Document:

ex102102007.htm

    Exhibit
      10.2

    

    PROMISSORY
      NOTE

     

    (Secured)

     

    $840,000.00                                                                                                                                                                                                              October
      8, 2007

     

    1.  Obligation.  In
      installments as herein stated, for value received, CLINIQA CORPORATION, a
      California corporation (“Maker”) promises to pay HEMAGEN DIAGNOSTICS, INC.
      (“Payee”), or its order, the principal sum of Eight Hundred Forty Thousand
      Dollars ($840,000.00), with interest on the unpaid principal owing from time
      to
      time at the rate of eight percent (8%) per annum from the date hereof until
      payment.

     

    2.  Payments.  Payments
      shall be made as follows:

     

    2.1  Principal
      payments in the amount of $17,500 plus accrued interest shall be due and payable
      monthly beginning on December 31, 2007, and continuing on the same day of each
      month thereafter.  The interest for the first monthly payment shall
      accrue from October 8, 2007.

     

    2.2  The
      entire unpaid balance of principal and accrued interest shall be due and payable
      on or before December 31, 2011.

     

    2.3  Interest
      shall be calculated on the basis of a 360-day year for the actual days
      elapsed.

     

    3.  Prepayment.  Each
      payment shall be credited first to interest then accrued, the remainder to
      principal; and interest shall thereupon cease upon the principal
      paid.  Maker reserves the right to prepay principal and/or interest at
      any time without penalty.

     

    4.  Prompt
      Performance.  Time is of the essence of this Note.  Upon
      the occurrence of any Event of Default as defined in Section 5, Payee shall have the right to declare,
      without making a demand of any kind, that the entire indebtedness is immediately
      due.  Waiver of the right to so accelerate the maturity of obligations
      hereunder will be effective only if set forth in written instrument signed
      by
      Payee.  Failure to exercise or delay in exercising the right will not
      be construed as a waiver of the right.

     

    5.  Default.  The
      occurrence at any time of any of the following shall constitute an Event of
      Default:

     

    (a)  Default
      in the payment of principal or interest due hereunder as described in section
      1.4 of the Asset Purchase Agreement executed of even date herewith between
      Maker
      and Payee;

     

    (b)  The
      occurrence of any event which would constitute a default by Maker under (i)
      the
      Security Agreement executed of even date herewith between Maker and Payee,
      or
      (ii) any liability or obligation of any endorser or guarantor of this Note
      to
      the holder, or (iii) any default by Maker under the Asset Purchase Agreement
      of
      even date herewith between Maker, as purchaser, and Payee, as
      seller;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (c)  The
      liquidation or dissolution of any party liable for the payment of this
      Note;

     

    (d)  The
      making of an assignment for the benefit of creditors by any party liable for
      the
      payment of this Note, whether as a maker, endorser, guarantor, surety or
      otherwise, the appointment of a receiver for all or substantially all of any
      such party’s property, or the filing by any such party of a petition in
      bankruptcy or other similar proceeding under law for the relief of
      debtors;

     

    (e)  The
      filing against any party liable for the payment of this Note, whether as a
      maker, endorser, guarantor, surety or otherwise, of a petition in bankruptcy
      or
      other similar proceeding under law for relief of debtors, which is not vacated
      or discharged within ninety (90) days after the filing thereof.

     

    6.  Waiver.  Maker
      waives presentment, protest and demand, notice of protest, notice of demand
      and
      dishonor, any notice of nonpayment of this Note; and Maker expressly agrees
      that
      this Note and any payment hereunder may be extended by Payee from time to time
      without in any way affecting the liability of Maker.

     

    7.  Lawful
      Money.  Principal and interest are payable in lawful money of the
      United States.

     

    8.  Governing
      Law.  This note shall be construed and interpreted in accordance
      with the laws of the State of Delaware.

     

    9.  Arbitration,
      Venue and Jurisdiction.  Any dispute, claim or controversy arising
      out of this Agreement shall be resolved exclusively by binding arbitration
      pursuant to the Commercial Rules of the American Arbitration Association then
      in
      effect, with venue for any arbitration proceedings in San Diego County,
      California.  A Party may institute legal action to compel arbitration
      or to enforce an arbitration award in the state or federal courts located in
      San
      Diego County, California.  Purchaser and Seller hereby expressly and
      irrevocably consent and submit to the jurisdiction of the state and federal
      courts in the County of San Diego, State of California.

     

    10.  Security
      Agreement.  This Note is secured by a Security Agreement
      (“Security Agreement”) between Maker and Payee dated and executed
      contemporaneously with this Note.

     

    11.  Guaranty.  Payment
      of this Note is guaranteed pursuant to the terms of a Personal Guaranty dated
      and executed contemporaneously with this Note.

     

    12.  Attorneys’
      Fees.  Maker shall pay all costs and expenses, including
      reasonable attorneys’ fees, incurred in collecting payment on this Note, or in
      enforcing any judgment obtained in any legal process to collect this
      Note.

     

     

    
      
        -2-

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	 	 “MAKER”:	 
	 	 	 
	 	
              CLINIQA
                CORPORATION

              a California corporation

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Granger
              Haugh	 
	 	 	Granger
              Haugh	 
	 	 	CEO	 
	 	 	 	 

    

     

     

    
      	 	 Accepted
              and Agreed:	 
	 	 	 
	 	 “PAYEE”:	 
	 	 	 
	 	
              HEMAGEN DIAGNOSTICS, INC.

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ William
              P. Hales	 
	 	 	William
              P.
              Hales	 
	 	 	Chairman,
              President and CEO	 
	 	 	 	 

    

     

    
      
        -3-ex103102007.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      10.3

    

     

    INVENTORY
      PURCHASE AGREEMENT

     

    THIS
      INVENTORY PURCHASE AGREEMENT (this “Agreement”) is entered into on October 8,
      2007 between Reagents Applications, Inc., a Delaware corporation (“RAI”) located
      at 8225 Mercury Court, San Diego, CA 92121 and Cliniqa Corporation, a California
      corporation (“Cliniqa”) located at 774 Twin Oaks Valley Road, San Marcos, CA
      92069.

     

    RECITAL

     

    A.           RAI
      and Cliniqa have entered into an Asset Purchase Agreement (“Purchase Agreement”)
      dated October 8, 2007 whereby Cliniqa has agreed to buy specified assets of
      Reagents Applications, Inc., a wholly owned subsidiary of Hemagen Diagnostics,
      Inc (“Hemagen”).

     

    B.           Cliniqa
      desires to purchase inventory from RAI.

     

    C.           RAI
      has agreed to supply such inventory to Cliniqa on the terms and conditions
      set
      forth in this Agreement.

     

    NOW
      THEREFORE, in consideration of the mutual covenants and consideration set forth
      herein, and intending to be legally bound hereby, the parties hereto agree
      as
      follows:

     

    1.           DEFINITIONS.

     

    1.1           
      “Effective Date” shall mean the date first set forth in the first paragraph of
      this

     

    Agreement.

     

    1.2           
      “Party” or “Parties” shall mean, respectively, RAI or Cliniqa, and RAI and
      Cliniqa.

     

    1.3           
      “Purchase Price” shall have the meaning assigned to such term in Section 3.1.

     

    1.4           “Inventory”
      shall mean the products listed on Exhibit A.

     

    1.5           “Term”
      shall have the meaning assigned to such term in Section 6.1.

     

    1.6           “Minimum
      Purchase Commitment” shall have the meaning assigned to such term in Section 2.2.

     

    2.           INVENTORY

     

    2.1           Inventory
      Selection.  During the term of this Agreement, RAI shall sell to
      Cliniqa, and Cliniqa will purchase from RAI, free and clear of any charges,
      encumbrances, security interests and claims, Inventory which has been selected
      by Cliniqa, from Exhibit A, as Cliniqa wishes to acquire from RAI.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2           Supply.  Cliniqa
      shall purchase Inventory pursuant to this Agreement and be obligated to purchase
      a minimum of $500,000 of Inventory (the “Minimum Purchase Commitment”) during
      the 18 month period after the effective date.  Pursuant to the
      Purchase Agreement, Cliniqa’s Purchase Price includes $100,000 of Inventory and
      thus the Minimum Purchase Commitment shall begin after Cliniqa receives $100,000
      of Inventory.

     

    2.3           Acceptance
      of Purchase Orders.  Cliniqa shall issue purchase orders under
      this Agreement.  RAI shall accept all purchase orders that are issued
      in conformance with the terms and conditions of this Agreement.  Upon
      acceptance of a purchase order, this Agreement and such accepted purchase order
      shall constitute a contract between Cliniqa and RAI.  If there is a
      conflict of terms between the terms of this Agreement and any such accepted
      purchase order, the terms of this Agreement shall prevail.

     

    2.4           Delivery.  RAI
      shall maintain its Inventory on a consignment basis to Cliniqa at the Raichem
      facility, located at 8225 Mercury Court, San Diego, CA 92121, or at another
      facility if Cliniqa moves its operations out of the Raichem
      facility.  Cliniqa shall ensure that the Inventory is segregated
      physically from its own inventory.  Cliniqa acknowledges that it shall
      be responsible for maintaining and safeguarding the Inventory, including
      maintaining all risk property damage insurance on such inventory at the
      replacement value, naming Hemagen as additional insured and loss
      payee.  Cliniqa shall provide a certificate of insurance identifying
      such coverages on the date hereof, and Hemagen shall be provided thirty (30)
      days notice of cancellation.

     

    2.5           Title,
      Risk of Loss.  Title and risk of loss, delay or damage to the
      Inventory shall pass to Cliniqa upon delivery.

     

    2.6           Reports,
      Audits.  RAI shall provide Cliniqa with an inventory report, not
      later than 10 days after the end of each month, showing the beginning balance
      of
      the Inventory, usage of inventory during the month from issued purchase orders
      and the balance at the end of the month.  Cliniqa agrees that it will
      perform spot inventory checks for certain inventory items identified by Hemagen
      on a monthly basis.  Cliniqa also agrees that Hemagen, at its own
      expense, may perform a physical inventory audit at the end of each
      month.  Hemagen shall inform Cliniqa no less than five days in advance
      of performing the audit.  Cliniqa shall use its best efforts to aid
      Hemagen in its audit.

     

    2.7           Inventory
      Shortfall.  Cliniqa agrees that any shortfall in the monthly
      inventory report shall constitute a purchase of Inventory and Cliniqa shall
      promptly issue a purchase order for Hemagen for the Inventory.

     

    2.8           Preferred
      Supplier.  For the Term of the Agreement, Cliniqa agrees that it
      shall purchase Inventory solely from RAI, prior to purchasing any like inventory
      from a third party.  If RAI desires to use any of the Inventory, it
      shall provide Cliniqa with a ten day written notice.  If Cliniqa
      desires to purchase the specific Inventory, it must promptly issue a purchase
      order to RAI.  RAI acknowledges that it will provide Cliniqa with
      sufficient notice on products that are scheduled for production or for which
      there are long lead times with other vendors.  If Cliniqa does not
      desire to purchase the specific inventory, RAI shall issue an inventory transfer
      order to Cliniqa for such quantity of Inventory desired to Hemagen’s facility,
      and the parties shall adjust

     

    
      
        -2-

      

      
         

        
          

        

      

      
         

      

    

    
      consigned
        inventory balances accordingly.  Cliniqa shall ship the product to
        Hemagen, or to another party, at Hemagen’s option and charge Hemagen reasonable
        shipping costs.  Any products purchased by RAI pursuant to this
        Section 2.9 shall reduce the Minimum
        Purchase Commitment by the value of the Inventory agreed upon under this
        agreement.

       

    

    2.9           Cliniqa
      will have the opportunity to review the most recently completed physical
      inventory reports to verify that sufficient inventory exists that would be
      purchasable under this agreement.  Should there be insufficient
      inventory acceptable to Cliniqa, such Minimum Purchase Commitment will be
      adjusted through negotiations with both Parties.

     

    3.           PURCHASE
      PRICE; PAYMENT TERMS.

     

    3.1           Purchase
      Price; Payment Terms.  In consideration of the delivery of
      Inventory pursuant to Article 2, Cliniqa shall pay to RAI the price for each
      Inventory item as set forth at Exhibit A (the “Purchase Price”).

     

    3.2           Taxes.  The
      prices stated are exclusive of any taxes, fees, duties, licenses or levies
      (“Taxes”) now or hereinafter imposed upon the Inventory, or use of the
      Inventory.  Any Sales and Use Taxes related to the Reagents used by
      Cliniqa shall be paid by Cliniqa or in lieu thereof, Cliniqa shall provide
      an
      exemption certificate acceptable to the taxing authorities.  Property
      taxes on the consigned inventory remain the responsibility of RAI.

     

    3.3           Payment
      Terms.  On the 15th and
      the last day
      of each month, RAI shall invoice Cliniqa for the Inventory
      purchased.  Payment terms are net thirty (30) days from the date of
      Hemagen’s invoice to Cliniqa.

     

    3.4           Final
      Payment.  Cliniqa acknowledges that if it has not met its
      obligation to purchase the Minimum Purchase Commitment, net of the Inventory
      Credit, during the 18 months period from the effective date, Cliniqa will issue
      a PO for the Minimum Purchase Commitment due 18 months from the effective date
      and it may designate specific inventory to be transferred at the prices agreed
      upon under this agreement.

     

    3.5           Non-saleable
      Material.  All material in consigned inventory reaching its
      expiration date or otherwise considered as outdated, spoiled, expired or for
      any
      reason unsaleable, is to be removed from inventory and not charged to Cliniqa,
      unless such damage to the inventory is caused as a direct result of Cliniqa’s
      negligence in maintaining and storing the inventory under proper storage
      conditions at Cliniqa’s facility.  The Minimum Purchase Commitment
      will be reduced by the value of such inventory considered
      non-saleable.

     

    4.           LIMITED
      WARRANTY.

     

    4.1           Limited
      Warranty.  With respect to any Inventory purchased pursuant to
      this Agreement, RAI makes those warranties expressly identified as “warranties”
as are set forth in RAI’s current operating manual, catalog, or written
      guarantee covering such Inventory.  Any description of the Inventory
      contained in this Agreement, is for the sole purpose of identifying them, and
      any such description is not part of the basis of the bargain, and does not
      constitute a warranty that the Inventory shall conform to that
      description.  Any sample or model used in connection with this
      Agreement is for illustrative purposes only, is not part of the basis of
      the

     

    
      
        -3-

      

      
         

        
          

        

      

      
         

      

    

    
      bargain,
        and is not to be construed as a warranty that the Inventory will conform
        to the
        sample or model.  No affirmation of fact or promise made by RAI,
        whether or not in this Agreement, shall constitute a warranty that the Inventory
        will conform to the affirmation or promise.  THE WARRANTY SET FORTH IN
        THIS PARAGRAPH IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED,
        INCLUDING THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, EXCEPT
        WITH RESPECT TO INTELLECTUAL PROPERTY.

       

    

    5.           LIMITATION
      OF LIABILITY.

     

    5.1           LIMITATION
      OF LIABILITY.  IN NO EVENT SHALL HEMAGEN BE LIABLE FOR ANY SPECIAL,
      INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION
      WITH ANY ASPECT OF THIS AGREEMENT OR THE USE OR PERFORMANCE OF HEMAGEN’S
      PRODUCTS.

     

    6.           TERM
      AND TERMINATION.

     

    6.1           Term.  The
      initial term of this Agreement shall commence on the Effective Date hereof
      and
      shall continue until the second anniversary of the Effective Date, unless
      terminated sooner as provided in this Agreement (the “Term”):

     

    6.2           Termination
      for Default.  If Cliniqa breaches any material provision of this
      Agreement and if such breach is not corrected within thirty (30) days after
      Hemagen gives notice of the breach to Cliniqa, Hemagen may, without prejudice
      to
      any of its other rights conferred on it by this Agreement, in addition to any
      other remedies available to it by law or in equity, terminate this Agreement
      immediately by giving notice of the termination, effective on the date of the
      notice, and declare any of the Minimum Commitment amount outstanding immediately
      due.  For any outstanding Minimum Commitment to be paid under this
      Section 6.2, Cliniqa may designate
      specific inventory to be transferred at the prices agreed upon under this
      agreement.  The right of Hemagen to terminate this Agreement, as
      provided in this Section 6.2, shall not
      be affected in any way by its waiver or failure to take action with respect
      to
      any previous default.

     

    6.3           Termination
      for Insolvency.  Subject to applicable bankruptcy laws, RAI may
      terminate this Agreement if, at any time, Cliniqa shall file in any court or
      agency pursuant to any statute or regulation of any state or country, a petition
      in bankruptcy or insolvency or for reorganization or for an arrangement or
      for
      the appointment of a receiver or trustee of it or of its assets, or if Cliniqa
      proposes a written agreement of composition or extension of its debts, or if
      Cliniqa shall be served with an involuntary petition against it, filed in any
      insolvency proceeding, and such petition shall not be dismissed within sixty
      (60) days after the filing thereof.

     

    6.4           Survival
      of Rights.  In the event of the termination of this Agreement
      prior to its expiration, the obligations of the Parties theretofore accrued
      under this Agreement shall survive, and the rights and obligations of the
      Parties under Sections 2.5, 3.3,
4,
5,
6,
7.5
      and 8 shall survive in accordance with
      the terms of such Sections.

     

    6.5           Rights
      Not Exclusive.  All rights to terminate, and rights upon
      termination, provided in this Agreement are in addition to other remedies in
      law
      or equity which may be available.

     

    
      
        -4-

      

      
         

        
          

        

      

      
         

      

    

     

    7.    MISCELLANEOUS.

     

    7.1           Severability.  In
      the event that any provision of this Agreement shall be held illegal, void
      or
      ineffective, the remaining portions hereof shall remain in full force and effect
      so long as such remaining portions do not materially change the intent of this
      Agreement or the right or obligations of the Parties hereunder.  If
      any provision of this Agreement is in conflict with any applicable statute
      or
      law in any jurisdiction, then such provision shall be deemed inoperative in
      such
      jurisdiction to the extent of such conflict and the Parties will renegotiate
      the
      affected provisions of this Agreement to resolve any inequities.  It
      is the intention of the Parties that, if any court or other tribunal construes
      any provision or clause of this Agreement, or any portion thereof, to be
      illegal, void or unenforceable because of the duration of such provision or
      the
      area or matter covered thereby, such court shall reduce the duration, area
      or
      matter of such provision and enforce such provision in its reduced
      form.

     

    7.2           Waiver.  A
      waiver by either Party of any of the terms and conditions of this Agreement
      in
      any instance shall not be deemed or construed to be a waiver of such term or
      condition for the future, or of any subsequent breach hereof.  All
      rights, remedies, undertakings, obligations and agreements contained in this
      Agreement shall be cumulative and none of them shall be in limitation of any
      other remedy, right, undertaking, obligation or agreement of either
      Party.

     

    7.3           Notices.  Any
      notice or other communication required or permitted under this Agreement shall
      be sent by certified mail or courier service, charges prepaid, or by facsimile
      transmission (receipt confirmed), to the address or facsimile number specified
      below:

     

    (a)           If
      to Hemagen:

     

    Hemagen
      Diagnostics, Inc.

                    9033
      Red Branch
      Road

                    Columbia,
      MD
      21045

                    Fax:           (410)
      992-9861

                    Attn:         William
      P. Hales, Chairman, President and CEO

     

    (b)           If
      to Cliniqa:

     

    Cliniqa
      Corporation

                    774
      Twin Oaks Valley
      Road

                    San
      Marcos, CA
      92069

                    Fax:           760-744-4128

                    Attn:        Kevin
      Gould, President

     

    or
      to
      such other address or facsimile number as a Party may specify in a notice duly
      given to the sender as provided herein.  A notice will be deemed to
      have been given five (5) days after the date deposited in the United States
      mail, or two (2) days after the date deposited with a courier service or, in
      the
      case of facsimile transmission, when received.

     

    7.4           Assignment;
      Binding Effect.  This Agreement shall be binding upon and inure to
      the benefit of the successors and assigns of the Parties
      hereto.  Neither Party may assign any of its
      rights, or delegate any of its obligations, under this Agreement without the
      written consent of the other Party.

     

    
      
        -5-

      

      
         

        
          

        

      

      
         

      

    

     

    Notwithstanding
      the foregoing, either Party may, without obtaining the consent of the other
      Party, assign this Agreement to any Affiliate or to any entity with which it
      may
      merge or consolidate, or to which it may transfer all or substantially of its
      assets to which this Agreement relates.

     

    7.5           Headings
      and References.  All section headings contained in this Agreement
      are for convenience of reference only and shall not affect the meaning or
      interpretation of this Agreement.  Unless the context requires
      otherwise, all references in this Agreement to any section, exhibit or appendix
      shall be deemed and construed as references to a section of, or an exhibit
      or
      appendix to, this Agreement, and any such exhibits and appendices are hereby
      incorporated in this Agreement by such reference.

     

    7.6           No
      Agency.  It is understood and agreed that each Party shall have
      the status of an independent contractor under this Agreement and that nothing
      in
      this Agreement shall be construed as authorization for either Party to act
      as
      agent for the other.

     

    7.7           No
      Strict Construction.  This Agreement has been prepared jointly and
      shall not be strictly construed against either Party.

     

    7.8           Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original as against any Party whose signature appears thereon but all of
      which together shall constitute but one and the same instrument.

     

    7.9           Inconsistencies.  Notwithstanding
      the content of Cliniqa’s purchase order, the terms of this Agreement shall take
      precedence over such purchase order, and any conflicting or inconsistent terms
      of Cliniqa’s purchase order shall be null and void.

     

    7.10           Choice
      of Law and Jurisdiction.  This Agreement shall be governed by and
      construed in accordance with the laws of the State of Delaware,
      U.S.A.  Any litigation or other dispute resolution between the Parties
      relating to this Agreement shall take place in the San Diego District of
      California.  The Parties consent to the personal jurisdiction of and
      venue in the state and federal courts within that District.

     

    7.11           Complete
      Understanding.  This Agreement, including all exhibits,
      constitutes the entire understanding between the Parties with respect to the
      subject matter hereof, and supersedes and replaces all prior or contemporaneous
      understandings or agreements, written or oral, regarding such subject
      matter.  No amendment to .or modification
      of
      this Agreement shall be binding unless in writing and signed by a duly
      authorized representative of both Parties.

     

    IN
      WITNESS WHEREOF, the Parties, through their authorized officers, have duly
      executed this Agreement as of the date first written above.

     

    
      
        -6-

      

      
         

        
          

        

      

      
         

      

    

    

     

    Hemagen
      Diagnostics, Inc.

     

    

     

    By:   
      /s/William P. Hales                                                                       

    Name:  William
      P. Hales

    Title:  Chairman,
      President and CEO

     

    Cliniqa
      Corporation

    

    By:   
      /s/Granger
      Haugh                                                               

    Name:  Granger
      Haugh

    Title:  President

     

    

    
      
        -7-

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