Document:

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 Company’s 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 Section 4 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

 

2

 

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 Section 1.

 

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 Section 1 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

  

 

3

 

	
  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 Section 1 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 Section 3, 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

 

4

 

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.                                       (a)                                  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

  	
   

  	
   

  

 

5

 

	
  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

 

6

 

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

 

7

 

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.]

 

8

 

IN WITNESS WHEREOF, the Company
has executed this Warrant as of the date first written above.

 

	
   

  	
   

  	
  CORGENIX
  MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

9

 

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):

 

	
  o

  	
   

  	
                  shares
  of the Common Stock covered by such Warrant; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  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):

 

	
  o

  	
   

  	
  $                   in
  lawful money of the United States; and/or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  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

  
	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  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 Section 2.

  
	
   

  
	
   

  

 

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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-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.

 

	
  Transferees

  	
   

  	
  Address

  	
   

  	
  Number

  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)

  	
   

  	
   

  	
   

  

 

B-1Exhibit 10.32

 

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)

 

2

 

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).

 

3

 

(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;

 

4

 

(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

 

5

 

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

 

6

 

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]

 

7

 

	
   

  	
   

  	
  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:

  

 

8

 

	
   

  	
   

  	
  ACKNOWLEDGED:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [PURCHASERS]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

9

 

SCHEDULE A

 

	
  Entity

  	
   

  	
  Jurisdiction of Organization

  	
   

  	
  Organization Identification Number

  	
   

  
	
  Corgenix Medical Corporation

  	
   

  	
  Nevada

  	
   

  	
  93-1223466

  	
   

  
	
  Corgenix, Inc.

  	
   

  	
  Delaware

  	
   

  	
  84-1147392

  	
   

  
	
  Corgenix (UK) Ltd.

  	
   

  	
  United Kingdom

  	
   

  	
   

  	
   

  
	
  Health-outfitters.com, Inc.

  	
   

  	
  Colorado

  	
   

  	
  84-1521002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

10

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