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: July 23, 2002
Corgenix Medical Corporation
(Exact Name of registrant as specified in its charter)
Colorado 000-24541 93-1223466
(State or other Commission File I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
12061 Tejon St.
Westminster, Colorado 80234
(Address, including zip code, of principal executive offices)
(303) 457-4345
(Registrant's telephone number including area code)
Item 5. Other Events
On July 1, 2002, Corgenix Medical Corporation entered into a stock
purchase agreement with Medical & Biological laboratories Co., Ltd. (MBL),
whereby MBL purchased 880,282 shares of Corgenix Rule 144 restricted common
stock at a purchase price of $.568 per share. Simultaneously with the execution
of this agreement, MBL also received a warrant to purchase an additional 880,282
shares of Corgenix common stock at a like price of $.568 per share.
Item 7. Financial Statements and Exhibits
(c) Exhibits
No. Exhibits
99.1 Stock Purchase Agreement, inclusive of:
A. Warrant
B. Distribution Agreement
C. Company Schedule of Exceptions
D. Registration Rights Agreement
99.2 Press Release
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED, this 23rd day of July, 2002.
Corgenix Medical Corporation
By: /s/ Douglass T. Simpson
Douglass T. Simpson
President
CORGENIX MEDICAL CORPORATION
MEDICAL & BIOLOGICAL LABORATORIES CO., LTD.
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COMMON STOCK PURCHASE AGREEMENT
July 1, 2002
Common Stock Purchase Agreement
THIS AGREEMENT is entered into effective as of July 1, 2002, between
CORGENIX MEDICAL CORPORATION, a Nevada corporation (the "Company") and MEDICAL &
BIOLOGICAL LABORATORIES CO., LTD., a corporation organized under the laws of
Japan (the "Purchaser").
In consideration of the mutual promises, covenants and conditions set
forth below, the parties mutually agree as follows:
1. PURCHASE AND SALE OF STOCK.
1.1. Issuance and Sale of Purchased Stock. At the Closing (defined below), the
Company will issue and sell to the Purchaser that number of shares of its Common
Stock, $.001 par value per share (the "Common Stock"), equal to the Market
Formula (defined below) (the "Purchased Stock"). The aggregate purchase price
for the Purchased Stock (the "Purchase Price") shall be equal to the product of
the Market Formula and the Average Closing Price (defined below). Based on the
July 1, 2002 effective date of this agreement, the "Average Closing Price" using
the definition set forth below is $.568 per share, resulting in a number of
shares of Purchased Stock (using the definition of market formula) of 880,282,
and a resulting aggregate purchase price of US $500,000.
1.2. Issuance of Warrant. For no additional consideration, the Company will
issue warrants to the Purchaser at the Closing representing the right to
purchase that number of shares of Common Stock equal to the Market Formula, at
an aggregate exercise price equal to the Purchase Price (the "Warrant"), such
Warrant to have the terms and conditions set forth in the form of Warrant
attached to this Agreement as Exhibit A. The Warrant shall be exercisable only
during the term of the Distribution Agreement between the Company and
Purchaser's U.S. Subsidiary, a copy of which is attached hereto as Exhibit B.
2. THE CLOSING.
Closing. The Closing of the sale and purchase of the Purchased Stock and
the issuance of the Warrant shall take place at the offices of Hutchinson Black
and Cook, LLC, 921 Walnut Street, Suite 200, Boulder, Colorado 80302 on July 3,
2002, at 10:00 a.m. Mountain Daylight Time, or at such other place, date and
time as may be mutually agreed to by the Company and the Purchaser (the
"Closing," and such date the "Closing Date"). At the Closing, the Company will
deliver to the Purchaser a stock certificate representing the shares of
Purchased Stock purchased hereunder and the Warrant, and the Purchaser shall
deliver to the Company the Purchase Price by wire transfer to the following
account:
Vectra Bank, N.A.
1990 West 10th Ave.
Broomfield, CO 80020 USA
Telephone: (303) 460-9991
ABA Routing No.: 102003154
Account No.: 435 01 18536
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Actual Trading Day" shall mean any day on which a trade of Common
Stock shall occur on the U.S. Over-the-Counter market.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act of 1934.
"Average Closing Price" shall mean the average closing price of the
Company's Common Stock for the ten (10) Actual Trading Days prior to the
effective date of this Agreement.
"Blue Sky Laws" shall have the same definition as provided in the
Registration Rights Agreement.
"Charter" shall mean the Articles of Incorporation of the Company.
"Company" shall mean Corgenix Medical Corporation.
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"Distribution Agreement" shall mean that certain Distribution
Agreement dated March 14, 2002, as it may be amended from time to time in the
future, between the Company and the Purchaser's U.S. subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Good Accounting Practice" shall mean, as to a particular
corporation, such accounting practice as, in the opinion of the independent
certified public accountants regularly retained by such corporation, conforms at
the time to generally accepted accounting principles applied on a consistent
basis (except for changes in application in which such accountants concur). Any
accounting terms not defined in this Agreement shall have the respective
meanings given to them under Good Accounting Practice consistent with those
applied in the preparation of the Company's consolidated financial statements as
(or as if) audited.
"Market Formula" shall mean the lesser of (i) the quotient obtained
by dividing U.S. $500,000 by the Average Closing Price and (ii) that number of
shares of Common Stock representing 19% of the total voting power of the
Company's voting securities outstanding as of the Closing (after giving effect
to the issuance of the Purchased Stock).
"Material Adverse Change" shall have mean a material adverse change
in the business, operations, net worth, prospects (financial or other), assets
or condition of the Company or its Subsidiary.
"Merger" shall mean a merger or consolidation with another person,
share purchase or exchange or other form of corporate reorganization or
transaction in which all voting securities of the Company outstanding prior
thereto represent less than fifty percent (50%) of the voting power of the
surviving entity outstanding immediately after such merger or consolidation.
"On a Fully Diluted Basis" shall refer to the number of shares of
Common Stock of the Company which would be outstanding and issued assuming that
all the shares of Common Stock issuable (1) upon the conversion or exchange of
the Company's convertible or exchangeable securities, including debentures, and
(2) upon the exercise of the Company's outstanding options and warrants for the
purchase of Common Stock (or securities convertible or exchangeable for Common
Stock), and rights to subscribe for or purchase Common Stock (or securities
convertible or exchangeable for Common Stock), were in fact issued.
"Permitted Stock Sales" shall mean any one or more of the following:
(i) the grant or issuance of Common Stock of any option, warrant or other right
to purchase Common Stock (or securities exercisable or convertible therefore) to
any employee or consultant of the Company pursuant to a plan authorized by the
Board of Directors of the Company or otherwise pursuant to authority of the
Board of Directors; (ii) the issuance of any Common Stock upon exercise or
conversion of any right, warrant, option or contract outstanding as of the date
of this Agreement.
"Purchased Stock" shall have the meaning set forth at Section 1.2.
"Stock" or "Common Stock" shall mean the Company's Common Stock,
$.001 par value per share.
"Proprietary Rights" shall mean all computer software, software
programs, patents, patent applications, trademarks, trademark applications,
trade secrets, service marks, trade names, copyrights, inventions, drawings,
designs, customer lists, proprietary know-how or information, other rights with
respect thereto, or any other intangible property rights.
"Registration Rights Agreement" shall mean that certain Registration
Rights Agreement dated of even date herewith, as it may be amended from time to
time in the future, between the Company and the Purchaser.
"Stock Purchase Agreement" or "Agreement" shall mean this Common
Stock Purchase Agreement dated as of the date hereof, and as it may be amended
from time to time, and entered into between the Company and the Purchaser.
"Subsidiary" shall mean any corporation, partnership, limited
liability company or other legal entity in which the Company owns more than
fifty percent (50%) of the stock or other equity interests having voting power
to elect a majority of the Board of Directors or other governing body of such
entity. "Subsidiary" also includes any partnership or limited liability company
in which the Company or one of its subsidiaries owns more than fifty percent
(50%) of the units of equity interest.
"Transaction Documents" means this Agreement, the Warrant, the
Registration Rights Agreement and each other agreement and document executed by
the Company in connection with the transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
The Purchaser represents and warrants for itself as follows:
4.1. Requisite Power and Authority. Purchaser has all necessary power and
authority under all applicable provisions of law to execute and deliver this
Agreement and to carry out its provisions. All action on Purchaser's part
required for the lawful execution and delivery of this Agreement has been or
will be effectively taken prior to the Closing Date. Upon their execution and
delivery, each of this Agreement and the Registration Rights Agreement will be a
valid and binding obligation of Purchaser, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, (ii) as limited by the application of general
principles of equity, and (iii) to the extent that the enforceability of the
indemnification provisions of the Registration Rights Agreement may be limited
by applicable laws.
4.2. Consents. All consents, approvals, orders, authorizations or registration,
qualification, designation, declaration or filing with any governmental or
banking authority on the part of Purchaser required in connection with the
consummation of the transactions contemplated in this Agreement have been or
shall have been obtained prior to, and be effective as of, the Closing.
4.3. Investment Representations. Purchaser understands that the Purchased Stock
has not been registered under the Act. Purchaser also understands that the
Purchased Stock is being offered and sold pursuant to an exemption from
registration contained in the Act based in part upon Purchaser's representations
contained in this Agreement. Purchaser hereby represents and warrants as
follows:
(A) Restricted Stock. Purchaser understands that the Purchased Stock has not
been registered under the Act, and the Company has no present intention of
registering such stock. Purchaser understands that it has no registration rights
with respect to the Purchased Stock except as provided in the Registration
Rights Agreement.
(B) Purchaser Bears Economic Risk. Purchaser is in a position to bear the
economic risk of this investment indefinitely. Purchaser is not a corporation or
partnership specifically formed for the purpose of consummating this
transaction.
(C) Acquisition for Own Account. Purchaser is acquiring the Purchased Stock for
its own account for investment and not with a view toward its resale
distribution, and has no present agreement, undertaking, arrangement, obligation
or commitment providing for the sale or distribution of the Purchased Stock.
(D) Purchaser Can Protect Its Own Interests. Purchaser represents that by reason
of its, or of its management's, business or financial experience, Purchaser has
the capacity to protect its own interests in connection with the transaction
contemplated in this Agreement.
(E) Access to Information. Purchaser has been given access to all Company
documents, records, and other information, has received physical delivery of all
those which it has requested, and has had adequate opportunity to ask questions
of, and has received answers from, the Company's officers, employees, agents,
accountants and representatives concerning the Company's business, operations,
financial condition, assets, liabilities and all other matters relevant to its
investment in the Purchased Stock. Purchaser acknowledges that neither the
Company nor any of its stockholders have made any representations or warranties
except to the extent set forth in this Agreement, the Exhibits hereto, or any
writing delivered by the Company to Purchaser.
4.4. Restrictive Legend.
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(A) Each certificate representing Purchased Stock shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise imprinted
with a legend substantially in the form of the legend set forth in the
Registration Rights Agreement (in addition to any legend required under
applicable state securities laws).
(B) The Purchaser hereby consents to the restrictions contained above and to the
notation of "stop-transfer" restrictions in the Company's stock transfer books
relative to its holdings and to assist in the enforcement of the limitations set
forth herein.
(C) The Company shall be obligated to reissue promptly unlegended certificates
for Registrable Securities (as that term is defined in the Registration Rights
Agreement) in accordance with the provisions of the Registration Rights
Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as provided in the Schedule of Exceptions attached hereto as
Exhibit C, the Company represents and warrants to the Purchaser as follows:
5.1. Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under, and by virtue of,
the laws of the State of Nevada and has all requisite corporate power and
authority to own its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. The Company is qualified to
do business as a foreign corporation in each jurisdiction where failure to be so
qualified could result in a Material Adverse Change.
5.2. Subsidiaries. The Company owns all of the equity interests in the
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following three Subsidiaries: Corgenix, Inc., a Delaware corporation;
Healthoutfitters.com, Inc., a Colorado corporation (to be dissolved and
discontinued effective June 30, 2002); and Corgenix U.K. Ltd., a corporation
organized under the laws of Great Britain.
5.3. Due Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of, and the performance of all obligations of the Company under the
Transaction Documents (including the authorization, issuance, reservation for
issuance and delivery of all of the Stock being sold or issued under the
Transaction Documents) has been taken or will be taken prior to the Closing. The
Transaction Documents are valid and binding obligations of the Company
enforceable in accordance with their respective terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors' rights generally and to
general equitable principles.
5.4. Capitalization.
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(A) Authorized and Issued. As of the Closing Date, the authorized and issued
capitalization of the Company will consist of (i) 40,000,000 shares of Common
Stock, par value U.S. $0.001 per share (the "Common Stock"), of which 4,327,899
shares are issued and outstanding and 481,937 shares are reserved for issuance
under options, warrants and other rights to purchase granted by the Company, and
(ii) 5,000,000 shares of preferred stock, par value U.S. $0.001 per share, none
of which are issued or outstanding. There are no other authorized or outstanding
shares of capital stock of the Company or voting securities or commitments to
issue any shares of capital stock or voting securities of the Company other than
pursuant to outstanding stock options and warrants of the Company. The shares of
Purchased Stock on issuance will be duly authorized, validly issued, fully paid
and non-assessable, and free of any liens, charges, claims, security interests
or encumbrances, other than liens, charges, claims, security interests and
encumbrances created by or imposed upon the holders thereof, and are not subject
to preemptive rights or rights of first refusal created by statute, the
Company's Articles of Incorporation or Bylaws or any agreement to which the
Company is a party or by which it is bound.
(B) No Other Rights Outstanding. Except as disclosed in or contemplated by this
Agreement or Exhibit C attached hereto, there are no other outstanding warrants,
options, conversion privileges, rights of first refusal, or other rights or
agreements (whether or not presently exercisable by their respective terms) to
purchase or otherwise acquire or issue any shares of capital stock of the
Company or any preemptive rights with respect to issuance of such capital stock.
5.5. Valid Issuance of Stock.
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(A) The Purchased Stock and Stock issuable upon exercise of the Warrant, when
issued, sold and delivered in accordance with the terms of this Agreement and
the Warrant, as applicable, will be duly and validly issued, fully paid and non
assessable.
(B) The outstanding shares of the capital stock of the Company are duly and
validly issued, fully paid and nonassessable, and such shares of such capital
stock, and all outstanding stock, options and other securities of the Company
have been issued in full compliance with the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "Act"), and
the registration and qualification requirements of all applicable state
securities laws, or in compliance with applicable exemptions therefrom.
5.6. Outstanding Indebtedness. The Company has performed in all material
respects all obligations heretofore required to be performed by it and is not in
default under, or in breach of, or in receipt of any claim of default under or
breach of, any material agreement. The Company has no present expectation or
intention of not performing in all material respects all such obligations and it
has no knowledge of any breach or anticipated breach by other parties. The
Company is not a party to any contract or commitment which, if properly
performed by all parties thereto in accordance with the terms thereof, could
result in a Material Adverse Change.
5.7. Compliance. The Company has duly obtained all governmental and regulatory
licenses and permits, the failure to so obtain could result in a Material
Adverse Change in the conduct of its business as now conducted and contemplated
and all such licenses and permits are in full force and effect. The Company is
not in violation of any term of its Charter, any directors or stockholders
resolutions, or Bylaws, or in violation of any mortgage, indenture, contract,
agreement, instrument, license, permit, judgment, decree, order, statute, rule
or regulation applicable to the Company the failure to comply with which could
result in a Material Adverse Change. The execution, delivery and performance of,
and compliance with, the Transaction Documents and the issuance and sale of the
Stock pursuant to this Agreement and the Warrant, will not result in any such
violation; nor will it conflict with, or constitute a default under, any such
term, or result in the creation of any mortgage, pledge, lien, encumbrance, or
charge upon any of the properties or assets of the Company pursuant to any such
terms.
5.8. Title to Property. The Company does not own any real property. The Company
has good and marketable title to the tangible personal properties, Proprietary
Rights, and other assets necessary to the operation of its business as now
conducted and contemplated without any conflict with or infringement of the
rights of others. Such properties and assets are not subject to any liens,
mortgages, pledges, encumbrances or charges of any kind except liens for current
taxes and assessments not delinquent. All leases by which the Company leases
real or personal property are in good standing, are valid and effective in
accordance with their respective terms, and the Company enjoys quiet enjoyment
under all such leases and is in compliance with such leases. The Company owns or
has rights to use all assets necessary to conduct its business as now conducted
and contemplated. All property owned or used by the Company is in good condition
and repair.
5.9. No Pending Litigation or Proceedings. There are no actions, suits,
investigations or proceedings (whether or not purportedly on behalf of the
Company) pending, affecting or, to the Company's knowledge after due inquiry,
threatened against the Company, before or by any governmental instrumentality,
domestic or foreign, or any court, arbitrator or grand jury. The Company is not
in default with respect to any judgment, order, demand, or regulation of any
court, arbitrator, grand jury or of any governmental agency. To the Company's
knowledge, no event has occurred nor does any condition exist on the basis of
which any litigation, proceeding or investigation might properly be instituted.
Neither the Company nor, to the knowledge of the Company after due inquiry, any
officer of the Company, is in default with respect to any order, writ,
injunction, decree, ruling or decision of any court, commission, board or other
government agency. The foregoing sentences include, without limiting their
generality, actions pending or threatened (or any basis therefor known to the
Company) involving the prior employment of any of the Company's officers or
employees or their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers.
5.10. No Brokers and Finders. The Company has not retained and is under no
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obligation to pay any investment banker, broker, or finder in connection with
the transactions contemplated by the Agreement.
5.11. Representations True and Correct. This Agreement, the Exhibits attached
hereto, and the other Transaction Documents do not contain any untrue statement
of a material fact or omit any material fact necessary in order to make the
statements contained therein not misleading. Except for general economic or
industry conditions, there is no information known to the Company which has not
been disclosed, in writing or orally, by the Company to the Purchaser which
could result in a Material Adverse Change.
5.12. Proprietary Rights.
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(A) The Company owns, or possesses adequate licenses for, all Proprietary Rights
used in its business, and the same are sufficient to conduct such business as it
has been and is contemplated as being conducted without any infringement on the
rights of others. To the Company's knowledge, no third party has any ownership
right, title, interest, claim in or lien on any of the Company's Proprietary
Rights and the Company has taken, and in the future the Company will use its
prudent business efforts to take, all steps reasonably necessary to preserve its
legal rights in, and the secrecy of, all its Proprietary Rights, except those
for which disclosure is required for legitimate business or legal reasons.
(B) To the knowledge of the Company, the current and proposed operations of the
Company do not conflict with nor infringe upon, and no one has asserted to the
Company that such operations conflict with or infringe upon, any intangible
property rights owned, possessed, or used by any third party which are of the
same kind as the Proprietary Rights and, to the knowledge of the Company, none
has been threatened.
(C) To the knowledge of the Company, there are no facts which would result in
any claim which could result in a Material Adverse Changebased on an assertion
that it does not have the unrestricted right to use, free of any rights or
claims of others, all Proprietary Rights in the development, manufacture, use,
sale, or other disposition of any or all products or services presently being or
contemplated to be used, furnished, or sold in the conduct of business.
5.13. Governmental Consents. All consents, approvals, orders, authorizations or
registrations, qualifications, designations, declarations or filings with any
federal, state or local governmental authority on the part of the Company
required in connection with the consummation of the transactions contemplated
herein shall have been obtained prior to and be effective as of the Closing. The
offer, sale and issuance of the Purchased Stock in conformity with the terms of
this Agreement are exempt from the registration and prospectus delivery
requirements of the Act.
5.14. Financial Statements. The Company has provided or made available to
Purchaser its financial statements as filed to date with the United States
Securities and Exchange Commission (collectively, the "Financial Statements").
The Financial Statements fairly present the financial condition and the results
of operations, changes in stockholders' equity and cash flow of the Company as
at the respective dates of and for the periods referred to in the Financial
Statements, all in accordance with GAAP consistently applied throughout the
periods involved (with the exception, as to interim financial statements, for
lack of GAAP footnote presentation and normal year-end audit adjustments). Since
the date of the most recent balance sheet included in the Financial Statements
or as set forth in Exhibit C attached hereto, there has been no Material Adverse
Change and no event has occurred and, to the knowledge of the Company, no
circumstance exists that may result in a Material Adverse Change. The Company
has not suffered or incurred any event (financial or otherwise) that would be
required to be disclosed in a filing with the SEC on Form 8-K (except as may in
fact have been filed of record with the SEC).
5.15. Interested Party Transactions. To the knowledge of the Company, no officer
or director of the Company or any "affiliate" or "associate" (as those terms are
defined in Rule 405 promulgated under the 1933 Act) of any such person has had,
either directly or indirectly, a material interest in: (i) any person or entity
which purchases from or sells, licenses or furnishes to the Company any goods,
property, technology, intellectual or other property rights or services; or (ii)
any contract or agreement to which the Company is a party or by which it may be
bound or affected. For purposes of this Section there shall be disregarded any
interest which arises solely from the ownership of less than a five percent (5%)
equity interest in a corporation whose stock is regularly traded on any national
securities exchange or in the over the counter market.
6. CONDITIONS TO PARTIES' OBLIGATIONS.
6.1. Conditions to Purchaser's Obligations. Purchaser's obligations to
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purchase the Purchased Stock and to otherwise consummate the transactions
contemplated in this Agreement at the Closing are subject to satisfaction of
the following conditions.
(A) Accuracy of Representations and Warranties. The Company's representations
and warranties in this Agreement and in any certificate or document delivered
pursuant to this Agreement shall be true and correct on and as of the Closing
Date as if made again as of such date.
(B) Performance of Obligations. The Company shall have performed and complied
with all agreements, obligations and conditions contained in the Transaction
Documents that are required to be performed or complied with by it on or before
the Closing Date and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described herein.
(C) No Material Adverse Change. Since the date of the most recent balance sheet
included in the Financial Statements or as set forth in Exhibit C attached
hereto, there shall have been no Material Adverse Change and no event shall have
occurred and, to the knowledge of the Company, no circumstance shall exist that
may result in a Material Adverse Change.
(D) Officer's Certificate. Purchaser shall have received a certificate in form
and substance reasonably acceptable to Purchaser dated as of the Closing Date
and signed by the President or any Vice-President and by the Secretary or the
Treasurer of the Company to the effect that the conditions of Subsections
6.1(A), (B), (C), (F), and (H) have been satisfied.
(E) Proceedings and Documents Satisfactory. All corporate and other proceedings
taken or required to be taken in connection with the transactions contemplated
hereby to be consummated at or prior to the Closing, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to Purchaser and
its counsel.
(F) Certified Articles and Bylaws. The Company shall have delivered to counsel
for Purchaser a copy of the Company's Charter, Bylaws, and resolutions of the
Board of Directors and shareholders approving the transactions contemplated by
this Agreement, which copy shall be certified by the Secretary of the Company to
be true and correct as of the Closing Date.
(G) Registration Rights Agreement. The Company and the Purchaser shall have
executed the Registration Rights Agreement substantially in the form of Exhibit
D attached hereto.
(H) Election of Directors. Effective as of the Closing Date, the bylaws of the
Company shall provide for a maximum of five (5) members to the Board of
Directors.
6.2. Conditions to the Company's Obligations. The Company's obligations to
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consummate the transactions contemplated in this Agreement at the Closing are
subject to the satisfaction of the following conditions.
(A) Accuracy of Representations and Warranties. The representations and
warranties of the Purchaser herein or in any document delivered pursuant to this
Agreement shall be true and correct on and as of the Closing Date.
(B) Proceedings Satisfactory. All corporate and other proceedings taken or
required to be taken in connection with the transactions contemplated hereby to
be consummated at or prior to the Closing, and all documents incident thereto,
shall be satisfactory in form and substance to the Company and its Counsel.
6.3. Failure of Condition. Any condition specified in this Article 6 may be
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waived if consented to in writing by the party whose performance is subject
to satisfaction of the condition.
6.4. Termination. This Agreement may be terminated at any time prior to the
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Closing Date:
(A) By the mutual consent of the Company and Purchaser; or
(B) By the Company or the Purchaser if the Closing shall not have occurred on or
before July 31, 2002, (or such later date as shall be mutually agreed to in
writing); provided, however, that the party seeking termination is not in
material default or breach of this Agreement.
7. COVENANTS OF THE COMPANY.
7.1. Visitation Rights. Subject to nondisclosure obligations with respect to the
Company's confidential information, the Purchaser or its employees, agents, or
representatives, may from time to time reasonably request the right to visit and
inspect any of the properties of the Company, to examine and make extracts from
the books and records of the Company, and to discuss its affairs, finances and
accounts with its officers, directors, and independent accountants, all at
reasonable times and as often as may be reasonably requested, and the Company
shall comply with such requests.
7.2. Expenses Paid by the Company. Upon a successful Closing, the Company will
pay the reasonable legal fees and expenses of counsel to the Purchaser (not to
exceed $10,000) in connection with the negotiation, execution and performance of
this Agreement and the transactions contemplated hereby.
7.3. Purchaser Right to Designate Nominee for Director. The Purchaser shall have
the right to designate one (1) individual for election or appointment to the
Company's Board of Directors (the "Purchaser's Designee"), so long as the
Distribution Agreement is in effect and the Purchaser owns at least eighty
percent (80%) of the Purchased Stock. Purchaser agrees that the foregoing is a
right to designate a person for election to the Board, not a right to appoint
directly to the Board, and therefore is subject to Purchaser's Designee
obtaining sufficient votes for election from the stockholders of the Company (or
sufficient votes for appointment from the existing directors of the Company) in
order to secure election of such Designee to the Board. The Company shall use
all reasonable efforts to ensure election of the Purchaser's Designee to the
Board. Until such time as the Purchaser makes such designation, and at any time
after such conditions for nomination cease to be satisfied or the Purchaser
otherwise has no nominee on the Board, the Purchaser shall in any event have the
right to send a non-voting observer to all Board meetings as long as the
Purchaser holds any shares of the Purchased Stock. Any such observer shall be
provided notices of the meetings in the same manner and timing as the members of
the Board. The Company shall indemnify the Purchaser's Designee and provide
directors' and officers' insurance coverage in the same manner and in the same
amount as is currently provided to all other officers and directors of the
Company. The Company will reimburse the directors for their customary and
reasonable expenses in attending Board meetings.
7.4. Restriction on Distributions. So long as the Purchaser holds at least fifty
percent (50%) the Purchased Stock, the Company shall not, without the prior
written consent of the Purchaser: (i) declare or pay any dividends or make any
distributions upon any of its equity securities except in accordance with
agreements in effect as of the date of this Agreement and disclosed to the
Purchaser on Exhibit C attached; (ii) purchase, redeem, or otherwise acquire any
of the Company's equity securities (including warrants, options and other rights
to acquire equity securities) other than the repurchase of securities in
accordance with agreements existing as of the date of this Agreement; (iii)
liquidate or dissolve; or (iv) amend any provision of its Charter or Bylaws in a
manner that would adversely affect the rights of the Purchaser under the
Transaction Documents.
7.5. Use of Proceeds. The proceeds received from the issuance of Purchased
----------------
Stock will be used for working capital and general corporate purposes.
8. PURCHASE AND SALE RIGHTS OF PURCHASER.
8.1. Purchaser's Rights of First Refusal in the Event of New Issues. Subject to
the terms of this Section 8.1, the Company may from time to time after the
Closing offer to grant, issue, or sell (the "Offer") securities, warrants,
options, or rights to purchase securities of the Company ("Securities"). With
respect to any Company offer to grant, issue, or sell any such Securities (other
than in a transaction registered under the Act), Purchaser shall have a right of
first refusal to purchase up to its pro rata share (based on its percentage of
the Company's outstanding Common Shares, calculated on a fully-diluted basis) of
such Securities on the same price, terms and conditions as the Company offers to
other potential investors.
(A) Within five (5) days after approval of the Offer by the Company's Board of
Directors, the Company shall give the Purchaser written notice of (i) those
terms which are of the type typically detailed in term sheets drafted with
respect to proposed investments by institutional firms and (ii) the proposed
recipients of the Offer.
(B) Within twenty (20) days of receipt of the Company's notice, the Purchaser
must give the Company written notice of its intent to exercise its right under
this Section 8.1 (subject to review and approval of final documentation),
specifying the number of securities to be acquired. Failure to give such timely
notice waives those rights.
(C) Any subsequent material change in the terms of the Offer (as provided in the
notice pursuant to Sub-paragraph (A), above) as approved by the Board of
Directors shall constitute a new offer. The failure of the Company to consummate
the transaction contemplated by the Offer within sixty (60) days after the date
by which Purchaser must give written notice to the Company under Paragraph (B)
above will constitute a material change in the Offer.
(D) The following shall not constitute an Offer under this Section 8.1: (i) any
registered public offering of the Company's Securities; (ii) any Permitted Stock
Sales; or (iii) a common stock dividend or stock split distributable on a
pro-rata basis to all holders of common stock.
8.2. Purchaser's Put Option. The Purchaser shall have a right (the "Put Right")
to cause the Company to repurchase all Purchased Stock then held by the
Purchaser, at the original purchase price, payable in either a lump-sum purchase
or financed over a six (6) month period at an interest rate equal to the U.S.
prime rate (as listed in the Money Rates section of the Wall Street Journal).
The Put Right shall be exercisable at any time after (i) termination or
expiration of the Distribution Agreement for any reason other than a breach by
the Purchaser; (ii) any Merger or consolidation of the Company with another
corporation in which the holders of the Company's voting equity securities
immediately prior to the transaction own fifty percent (50%) or less of the
voting securities of the surviving corporation immediately following the
transaction; or (iii) any sale or other disposition of all or substantially all
of the Company's assets. The Put Right shall be personal to Purchaser and shall
not be assignable, with or without consideration, to any person other than its
Affiliates in accordance with Section 10.2.
9. CONFIDENTIALITY AND NON-DISCLOSURE .
9.1. Disclosure of Terms. The terms and conditions of the Transaction Documents
(collectively, the "Financing Terms"), including their existence, shall be
considered confidential information and shall not be disclosed by any party
hereto to any third party except in accordance with the provisions set forth
below.
9.2. Press Releases, Etc. No announcement regarding the Financing Terms or the
Purchaser in a press release, conference, advertisement, announcement,
professional or trade publication, mass marketing materials or otherwise to the
general public may be made without the prior written consent of each of the
parties hereto.
9.3. Permitted Disclosures. Notwithstanding the foregoing, any party may
disclose any of the Financing Terms (i) to its current or bona fide prospective
investors, employees, investment bankers, lenders, accountants and attorneys, in
each case only where such persons or entities are under appropriate
nondisclosure obligations, and (ii) as and to the extent required by applicable
law (on the terms described in Section 9.4 below).
9.4. Legally Compelled Disclosure. In the event that any party is requested or
becomes legally compelled (including without limitation, pursuant to securities
laws and regulations) to disclose the existence of this Agreement or any of the
terms hereof in contravention of the provisions of this Section 9, such party
(the "Disclosing Party") shall provide the other party (the "Non-Disclosing
Party") with prompt written notice of that fact so that the Non-Disclosing Party
may seek a protective order, confidential treatment or other appropriate remedy.
In such event, the Disclosing Party shall furnish only that portion of the
information which is legally required and shall exercise reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded such
information to the extent reasonably requested by the Non-Disclosing Party.
9.5. Other Information. The provisions of this Section 9 shall be in
------------------
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto with respect to the
transactions contemplated hereby.
10. MISCELLANEOUS.
10.1. Survival of Covenants; Successors and Assigns. All representations and
warranties made by the Company and the Purchaser in this Agreement and in
certificates or other documents delivered pursuant hereto shall survive the
making of the investments and the carrying out of the transactions contemplated
by this Agreement and the sale, issuance, and delivery of the Purchased Stock to
Purchaser, but no claim based on a breach of any such representation or warranty
made be made after the second anniversary of the Closing Date. All such
covenants, agreements, representations and warranties shall be binding upon any
successors and assigns of the Company and Purchaser.
10.2. Assignability of Rights. The Company may not assign any of its rights
under this Agreement without the Purchaser's written consent. Subject to
compliance with applicable securities and blue sky laws and regulations and with
Section 4.4 hereof, the provisions of this Agreement which are for the
Purchaser's benefit as Purchaser, are also for the benefit of, and enforceable
by, any Affiliate of the Purchaser. In connection with any such assignment, the
assigning party shall provide the Company with written notice setting forth the
name and notice address of the assignee. An assignee of Purchaser shall be
subject to the affirmative obligations of Purchaser to the extent existing as of
the date of assignment.
10.3. Notices. Except as may be otherwise provided herein, all notices,
requests, waivers and other communications made pursuant to this Agreement shall
be in writing and shall be conclusively deemed to have been duly given (a) when
hand delivered to the other party; (b) when received when sent by facsimile at
the address and number set forth below; (c) three business days after deposit in
the U.S. mail with first class or certified mail receipt requested postage
prepaid and addressed to the other party as set forth below; or (d) the next
business day after deposit with a national overnight delivery service, postage
prepaid, addressed to the parties as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.
To the Company:
CORGENIX MEDICAL CORPORATION
Attn: President
12061 Tejon Street
Westminster, CO 80234 USA
Fax: (303) 252-9212
Telephone: (303) 457-4345
Copy to:
HUTCHINSON BLACK AND COOK, LLC
921 Walnut Street, Suite 200
Boulder, CO 80302 USA
Attn: Steven A. Erickson
Fax Number: (303) 442-6593
Phone Number: (303) 442-6514
To Purchaser:
MEDICAL & BIOLOGICAL LATORATORIES CO., LTD.
Attn: Sachiko Suno, President
5F Sumitomo-Shoji Marunouchi Bldg,
5-10 Marunouchi 3-chome
Naka-ku, Nagoya 460-0002
Japan
Fax: 81-52-950-1073
Telephone: 81-52-971-2081
Copy to:
Mori Sogo
Attn: Hajime Tanahashi
NKK Bldg.
1-1-2 Marunouchi
Chiyoda-ku Tokyo 100-0005
Japan
Fax: 81-3-5223-7633
Telephone: 81-3-5223-7733
Each person making a communication hereunder by facsimile shall
promptly confirm by telephone to the person to whom such communication was
addressed each communication made by it by facsimile hereto but the absence of
such confirmation shall not affect the validity of any such communication. A
party may change or supplement the addresses given above, or designate
additional addresses, for purposes of this Section 10.3 by giving the other
party written notice of the new address in the manner set forth above.
10.4 Governing Law. This Agreement shall be construed in accordance with and
-------------
governed by the laws of the State of Colorado.
10.5 Venue. Each of the parties consents and submits to the jurisdiction of the
federal courts located in the District of Colorado in connection with any suits
or other actions arising between the parties under this Agreement, and consents
and waives any objections to the venue of such action or proceeding in the
federal courts located in the District of Colorado.
10.6 Severability. If any term, provision, covenant, or condition of this
Agreement, or its application to any person or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such term, provision, covenant, or condition as
applied to other persons or circumstances shall remain in full force and effect.
10.7 Entire Agreement; Amendments.
----------------------------
(A) The Transaction Documents and the other documents and agreements delivered
pursuant thereto constitute the full and entire understanding and agreement
among the parties with respect to the subject hereof and thereof.
(B) This Agreement may not be amended orally. The provisions of this Agreement
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 with the prior
written consent of the Company and the Purchaser.
10.8 Authorization. Each of the undersigned representatives of the parties
warrants and represents that he or she is duly authorized to execute this
Agreement on behalf of the respective party for which he or she signs, and that
the organization on whose behalf he or she signs is currently in good standing
in the jurisdiction where organized.
10.9 Gender, Number, and Tense. Throughout this Agreement, as the context
---------------------------
may require:
(A) The masculine gender includes the feminine and neuter; and the neuter gender
includes the masculine and feminine; and
(B) The singular number includes the plural, and the plural number includes the
singular.
10.10 Headings. The headings of the Articles, Sections and Subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Agreement.
10.11 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.12 Delays, Omission, and Waivers. No delay or omission to exercise any right,
power or remedy accruing to the Company or to Purchaser upon any breach or
default of any party hereto under this Agreement will impair any such right,
power or remedy of the Company or the Purchaser, nor will it be construed to be
a waiver of any such breach or default or an acquiescence therein, nor will any
similar breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring; nor will any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Company or the Purchaser of any breach or default
under this Agreement or any waiver on the part of the Company or the Purchaser
of any provisions or conditions of this Agreement must be in writing and will be
effective only to the extent specifically set forth in such writing. As to the
Purchaser or its permitted assignees, no waiver of any provision of this
Agreement will be effective without a written consent signed by holders of at
least a majority of the then outstanding Purchased Stock and Conversion Stock.
10.13 Breach. In the event of a claimed breach of any provision of this
Agreement, the party claiming breach shall give written notice (the "Notice of
Breach") to the party against whom breach is claimed, specifying the nature of
the breach claimed. The party against whom breach is claimed shall have thirty
(30) days from the date of the Notice of Breach to: (i) cure the event giving
rise to the claimed breach or substantially commence cure of such event (if such
event is capable of cure within ninety (90) days of its occurrence), giving
appropriate evidence of such cure or commencement of cure to the party claiming
breach; (ii) deny that a breach has occurred, providing a written response
outlining the basis of its conclusion; or (iii) acknowledge that the asserted
breach has occurred.
10.14 Remedies. No remedy herein conferred is intended to be exclusive of any
other remedy herein or as provided by law, but each shall be cumulative and
shall be in addition to every other remedy set forth in this Agreement, the
Exhibits, or existing at law, in equity, or by statute. The parties specifically
acknowledge that under certain circumstances the parties may be entitled to
specific performance and/or injunctive relief where without such remedies the
damage to the injured parties may be irreparable and money damages inadequate.
Moreover, in any suit between or among the parties hereto for such breach of any
of the provisions hereof, the prevailing party in such suit shall be entitled to
receive from the breaching party reasonable attorneys' fees and disbursements
incurred in the prosecution of such suit.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE COMPANY: CORGENIX MEDICAL CORPORATION,
a Nevada corporation
By: /s/ Douglass T. Simpson
Its: President
PURCHASER: MEDICAL & BIOLOGICAL LABORATORIES CO., LTD., a
corporation organized under the laws of Japan
By: /s/Sachiko Suno
Its: Chairperson
EXHIBITS CHECKLIST
Exhibit Title
A Warrant
B Distribution Agreement
C Company Schedule of Exceptions
D Registration Rights Agreement
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). NO SALE OR OTHER
DISPOSITION OF THE SAME MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER
THE ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL ON BEHALF OF THE HOLDER HEREOF, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION. IN ADDITION, THE TRANSFERABILITY OF THE
SECURITIES REPRESENTED BY THIS WARRANT IS SUBJECT TO ALL OF THE TERMS AND
PROVISIONS HEREOF, INCLUDING THOSE CONTAINED IN EXHIBIT A ATTACHED HERETO.
Void after 5:00 P.M., Denver Right to Shares of
Time, on July 3, 2007 the Common Stock of
Corgenix Medical Corporation
CORGENIX MEDICAL CORPORATION
COMMON STOCK PURCHASE WARRANT
Corgenix Medical Corporation, a Nevada corporation (the "Company"), hereby
certifies that for value received, Medical & Biological Laboratories Co., Ltd.,
a corporation organized under the laws of Japan, or its assigns (the "Holder")
is entitled to purchase, subject to the terms and conditions hereinafter set
forth, such number of fully paid and non-assessable shares of the common stock
of the Company (the "Common Stock") as determined in accordance with Section 1
below.
1. NUMBER OF SHARES; EXERCISE PRICE. The Holder of this Warrant shall be
entitled to purchase 880,282 shares of Common Stock (the "Common Shares"). [The
number of shares of Common Stock shall be equal to the Market Formula (defined
below). The "Market Formula" shall be equal to the quotient obtained by dividing
U.S. $500,000 by the average of the closing price for the Company's Common Stock
for the ten (10) Actual Trading Days (defined below) prior to the effective date
of this Agreement. An "Actual Trading Day" shall mean any day on which a trade
of Common Stock shall occur on the U.S. Over-the-Counter market.]
For purposes of this Warrant, "Exercise Price" shall be equal to $ .568
per share. [Price shall be equal to the Market Formula] The Exercise Price shall
be adjusted for stock splits, the payment of dividends with respect to the
Common Stock, or any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company,
including without limitation, merger, consolidation, reorganization,
reincorporation or other change in corporation structure.
2. EXERCISE. This Warrant may be exercised prior to the VOID date set forth
above, but only during the term and continuance of that certain Distribution
Agreement & OEM Supply Agreement dated as of March 14, 2002 between the Company
and RhiGene Inc, a domestic U.S. subsidiary of Holder (the "Distribution
Agreement"), by submitting at the office of the Company at 12061 Tejon Street,
Westminster, CO 80234, or at such other office as the Company may designate by
notice in writing provided not less than thirty (30) days prior to the indicated
intended effective date of exercise, this Warrant, with the Purchase Form
annexed hereto duly executed and accompanied by payment of the Exercise Price
for the number of shares of Common Stock specified in such form. Holder shall
pay the Exercise Price in lawful money of the United States. As promptly as
practicable after surrender of this Warrant and receipt of such Exercise Price,
the Company shall issue and deliver to Holder a certificate or certificates for
the Common Shares, in certificates of such denominations, and in such names as
Holder may specify, together with any other stock, securities or property that
such Holder may be entitled to receive pursuant to Section 8 below. In the event
Holder shall purchase less than all the Common Shares purchasable under this
Warrant, the Company shall cancel this Warrant upon the surrender hereof and
shall execute and deliver to Holder a new Warrant of like tenor for the balance
of the Common Shares purchasable hereunder. Upon receipt by the Company of this
Warrant at its office in proper form for exercise, Holder shall be deemed to be
the Holder of record of the Common Shares issued upon such exercise, effective
as of the effective date of exercise set forth in such exercise notice.
3. RESERVATION OF STOCK. The Company covenants to make available, solely for
issuance and delivery upon the exercise of this Warrant, the number of Common
Shares from time to time issuable upon the exercise of this Warrant. All Common
Shares issued upon the exercise of this Warrant shall be duly authorized, fully
paid, and non-assessable with no liability therefore on the part of Holder, and
the Company will pay all taxes (excluding any income taxes payable by Holder) in
connection with the issuance thereof.
4. CERTIFICATE AS TO ADJUSTMENTS IN EXERCISE PRICE. Upon the occurrence of any
event requiring an adjustment of the Exercise Price, the Company, at its
expense, shall promptly compute the amount of such adjustment in accordance with
the terms hereof and prepare and furnish to Holder of this Warrant a certificate
of a duly authorized officer of the Company setting forth the amount of such
adjustment and showing in detail the facts upon which such adjustment is based.
The Company shall, upon the written request at any time of Holder of the
Warrant, furnish to such Holder a like certificate setting forth (a) any
adjustments; (b) the then-current Exercise Price at the time in effect; and (c)
the number of Common Shares and the amount, if any, of other property which
would then be received upon the exercise of this Warrant.
5. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification,
capital reorganization or other change of outstanding shares of Common Shares of
the Company, or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding Common
Shares) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety or substantially as an entirety, the
Company shall, as a condition precedent to such transaction, ensure that Holder
shall have the right thereafter, by exercising this Warrant, to purchase the
kind and amount of shares of stock and other securities and property received
upon such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance by a Holder of the number of Common
Shares that might have been purchased upon exercise of this Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance. The Company shall also ensure that any provision pertaining to
adjustments shall be as substantially similar as practicable to the adjustments
mechanisms set forth in this Warrant. The terms of this Section 5 shall
similarly apply to successive reclassifications, capital reorganizations or
other changes of shares of Common Shares and to successive consolidations,
mergers, sales or conveyances. In the event that in any such capital
reorganization or reclassification, consolidation, merger, sale or conveyance,
additional Common Shares shall be issued in exchange, conversion, substitution
or payment, in whole or in part, for or of a security of the Company other than
Common Shares, any such issue shall be treated as an issue of Common Shares
covered by the provisions of Section 4 hereof.
6. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of Holder, upon presentation and
surrender hereof to the Company for other Warrants of different denominations
entitling the Holder thereof to purchase in the aggregate the same number of
Common Shares purchasable hereunder. Any transfer or assignment of this Warrant
may, subject to the provisions of applicable federal and state securities laws
and the terms of Section 10 and Exhibit A hereto, be made upon surrender of this
Warrant to the Company with the Assignment Form annexed hereto duly executed and
funds sufficient to pay any transfer tax; whereupon the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee named in
such duly execute Assignment Form, this Warrant shall promptly be cancelled, and
in the case of a transfer or assignment of the right to purchase less than all
of the Common Shares purchasable under this Warrant, the Company shall execute
and deliver to Holder a new Warrant of like tenor for the balance of the Common
Shares purchasable hereunder. Upon the Company's receipt of (a) satisfactory
evidence of the loss, theft, destruction or mutilation of this Warrant; (b) in
the case of loss, theft or destruction, a reasonably satisfactory
indemnification agreement from the Holder hereof; and (c) if mutilated, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation on the part of
the Company, whether or not this Warrant so lost, stolen, destroyed, or
mutilated shall be at any time enforceable by anyone.
7. DISSOLUTION OR LIQUIDATION; DIVIDENDS AND DISTRIBUTIONS. (a) The Company
shall deliver to Holder fifteen (15) days' prior written notice of any proposed
distribution of the assets of the Company, and shall make no distributions to
its shareholders prior to the expiration of such fifteen-day period. Upon
receipt of such notice, Holder may exercise this Warrant at any time prior to
the expiration of such fifteen-day period and thereafter receive any
distributions made to shareholders of the Company in connection with such
dissolution or liquidation.
(b) The Company shall deliver to Holder thirty (30) days' prior written notice
of the record date or payment date of any proposed dividend or distribution to
its shareholders.
8. NOTIFICATION OF CORPORATE MATTERS. Prior to the issuance of any Common Shares
to Holder pursuant to exercise of the Warrant, the Company shall deliver to such
Holder prior written notice of any matter (i) involving an initial public
offering of the capital stock of the Company, (ii) any sale of substantially all
the assets of the Company, (iii) any agreement regarding the sale of the
Company's outstanding capital stock, or (iv) submitted to its shareholders
(whether such matter is submitted to a vote, written consent or other approval)
(the events described in the foregoing items (i) - (iv) each being a "Notice
Matter"). Such notice shall be delivered at the same time and in the same manner
as would notice provided to the shareholders of the Company regarding a
shareholder voting matter, and in any event shall be delivered at least
forty-five (45) days prior to the earlier of (x) the record date or the date
fixed for action on Notice Matter or (y) the closing date for the event which is
the subject of the Notice Matter.
9. NOTICE. Any notice required or permitted by the terms of this Warrant shall
be given in writing and effective upon personal delivery or three (3) calendar
days after being sent Certified Mail, postage prepaid, return receipt requested,
and addressed to the appropriate party at the address set forth in the Note for
such party, or at such other address as that party may have previously
designated by notice given to the other in accordance with this Section 9.
10. NO ASSIGNMENT. This Warrant may not be assigned or otherwise transferred by
Holder without the prior written consent of the Company, which consent shall not
be unreasonably withheld if Holder is in compliance with Rule 144 under the
Securities Act and the restrictions on transfer set forth in Exhibit A attached
hereto, or provides an effective registration statement related thereto or an
opinion of counsel on behalf of Holder, satisfactory to the Company, that such
registration is not required under the Securities Act or receipt of a no-action
letter from the Securities and Exchange Commission.
11. GOVERNING LAW. The laws of the State of Colorado shall govern the validity
and interpretation of this Warrant. The parties agree that any action or
proceeding commenced under or with respect to this Warrant shall be brought only
in the county or district courts of Boulder County, Colorado, and the parties
irrevocably consent to the jurisdiction of such courts and waive any right to
alter or change venue, including by removal.
12. ENTIRE AGREEMENT; SEVERABILITY; AMENDMENTS. This Warrant constitutes the
entire understanding or agreement between the parties with respect to the
subject matter hereof, and there is no understanding or agreement, oral or
written, which is not set forth herein or therein. In the event any provision of
this Warrant shall be prohibited or unenforceable in any jurisdiction, it shall,
as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law, or if for any reason it is not deemed so modified, it
shall be ineffective only to the extent of such prohibition or unenforceability
without affecting the remaining provisions hereof, and any such prohibition or
unenforceability shall not invalidate or render unenforceable such provision in
any other jurisdiction. This Warrant may not be amended, modified, or changed,
nor shall any waiver by Holder of any provision of this Warrant be effective,
except by written instrument signed by the party against whom enforcement of
such amendment, modification, or waiver is sought.
13. EXPIRATION. The right to exercise this Warrant shall expire on July 3,
2007, at 5:00 p.m., Denver time.
Dated: July 3, 2002
Corgenix Medical Corporation,
a Nevada corporation
By: /s/ Douglass T. Simpson
Title: President
PURCHASE FORM
Dated_____________, __________
The undersigned hereby irrevocably elects to exercise the attached Warrant
to the extent of purchasing ____________ shares of Common Stock of Corgenix
Medical Corporation, and hereby makes payment in full therefor at the Exercise
Price set forth in such Warrant.
Signature: _________________________________
Address: _________________________________
- ---------------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________________________
hereby sells, assigns and transfer unto
Name
- --------------------------------------------------------------------------
(Please print in block letters)
Address_________________________________________________________________________
the right to purchase Common Stock of Corgenix Medical Corporation, represented
by the attached Warrant to the extent of ________ shares as to which such right
is exercisable and does hereby irrevocably constitute and appoint
___________________________________________, attorney, to transfer the same on
the books of Corgenix Medical Corporation, with full power of substitution in
the premises.
Signature:____________________________
Dated ____________, _______
EXHIBIT A
RESTRICTIONS ON TRANSFERABILITY
(1) This Warrant and the Common Shares issuable upon its exercise are restricted
securities within the meaning of Rule 144 of the Securities and Exchange
Commission (the "Commission") promulgated pursuant to the Securities Act of 1933
as amended (the "Securities Act"); such securities are not registered and must
be held indefinitely unless they are subsequently registered under the
Securities Act and any applicable state and foreign securities laws, or unless
an exemption from registration is available thereunder; in any event, the
exemption from registration under Rule 144 will not be available for at least
one year from the date of acquisition of the common shares, and even then may
not be available unless (a) a public trading market then exists for the Common
Shares; (b) adequate information concerning the Company is then available to the
public; and (c) other terms and conditions of Rule 144 are complied with; and
any sale of such securities may be made by such Holder only in limited amounts
in accordance with such terms and conditions or any other applicable exemption
from registration under the Securities Act.
(2) Each certificate representing the Common Shares, this Warrant, and any other
securities issued in respect of any such shares upon any stock split, stock
dividend, recapitalization, merger, or similar events (unless no longer required
in the opinion of counsel for the Company) will be stamped or otherwise
imprinted with a legend substantially in the following form (in addition to any
other legends required under state securities laws applicable to any Holder in
the reasonable opinion of the Company's counsel):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW.
THESE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR AN EXEMPTION THEREFROM UNDER SAID ACT AND LAWS. IN
ADDITION, THE TRANSFERABILITY OF THESE SECURITIES IS SUBJECT TO THE
PROVISIONS OF A COMMON STOCK WARRANT ISSUED TO A CERTAIN HOLDER AND DATED
AS OF JULY 3, 2002 A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER'S
PRINCIPAL EXECUTIVE OFFICE.
(3) These securities shall not be transferred, and the Company shall not be
required to register any transfer of such securities on the books of the
Company, unless the Company shall have been provided with an opinion of counsel
reasonably satisfactory to it prior to such transfer that registration under the
Securities Act is not required in connection with the transaction resulting in
such transfer; provided, however, that no such opinion of counsel shall be
required in order to effectuate a transfer in accordance with the provisions of
Rule 144(k) promulgated under the Securities Act. Holder hereby consents to the
notation of "STOP TRANSFER" restrictions in the Company's stock transfer books
relative to its holdings of such shares to assist in the enforcement of the
limitations set forth herein.
DISTRIBUTION AGREEMENT & OEM SUPPLY AGREEMENT
This Distribution Agreement ("Agreement") is entered into as of 3/14/02 between:
RhiGene Inc. with its principal place of business at 455 State St., Suite
104 Des Plaines, Illinois, USA (hereafter called "RhiGene")
and:
Corgenix, Inc. with its principal place of business at 12061 Tejon St.,
Westminster, Colorado, USA (hereafter called the "Distributor").
WITNESSETH
WHEREAS, the Distributor desires to undertake the distribution of RhiGene
products in the territory on an exclusive basis, and whereas RhiGene desires to
appoint the Distributor to perform such services, subject to the terms and
conditions of this Agreement.
WHEREAS, the Distributor desires to undertake the distribution of OEM labeled
product (defined below) in the territory, and whereas RhiGene desires to appoint
the Distributor to perform such services, subject to the terms and conditions of
this Agreement.
NOW THEREFORE, for the reasons stated above, and in consideration of the mutual
covenants and conditions of the Agreement, the parties hereby agree as follows:
ARTICLE 1 DEFINITIONS
For the purpose of this Agreement, the following terms shall have definitions as
follows:
( ) "Products " shall mean RhiGene diagnostic test kits listed in Exhibit A.
( ) "Territory" shall mean (i) North (excluding Mexico), Central and South
America (collectively, the "RhiGene Label Territory") and (ii) the rest of
the world (excluding Japan, Korea and Taiwan) (collectively, the "OEM Label
Territory")..
( ) "Label" shall mean every label and package insert used for RhiGene products.
Depending on the country where the Product is distributed pursuant to
Section 2.1, the Label will bear either the RhiGene name (hereafter "RhiGene
Label") or the Corgenix name (hereafter "OEM Label").
ARTICLE 2 APPOINTMENT
( ) a) Subject to the terms and conditions contained herein, RhiGene grants to
the Distributor the exclusive and non-transferable rights to sell the
Products under the RhiGene Label in the RhiGene Label Territory.
b) RhiGene grants to the Distributor the non-exclusive and non-transferable
right to sell the Products except the kits specified in Exhibit A under
OEM Label in the OEM Label Territory.
( ) The Distributor may appoint sub-distributors, dealers, agents or other third
parties for distribution of the Products in the Territory; provided that (i)
the Distributor shall provide RhiGene in advance in writing with a name,
address, telephone and facsimile number of and contact person for such third
party; (ii) the Distributor shall notify such third party of the
Distributor's obligations hereunder and ensure that such third party will
distribute the Products in compliance with the terms of this Agreement; and
(iii) the Distributor shall be responsible for any action or inaction of
such third party and shall indemnify and hold RhiGene harmless from, and all
damages, losses, expenses or claims arising out of or in connection with
such third party's distribution of the Products.
( ) The products may not be sold or used for any purpose other than in vitro
use. Without limiting the generality of the foregoing, no Products may be
sold for any use whatsoever in human beings.
ARTICLE 3 DUTIES AS A DISTRIBUTOR
( ) The Distributor shall use its best efforts at its sole expense to promote,
market and sell the Products to obtain the maximum sales in the Territory.
The Products shall be sold under RhiGene Label or OEM Label depending on the
portion of the Territory where sold.
( ) In order to promote and extend the sales of the Products throughout the
Territory, the Distributor will undertake at its expense all necessary
advertising and promotion (including journal advertisements, booklets,
posters, literature and exhibitions at scientific meetings).
( ) The Distributor undertakes to maintain an adequate trained sales force and
technical staff sufficient to service the needs of the customers in the
Territory.
( ) Subject to the purchase of the prescribed minimum quantity, the Distributor
is authorized to stock at its chosen location, sufficient quantities of the
Products to satisfy promptly the needs of the customers in the Territory.
( ) The Distributor undertakes to maintain all records related to the sales of
the Products in the Territory. The Distributor shall provide to RhiGene such
periodic written reports of its promotional activities and results as
RhiGene shall reasonably request.
( ) The Distributor shall comply at its own expense with current regulations
applicable to the distribution, sale, or use of any of the Products. If
current regulations applicable to the distribution, sale or use of any of
the Products change, then RhiGene and the Distributor will negotiate in good
faith the means of complying with such new regulations.
( ) During the term hereof, the Distributor shall not:
( ) do any act or thing which may prevent or interfere with the promotion or
sale of the Products in the Territory; or
b) sell or be in any way concerned in the sale of any products in the
Territory which shall or may compete with the Products (Competing
Products), nor be interested directly or indirectly in any business firm
or company manufacturing or selling products in the Territory; provided,
however, that Distributor may continue to sell OEM labeled products
derived from different manufacturers to Distributor's current autoimmune
product distributors in Europe, Africa and Asia (except Japan, Korea and
Taiwan) by the end of 2002. Distributor will convert the existing
distributors from the current products to the RhiGene/Corgenix labeled
products by the end of 2002.
ARTICLE 4 DUTIES OF RHIGENE
( ) RhiGene shall supply the Products in accordance with the current product
specifications as specified on Exhibit B, and shall, subject to
availability, ship all Products for which purchase orders have been
submitted by the Distributor and accepted by RhiGene.
( ) RhiGene shall furnish to the Distributor, reasonable quantities of catalogs,
product data, descriptions, brochures, advertising materials and
photographs.
( ) RhiGene shall not directly or indirectly sell the Products in the Territory.
RhiGene shall transfer to the Distributor any sales leads from a customer
located in the RhiGene Label Territory obtained from its marketing efforts,
including but not limited to advertising, exhibitions, etc.
( ) RhiGene shall provide, without charge, technical and sales training to a
minimum of two representatives of the Distributor at RhiGene's premises or
such other location as RhiGene shall determine; provided, however, that
RhiGene shall not be responsible for the payment of related travel and
lodging expenses.
ARTICLE 5 WARRANTY AND SPECIFICATIONS
( ) RhiGene warrants that the Products shall meet the specifications stated in
its catalog and its package inserts. The shelf life of the Products is
described in Exhibit B. Residual shelf life of each item is determined by
RhiGene. The residual shelf life at the time of delivery to the Distributor
shall be, for Products which have more than six months shelf life, at least
four (4) months after the date of delivery to the Distributor.
( ) The Distributor shall have the right to refuse to accept Products which do
not conform to 5.1.
( ) RhiGene shall have the right to modify Product specifications and shall
notify the Distributor in writing of any such modification.
( ) The Products shall be distributed and sold as delivered by RhiGene. If the
Products are altered in any way by the Distributor (other than by the
addition of OEM packaging for which the Distributor is responsible), RhiGene
shall be relieved of any warranty for Product quality.
( ) RhiGene shall supply Products which meet the specifications. When the
quality, materials or workmanship of the Products are found by the
Distributor not to conform to the specifications, the Distributor shall
notify RhiGene in writing within four (4) months of receipt of the Products.
In such event RhiGene will accept return of such non-conforming Products and
will replace them at RhiGene's cost, or will reimburse the cost of such
Products to the Distributor.
ARTICLE 6 TRADEMARKS, PROPRIETARY RIGHTS & CONFIDENTIALITY
The Distributor shall have the right to promote and sell Products in the
RhiGene Label Territory under RhiGene's trademarks, which trademarks shall be
and shall remain the exclusive property of RhiGene. The Distributor recognizes
that RhiGene is the exclusive owner of all trademarks, trade names, designs, and
logos used with the Products and that the Distributor has no right or interest
in such trademarks, trade names, designs or logos other than those explicitly
granted in the Agreement. RhiGene grants to the Distributor the royalty-free,
non-exclusive right to use any RhiGene trademarks, trade names, designs and
logos for the Products during the terms of this Agreement in the RhiGene Label
Territory for limited purpose of promoting sale of the Products. All rights of
the Distributor under this paragraph shall cease immediately upon termination or
expiration of this Agreement.
ARTICLE 7 MINIMUM PURCHASE
The Distributor agrees to purchase the following minimum amounts of Products
from RhiGene (net price) during the term of this Agreement.
Year 1 (April 1, 2002 - March 31, 2003) : US$ 175,000 Year 2 (April 1, 2003
- March 31, 2004) : US$ 660,000 Year 3 (April 1, 2004 - March 31,
2005) : US$ 860,000
ARTICLE 8 DURATION AND TERMINATION
( ) This Agreement shall be effective from for a three (3) year
----------
period, i.e. until .
-------------------
( ) Both parties will meet four (4) months prior to the expiration of the
Agreement in order to agree on the renewal of the present Agreement. If the
parties shall not agree to the renewal term, this Agreement shall terminate
automatically and without notice on .
( ) The parties shall meet three (3) months before the end of each year to
review sales progress. If the Distributor does not in any year of the
Agreement reach the minimum purchase amount of the Products specified in
ARTICLE 7, RhiGene shall have the option, but not the obligation, to
terminate this Agreement with ninety (90) days advance written notice.
( ) In the event of any termination hereunder (other than a termination
resulting from a breach of this Agreement by the Distributor), RhiGene shall
meet any outstanding written order of the Distributor's customers, and the
Distributor shall be permitted to sell any Products in its inventory in
accordance with the terms of this Agreement. In the event of a termination
hereunder, the Distributor shall pay RhiGene immediately any money owed in
respect of Products delivered hereunder and shall promptly return to RhiGene
at the Distributor's expense any technical information or other material
concerning any of the Products in its possession. In the event of a
termination of this Agreement resulting from a breach of this Agreement by
the Distributor, RhiGene shall not be obligated to meet any outstanding
orders of the Distributor's customers and the Distributor shall promptly
return to RhiGene at the Distributor's expense any Products then in its
inventory.
ARTICLE 9 PRICE
( ) The prices of Products applicable to the Distributor are in US currency
"US$", FOB Nagoya, as specified on Exhibit B.
( ) RhiGene reserves the right to revise its prices at the end of each year
effective on the anniversary date of the signing of this Agreement;
provided, however, that (i) orders placed by the Distributor which have
previously been acknowledged by RhiGene shall not be affected by any
increase in prices without the Distributor's specific written consent; (ii)
RhiGene will give the Distributor sixty(60) days advance notice and consult
in good faith with the Distributor prior to any such revision of prices; and
(iii) no adjustment to the prices shall reflect an increase greater than the
rate of increase in the United Sate Consumer Price Index - All Urban
Consumers, published by the United States Department of Commerce since the
date of any previous adjustment to the prices.
ARTICLE 10 PURCHASE, SHIPMENT AND PAYMENT
( ) The Distributor shall submit to RhiGene by fax (fax no. 847 375-9093) a
written purchase order for each Product sold by it, which order will be
deemed accepted unless expressly rejected by RhiGene by fax within two days
after the receipt of the purchase order. All orders shall be shipped from
MBL (RhiGene's parent company) to Westminster, CO USA by FOB Nagoya. Risk of
damage or loss shall pass to the Distributor upon delivery to the courier.
The Distributor may not cancel an order for any products after the Product
has been shipped.
( ) All orders received and accepted by RhiGene from the Distributor shall be
shipped by MBL as soon as practicable; however, neither RhiGene nor MBL
shall be responsible for delays caused by governmental orders or
requirements, transportation conditions, labeling or material shortages,
strikes, fires or any other cause beyond RheGene or MBL's control. The
Distributor has the option to cancel without penalty a purchase order which
was not be shipped within two (2) weeks after the date of the purchase
order.
( ) Payments are to be made within sixty (60) days from the date of invoice. If
the Distributor fails to pay any amounts due and owing during such sixty
(60) days period, the Distributor shall be liable for interest on the
overdue amount at a rate of 10% per annum; provided, however, if the
Distributor has an appropriate reason for the failure to make timely
payment, the interest charge may be excused with RhiGene's agreement.
ARTICLE 11 FORECASTS
The Distributor promises to supply RhiGene with forecast figures every three
(3) months.
ARTICLE 12 LIABILITY AND INDEMNITY
( ) The parties each agree to maintain during the term hereof liability
insurance for personal injury and property damage. Such insurance shall
cover each party's respective obligations and indemnification as provided
under the sections below.
( ) The Distributor agrees to indemnify, defend and hold harmless RhiGene
from any and all damages or losses that:
b) are directly or proximately caused by the willful misconduct or
negligence of the Distributor or officers, employees or agents, or
relate to any failure by the Distributor to comply with any terms hereunder
including, without limitation, applicable laws and regulations regarding the
sale of Products by the Distributor pursuant to this Agreement. (?) RhiGene
agrees to indemnify, defend and hold harmless the Distributor
from any and all damages or losses that:
c) are directly or proximately caused by the willful misconduct or
negligence of RhiGene or its officers, employees or agents, or
d) relate to any failure by RhiGene to comply with any terms hereunder.
( ) The obligations contained in this Section 12 shall continue in full force
and effect after the termination of this Agreement.
ARTICLE 13 AMENDMENTS AND MODIFICATIONS
a) Any amendment or modification to this Agreement must be made in writing
and signed by both parties hereto
b) If any clause of this Agreement is held to be illegal, void or unenforceable,
all other terms of this Agreement shall remain valid.
ARTICLE 14 PROVISION FOR EARLY TERMINATION
( ) Upon the occurrence of any of the following:
( ) either party enters bankruptcy or other insolvency proceedings or
assigns a substantial portion of its assets for the benefit of
creditors, or
( ) either party enters into liquidation proceedings, transfers all or
substantiall all of its assets or is acquired by a third party through
merger or the acquisition of a controlling equity interest, or
( ) either party commits a breach of this Agreement and that breach is not
remedied to the satisfaction of other party within thirty days after
specific written notice of the breach
then in such event the other party may terminate this Agreement with
immediate effect upon written notice to the offending party.
( ) If either party ceases to be in the business of distribution or
manufacture, as the case may be, of diagnostic test kits, such party may
terminate this Agreement by giving a six (6) months prior written notice
to the other party.
( ) Upon expiration or earlier termination of this Agreement, neither party
shall be entitled to any termination fee or other compensation of any kind,
unless expressly provided for herein.
14.4 The provision of paragraph 8.4 shall apply to this article.
ARTICLE 15 SETTLEMENT OF DISPUTES AND APPLICABLE JURISDICTION
- ----------------------------------------------------------------
a) The parties hereto sincerely intend to conduct their business relationship
under the terms of this Agreement in mutual trust.
b) If, however, contrary to all expectation, an agreement can not be reached,
any difference relating to the application or the fulfillment of the clauses of
this Agreement shall be resolved in federal or state courts located in the State
of Illinois, USA.
c) This Agreement shall be governed be and be construed under the law of
the State of Illinois, USA.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
RHIGENE INC.
By: /s/ Sachiko Suno
Name: Sachiko Suno
Title: President and CEO
CORGENIX, INC.
By: /s/ Luis R. Lopez, MD
Name: Luis R. Lopez, MD
Title: CEO
LIST OF EXHIBITS
EXHIBIT A Products
In Europe, Africa, Asia and Mexico, exclude MESACUP Dsg-1/-3 and
BP-180 Kit
EXHIBIT B Price list; Transfer price and shelf life of Products
EXHIBIT C
CORGENIX MEDICAL CORPORATION
SCHEDULE OF EXCEPTIONS
Section 5.2 HealthOutfitters.com, Inc. The Company intends to dissolve its
wholly-owned subsidiary, HealthOutfitters.com, Inc., effective June 30, 2002.
The Company estimates that it will recognize a loss from discontinued operations
of approximately $425,000 in connection with this dissolution. Such loss is due
primarily to the write-off of previously capitalized software development costs.
Section 5.8 Title to Property. The Company has pledged all of its assets as
collateral for a note (the "SBA Note") to Vectra Bank Colorado, N.A., in
connection with a loan under the provisions of the U.S. Small Business
Administration (the "SBA"). At March 31, 2002, $652,665.00 in principal amount
remained outstanding under the SBA Note.
The Company also maintains a $300,000 revolving line of credit with Vectra Bank
Colorado, N.A., secured by pledge of all of the Company's accounts receivable
and inventory. As of the date of the Agreement, $70,000.00 in principal amount
was outstanding under the foregoing line of credit.
Section 5.12 Proprietary Rights. As described above under Section 5.8, the
Company has granted a security interest in its Proprietary Rights under the SBA
Note.
CORGENIX MEDICAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
June ___, 2002
TABLE OF CONTENTS
1. REGISTRATION UNDER THE SECURITIES ACT OF 1933.1
SECTION 1.1 CERTAIN DEFINITIONS.3
SECTION 1.2 PROPOSED TRANSFERS. 4
SECTION 1.3 COMPANY REGISTRATION. 5
(A) Notice and Piggyback Rights. 5
(B) Underwriting; Limits. 6
(C) Waiver. 6
SECTION 1.4 REGISTRATION AT THE REQUEST OF THE HOLDERS. 6
(A) Request; Mechanics. 6
(B) Exceptions. 7
(C) Underwriting. 8
(D) Form S-3. 8
SECTION 1.5 EXPENSES OF REGISTRATION. 8
(A) Registration Expenses. 8
(B) Selling Expenses. 9
(C) Legal Expenses. 9
(D) Ineffective Requested Registration. 9
SECTION 1.6 REGISTRATION PROCEDURES. 9
SECTION 1.7 INDEMNIFICATION. 10
(A) Company's Obligation to Indemnify. 10
(1) Generally.10
(2) Reimbursement.10
(3) Limitation. 10
(4) Survival of Obligation. 10
(B) Holder's Obligation to Indemnify. 11
(1) Generally.11
(2) Reimbursement. 11
(3) Limitation. 11
(4) Survival of Obligation of the Holders. 11
(C) Indemnifying Party May Assume Defense. 11
(1) Generally.11
(2) Settlement Approval, Release Required. 12
(D) Contribution. 12
SECTION 1.8 INFORMATION BY HOLDER. 12
SECTION 1.9 RULE 144 REPORTING. 12
SECTION 1.10 TRANSFER OF REGISTRATION RIGHTS. 13
SECTION 1.11 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS.13
SECTION 1.12 TERMINATION OF REGISTRATION RIGHTS. 13
SECTION 1.13 LOCKUP. ERROR! BOOKMARK NOT DEFINED.
2. MISCELLANEOUS. 13
SECTION 2.1 SURVIVAL OF COVENANTS; SUCCESSORS AND ASSIGNS.13
SECTION 2.2 ASSIGNABILITY OF RIGHTS. 14
SECTION 2.3 COMMUNICATIONS AND NOTICES. 14
SECTION 2.4 LAW GOVERNING AND VENUE. 15
SECTION 2.5 SUBSEQUENT INSTRUMENTS AND ACTS. 15
SECTION 2.6 SEVERABILITY. 15
SECTION 2.7 ENTIRE AGREEMENT; AMENDMENTS. 15
SECTION 2.8 DELAYS, OMISSIONS, AND WAIVERS. 16
SECTION 2.9 AUTHORIZATION. 16
SECTION 2.10 GENDER, NUMBER AND TENSE. 16
SECTION 2.11 HEADINGS. 16
SECTION 2.12 COUNTERPARTS. 16
SECTION 2.13 REMEDIES. 16
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into effective as of June ___, 2002, among CORGENIX MEDICAL CORPORATION, a
Nevada corporation (the "Company") and MEDICAL & BIOLOGICAL LABORATORIES CO.,
LTD., a corporation organized under the laws of Japan (the "Investor").
RECITALS
A. The Investor and the Company are parties to a Common Stock Purchase
Agreement of even date herewith and as it may be amended from time to time (the
"Stock Purchase Agreement") whereby the Investor has purchased shares of the
Company's Common Stock.
B. The Investor is willing to have all of its rights with respect to
registration of its Registrable Securities (as defined below) under the
Securities Act of 1933, as amended, governed by this Agreement.
TERMS
NOW, THEREFORE, the parties hereto agree as follows:
A. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
1. Certain Definitions. As used in this Section l, the following terms
--------------------
shall have the following respective meanings:
"Blue Sky laws" shall mean the securities regulation laws of any
political subdivision of the United States.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Distribution Agreement" shall mean that certain Distribution
Agreement & OEM Supply Agreement dated effective as of March 14, 2002, between
the Company and RhiGene Inc., a U.S. subsidiary of the Investor (the "Investor
Subsidiary").
"Holder" shall mean any holder of outstanding Registrable Securities.
"Initiating Holders" shall mean those Holders of not less than
fifty-one percent (51%) of the aggregate of all then outstanding Registrable
Securities at the time a registration under Section 1.4 below is requested.
The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Purchased Stock" under this Agreement shall mean and include all
shares of the Company's Common Stock issued under the Stock Purchase Agreement
and upon exercise of the Warrant (as defined in the Stock Purchase Agreement).
"Registrable Securities" means the Purchased Stock and any other
Common Stock issued or issuable with respect to any of the Purchased Stock by
way of dividend, stock-split, recapitalization, or the like. Registrable
Securities do not include any securities that have been registered pursuant to a
registration statement under the Securities Act and sold pursuant thereto or
that have become eligible for public resale pursuant to Rule 144 (k) under the
Securities Act.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 1.6 below, including, by way of illustration
only and without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, underwriting
expenses not included in Selling Expenses, the expense of any audits or
financial statement reviews incident to or required by any such registration
(including the expense of any cold comfort letters), and Blue Sky fees and
expenses (but excluding the compensation of regular employees of the Company,
which shall be paid in any event by the Company).
"Restricted Securities" shall mean the securities of the Company
required to bear a legend substantially the same as the legend set forth in
Section 1.2(D) of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean the underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
2. Proposed Transfers. The Holder of each certificate representing
--------------------
Registrable Securities, by entering into this Agreement and accepting those
securities, agrees to comply in all respects with the following provisions:
Section 2.1 Prior to any proposed transfer of any Registrable Securities (other
than under circumstances described in Section 1.3 and Section 1.4 below), the
Holder of those Registrable Securities shall give written notice to the Company
of such Holder's intention to effect the transfer, together with a detailed
statement of the circumstances surrounding the proposed transfer; provided,
however, that the Holder need not provide such notice with respect to
Registrable Securities for which the Company has previously issued unlegended
certificates.
Section 2.2 Such notice shall, if reasonably requested by the Company, also be
accompanied by a written opinion of legal counsel (both of which, counsel and
opinion, shall be reasonably satisfactory to the Company and its counsel)
stating that the proposed transfer of the Registrable Securities may be effected
without registration under the Securities Act and without Blue Sky
qualification.
Section 2.3 Having satisfied Subsection 1.2(B) above, the Holder of such
Registrable Securities shall be entitled to transfer the Registrable Securities
in accordance with the terms of the notice delivered by the Holder to the
Company.
Section 2.4 Each certificate evidencing the Registrable Securities shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend in substantially the following form in addition to any
legend required under applicable state securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SHARES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
The Company shall remove such restrictive legend upon the request of any Holder
if (1) the Company has received a written opinion of legal counsel (both of
which, counsel and opinion, shall be reasonably satisfactory to the Company and
its counsel) to the effect that registration of any and all future transfers is
not required, (2) an appropriate registration statement with respect to such
Registrable Securities has been filed by the Company with the Commission and
declared effective by the Commission, or (3) such transfer has been made in
compliance with the requirements of Rule 144 or its successor. In these events,
the Company shall cause new certificates without the above legend to be issued
promptly to the Holder in exchange for outstanding legended certificates.
3. Company Registration.
--------------------
Section 3.1 Notice and Piggyback Rights. If at any time the Company shall decide
to register in connection with a public offering any of its securities solely
for cash, the Company will:
(A) promptly give to each Holder written notice of the registration (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable Blue Sky laws); and
(B) include in such registration (and any related Blue Sky qualification or
other compliance reasonably requested by Holders in order to sell such
securities), and in any underwriting involved, all the Registrable Securities
specified in a written request, made within 30 days after receipt of such
written notice from the Company, by any Holder or Holders, except as set forth
in Subsection 1.3(B) below.
The provisions of this Subsection 1.3(A) do not apply to any of
the following: (i) the Company's initial public offering of its Common Stock,
(ii) a registration on any registration form that would not permit secondary
sales by a Holder, (iii) a registration that relates solely to employee benefit
plans, (iv) a registration that relates solely to a Commission Rule 145
transaction, or (v) a registration on Form S-4, Form S-8, or any replacement
form.
Section 3.2 Underwriting; Limits. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Subsection 1.3(A). All Holders proposing to distribute their
Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriters selected by the
Company. Notwithstanding any other provision of this Section 1.3, if the
underwriter determines that marketing factors require a limitation of the amount
of securities to be registered, the Company may exclude any or all of the
Registrable Securities requested to be included, pro rata among the respective
Holders on the basis of the amount of Registrable Securities requested to be
registered by each Holder. However, (i) no Registrable Securities may be
excluded from such registration until the securities of Company employees,
officers and directors possessing registration rights shall have been first
excluded on a pro rata basis; and (ii) if any of the Registrable Securities are
so excluded, no party shall sell securities in such registration other than the
Company and any third party invoking a demand registration right. If any Holder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter within five (5)
days after receipt of such notice, and any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from registration.
Waiver. The Holders' rights under this Section 1.3 may be waived as to any
particular offering by the Holders of fifty-one percent (51%) or more of all
Registrable Securities.
4. Registration at the Request of the Holders.
------------------------------------------
Section 4.1 Request; Mechanics. The Initiating Holders may, at any time after
the termination of the Distribution Agreement (other than a termination thereof
due to elective termination by the Investor Subsidiary or termination thereof
for cause due to breach by the Investor Subsidiary), upon delivery of written
notice to the Company specifying this Section 1.4(A), require the Company to use
its best efforts to prepare and file a registration statement and other
qualifications or compliances with respect to all or part of the Registrable
Securities. In the event of such a request, the Company will: Promptly give
written notice of the proposed registration, qualification or compliance to all
other Holders; Use its diligent efforts to file as soon as practicable all such
registrations, qualifications and compliances as may be so requested and as
would facilitate the sale and distribution of all or such portion of such
Holders' Registrable Securities as are specified in their request; Include in
such registrations, qualifications, and compliances the Registrable Securities
of any Holders who ask in writing, within thirty (30) days after receipt of
notice under Subsection 1.4(A)(1), to join in such request; The Company may be
required to prepare, file and keep effective a registration statement under this
Section 1.4(A) on no more than two (2) occasions. If the Company receives any
proceeds of the offering, the offering will be deemed to be pursuant to Section
1.3 above, not pursuant to Section 1.4(A).
Section 4.2 Exceptions. The Company shall not be obligated to effect any
registration, qualification, or compliance requested by a Holder with respect to
a proposed distribution of Registrable Securities by a Holder under Section
1.4(A):
(A) in any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance; or
(B) within twelve (12) months of the effective date of a registration statement
previously filed under Section 1.4(A).
If the Company shall furnish to such Holders a certificate signed by
the President of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or its
shareholders for a registration statement to be filed in the near future, then
the Company's obligation to use its best efforts to file a registration
statement under Section 1.4(A) shall be deferred for a period during which such
filing of a registration statement would be seriously detrimental, provided that
this period will not exceed 180 days, and provided further that the Company
shall not defer its obligations in this manner more than once in any
twelve-month period.
Section 4.3 Underwriting. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 1.4(A).
(A) The Company shall include such information in the written notice referred to
in Subsection 1.4(A)(1).
(B) The Initiating Holders shall negotiate with an underwriter selected by a
majority of the Initiating Holders and approved by the Company (such approval
not to be unreasonably withheld or delayed) with regard to the underwriting of
the requested registration. But if a majority in interest of the Initiating
Holders have not agreed with the underwriter as to the terms and conditions of
the underwriting within ten (10) days following commencement of such
negotiations, a majority in interest of the Initiating Holders may select
another underwriter of their choice approved by the Company (such approval not
to be unreasonably withheld or delayed.
(C) The right of any Holder to include its Registrable Securities in a
registration pursuant to Section 1.4(A) shall be conditioned upon the Holder's
participation in such underwriting on the terms and conditions of such
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder).
(D) The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters approved by a majority in
interest of the Holders participating in the offering.
(E) Notwithstanding any other provision of this Section 1.4, if the underwriter
advises the Company or the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, the Initiating
Holders shall so advise all Holders of Registrable Securities. The Company will
then include in such registration, prior to the inclusion of any other
securities which are not Registrable Securities, the number of shares of
Registrable Securities that the underwriter believes may be included in the
registration in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities then requested to be registered by such Holders. An
underwriting initiated by the Initiating Holders shall count as a "demand"
registration under Subsection 1.4(A) only if 80% or more of the Registrable
Securities requested to be included in such underwriting are registered and
sold.
(F) If any Holder of Registrable Securities disapproves of the terms of the
underwriting, he may elect to withdraw from the underwriting by written notice
to the Company, the underwriter and the Initiating Holders within five (5) days
of notice to such Holder of the terms of the underwriting. Any Registrable
Securities that are excluded from the underwriting by reason of the
underwriter's marketing limitation or withdrawn from the underwriting shall be
withdrawn from the registration.
Section 4.4 Form S-3. The Company shall use its commercially reasonable efforts
to qualify for registration on Form S-3 (including its successors) as soon as
practicable following the end of the fiscal year that includes the effective
date of its first registration statement filed with the Commission.
(A) After the Company has qualified for the use of Form S-3, Holders of
Registrable Securities shall have the right to request up to two (2)
registrations on Form S-3, including "shelf" registrations pursuant to Rule 415
under the Securities Act or any successor rule thereunder; provided, however,
that Holders shall not request more than one registration within any
twelve-month period. Such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such Holders. But the Company shall not be
required to effect a registration pursuant to this Paragraph (D): (i) within 90
days of the effective date of any registration referred to in Section 1.3 or
Section 1.4(A) or of the last registration effected pursuant to this Subsection
1.4(D); and (ii) unless the Registrable Securities requested to be so registered
for each such registration have an expected aggregate offering price of at least
$200,000.00.
(B) The Company shall give written notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this
Subsection (D) and shall provide a reasonable opportunity for other Holders to
participate in the registration. But if the registration is for an underwritten
offering, the terms of Subsection 1.4(C) shall apply to all participants in such
offering.
(C) The Company will use its best efforts to effect promptly the registration of
all shares of Registrable Securities on Form S-3 to the extent requested by the
Holders for purposes of disposition.
5. Expenses of Registration.
------------------------
Section 5.1 Registration Expenses. All Registration Expenses incurred in
connection with registration, qualification or compliance under Section 1.3 and
Section 1.4 shall be borne by the Company; provided that Holders of securities
being registered pursuant to Section 1.3 agree that they will pay (on a pro rata
basis among those Holders selling Registrable Securities in the particular
state) all Blue Sky fees associated with the registration of Registrable
Securities in those states in which the Company is not otherwise registering or
qualifying shares of its stock for sale in such registration.
Section 5.2 Selling Expenses. All Selling Expenses incurred in connection with
these transactions shall be borne by the Holders of the securities so registered
pro rata on the basis of the amount of stock so registered.
Section 5.3 Legal Expenses. Each Holder shall bear its own expenses, if any, for
the fees and disbursements of counsel to such Holder incurred in connection with
these transactions; provided that the Company shall pay the fees and expenses of
one counsel for the Holders.
Section 5.4 Ineffective Requested Registration. The Company shall not be
required to pay any Registration Expenses if the registration statement does not
become effective as a result of the withdrawal of a request for registration by
the Initiating Holders pursuant to Subsection 1.4(A) or 1.4(D), which withdrawal
was not caused by the Company's failure to comply with applicable registration
requirements and regulations or by the occurrence of a Material Adverse Change
(as that term is defined in the Stock Purchase Agreement). In such a case, the
Initiating Holders shall bear such Registration Expenses pro rata on the basis
of the number of shares of each Initiating Holder included in the registration
request, and such registration shall not be counted as a registration pursuant
to Subsection 1.4(A) or 1.4(D), or the Initiating Holders will not bear such
expenses and such registration shall be counted as a registration pursuant to
Subsection 1.4(A) or 1.4(D), as elected by the holders of a majority of the
shares of Initiating Holders included in the registration request.
6. Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Agreement, the Company will
keep each Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense
the Company will:
Section 6.1 Keep such registration, qualification or compliance effective until
the Holders have completed the distribution described in the registration
statement, but for not more than 120 days (or if the registration is
underwritten, 90 days).
Section 6.2 Furnish such number of prospectuses (including preliminary
prospectuses) and other documents incident to the registration as a Holder from
time to time may reasonably request.
Section 6.3 At the time when any registration statement becomes effective, and
at the time when any post-effective amendment becomes effective, request counsel
to furnish to the Holders of the Registrable Securities being registered under
that registration statement, an opinion of counsel in customary form and
reasonably satisfactory to the majority in interest of the Holders.
Section 6.4 Notify each Holder of Registrable Securities, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and
at the request of any such Holder, the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading.
Section 6.5 Cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, and, if not so listed, to be listed on the NASD automated quotation
system, provided, in either case, that such Registrable Securities qualify for
listing.
Section 6.6 Provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement.
Section 6.7 Use its best efforts to obtain a cold comfort letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters as the Holders
may reasonably request.
7. Indemnification.
---------------
Section 7.1 Company's Obligation to Indemnify.
---------------------------------
(A) Generally. With respect to any registration, qualification or compliance
that has been effected pursuant to this Agreement, to the extent permitted by
law the Company will indemnify each Holder, its officers, directors, managers,
members, and partners and each person controlling such Holder, each legal
counsel, and each underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue or alleged untrue statement of, or omission or alleged omission of a
material fact contained in, or required to be stated in any registration
statement, including any preliminary or final prospectus, offering circular or
other document incident to any such registration, qualification, or compliance.
The Company will further indemnify them against any violation or alleged
violation by the Company of any rule or regulation promulgated under the
Securities Act or any applicable state securities law in connection with any
such registration, qualification or compliance.
(B) Reimbursement. The Company will promptly reimburse each such Holder, and
each of its officers, directors, partners and controlling persons, each legal
counsel and each such underwriter, for any legal and any other expenses
reasonably incurred, as such expenses are incurred, in connection with
investigating or defending any such claim, loss, damage, liability or action.
(C) Limitation. The Company will not be liable in any such case to the extent
that any claim, loss, damage, liability or expense arising out of any untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in such registration statement, including any preliminary or final prospectus,
offering circular or other document, is based upon written information furnished
to the Company by or on behalf of such Holder or underwriter and which is stated
to be specifically for use therein.
(D) Survival of Obligation. The obligations of the Company under this Section
1.7 shall survive the redemption and conversion, if any, of the Purchased Stock,
the completions of the offerings of Registrable Securities under the
registration statements, and otherwise.
Section 7.2 Holder's Obligation to Indemnify.
--------------------------------
(A) Generally. If Registrable Securities held by any Holder are included in the
securities as to which the registration, qualification or compliance is being
effected, to the extent permitted by law each such Holder will indemnify the
Company, each of its officers and directors, each legal counsel and independent
accountant of the Company, each underwriter of the Company's securities covered
by such a registration statement, each person who controls the Company within
the meaning of the Securities Act and each other such Holder, each of its
officers, directors and partners, each person controlling such Holder, and each
legal counsel, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue or alleged untrue
statement of, or omission or alleged omission of a material fact contained in,
or required to be stated in, any registration statement, including any
preliminary or final prospectus, offering circular or other document.
(B) Reimbursement. Each such Holder will promptly reimburse the Company, such
Holders, underwriters, legal counsel and independent accountants and all of
their respective officers, directors, partners, and controlling persons for any
legal or any other expenses reasonably incurred, as such expenses are incurred,
in connection with investigating or defending any such claim, loss, damage,
liability or action.
(C) Limitation. In any case, a Holder's obligation under this Subsection 1.7(B)
shall extend only so far as the untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement
(including any preliminary or final prospectus), offering circular, or other
document in reliance upon written information furnished to the Company by or on
behalf of such Holder and which is stated to be specifically for use therein.
Furthermore, the liability of each Holder under this Section 1.7 shall be
several, not joint, and shall not exceed the net proceeds received by the Holder
in connection with such registration, qualification, or compliance. The
foregoing limit on a Holder's monetary liability shall not apply in the event of
willful fraud by Holder.
(D) Survival of Obligation of the Holders. The obligations of the Holders under
this Section 1.7 shall survive the conversion or redemption of the Purchased
Stock, and completion of the offerings of Registrable Securities under the
registration statements.
Section 7.3 Indemnifying Party May Assume Defense.
-------------------------------------
(A) Generally. Each party entitled to indemnification under this Section 1.7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. Unless in
such Indemnified Party's reasonable judgment a conflict of interest between such
Indemnified and Indemnifying Parties may exist with respect to such claim, the
Indemnified Party shall permit the Indemnifying Party to assume the defense of
any such claim or any resulting litigation. But counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at its own
expense. Failure by the Indemnified Party to provide such written notice shall
not relieve the Indemnifying Party from its obligation under this Section 1.7.
In the event that the Indemnifying Party does not assume the defense of any such
claim or any resulting litigation within a reasonable period of time, or in the
event disparate interests of the Indemnified and Indemnifying Parties require
the Indemnified Party to seek separate counsel, the Indemnified Party may assume
the defense with counsel of its choice, and the Indemnifying Party will pay the
reasonable expense of such counsel; provided, however, that the Indemnifying
Party will be required to assume the expense of only one single counsel for all
Indemnified Parties in connection with any given claim or litigation.
(B) Settlement Approval, Release Required. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term the giving by the claimant or
plaintiff to the Indemnified Party of a release from all liability in respect to
such claim or litigation.
Section 7.4 Contribution. If recovery is not available under the foregoing
indemnification provisions of this section for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution for liabilities and expenses, except to the
extent that contribution is not permitted under the Securities Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the securities (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the party who supplied or failed to supply the information as to which
the claim is asserted, the opportunity to correct and prevent any statement or
omission, and any other equivalent considerations appropriate under the
circumstances; provided that in no event will any Holder be required to
contribute an amount in excess of the proceeds to the Holder from the sale of
its Registrable Securities included in that offering, except in the case of
willful fraud by such Holder. The Company and the Holders agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocations.
8. Information by Holder. The Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding the Holders
and the distribution proposed by the Holders as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
9. Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
that at all times after 90 days after the effective date of the first
registration statement filed by the Company for a public offering of its
securities the Company will:
Section 9.1 Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act.
Section 9.2 Use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Section 9.3 So long as a Holder owns any Registrable Securities, furnish to such
Holder upon request: (i) a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, as amended; (ii) a copy of the most recent annual or quarterly
report of the Company; and (iii) such other reports and documents so filed by
the Company as such person may reasonably request in availing itself of any rule
or regulation of the Commission allowing that person to sell any such securities
without registration.
10. Transfer of Registration Rights. The right to cause the Company to register
Registrable Securities pursuant to this Section may be assigned (but only with
all related obligations) to any transferee, provided the Company is furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; and provided, further, that such assignment shall be permitted and be
effective only if the assignment is made in compliance with the Securities Act
and applicable Blue Sky Laws, and regulations promulgated thereunder, and
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act; and
provided, further, that such transferee or assignee will own after such transfer
or assignment 100,000 shares of Registrable Securities; and provided, further,
that such transferee shall agree in writing to be bound by the terms and
provisions of this Agreement.
11. Limitations on Subsequent Registration Rights. From and after the date
hereof, the Company will not, without the prior written consent of the holders
of at least a majority of the then outstanding Registrable Securities, enter
into any agreement with any holder or prospective holder of any securities of
the Company providing for registration rights that would allow such holder or
prospective holder of any securities of the Company to include such securities
in any registration filed under Section 1.3 or 1.4(A) hereof, unless under the
terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of
such holder's securities will not diminish the amount of Registrable Securities
which are included.
12. Termination of Registration Rights. The registration rights granted pursuant
to this Section 1 shall terminate 10 years after the effective date of this
Agreement. With respect to any particular Holder, the registration rights
granted pursuant to this Section 1 shall terminate at anytime that the Holder
can sell all of such Holder's Registrable Securities within a three month period
pursuant to the provisions of Rule 144(k) of the Commission.
B. MISCELLANEOUS.
1. Survival of Covenants; Successors and Assigns. All covenants, agreements,
representations and warranties made by the parties in this Agreement shall
survive the closing of the transactions contemplated by this Agreement. All such
covenants, agreements, representations and warranties will inure to the benefit
of, and be binding upon, any successors, assigns, heirs, transferees, executors,
and administrators of the parties hereto.
2. Assignability of Rights. The Company may not assign any of its rights
------------------------
or delegate any of its duties under this Agreement without the written
consent of Holders of a majority of the voting power of the then outstanding
Registrable Securities.
3. Communications and Notices. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant to this
Agreement shall be in writing and shall be conclusively deemed to have been duly
given (a) when hand delivered to the other party; (b) when received when sent by
facsimile at the address and number set forth below; (c) three business days
after deposit in the U.S. mail with first class or certified mail receipt
requested postage prepaid and addressed to the other party as set forth below;
or (d) the next business day after deposit with a national overnight delivery
service, postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives
a confirmation of delivery from the delivery service provider.
To the Company:
CORGENIX MEDICAL CORPORATION
12061 Tejon Street
Westminster, CO 80234
Attn: Douglass T. Simpson, President
Fax Number: 303-457-4549
Phone Number: 303-457-4345
Copy to:
Hutchinson Black and Cook, LLC
Attn: Steven A. Erickson
921 Walnut Street
Suite 200
Boulder, CO 80302
Fax Number: 303-442-6593
Phone Number: 303-442-6514
To Investor:
MEDICAL & BIOLOGICAL LABORATORIES CO., LTD.
Attn: Sachiko Suno, President
5F Sumitomo-Shoji Marunouchi Bldg,
5-10 Marunouchi 3-chome
Naka-ku, Nagoya 460-0002
Japan
Fax: 81-52-950-1073
Telephone: 81-52-971-2081
Copy to:
Mori Sogo
Attn: Hajime Tanahashi
NKK Bldg.
1-1-2 Marunouchi
Chiyoda-ku Tokyo 100-0005
Japan
Fax: 81-3-5223-7633
Telephone: 81-3-5223-7733
Each person making a communication hereunder by facsimile shall promptly confirm
by telephone to the person to whom such communication was addressed each
communication made by it by facsimile hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 2.3 by giving the other party written
notice of the new address in the manner set forth above.
4. Law Governing and Venue. This Agreement shall be governed by the laws of the
State of Colorado in all respects. Each of the parties consents and submits to
the jurisdiction of the federal courts located in the District of Colorado in
connection with any suits or other actions arising between the parties under
this Agreement, and consents and waives any objections to the venue of such
action or proceeding in the federal courts located in the District of Colorado.
5. Subsequent Instruments and Acts. The parties agree that they will
----------------------------------
execute any further instruments and perform any acts that may become
necessary to carry out this Agreement.
6. Severability. If any term, provision, covenant, or condition of this
Agreement, or its application to any person or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such term, provision, covenant, or condition as
applied to other persons or circumstances shall remain in full force and effect.
7. Entire Agreement; Amendments.
----------------------------
Section 7.1 This Agreement and the other documents and agreements delivered
pursuant hereto or concurrently herewith constitute the full and entire
agreement and understanding among the parties with regard to the subjects hereof
and thereof.
Section 7.2 This Agreement may not be amended orally. Amendment to this
Agreement, or of any supplement, and of the rights and obligations of the
Company and of the Holders, may be made with the written consent of the Company
and the affirmative vote or written consent of the Holders of a majority of the
voting power of the Registrable Securities then outstanding. But no such
amendment shall alter the provisions of this Agreement so as to reduce the
percentage of Registrable Securities which is required to consent to any such
amendment, without the vote or consent of the Holders of all of the then
outstanding Registrable Securities.
8. Delays, Omissions, and Waivers. No delay or omission to exercise any right,
power or remedy accruing to the Company or any Holder, upon any breach or
default of any party hereto under this Agreement, will impair any such right,
power or remedy of the Company or such Holder nor will it be construed to be a
waiver of any such breach or default, or an acquiescence therein, nor will any
similar breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring; nor will any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Company or any Holder of any provision or
conditions of this Agreement, must be in writing and will be effective only to
the extent specifically set forth in such writing. No waiver by the Holders of
any provision of this Agreement will be effective without a written consent
signed by Holders of a majority of the voting power of the then outstanding
Registrable Securities.
9. Authorization. Each of the undersigned representatives of the parties
warrants and represents that he is duly authorized to execute this Agreement on
behalf of the respective party for which he signs, and that the organization on
whose behalf he signs is currently in good standing in the jurisdiction where
organized.
10. Gender, Number and Tense. Throughout this Agreement, as the context may
------------------------
require:
Section 10.1 The masculine gender includes the feminine and neuter; and the
neuter gender includes the masculine and feminine; and
Section 10.2 The singular number includes the plural, and the plural number
includes the singular.
11. Headings. The headings of the Sections and Subsections of this
--------
Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Agreement.
12. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Remedies. No remedy herein conferred upon the parties hereto is intended to
be exclusive of any other remedy herein or provided by law, but each shall be
cumulative and shall be in addition to every other remedy set forth in this
Agreement or existing at law, in equity, or by statute. The parties specifically
acknowledge that under certain circumstances the parties may be entitled to
specific performance and/or injunctive relief where without such remedies the
damage to the injured parties may be irreparable and money damages inadequate.
Moreover, in any suit between or among the parties hereto for such breach of the
provisions hereof, the prevailing party in such suit shall be entitled to
receive from the breaching party, reasonable attorneys' fees and disbursements
incurred in the prosecution of such suit.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE COMPANY: CORGENIX MEDICAL CORPORATION,
a Nevada corporation
By:
--------------------------------
Its:
--------------------------------
INVESTORS: MEDICAL & BIOLOGICAL LABORATORIES
CO., LTD., a corporation organized under the
laws of Japan
By:
--------------------------------
Its:
PRESS RELEASE
NASDAQ (OTCBB) CONX
FOR IMMEDIATE RELEASE
Corgenix and MBL Announce Strategic Investment
DENVER, COLORADO and NAGOYA, JAPAN- July 8, 2002 /PRNewswire/ -- Corgenix
Medical Corporation (OTC-Bulletin Board: CONX) today announced a $500,000
strategic investment in Corgenix by Medical & Biological Laboratories Co., Ltd.
(MBL). The companies will work in partnership to extend the market opportunities
for MBL's complete diagnostic line of autoimmune testing products throughout the
world. This agreement is an expansion of the recently announced distribution
agreement between the two companies.
As part of the investment agreement, MBL will have warrants to purchase
additional shares of Common Stock for a total potential investment of
$1,000,000. The investment is subject to customary closing conditions and the
shares will not initially be registered under the United States Securities Act
of 1933, as amended.
Commenting on the investment by MBL, Doug Simpson, President and Chief Operating
Officer of Corgenix said, "We are extremely delighted that MBL has chosen to
invest in our company. At Corgenix we have secured our market-leading niche
position by constantly anticipating, researching and developing new diagnostic
test kits for the market, and by our efforts to attract important strategic
partners. This financial and business relationship with MBL will help Corgenix
further develop and expand our business strategy, especially with regards to
autoimmune disease testing. It may also provide additional growth opportunities
for us in Asia."
About Corgenix Medical Corporation
Corgenix is a leader in the development and manufacturing of anti-Phospholipid
test kits, being the first on the market with an FDA cleared assay for
anti-Cardiolipin (aCL), and is still the only manufacturer of an FDA cleared
anti-phosphatidylserine (aPS) and an anti-Prothrombin (aPT) test kit. The
company is based in metropolitan Denver and is focused on the development of
specialized diagnostic kits for immunology disorders, vascular diseases and bone
and joint diseases. Corgenix diagnostic products are commercialized for use in
clinical laboratories throughout the world.
About Medical & Biological Laboratories Co., Ltd.
Headquartered in Nagoya Japan, MBL was established in 1969 as the first
manufacturer of antibodies in Japan. MBL currently sells more than 1,000
different antibodies of apoptosis, intracellular signal transduction and cell
surface related proteins, and is the autoimmune diagnostics market leader in
Japan. MBL is a leader in the use of immunological methods utilizing such
technologies as recombinant DNA and cell-fusion for early discovery of disease
and determination of curing effects by utilizing these technologies. In
addition, MBL has been heavily involved with molecular and cell biology and has
developed a broad range of products which have been widely used in basic
research. MBL went public in Japan 1996.
Statements in this release that are not strictly historical are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and should be considered as subject to various
risks and uncertainties that could cause actual results to differ materially
from those anticipated. Further, risks are detailed in the Company's filings
with the Securities and Exchange Commission, including those set forth in the
Company's most recent Form 10-KSB and Quarterly Reports on Form 10-QSB available
at www.sec.gov.
For more information, contact:
Scott Liolios, President, The Liolios Group, (949) 574-3860;
scott@liolios.com
William Critchfield, CFO, Corgenix, (303) 453-4345; wcritchfield@corgenix.com