, other than the Manager’s personal papers in regard to
      his role in the Company, which may then be in the Manager’s possession or under
      his control.

     

    8.  CLOSING

     

    8.1  Closing
      Date.
      This
      Agreement shall be effective as of October 1, 2005.

     

    8.2  Conditions
      of Closing.
      The
      parties hereto agree that it shall be a condition of the execution of this
      Agreement that prior to or contemporaneously with the execution of this
      Agreement:

     

    (a)  this
      Agreement shall be approved by the Board of Directors of the
      Company.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    9.  NOTICES
      AND REQUESTS

     

    9.1  Notices
      and Requests.
      All
      notices and requests in connection with this Agreement shall be deemed given
      as
      of the day they are received either by messenger, delivery service, or mailed
      by
      registered or certified mail with postage prepaid and return receipt requested
      and addressed as follows:

     

    (a)  If
      to the
      Company, the registered office in the State of Florida.

     

    (b)  If
      to the
      Manager, the office address in Horten, Norway.

     

    or
      to
      such other address as the party to receive notice or request so designates
      by
      written notice to the others.

     

    10.  INDEPENDENT
      PARTIES

     

    10.1  Independent
      Parties.
      This
      Agreement is intended solely as a management services agreement and no
      partnership, agency, joint venture, distributorship or other form of agreement
      is intended.

     

    11.  AGREEMENT
      VOLUNTARY AND EQUITABLE

     

    11.1  Agreement
      Voluntary.
      The
      parties acknowledge and declare that in executing this Agreement they are each
      relying wholly on their own judgment and knowledge and have not been influenced
      to any extent whatsoever by any representations or statements made by or on
      behalf of any other party regarding any matters dealt with herein or incidental
      thereto.

     

    11.2  Agreement
      Equitable.
      The
      parties further acknowledge and declare that they each have carefully considered
      and understand the provisions contained herein, including, but without limiting
      the generality of the foregoing, the Manager’s rights upon termination and the
      restrictions on the Manager after termination and agree that the said provisions
      are mutually fair and equitable, and that they executed this Agreement
      voluntarily and of their own free will.

     

    12.  CONTRACT
      NON-ASSIGNABLE; INUREMENT

     

    12.1  Contract
      Non-Assignable.
      This
      Agreement and all other rights, benefits and privileges contained herein may
      not
      be assigned by the Manager.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    12.2  Inurement.
      The
      rights, benefits and privileges contained herein, including without limitation
      the benefits of Sections 2 and 6 hereof, shall inure to the benefit of and
      be
      binding upon the respective parties hereto, their heirs, executors,
      administrators and successors.

     

    13.  ENTIRE
      AGREEMENT

     

    13.1  Entire
      Agreement.
      This
      Agreement represents the entire Agreement between the parties and supersedes
      any
      and all prior agreements and understandings, whether written or oral, among
      the
      parties including the Management Agreement between Osmotex AS and Johnny
      Christiansen. The Manager acknowledges that he was not induced to enter into
      this Agreement by any representation, warranty, promise or other statement,
      except as contained herein.

     

    13.2  Previous
      Agreements Cancelled.
      Save
      and except for the express provisions of this Agreement, any and all previous
      agreements, written or oral, between the parties hereto or on their behalf
      relating to the services of the Manager for the Company are hereby terminated
      and cancelled and each of the parties hereby releases and further discharges
      the
      other of and from all manner of actions, causes of action, claims and demands
      whatsoever under or in respect of any such agreements.

     

    14.  WAIVER

     

    14.1  Waiver.
      No
      consent or waiver, express or implied, by either party to or of any breach
      or
      default by the other party in the performance by the other of its or his
      obligations herein shall be deemed or construed to be a consent or waiver to
      or
      of any breach or default of the same or any other obligation of such party.
      Failure on the part of either party to complain of any act or failure to act,
      or
      to declare the other party in default irrespective of how long such failure
      continues, shall not constitute a waiver by such party of its or his rights
      herein or of the right to then or subsequently declare a default.

     

    15.  SEVERABILITY

     

    15.1  Severability.
      If any
      provision contained herein is determined to be void or unenforceable in whole
      or
      in part, it is to that extent deemed omitted. The remaining provisions shall
      not
      be affected in any way.

     

    16.  AMENDMENT

     

    16.1  Amendment.
      This
      Agreement shall not be amended or otherwise modified except by a written notice
      of even date herewith or subsequent hereto signed by both parties.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    17.  HEADINGS

     

    17.1  Headings.
      The
      headings of the sections and subsections herein are for convenience only and
      shall not control or affect the meaning or construction of any provisions of
      this Agreement.

     

    18.  GOVERNING
      LAW

     

    18.1  Governing
      Law.
      This
      Agreement shall be construed under and governed by the laws of the State of
      Florida and the laws of United States applicable therein.

     

    19.  EXECUTION

     

    19.1  Executive
      in Several Counterparts.
      This
      Agreement may be executed by facsimile and in several counterparts, each of
      which shall be deemed to be an original and all of which shall together
      constitute one and the same instrument.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the ____ day of
      ____________________, 2005.

     

    
      	THE
              COMPANY	 
	 	 
	Per:  	 /s/
              Svein Milford	 
	 	Authorized Signatory	 
	 	 
	Name:  	Svein
              Milford	 
	 	 
	Title: 	Chairman
              of the Board	 
	 	 
	 	 

    

     

    
      	 	 	 
	SIGNED by Johnny
              Christiansen
              on
              behalf of	)	 
	the MANAGER
              in
              the presence of: 	)	 
	 	)	 
	/s/
              Johnny Christiansen	)	 
	Name	)	 
	 	)	 
	Spurvestien
              24	)	/s/
              Johhny Christiansen
	Address	
            	)	JOHHNY
              CHRISTIANSEN
	 	)	 
	3189
              Horten, Norway	)	 
	 	)	 
	 	
            	)	 
	Occupation	)	 
	 	)	 
	 	 	 

    

     

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      “A”

     

    MANAGER’S
      DUTIES

     

    1.  On
      behalf
      of the Manager, Johnny Christiansen shall be appointed as the Chief Executive
      Officer of the Company and he shall faithfully, honestly and diligently serve
      the Company and its subsidiary.

     

    2.  The
      Manager and Christiansen will create value for the shareholders by managing
      the
      overall interests of the Company by professionally performing the functions
      of
      Chief Executive Officer.

     

    3.  The
      Manager and Christiansen shall be responsible for managing the operations of
      the
      Company in accordance with the policies and instructions of the Board of
      Directors.

     

    4.  The
      Manager’s primary responsibility will be to successfully commercialize the
      Osmotex technologies on a worldwide basis.

     

    5.  The
      Manager and Christiansen shall report to the Board of Directors and shall work
      in close cooperation with the Chief Financial Officer of the
      Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      “B”

     

    NON-DISCLOSURE PROVISIONS

     

    1.  CONFIDENTIAL
      INFORMATION AND MATERIALS

     

    
      	(a)  	
              “Confidential
                Information” shall mean, for the purposes of this Agreement, non-public
                information which the Company designates as being confidential or
                which,
                under the circumstances surrounding disclosure ought reasonably to
                be
                treated as confidential. Confidential Information includes, without
                limitation, information, whether written, oral or communicated by
                any
                other means, relating to released or unreleased Company software
                or
                hardware products, the marketing or promotion of any product of the
                Company, the Company’s business policies or practices, and information
                received from others which the Company is obliged to treat as
                confidential. Confidential Information disclosed to the Manager by
                any
                subsidiary and/or agents of the Company is covered by this
                Agreement.

            

    

     

    
      	(b)  	
              Confidential
                Information shall not include that information defined as Confidential
                Information hereinabove which the Manager can exclusively
                establish:

            

    

     

    
      	(i)  	
              is
                or subsequently becomes publicly available without breach of any
                obligation of confidentiality owed to the
                Company;

            

    

     

    
      	(ii)  	
              became
                known to the Manager prior to disclosure by the Company to the
                Manager;

            

    

     

    
      	(iii)  	
              became
                known to the Manager from a source other than the Company other than
                by
                the breach of any obligations of confidentiality owed to the Company;
                or

            

    

     

    
      	(iv)  	
              is
                independently developed by the
                Manager.

            

    

     

    
      	(c)  	
              Confidential
                Materials shall include all tangible materials containing Confidential
                Information, including, without limitation, written or printed documents
                and computer disks or tapes, whether machine or user
                readable.

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    2.  RESTRICTIONS

     

    
      	(a)  	
              The
                Manager shall not disclose any Confidential information to third
                parties
                for a period of three (3) years following the termination of this
                Agreement, except as provided herein. However, the Manager may disclose
                Confidential information during bona fide execution of the Duties
                or in
                accordance with judicial or other governmental order, provided that
                the
                Manager shall give reasonable notice to the Company prior to such
                disclosure and shall comply with any applicable protective order
                or
                equivalent.

            

    

     

    
      	(b)  	
              The
                Manager shall take reasonable security precautions, at least as great
                as
                the precautions he takes to protect his own confidential information,
                to
                keep confidential the Confidential Information, as defined
                hereinabove.

            

    

     

    
      	(c)  	
              Confidential
                Information and Materials may be disclosed, reproduced, summarized
                or
                distributed only in pursuance of the business relationship of the
                Manager
                with the Company, and only as provided
                hereunder.

            

    

     

    3.  RIGHTS
      AND REMEDIES

     

    
      	(a)  	
              The
                Manager shall notify the Company immediately upon discovery of any
                unauthorized use or disclosure of Confidential Information or Materials,
                or any other breach of this Agreement by the Manager, and shall co-operate
                with the Company in every reasonable manner to aid the Company to
                regain
                possession of said Confidential Information or Materials and prevent
                all
                such further unauthorized use.

            

    

     

    
      	(b)  	
              The
                Manager shall return all originals, copies, reproductions and summaries
                of
                or relating to the Confidential Information at the request of the
                Company
                or, at the option of the Company, certify destruction of the
                same.

            

    

     

    
      	(c)  	
              The
                parties hereto recognize that a breach by the Manager of any of the
                provisions contained herein would result in damages to the Company
                and
                that the Company could not be compensated adequately for such damages
                by
                monetary award. Accordingly, the Manager agrees that in the event
                of any
                such breach, in addition to all other remedies available to the Company
                at
                law or in equity, the Company shall be entitled as a matter of right
                to
                apply to a court of competent jurisdiction for such relief by way
                of
                restraining order, injunction, decree or otherwise, as may be appropriate
                to ensure compliance with the provisions of this
                Agreement.

            

    

     

     

    4.  MISCELLANEOUS

     

    
      	(a)  	
              All
                Confidential Information and Materials are and shall remain the property
                of the Company. By disclosing information to the Manager, the Company
                does
                not grant any express or implied right to the Manager to or under
                any and
                all patents, copyrights, trademarks, or trade secret information
                belonging
                to the Company.

            

    

     

     

    
      
        
        

      

        -3-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]