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: May 26, 2005
Corgenix Medical Corporation
(Exact Name of registrant as specified in its charter)
Nevada 000-24541 93-1223466
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification No.)
of incorporation) (
12061 Tejon Street
Westminster, Colorado 80234
(Address, including zip code, of principal executive offices)
(303) 457-4345 (Registrant's telephone number
including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
- - Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
- - Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
- - Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
- - Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01 Entry Into a Material Definitive Agreement
Corgenix Medical Corporation (the "Company") entered into agreements on May 19,
2005, for a private placement financing with certain institutional and other
accredited investors, including Truk International Fund, LP, Truk Opportunity
Fund, LLC and DCOFI Master LDC, representing potential gross proceeds to the
Company of up to $5,135,000.
The private placement includes $3,420,000 in aggregate principal amount of
Secured Convertible Term Notes due 2008, of which $2,420,000 was funded at
closing. The remaining $1,000,000 is issuable by the Company upon the
satisfaction of certain conditions contained in the transaction agreements. Of
the amount funded at closing, $250,000 is held in a restricted cash account.
However, that amount will be released if the Company's common stock trades a
minimum daily value of $25,000 at an average closing price per share of $0.40 or
greater for 22 consecutive trading days. The transaction also provides for up to
$1,500,000 in subsequent debt funding through an additional investment right
exercisable by the investors, in their sole discretion, for up to 270 days
following the closing. Warrants to acquire approximately 7,700,000 shares of the
Company's common stock and 860,000 shares of restricted common stock, at $0.25
per share, were also issued to the investors.
The interest rate on the Secured Convertible Term Notes is the greater of (i)
prime rate plus 3% or (ii) 12%, except for the portion of the note proceeds that
is held in the restricted cash account, which amount accrues interest at the
prime rate. However, (i) if the Company has registered the shares of common
stock underlying the term notes and the warrants, and that registration is
declared effective, and (ii) the market price of the common stock for the five
consecutive trading days preceding the last business day of each month exceeds
the conversion price (as adjusted) by 25%, then the interest rate for the next
calendar month is reduced by 25 basis points for each incremental 25% increase
in the market price above the fixed conversion price.
The principal amount of each Secured Convertible Term Note is divided into three
categories - Amortizing Principal Amount, Non-Restricted Non-Amortizing
Principal Amount, and Restricted Non-Amortizing Principal Amount. Amortizing
payments of the Amortizing Principal Amount begin on November 1, 2005 and such
payments are due on the first day of each month thereafter until the principal
amount is paid in full. The Non-Amortizing Principal Amount and the Restricted
Non-Amortizing Principal Amount, together with any unpaid Amortizing Principal
Amount and accrued but unpaid interest or fees, are due on the May 19, 2008 (the
maturity date), unless sooner paid. Interest payments on all three amounts begin
June 1, 2005, and such interest payments are due on the first day of each
subsequent month until the principal amount is paid in full.
The Secured Convertible Term Notes may be prepaid, but any prepayment must be
125% of the portion of the principal amount to be prepaid, together with accrued
but unpaid interest thereon and any other sums due. The holders of the Secured
Convertible Term Notes may accelerate all sums of principal, interest and other
fees then remaining unpaid upon the occurrence of an event of default (as
defined in the form of Secured Convertible Term Note attached as Exhibit 4.1)
beyond any applicable grace period. In the event of such acceleration, the
amount due and owing the holder shall be 125% of the outstanding principal
amount (plus accrued and unpaid interest and fees, if any). As part of the
financing terms, a blanket lien now covers all of the Company's assets.
The number of shares of common stock to be issued upon conversion of a Secured
Convertible Term Note is determined by dividing that portion of the principal
amount, interest and fees to be converted by the then applicable conversion
price, which is initially set at $0.30. The conversion price may be adjusted to
account for certain events, such as stock splits, combinations, dividends and
share issuances below the then current conversion price.
The conversion right as contained in the Secured Convertible Term Notes provide
that a holder will not convert an amount of a note that would be convertible
into shares of common stock to the extent that the number of shares held by the
holder, when added to the number of shares of common stock beneficially owned by
such holder or issuable if the holder exercised one or more of its warrants
immediately prior to conversion, would exceed 4.99% of the Company's issued and
outstanding common stock.
The Company also issued warrants to acquire approximately 7,700,000 shares of
the Company's common stock. The warrants are exercisable for seven years from
the date of issuance at an exercise price of $0.25 per share. The exercise price
is also subject to adjustment upon the occurrence of certain specified events,
including issuance of additional shares of common stock or subdivision or
combining of shares of common stock.
The transaction also included a Registration Rights Agreement in which the
Company has agreed to file a registration statement on Form SB-2 covering the
shares of common stock issuable upon the exercise of the warrants or the
conversion of the Secured Convertible Term Notes. If the registration statement
is declared effective or is otherwise ineffective or incomplete on the time
schedule cited in the Registration Rights Agreement, the Company shall pay the
holders of the Secured Convertible Term Notes or warrants liquidated damages in
the amount of 1.5% on the original principal amount of Secured Convertible Term
Notes for each 30-day period that elapses until the registration statement is
declared effective.
Certain officers, directors and significant shareholders entered into Lockup
Agreements whereby they agreed not to sell, offer, contract or grant any option
to sell, pledge, transfer, establish an open "put equivalent position" or
otherwise dispose of their shares of the Company's common stock, or any
securities exchangeable or convertible into common stock, for a period of six
months from the effective date of the initial registration statement covering
shares of Common Stock which may be acquired by the investors in connection with
the transaction.
With the funding described above, the Company has refinanced approximately
$970,000 of existing debt, including loans from Vectra Bank, and Genesis
Bioventures, Inc., and plans to use the balance of the net proceeds, after
transaction fees and expenses, for key strategic initiatives, working capital
and other general corporate purposes.
The foregoing is a summary of the terms of the Securities Purchase Agreement,
the Secured Convertible Term Note, the Common Stock Purchase Warrant, the
Registration Rights Agreement, the Restricted Account Agreement and the Lockup
Agreement. Such summary does not purport to be complete and is qualified in its
entirety by reference to the full text of each such agreement, copies of which
are attached hereto as Exhibits 4.1, 4.2 and 10.1 through 10.8 and incorporated
herein by reference. A press release announcing the transaction is attached as
Exhibit 99.1 and is incorporated herein by reference.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01 above, incorporated herein by reference.
ITEM 3.02 Unregistered Sales of Equity Securities
See Item 1.01 above, incorporated herein by reference.
ITEM 9.01 Financial Statements and Exhibits
a) Not applicable
b) Not applicable
c) Exhibits:
4.1 Form of Secured Convertible Term Note 4.2 Form of Common Stock
Purchase Warrant 10.1 Form of Securities Purchase Agreement 10.2 Form
of Term Note Security Agreement 10.3 Form of Registration Rights
Agreement 10.4 Form of Restricted Account Agreement 10.5 Form of
Restricted Account Side Letter 10.6 Form of Stock Pledge Agreement
10.7 Form of Lockup Letter 10.8 Form of Subsidiary Guaranty 99.1
Press Release
Safe Harbor Statement
Statements in this report that are not strictly historical facts are "forward
looking" statements (identified by the words "believe", "estimate", "project",
"expect" or similar expressions) within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements inherently involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Factors that would cause or contribute to such
differences include, bus are not limited to, continued acceptance of the
Company's products and services in the marketplace, competitive factors, changes
in the regulatory environment, and other risks detailed in the Company's
periodic report filings with the Securities and Exchange Commission. The
statements in this report are made as of today, based upon information currently
known to management, and the Company does not undertake any obligation to
publicly update or revise any forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORGENIX MEDICAL CORPORATION
Date: May 26, 2005 By: /s/ Douglass T. Simpson
---------------------------
Douglass T. Simpson
President and Chief Executive
Officer
EXHIBIT INDEX
Exhibit No. Description
4.1 Form of Secured Convertible Term Note 4.2 Form of Common Stock
Purchase Warrant 10.1 Form of Securities Purchase Agreement 10.2 Form
of Term Note Security Agreement 10.3 Form of Registration Rights
Agreement 10.4 Form of Restricted Account Agreement 10.5 Form of
Restricted Account Side Letter 10.6 Form of Stock Pledge Agreement
10.7 Form of Lockup Letter 10.8 Form of Subsidiary Guaranty 99.1
Press Release
Exhibit No. 4.1
THIS TERM NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS TERM NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THIS TERM NOTE AND THE COMMON SHARES ISSUABLE UPON
CONVERSION OF THIS TERM NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
TERM NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO CORGENIX MEDICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.
FORM OF SECURED CONVERTIBLE TERM NOTE
FOR VALUE RECEIVED, CORGENIX MEDICAL CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to [HOLDERS] (the "Holders") or their
registered assigns or successors in interest, or order, the sum of [NUMBER],
together with any accrued and unpaid interest thereon, on May 19, 2008 (the
"Maturity Date") if not sooner paid. [NUMBER] of the original principal amount
of this Secured Convertible Term Note (this "Term Note") is subject to
amortizing payments pursuant to Section 1.2 hereof and is hereinafter referred
to as the "Amortizing Principal Amount." [NUMBER] of the remaining original
principal amount of this Term Note is non-amortizing and is hereinafter referred
to as the "Non-Restricted Non-Amortizing Principal Amount" and the remaining
[NUMBER] of the original principal amount of this Term Note that is contained in
the Restricted Account (as defined in the Restricted Account Agreement referred
to in the Purchase Agreement (as hereinafter defined)) is non amortizing and is
hereinafter referred to as the "Restricted Non-Amortizing Principal Amount."
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower, the Holders, and [OTHER PURCHASER] (the
"Purchase Agreement").
On the date hereof, the Borrower is issuing to DC pursuant to the Purchase
Agreement an identical secured convertible term note in the original principal
amount of [NUMBER] of which will also be placed in the Restricted Account.
The following terms shall apply to this Term Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1 (a) Interest Rate. Subject to Sections 1.1(b), 4.12 and 5.6 hereof, interest
payable on this Term Note shall accrue (i) for the Amortizing Principal Amount
and Non-Restricted Non-Amortizing Principal Amount at a rate per annum (the
"Interest Rate") equal to the greater of (x) the "prime rate" published in The
Wall Street Journal from time to time (the "Prime Rate"), plus three percent
(3%), or (y) twelve percent (12%) and (ii) for the Restricted Non-Amortizing
Principal Amount, the Prime Rate. The Prime Rate shall be increased or decreased
as the case may be for each increase or decrease in the prime rate in an amount
equal to such increase or decrease in the prime rate; each change to be
effective as of the day of the change in such rate. Interest shall accrue from
the date hereof and shall be calculated on the basis of a 360 day year. Interest
on the Amortizing Principal Amount, the Non-Restricted Non-Amortizing Principal
Amount and the Restricted Non-Amortizing Principal Amount shall be payable
monthly, in arrears, commencing on June 1, 2005 and on the first day of each
consecutive calendar month thereafter (each, a "Repayment Date") and on the
Maturity Date, whether by acceleration or otherwise.
(b) Interest Rate Adjustment. The Interest Rate shall be subject to adjustment
on the last business day of each month hereafter until the Maturity Date (each a
"Determination Date"). If on any Determination Date (i) the Borrower shall have
registered under the Securities Act of 1933, as amended (the "Securities Act"),
the shares of Common Stock underlying each of the conversion of this Term Note
and the exercise of the Warrant on a registration statement declared effective
by the Securities and Exchange Commission (the "SEC"), and (ii) the market price
(the "Market Price") of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market (as defined below) for the five (5) consecutive trading days
immediately preceding such Determination Date exceeds the then applicable Fixed
Conversion Price by at least twenty five percent (25%), the Interest Rate for
the succeeding calendar month shall automatically be reduced by 25 basis points
(25 b.p.) (0.25%) for each incremental twenty five percent (25%) increase in the
Market Price of the Common Stock above the then applicable Fixed Conversion
Price. Notwithstanding the foregoing (and anything to the contrary contained
herein), in no event shall the Interest Rate be less than zero percent (0%).
1.2 Minimum Monthly Principal Payments. Amortizing payments of the Amortizing
Principal Amount shall begin on November 1, 2005 and shall recur on each
succeeding Repayment Date thereafter until the Amortizing Principal Amount has
been repaid in full, whether by the payment of cash or by the conversion of such
principal into Common Stock pursuant to the terms hereof. Subject to Section 2.1
and Article III below, on each Repayment Date, the Borrower shall make payments
to the Holders in the amount of $________ (the "Monthly Principal Amount"),
together with any accrued and unpaid interest then due on the Amortizing
Principal Amount, the Non-Restricted Non-Amortizing Principal Amount and the
Restricted Non-Amortizing Principal Amount plus any and all other amounts which
are then owing under this Term Note that have not been paid (the Monthly
Principal Amount, together with such accrued and unpaid interest and such other
amounts, collectively, the "Monthly Amount"); provided that, following a release
of an amount of funds from the Restricted Account (as defined in the Restricted
Account Agreement) pursuant to the Release as defined in the Restricted Account
Side Letter (the "Release Amount") each Monthly Principal Amount due on any
Repayment Date following any such release shall be increased by an amount equal
to (x) the Release Amount divided by (y) the sum of (I) the number of Repayment
Dates remaining until the Maturity Date plus (II) one (1). Any Principal Amount
that remains outstanding on the Maturity Date shall be due and payable on the
Maturity Date.
ARTICLE II
CONVERSION REPAYMENT
2.1 Payment of Monthly Amount in Cash or Common Stock. If the Monthly Amount (or
a portion of such Monthly Amount if such portion of the Monthly Amount would
have been converted into shares of Common Stock but for Section 3.2) is required
to be paid in cash pursuant to Section 2.1(b), then the Borrower shall pay the
Holders an amount equal to 110% of the Monthly Amount due and owing to the
Holders on the Repayment Date in cash. If the Monthly Amount (or a portion of
such Monthly Amount if not all of the Monthly Amount may be converted into
shares of Common Stock pursuant to Section 3.2) is required to be paid in shares
of Common Stock pursuant to Section 2.1(b), the number of such shares to be
issued by the Borrower to the Holders on such Repayment Date (in respect of such
portion of the Monthly Amount converted into shares of Common Stock pursuant to
Section 2.1(b)), shall be the number determined by dividing (x) the portion of
the Monthly Amount converted into shares of Common Stock, by (y) the then
applicable Fixed Conversion Price. For purposes hereof, the initial "Fixed
Conversion Price" means $0.30.
(b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2 and
3.2 hereof, the Holders shall convert into shares of Common Stock all or a
portion of the Monthly Amount due on each Repayment Date according to the
following guidelines (collectively, the "Conversion Criteria"): (i) the average
closing price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market for the five (5) consecutive trading days immediately preceding
such Repayment Date shall be greater than or equal to 115% of the Fixed
Conversion Price and (ii) the amount of such conversion does not exceed twenty
five percent (25%) of the aggregate dollar trading volume of the Common Stock
for the twenty two (22) trading day period immediately preceding the applicable
Repayment Date. If the Conversion Criteria are not met, the Holder shall convert
only such part of the Monthly Amount that meets the Conversion Criteria. Any
part of the Monthly Amount due on a Repayment Date that the Holders have not
been able to convert into shares of Common Stock due to failure to meet the
Conversion Criteria, shall be paid by the Borrower in cash at the rate of 110%
of the Monthly Amount otherwise due on such Repayment Date, within three (3)
business days of the applicable Repayment Date.
(c) Application of Conversion Amounts. Any amounts converted by the Holders
pursuant to Section 2.1(b) shall be deemed to constitute payments of, or applied
against, (i) first, outstanding fees, (ii) second, accrued interest on the
Amortizing Principal Amount, (iii) third, accrued interest on the Non-Restricted
and Restricted Non-Amortizing Principal Amount and (iv) fourth, the Amortizing
Principal Amount.
2.2 No Effective Registration. Notwithstanding anything to the contrary herein,
no amount payable hereunder may be converted into Common Stock unless (a) either
(i) an effective current Registration Statement (as defined in the Registration
Rights Agreement) covering the shares of Common Stock to be issued in
satisfaction of such obligations exists, or (ii) an exemption from registration
of the Common Stock is available pursuant to Rule 144(k) of the Securities Act,
and (b) no Event of Default hereunder exists and is continuing, unless such
Event of Default is cured within any applicable cure period or is otherwise
waived in writing by the Holders in whole or in part at the Holders' option.
2.3 Optional Redemption of Amortizing Principal Amount. The Borrower will have
the option of prepaying the outstanding Amortizing Principal Amount ("Optional
Amortizing Redemption"), in whole or in part, by paying to the Holders a sum of
money equal to one hundred twenty five percent (125%) of the portion of the
Amortizing Principal Amount to be redeemed, together with accrued but unpaid
interest thereon and any and all other sums due, accrued or payable to the
Holders arising under this Term Note, the Purchase Agreement or any Related
Agreement (the "Amortizing Redemption Amount") on the Amortizing Redemption
Payment Date (as defined below). The Borrower shall deliver to the Holders a
notice of redemption (the "Notice of Amortizing Redemption") specifying the date
for such Optional Amortizing Redemption (the "Amortizing Redemption Payment
Date"), which date shall be not less than ten (10) business days after the date
of the Notice of Amortizing Redemption (the "Redemption Period"). A Notice of
Amortizing Redemption shall not be effective with respect to any portion of the
Amortizing Principal Amount for which the Holders have a pending election to
convert pursuant to Section 3.1, or for conversions initiated or made by the
Holders pursuant to Section 3.1 during the Redemption Period. The Amortizing
Redemption Amount shall be determined as if such Holders' conversion elections
had been completed immediately prior to the date of the Notice of Amortizing
Redemption. On the Amortizing Redemption Payment Date, the Amortizing Redemption
Amount shall be paid in good funds to the Holders. In the event the Borrower
fails to pay the Amortizing Redemption Amount on the Amortizing Redemption
Payment Date as set forth herein, then such Notice of Amortizing Redemption will
be null and void.
2.4 Optional Redemption of Non-Restricted or Restricted Non-Amortizing Principal
Amount. The Borrower will have the option of repaying the outstanding
Non-Restricted or Restricted Non-Amortizing Principal Amount ("Optional
Non-Amortizing Redemption"), in whole or in part, by paying the Holders a sum of
money equal to one hundred twenty percent (125%) of the portion of the
Non-Restricted or Restricted Non-Amortizing Principal Amount to be redeemed,
together with accrued but unpaid interest thereon (the "Non-Amortizing
Redemption Amount") on the Non-Amortizing Redemption Date (as defined below).
The Borrower shall deliver to the Holders a written notice of redemption (the
"Notice of Non-Amortizing Redemption") specifying the date for such Optional
Non-Amortizing Redemption (the "Non-Amortizing Redemption Date"), which date
shall be not less than ten (10) business days after the date of the Notice of
Non-Amortizing Redemption (the "Non-Amortizing Redemption Period"). A Notice of
Non-Amortizing Redemption shall not be effective with respect to any portion of
the Non-Restricted or Restricted Non-Amortizing Principal Amount for which the
Holders have a pending election to convert pursuant to Section 3.1, or for
conversions initiated or made by the Holders pursuant to Section 3.1 during the
Non-Amortizing Redemption Period. The Non-Amortizing Redemption Amount shall be
determined as if the Holders' conversion elections had been completed
immediately prior to the date of the Notice of Non-Amortizing Redemption. On the
Non-Amortizing Redemption Date, the Non-Amortizing Redemption Amount shall (i)
in the case of a redemption of the Non-Restricted Non-Amortizing Principal
Amount, be paid in good funds to the Holders and, (ii) in the case of a
redemption of the Restricted Non-Amortizing Principal Amount, by (x) furnishing
the Holders written direction to notify the bank holding the Restricted Account
to release from the Restricted Account and deliver to the Holders a sum of money
equal to the Non-Amortizing Redemption Amount and (y) if the amount on deposit
in the Restricted Account is less than the Non-Amortizing Redemption Amount, by
furnishing the Holders written direction to notify the bank holding the
Restricted Account to release all amounts on deposit in the Restricted Account
to the Holders and delivering to the Holders good funds in an amount equal to
the balance of the Non-Amortizing Redemption Amount.
ARTICLE III
CONVERSION RIGHTS
3.1 Holders' Conversion Rights. Subject to Section 2.2, the Holders shall have
the right, but not the obligation, to convert all or any portion of the then
aggregate outstanding Principal Amount of this Term Note, together with interest
and fees due hereon, into shares of Common Stock, subject to the terms and
conditions set forth in this Article III. The Holders may exercise such right by
delivery to the Borrower of a written Notice of Conversion pursuant to Section
3.3. The shares of Common Stock to be issued upon such conversion are herein
referred to as the "Conversion Shares."
3.2 Conversion Limitation. Notwithstanding anything contained herein to the
contrary, the Holders shall not be entitled to convert pursuant to the terms of
this Term Note an amount that would be convertible into that number of
Conversion Shares which would exceed the difference between 4.99% of the issued
and outstanding shares of Common Stock and the number of shares of Common Stock
beneficially owned by such Holders or issuable upon exercise of Warrants held by
such Holders. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13d-3 thereunder. The Holders may void the Conversion Share
limitation described in this Section 3.2 upon 75 days prior notice to the
Borrower or without any notice requirement upon an Event of Default.
3.3 Mechanics of Holders' Conversion. (a) In the event that the Holders elects
to convert any amounts outstanding under this Term Note into Common Stock, the
Holders shall give notice of such election by delivering an executed and
completed notice of conversion (a "Notice of Conversion") to the Borrower, which
Notice of Conversion shall provide a breakdown in reasonable detail of the
Principal Amount, accrued interest and fees being converted. On each Conversion
Date (as hereinafter defined) and in accordance with its Notice of Conversion,
the Holders shall make the appropriate reduction to the Principal Amount,
accrued interest and fees as entered in its records and shall provide written
notice thereof to the Borrower within two (2) business days after the Conversion
Date. Each date on which a Notice of Conversion is delivered or telecopied to
the Borrower in accordance with the provisions hereof shall be deemed a
"Conversion Date". A form of Notice of Conversion to be employed by the Holders
is annexed hereto as Exhibit A.
(b) Pursuant to the terms of a Notice of Conversion, the Borrower will issue
instructions to the transfer agent accompanied by an opinion of counsel, if so
required by the Borrower's transfer agent, within one (1) business day of the
date of the delivery to the Borrower of the Notice of Conversion and shall cause
the transfer agent to transmit the certificates representing the Conversion
Shares to the Holders by crediting the account of the Holders' designated broker
with The Depository Trust Company ("DTC") through its Deposit Withdrawal Agent
Commission ("DWAC") system within three (3) business days after receipt by the
Borrower of the Notice of Conversion (the "Delivery Date"). In the case of the
exercise of the conversion rights set forth herein the conversion privilege
shall be deemed to have been exercised and the Conversion Shares issuable upon
such conversion shall be deemed to have been issued upon the date of receipt by
the Borrower of the Notice of Conversion. The Holders shall be treated for all
purposes as the record holders of such shares of Common Stock, unless the
Holders provides the Borrower written instructions to the contrary.
3.4 Late Payments. The Borrower understands that a delay in the delivery of the
shares of Common Stock in the form required pursuant to this Article beyond the
Delivery Date could result in economic loss to the Holders. As compensation to
the Holders for such loss, the Borrower agrees to pay late payments to the
Holders for late issuance of such shares in the form required pursuant to this
Article III upon conversion of the Note, in the amount equal to $250 per
business day after the Delivery Date. The Borrower shall pay any payments
incurred under this Section in immediately available funds upon demand.
3.5 Conversion Mechanics.
(a) The number of shares of Common Stock to be issued upon each
conversion of this Term Note pursuant to this Article III shall be
determined by dividing that portion of the Principal Amount and
interest and fees to be converted, if any, by the then applicable
Fixed Conversion Price. In the event of any conversions of
outstanding obligations under this Term Note in part pursuant to this
Article III, such conversions shall be deemed to constitute
conversions (i) first, of the Monthly Amount for the current calendar
month, (ii) then of the accrued interest on the Non-Restricted and
Restricted Non-Amortizing Principal Amount, (iii) then of outstanding
Amortizing Principal Amount, by applying the conversion amount to
Monthly Principal Amounts for the remaining Repayment Dates in
chronological order and (iv) then, of outstanding Non-Restricted and
Restricted Non-Amortizing Principal Amount.
(b) The Fixed Conversion Price and number and kind of shares or other
securities to be issued upon conversion are subject to adjustment
from time to time upon the occurrence of certain events, as follows:
A. Stock Splits, Combinations and Dividends. If the shares of
------------------------------------------
Common Stock are subdivided or combined into a greater or smaller
number of shares of Common Stock, or if a dividend is paid on the
Common Stock in shares of Common Stock, the Fixed Conversion Price or
the Conversion Price, as the case may be, shall be proportionately
reduced in case of subdivision of shares or stock dividend or
proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior
to such event.
B. During the period the conversion right exists, the Borrower
will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the full conversion of
this Term Note. The Borrower represents that upon
issuance and receipt of adequate consideration, such
shares will be duly authorized and validly issued,
fully paid and non-assessable. The Borrower agrees
that its issuance of this Term Note shall constitute
full authority to its officers, agents, and transfer
agents who are charged with the duty of executing and
issuing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon
the conversion of this Term Note.
C. Share Issuances. Subject to the provisions of this Section
----------------
3.5, if the Borrower shall at any time prior to the conversion or
repayment in full of the Principal Amount issue any shares of Common
Stock or securities convertible into Common Stock to a person other
than the Holders (except (i) pursuant to Subsections A or B above;
(ii) pursuant to options, warrants or other obligations to issue
shares outstanding on the date hereof as disclosed to the Holders in
writing or in the Borrower's Exchange Act filings (iii) for the sale
of the shares of Common Stock listed on Schedule A hereto; and (iv)
pursuant to options that are issuable as of the date hereof under any
employee incentive stock option plan adopted by the Borrower) for a
consideration per share (the "Offer Price") less than the Fixed
Conversion Price in effect at the time of such issuance, then the
Fixed Conversion Price shall be immediately reset to such lower Offer
Price at the time of issuance of such securities. For purposes
hereof, the issuance of any security of the Borrower convertible into
or exercisable or exchangeable for Common Stock shall result in an
adjustment to the Fixed Conversion Price at the time of issuance of
such securities.
D. Reclassification, etc. If the Borrower at any time shall,
----------------------
by reclassification or otherwise, change the Common Stock into the
same or a different number of securities of any class or classes,
this Term Note, as to the unpaid Principal Amount and accrued
interest thereon, shall thereafter be deemed to evidence the right to
purchase an adjusted number of such securities and kind of securities
as would have been issuable as the result of such change with respect
to the Common Stock immediately prior to such reclassification or
other change.
3.6 Issuance of Replacement Note. Upon any partial conversion of this Term Note,
a replacement Note containing the same date and provisions of this Term Note
shall, at the written request of the Holders, be issued by the Borrower to the
Holders for the outstanding Principal Amount of this Term Note and accrued
interest which shall not have been converted or paid. Subject to the provisions
of Article IV, the Borrower will pay no costs, fees or any other consideration
to the Holders for the production and issuance of a replacement Note.
ARTICLE IV
EVENTS OF DEFAULT
Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holders may make all sums of principal, interest
and other fees then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable. In the event of such an acceleration, the
amount due and owing to the Holders shall be 125% of the outstanding principal
amount of the Note (plus accrued and unpaid interest and fees, if any) (the
"Default Payment"). The Default Payment shall be applied first to any fees due
and payable to the Holders pursuant to this Term Note, the Purchase Agreement or
the Related Agreements, then to accrued and unpaid interest due on the Note and
then to the outstanding principal balance of the Note.
The occurrence of any of the following events set forth in Sections 4.1
through 4.10, inclusive, is an "Event of Default":
4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay
when due any installment of principal, interest or other fees hereon in
accordance herewith, or the Borrower fails to pay when due any amount due under
any other promissory note issued by the Borrower, and in any such case, such
failure shall continue for a period of three (3) days following the date upon
which any such payment was due.
4.2 Breach of Covenant. The Borrower breaches any covenant or any other term or
condition of this Term Note or the Purchase Agreement in any material respect,
or the Borrower or any of its Subsidiaries breaches any covenant or any other
term or condition of any Related Agreement in any material respect and, in any
such case, such breach, if subject to cure, continues for a period of fifteen
(15) days after the occurrence thereof.
4.3 Breach of Representations and Warranties. Any representation or warranty
made by the Borrower in this Term Note or the Purchase Agreement, or by the
Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such
case, be false or misleading in any material respect on the date that such
representation or warranty was made or deemed made.
4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.
4.5 Judgments. Any money judgment, writ or similar final process shall be
entered or filed against the Borrower or any of its Subsidiaries or any of their
respective property or other assets for more than $50,000, and shall remain
unvacated, unbonded or unstayed for a period of thirty (30) days.
4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
of its Subsidiaries and not stayed within 30 days.
4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension
of the Common Stock shall be in effect for five (5) consecutive days or five (5)
days during a period of ten (10) consecutive days, excluding in all cases a
suspension of all trading on a Principal Market, provided that the Borrower
shall not have been able to cure such trading suspension within thirty (30) days
of the notice thereof or list the Common Stock on another Principal Market
within sixty (60) days of such notice. The "Principal Market" for the Common
Stock shall include the OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ
National Market System, American Stock Exchange, or New York Stock Exchange
(whichever of the foregoing is at the time the principal trading exchange or
market for the Common Stock).
4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower shall fail
(i) to timely deliver Common Stock to the Holders pursuant to and in the form
required by this Term Note, and Section 9 of the Purchase Agreement, if such
failure to timely deliver Common Stock shall not be cured within two (2)
business days or (ii) to deliver a replacement Note to the Holders within seven
(7) business days following the required date of such issuance pursuant to this
Term Note, the Purchase Agreement or any Related Agreement (to the extent
required under such agreements).
4.9 Default Under Related Agreements or Other Agreements. The occurrence and
continuance of any Event of Default (as defined in the Purchase Agreement or any
Related Agreement) or any event of default (or similar term) under any other
indebtedness.
4.10 Change in Control. Any "Person" (as defined in Section 13(d)(3) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), not including
Dr. Luis R. Lopez or the Purchasers shall become the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of more than 25% of the total
voting power attached to all outstanding equity securities of the Borrower.
DEFAULT RELATED PROVISIONS
4.11 Default Interest Rate. Following the occurrence and during the continuance
of an Event of Default, the Borrower shall pay additional interest on this Term
Note in an amount equal to two percent (2%) per month (twenty-four percent (24%)
per annum), and all outstanding obligations under this Term Note, including
unpaid interest, shall continue to accrue such additional interest from the date
of such Event of Default until the date such Event of Default is cured or
waived.
4.12 Conversion Privileges. The conversion privileges set forth in Article III
shall remain in full force and effect immediately from the date hereof and until
this Term Note is paid in full.
4.13 Cumulative Remedies. The remedies under this Term Note
--------------------
shall be cumulative.
ARTICLE V
MISCELLANEOUS
5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holders hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
5.2 Notices. Any notice herein required or permitted to be given shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
Borrower at the address provided in the Purchase Agreement executed in
connection herewith, and to the Holders at the address provided in the Purchase
Agreement for such Holders, or at such other address as the Borrower or the
Holders may designate by ten days advance written notice to the other parties
hereto. A Notice of Conversion shall be deemed given when made to the Borrower
pursuant to the Purchase Agreement.
5.3 Amendment Provision. The term "Term Note" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented, and any
successor instrument issued pursuant to Section 3.6 hereof, as it may be amended
or supplemented.
5.4 Assignability. This Term Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holders and their
successors and assigns, and may be assigned by the Holders in accordance with
the requirements of the Purchase Agreement. This Term Note shall not be assigned
by the Borrower without the consent of the Holders.
5.5 Governing Law. This Term Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both the Borrower and the Holders agree to submit to the jurisdiction
of such courts. The prevailing party shall be entitled to recover from the other
party its reasonable attorney's fees and costs. In the event that any provision
of this Term Note is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Term Note. Nothing contained herein shall be deemed
or operate to preclude the Holders from bringing suit or taking other legal
action against the Borrower in any other jurisdiction to collect on the
Borrower's obligations to the Holders, to realize on any collateral or any other
security for such obligations, or to enforce a judgment or other court order in
favor of the Holders.
5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holders and thus refunded to the Borrower.
5.7 Security Interest and Guarantee. The Holders have been granted a security
interest (i) in certain assets of the Borrower and its Subsidiaries as more
fully described in the Term Note Security Agreement dated as of the date hereof
and (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof. The
obligations of the Borrower under this Term Note are guaranteed by certain
Subsidiaries and a shareholder of the Borrower pursuant to the Subsidiary
Guaranty and Guaranty dated as of the date hereof, respectively.
5.8 Construction. Each party acknowledges that its legal counsel participated in
the preparation of this Term Note and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Term Note to favor any party
against the other.
5.9 Cost of Collection. If default is made in the payment of this Term Note, the
Borrower shall pay to the Holders reasonable costs of collection, including
reasonable attorney's fees.
IN WITNESS WHEREOF, the Borrower has caused this Term Note to be signed in
its name effective as of this 19th day of May, 2005.
CORGENIX MEDICAL CORPORATION
--------------------------------
Name:
Title:
WITNESS:
- -------------------------------
EXHIBIT A
NOTICE OF CONVERSION
(To be executed by the Holders in order to convert all or part of
the Note into Common Stock
[Name and Address of Holders]
The Undersigned hereby converts $_________ of the principal and $_____________
of the interest due on [specify applicable Repayment Date] under the Convertible
Term Note issued by CORGENIX MEDICAL CORPORATION dated May __, 2005 by delivery
of Shares of Common Stock of CORGENIX MEDICAL CORPORATION on and subject to the
conditions set forth in Article III of such Note.
1. Date of Conversion _______________________
2. Shares To Be Delivered: _______________________
By:
-------------------------
Name:
By:
-------------------------
Title
SCHEDULE A
[List of shares of common stock to be purchased by Ascendiant, Burnham and
[Heidke Funds] on the Closing Date.]
Exhibit 4.2
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO CORGENIX MEDICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.
Right to Purchase [NUMBER] of the Common Stock of CORGENIX MEDICAL
CORPORATION
(subject to adjustment as provided herein)
FORM OF COMMON STOCK PURCHASE WARRANT
No. _________________ Issue Date: May 19, 2005
CORGENIX MEDICAL CORPORATION a corporation organized under the laws of the
State of Nevada (Corgenix), hereby certifies that, for value received, [HOLDER],
or assigns (the Holder), is entitled, subject to the terms set forth below, to
purchase from the Company (as defined herein) from and after the Issue Date of
this Warrant and at any time or from time to time before 5:00 p.m., New York
time, through the close of business on May 19, 2012 (the Expiration Date), up to
[NUMBER] fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $0.001 par value per share, at the applicable Exercise Price per share
(as defined below). The number and character of such shares of Common Stock and
the applicable Exercise Price per share are subject to adjustment as provided
herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term Company shall include Corgenix and any corporation
which shall succeed, or assume the obligations of, Corgenix hereunder.
(b) The term Common Stock includes (i) the Companys Common
Stock, par value $0.001 per share; and (ii) any other securities into
which or for which any of the securities described in (i) may be converted
or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
(c) The term Other Securities refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any time shall
be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section4 or
otherwise.
(d) The Exercise Price applicable under this Warrant shall be a price
per share of Common Stock of the lower of (i) $0.23 or (ii) the closing
bid price on the last trading day prior to the Closing.
1. Exercise of Warrant.
1.1 Number of Shares Issuable upon Exercise. From and after the date hereof
through and including the Expiration Date, the Holder shall be entitled to
receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as
Exhibit A (the Exercise Notice), shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.
1.2 Fair Market Value. For purposes hereof, the Fair Market Value of a share of
Common Stock as of a particular date (the Determination Date) shall mean:
(a) If the Company's Common Stock is traded on the American Stock Exchange or
another national exchange or is quoted on the National or SmallCap Market
of The Nasdaq Stock Market, Inc. (Nasdaq), then the closing or last sale
price, respectively, reported for the last business day immediately
preceding the Determination Date.
(b) If the Company's Common Stock is not traded on the American Stock Exchange
or another national exchange or on the Nasdaq but is traded on the OTC
Bulletin Board or is listed on the pink sheets, then the mean of the
average of the closing bid and asked prices reported for the last business
day immediately preceding the Determination Date.
(c) Except as provided in clause (d) below, if the Company's
Common Stock is not publicly traded, then as the Holder and
the Company agree or in the absence of agreement by
arbitration in accordance with the rules then in effect of
the American Arbitration Association, before a single
arbitrator to be chosen by the Holder and the Company from a
panel of persons qualified by education and training to pass
on the matter to be decided.
(d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the
Company's charter, then all amounts to be payable per share
to holders of the Common Stock pursuant to the charter in
the event of such liquidation, dissolution or winding up,
plus all other amounts to be payable per share in respect of
the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (d) that all of the shares
of Common Stock then issuable upon exercise of the Warrant
are outstanding at the Determination Date.
1.3 Company Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.
1.4 Trustee for Warrant Holders. In the event that a bank or trust company shall
have been appointed as trustee for the holders of the Warrant pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and duties
of a warrant agent (as hereinafter described) and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this Section1.
2. Procedure for Exercise.
2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that
the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares in accordance herewith. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share, together with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such exercise
pursuant to Section1 or otherwise.
2.2 Exercise. (a) Payment may be made either (i) in cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price, (ii) by delivery of the Warrant, or shares of Common
Stock and/or Common Stock receivable upon exercise of the Warrant in accordance
with Section(b) below, or (iii) by a combination of any of the foregoing
methods, for the number of Common Shares specified in such Exercise Notice (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the Holder per the terms of this
Warrant) and the Holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein. (b) Notwithstanding
any provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Exercise Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the Holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being exercised) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Exercise
Notice in which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X=Y (A-B)
A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised,
the portion of the Warrant being exercised (at the date of such
calculation)
A = the Fair Market Value of one share of the Company's Common
Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.
3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or from time
to time, the Company shall (a) effect a reorganization, (b) consolidate with or
merge into any other person, or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate
provision shall be made by the Company whereby the Holder of this Warrant, on
the exercise hereof as provided in Section1 at any time after the consummation
of such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.
3.2 Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company,
concurrently with any distributions made to holders of its Common Stock, shall
at its expense deliver or cause to be delivered to the Holder the stock and
other securities and property (including cash, where applicable) receivable by
the Holder of the Warrant pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder of the
Warrant.
3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holders of the Warrant will be delivered to the Holder or the Trustee as
contemplated by Section 3.2.
4. Extraordinary Events Regarding Common Stock. In the event that the Company
shall (a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock into
a smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of shares of Common Stock that the holder of this Warrant shall thereafter, on
the exercise hereof as provided in Section 1, be entitled to receive shall be
increased to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Exercise Price that would otherwise (but for the provisions of this Section 4)
be in effect, and (b) the denominator is the Exercise Price in effect on the
date of such exercise.
(b) Share Issuances. Subject to the provisions of this Section 3.3, if the
Company shall at any time prior to the exercise in full of this Warrant issue
any shares of Common Stock or securities convertible into Common Stock to a
person other than the Holder (except (i) pursuant to subsection 4(a) above; (ii)
pursuant to options, warrants, or other obligations to issue shares outstanding
on the date hereof as disclosed to Holder in writing or in the Company's
Exchange Act Filings; (iii) for the sale of the shares of Common Stock listed on
Schedule A to the Secured Convertible Term Notes; or (iv) pursuant to options
that may be issued as of the date hereof under any employee incentive stock
option adopted by the Company) for a consideration per share (the Offer Price)
less than any Exercise Price in effect at the time of such issuance, then such
Exercise Price shall be immediately reset to such lower Exercise Price pursuant
to the formula below. For purposes hereof, the issuance of any security of the
Borrower convertible into or exercisable or exchangeable for Common Stock shall
result in an adjustment to the applicable Exercise Price at the time of issuance
of such securities.
If the Company issues any additional shares in the manner referred to
above in this subsection 4(b) then, and thereafter successively upon each such
issue, each Exercise Price shall be adjusted by multiplying the each then
applicable Exercise Price by the following fraction:
_____(A x C) + (B x D)_____
(A + B) x C
A = Total number of shares outstanding or deemed to be outstanding
immediately prior to such issuance.
B = Number of shares issued (or deemed to have been issued).
C = Exercise Price in effect immediately prior to such issuance.
D = Consideration received by the Company upon such issuance.
5. Certificate as to Adjustments. In each case of any adjustment or readjustment
in the shares of Common Stock (or Other Securities) issuable on the exercise of
the Warrant, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Exercise Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the holder of the Warrant and any Warrant agent
of the Company (appointed pursuant to Section 11 hereof).
6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will
at all times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrant, shares of Common Stock (or Other Securities) from time
to time issuable on the exercise of the Warrant.
7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a Transferor) in whole or in part.
On the surrender for exchange of this Warrant, with the Transferor's endorsement
in the form of Exhibit B attached hereto (the Transferor Endorsement Form) and
together with evidence reasonably satisfactory to the Company demonstrating
compliance with applicable securities laws, which shall include, without
limitation, a legal opinion from the Transferor's counsel that such transfer is
exempt from the registration requirements of applicable securities laws, the
Company at its expense but with payment by the Transferor of any applicable
transfer taxes) will issue and deliver to or on the order of the Transferor
thereof a new Warrant of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a Transferee),
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant so surrendered by
the Transferor.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration Rights. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in a
Registration Rights Agreement entered into by the Company and Holder dated as of
even date of this Warrant.
10. Maximum Exercise. Notwithstanding anything contained herein to the contrary,
the Holder shall not be entitled to exercise this Warrant for, or be required to
receive pursuant to the terms of this Warrant, that number of shares of Common
Stock which, when added to the number of shares of Common Stock otherwise
beneficially owned by such Holder including those issuable upon conversion of
notes held by such Holder would exceed 4.99% of the outstanding shares of Common
Stock of the Company at the time of exercise. For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and Regulation 13d-3
thereunder. The conversion limitation described in this Section 3.2 shall
automatically become null and void without any notice to the Company upon the
occurrence and during the continuance beyond any applicable grace period of an
Event of Default, or upon 75 days prior notice to the Company.
11. Warrant Agent. The Company may, by written notice to the each Holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
12. Transfer on the Company's Books. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
13. Notices, Etc. All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
in writing by such Holder or, until any such Holder furnishes to the Company an
address, then to, and at the address of, the last Holder of this Warrant who has
so furnished an address to the Company.
14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of State of New York without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York; provided, however, that the Holder may choose to waive
this provision and bring an action outside the state of New York. The Company
agrees to submit to the jurisdiction of such courts and waive trial by jury. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Warrant is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of this Warrant. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision. The Company acknowledges
that legal counsel participated in the preparation of this Warrant and,
therefore, stipulates that the rule of construction that ambiguities are to be
resolved against the drafting party shall not be applied in the interpretation
of this Warrant to favor any party against the other party.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
CORGENIX MEDICAL CORPORATION
WITNESS: By:
Name:
Title:
- --------------------------------
A-1
EXHIBIT A
FORM OF SUBSCRIPTION
(To Be Signed Only On Exercise Of Warrant)
TO: Corgenix Medical Corporation
Attention: Chief Financial Officer
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):
________ ________ shares of the Common Stock covered by such
Warrant; or
________ the maximum number of shares of Common Stock covered by such
Warrant pursuant to the cashless exercise procedure set forth in
Section 2.
The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
________ $__________ in lawful money of the United States;
and/or
________ the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock (using a
Fair Market Value of $_______ per share for purposes of this
calculation); and/or
________ the cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section
2.2, to exercise this Warrant with respect to the maximum number
of shares of Common Stock purchasable pursuant to the cashless
exercise procedure set forth in Section2.
The undersigned requests that the certificates for such
shares be issued in the name of, and delivered to
______________________________________________ whose address is
- ---------------------------------------------------------------------------.
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the Securities Act) or pursuant to an exemption from
registration under the Securities Act.
----------------------------------
Dated: (Signature must conform to name
of holder as specified on the
face of the Warrant)
Address:
B-1
B-1
EXHIBIT B
FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading Transferees the right
represented by the within Warrant to purchase the number of shares of Common
Stock of Corgenix Medical Corporation into which the within Warrant relates
specified under the heading Number Transferred opposite the name(s) of such
person(s) and appoints each such person Attorney to transfer its respective
right on the books of Corgenix Medical Corporation with full power of
substitution in the premises.
Number
Transferees Address Transferred
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Dated:
(Signature must conform to name
of holder as specified on the
face of the Warrant)
Address:
SIGNED IN THE PRESENCE OF:
----------------------------------
----------------------------------
(Name)
ACCEPTED AND AGREED:
[TRANSFEREE]
- ------------------------------------
- ------------------------------------
(Name)
Exhibit 10.1
CORGENIX MEDICAL CORPORATION
FORM OF SECURITIES PURCHASE AGREEMENT
MAY 19, 2005
TABLE OF CONTENTS
(continued)
Page
-iv-
TABLE OF CONTENTS
Page
-i-
1. Agreement to Sell and Purchase..............................1
2. Fees and Warrants...........................................5
3. Closing, Delivery, Payment and Certain Conditions...........6
3.1 Closing................................................6
3.2 Delivery...............................................6
3.3 Conversion and Lockup..................................6
3.4 Guaranty Requirement...................................6
3.5 Investment Rights......................................6
4. Representations and Warranties of the Company...............6
4.1 Organization, Good Standing and Qualification..........6
4.2 Subsidiaries...........................................7
4.3 Capitalization; Voting Rights..........................7
4.4 Authorization; Binding Obligations.....................8
4.5 Liabilities............................................9
4.6 Agreements; Action.....................................9
4.7 Obligations to Related Parties.........................9
4.8 Changes...............................................10
4.9 Title to Properties and Assets; Liens, Etc............11
4.10 Intellectual Property.................................12
4.11 Compliance with Other Instruments.....................12
4.12 Litigation............................................12
4.13 Tax Returns and Payments..............................13
4.14 Employees.............................................13
4.15 Registration Rights and Voting Rights.................14
4.16 Compliance with Laws; Permits.........................14
4.17 Environmental and Safety Laws.........................14
4.18 Valid Offering........................................14
4.19 Full Disclosure.......................................15
4.20 Insurance.............................................15
4.21 SEC Reports...........................................15
4.22 Listing...............................................15
4.23 No Integrated Offering................................15
4.24 Stop Transfer.........................................16
4.25 Dilution..............................................16
4.26 Patriot Act...........................................16
5. Representations and Warranties of the Purchaser............16
5.1 No Shorting...........................................16
5.2 Organization, Good Standing and Qualification.........17
5.3 Requisite Power and Authority.........................17
5.4 Investment Representations............................18
5.5 The Purchasers Bear Economic Risk.....................18
5.6 Acquisition for Own Account...........................18
5.7 The Purchasers Can Protect Their Interest.............18
5.8 Accredited Investor...................................18
5.9 Legends...............................................18
6. Covenants of the Company...................................19
6.1 Stop-Orders...........................................19
6.2 Listing...............................................20
6.3 Market Regulations....................................20
6.4 Reporting Requirements................................20
6.5 Use of Funds..........................................20
6.6 Access to Facilities..................................20
6.7 Taxes.................................................21
6.8 Insurance.............................................21
6.9 Intellectual Property.................................22
6.10 Properties............................................22
6.11 Confidentiality.......................................22
6.12 Required Approvals....................................22
6.13 Repayment of Indebtedness.............................23
6.14 Reissuance of Securities..............................24
6.15 Opinion...............................................24
6.16 Margin Stock..........................................24
6.17 Restricted Cash Disclosure............................24
6.18 Financing Right of First Refusal......................24
6.19 Additional Investment Right...........................25
6.20 Net Worth.............................................25
6.21 Retention of Investor Relations/Public Relations
Firm and Program......................................25
6.22 Maintenance of Formula Amount.........................25
7. Covenants of the Purchasers................................26
7.1 Confidentiality.......................................26
7.2 Non-Public Information................................26
8. Covenants of the Company and the Purchasers Regarding
Indemnification............................................26
8.1 Company Indemnification...............................26
8.2 The Purchasers' Indemnification.......................26
9. Conversion of Convertible Term Notes.......................26
9.1 Mechanics of Conversion...............................26
10. Registration Rights........................................28
10.1 Registration Rights Granted...........................28
10.2 Offering Restrictions.................................28
11. Miscellaneous..............................................28
11.1 Governing Law.........................................28
11.2 Survival..............................................29
11.3 Successors............................................29
11.4 Entire Agreement......................................29
11.5 Amendment and Waiver..................................29
11.6 Delays or Omissions...................................29
11.7 Notices...............................................29
11.8 Attorneys' Fees.......................................30
11.9 Titles and Subtitles..................................30
11.10Facsimile Signatures; Counterparts....................31
11.11Broker's Fees.........................................31
11.12Construction..........................................31
2
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of May 19, 2005, by and among Corgenix Medical Corporation, a Nevada
corporation (the "Company"), and [PURCHASERS].
RECITALS
WHEREAS, the Company has authorized the sale to the Purchasers of
Convertible Term Notes in the aggregate principal amount of Two Million Four
Hundred Twenty Thousand Dollars ($2,420,000) (each as amended, modified or
supplemented from time to time, an "Original Term Note"), which Original Term
Notes are convertible into shares of the Company's common stock, $0.001 par
value per share (the "Common Stock") at an initial fixed conversion price of
$0.30 per share of Common Stock ("Fixed Conversion Price") and subject to the
satisfaction of the conditions herein, up to an additional One Million Dollars
($1,000,000) in additional term notes (each as amended, modified or supplemented
from time to time an "Additional Term Note" and together with the Original Term
Notes, the "Term Notes");
WHEREAS, the Company wishes to issue warrants to the Purchasers to
purchase in the aggregate up to 60% of the number of shares of the Company's
Common Stock issuable through the conversion of the total amount potentially
being invested by the Purchasers, or Three Million Four Hundred Twenty Thousand
Dollars ($3,420,000) (the "Total Investment Amount") (subject to adjustment as
set forth therein) in connection with the Purchasers' purchase of the Term
Notes;
WHEREAS, the Purchasers desire to purchase the Term Notes and the Warrants
(as defined in Section 2) on the terms and conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Term Notes and the
Warrants to the Purchasers on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase.
(a) Pursuant to the terms and conditions set forth in this
Agreement, on the Closing Date (as defined in Section 3),
the Company agrees to sell to the Purchasers, and the
Purchasers, severally and not jointly, hereby agree to
purchase from the Company, an Original Term Note in the
principal amount and at the purchase price set forth
opposite such Purchaser's name on Schedule I hereto
convertible in accordance with the terms thereof into shares
of the Company's Common Stock in accordance with the terms
of such Term Note and this Agreement. It is understood and
agreed that the purchases by the Purchasers are to be
separate transactions. The purchase of the Original Term
Notes on the Closing Date shall be known as the "Offering."
A form of the Term Notes are annexed hereto as Exhibit A.
The Term Notes will mature on the Maturity Date (as defined
in the Term Notes). Collectively, the Term Notes, the
Warrants and Common Stock issuable upon conversion of the
Term Notes and upon exercise of the Warrants are referred to
as the "Securities."
(b) Subject to the terms and conditions set forth herein and in
the Related Agreements (as hereinafter defined), at the
request of the Company, the Purchasers may make additional
loans (the "Loans") to the Company from time to time which,
in the aggregate at any time outstanding, will not exceed
the lesser of (x) (I) One Million Dollars ($1,000,000) minus
(II) such reserves as the Purchasers may reasonably in their
good faith judgment deem proper and necessary from time to
time (the "Reserves") and (y) an amount equal to (I) the
Accounts Availability (as defined below) minus (II) the
Reserves. The amount derived at any time from Section
1(b)(y)(I) minus 1(b)(y)(II) shall be referred to as the
"Formula Amount". The Company shall execute and deliver
Additional Term Notes of each such Loan to each of the
following Purchasers in the following pro rata percentages
(i) 34.09090909% to [PURCHASER] and (ii) 65.90909090% to
[PURCHASER 2]. Notwithstanding the foregoing, the
Purchasers shall have no obligation to make Loans to the
Company in less than One Hundred Thousand Dollar ($100,000)
tranches.
(c) Notwithstanding the limitations set forth above, if requested by the
Company, the Purchasers retain the right to lend to the Company from time
to time such amounts in excess of such limitations as the Purchasers may
determine in their sole discretion.
(d) "Accounts Availability" means the amount of Loans against
Eligible Accounts (as hereinafter defined) the Purchasers
may from time to time make available to the Company up to
ninety percent (90%) of the net face amount of Eligible
Accounts (except in the case of Foreign Eligible Accounts as
defined below, sixty percent (60%)) based on Accounts (as
hereinafter defined) of the Company and its subsidiaries.
"Accounts" means all "accounts", as such term is defined in
the UCC (as hereinafter defined), now owned or hereafter
acquired by any person, including: (a) all accounts
receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by
Chattel Paper (as hereinafter defined) or Instruments (as
hereinafter defined)) (including any such obligations that
may be characterized as an account or contract right under
the UCC); (b) all of such person's rights in, to and under
all purchase orders or receipts for Goods (as hereinafter
defined) or services; (c) all of such person's rights to any
Goods represented by any of the foregoing (including unpaid
sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or
repossessed goods); (d) all rights to payment due to such
person for Goods or other property sold, leased, licensed,
assigned or otherwise disposed of, for a policy of insurance
issued or to be issued, for a secondary obligation incurred
or to be incurred, for energy provided or to be provided,
for the use or hire of a vessel under a charter or other
contract, arising out of the use of a credit card or charge
card, or for services rendered or to be rendered by such
person or in connection with any other transaction (whether
or not yet earned by performance on the part of such
person); and (e) all collateral security of any kind given
by any Account Debtor (as hereinafter defined) or any other
person with respect to any of the foregoing. "Eligible
Accounts" means and includes each Account of the Company and
each of its subsidiaries which conforms to the following
criteria: (a) shipment of the merchandise or the rendition
of services has been completed; (b) no return, rejection or
repossession of the merchandise has occurred; (c)
merchandise or services shall not have been rejected or
disputed by any person who is or may be obligated with
respect to an account ("Account Debtor") and there shall not
have been asserted any offset, defense or counterclaim; (d)
continues to be in full conformity with the representations
and warranties made by the Company and its subsidiaries to
each of the Purchasers with respect thereto; (e) each
Purchaser is, and continues to be, satisfied with the credit
standing of the Account Debtor in relation to the amount of
credit extended; (f) there are no facts existing or
threatened which are likely to result in any adverse change
in an Account Debtor's financial condition; (g) is
documented by an invoice in a form approved by the
Purchasers and shall not be unpaid more than ninety (90)
days (except in the case of a Foreign Eligible Account as
defined below, 120 days) from invoice date; (h) not more
than twenty-five percent (25%) of the unpaid amount of
invoices due from such Account Debtor remains unpaid more
than ninety (90) days (except in the case of a Foreign
Eligible Account as defined below, 60 days) from invoice
date; (i) is not evidenced by Chattel Paper or an Instrument
of any kind with respect to or in payment of the Account
unless such Instrument is duly endorsed to and in possession
of the Purchasers or represents a check in payment of an
Account; (j) if the Account Debtor is located outside the
United States, the Account complies with clauses (g) and (h)
above and is otherwise satisfactory to the Purchasers in
their sole discretion (a "Foreign Eligible Account"); (k)
such Purchaser has a first priority perfected Lien (as
hereinafter defined) in such Account and such Account is not
subject to any Lien other than Permitted Liens (as
hereinafter defined); (1) does not arise out of transactions
with any employee, officer, director, stockholder or
Affiliate (as hereinafter defined) of Company or any of its
subsidiaries; (m) is payable to Company or any of its
subsidiaries; (n) does not arise out of a bill and hold sale
prior to shipment and does not arise out of a sale to any
person to which the Company or any of its subsidiaries is
indebted; (o) is net of any returns, discounts, claims,
credits and allowances; (p) if the Account arises out of
contracts between the Company and/or any of its
subsidiaries, on the one hand, and the United States, on the
other hand, any state, or any department, agency or
instrumentality of any of them, the Company and/or such
subsidiary, as the case may be, has so notified such
Purchaser, in writing, prior to the creation of such
Account, and there has been compliance with any governmental
notice or approval requirements, including compliance with
the Federal Assignment of Claims Act; (q) is a good and
valid account representing an undisputed bona fide
indebtedness incurred by the Account Debtor therein named,
for a fixed sum as set forth in the invoice relating thereto
with respect to an unconditional sale and delivery upon the
stated terms of Goods sold by the Company or any of its
subsidiaries or work, labor and/or services rendered by the
Company or any of its subsidiaries; (r) does not arise out
of progress billings prior to completion of the order; (s)
the total unpaid Accounts from such Account Debtor does not
exceed twenty-five percent (25%) of all Eligible Accounts;
(t) the Company's or such subsidiary's right to payment is
absolute and not contingent upon the fulfillment of any
condition whatsoever; (u) the Company or such subsidiary, as
the case may be, is able to bring suit and enforce its
remedies against the Account Debtor through judicial
process; (v) does not represent interest payments, late or
finance charges owing to the Company or such subsidiary, as
the case may be, and (w) is otherwise satisfactory to any
such Purchaser as determined by such Purchaser in the
exercise of its sole discretion. In the event the Company
requests that such Purchaser include within Eligible
Accounts certain Accounts of one or more of the Company's
acquisition targets, such Purchaser shall at the time of
such request consider such inclusion, but any such inclusion
shall be at the sole option of such Purchaser and shall at
all times be subject to the execution and delivery to such
Purchaser of all such documentation (including, without
limitation, guaranty and security documentation) as such
Purchaser may require in its sole discretion. "UCC" means
the Uniform Commercial Code as the same may from time to
time be in effect in the State of New York; provided, that
in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of, or
remedies with respect to, the Purchasers' Lien on any
Collateral (as hereinafter defined) is governed by the
Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions of this
Agreement relating to such attachment, perfection, priority
or remedies and for purposes of definitions related to such
provisions; provided further, that to the extent that UCC is
used to define any term herein or in any Related Agreement
and such term is defined differently in different Articles
or Divisions of the UCC, the definition of such term
contained in Article or Division 9 shall govern. "Chattel
Paper" means all "chattel paper," as such term is defined in
the UCC, including electronic chattel paper, now owned or
hereafter acquired by any person. "Instruments means all
"instruments", as such term is defined in the UCC, now owned
or hereafter acquired by any person, wherever located,
including all certificated securities and all promissory
notes and other evidences of indebtedness, other than
instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper. "Goods" means all
"goods", as such term is defined in the UCC, now owned or
hereafter acquired by any person, wherever located,
including embedded software to the extent included in
"goods" as defined in the UCC. "Lien" means any mortgage,
security deed, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or
otherwise), charge, claim or encumbrance, or preference,
priority or other security agreement or preferential
arrangement held or asserted in respect of any asset of any
kind or nature whatsoever including any conditional sale or
other title retention agreement, any lease having
substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any
financing statement under the UCC or comparable law of any
jurisdiction. "Permitted Liens" means (a) Liens of
carriers, warehousemen, artisans, bailees, mechanics and
materialmen incurred in the ordinary course of business
securing sums not overdue; (b) Liens incurred in the
ordinary course of business in connection with worker's
compensation, unemployment insurance or other forms of
governmental insurance or benefits, relating to employees,
securing sums (i) not overdue or (ii) being diligently
contested in good faith provided that adequate reserves with
respect thereto are maintained on the books of Company or
any Subsidiary thereof in conformity with generally accepted
accounting principles in effect from time to time in the
United States of America ("GAAP"); (c) Liens in favor of the
Purchasers; (d) Liens for taxes (i) not yet due or (ii)
being diligently contested in good faith by appropriate
proceedings, provided that adequate reserves with respect
thereto are maintained on the books of Company or any
Subsidiary thereof in conformity with GAAP provided, that,
the Lien shall have no effect on the priority of Liens in
favor of the Purchasers or the value of the assets in which
the Purchasers have a Lien; (e) Purchase Money Liens
securing Purchase Money Indebtedness to the extent permitted
in this Agreement and (f) Liens specified on Schedule 4.9
hereto. "Affiliate" of any person means (a) any person
(other than a Subsidiary) which, directly or indirectly, is
in control of, is controlled by, or is under common control
with such person, (b) any person who is a director or
officer (i) of such person, (ii) of any Subsidiary of such
person or (iii) of any person described in clause (a) above.
For the purposes of this definition, control of a person
shall mean the power (direct or indirect) to direct or cause
the direction of the management and policies of such person
whether by contract or otherwise.
2. Fees and Warrants. On the Closing Date:
(a) The Company will issue and deliver to each Purchaser a
Warrant to purchase up to that number of shares of the
Company's Common Stock set forth opposite the name of such
Purchaser on Schedule I hereto (as amended, modified or
supplemented from time to time, a "Warrant"). The Warrants
must be delivered on the Closing Date. A form of Warrant is
annexed hereto as Exhibit B. All the representations,
covenants, warranties, undertakings, and indemnification,
and other rights made or granted to or for the benefit of
the Purchasers by the Company are hereby also made and
granted in respect of the Warrants and shares of the
Company's Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares").
(b) The Company shall pay (i) to [PURCHASER'S MANAGER], a
closing payment in an amount equal to three and one half
percent (3.5%) of 34.09090909% of the Total Investment
Amount and (ii) to [PURCHASER 2'S MANAGER], a closing
payment in an amount equal to three and one half percent
(3.5%) of 65.90909090% of the Total Investment Amount. The
foregoing fees are referred to herein as the "Closing
Payment."
(c) The Company shall reimburse the Purchasers for their
reasonable expenses (including legal fees and expenses)
incurred in connection with the preparation and negotiation
of this Agreement and the Related Agreements (as hereinafter
defined), and expenses incurred in connection with the
Purchasers' due diligence review of the Company and its
Subsidiaries (as defined in Section 6.8) and all related
matters. Amounts required to be paid under this Section
2(c), will be paid on the Closing Date and shall in no event
exceed $37,500 in the aggregate.
(d) The Closing Payment and the expenses referred to in the preceding clause
(c) (net of deposits previously paid by the Company) shall be paid at
closing out of funds held pursuant to an Escrow Agreement (as defined
below) and a disbursement letter (the "Disbursement Letter").
3. Closing, Delivery, Payment and Certain Conditions.
3.1 Closing. Subject to the terms and conditions herein, the closing of the
Offering (the "Closing"), shall take place on the date hereof, at such time or
place as the Company and the Purchasers may mutually agree (such date is
hereinafter referred to as the "Closing Date").
3.2 Delivery. Pursuant to the Escrow Agreement, at the Closing on the Closing
Date, the Company will deliver to the Purchasers, among other things, Original
Term Notes in the form attached as Exhibit A representing the aggregate
principal amount of $2,420,000 and Warrants in the form attached as Exhibit B in
each Purchaser's name representing in the aggregate 60% of the number of shares
of the Company's Common Stock issuable through conversion of the Total
Investment Amount, and each Purchaser will deliver to the Company, among other
things, the amounts set forth to be delivered by it in the Disbursement Letter
by certified funds or wire transfer (it being understood that $250,000 of the
proceeds of the Original Term Notes shall be placed in the Restricted Account
(as defined in the Restricted Account Agreement referred to below)).
3.3 Conversion and Lockup. Prior to the Closing Date, the Company shall have
caused its directors, controlling shareholders and certain other persons
requested by the Purchasers to agree to "lockup" and not sell their shares of
Common Stock of the Company, pursuant to documentation, and on terms and
conditions, acceptable to the Purchasers.
3.4 Guaranty Requirement. Prior to the Closing Date, Dr. Luis
Lopez shall have guaranteed $250,000 of the Total Investment
Amount.
3.5 Investment Rights. For 30 days after the Closing Date, the Company shall
have the right to sell up to $500,000 of the Company's common or convertible
preferred stock, subject to the Purchasers' consent. The terms of any such
preferred stock shall be approved by the Purchasers prior to the Company's
acceptance of any proceeds from the sale of such stock.
4. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Purchasers as follows (which representations and warranties
are supplemented by the Company's filings under the Securities Exchange Act of
1934, as amended, made prior to the date of this Agreement (collectively, the
"Exchange Act Filings"), copies of which have been provided to the Purchasers):
4.1 Organization, Good Standing and Qualification. Each of the Company and each
of its Subsidiaries is a corporation, partnership or limited liability company,
as the case may be, duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization. Each of the Company and each of
its Subsidiaries has the corporate, partnership or limited liability company, as
the case may be, power and authority to own and operate its properties and
assets, to execute and deliver (i) this Agreement, (ii) the Term Notes and the
Warrants to be issued in connection with this Agreement, (iii) the Registration
Rights Agreement relating to the Securities dated as of the date hereof among
the Company and the Purchasers (as amended, modified or supplemented from time
to time, the "Registration Rights Agreement"), (iv) the Subsidiary Guaranty
dated as of the date hereof made by certain Subsidiaries of the Company (as
amended, modified or supplemented from time to time, the "Subsidiary Guaranty"),
(v) the Stock Pledge Agreement dated as of the date hereof among the Company,
certain Subsidiaries of the Company and the Purchasers (as amended, modified or
supplemented from time to time, the "Stock Pledge Agreement"), (vi) the Escrow
Agreement dated as of the date hereof among the Company, the Purchasers and the
escrow agent referred to therein, substantially in the form of Exhibit D hereto
(as amended, modified or supplemented from time to time, the "Escrow
Agreement"), (vii) the Restricted Account Agreement dated as of the date hereof
among the Company, the Purchasers and North Fork Bank (as amended, modified or
supplemented from time to time, the "Restricted Account Agreement"), (viii) the
Restricted Account Side Letter related to the Restricted Account Agreement dated
as of the date hereof among the Company and the Purchasers (as amended, modified
or supplemented from time to time, the "Restricted Account Side Letter"), (ix)
the Subordination Agreement dated as of the date hereof among the Purchasers and
the subordinated creditors party thereto, and acknowledged and agreed to by the
Company (as amended, modified or supplemented from time to time, the
Subordination Agreement") and (x) all other agreements related to this Agreement
and the Term Note and referred to herein (the preceding clauses (ii) through
(ix), collectively, the "Related Agreements"), to issue and sell the Term Notes
and the shares of Common Stock issuable upon conversion of the Term Notes (the
"Note Shares"), to issue and sell the Warrants and the Warrant Shares, and to
carry out the provisions of this Agreement and the Related Agreements and to
carry on its business as presently conducted. Each of the Company and each of
its Subsidiaries is duly qualified and is authorized to do business and is in
good standing as a foreign corporation, partnership or limited liability
company, as the case may be, in all jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which failure to do
so has not, or would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the business, assets, liabilities,
condition (financial or otherwise), properties, operations or prospects of the
Company and its Subsidiaries, taken individually and as a whole (a "Material
Adverse Effect"). Corgenix (UK) Ltd. owns no material assets in the United
States.
4.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the direct
owner of such Subsidiary and its percentage ownership thereof, is set forth on
Schedule 4.2. For the purpose of this Agreement, a "Subsidiary" of any person or
entity means (i) a corporation or other entity whose shares of stock or other
ownership interests having ordinary voting power (other than stock or other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the directors of such corporation, or other
persons or entities performing similar functions for such person or entity, are
owned, directly or indirectly, by such person or entity or (ii) a corporation or
other entity in which such person or entity owns, directly or indirectly, more
than 50% of the equity interests at such time.
4.3 Capitalization; Voting Rights.
(a) The authorized capital stock of the Company, as of the date
hereof consists of 45,000,000 shares, of which 40,000,000
are shares of Common Stock, par value $0.001 per share,
5,346,964 shares of which are issued and outstanding, and
5,000,000 are shares of preferred stock, par value $0.001
per share, none of which are issued and outstanding. The
authorized capital stock of each Subsidiary of the Company
is set forth on Schedule 4.3.
(b) Except as disclosed on Schedule 4.3, other than: (i) the
shares reserved for issuance under the Company's stock
option plans; and (ii) shares which may be granted pursuant
to this Agreement and the Related Agreements, there are no
outstanding options, warrants, rights (including conversion
or preemptive rights and rights of first refusal), proxy or
stockholder agreements, or arrangements or agreements of any
kind for the purchase or acquisition from the Company of any
of its securities. Except as disclosed on Schedule 4.3,
neither the offer, issuance or sale of any of the Term Notes
or the Warrants, or the issuance of any of the Note Shares
or Warrant Shares, nor the consummation of any transaction
contemplated hereby will result in a change in the price or
number of any securities of the Company outstanding, under
anti-dilution or other similar provisions contained in or
affecting any such securities.
(c) All issued and outstanding shares of the Company's Common Stock: (i) have
been duly authorized and validly issued and are fully paid and
nonassessable; and (ii) were issued in compliance in all material respects
with all applicable state and federal laws concerning the issuance of
securities.
(d) The rights, preferences, privileges and restrictions of the
shares of the Common Stock are as stated in the Company's
Articles of Incorporation (the "Charter"). The Note Shares
and Warrant Shares have been duly and validly reserved for
issuance. When issued in compliance with the provisions of
this Agreement and the Company's Charter, the Securities
will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances; provided,
however, that the Securities may be subject to restrictions
on transfer under state and/or federal securities laws as
set forth herein or as otherwise required by such laws at
the time a transfer is proposed.
4.4 Authorization; Binding Obligations. All corporate, partnership or limited
liability company, as the case may be, action on the part of the Company and
each of its Subsidiaries (including the respective officers and directors)
necessary for the authorization of this Agreement and the Related Agreements,
the performance of all obligations of the Company and its Subsidiaries hereunder
and under the other Related Agreements at the Closing and, the authorization,
sale, issuance and delivery of the Term Notes and the Warrants has been taken or
will be taken prior to the Closing. This Agreement and the Related Agreements,
when executed and delivered and to the extent it is a party thereto, will be
valid and binding obligations of each of the Company and each of its
Subsidiaries, enforceable against each such person in accordance with their
terms, except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights; and
(b) general principles of equity that restrict the availability of equitable
or legal remedies.
The sale of the Term Notes and the subsequent conversion of the Term Notes into
Note Shares are not and will not be subject to any preemptive rights or rights
of first refusal that have not been properly waived or complied with. The
issuance of the Warrants and the subsequent exercise of the Warrants for Warrant
Shares are not and will not be subject to any preemptive rights or rights of
first refusal that have not been properly waived or complied with.
4.5 Liabilities. Neither the Company nor any of its Subsidiaries has any
contingent liabilities in excess of $25,000, except current liabilities incurred
in the ordinary course of business and liabilities disclosed in any Exchange Act
Filings.
4.6 Agreements; Action. Except as set forth on Schedule 4.6 or
as disclosed in any Exchange Act Filings:
(a) there are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs
or decrees to which the Company or any of its Subsidiaries
is a party or by which it is bound which may involve: (i)
obligations (contingent or otherwise) of, or payments to,
the Company in excess of $50,000 (other than obligations of,
or payments to, the Company arising from purchase or sale
agreements entered into in the ordinary course of business);
or (ii) the transfer or license of any patent, copyright,
trade secret or other proprietary right to or from the
Company (other than licenses arising from the purchase of
"off the shelf" or other standard products); or (iii)
provisions restricting the development, manufacture or
distribution of the Company's products or services; or (iv)
indemnification by the Company with respect to infringements
of proprietary rights.
(b) Since June 30, 2004, neither the Company nor any of its
Subsidiaries has: (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to
any class or series of its capital stock; (ii) incurred any
indebtedness for money borrowed or any other liabilities
(other than ordinary course obligations) individually in
excess of $50,000 or, in the case of indebtedness and/or
liabilities individually less than $50,000, in excess of
$100,000 in the aggregate; (iii) made any loans or advances
to any person in excess, individually or in the aggregate,
of $100,000, other than ordinary course advances for travel
expenses; or (iv) sold, exchanged or otherwise disposed of
any of its assets or rights, other than the sale of its
inventory in the ordinary course of business.
(c) For the purposes of subsections (a) and (b) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and
proposed transactions involving the same person or entity (including
persons or entities the Company has reason to believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual
minimum dollar amounts of such subsections.
4.7 Obligations to Related Parties. Except as set forth on Schedule 4.7, there
are no obligations of the Company or any of its Subsidiaries to officers,
directors, stockholders or employees of the Company or any of its Subsidiaries
other than:
(a) for payment of salary for services rendered and for bonus payments;
(b) reimbursement for reasonable expenses incurred on behalf of the Company
and its Subsidiaries;
(c) for other standard employee benefits made generally available to all
employees (including stock option agreements outstanding under any stock
option plan approved by the Board of Directors of the Company); and
(d) obligations listed in the Company's financial statements or disclosed in
any of its Exchange Act Filings.
Except as described above or set forth on Schedule 4.7, none of the officers,
directors or, to the best of the Company's knowledge, key employees or
stockholders of the Company or any members of their immediate families, are
indebted to the Company, individually or in the aggregate, in excess of $50,000
or have any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation which competes with the Company, other
than passive investments in publicly traded companies (representing less than
one percent (1%) of such company) which may compete with the Company. Except as
described above, no officer, director or stockholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with the Company and no agreements, understandings or proposed
transactions are contemplated between the Company and any such person. Except as
set forth on Schedule 4.7, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
4.8 Changes. Since June 30, 2004, except as disclosed in any Exchange Act Filing
or in any Schedule to this Agreement or in any of the Related Agreements, there
has not been:
(a) any change in the business, assets, liabilities, condition (financial or
otherwise), properties, operations or prospects of the Company or any of
its Subsidiaries, which individually or in the aggregate has had, or would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(b) any resignation or termination of any officer, key employee or group of
employees of the Company or any of its Subsidiaries;
(c) any material change, except in the ordinary course of business, in the
contingent obligations of the Company or any of its Subsidiaries by way of
guaranty, endorsement, indemnity, warranty or otherwise;
(d) any damage, destruction or loss, whether or not covered by insurance,
which has had, or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
(e) any waiver by the Company or any of its Subsidiaries of a material right
under a written contract or of a material debt owed to it;
(f) any direct or indirect loans made by the Company or any of its
Subsidiaries to any stockholder, employee, officer or director of the
Company or any of its Subsidiaries, other than advances made in the
ordinary course of business;
(g) any material change in any compensation arrangement or agreement with any
employee, officer, director or stockholder of the Company or any of its
Subsidiaries;
(h) any labor organization activity related to the Company or any of its
Subsidiaries;
(i) any debt, obligation or liability incurred, assumed or guaranteed by the
Company or any of its Subsidiaries, except those for immaterial amounts
and for current liabilities incurred in the ordinary course of business;
(j) any sale, assignment or transfer of any patents, trademarks, copyrights,
trade secrets or other intangible assets owned by the Company or any of
its Subsidiaries;
(k) any change in any material agreement to which the Company or any of its
Subsidiaries is a party or by which either the Company or any of its
Subsidiaries is bound which either individually or in the aggregate has
had, or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
(l) any other event or condition of any character that, either individually or
in the aggregate, has had, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; or
(m) any arrangement or commitment by the Company or any of its Subsidiaries to
do any of the acts described in subsection (a) through (m) above.
4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on Schedule
4.9, each of the Company and each of its Subsidiaries has good and valid title
to its properties and assets, and good title to its leasehold estates, in each
case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other
than:
(a) those resulting from taxes which have not yet become delinquent;
(b) minor liens and encumbrances which do not materially detract from the
value of the property subject thereto or materially impair the operations
of the Company or any of its Subsidiaries; and
(c) those that have otherwise arisen in the ordinary course of business.
All facilities, machinery, equipment, fixtures, vehicles and other properties
owned, leased or used by the Company and its Subsidiaries are in good operating
condition and repair and are reasonably fit and usable for the purposes for
which they are being used. Except as set forth on Schedule 4.9, the Company and
its Subsidiaries are in compliance with all material terms of each lease to
which any of them is a party or is otherwise bound.
4.10 Intellectual Property.
Except as set forth on Schedule 4.10:
(a) Each of the Company and each of its Subsidiaries owns or
possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information and other proprietary rights
and processes necessary for its business as now conducted
and to the Company's knowledge, as presently proposed to be
conducted (the "Intellectual Property"), without any known
infringement of the rights of others. There are no
outstanding options, licenses or agreements of any kind
relating to the foregoing proprietary rights, nor is the
Company or any of its Subsidiaries bound by or a party to
any options, licenses or agreements of any kind with respect
to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other
proprietary rights and processes of any other person or
entity other than such licenses or agreements arising from
the purchase of "off the shelf" or standard products.
(b) Neither the Company nor any of its Subsidiaries has received any
communications alleging that the Company or any of its Subsidiaries has
violated any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other
person or entity, nor is the Company or any of its Subsidiaries aware of
any basis therefor.
(c) The Company does not believe it is or will be necessary to utilize any
inventions, trade secrets or proprietary information of any of its
employees made prior to their employment by the Company or any of its
Subsidiaries, except for inventions, trade secrets or proprietary
information that have been rightfully assigned to the Company or any of
its Subsidiaries.
4.11 Compliance with Other Instruments. Neither the Company nor any of its
Subsidiaries is in violation or default of (x) any term of its Charter or
Bylaws, or (y) of any provision of any indebtedness, mortgage, indenture,
contract, agreement or instrument to which it is party or by which it is bound
or of any judgment, decree, order or writ, which violation or default, in the
case of this clause (y), has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. The
execution, delivery and performance of and compliance with this Agreement and
the Related Agreements to which it is a party, and the issuance and sale of the
Term Note by the Company and the other Securities by the Company each pursuant
hereto and thereto, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term or provision, or result in the creation
of any mortgage, pledge, lien, encumbrance or charge upon any of the properties
or assets of the Company or any of its Subsidiaries or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties.
4.12 Litigation. Except as set forth on Schedule 4.12 hereto, there is no
action, suit, proceeding or investigation pending or, to the Company's
knowledge, currently threatened against the Company or any of its Subsidiaries
that prevents the Company or any of its Subsidiaries from entering into this
Agreement or the other Related Agreements, or from consummating the transactions
contemplated hereby or thereby, or which has had, or would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect or any change in the current equity ownership of the Company or any of
its Subsidiaries, nor is the Company aware that there is any basis to assert any
of the foregoing. Neither the Company nor any of its Subsidiaries is a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company or any of its Subsidiaries currently
pending or which the Company or any of its Subsidiaries intends to initiate.
4.13 Tax Returns and Payments. Each of the Company and its Subsidiaries has
timely filed all tax returns (federal, state and local) required to be filed by
it. All taxes shown to be due and payable on such returns, any assessments
imposed, and all other taxes due and payable by the Company or any of its
Subsidiaries on or before the Closing, have been paid or will be paid prior to
the time they become delinquent. Except as set forth on Schedule 4.13, neither
the Company nor any of its Subsidiaries has been advised:
(a) that any of its returns, federal, state or other, have been or are being
audited as of the date hereof; or
(b) of any deficiency in assessment or proposed judgment to its federal, state
or other taxes.
The Company has no knowledge of any liability for any tax to be imposed upon its
properties or assets as of the date of this Agreement that is not adequately
provided for.
4.14 Employees. Except as set forth on Schedule 4.14, neither the Company nor
any of its Subsidiaries has any collective bargaining agreements with any of its
employees. There is no labor union organizing activity pending or, to the
Company's knowledge, threatened with respect to the Company or any of its
Subsidiaries. Except as disclosed in the Exchange Act Filings or on Schedule
4.14, neither the Company nor any of its Subsidiaries is a party to or bound by
any currently effective employment contract, deferred compensation arrangement,
bonus plan, incentive plan, profit sharing plan, retirement agreement or other
employee compensation plan or agreement. To the Company's knowledge, no employee
of the Company or any of its Subsidiaries, nor any consultant with whom the
Company or any of its Subsidiaries has contracted, is in violation of any term
of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company or any of its Subsidiaries because of the nature of
the business to be conducted by the Company or any of its Subsidiaries; and to
the Company's knowledge the continued employment by the Company or any of its
Subsidiaries of its present employees, and the performance of the Company's and
its Subsidiaries' contracts with its independent contractors, will not result in
any such violation. Neither the Company nor any of its Subsidiaries is aware
that any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere in any material respect with their duties to the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries has received any
notice alleging that any such violation has occurred. Except for employees who
have a current effective employment agreement with the Company or any of its
Subsidiaries, no employee of the Company or any of its Subsidiaries has been
granted the right to continued employment by the Company or any of its
Subsidiaries or to any material compensation following termination of employment
with the Company or any of its Subsidiaries. Except as set forth on Schedule
4.14, the Company is not aware that any officer, key employee or group of
employees intends to terminate his, her or their employment with the Company or
any of its Subsidiaries, nor does the Company or any of its Subsidiaries have a
present intention to terminate the employment of any officer, key employee or
group of employees.
4.15 Registration Rights and Voting Rights. Except as set forth on Schedule 4.15
or except as disclosed in Exchange Act Filings, neither the Company nor any of
its Subsidiaries is presently under any obligation, and neither the Company nor
any of its Subsidiaries has granted any rights, to register any of the Company's
or its Subsidiaries' presently outstanding securities or any of its securities
that may hereafter be issued. Except as set forth on Schedule 4.15 or except as
disclosed in Exchange Act Filings, neither the Company nor any of its
Subsidiaries has entered into any agreement with respect to the voting of equity
securities of the Company or any of its Subsidiaries.
4.16 Compliance with Laws; Permits. Neither the Company nor any of its
Subsidiaries is in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which has had, or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. No governmental
orders, permissions, consents, approvals or authorizations are required to be
obtained and no registrations or declarations are required to be filed in
connection with the execution and delivery of this Agreement or any other
Related Agreement and the issuance of any of the Securities, except such as has
been duly and validly obtained or filed, or with respect to any filings that
must be made after the Closing, as will be filed in a timely manner. Each of the
Company and its Subsidiaries has all material franchises, permits, licenses and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which would, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.17 Environmental and Safety Laws. Neither the Company nor any of its
Subsidiaries is in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation.
4.18 Valid Offering. Assuming the accuracy of the representations and warranties
of the Purchasers contained in this Agreement, the offer, sale and issuance of
the Securities will be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws.
4.19 Full Disclosure. Each of the Company and each of its Subsidiaries has
provided the Purchasers with all information requested by the Purchasers in
connection with their decision to purchase the Term Note and the Warrant,
including all information the Company and its Subsidiaries believe is reasonably
necessary to make such investment decision. Neither this Agreement, the Related
Agreements, or the exhibits and schedules hereto and thereto contain any untrue
statement of a material fact nor omit to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading. Any financial projections
and other estimates provided to the Purchasers by the Company or any of its
Subsidiaries were based on the Company's and its Subsidiaries' experience in the
industry and on assumptions of fact and opinion as to future events which the
Company or any of its Subsidiaries, at the date of the issuance of such
projections or estimates, believed to be reasonable.
4.20 Insurance. Each of the Company and each of its Subsidiaries has general
commercial, product liability, fire and casualty insurance policies with
coverages which the Company believes are customary for companies similarly
situated to the Company and its Subsidiaries in the same or similar business.
4.21 SEC Reports. Except as set forth on Schedule 4.21, the Company has filed
all reports and other documents required to be filed by it under the Securities
Exchange Act 1934, as amended (the "Exchange Act"). The Company has furnished
the Purchasers with copies of: (i) its Annual Reports on Form 10-KSB for its
fiscal year ended June 30, 2004; and (ii) its Quarterly Reports on Form 10-QSB
for its fiscal quarters ended September 30, 2004 and December 31, 2004 and the
Form 8-K filings which it has made during the fiscal year 2005 to date
(collectively, the "SEC Reports"). Except as set forth on Schedule 4.21, each
SEC Report was, at the time of its filing, in substantial compliance with the
requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their respective filing dates, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.22 Listing. The Company's Common Stock is listed for trading on the Over the
Counter Bulletin Board ("OTCBB") and satisfies all requirements for the
continuation of such trading. The Company has not received any notice that its
Common Stock will not be eligible to be traded on the OTCBB or that its Common
Stock does not meet all requirements for such trading.
4.23 No Integrated Offering. Neither the Company, nor any of its Subsidiaries or
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the Offering to be
integrated with prior offerings by the Company for purposes of the Securities
Act and which would prevent the Company from selling the Securities pursuant to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or Subsidiaries take any action or steps that would cause the offering of the
Securities to be integrated with other offerings.
4.24 Stop Transfer. The Securities are restricted securities as of the date of
this Agreement. Neither the Company nor any of its Subsidiaries will issue any
stop transfer order or other order impeding the sale and delivery of any of the
Securities at such time as the Securities are registered for public sale or an
exemption from registration is available, except as required by state and
federal securities laws.
4.25 Dilution. The Company specifically acknowledges that its obligation to
issue the shares of Common Stock upon conversion of the Term Notes and exercise
of the Warrants is binding upon the Company and enforceable regardless of the
dilution such issuance may have on the ownership interests of other shareholders
of the Company.
4.26 Patriot Act. The Company certifies that, to the best of Company's
knowledge, neither the Company nor any of its Subsidiaries has been designated,
and is not owned or controlled, by a "suspected terrorist" as defined in
Executive Order 13224. The Company hereby acknowledges that the Purchasers seek
to comply with all applicable laws concerning money laundering and related
activities. In furtherance of those efforts, the Company hereby represents,
warrants and agrees that: (i) none of the cash or property that the Company or
any of its Subsidiaries will pay or will contribute to the Purchasers has been
or shall be derived from, or related to, any activity that is deemed criminal
under United States law; and (ii) no contribution or payment by the Company or
any of its Subsidiaries to the Purchasers, to the extent that they are within
the Company's and/or its Subsidiaries' control shall cause the Purchasers to be
in violation of the United States Bank Secrecy Act, the United States
International Money Laundering Control Act of 1986 or the United States
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001. The Company shall promptly notify the Purchasers if any of these
representations ceases to be true and accurate regarding the Company or any of
its Subsidiaries. The Company agrees to provide the Purchasers any additional
information regarding the Company or any of its Subsidiaries that the Purchasers
deem necessary or convenient to ensure compliance with all applicable laws
concerning money laundering and similar activities. The Company understands and
agrees that if at any time it is discovered that any of the foregoing
representations are incorrect, or if otherwise required by applicable law or
regulation related to money laundering or similar activities, the Purchasers may
undertake appropriate actions to ensure compliance with such applicable law or
regulation, including but not limited to segregation and/or redemption of the
Purchasers' investment in the Company. The Company further understands that the
Purchasers may release confidential information about the Company and its
Subsidiaries and, if applicable, any underlying beneficial owners, to proper
authorities if the Purchasers, in their sole reasonable discretion, after
consultation with legal counsel, determine that it is in the best interests of
the Purchasers in light of relevant rules and regulations under the laws set
forth in subsection (ii) above.
5. Representations and Warranties of the Purchaser. Each Purchaser, severally
and not jointly, hereby represents and warrants to the Company as follows (such
representations and warranties do not lessen or obviate the representations and
warranties of the Company set forth in this Agreement):
5.1 No Shorting. Such Purchaser or any of its affiliates and investment partners
have not, will not and will not cause any person or entity to directly engage in
"short sales" of the Company's Common Stock as long as the Term Notes or any
Warrants shall be outstanding.
5.2 Organization, Good Standing and Qualification. Each of the Purchasers is a
corporation, partnership, limited duration company or limited liability company,
as the case may be, duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization. Each of the Purchasers has the
corporate, partnership, limited duration company or limited liability company,
as the case may be, power and authority to own and operate its properties and
assets, to execute and deliver (i) this Agreement, (ii) the Term Notes and the
Warrants to be issued in connection with this Agreement, (iii) the Registration
Rights Agreement relating to the Securities dated as of the date hereof among
the Company and the Purchasers (as amended, modified or supplemented from time
to time, the "Registration Rights Agreement"), (iv) the Subsidiary Guaranty
dated as of the date hereof made by certain Subsidiaries of the Company (as
amended, modified or supplemented from time to time, the "Subsidiary Guaranty"),
(v) the Stock Pledge Agreement dated as of the date hereof among the Company,
certain Subsidiaries of the Company and the Purchasers (as amended, modified or
supplemented from time to time, the "Stock Pledge Agreement"), (vi) the Escrow
Agreement dated as of the date hereof among the Company, the Purchasers and the
escrow agent referred to therein, substantially in the form of Exhibit D hereto
(as amended, modified or supplemented from time to time, the "Escrow
Agreement"), (vii) the Restricted Account Agreement dated as of the date hereof
among the Company, the Purchasers and North Fork Bank (as amended, modified or
supplemented from time to time, the "Restricted Account Agreement"), (viii) the
Restricted Account Side Letter related to the Restricted Account Agreement dated
as of the date hereof among the Company and the Purchasers (as amended, modified
or supplemented from time to time, the "Restricted Account Side Letter"), (ix)
the Subordination Agreement dated as of the date hereof among the Purchasers and
the subordinated creditors party thereto, and acknowledged and agreed to by the
Company (as amended, modified or supplemented from time to time, the
Subordination Agreement") and (x) all other agreements related to this Agreement
and the Term Note and referred to herein (the preceding clauses (ii) through
(ix), collectively, the "Related Agreements"), to purchase the Term Notes and
the shares of Common Stock issuable upon conversion of the Term Notes (the "Note
Shares"), to purchase the Warrants and the Warrant Shares, and to carry out the
provisions of this Agreement and the Related Agreements. Each of the Purchasers
is duly qualified and is authorized to do business and is in good standing as a
foreign corporation, partnership, limited duration company or limited liability
company, as the case may be, in such Purchasers jurisdictions of organization.
5.3 Requisite Power and Authority. Such Purchaser has all necessary power and
authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
company action on such Purchaser's part required for the lawful execution and
delivery of this Agreement and the Related Agreements has been or will be
effectively taken prior to the Closing. Upon their execution and delivery, this
Agreement and the Related Agreements will be valid and binding obligations of
such Purchaser, enforceable in accordance with their terms, except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights; and
(b) as limited by general principles of equity that restrict the availability
of equitable and legal remedies.
5.4 Investment Representations. Such Purchaser understands that the Securities
are being offered and sold pursuant to an exemption from registration contained
in the Securities Act based in part upon such Purchaser's representations
contained in this Agreement, including, without limitation, that such Purchaser
is an "accredited investor" within the meaning of Regulation D under the
Securities Act. Such Purchaser confirms that it has received or has had full
access to all the information it considers necessary or appropriate to make an
informed investment decision with respect to the Term Note and the Warrant to be
purchased by it under this Agreement and the Note Shares and the Warrant Shares
acquired by it upon the conversion of such Term Note and the exercise of such
Warrant, respectively. Such Purchaser further confirms that it has had an
opportunity to ask questions and receive answers from the Company regarding the
Company's and its Subsidiaries' business, management and financial affairs and
the terms and conditions of the Offering, the Term Notes, the Warrants and the
Securities.
5.5 The Purchasers Bear Economic Risk. Such Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. Such Purchaser acknowledges and agrees that it must bear the
economic risk of this investment until the Securities are sold pursuant to: (i)
an effective registration statement under the Securities Act; or (ii) an
applicable exemption from registration with respect to such sale.
5.6 Acquisition for Own Account. Such Purchaser is acquiring its Term Notes and
Warrant and the Note Shares and the Warrant Shares for such Purchaser's own
account for investment only, and not as a nominee or agent and not with a view
towards or for resale in connection with their distribution.
5.7 The Purchasers Can Protect Their Interest. Such Purchaser represents that by
reason of its, or of its management's, business and financial experience, such
Purchaser has the capacity to evaluate the merits and risks of its investment in
its Term Notes, Warrant and the Securities and to protect its own interests in
connection with the transactions contemplated in this Agreement and the Related
Agreements. Further, such Purchaser is aware of no publication of any
advertisement in connection with the transactions contemplated in this Agreement
or the Related Agreements.
5.8 Accredited Investor. Such Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.
5.9 Legends.
(a) The Term Notes shall bear substantially the following legend:
"THIS TERM NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
TERM NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS TERM NOTE
AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS TERM NOTE MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS TERM NOTE OR SUCH
SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CORGENIX MEDICAL
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) The Note Shares and the Warrant Shares, shall bear a legend which shall be
in substantially the following form until such shares are covered by an
effective registration statement filed with the Securities and Exchange
Commission (the "SEC"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CORGENIX MEDICAL
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
(c) The Warrant shall bear substantially the following legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING
SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO CORGENIX
MEDICAL CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
6. Covenants of the Company. The Company covenants and agrees with the
Purchasers as follows:
6.1 Stop-Orders. The Company will advise the Purchasers, promptly after it
receives notice of issuance by the SEC, any state securities commission or any
other regulatory authority of any stop order or of any order preventing or
suspending any offering of any securities of the Company, or of the suspension
of the qualification of the Common Stock of the Company for offering or sale in
any jurisdiction, or the initiation of any proceeding for any such purpose.
6.2 Listing. The Company's shares of Common Stock issuable upon conversion of
the Term Notes and upon the exercise of the Warrants are listed on the OTCBB
(the "Principal Market") as of the date hereof and the Company shall maintain
such on the Principal Market so long as any other shares of Common Stock shall
be so listed. The Company will maintain the listing of its Common Stock on the
Principal Market, and will comply in all material respects with its reporting,
filing and other obligations.
6.3 Market Regulations. The Company shall notify the SEC, NASD and applicable
state authorities, in accordance with their requirements, of the transactions
contemplated by this Agreement, and shall take all other necessary action and
proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Securities to the Purchasers
and promptly provide copies thereof to the Purchasers.
6.4 Reporting Requirements. The Company will timely file with the SEC all
reports required to be filed pursuant to the Exchange Act and refrain from
terminating its status as an issuer required by the Exchange Act to file reports
thereunder even if the Exchange Act or the rules or regulations thereunder would
permit such termination.
6.5 Use of Funds. The Company agrees that it will use the proceeds of the sale
of the Term Notes and the Warrants for the purposes specified on Schedule 6.5
only (it being understood that $250,000 of the proceeds of the Term Notes will
be deposited in the Restricted Account on the Closing Date and shall be subject
to the terms and conditions of the Restricted Account Agreement and the
Restricted Account Side Letter). The Purchasers may withhold any further funding
under the Offering if the Company fails to use the proceeds as specified on
Schedule 6.5.
6.6 Access to Facilities. The Company and each of its Subsidiaries will permit
any representatives designated by any Purchaser (or any successor of such
Purchaser), upon reasonable notice and during normal business hours, at such
person's expense and accompanied by a representative of the Company, to:
(a) visit and inspect any of the properties of the Company or any of its
Subsidiaries;
(b) examine the corporate and financial records of the Company or any of its
Subsidiaries (unless such examination is not permitted by federal, state
or local law or by contract) and make copies thereof or extracts
therefrom; and
(c) discuss the affairs, finances and accounts of the Company or any of its
Subsidiaries with the directors, officers and independent accountants of
the Company or any of its Subsidiaries.
Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries
will provide any material, non-public information to any Purchaser unless such
Purchaser signs a confidentiality agreement and otherwise complies with
Regulation FD under the federal securities laws.
6.7 Taxes. Each of the Company and each of its Subsidiaries will promptly pay
and discharge, or cause to be paid and discharged, when due and payable, all
lawful taxes, assessments and governmental charges or levies imposed upon the
income, profits, property or business of the Company and its Subsidiaries;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall be contested in good faith by appropriate
proceedings and if the Company and/or such Subsidiary shall have set aside on
its books adequate reserves with respect thereto, and provided, further, that
the Company and its Subsidiaries will pay all such taxes, assessments, charges
or levies forthwith upon the commencement of proceedings to foreclose any lien
which may have attached as security therefor.
6.8 Insurance. Each of the Company and its Subsidiaries will keep its assets
which are of an insurable character insured by financially sound and reputable
insurers against loss or damage by fire, explosion and other risks customarily
insured against by companies in similar businesses similarly situated as the
Company and its Subsidiaries; and the Company and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons and property to the extent and in the
manner which the Company reasonably believes is customary for companies in
similar businesses similarly situated as the Company and its Subsidiaries and to
the extent available on commercially reasonable terms. The Company and each of
its Subsidiaries will jointly and severally bear the full risk of loss from any
loss of any nature whatsoever with respect to the assets pledged to the
Purchaser as security for their obligations hereunder and under the Related
Agreements. At the Company's and each of its Subsidiaries' joint and several
cost and expense in amounts and with carriers reasonably acceptable to the
Purchasers, the Company and each of its Subsidiaries shall (i) keep all their
insurable properties and properties in which they have an interest insured
against the hazards of fire, flood, sprinkler leakage, those hazards covered by
extended coverage insurance and such other hazards, and for such amounts, as is
customary in the case of companies engaged in businesses similar to the
Company's or the respective Subsidiary's including business interruption
insurance; (ii) maintain a bond in such amounts as is customary in the case of
companies engaged in businesses similar to the Company's or the respective
Subsidiary's insuring against larceny, embezzlement or other criminal
misappropriation of insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of the
Company or any of its Subsidiaries either directly or through governmental
authority to draw upon such funds or to direct generally the disposition of such
assets; (iii) maintain public and product liability insurance against claims for
personal injury, death or property damage suffered by others; (iv) maintain all
such worker's compensation or similar insurance as may be required under the
laws of any state or jurisdiction in which the Company or the respective
Subsidiary is engaged in business; and (v) furnish the Purchasers with (x)
copies of all policies and evidence of the maintenance of such policies at least
thirty (30) days before any expiration date, (y) excepting the Company's
workers' compensation policy, endorsements to such policies naming the
Purchasers as "co-insured" or "additional insured" and appropriate loss payable
endorsements in form and substance satisfactory to the Purchasers, naming the
Purchasers as loss payees, and (z) evidence that as to the Purchasers the
insurance coverage shall not be impaired or invalidated by any act or neglect of
the Company or any Subsidiary and the insurer will provide the Purchasers with
at least thirty (30) days notice prior to cancellation. The Company and each
Subsidiary shall instruct the insurance carriers that in the event of any loss
thereunder, the carriers shall make payment for such loss to the Company and/or
the Subsidiary and the Purchasers jointly. In the event that as of the date of
receipt of each loss recovery upon any such insurance, the Purchasers have not
declared an event of default with respect to this Agreement or any of the
Related Agreements, then the Company and/or such Subsidiary shall be permitted
to direct the application of such loss recovery proceeds toward investment in
property, plant and equipment that would comprise "Collateral" secured by the
Purchasers' security interest pursuant to its security agreement, with any
surplus funds to be applied toward payment of the obligations of the Company to
the Purchasers. In the event that the Purchasers have properly declared an event
of default with respect to this Agreement or any of the Related Agreements, then
all loss recoveries received by the Purchasers upon any such insurance
thereafter may be applied to the obligations of the Company hereunder and under
the Related Agreements, in such order as the Purchasers may determine. Any
surplus (following satisfaction of all Company obligations to the Purchasers)
shall be paid by the Purchasers to the Company or applied as may be otherwise
required by law. Any deficiency thereon shall be paid by the Company or the
Subsidiary, as applicable, to the Purchasers, on demand.
6.9 Intellectual Property. Each of the Company and each of its Subsidiaries
shall maintain in full force and effect its existence, rights and franchises and
all licenses and other rights to use Intellectual Property owned or possessed by
it and reasonably deemed to be necessary to the conduct of its business.
6.10 Properties. Each of the Company and each of its Subsidiaries will keep its
properties in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all needful and proper repairs, renewals,
replacements, additions and improvements thereto; and each of the Company and
each of its Subsidiaries will at all times comply with each provision of all
leases to which it is a party or under which it occupies property if the breach
of such provision would, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.11 Confidentiality. The Company agrees that it will not disclose, and will not
include in any public announcement, the names of the Purchasers, unless
expressly agreed to by the Purchasers or unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement. Notwithstanding the foregoing, the Company may disclose the
Purchasers' identity and the terms of this Agreement to its current and
prospective debt and equity financing sources. Notwithstanding the provisions of
this section, the Purchasers consent to the Company's filing of this Agreement
and the Related Agreements as exhibits to its Form 8-K.
6.12 Required Approvals. For so long as twenty-five percent (25%) of the
aggregate principal amount of the Original Term Notes are outstanding, the
Company, without the prior written consent of the Purchasers, shall not, and
shall not permit any of its Subsidiaries to:
(a) (i) directly or indirectly declare or pay any dividends, other than
dividends paid to the Company or any of its wholly-owned Subsidiaries,
(ii) issue any preferred stock that is mandatorily redeemable prior to the
one year anniversary of Maturity Date (as defined in the Term Notes) or
(iii) redeem any of its preferred stock or other equity interests;
(b) liquidate, dissolve or effect a material reorganization (it being
understood that in no event shall the Company dissolve, liquidate or merge
with any other person or entity (unless the Company is the surviving
entity);
(c) become subject to (including, without limitation, by way of amendment to
or modification of) any agreement or instrument which by its terms would
(under any circumstances) restrict the Company's or any of its
Subsidiaries' right to perform the provisions of this Agreement, any
Related Agreement or any of the agreements contemplated hereby or thereby;
(d) materially alter or change the scope of the business of the Company and
its Subsidiaries taken as a whole;
(e) (i) create, incur, assume or suffer to exist any
indebtedness (exclusive of debt incurred to finance the
purchase of equipment not in excess of five percent (5%) of
the fair market value of the Company's and its Subsidiaries'
assets) whether secured or unsecured other than (x) the
Company's indebtedness to the Purchasers, (y) indebtedness
set forth on Schedule 6.12(e) attached hereto and made a
part hereof and any refinancings or replacements thereof on
terms no less favorable to the Company than the indebtedness
being refinanced or replaced, and (z) any debt incurred in
connection with the purchase of assets in the ordinary
course of business, or any refinancings or replacements
thereof on terms no less favorable to the Company than the
indebtedness being refinanced or replaced; (ii) cancel any
debt owing to it in excess of $50,000 in the aggregate
during any 12 month period; (iii) assume, guarantee, endorse
or otherwise become directly or contingently liable in
connection with any obligations of any other Person, except
the endorsement of negotiable instruments by the Company for
deposit or collection or similar transactions in the
ordinary course of business or guarantees of indebtedness
otherwise permitted to be outstanding pursuant to this
clause (e); and
(f) create or acquire any Subsidiary after the date hereof
unless (i) such Subsidiary is a wholly-owned Subsidiary of
the Company and (ii) such Subsidiary becomes party to the
Term Note Security Agreement, the Stock Pledge Agreement and
the Subsidiary Guaranty (either by executing a counterpart
thereof or an assumption or joinder agreement in respect
thereof) and, to the extent required by the Purchasers,
satisfies each condition of this Agreement and the Related
Agreements as if such Subsidiary were a Subsidiary on the
Closing Date.
6.13 Repayment of Indebtedness. The Company agrees that if and for so long as it
shall have less than $500,000 in cash, it shall not make any payments of
principal or interest on any indebtedness other than the Company's indebtedness
to the Purchasers.
6.14 Reissuance of Securities. The Company agrees to reissue certificates
representing the Securities without the legends set forth in Section 5.8 above
at such time as:
(a) the holder thereof is permitted to dispose of such Securities pursuant to
Rule 144(k) under the Securities Act; or
(b) upon resale subject to an effective registration statement after such
Securities are registered under the Securities Act.
The Company agrees to cooperate with the Purchasers in connection with all
resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions
necessary to allow such resales provided the Company and its counsel receive
reasonably requested representations from the selling Purchaser and the broker,
if any.
6.15 Opinion. On the Closing Date, the Company will deliver to the Purchasers an
opinion acceptable to the Purchasers from the Company's external legal counsel.
The Company will provide, at the Company's expense, such other legal opinions in
the future as are deemed reasonably necessary by any Purchaser (and acceptable
to such Purchaser) in connection with the conversion of the Term Notes and
exercise of the Warrants.
6.16 Margin Stock. The Company will not permit any of the proceeds of the Term
Note or the Warrant to be used directly or indirectly to "purchase" or "carry"
"margin stock" or to repay indebtedness incurred to "purchase" or "carry"
"margin stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect.
6.17 Restricted Cash Disclosure. The Company agrees that, in connection with its
filing of its 8-K Report with the SEC concerning the transactions contemplated
by this Agreement and the Related Agreements (such report, the "Transaction
8-K") in a timely manner after the date hereof, it will disclose in such
Transaction 8-K the amount of the proceeds of the Term Notes issued to the
Purchasers that has been placed in a restricted cash account and is subject to
the terms and conditions of this Agreement and the Related Agreements.
Furthermore, the Company agrees to disclose in all public filings required by
the SEC (where appropriate) following the filing of the Transaction 8-K, the
existence of the restricted cash referred to in the immediately preceding
sentence, together with the amount thereof.
6.18 Financing Right of First Refusal. (a) The Company hereby grants to the
Purchasers a right of first refusal to provide any Additional Financing (as
defined below) to be issued by the Company and/or any of its Subsidiaries,
subject to the following terms and conditions. From and after the date hereof,
prior to the incurrence of any additional indebtedness and/or the sale or
issuance of any equity interests of the Company or any of its Subsidiaries
(other than pursuant to employee benefit plans or the exercise or conversion of
securities outstanding on the date hereof) (an "Additional Financing"), the
Company and/or any Subsidiary of the Company, as the case may be, shall notify
the Purchasers of its intention to enter into such Additional Financing. In
connection therewith, the Company and/or the applicable Subsidiary thereof shall
submit a term sheet (a "Proposed Term Sheet") to the Purchasers setting forth
the terms, conditions and pricing of any such Additional Financing (such
financing to be negotiated on "arm's length" terms and the terms thereof to be
negotiated in good faith) proposed to be entered into by the Company and/or such
Subsidiary. The Purchasers (or one or more thereof) shall have the right, but
not the obligation, to deliver their own proposed term sheet (the "Purchasers
Term Sheet") setting forth the terms and conditions upon which the Purchasers
(or one or more thereof) would be willing to provide such Additional Financing
to the Company and/or such Subsidiary. The Purchasers Term Sheet shall contain
terms no less favorable to the Company and/or such Subsidiary than those
outlined in the Proposed Term Sheet. The Purchasers (or one or more thereof)
shall deliver such Purchasers Term Sheet within ten business days of receipt of
each such Proposed Term Sheet. If the provisions of the Purchasers Term Sheet
are at least as favorable to the Company and/or such Subsidiary, as the case may
be, as the provisions of the Proposed Term Sheet, the Company and/or such
Subsidiary shall enter into and consummate the Additional Financing transaction
outlined in the Purchasers Term Sheet.
(b) The Company will not, and will not permit its Subsidiaries to, agree,
directly or indirectly, to any restriction with any person or entity which
limits the ability of the Purchasers to consummate an Additional Financing
with the Company or any of its Subsidiaries.
6.19 Additional Investment Right. The Company agrees that the Purchasers shall
have the right (at their sole option), on or prior to the date which is 270 days
following the Closing Date, to cause the Company to issue to the Purchasers
additional notes in an aggregate principal amount of up to $1,500,000 on the
same terms and conditions (including, without limitation, the same interest rate
and the Fixed Conversion Price (as defined in the Term Notes) then in effect,
proportionate warrant coverage (at the same exercise prices), a proportionate
amortization schedule, etc. but without the additional investment right
described in this section) set forth in, and pursuant to substantially similar
documentation as, this Agreement and the Related Agreements.
6.20 Net Worth. The Company shall maintain a minimum tangible net worth in
accordance with GAAP of $0 for so long as it has obligations to the Purchasers
under this Agreement and the Related Agreements.
6.21 Retention of Investor Relations/Public Relations Firm and Program. The
Company shall retain an investor relations firm/public relations firm approved
by the Purchasers for so long as the Company has obligations to the Purchasers
under this Agreement and the Related Agreements. Such investor relations
firm's/public relations firm's budget and program must be approved in advance by
the Purchasers for so long as the Company has obligations to the Purchasers
under this Agreement and the Related Agreements.
6.22 Maintenance of Formula Amount. The Company shall at all times have a
Formula Amount of at least Four Hundred Thousand Dollars ($400,000). On a
monthly basis, the Company shall provide a certificate of an officer of the
Company stating that the Company has a Formula Amount of at least Four Hundred
Thousand Dollars ($400,000). The Company shall provide a certificate stating its
Formula Amount promptly after the Company releases its quarterly financial
results for the Company's first three financial quarters and for the Company's
fiscal year end.
7. Covenants of the Purchasers. Each Purchaser, severally and not jointly,
covenants and agrees with the Company as follows: 7.1 Confidentiality. Such
Purchaser agrees that it will not disclose, and will not include in any public
announcement, the name of the Company, unless expressly agreed to by the Company
or unless and until such disclosure is required by law or applicable regulation,
and then only to the extent of such requirement.
7.2 Non-Public Information. Such Purchaser agrees not to effect any sales of the
shares of the Company's Common Stock while in possession of material, non-public
information regarding the Company if such sales would violate applicable
securities law.
8. Covenants of the Company and the Purchasers Regarding Indemnification.
8.1 Company Indemnification. The Company agrees to indemnify, hold harmless,
reimburse and defend the Purchasers and each of the Purchasers' officers,
directors, agents, affiliates, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Purchasers which results, arises out of or is based upon: (i) any
misrepresentation by the Company or any of its Subsidiaries or breach of any
warranty by the Company or any of its Subsidiaries in this Agreement, any other
Related Agreement or in any exhibits or schedules attached hereto or thereto; or
(ii) any breach or default in performance by the Company or any of its
Subsidiaries of any covenant or undertaking to be performed by the Company or
any of its Subsidiaries hereunder, under any other Related Agreement or any
other agreement entered into by the Company and/or any of its Subsidiaries and
the Purchasers relating hereto or thereto.
8.2 The Purchasers' Indemnification. Each Purchaser agrees to indemnify, hold
harmless, reimburse and defend the Company and each of the Company's officers,
directors, agents, affiliates, control persons and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Company which results, arises out of or is based upon: (i) any misrepresentation
by such Purchaser or breach of any warranty by such Purchaser in this Agreement
or in any exhibits or schedules attached hereto or any Related Agreement; or
(ii) any breach or default in performance by such Purchaser of any covenant or
undertaking to be performed by such Purchaser hereunder, or under any other
Related Agreement.
9. Conversion of Convertible Term Notes.
9.1 Mechanics of Conversion.
(a) Provided any Purchaser has notified the Company of such
Purchaser's intention to sell the Note Shares and the Note
Shares are included in an effective registration statement
or are otherwise exempt from registration when sold: (i)
upon the conversion of a Term Note or part thereof, the
Company shall, at its own cost and expense, take all
necessary action (including the issuance of an opinion of
counsel reasonably acceptable to such Purchaser following a
request by such Purchaser) to assure that the Company's
transfer agent shall issue shares of the Company's Common
Stock in the name of such Purchaser (or its nominee) or such
other persons as designated by such Purchaser in accordance
with Section 9.1(b) hereof and in such denominations to be
specified representing the number of Note Shares issuable
upon such conversion; and (ii) the Company warrants that no
instructions other than these instructions have been or will
be given to the transfer agent of the Company's Common Stock
and that after the Effectiveness Date (as defined in the
Registration Rights Agreement) the Note Shares issued will
be freely transferable subject to the prospectus delivery
requirements of the Securities Act and the provisions of
this Agreement, and will not contain a legend restricting
the resale or transferability of the Note Shares.
(b) Each Purchaser will give notice of its decision to exercise
its right to convert its Term Note or part thereof by
telecopying or otherwise delivering an executed and
completed notice of the number of shares to be converted to
the Company (the "Notice of Conversion"). Such Purchaser
will not be required to surrender its Term Note until such
Purchaser receives a credit to the account of the
Purchaser's prime broker through the DWAC system (as defined
below), representing the Note Shares or until its Term Note
has been fully satisfied. Each date on which a Notice of
Conversion is telecopied or delivered to the Company in
accordance with the provisions hereof shall be deemed a
"Conversion Date." Pursuant to the terms of the Notice of
Conversion, the Company will issue instructions to the
transfer agent accompanied by an opinion of counsel within
two (2) business days of the date of the delivery to the
Company of the Notice of Conversion and shall cause the
transfer agent to transmit the certificates representing the
Conversion Shares to the Holder by crediting the account of
such Purchaser's prime broker with The Depository Trust
Company ("DTC") through its Deposit Withdrawal Agent
Commission ("DWAC") system within three (3) business days
after receipt by the Company of the Notice of Conversion
(the "Delivery Date").
(c) The Company understands that a delay in the delivery of the
Note Shares in the form required pursuant to Section 9
hereof beyond the Delivery Date could result in economic
loss to the Purchasers. In the event that the Company fails
to direct its transfer agent to deliver the Note Shares to
any Purchaser via the DWAC system within the time frame set
forth in Section 9.1(b) above and the Note Shares are not
delivered to such Purchaser by the Delivery Date, as
compensation to such Purchaser for such loss, the Company
agrees to pay late payments to such Purchaser for late
issuance of the Note Shares in the form required pursuant to
Section 9 hereof upon conversion of its Term Note in the
amount equal to the greater of: (i) $250 per business day
after the Delivery Date; or (ii) such Purchaser's actual
damages from such delayed delivery. Notwithstanding the
foregoing, the Company will not owe a Purchaser any late
payments if the delay in the delivery of the Note Shares
beyond the Delivery Date is solely out of the control of the
Company and the Company is actively trying to cure the cause
of the delay. The Company shall pay any payments incurred
under this Section in immediately available funds upon
demand and, in the case of actual damages, accompanied by
reasonable documentation of the amount of such damages.
Such documentation shall show the number of shares of Common
Stock such Purchaser is forced to purchase (in an open
market transaction) which such Purchaser anticipated
receiving upon such conversion, and shall be calculated as
the amount by which (A) such Purchaser's total purchase
price (including customary brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (B) the
aggregate principal and/or interest amount of its Term Note,
for which such Conversion Notice was not timely honored.
Nothing contained herein or in any document referred to herein or delivered in
connection herewith shall be deemed to establish or require the payment of a
rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest or dividends required to
be paid or other charges hereunder exceed the maximum amount permitted by such
law, any payments in excess of such maximum shall be credited against amounts
owed by the Company to the Purchasers and thus refunded to the Company.
10. Registration Rights.
10.1 Registration Rights Granted. The Company hereby grants registration rights
to the Purchasers pursuant to a Registration Rights Agreement dated as of even
date herewith among the Company and the Purchasers.
10.2 Offering Restrictions. Except as previously disclosed in the SEC Reports or
in the Exchange Act Filings, or stock or stock options granted to employees or
directors of the Company (these exceptions hereinafter referred to as the
"Excepted Issuances"), neither the Company nor any of its Subsidiaries will
issue any securities with a continuously variable/floating conversion feature
which are or could be (by conversion or registration) free-trading securities
(i.e. common stock subject to a registration statement) prior to the full
repayment or conversion of the Term Note (together with all accrued and unpaid
interest and fees related thereto) (the "Exclusion Period").
11. Miscellaneous.
11.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT BY EITHER PARTY
AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND
EACH RELATED AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR
IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BOTH PARTIES AND THE
INDIVIDUALS EXECUTING THIS AGREEMENT AND THE RELATED AGREEMENTS ON BEHALF OF THE
COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND WAIVE TRIAL BY
JURY. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY RELATED AGREEMENT
DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANY
APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED
INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED
MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW. ANY SUCH PROVISION WHICH
MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY
OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT OR ANY RELATED
AGREEMENT.
11.2 Survival. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by the Purchasers and the closing of
the transactions contemplated hereby to the extent provided therein. All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.
11.3 Successors. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
heirs, executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the
Securities from time to time, other than the holders of Common Stock which has
been sold by such Purchaser pursuant to Rule 144 or an effective registration
statement. The Purchasers may not assign their rights hereunder to a competitor
of the Company.
11.4 Entire Agreement. This Agreement, the Related Agreements, the exhibits and
schedules hereto and thereto and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
11.5 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the written consent of
the Company and each of the Purchasers.
(b) The obligations of the Company and the rights of the Purchasers under this
Agreement may be waived only with the unanimous written consent of the
Purchasers.
(c) The obligations of the Purchasers and the rights of the Company under this
Agreement may be waived only with the written consent of the Company.
11.6 Delays or Omissions. It is agreed that no delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement or the Related Agreements,
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. All remedies, either under this Agreement or the Related Agreements,
by law or otherwise afforded to any party, shall be cumulative and not
alternative.
11.7 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified;
(b) when sent by confirmed facsimile if sent during normal business hours of
the recipient, if not, then on the next business day;
(c) three (3) business days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or
(d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.
All communications shall be sent as follows:
If to the Company, to: Corgenix Medical Corporation
12061 Tejon Street
Westminster, CO 80234
Attention: Chief Financial
Officer
Facsimile:
If to a [Purchaser]: [Purchasers Address]
or at such other address as the Company or such Purchaser may designate by
written notice to the other parties hereto given in accordance herewith.
11.8 Attorneys' Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including, without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
11.9 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
11.10 Facsimile Signatures; Counterparts. This Agreement may be executed by
facsimile signatures and in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
11.11 Broker's Fees. Other than Burnham Securities Inc. and Ascendiant, each
party hereto represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated herein.
Each party hereto further agrees to indemnify each other party for any claims,
losses or expenses incurred by such other party as a result of the
representation in this Section 11.11 being untrue.
11.12 Construction. Each party acknowledges that its legal counsel participated
in the preparation of this Agreement and the Related Agreements and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Agreement to favor any party against the other.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY: PURCHASERS:
CORGENIX MEDICAL CORPORATION
By:
-------------------------
-------------------------
Name:
Title
A-1
EXHIBIT A
FORM OF CONVERTIBLE TERM NOTE
B-1
EXHIBIT B
FORM OF WARRANT
C-2
C-1
EXHIBIT C
FORM OF OPINION
D-1
EXHIBIT D
FORM OF ESCROW AGREEMENT
SCHEDULE I
Original Term Notes:
Principal
Purchaser Amount Purchase Price
[PURCHASER] $825,000 $747,800
[PURCHASER 2] $1,595,000 $1,450,000
Warrants:
Number of Shares of
Holder the Company's Common Stock
[PURCHASER] 2,331,818
[PURCHASER 2] 4,508,182
SCHEDULE 6.5
Legal Fees and Amounts listed on the
Disbursement Letter to the Escrow Agent
<page>
Exhibit 10.2
CORGENIX MEDICAL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES
FORM OF TERM NOTE SECURITY AGREEMENT
To: [PURCHASERS]
Date: May 19, 2005
To Whom It May Concern:
1. To secure the payment of all Obligations (as hereafter defined), Corgenix
Medical Corporation, a Nevada corporation (the "Company"), each of the
other undersigned parties (together, "Purchasers")) and each other entity
that is required to enter into this Term Note Security Agreement (each an
"Assignor" and, collectively, the "Assignors") hereby assign and grant to
Purchasers a continuing security interest in all of the following property
now owned or at any time hereafter acquired by any Assignor, or in which
any Assignor now has or at any time in the future may acquire any right,
title or interest (the "Collateral"): all cash, cash equivalents,
accounts, accounts receivable, deposit accounts (including, without
limitation, the Restricted Account (the "Restricted Account") maintained
at [Bank] (Account Name: _________, Account Number: __________) referred
to in the Restricted Account Agreement), inventory, equipment, goods,
documents, instruments (including, without limitation, promissory notes),
contract rights, general intangibles (including, without limitation,
payment intangibles and an absolute right to license on terms no less
favorable than those currently in effect among our affiliates), chattel
paper, supporting obligations, investment property (including, without
limitation, all equity interests owned by any Assignor), letter-of-credit
rights, trademarks, trademark applications, tradestyles, patents, patent
applications, copyrights, copyright applications and other intellectual
property in which any Assignor now has or hereafter may acquire any right,
title or interest, all proceeds and products thereof (including, without
limitation, proceeds of insurance) and all additions, accessions and
substitutions thereto or therefore. In the event any Assignor wishes to
finance the acquisition in the ordinary course of business of any
hereafter acquired equipment and has obtained a commitment from a
financing source to finance such equipment from an unrelated third party,
each Purchaser agrees to release its security interest on such hereafter
acquired equipment so financed by such third party financing source.
Except as otherwise defined herein, all capitalized terms used herein
shall have the meaning provided such terms in the Securities Purchase
Agreement referred to below.
2. The term "Obligations" as used herein shall mean and include all debts,
liabilities and obligations owing by each Assignor to Purchasers arising
under, out of, or in connection with: (i) that certain Securities Purchase
Agreement dated as of the date hereof by and between the Company and
Purchasers (the "Securities Purchase Agreement") and (ii) the Related
Agreements referred to in the Securities Purchase Agreement, (the
Securities Purchase Agreement and each Related Agreement, as each may be
amended, modified, restated or supplemented from time to time, are
collectively referred to herein as the "Documents"), and in connection
with any documents, instruments or agreements relating to or executed in
connection with the Documents or any documents, instruments or agreements
referred to therein or otherwise, and in connection with any other
indebtedness, obligations or liabilities of any Assignor to Purchasers,
whether now existing or hereafter arising, direct or indirect, liquidated
or unliquidated, absolute or contingent, due or not due and whether under,
pursuant to or evidenced by a note, agreement, guaranty, instrument or
otherwise, in each case, irrespective of the genuineness, validity,
regularity or enforceability of such Obligations, or of any instrument
evidencing any of the Obligations or of any collateral therefor or of the
existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of the Obligations
in any case commenced by or against any Assignor under Title 11, United
States Code, including, without limitation, obligations or indebtedness of
each Assignor for post-petition interest, fees, costs and charges that
would have accrued or been added to the Obligations but for the
commencement of such case.
3. Each Assignor hereby jointly and severally represents, warrants and
covenants to Purchasers that:
(a) it is a corporation, partnership or limited liability company, as the case
may be, validly existing, in good standing and organized under the
respective laws of its jurisdiction of organization set forth on Schedule
A, and each Assignor will provide Purchasers thirty (30) days' prior
written notice of any change in any of its respective jurisdiction of
organization;
(b) its legal name is as set forth in its respective Certificate of
Incorporation or other organizational document (as applicable) as amended
through the date hereof and as set forth on Schedule A, and it will
provide Purchasers thirty (30) days' prior written notice of any change in
its legal name;
(c) its organizational identification number (if applicable) is as set forth
on Schedule A hereto, and it will provide Purchasers thirty (30) days'
prior written notice of any change in its organizational identification
number;
(d) it is the lawful owner of the respective Collateral and it has the sole
right to grant a security interest therein and will defend the Collateral
against all claims and demands of all persons and entities;
(e) it will keep its respective Collateral free and clear of all
attachments, levies, taxes, liens, security interests and
encumbrances of every kind and nature ("Encumbrances"),
except (i) Encumbrances securing the Obligations, (ii) (a)
Encumbrances of carriers, warehousemen, artisans, bailees,
mechanics and materialmen incurred in the ordinary course of
business securing sums not overdue; (b) Encumbrances
incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, relating to
employees, securing sums (i) not overdue or (ii) being
diligently contested in good faith provided that adequate
reserves with respect thereto are maintained on the books of
Company or any Subsidiary thereof, in conformity with GAAP;
(c) Encumbrances in favor of Purchasers; (d) Encumbrances
for taxes (i) not yet due or (ii) being diligently contested
in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the
books of the Company or any Subsidiary thereof in conformity
with GAAP provided, that, the Encumbrance shall have no
effect on the priority of Encumbrances in favor of any
Purchaser or the value of the assets in which any Purchaser
has an Encumbrance; (e) Purchase Money Liens (as defined
below) securing Purchase Money Indebtedness (as defined
below) to the extent permitted in this Agreement and (ii) to
the extent said Encumbrance does not secure indebtedness in
excess of $50,000 and such Encumbrance is removed or
otherwise released within ten (10) days of the creation
thereof;
(f) it will, at its and the other Assignors' joint and several cost and
expense, keep the Collateral in a good state of repair (ordinary wear and
tear excepted) and will not waste or destroy the same or any part thereof
other than ordinary course discarding of items no longer used or useful in
its or such other Assignors' business;
(g) it will not without each Purchaser's prior written consent,
sell, exchange, lease or otherwise dispose of the
Collateral, whether by sale, lease or otherwise, except for
the sale of inventory in the ordinary course of business and
for the disposition or transfer in the ordinary course of
business during any fiscal year of obsolete and worn-out
equipment or equipment no longer necessary for its ongoing
needs, having an aggregate fair market value of not more
than $25,000 and only to the extent that:
(i) the proceeds of any such disposition are used to acquire replacement
Collateral which is subject to each of Purchasers' first priority
perfected security interest, or are used to repay Obligations or to pay
general corporate expenses; and
(ii) following the occurrence of an Event of Default which continues to exist
the proceeds of which are remitted to each of Purchasers to be held as
cash collateral for the Obligations;
(h) it will insure or cause the Collateral to be insured in each
Purchaser's name against loss or damage by fire, theft,
burglary, pilferage, loss in transit and such other hazards
as Purchasers shall specify in amounts and under policies by
insurers acceptable to Purchasers and all premiums thereon
shall be paid by such Assignor and the policies delivered to
Purchasers. If any such Assignor fails to do so, Purchasers
may procure such insurance and the cost thereof shall be
promptly reimbursed by the Assignors, jointly and severally,
and shall constitute Obligations;
(i) it will at all reasonable times allow any of Purchasers or Purchasers'
representatives free access to and the right of inspection of the
Collateral; and
(j) such Assignor (jointly and severally with each other
Assignor) hereby indemnifies and saves each Purchaser
harmless from all loss, costs, damage, liability and/or
expense, including reasonable attorneys' fees, that any such
Purchaser may sustain or incur to enforce payment,
performance or fulfillment of any of the Obligations and/or
in the enforcement of this Term Note Security Agreement or
in the prosecution or defense of any action or proceeding
either against such Purchaser or any Assignor concerning any
matter growing out of or in connection with this Term Note
Security Agreement, and/or any of the Obligations and/or any
of the Collateral except to the extent caused by such
Purchaser's own gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final
decision).
(k) each Assignor will provide evidence to Purchasers of a letter
acknowledged by each Account Debtor (as defined in the Securities Purchase
Agreement) stating that any amounts owed by such Account Debtor will be
paid to the lock-box account as specified by Purchasers.
"Purchase Money Indebtedness" means (a) any indebtedness incurred for
the payment of all or any part of the purchase price of any fixed asset,
including indebtedness under capitalized leases, (b) any indebtedness incurred
for the sole purpose of financing or refinancing all or any part of the purchase
price of any fixed asset, and (c) any renewals, extensions or refinancings
thereof (but not any increases in the principal amounts thereof outstanding at
that time); "Purchase Money Lien" means any Encumbrance upon any fixed assets
that secures the Purchase Money Indebtedness related thereto but only if such
Encumbrance shall at all times be confined solely to the asset the purchase
price of which was financed or refinanced through the incurrence of the Purchase
Money Indebtedness secured by such Encumbrance and only if such Encumbrance
secures only such Purchase Money Indebtedness.
4. Notwithstanding anything contained herein, nothing shall require Corgenix
(UK) Limited to:
(a) remove, or give to the Assignors any priority over the fixed and floating
charge in favor of National Westminster Bank Plc, provided such charge
will be fully discharged within 60 days of the date hereof;
(b) comply with any of the provisions of this Term Note Security Agreement to
the extent that compliance with this Term Note Security Agreement would
breach any of the laws of England and Wales.
5. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Term Note Security Agreement:
(a) any covenant, warranty, representation or statement made or furnished to
Purchasers by any Assignor or on any Assignor's behalf was breached in any
material respect or false in any material respect when made or furnished,
as the case may be, and, in the case of a covenant, if subject to cure,
shall not be cured for a period of fifteen (15) days;
(b) the loss, theft, substantial damage, destruction, sale or encumbrance to
or of any of the Collateral or the making of any levy, seizure or
attachment thereof or thereon except to the extent:
(i) such loss is covered by insurance proceeds which are used to replace the
item or repay Purchasers; or
(ii) said levy, seizure or attachment does not secure indebtedness in excess of
$100,000 and such levy, seizure or attachment has not been removed or
otherwise released within ten (10) days of the creation or the assertion
thereof;
(c) any Assignor shall become insolvent, cease operations, dissolve, terminate
its business existence, make an assignment for the benefit of creditors,
or suffer the appointment of a receiver, trustee, liquidator or custodian
of all or any part of Assignors' property;
(d) any proceedings under any bankruptcy or insolvency law shall be commenced
by or against any Assignor;
(e) the Company shall repudiate, purport to revoke or fail to perform any or
all of its obligations under any Note (after passage of applicable cure
periods, if any); or
(f) an Event of Default shall have occurred under and as defined in any
Document.
6. Upon the occurrence of any Event of Default and at any time thereafter,
each of Purchasers may declare all Obligations immediately due and payable
and each of Purchasers shall have the remedies of a secured party provided
in the Uniform Commercial Code as in effect in the State of New York, this
Agreement and other applicable law. Upon the occurrence of any Event of
Default and at any time thereafter, each of Purchasers will have the right
to take possession of the Collateral and to maintain such possession on
any Assignor's premises or to remove the Collateral or any part thereof to
such other premises as such Purchaser may desire. Upon Purchasers'
request, each of the Assignors shall assemble or cause the Collateral to
be assembled and make it available to Purchasers at a place designated by
Purchasers. If any notification of intended disposition of any Collateral
is required by law, such notification, if mailed, shall be deemed properly
and reasonably given if mailed at least ten (10) days before such
disposition, postage prepaid, addressed to any Assignor either at such
Assignor's address shown herein or at any address appearing on Purchasers'
records for such Assignor. Any proceeds of any disposition of any of the
Collateral shall be applied by Purchasers to the payment of all expenses
in connection with the sale of the Collateral, including reasonable
attorneys' fees and other legal expenses and disbursements and the
reasonable expense of retaking, holding, preparing for sale, selling, and
the like, and any balance of such proceeds may be applied by Purchasers
toward the payment of the Obligations in such order of application as
Purchasers may elect, and each Assignor shall be liable for any
deficiency. For the avoidance of doubt, following the occurrence and
during the continuance of an Event of Default, Purchasers shall have the
immediate right to withdraw any and all monies contained in the Restricted
Account or any other deposit accounts in the name of the Assignor and
controlled by Purchasers and apply the same to the repayment of the
Obligations (in such order of application as Purchasers may elect).
7. If any Assignor defaults in the performance or fulfillment of any of the
material terms, conditions, promises, covenants, provisions or warranties
on such Assignor's part to be performed or fulfilled under or pursuant to
this Term Note Security Agreement, each Purchaser may, at its option
without waiving its right to enforce this Term Note Security Agreement
according to its terms, immediately or at any time thereafter and with
notice to the Assignors, perform or fulfill the same or cause the
performance or fulfillment of the same for each Assignor's joint and
several account and at each Assignor's joint and several cost and expense,
and the cost and expense thereof (including reasonable attorneys' fees)
shall be added to the Obligations and shall be payable on demand with
interest thereon at the then interest rate on the Amortizing Principal
Amount of the Term Notes (as defined in the Securities Purchase Agreement)
plus 24% per annum, or, at such Purchaser's option, debited by such
Purchaser from the Restricted Account or any other deposit accounts in the
name of the Assignor and controlled by such Purchaser.
8. Each Assignor appoints each Purchaser, any of such Purchaser's officers,
employees or any other person or entity whom such Purchaser may designate
as its attorney, with power to execute such documents in each of its
behalf and to supply any omitted information and correct patent errors in
any documents executed by any Assignor or on any Assignor's behalf; to
file financing statements against each Assignor covering the Collateral
(and, in connection with the filing of any such financing statements,
describe the Collateral as "all assets and all personal property, whether
now owned and/or hereafter acquired" (or any substantially similar
variation thereof)); to sign its name on public records; and to do all
other things such Purchaser deems necessary to carry out this Term Note
Security Agreement. Each Assignor hereby ratifies and approves all acts of
the attorney and neither such Purchaser nor the attorney will be liable
for any acts of commission or omission, nor for any error of judgment or
mistake of fact or law other than gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final decision).
This power being coupled with an interest, is irrevocable so long as any
Obligations remain unpaid.
9. No delay or failure on each Purchaser's part in exercising any right,
privilege, remedy or option hereunder shall operate as a waiver of such or
of any other right, privilege, remedy or option, and no waiver whatever
shall be valid unless in writing, signed by each Purchaser and then only
to the extent therein set forth, and no waiver by any Purchaser of any
default shall operate as a waiver of any other default or of the same
default on a future occasion. Purchasers' books and records containing
entries with respect to the Obligations shall be admissible in evidence in
any action or proceeding, shall be binding upon each Assignor for the
purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof. Each Purchaser shall have the right to enforce
any one or more of the remedies available to such Purchaser, successively,
alternately or concurrently. Each Assignor agrees to join with each
Purchaser in executing financing statements or other instruments to the
extent required by the Uniform Commercial Code in form satisfactory to
such Purchaser and in executing such other documents or instruments as may
be required or deemed necessary by such Purchaser for purposes of
effecting or continuing such Purchaser's security interest in the
Collateral.
10. This Term Note Security Agreement shall be governed by and construed in
accordance with the laws of the State of New York and cannot be terminated
orally. All of the rights, remedies, options, privileges and elections
given to each Purchaser hereunder shall inure to the benefit of each
Purchaser's successors and assigns. The term "Purchaser" as herein used
shall include each Purchaser, any parent of Purchaser's, any of
Purchaser's subsidiaries and any co-subsidiaries of Purchaser's parent,
whether now existing or hereafter created or acquired, and all of the
terms, conditions, promises, covenants, provisions and warranties of this
Agreement shall inure to the benefit of each of the foregoing, and shall
bind the representatives, successors and assigns of each Assignor.
Purchasers and each Assignor hereby (a) waive any and all right to trial
by jury in litigation relating to this Agreement and the transactions
contemplated hereby and each Assignor agrees not to assert any
counterclaim in such litigation, (b) submit to the nonexclusive
jurisdiction of any New York State court sitting in the borough of
Manhattan, the city of New York and (c) waive any objection Purchasers or
any Assignor may have as to the bringing or maintaining of such action
with any such court.
11. It is understood and agreed that any person or entity that desires to
become an Assignor hereunder, or is required to execute a counterpart of
this Term Note Security Agreement after the date hereof pursuant to the
requirements of any Document, shall become an Assignor hereunder by (x)
executing a Joinder Agreement in form and substance satisfactory to
Purchasers, (y) delivering supplements to such exhibits and annexes to
such Documents as Purchasers shall reasonably request and (z) taking all
actions as specified in this Agreement as would have been taken by such
Assignor had it been an original party to this Agreement, in each case
with all documents required above to be delivered to Purchasers and with
all documents and actions required above to be taken to the reasonable
satisfaction of Purchasers.
12. All notices from Purchasers to any Assignor shall be sufficiently given if
mailed or delivered to such Assignor's address set forth below.
13. All rights of Purchasers hereunder shall be exercised by [PURCHASER], as
their agent.
[SIGNATURE PAGE FOLLOWS]
Very truly yours,
CORGENIX MEDICAL CORPORATION
By:
-----------------------------
Name:
Title:
Address:
CORGENIX, INC.
By:
-----------------------------
Name:
Title:
Address:
CORGENIX (UK) LTD.
By:
-----------------------------
Name:
Title:
Address:
HEALTH-OUTFITTERS.COM, INC.
By:
-----------------------------
Name:
Title:
Address:
ACKNOWLEDGED:
[PURCHASERS]
-----------------------------
-----------------------------
-----------------------------
SCHEDULE A
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Jurisdiction of Organization
Entity Organization Identification Number
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Corgenix Medical Nevada 93-1223466
Corporation
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Corgenix, Inc. Delaware 84-1147392
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Corgenix (UK) Ltd. United Kingdom
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Health-outfitters.com, Colorado 84-1521002
Inc.
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- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
<page>
Exhibit 10.3
FORM OF REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 19, 2005, by and between CORGENIX MEDICAL CORPORATION, a Nevada
corporation (the "Company"), and [[PURCHASERS] (the "Purchasers").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchasers and the Company (as
amended, modified or supplemented from time to time, the "Securities Purchase
Agreement"), and pursuant to the Notes and the Warrants referred to therein.
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Securities Purchase Agreement shall have the meanings given such
terms in the Securities Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
"Commission" means the Securities and Exchange
Commission.
"Common Stock" means shares of the Company's common stock, par value
$0.001 per share.
"Effectiveness Date" means (i) with respect to the initial
Registration Statement required to be filed hereunder, a date no later than
one-hundred-twenty (120) days following the date hereof and (ii) with respect to
each additional Registration Statement required to be filed hereunder, a date no
later than forty (40) days following the applicable Filing Date.
"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"Filing Date" means, (i) with respect to the initial Registration
Statement required to be filed hereunder, a date no later than thirty (30) days
following the date hereof, and (ii) with respect to shares of Common Stock
issuable to the Holder as a result of adjustments to the Fixed Conversion Price
made pursuant to the Securities Purchase Agreement, any Notes or the Warrants or
otherwise, thirty (30) days after the occurrence of such event or the date of
the adjustment of the Fixed Conversion Price.
"Holder" or "Holders" means a Purchaser or the Purchasers, as the
case may be or any of their affiliates or transferees to the extent any of them
hold Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" means the shares of Common Stock issued upon
the conversion of any Note (as defined in the Securities Purchase Agreement) and
issuable upon exercise of the Warrants.
"Registration Statement" means each registration statement required
to be filed hereunder, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor statute.
"Securities Purchase Agreement" shall have the meaning provided
above.
"Trading Market" means any of the OTCBB, NASDAQ SmallCap Market, the
Nasdaq National Market, the American Stock Exchange or the New York Stock
Exchange.
"Warrants" means, collectively, the Common Stock purchase warrants
issued pursuant to the Securities Purchase Agreement.
2. Registration.
(a) On or prior to the applicable Filing Date the Company shall
prepare and file with the Commission a Registration
Statement covering the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form SB-2
(except if the Company is not then eligible to register for
resale the Registrable Securities on Form SB-2, in which
case such registration shall be on another appropriate form
in accordance herewith). The Company shall cause the
Registration Statement to become effective and remain
effective as provided herein. The Company shall use its
reasonable commercial efforts to cause the Registration
Statement to be declared effective under the Securities Act
as promptly as possible after the filing thereof, but in any
event no later than the Effectiveness Date. The Company
shall use its reasonable commercial efforts to keep the
Registration Statement continuously effective under the
Securities Act until the date which is the earlier date of
when (i) all Registrable Securities have been sold or (ii)
all Registrable Securities may be sold immediately without
registration under the Securities Act and without volume
restrictions pursuant to Rule 144(k), as determined by the
counsel to the Company pursuant to a written opinion letter
to such effect, addressed and acceptable to the Company's
transfer agent and the affected Holders (the "Effectiveness
Period").
(b) If: (i) the Registration Statement is not filed on or prior
to the Filing Date; (ii) the Registration Statement is not
declared effective by the Commission by the Effectiveness
Date; (iii) after the Registration Statement is filed with
and declared effective by the Commission, the Registration
Statement ceases to be effective (by suspension or
otherwise) as to all Registrable Securities to which it is
required to relate at any time prior to the expiration of
the Effectiveness Period (without being succeeded
immediately by an additional registration statement filed
and declared effective) for a period of time which shall
exceed 30 days in the aggregate per year or more than 20
consecutive calendar days (defined as a period of 365 days
commencing on the date the Registration Statement is
declared effective); or (iv) the Common Stock is not listed
or quoted, or is suspended from trading on any Trading
Market for a period of three (3) consecutive Trading Days
(provided the Company shall not have been able to cure such
trading suspension within 30 days of the notice thereof or
list the Common Stock on another Trading Market); (any such
failure or breach being referred to as an "Event," and for
purposes of clause (i) or (ii) the date on which such Event
occurs, or for purposes of clause (iii) the date on which
such 30 day or 20 consecutive day period (as the case may
be) is exceeded, or for purposes of clause (iv) the date on
which such three (3) Trading Day period is exceeded, being
referred to as "Event Date"), then until the applicable
Event is cured, the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty,
equal to 1.5% for each thirty (30) day period (prorated for
partial periods) on a daily basis of the sum of (x) the
original principal amount of the Term Note (as defined in
the Securities Purchase Agreement) held by such Holder plus
(y) the original principal amount of each applicable Minimum
Borrowing Note (as defined in the Revolving Loan and
Security Agreement) held by such Holder. While such Event
continues, such liquidated damages shall be paid not less
often than each thirty (30) days. Any unpaid liquidated
damages as of the date when an Event has been cured by the
Company shall be paid within three (3) days following the
date on which such Event has been cured by the Company.
(c) Within three business days of the Effectiveness Date, the
Company shall cause its counsel to issue a blanket opinion
in the form attached hereto as Exhibit A, to the transfer
agent stating that the shares are subject to an effective
registration statement and can be reissued free of
restrictive legend upon notice of a sale by any of the
Purchasers and confirmation by such Purchaser that it has
complied with the prospectus delivery requirements, provided
that the Company has not advised the transfer agent orally
or in writing that the opinion has been withdrawn. Copies of
the blanket opinion required by this Section 2(c) shall be
delivered to the Purchasers within the time frame set forth
above.
3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission the Registration
Statement with respect to such Registrable Securities,
respond as promptly as possible to any comments received
from the Commission, and use its best efforts to cause the
Registration Statement to become and remain effective for
the Effectiveness Period with respect thereto, and promptly
provide to the Purchasers copies of all filings and
Commission letters of comment relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus
used in connection therewith as may be necessary to comply
with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by the
Registration Statement and to keep such Registration
Statement effective until the expiration of the
Effectiveness Period;
(c) furnish to the Purchasers such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
Prospectus) as the Purchasers reasonably may request to facilitate the
public sale or disposition of the Registrable Securities covered by the
Registration Statement;
(d) use its commercially reasonable efforts to register or
qualify the Purchasers' Registrable Securities covered by
the Registration Statement under the securities or "blue
sky" laws of such jurisdictions within the United States as
the Purchasers may reasonably request, provided, however,
that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified
or to consent to general service of process in any such
jurisdiction;
(e) list the Registrable Securities covered by the Registration Statement with
any securities exchange on which the Common Stock of the Company is then
listed;
(f) immediately notify the Purchasers at any time when a
Prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event of
which the Company has knowledge as a result of which the
Prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances then existing; and
(g) make available for inspection by the Purchasers and any
attorney, accountant or other agent retained by the
Purchasers, all publicly available, non-confidential
financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's
officers, directors and employees to supply all publicly
available, non-confidential information reasonably requested
by the attorney, accountant or agent of the Purchasers.
4. Registration Expenses. All expenses relating to the Company's compliance
with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and
expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the NASD, transfer
taxes, fees of transfer agents and registrars, fees of, and disbursements
incurred by, one counsel for the Holders (to the extent such counsel is
required due to the Company's failure to meet any of its obligations
hereunder), are called "Registration Expenses". All selling commissions
applicable to the sale of Registrable Securities, including any fees and
disbursements of any special counsel to the Holders beyond those included
in Registration Expenses, are called "Selling Expenses." The Company shall
only be responsible for all Registration Expenses.
5. Indemnification.
(a) In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless each of the
Purchasers, and their respective officers, directors and
each other person, if any, who controls any of the
Purchasers within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or
several, to which any of the Purchasers, or such persons may
become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under
which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary
Prospectus or final Prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are
based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will
reimburse the Purchasers, and each such person for any
reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case if and to
the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by or on
behalf of any of the Purchasers or any such person in
writing specifically for use in any such document.
(b) In the event of a registration of the Registrable Securities
under the Securities Act pursuant to this Agreement, each of
the Purchasers will indemnify and hold harmless the Company,
and its officers, directors and each other person, if any,
who controls the Company within the meaning of the
Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such
persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of any material fact which was furnished in
writing by such Purchaser to the Company expressly for use
in (and such information is contained in) the Registration
Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and each such
person for any reasonable legal or other expenses incurred
by them in connection with investigating or defending any
such loss, claim, damage, liability or action, provided,
however, that such Purchaser will be liable in any such case
if and only to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished in
writing to the Company by or on behalf of such Purchaser
specifically for use in any such document. Notwithstanding
the provisions of this paragraph, no Purchaser shall be
required to indemnify any person or entity in excess of the
amount of the aggregate net proceeds received by such
Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.
(c) Promptly after receipt by a party entitled to claim
indemnification hereunder (an "Indemnified Party") of notice
of the commencement of any action, such Indemnified Party
shall, if a claim for indemnification in respect thereof is
to be made against a party hereto obligated to indemnify
such Indemnified Party (an "Indemnifying Party"), notify the
Indemnifying Party in writing thereof, but the omission so
to notify the Indemnifying Party shall not relieve it from
any liability which it may have to such Indemnified Party
other than under this Section 5(c) and shall only relieve it
from any liability which it may have to such Indemnified
Party under this Section 5(c) if and to the extent the
Indemnifying Party is prejudiced by such omission. In case
any such action shall be brought against any Indemnified
Party and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish,
to assume and undertake the defense thereof with counsel
satisfactory to such Indemnified Party, and, after notice
from the Indemnifying Party to such Indemnified Party of its
election so to assume and undertake the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5(c) for any legal expenses
subsequently incurred by such Indemnified Party in
connection with the defense thereof; if the Indemnified
Party retains its own counsel, then the Indemnified Party
shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such
action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have
reasonably concluded that there may be reasonable defenses
available to it which are different from or additional to
those available to the Indemnifying Party or if the
interests of the Indemnified Party reasonably may be deemed
to conflict with the interests of the Indemnifying Party,
the Indemnified Party shall have the right to select one
separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with
the reasonable expenses and fees of such separate counsel
and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in
the event of joint liability under the Securities Act in any
case in which either (i) the Purchasers, or any officer,
director or controlling person of the Purchasers, makes a
claim for indemnification pursuant to this Section 5 but it
is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that this Section 5
provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the
part of the Purchasers or such officer, director or
controlling person of the Purchasers in circumstances for
which indemnification is provided under this Section 5;
then, and in each such case, the Company and the Purchasers
will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution
from others) in such proportion so that each Purchaser is
responsible only for the portion represented by the
percentage that the public offering price of its securities
offered by the Registration Statement bears to the public
offering price of all securities offered by such
Registration Statement, provided, however, that, in any such
case, (A) no Purchaser will be required to contribute any
amount in excess of the public offering price of all such
securities offered by it pursuant to such Registration
Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of
the Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent
misrepresentation.
6. Representations and Warranties.
(a) The Common Stock of the Company is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and, except with
respect to certain matters which the Company has disclosed
to the Purchasers on Schedule 4.21 to the Securities
Purchase Agreement, the Company has timely filed all proxy
statements, reports, schedules, forms, statements and other
documents required to be filed by it under the Exchange
Act. The Company has filed (i) its Annual Report on Form
10-KSB for its fiscal year ended June 30, 2004 and (ii) its
Quarterly Report on Form 10-QSB for the fiscal quarters
ended September 30, 2004 and December 31, 2004
(collectively, the "SEC Reports"). Each SEC Report was, at
the time of its filing, in substantial compliance with the
requirements of its respective form and none of the SEC
Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective
filing dates, contained any untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made,
not misleading. The financial statements of the Company
included in the SEC Reports comply as to form in all
material respects with applicable accounting requirements
and the published rules and regulations of the Commission or
other applicable rules and regulations with respect
thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the
case of unaudited interim statements, to the extent they may
not include footnotes or may be condensed) and fairly
present in all material respects the financial condition,
the results of operations and the cash flows of the Company
and its subsidiaries, on a consolidated basis, as of, and
for, the periods presented in each such SEC Report.
(b) The Common Stock is listed for trading on the OTCBB and satisfies all
requirements for the continuation of such listing. The Company has not
received any notice that its Common Stock will be delisted from the OTCBB
(except for prior notices which have been fully remedied) or that the
Common Stock does not meet all requirements for the continuation of such
listing.
(c) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances
that would cause the offering of the Securities pursuant to
the Securities Purchase Agreement to be integrated with
prior offerings by the Company for purposes of the
Securities Act which would prevent the Company from selling
the Common Stock pursuant to Rule 506 under the Securities
Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or
subsidiaries take any action or steps that would cause the
offering of such Securities to be integrated with other
offerings.
(d) The Warrants, the Notes and the shares of Common Stock which
the Purchasers may acquire pursuant to the Warrants and the
Notes are all restricted securities under the Securities Act
as of the date of this Agreement. The Company will not
issue any stop transfer order or other order impeding the
sale and delivery of any of the Registrable Securities at
such time as such Registrable Securities are registered for
public sale or an exemption from registration is available,
except as required by federal or state securities laws.
(e) The Company understands the nature of the Registrable
Securities issuable upon the conversion of the Notes and the
exercise of the Warrants and recognizes that the issuance of
such Registrable Securities may have a potential dilutive
effect. The Company specifically acknowledges that its
obligation to issue the Registrable Securities is binding
upon the Company and enforceable regardless of the dilution
such issuance may have on the ownership interests of other
shareholders of the Company.
(f) Except for agreements made in the ordinary course of
business, there is no agreement that has not been filed with
the Commission as an exhibit to a registration statement or
to a form required to be filed by the Company under the
Exchange Act, the breach of which could reasonably be
expected to have a material and adverse effect on the
Company and its subsidiaries, or would prohibit or otherwise
interfere with the ability of the Company to enter into and
perform any of its obligations under this Agreement in any
material respect.
(g) The Company will at all times have authorized and reserved a sufficient
number of shares of Common Stock for the full conversion of the Notes and
the exercise of the Warrants.
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder, of any
of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement.
(b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 7(b) hereto, neither the Company nor
any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the
Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the
date hereof enter into any agreement providing any such
right for inclusion of shares in the Registration Statement
to any of its security holders. Except as and to the extent
specified in Schedule 7(b) hereto, the Company has not
previously entered into any agreement granting any
registration rights with respect to any of its securities to
any Person that have not been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it
in connection with sales of Registrable Securities pursuant to the
Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of a
Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable
Securities under the applicable Registration Statement until
such Holder's receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement or until it
is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders
to enforce the provisions of this paragraph. For purposes
of this Section 7(d), a "Discontinuation Event" shall mean
(i) when the Commission notifies the Company whether there
will be a "review" of such Registration Statement and
whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to
each of the Holders); (ii) any request by the Commission or
any other Federal or state governmental authority for
amendments or supplements to such Registration Statement or
Prospectus or for additional information; (iii) the issuance
by the Commission of any stop order suspending the
effectiveness of such Registration Statement covering any or
all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) the receipt by the
Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage
of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or
any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material
respect or that requires any revisions to such Registration
Statement, Prospectus or other documents so that, in the
case of such Registration Statement or Prospectus, as the
case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the
Commission a registration statement relating to an offering
for its own account or the account of others under the
Securities Act of any of its equity securities, other than
on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any
acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder
written notice of such determination and, if within fifteen
days after receipt of such notice, any such Holder shall so
request in writing, the Company shall include in such
registration statement all or any part of such Registrable
Securities such holder requests to be registered to the
extent the Company may do so without violating registration
rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks
applicable to all holders of registration rights and subject
to obtaining any required consent of any selling
stockholder(s) to such inclusion under such registration
statement.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the
Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to
a matter that relates exclusively to the rights of certain
Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least
a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the
immediately preceding sentence.
(g) Notices. Any notice or request hereunder may be given to
the Company or the Purchasers at the respective addresses
set forth below or as may hereafter be specified in a notice
designated as a change of address under this Section 7(g).
Any notice or request hereunder shall be given by registered
or certified mail, return receipt requested, hand delivery,
overnight mail, Federal Express or other national overnight
next day carrier (collectively, "Courier") or telecopy
(confirmed by mail). Notices and requests shall be, in the
case of those by hand delivery, deemed to have been given
when delivered to any party to whom it is addressed, in the
case of those by mail or overnight mail, deemed to have been
given three (3) business days after the date when deposited
in the mail or with the overnight mail carrier, in the case
of a Courier, the next business day following timely
delivery of the package with the Courier, and, in the case
of a telecopy, when confirmed. The address for such notices
and communications shall be as follows:
---------------------------------------------------------
If to the Company: CORGENIX MEDICAL CORPORATION
12061 Tejon Street
Westminster, CO 80234
Attention: Chief Financial
Officer
---------------------------------------------------------
---------------------------------------------------------
If to a Purchaser: [PURCHASER'S ADDRESS]
---------------------------------------------------------
---------------------------------------------------------
If to any other Person To the address of such Holder
who is then the as it appears in the stock
registered Holder: transfer books of the Company
---------------------------------------------------------
or such other address as may be designated in writing hereafter in accordance
with this Section 7(g) by such Person.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its
rights or obligations hereunder without the prior written
consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons
as permitted under the Securities Purchase Agreement and
each Term Note.
(i) Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which
taken together shall constitute one and the same Agreement.
In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and
effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning
the interpretation, enforcement and defense of the
transactions contemplated by this Agreement shall be
commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan. Each
party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to
the jurisdiction of any such court or that such Proceeding
is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in
any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions
of this Agreement, the Securities Purchase Agreement, or any
Related Agreement, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its
reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution
of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
CORGENIX MEDICAL CORPORATION [PURCHASERS]
By:
Name:
Title:
EXHIBIT A
[Month __, 2005]
[Transfer Agent]
Re: Corgenix Medical Corporation
Registration Statement on Form SB-2
Ladies and Gentlemen:
As counsel to Corgenix Medical Corporation, a Nevada corporation (the
"Company"), we have been requested to render our opinion to you in connection
with the resale by the individuals or entitles listed on Schedule A attached
hereto (the "Selling Stockholders"), of an aggregate of [amount] shares (the
"Shares") of the Company's Common Stock.
A Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any
time while such registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if
such registration statement is not available or effective at any point in the
future.
Very truly yours,
[Company counsel]
Schedule A
Selling Stockholder Shares
Being Offered
Schedule 7(b)
Exhibit 10.4
FORM OF RESTRICTED ACCOUNT AGREEMENT
This Restricted Account Agreement (this "Agreement") is entered into this
19th day of May, 2005, by and among [BANK], a New York banking corporation with
offices at [ADDRESS] (together with its successors and assigns, the "Bank"),
CORGENIX MEDICAL CORPORATION, a Nevada corporation with offices at 12061 Tejon
Street, Westminster, Colorado 80234 (together with its successors and assigns,
the "Company"), and [PURCHASERS] ("Purchasers"). Unless otherwise defined
herein, capitalized terms used herein shall have the meaning provided such terms
in the Purchase Agreement referred to below.
WHEREAS, Purchasers have provided financing to the Company, which
financing is evidenced by a Securities Purchase Agreement (as amended, modified
or supplemented from time to time, the "Purchase Agreement") and the Related
Agreements referred to therein;
WHEREAS, the Company and Purchasers have retained the Bank to provide
certain services with respect to the Restricted Account (as defined below); and
WHEREAS, the Company and Purchasers have agreed that an amount of cash
equal to $250,000 shall be deposited by Purchasers on behalf of the Company by
wire transfer of immediately available funds into the Restricted Account, which
cash shall be held by the Bank for the benefit of Purchasers, as security for
the Company's and its Subsidiaries' obligations under the Purchase Agreement and
the Related Agreements. For the purposes of this Agreement, the "Restricted
Account" shall mean that certain deposit account (as defined in Section 9-102 of
the Uniform Commercial Code as in effect in the State of New York on the date
hereof) described on Exhibit B hereto, which Restricted Account shall be
maintained at the Bank and shall be in the sole dominion and control of
Purchasers;
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The Bank is hereby authorized to accept for deposit into the Restricted
Account the sum of $250,000. The Bank hereby agrees to hold any and all monies,
and other amounts from time to time on deposit and/or held in the Restricted
Account for the benefit of Purchasers and shall not release any monies held in
the Restricted Account until such time as the Bank shall have received a notice
from Purchasers substantially in the form attached hereto as Exhibit A (a
"Release Notice"). Following the receipt of a Release Notice from Purchasers,
the Bank agrees to promptly disburse the amount of cash referred to in such
Release Notice to such account as Purchasers shall determine in their sole
discretion. The Bank hereby agrees that it will only comply with written
instructions originated by Purchasers directing disposition of funds in the
Restricted Account. The Company hereby irrevocably authorizes the Bank to comply
with any and all instructions given to the Bank by Purchasers with respect to
the Restricted Account without further consent by the Company. The Bank, the
Company and Purchasers agree that the Restricted Account is in Purchasers' sole
dominion and control.
2. Each of the Company, Purchasers and the Bank hereby agrees that the
Restricted Account shall not be closed, and the account name and account number
in respect thereof shall not be changed, in any case, without the consent of
Purchasers, except as specifically provided for in Section 9 below.
3. The Bank hereby subordinates any claims and security interests it may have
against, or with respect to, the Restricted Account (including any amounts from
time to time on deposit therein) to the security interests of Purchasers
therein, and agrees that no amounts shall be charged by it to, or withheld or
set-off or otherwise recouped by it from, the Restricted Account or any amounts
from time to time on deposit therein; provided that, in connection with all
service charges and any other charges which the Bank is entitled to receive in
connection with the servicing and maintaining of the Restricted Account (such
charges, collectively, the "Charges"), each of the Company, Purchasers and the
Bank hereby agrees that the Bank will collect such Charges in the following
manner: (i) first, the Bank will charge other deposit accounts maintained by the
Company with the Bank, if any, (ii) second, in the event that there are
insufficient collected funds in such other deposit accounts to pay such Charges,
the Bank will promptly notify the Company and Purchasers with respect to same
and, within seven (7) business days of the Company's receipt of such notice, the
Company shall pay to the Bank the full amount of such Charges then due, and
(iii) third, if the Company fails to pay to the Bank such Charges then due
within the time period set forth in the preceding clause (ii), the Bank will
promptly provide a written notice to Purchasers of such occurrence and, in such
case, the Bank is hereby authorized, following a period of five (5) business
days after the receipt of such written notice by Purchasers, to deduct such
Charges then due from the Restricted Account, unless, during such five (5)
business day period, Purchasers pays the amount of any such Charges then due to
the Bank from its own account. Except for the payment of the Charges as set
forth in the immediately preceding proviso, the Bank agrees that it shall not
offset, deduct or claim against the Restricted Account unless and until
Purchasers have notified the Bank in writing that all of the Company's
obligations under the Purchase Agreement and the Related Agreements have been
performed.
4. The Company and the Bank agree that the maintenance by the Bank of the
Restricted Account shall be as agent for Purchasers. The Bank shall be
responsible for the performance of only such duties as are set forth herein. The
Bank's duties hereunder, however, are merely ministerial, and the Bank shall
have no liability or obligation to the Company or Purchasers or to any other
person for any act or omission of the Bank in connection with the performance of
the Bank's duties in servicing and/or maintaining the Restricted Account, except
for acts of gross negligence or willful misconduct by the Bank. IN NO EVENT,
HOWEVER, SHALL THE BANK HAVE ANY RESPONSIBILITY FOR CONSEQUENTIAL, INDIRECT,
SPECIAL OR EXEMPLARY DAMAGES OR LOST PROFITS, WHETHER OR NOT IT HAS NOTICE
THEREOF, AND REGARDLESS OF THE BASIS, THEORY OR NATURE OF THE ACTION UPON WHICH
THE CLAIM IS ASSERTED, NOR SHALL IT HAVE ANY RESPONSIBILITY OR LIABILITY FOR THE
VALIDITY OR ENFORCEABILITY OF ANY SECURITY INTEREST OR OTHER INTEREST OF
[PURCHASER'S MANAGER] OR THE COMPANY IN THE RESTRICTED ACCOUNT. In furtherance
of and without limiting the foregoing, the Company and Purchasers agree that the
Bank shall not be liable for any damage or loss to them for any delay or failure
of performance arising out of the acts or omissions of any third parties,
including, but not limited to, various communication services, courier services,
the Federal Reserve system, any other bank or any third party who may be
affected by funds transactions, fire, mechanical, computer or electrical
failures or other unforeseen contingencies, strikes or any similar or dissimilar
cause beyond the reasonable control of the Bank. This paragraph shall survive
the termination of this Agreement.
5. Except where the Bank has been grossly negligent or has acted in bad faith,
each of each Purchaser and the Company and their respective successors and
assigns will release the Bank from and shall indemnify and hold the Bank
harmless from and against any and all losses, claims, damages, liabilities,
costs and expenses (including, without limitation, reasonable counsel fees,
whether arising in an action or proceeding among the parties hereto or
otherwise, without regard to the merit or lack of merit thereof) to which the
Bank may become subject, or which it may suffer or incur, arising out of or
based upon this Agreement or the actions contemplated hereby. This paragraph
shall survive termination of this Agreement.
6. The Bank shall be fully protected in acting on any order or direction by
Purchasers respecting the items received by the Bank or the monies or other
items in the Restricted Account without making any independent inquiry
whatsoever as to Purchasers' rights or authority to give such order or direction
or as to the application of any payments made pursuant thereto.
7. Nothing in this Agreement shall be deemed to prohibit the Bank from complying
with its customary procedures in the event that it is served with any legal
process with respect to the Restricted Account.
8. The rights and powers granted in this Agreement to [PURCHASER'S AGENT] have
been granted in order to protect and further perfect its security interests in
the Restricted Account (including any amounts from time to time on deposit
therein) and are powers coupled with an interest and will be affected neither by
any purported revocation by the Company of this Agreement or the rights granted
to [PURCHASER'S AGENT] hereunder or by the bankruptcy, insolvency,
conservatorship or receivership of the Company or the Bank or by the lapse of
time.
9. This Agreement may not be amended or waived except by an instrument in
writing signed by each of the parties hereto. This Agreement may be terminated
by the Bank upon giving the Company and Purchasers thirty (30) days prior
written notice. Purchasers shall designate a successor bank on or prior to the
effective date of such termination and the Bank shall deliver the balance in the
Restricted Account to such successor bank. Any notice required to be given
hereunder may be given, and shall be deemed given when delivered, via telefax,
U.S. mail return receipt requested or nationally recognized overnight courier to
each of the parties at the address set forth above. This Agreement may be
executed in any number of counterparts, each of which shall be an original and
all of which, when taken together, shall constitute one agreement. Delivery of
an executed signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to its conflict of laws principles. This Agreement sets
forth the entire agreement among the parties hereto as to the matters set forth
herein and supersedes all prior communications, written or oral, with respect to
the matters herein. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
CONTEMPLATED BY THIS AGREEMENT. THE BANK, THE COMPANY AND PURCHASERS EACH HEREBY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS
LOCATED IN THE COUNTY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS
AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY.
* * * *
Agreed and accepted this 19th day of May, 2005.
[BANK]
By:
---------------------------
---------------------------
Name:
---------------------------
---------------------------
Title:
---------------------------
[PURCHASER]
CORGENIX MEDICAL CORPORATION
By:
---------------------------
---------------------------
Name:
---------------------------
---------------------------
Title:
---------------------------
EXHIBIT A
RELEASE NOTICE
To: [BANK]
Re: Account Name:
----------------------
Account Number:
--------------------
Reference is made to that certain Restricted Account Agreement, dated as
of May __, 2005 (the "Restricted Account Agreement"), among [BANK] (the "Bank"),
Corgenix Medical Corporation (the "Company"), and [PURCHASERS] ("Purchasers").
This is to notify you that Purchasers authorize the release of
$_____________ (the "Release Amount") from the account referenced above in
accordance with the terms of the Restricted Account Agreement. Within one
business day following the receipt of this Release Notice, the Bank hereby
agrees to wire the Release Amount (or, in the event that the amount in the
Restricted Account is less than the Release Amount, such lesser amount) to the
following account in accordance with the wire instructions set forth below:
[Insert Wire Instructions]
[PURCHASERS]
---------------------------
---------------------------
Agreed and accepted this __ day
of ___________ 200__.
[BANK]
By:
---------------------------
---------------------------
Name:
Title:
EXHIBIT B
Restricted Account
o Bank:
o Bank Routing Number:
Attn:
Phone:
Account Name:
Account #:
Exhibit 10.5
FORM OF RESTRICTED ACCOUNT SIDE LETTER
May 19, 2005
CORGENIX MEDICAL CORPORATION
12061 Tejon Street
Westminster, CO 80234
Attn: President
Re: Restricted Account: Account Number
----------------------,
Account Name: _____________, maintained at North Fork
(the "Restricted Account").
Reference is made to (i) that certain Securities Purchase Agreement, dated as of
May __, 2005 (as amended, modified or supplemented from time to time, the
"Purchase Agreement"), by and between Corgenix Medical Corporation, a Nevada
corporation (the "Company"), and [PURCHASERS] (the "Purchasers") and (ii) that
certain Restricted Account Agreement, dated as of May __, 2005 (as amended,
modified or supplemented from time to time, the "Restricted Account Agreement"),
by and among the Company, the Purchasers and North Fork (the "Bank").
Capitalized terms used but not defined herein shall have the meanings ascribed
them in the Purchase Agreement or the Restricted Account Agreement, as
applicable. Pursuant to Section 3.2 of the Purchase Agreement, the Company is
required to place $250,000 in the Restricted Account, and, subject to the
provisions of this letter, the Purchase Agreement and any Related Agreement,
maintain such amount in the Restricted Account for as long as the Purchasers
shall have any obligations outstanding under the Note and to assign the
Restricted Account for the benefit of the Purchasers as security for the
performance of the Company's obligations to the Purchasers. The Purchasers and
the Company desire to clarify certain aspects regarding the use of funds
contained in the Restricted Account, and for good consideration, the receipt and
sufficiency of which is here acknowledged, the Company and the Purchasers agree
that at such time as the Company's registration statement registering the shares
of the Company's common stock comprising the Offering is declared effective, the
Restricted Account is to be released upon satisfaction of the following
condition: $250,000 shall be released at such time as the Company's common stock
trades a minimum daily average dollar amount of $25,000 at an average closing
price per share of $0.40 or greater (appropriately adjusted for stock splits,
reverse stock splits, stock dividends and recapitalizations) over a twenty-two
(22) consecutive trading day period (the "Release"). Upon the Purchasers'
satisfaction that the conditions in this paragraph have been met for the
Release, the Purchasers shall direct the Bank, pursuant to a Release Notice (as
defined in the Restricted Account Agreement), to wire the funds from the
Restricted Account to such bank account as the Company may direct the Purchasers
in writing.
Additionally, the Company may request that the Purchasers direct the Bank to
release all or any portion of the amounts contained in the Restricted Account
following (or in connection with) the consummation of an acquisition by the
Company or any of its Subsidiaries. Such a release referred to in the
immediately preceding sentence shall be subject (in all respects) to the
Purchasers' evaluation of all factors that it considers (in its sole discretion)
relevant at the time of such requested release, including its determination (i)
of the relative benefit of such acquisition to the Company and its Subsidiaries
and (ii) of the overall performance (financial or otherwise) of the Company and
its Subsidiaries at such time. The Purchasers shall not be under any obligation
to release any amount pursuant to this paragraph and the release of such amounts
shall be in the Purchasers' sole and absolute discretion. Prior to any such
acquisition referred to in this paragraph, the Company shall comply with Section
6.12(f) of the Purchase Agreement in all respects.
This letter may not be amended or waived except by an instrument in writing
signed by the Company and the Purchasers. This letter may be executed in any
number of counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one agreement. Delivery of an executed
signature page of this letter by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. This letter shall be
governed by, and construed in accordance with, the laws of the State of New
York. This letter supersedes all prior communications, written or oral, with
respect to the matters herein.
If the foregoing meets with your approval please signify your acceptance of the
terms hereof by signing below.
Signed
[PURCHASERS]
Agreed and Accepted this ___ day of May, 2005.
CORGENIX MEDICAL CORPORATION
By:
------------------------------------
Name:
Title:
Exhibit 10.6
FORM STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this "Agreement"), dated as of May 19, 2005,
among [PLEDGEES] (each a "Pledgee" and together the "Pledgees"), Corgenix
Medical Corporation, a Nevada corporation (the "Company"), and each of the other
undersigned pledgors, each a direct or indirect subsidiary of the Company (the
Company and each such other undersigned pledgor, a "Pledgor" and collectively,
the "Pledgors").
BACKGROUND
The Company has entered into a Securities Purchase Agreement, dated as of
May __, 2005 (as amended, modified, restated or supplemented from time to time,
the "Securities Purchase Agreement"), pursuant to which the Pledgees provide or
will provide certain financial accommodations to the Company.
In order to induce the Pledgees to provide or continue to provide the
financial accommodations described in the Securities Purchase Agreement, each
Pledgor has agreed to pledge and grant a security interest in the collateral
described herein to the Pledgees on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Defined Terms. All capitalized terms used herein which are not defined shall
have the meanings given to them in the Securities Purchase Agreement.
2. Pledge and Grant of Security Interest. To secure the full and punctual
payment and performance of (the following clauses (a) and (b), collectively, the
"Indebtedness") (a) the obligations under the Securities Purchase Agreement and
the Related Agreements referred to in the Securities Purchase Agreement (the
Securities Purchase Agreement and the Related Agreements, as each may be
amended, restated, modified and/or supplemented from time to time, collectively,
the "Documents") and (b) all other indebtedness, obligations and liabilities of
each Pledgor to the Pledgees whether now existing or hereafter arising, direct
or indirect, liquidated or unliquidated, absolute or contingent, due or not due
and whether under, pursuant to or evidenced by a note, agreement, guaranty,
instrument or otherwise (in each case, irrespective of the genuineness,
validity, regularity or enforceability of such Indebtedness, or of any
instrument evidencing any of the Indebtedness or of any collateral therefor or
of the existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of such Indebtedness in
any case commenced by or against any Pledgor under Title 11, United States Code,
including, without limitation, obligations or indebtedness of each Pledgor for
post-petition interest, fees, costs and charges that would have accrued or been
added to the Indebtedness but for the commencement of such case), each Pledgor
hereby pledges, assigns, hypothecates, transfers and grants a security interest
to the Pledgees in all of the following (the "Collateral"):
(a) the shares of stock set forth on Schedule A annexed hereto and expressly
made a part hereof (together with any additional shares of stock or other equity
interests acquired by any Pledgor, the "Pledged Stock"), the certificates
representing the Pledged Stock and all dividends, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Stock;
(b) all additional shares of stock of any issuer (each, an "Issuer") of the
Pledged Stock from time to time acquired by any Pledgor in any manner,
including, without limitation, stock dividends or a distribution in connection
with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off or
split-off (which shares shall be deemed to be part of the Collateral), and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all options and rights, whether as an addition to, in substitution of or in
exchange for any shares of any Pledged Stock and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
such options and rights.
3. Delivery of Collateral. All certificates representing or evidencing the
Pledged Stock shall be delivered to and held by or on behalf of the Pledgees
pursuant hereto and shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Pledgees. Each Pledgor hereby authorizes the Issuer upon demand by the Pledgees
to deliver any certificates, instruments or other distributions issued in
connection with the Collateral directly to the Pledgees, in each case to be held
by the Pledgees, subject to the terms hereof. Upon an Event of Default (as
defined below) under the Term Note that has occurred and is continuing beyond
any applicable grace period, the Pledgees shall have the right, during such time
in their discretion and without notice to the Pledgor, to transfer to or to
register in the name of the Pledgees or any of their nominees any or all of the
Pledged Stock. In addition, the Pledgees shall have the right at such time to
exchange certificates or instruments representing or evidencing Pledged Stock
for certificates or instruments of smaller or larger denominations.
4. Representations and Warranties of each Pledgor. Each Pledgor jointly and
severally represents and warrants to the Pledgees (which representations and
warranties shall be deemed to continue to be made until all of the Indebtedness
has been paid in full and each Document and each agreement and instrument
entered into in connection therewith has been irrevocably terminated) that:
(a) the execution, delivery and performance by each Pledgor of this Agreement
and the pledge of the Collateral hereunder do not and will not result in any
material violation of any material agreement, indenture, instrument, license,
judgment, decree, order, law, statute, ordinance or other governmental rule or
regulation applicable to any Pledgor;
(b) this Agreement constitutes the legal, valid, and binding obligation of each
Pledgor enforceable against each Pledgor in accordance with its terms;
(c) (i) all Pledged Stock owned by each Pledgor is set forth on Schedule A
hereto and (ii) each Pledgor is the direct and beneficial owner of each share of
the Pledged Stock set forth opposite its name;
(d) all of the shares of the Pledged Stock have been duly authorized, validly
issued and are fully paid and nonassessable;
(e) no consent or approval of any person, corporation, governmental body,
regulatory authority or other entity, is or will be necessary for (i) the
execution, delivery and performance of this Agreement, (ii) the exercise by the
Pledgees of any rights with respect to the Collateral or (iii) the pledge and
assignment of, and the grant of a security interest in, the Collateral
hereunder;
(f) there are no pending or, to the best of each Pledgor's knowledge, threatened
actions or proceedings before any court, judicial body, administrative agency or
arbitrator which may materially adversely affect the Collateral;
(g) each Pledgor has the requisite power and authority to enter into this
Agreement and to pledge and assign the Collateral to the Pledgees in accordance
with the terms of this Agreement;
(h) each Pledgor owns each item of the Collateral and, except for the pledge and
security interest granted to the Pledgees hereunder, the Collateral shall be,
immediately following the closing of the transactions contemplated by the
Documents, free and clear of any other security interest, pledge, claim, lien,
charge, hypothecation, assignment, offset or encumbrance whatsoever
(collectively, "Liens");
(i) there are no restrictions on transfer of the Pledged Stock contained in the
certificate of incorporation or by-laws (or equivalent organizational documents)
of the Issuer or otherwise which have not otherwise been enforceably and legally
waived by the necessary parties;
(j) none of the Pledged Stock has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject;
(k) the pledge and assignment of the Collateral and the grant of a security
interest under this Agreement vest in the Pledgees all rights of each Pledgor in
the Collateral as contemplated by this Agreement; and
(l) The Pledged Stock constitutes one hundred percent (100%) of the issued and
outstanding shares of capital stock of each Issuer.
5. Exclusions. Notwithstanding anything contained herein, nothing shall require
Corgenix (UK) Limited to:
(a) remove, or give to the Pledgees any priority over the fixed and floating
charge in favor of National Westminster Bank Plc, provided such charge will be
fully discharged within 60 days of the date hereof;
(b) comply with any of the provisions of this Stock Pledge Agreement to the
extent that compliance with this Stock Pledge Agreement would breach any of the
laws of England and Wales.
6. Covenants. Each Pledgor jointly and severally covenants that, until the
Indebtedness shall be satisfied in full and each Document and each agreement and
instrument entered into in connection therewith is irrevocably terminated:
(a) No Pledgor will sell, assign, transfer, convey, or otherwise dispose of its
rights in or to the Collateral or any interest therein; nor will any Pledgor
create, incur or permit to exist any Lien whatsoever with respect to any of the
Collateral or the proceeds thereof other than that created hereby.
(b) Each Pledgor will, at its expense, defend the Pledgees' right, title and
security interest in and to the Collateral against the claims of any other
party.
(c) Each Pledgor shall at any time, and from time to time, upon the written
request of the Pledgees, execute and deliver such further documents and do such
further acts and things as the Pledgees may reasonably request in order to
effect the purposes of this Agreement including, but without limitation,
delivering to the Pledgees upon the occurrence of an Event of Default
irrevocable proxies in respect of the Collateral in form satisfactory to the
Pledgees. Until receipt thereof, upon an Event of Default that has occurred and
is continuing beyond any applicable grace period, this Agreement shall
constitute each Pledgor's proxy to the Pledgees or their nominees to vote all
shares of Collateral then registered in such Pledgor's name.
(d) No Pledgor will consent to or approve the issuance of (i) any additional
shares of any class of capital stock or other equity interests of the Issuer; or
(ii) any securities convertible either voluntarily by the holder thereof or
automatically upon the occurrence or nonoccurrence of any event or condition
into, or any securities exchangeable for, any such shares, unless, in either
case, such shares are pledged as Collateral pursuant to this Agreement.
7. Voting Rights and Dividends. In addition to the Pledgees' rights and remedies
set forth in Section 8 hereof, in case an Event of Default shall have occurred
and be continuing, beyond any applicable cure period, the Pledgees shall (i) be
entitled to vote the Collateral, (ii) be entitled to give consents, waivers and
ratifications in respect of the Collateral (each Pledgor hereby irrevocably
constituting and appointing the Pledgees, with full power of substitution, the
proxy and attorney-in-fact of each Pledgor for such purposes) and (iii) be
entitled to collect and receive for its own use cash dividends paid on the
Collateral. No Pledgor shall be permitted to exercise or refrain from exercising
any voting rights or other powers if, in the reasonable judgment of the
Pledgees, such action would have a material adverse effect on the value of the
Collateral or any part thereof; and, provided, further, that each Pledgor shall
give at least five (5) days' written notice of the manner in which such Pledgor
intends to exercise, or the reasons for refraining from exercising, any voting
rights or other powers other than with respect to any election of directors and
voting with respect to any incidental matters. Following the occurrence of an
Event of Default, all dividends and all other distributions in respect of any of
the Collateral, shall be delivered to the Pledgees to hold as Collateral and
shall, if received by any Pledgor, be received in trust for the benefit of the
Pledgees, be segregated from the other property or funds of any other Pledgor,
and be forthwith delivered to the Pledgees as Collateral in the same form as so
received (with any necessary endorsement).
8. Event of Default. An Event of Default shall be deemed to have occurred and
may be declared by the Pledgees upon the happening of any of the following
events:
(a) An "Event of Default" under any Document or any agreement or note related to
any Document shall have occurred and be continuing beyond any applicable cure
period;
(b) Any Pledgor shall default in the performance of any of its obligations under
any agreement between any Pledgor and the Pledgees, including, without
limitation, this Agreement, and such default shall not be cured for a period of
fifteen (15) days after the occurrence thereof;
(c) Any representation or warranty of any Pledgor made herein, in any Document
or in any agreement, statement or certificate given in writing pursuant hereto
or thereto or in connection herewith or therewith shall be false or misleading
in any material respect;
(d) Any portion of the Collateral is subjected to levy of execution, attachment,
or other judicial process; or any portion of the Collateral is the subject of a
claim (other than by the Pledgees) of a Lien or other right or interest in or to
the Collateral and such levy or claim shall not be cured, disputed or stayed
within a period of fifteen (15) business days after the occurrence thereof; or
(e) Any Pledgor shall (i) apply for consent to, or suffer to exist the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or other fiduciary of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of creditors, (iii)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vi) acquiesce to, or fail to have dismissed, within sixty (60) days,
any petition filed against it in any involuntary case under such bankruptcy
laws, or (vii) take any action for the purpose of effecting any of the
foregoing.
9. Remedies. In case an Event of Default shall have occurred and be declared by
the Pledgees, the Pledgees may:
(a) Transfer any or all of the Collateral into their name, or into the name of
their nominee or nominees;
(b) Exercise all corporate rights with respect to the Collateral including,
without limitation, all rights of conversion, exchange, subscription or any
other rights, privileges or options pertaining to any shares of the Collateral
as if they were the absolute owners thereof, including, but without limitation,
the right to exchange, at their discretion, any or all of the Collateral upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of the Issuer thereof, or upon the exercise by the Issuer of any
right, privilege or option pertaining to any of the Collateral, and, in
connection therewith, to deposit and deliver any and all of the Collateral with
any committee, depository, transfer agent, registrar or other designated agent
upon such terms and conditions as they may determine, all without liability
except to account for property actually received by them; and
(c) Subject to any requirement of applicable law, sell, assign and deliver the
whole or, from time to time, any part of the Collateral at the time held by the
Pledgees, at any private sale or at public auction, with or without demand,
advertisement or notice of the time or place of sale or adjournment thereof or
otherwise (all of which are hereby waived, except such notice as is required by
applicable law and cannot be waived), for cash or credit or for other property
for immediate or future delivery, and for such price or prices and on such terms
as the Pledgees in their sole discretion may determine, or as may be required by
applicable law.
Each Pledgor hereby waives and releases any and all right or equity of
redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, the Pledgees may bid for and purchase the whole or
any part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by the Pledgees hereunder whether upon sale of
the Collateral or any part thereof or otherwise shall be held by the Pledgees
and applied by them as provided in Section 10 hereof. No failure or delay on the
part of the Pledgees in exercising any rights hereunder shall operate as a
waiver of any such rights nor shall any single or partial exercise of any such
rights preclude any other or future exercise thereof or the exercise of any
other rights hereunder. The Pledgees shall have no duty as to the collection or
protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 10 hereof. The Pledgees may exercise
their rights with respect to property held hereunder without resort to other
security for or sources of reimbursement for the Indebtedness. In addition to
the foregoing, the Pledgees shall have all of the rights, remedies and
privileges of a secured party under the Uniform Commercial Code of New York
regardless of the jurisdiction in which enforcement hereof is sought.
10. Private Sale. Each Pledgor recognizes that the Pledgees may be unable to
effect (or to do so only after delay which would adversely affect the value that
might be realized from the Collateral) a public sale of all or part of the
Collateral by reason of certain prohibitions contained in the Securities Act,
and may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor agrees that any such private sale
may be at prices and on terms less favorable to the seller than if sold at
public sales and that such private sales shall be permitted if otherwise made in
a commercially reasonable manner. Each Pledgor agrees that the Pledgees have no
obligation to delay sale of any Collateral for the period of time necessary to
permit the Issuer to register the Collateral for public sale under the
Securities Act.
11. Proceeds of Sale. The proceeds of any collection, recovery, receipt,
appropriation, realization or sale of the Collateral shall be applied by the
Pledgees as follows:
(a) First, to the payment of all costs, reasonable expenses and charges of the
Pledgees and to the reimbursement of the Pledgees for the prior payment of such
costs, reasonable expenses and charges incurred in connection with the care and
safekeeping of the Collateral (including, without limitation, the reasonable
expenses of any sale or any other disposition of any of the Collateral), the
expenses of any taking, attorneys' fees and reasonable expenses, court costs,
any other fees or expenses incurred or expenditures or advances made by the
Pledgees in the protection, enforcement or exercise of their rights, powers or
remedies hereunder;
(b) Second, to the payment of the Indebtedness, in whole or in part, in such
order as the Pledgees may elect, whether or not such Indebtedness is then due;
(c) Third, to such persons, firms, corporations or other entities as required by
applicable law including, without limitation, Section 9-504(1)(c) of the UCC;
and
(d) Fourth, to the extent of any surplus to the Pledgors or as a court of
competent jurisdiction may direct.
In the event that the proceeds of any collection, recovery, receipt,
appropriation, realization or sale are insufficient to satisfy the Indebtedness,
each Pledgor shall be jointly and severally liable for the deficiency plus the
reasonable costs and fees of any attorneys employed by the Pledgees to collect
such deficiency.
12. Waiver of Marshaling. Each Pledgor hereby waives any right to compel any
marshaling of any of the Collateral.
13. No Waiver. Any and all of the Pledgees' rights with respect to the Liens
granted under this Agreement shall continue unimpaired, and each Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding (a)
the bankruptcy, insolvency or reorganization of any Pledgor, (b) the release or
substitution of any item of the Collateral at any time, or of any rights or
interests therein, or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Pledgees in reference to any of the
Indebtedness. Each Pledgor hereby waives all notice of any such delay,
extension, release, substitution, renewal, compromise or other indulgence, and
hereby consents to be bound hereby as fully and effectively as if such Pledgor
had expressly agreed thereto in advance. No delay or extension of time by the
Pledgees in exercising any power of sale, option or other right or remedy
hereunder, and no failure by the Pledgees to give notice or make demand, shall
constitute a waiver thereof, or limit, impair or prejudice the Pledgees' right
to take any action against any Pledgor or to exercise any other power of sale,
option or any other right or remedy.
14. Expenses. The Collateral shall secure, and each Pledgor shall pay to the
Pledgees on demand, from time to time, all reasonable costs and expenses,
(including but not limited to, reasonable attorneys' fees and costs, taxes, and
all transfer, recording, filing and other charges) of, or incidental to, the
custody, care, transfer, administration of the Collateral or any other
collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of the Pledgees under this Agreement or
with respect to any of the Indebtedness.
15. The Pledgees Appointed Attorney-In-Fact and Performance by the Pledgees.
Upon the occurrence of an Event of Default, each Pledgor hereby irrevocably
constitutes and appoints the Pledgees as such Pledgor's true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and to do in such Pledgor's name, place and stead, all
such acts, things and deeds for and on behalf of and in the name of such
Pledgor, which such Pledgor could or might do or which the Pledgees may deem
necessary, desirable or convenient to accomplish the purposes of this Agreement,
including, without limitation, to execute such instruments of assignment or
transfer or orders and to register, convey or otherwise transfer title to the
Collateral into the Pledgees' name. Each Pledgor hereby ratifies and confirms
all that said attorney-in-fact may so do and hereby declares this power of
attorney to be coupled with an interest and irrevocable. If any Pledgor fails to
perform any agreement herein contained, the Pledgees may themselves perform or
cause performance thereof, and any costs and expenses of the Pledgees incurred
in connection therewith shall be paid by the Pledgors as provided in Section 10
hereof.
16. Waivers.
(a) EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED BY
THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS
THAT ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
17. Recapture. Notwithstanding anything to the contrary in this Agreement, if
the Pledgees receive any payment or payments on account of the Indebtedness,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver, or any other party under the United States
Bankruptcy Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or affecting the
enforcement of creditors' rights generally, common law or equitable doctrine,
then to the extent of any sum not finally retained by the Pledgees, each
Pledgor's obligations to the Pledgees shall be reinstated and this Agreement
shall remain in full force and effect (or be reinstated) until payment shall
have been made to the Pledgees, which payment shall be due on demand.
18. Captions. All captions in this Agreement are included herein for convenience
of reference only and shall not constitute part of this Agreement for any other
purpose.
19. Miscellaneous.
(a) This Agreement constitutes the entire and final agreement among the parties
with respect to the subject matter hereof and may not be changed, terminated or
otherwise varied except by a writing duly executed by the parties hereto.
(b) No waiver of any term or condition of this Agreement, whether by delay,
omission or otherwise, shall be effective unless in writing and signed by the
party sought to be charged, and then such waiver shall be effective only in the
specific instance and for the purpose for which given.
(c) In the event that any provision of this Agreement or the application thereof
to any Pledgor or any circumstance in any jurisdiction governing this Agreement
shall, to any extent, be invalid or unenforceable under any applicable statute,
regulation, or rule of law, such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform to
such statute, regulation or rule of law, and the remainder of this Agreement and
the application of any such invalid or unenforceable provision to parties,
jurisdictions, or circumstances other than to whom or to which it is held
invalid or unenforceable shall not be affected thereby, nor shall the same
affect the validity or enforceability of any other provision of this Agreement.
(d) This Agreement shall be binding upon each Pledgor, and each Pledgor's
successors and assigns, and shall inure to the benefit of the Pledgees and their
successors and assigns.
(e) Any notice or other communication required or permitted pursuant to this
Agreement shall be given in accordance with the Securities Purchase Agreement.
(f) This Agreement shall be governed by and construed and enforced in all
respects in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York.
(g) EACH PLEDGOR EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF EACH COURT
OF COMPETENT JURISDICTION LOCATED IN THE STATE OF NEW YORK FOR ALL PURPOSES IN
CONNECTION WITH THIS AGREEMENT. ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN A STATE COURT LOCATED IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK. EACH PLEDGOR FURTHER CONSENTS THAT
ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION,
ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS
OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER,
MAY BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN
DISTRICT OF NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
OR BY PERSONAL SERVICE PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED,
OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS.
EACH PLEDGOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION
OR VENUE OR BASED UPON FORUM NON CONVENIENS.
(h) It is understood and agreed that any person or entity that desires to become
a Pledgor hereunder, or is required to execute a counterpart of this Stock
Pledge Agreement after the date hereof pursuant to the requirements of any
Document, shall become a Pledgor hereunder by (x) executing a Joinder Agreement
in form and substance satisfactory to the Pledgees, (y) delivering supplements
to such exhibits and annexes to such Documents as the Pledgees shall reasonably
request and (z) taking all actions as specified in this Agreement as would have
been taken by such Pledgor had it been an original party to this Agreement, in
each case with all documents required above to be delivered to the Pledgees and
with all documents and actions required above to be taken to the reasonable
satisfaction of the Pledgees.
(i) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which when taken together shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed an original signature hereto.
(j) All rights of the Pledgees hereunder may be exercised by [PLEDGEE], as their
agent.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.
CORGENIX MEDICAL CORPORATION
By:
----------------------------
Name:
Title:
CORGENIX, INC.
By:
----------------------------
Name:
Title:
CORGENIX (UK) LTD.
By:
----------------------------
Name:
Title:
HEALTH-OUTFITTERS.COM, INC.
By:
----------------------------
Name:
Title:
[PLEDGEE SIGNATURES]
SCHEDULE A to the Stock Pledge Agreement
Pledged Stock
- ----------------------------------------------------------------------
Stock
Class of Certificate Number
Pledgor Issuer Stock Number Par Value of Shares
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
[Insert
Pledgors
and Pledged
Stock]
- ----------------------------------------------------------------------
Exhibit 10.7
May 19, 2005
[LENDER]
Re: Corgenix Medical Corporation (the "Company")
Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
common stock ("Common Stock") of the Company or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to enter into
a financing transaction with [LENDERS] (the "Lenders") (the "Transaction"). The
undersigned recognizes that the Transaction will be of benefit to the
undersigned and will benefit the Company. The undersigned acknowledges that the
Company and the Lenders are relying on the representations and agreements of the
undersigned contained in this letter agreement in carrying out the Transaction.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, (and will use reasonable efforts to cause any immediate
family member of (i) the undersigned or (ii) the undersigned's spouse, living in
the undersigned's household not to), without the prior written consent of the
Lenders (which consent may be withheld in their sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended, or otherwise dispose of any shares of Common Stock, options
or warrants to acquire shares of Common Stock (except for any disposition deemed
to occur upon the exercise of an option or warrant held by the undersigned), or
securities exchangeable or exercisable for or convertible into shares of Common
Stock currently or hereafter owned either of record or beneficially (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned (or such spouse or family member), or publicly announce an intention
to do any of the foregoing, for a period of six months from the effective date
of the initial registration statement covering shares of Common Stock which may
be acquired by the Lenders in connection with the Transaction. The foregoing
sentence shall not apply to the transfer of any or all shares of Common Stock
owned by the undersigned, either during his or her lifetime or on death, by
gift, will or intestate succession to the immediate family of the undersigned or
to a trust the beneficiaries of which are exclusively the undersigned and/or a
member or members of his or her immediate family; provided, however, that in any
such case it shall be a condition to such transfer that the transferee executes
and delivers to the Lenders an agreement stating that the transferee is
receiving and holding the Common Stock subject to the provisions of this letter
agreement, and there shall be no further transfer of such Common Stock except in
accordance with this letter agreement. The undersigned also agrees and consents
to the entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions. For purposes
of this paragraph, the term "immediate family" shall have the same meaning as
set forth in Rule 16a-1(e) promulgated under the Securities Exchange Act of
1934, as amended.
The undersigned waives any registration rights relating to registration
under the Securities Act of 1933, as amended, of any Common Stock owned either
of record or beneficially by the undersigned.
This letter agreement is irrevocable and will be binding on the
undersigned and the respective successors, heirs, personal representatives and
assigns of the undersigned.
Printed Name of Holder
[To be signed by management, insiders and MBL]
By:
--------------------------------
Signature
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of
an entity)
Exhibit 10.8
FORM OF SUBSIDIARY GUARANTY
New York, New York May 19th, 2005
FOR VALUE RECEIVED, and in consideration of note purchases from, loans
made or to be made or credit otherwise extended or to be extended by [LENDERS]
(each a "Lender" and together the "Lenders") to or for the account of Corgenix
Medical Corporation, a Nevada corporation ("Debtor"), from time to time and at
any time and for other good and valuable consideration and to induce the
Lenders, in their discretion, to purchase such notes, make such loans or
extensions of credit and to make or grant such renewals, extensions, releases of
collateral or relinquishments of legal rights as the Lenders may deem advisable,
the undersigned (and each of them if more than one, the liability under this
Guaranty being joint and several) (jointly and severally referred to as
"Guarantors" or "the undersigned") unconditionally guaranties to the Lenders,
their successors, endorsees and assigns the prompt payment when due (whether by
acceleration or otherwise) of all present and future obligations and liabilities
of any and all kinds of Debtor to the Lenders and of all instruments of any
nature evidencing or relating to any such obligations and liabilities upon which
Debtor is or may become liable to the Lenders, whether incurred by Debtor as
maker, endorser, drawer, acceptor, guarantor, accommodation party or otherwise,
and whether due or to become due, secured or unsecured, absolute or contingent,
joint or several, and however or whenever acquired by the Lenders, whether
arising under, out of, or in connection with (i) that certain Securities
Purchase Agreement dated as of the date hereof by and between Debtor and the
Lenders (the "Securities Purchase Agreement") and (ii) each Related Agreement
referred to in the Securities Purchase Agreement, (the Securities Purchase
Agreement and each Related Agreement, as each may be amended, modified, restated
or supplemented from time to time, are collectively referred to herein as the
"Documents"), or any documents, instruments or agreements relating to or
executed in connection with the Documents or any documents, instruments or
agreements referred to therein or otherwise, or any other indebtedness,
obligations or liabilities of Debtor to the Lenders, whether now existing or
hereafter arising, direct or indirect, liquidated or unliquidated, absolute or
contingent, due or not due and whether under, pursuant to or evidenced by a
note, agreement, guaranty, instrument or otherwise (all of which are herein
collectively referred to as the "Obligations"), and irrespective of the
genuineness, validity, regularity or enforceability of such Obligations, or of
any instrument evidencing any of the Obligations or of any collateral therefor
or of the existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of the Obligations in any
case commenced by or against Debtor under Title 11, United States Code,
including, without limitation, obligations or indebtedness of Debtor for
post-petition interest, fees, costs and charges that would have accrued or been
added to the Obligations but for the commencement of such case. Terms not
otherwise defined herein shall have the meaning assigned such terms in the
Securities Purchase Agreement. In furtherance of the foregoing, the undersigned
hereby agrees as follows:
1. No Impairment. The Lenders may at any time and from time to time, either
before or after the maturity thereof, without notice to or further consent
of the undersigned, extend the time of payment of, exchange or surrender
any collateral for, renew or extend any of the Obligations or increase or
decrease the interest rate thereon, or enter into any other agreement with
Debtor or with any other party to or person liable on any of the
Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between the Lenders
and Debtor or any such other party or person, or make any election of
rights the Lenders may deem desirable under the United States Bankruptcy
Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or affecting the
enforcement of creditors' rights generally (any of the foregoing, an
"Insolvency Law") without in any way impairing or affecting this Guaranty.
This instrument shall be effective regardless of the subsequent
incorporation, merger or consolidation of Debtor, or any change in the
composition, nature, personnel or location of Debtor and shall extend to
any successor entity to Debtor, including a debtor in possession or the
like under any Insolvency Law.
2. Guaranty Absolute. Each of the undersigned jointly and severally
guarantees that the Obligations will be paid strictly in accordance with
the terms of the Documents and/or any other document, instrument or
agreement creating or evidencing the Obligations, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of Debtor with respect thereto.
Guarantors hereby knowingly accept the full range of risk encompassed
within a contract of "continuing guaranty" which risk includes the
possibility that Debtor will contract additional indebtedness for which
Guarantors may be liable hereunder after Debtor's financial condition or
ability to pay its lawful debts when they fall due has deteriorated,
whether or not Debtor has properly authorized incurring such additional
indebtedness. The undersigned acknowledge that (i) no oral
representations, including any representations to extend credit or provide
other financial accommodations to Debtor, have been made by the Lenders to
induce the undersigned to enter into this Guaranty and (ii) any extension
of credit to Debtor shall be governed solely by the provisions of the
Documents. The liability of each of the undersigned under this Guaranty
shall be absolute and unconditional, in accordance with its terms, and
shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation: (a)
any waiver, indulgence, renewal, extension, amendment or modification of
or addition, consent or supplement to or deletion from or any other action
or inaction under or in respect of the Documents or any other instruments
or agreements relating to the Obligations or any assignment or transfer of
any thereof, (b) any lack of validity or enforceability of any Document or
other documents, instruments or agreements relating to the Obligations or
any assignment or transfer of any thereof, (c) any furnishing of any
additional security to the Lenders or their assignees or any acceptance
thereof or any release of any security by the Lenders or their assignees,
(d) any limitation on any party's liability or obligation under the
Documents or any other documents, instruments or agreements relating to
the Obligations or any assignment or transfer of any thereof or any
invalidity or unenforceability, in whole or in part, of any such document,
instrument or agreement or any term thereof, (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to Debtor, or any action
taken with respect to this Guaranty by any trustee or receiver, or by any
court, in any such proceeding, whether or not the undersigned shall have
notice or knowledge of any of the foregoing, (f) any exchange, release or
nonperfection of any collateral, or any release, or amendment or waiver of
or consent to departure from any guaranty or security, for all or any of
the Obligations or (g) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the undersigned. Any
amounts due from the undersigned to the Lenders shall bear interest until
such amounts are paid in full at the highest rate then applicable to the
Obligations. Obligations include post-petition interest whether or not
allowed or allowable.
3. Waivers.
(a) This Guaranty is a guaranty of payment and not of collection. The Lenders
shall be under no obligation to institute suit, exercise rights or
remedies or take any other action against Debtor or any other person
liable with respect to any of the Obligations or resort to any collateral
security held by them to secure any of the Obligations as a condition
precedent to the undersigned being obligated to perform as agreed herein
and each Guarantor hereby waives any and all rights which it may have by
statute or otherwise which would require the Lenders to do any of the
foregoing. Each Guarantor further consents and agrees that the Lenders
shall be under no obligation to marshal any assets in favor of Guarantors,
or against or in payment of any or all of the Obligations. The undersigned
hereby waives all suretyship defenses and any rights to interpose any
defense, counterclaim or offset of any nature and description which the
undersigned may have or which may exist between and among the Lenders,
Debtor and/or the undersigned with respect to the undersigned's
obligations under this Guaranty, or which Debtor may assert on the
underlying debt, including but not limited to failure of consideration,
breach of warranty, fraud, payment (other than cash payment in full of the
Obligations), statute of frauds, bankruptcy, infancy, statute of
limitations, accord and satisfaction, and usury.
(b) Each of the undersigned further waives (i) notice of the acceptance of
this Guaranty, of the making of any such loans or extensions of credit,
and of all notices and demands of any kind to which the undersigned may be
entitled, including, without limitation, notice of adverse change in
Debtor's financial condition or of any other fact which might materially
increase the risk of the undersigned and (ii) presentment to or demand of
payment from anyone whomsoever liable upon any of the Obligations,
protest, notices of presentment, non-payment or protest and notice of any
sale of collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by the undersigned hereunder,
or any setoff or application of funds of the undersigned by the Lenders,
the undersigned shall not be entitled to be subrogated to any of the
rights of the Lenders against Debtor or against any collateral or
guarantee or right of offset held by the Lenders for the payment of the
Obligations, nor shall the undersigned seek or be entitled to seek any
contribution or reimbursement from Debtor in respect of payments made by
the undersigned hereunder, until all amounts owing to the Lenders by
Debtor on account of the Obligations are paid in full and the Lenders'
obligation to extend credit pursuant to the Documents has been terminated.
If, notwithstanding the foregoing, any amount shall be paid to the
undersigned on account of such subrogation rights at any time when all of
the Obligations shall not have been paid in full and the Lenders'
obligation to extend credit pursuant to the Documents shall not have been
terminated, such amount shall be held by the undersigned in trust for the
Lenders, segregated from other funds of the undersigned, and shall
forthwith upon, and in any event within two (2) business days of, receipt
by the undersigned, be turned over to the Lenders in the exact form
received by the undersigned (duly endorsed by the undersigned to the
Lenders, if required), to be applied against the Obligations, whether
matured or unmatured, in such order as the Lenders may determine, subject
to the provisions of the Documents. Any and all present and future debts
and obligations of Debtor to any of the undersigned are hereby waived and
postponed in favor of, and subordinated to the full payment and
performance of, all present and future debts and Obligations of Debtor to
the Lenders.
(d) Notwithstanding anything contained herein, nothing shall require Corgenix
(UK) Limited to:
(i) remove, or give to the Lenders any priority over the fixed and floating
charge in favor of National Westminster Bank Plc, provided such charge
will be fully discharged within 60 days of the date hereof;
(ii) comply with any of the provisions of the Documents to the extent that
compliance with the Documents would breach any of the laws of England and
Wales.
4. Security. All sums at any time to the credit of the undersigned and any
property of the undersigned in the Lenders' possession or in the
possession of any bank, financial institution or other entity that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, the Lenders (each such
entity, an "Affiliate") shall be deemed held by the Lenders or such
Affiliate, as the case may be, as security for any and all of the
undersigned's obligations to the Lenders and to any Affiliate of the
Lenders, no matter how or when arising and whether under this or any other
instrument, agreement or otherwise.
5. Representations and Warranties. Each of the undersigned respectively,
hereby jointly and severally represents and warrants (all of which
representations and warranties shall survive until all Obligations are
indefeasibly satisfied in full and the Documents have been irrevocably
terminated), that:
(a) Corporate Status. It is a corporation, partnership or limited liability
company, as the case may be, duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization indicated on
the signature page hereof and has full power, authority and legal right to
own its property and assets and to transact the business in which it is
engaged.
(b) Authority and Execution. It has full power, authority and legal right to
execute and deliver, and to perform its obligations under, this Guaranty
and has taken all necessary corporate, partnership or limited liability
company, as the case may be, action to authorize the execution, delivery
and performance of this Guaranty.
(c) Legal, Valid and Binding Character. This Guaranty
constitutes its legal, valid and binding obligation
enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of
general application affecting the enforcement of creditor's
rights and general principles of equity that restrict the
availability of equitable or legal remedies.
(d) Violations. The execution, delivery and performance of this
Guaranty will not violate any requirement of law applicable
to it or any contract, agreement or instrument to which it
is a party or by which it or any of its property is bound or
result in the creation or imposition of any mortgage, lien
or other encumbrance other than to the Lenders on any of its
property or assets pursuant to the provisions of any of the
foregoing, which, in any of the foregoing cases, would
reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.
(e) Consents or Approvals. No consent of any other person or
entity (including, without limitation, any creditor of the
undersigned) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental
authority is required in connection with the execution,
delivery, performance, validity or enforceability of this
Guaranty by it, except to the extent that the failure to
obtain any of the foregoing would not reasonably be expected
to have, either individually or in the aggregate, a Material
Adverse Effect.
(f) Litigation. No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator
or governmental authority, bureau or agency is currently
pending or, to the best of its knowledge, threatened (i)
with respect to this Guaranty or any of the transactions
contemplated by this Guaranty or (ii) against or affecting
it, or any of its property or assets, which, in each of the
foregoing cases, if adversely determined, would reasonably
be expected to have a Material Adverse Effect.
(g) Financial Benefit. It has derived or expects to derive a financial or
other advantage from each and every loan, advance or extension of credit
made under the Documents or other Obligation incurred by Debtor to the
Lenders.
6. Acceleration.
(a) If any breach of any covenant or condition or other event of
default shall occur and be continuing under any agreement
made by Debtor or any of the undersigned to the Lenders, or
either Debtor or any of the undersigned should at any time
become insolvent, or make a general assignment, or if a
proceeding in or under any insolvency law shall be filed or
commenced by, or in respect of, any of the undersigned, or
if a notice of any lien, levy, or assessment is filed of
record with respect to any assets of any of the undersigned
by the United States of America or any department, agency,
or instrumentality thereof, or if any taxes or debts owing
at any time or times hereafter to any one of them becomes a
lien or encumbrance upon any assets of the undersigned in
the Lenders' possession, or otherwise, any and all
Obligations shall for purposes hereof, at the Lenders'
option, be deemed due and payable without notice
notwithstanding that any such Obligation is not then due and
payable by Debtor.
(b) Each of the undersigned will promptly notify the Lenders of
any default by such undersigned in its respective
performance or observance of any term or condition of any
agreement to which the undersigned is a party if the effect
of such default is to cause, or permit the holder of any
obligation under such agreement to cause, such obligation to
become due prior to its stated maturity and, if such an
event occurs, the Lenders shall have the right to accelerate
such undersigned's obligations hereunder.
7. Payments from Guarantors. The Lenders, in their sole and absolute
discretion, with or without notice to the undersigned, may apply on
account of the Obligations any payment from the undersigned or any other
Guarantors, or amounts realized from any security for the Obligations, or
may deposit any and all such amounts realized in a non-interest bearing
cash collateral deposit account to be maintained as security for the
Obligations.
8. Costs. The undersigned shall pay on demand, all costs, fees and expenses
(including reasonable expenses for legal services of every kind) relating
or incidental to the enforcement or protection of the rights of the
Lenders hereunder or under any of the Obligations.
9. No Termination. This is a continuing irrevocable guaranty and shall remain
in full force and effect and be binding upon the undersigned, and each of
the undersigneds successors and assigns, until all of the Obligations have
been paid in full and the Lenders' obligation to extend credit pursuant to
the Documents has been irrevocably terminated. If any of the present or
future Obligations are guarantied by persons, partnerships or corporations
in addition to the undersigned, the death, release or discharge in whole
or in part or the bankruptcy, merger, consolidation, incorporation,
liquidation or dissolution of one or more of them shall not discharge or
affect the liabilities of any undersigned under this Guaranty.
10. Recapture. Anything in this Guaranty to the contrary notwithstanding, if
the Lenders receive any payment or payments on account of the liabilities
guaranteed hereby, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver, or any other
party under any Insolvency Law, common law or equitable doctrine, then to
the extent of any sum not finally retained by the Lenders, the
undersigned's obligations to the Lenders shall be reinstated and this
Guaranty shall remain in full force and effect (or be reinstated) until
payment shall have been made to the Lenders, which payment shall be due on
demand.
11. Books and Records. The books and records of the Lenders showing the
account between the Lenders and Debtor shall be admissible in evidence in
any action or proceeding, shall be binding upon the undersigned for the
purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof.
12. No Waiver. No failure on the part of the Lenders to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Lenders of
any right, remedy or power hereunder preclude any other or future exercise
of any other legal right, remedy or power. Each and every right, remedy
and power hereby granted to the Lenders or allowed them by law or other
agreement shall be cumulative and not exclusive of any other, and may be
exercised by the Lenders at any time and from time to time.
13. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DOES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE
UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF THE
LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDERS WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION.
14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE CHANGED
OR TERMINATED ORALLY AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED AS
TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS. EACH OF THE UNDERSIGNED EXPRESSLY CONSENTS TO THE
JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK,
COUNTY OF NEW YORK, AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR ALL PURPOSES IN CONNECTION HEREWITH. ANY
JUDICIAL PROCEEDING BY THE UNDERSIGNED AGAINST THE LENDERS INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF,
RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE SUPREME
COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE UNDERSIGNED
FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS
(INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION
TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE
IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL
SERVICE PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH
OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. EACH OF
THE UNDERSIGNED WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY
ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.
15. Severability. To the extent permitted by applicable law, any provision of
this Guaranty which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
16. Amendments, Waivers. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the undersigned therefrom shall
in any event be effective unless the same shall be in writing executed by
each of the undersigned directly affected by such amendment and/or waiver
and the Lenders.
17. Notice. All notices, requests and demands to or upon the undersigned,
shall be in writing and shall be deemed to have been duly given or made
(a) when delivered, if by hand, (b) three (3) days after being sent,
postage prepaid, if by registered or certified mail, (c) when confirmed
electronically, if by facsimile, or (d) when delivered, if by a recognized
overnight delivery service in each event, to the numbers and/or address
set forth beneath the signature of the undersigned.
18. Successors. The Lenders may, from time to time, without notice to the
undersigned, sell, assign, transfer or otherwise dispose of all or any
part of the Obligations and/or rights under this Guaranty. Without
limiting the generality of the foregoing, the Lenders may assign, or grant
participations, to one or more banks, financial institutions or other
entities all or any part of any of the Obligations. In each such event,
the Lenders, their Affiliates and each and every immediate and successive
purchaser, assignee, transferee or holder of all or any part of the
Obligations shall have the right to enforce this Guaranty, by legal action
or otherwise, for its own benefit as fully as if such purchaser, assignee,
transferee or holder were herein by name specifically given such right.
The Lenders shall have an unimpaired right to enforce this Guaranty for
their benefit with respect to that portion of the Obligations which the
Lenders have not disposed of, sold, assigned, or otherwise transferred.
19. Becoming a Guarantor. It is understood and agreed that any person or
entity that desires to become a Guarantor hereunder, or is required to
execute a counterpart of this Guaranty after the date hereof pursuant to
the requirements of any Document, shall become a Guarantor hereunder by
(x) executing a Joinder Agreement in form and substance satisfactory to
the Lenders, (y) delivering supplements to such exhibits and annexes to
such Documents as the Lenders shall reasonably request and (z) taking all
actions as specified in this Guaranty as would have been taken by such
Guarantor had it been an original party to this Guaranty, in each case
with all documents required above to be delivered to the Lenders and with
all documents and actions required above to be taken to the reasonable
satisfaction of the Lenders.
20. Release. Nothing except cash payment in full of the Obligations shall
release any of the undersigned from liability under this Guaranty.
21. Limitation of Obligations under this Guaranty. Each Guarantor and the
Lenders (by their acceptance of the benefits of this Guaranty) hereby
confirm that it is their intention that this Guaranty not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the
Uniform Fraudulent Conveyance Act or any similar Federal or state law. To
effectuate the foregoing intention, each Guarantor and the Lenders (by
their acceptance of the benefits of this Guaranty) hereby irrevocably
agree that the Obligations guaranteed by such Guarantor shall be limited
to such amount as will, after giving effect to such maximum amount and all
other (contingent or otherwise) liabilities of such Guarantor that are
relevant under such laws and after giving effect to any rights to
contribution pursuant to any agreement providing for an equitable
contribution among such Guarantor and the other Guarantors (including this
Guaranty), result in the Obligations of such Guarantor under this Guaranty
in respect of such maximum amount not constituting a fraudulent transfer
or conveyance.
[REMAINDER OF THIS PAGE IS BLANK.
SIGNATURE PAGE IMMEDIATELY FOLLOWS.]
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
this ___ day of May, 2005.
CORGENIX, INC., a Delaware
corporation
-----------------------------------
Name:
Title:
Address:
Telephone:
Facsimile:
CORGENIX (UK) LTD., a corporation
organized under the Companies Act
1985 of England and Wales
-----------------------------------
Name:
Title:
Address:
Telephone:
Facsimile:
HEALTH-OUTFITTERS.COM, INC.,
a Colorado corporation
-----------------------------------
Name:
Title:
Address:
Telephone:
Facsimile:
Exhibit 99.1
PRESS RELEASE
For Immediate Release
CORGENIX ANNOUNCES THE SUCCESSFUL COMPLETION OF PRIVATE PLACEMENT FINANCING
REPRESENTING POTENTIAL GROSS PROCEEDS OF UP TO $5.1 MILLION
DENVER, COLORADO - May 23, 2005 /PR Newswire/ -- Corgenix Medical Corporation
(OTC-Bulletin Board: CONX) today announced the successful completion of private
placement financing by selected institutional and accredited investors
representing potential gross proceeds to the Company of up to $5,135,000.
The private placement consists of $3,420,000 in aggregate principal amount of
Senior Convertible Term Notes due 2008, of which $2,420,000 was funded at
closing with $250,000 of that amount held in a restricted cash account; $215,000
in common stock subscriptions funded at closing; and the potential for up to
$1,500,000 in subsequent funding through additional investment rights
exercisable for up to 270 days following the closing of the transaction.
Warrants to acquire approximately 7,700,000 shares were also provided to the
participating investors. With this funding, the Company has refinanced
approximately $970,000 of existing debt and plans to use the balance of the net
proceeds, after transaction fees and expenses, for key strategic initiatives,
working capital and other general corporate purposes.
Ascendiant Securities LLC, an investment banking firm based in Irvine,
California and Burnham Securities Inc. of New York served as placement agents.
In commenting about the financing, William H. Critchfield, Corgenix's Senior
Vice President and Chief Financial Officer, said "We are extremely pleased that
we were successful in obtaining the interest and commitment of two highly
regarded funds to lead the investment, both of which have been very active in
health care industry investments. We expect that Corgenix will gain significant
credibility by having these funds as investors and business partners, both
currently and going forward. With the new financial resources available, the
Company is actively working to accelerate several new product introductions, and
evaluating and pursuing opportunities to grow our business in new markets and
through selected strategic acquisitions."
Additional information regarding the private placement will be provided in a
Form 8-K filing to be made with the Securities and Exchange Commission.
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). 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 disorders. Corgenix diagnostic
products are commercialized for use in clinical laboratories throughout the
world. More information is available at www.corgenixonline.com.
This announcement contains forward-looking statements. Such forward-looking
statements may relate to future events or the Company's future performance,
including: financial performance and projections; growth in revenue and
earnings; and business prospects and opportunities. Interested parties can
identify forward-looking statements by those that are not historical in nature,
particularly those that use terminology such as "may," "will," "should,"
"expects," "anticipates," "contemplates," "estimates," "believes", "plans,"
"projected," "predicts," "potential" or "continue" or the negative of these or
similar terms. In evaluating these forward-looking statements, interested
parties should consider various factors, including "Risk Factors" as described
in the Company's periodic filings with the Securities and Exchange Commission.
The statements in this press release are made as of today, based upon
information currently known to management, and the company does not undertake
any obligation to publicly update or revise any forward-looking statements.
Complete copies of the Corgenix Medical Corporation Forms 10-KSB and 10-QSB are
available at www.sec.gov. Copies and additional information can be obtained by
contacting William Critchfield, Senior Vice President and Chief Financial
Officer: phone (303) 453-8903, or e-mail at wcritchfield@corgenix.com.