Document:

Exhibit 10.3

 

Promissory Note

 

September 30, 2009

 

Borrower:  CORGENIX MEDICAL CORPORATION and CORGENIX,
INC.

 

Lender:  Summit Financial Resources, L.P.

 

Amount:  $250,000

 

Maturity:  September 30, 2012

 

For value received, Borrower promises to pay to the order
of Lender at 2455 East Parley’s Way, Suite 200, Salt Lake City, Utah 84109,
the sum of two hundred fifty thousand dollars ($250,000) or such other
principal balance as may be outstanding, with interest thereon from the date
hereof until paid, both before and after judgment, at a variable rate compounding
daily and computed on the basis of a three hundred sixty (360) day year as
follows: two and seventy-five tenths percent (2.75%) per annum above the Prime
Rate (hereinafter defined) from time to time in effect, adjusted as of the date
of any change in the Prime Rate.

 

This Promissory Note is made in accordance with the
Loan and Security Agreement dated September 30, 2009, by and between
Lender and Borrower (the “Loan and Security Agreement”), and is secured by the
collateral identified in and contemplated by the Loan and Security Agreement.  Disbursements under this Promissory Note
shall be made only in accordance with the Loan and Security Agreement.

 

Principal and interest shall be payable in thirty-six
(36) equal monthly installments, commencing on October 31, 2009, and on
the last day of each month thereafter until September 30, 2012, at which
time all remaining outstanding principal and interest shall be due and payable
in full; provided, however, that in the event (i) Borrower receives all or
any portion of the Second Loan Advance (as defined in the Loan and Security
Agreement), or (ii) the Prime Rate changes, the amount of such installment
payments shall be automatically adjusted to provide for amortization of this
loan at the same rate and the same time frame as originally contemplated by
this Promissory Note.

 

“Prime Rate” means the Prime Rate as published in the
Money Rates section of The Wall Street
Journal.  This definition of Prime
Rate is to be strictly interpreted and is not intended to serve any purpose
other than providing an index to determine the variable interest rate used
herein.  It is not the lowest rate at
which Lender may make loans to any of its customers, either now or in the future.

 

Prepayment of this Promissory Note in whole or in part
shall be subject to the early termination fees set forth in the Loan and
Security Agreement.  Any prepayment
received by Lender after 2:00 p.m. Mountain Time shall be deemed received
on the following Banking Business Day (as defined in the Loan and Security
Agreement).  Any prepayments shall reduce

 

 

or excuse the last
installment payments owing.  All
scheduled installment payments shall remain due and owing as scheduled until
all outstanding principal has been paid in full.

 

If any Event of Default (as defined in the Loan and
Security Agreement) occurs, time being of the essence hereof, then the entire
unpaid balance, with interest as aforesaid, shall, at the election of the
holder hereof and without notice of such election, become immediately due and
payable in full.

 

Upon default in payment of any principal or interest
when due, whether due at stated maturity, by acceleration, or otherwise, all
outstanding principal shall bear interest at a default rate from the date when
due until paid, both before and after judgment, which default rate shall be ten
percent (10%) per annum above the Prime Rate, adjusted as of the date of any
change in the Prime Rate.

 

If an Event of Default occurs, Borrower agrees to pay
to the holder hereof all collection costs, including reasonable attorneys fees
and legal expenses, in addition to all other sums due hereunder.

 

This Promissory Note shall be governed by and
construed in accordance with the laws of the State of Utah.

 

Borrower acknowledges that by execution and delivery
of this Promissory Note, Borrower has transacted business in the State of Utah
and Borrower voluntarily submits to, consents to, and waives any defense to the
jurisdiction of courts located in the State of Utah as to all matters relating
to or arising from this Promissory Note. 
EXCEPT AS EXPRESSLY AGREED IN WRITING BY LENDER, THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE OF UTAH SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION
OF ANY AND ALL CLAIMS, DISPUTES, AND CONTROVERSIES, ARISING UNDER OR RELATING
TO THIS PROMISSORY NOTE.  NO LAWSUIT,
PROCEEDING, OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THIS PROMISSORY
NOTE MAY BE COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY
AGREED IN WRITING BY LENDER.

 

All obligations of Borrower under this Promissory Note
shall be joint and several.

 

Borrower and all endorsers, sureties and guarantors
hereof hereby jointly and severally waive presentment for payment, demand,
protest, notice of protest, notice of protest and of non-payment and of
dishonor, and consent to extensions of time, renewal, waivers or modifications
without notice and further consent to the release of any collateral or any part
thereof with or without substitution.

 

[Signatures on Following
Page]

 

2

 

	
   

  	
  Borrower:

  
	
   

  	
   

  
	
   

  	
  CORGENIX MEDICAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  William
  Critchfield

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CORGENIX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  William Critchfield

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  

 

3Exhibit
10.4

 

LOAN AND SECURITY
AGREEMENT

 

Between

 

SUMMIT FINANCIAL
RESOURCES, L.P.

Lender

 

and

 

CORGENIX MEDICAL
CORPORATION

CORGENIX, INC.

Borrower

 

Effective Date: September 30,
2009

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Loan
  Description

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Amount
  of Loan

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Nature
  and Duration of Loan

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Promissory
  Note

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Disbursements
  of Promissory Note

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Administration
  Fee

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  First
  Loan Advance Fee

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Early
  Termination Fee

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  Loan
  Payments

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  Excess
  Interest

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Security
  for Loan

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Grant
  of Security Interest

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Representations
  and Warranties Concerning Collateral

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Covenants
  Concerning Collateral

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Conditions
  to Loan Disbursements

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Conditions
  to Loan Disbursements

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  No
  Default, Adverse Change, False or Misleading Statement

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Representations
  and Warranties

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Organization
  and Qualification

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Authorization

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Accuracy
  of Financial Statements

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Full
  and Accurate Disclosure

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Compliance
  with All Other Applicable Law

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Operation
  of Business

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Payment
  of Taxes

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Borrower’s
  Covenants

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Eligible
  Equipment

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Continued
  Compliance with Applicable Law

  	
   

  	
  12

  

 

i

 

TABLE OF
CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Payment
  of Taxes and Obligations

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  Financial
  Statements and Reports

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
  Insurance

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.6

  	
  Inspection

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.7

  	
  Operation
  of Business

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Default

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Events
  of Default

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  No
  Waiver of Event of Default

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Remedies

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Remedies
  upon Event of Default

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Rights
  and Remedies Cumulative

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  No
  Waiver of Rights

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  General
  Provisions

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Governing
  Agreement

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Borrower’s
  Obligations Cumulative

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  Payment
  of Expenses and Attorney’s Fees

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.4

  	
  Right
  to Perform for Borrower

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.5

  	
  Assignability

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.6

  	
  Third
  Party Beneficiaries

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.7

  	
  Governing
  Law

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.8

  	
  Severability
  of Invalid Provisions

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.9

  	
  Interpretation
  of Loan and Security Agreement

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.10

  	
  Survival
  and Binding Effect of Representations, Warranties, and Covenants

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.11

  	
  Indemnification

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.12

  	
  Interest
  on Expenses and Indemnification, Collateral, Order of Application

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.13

  	
  Limitation
  of Consequential Damages

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.14

  	
  Revival
  Clause

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.15

  	
  Consent
  to Utah Jurisdiction, Exclusive Jurisdiction of Utah Courts, and Jury Waiver

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.16

  	
  Nature
  of Borrower’s Obligations

  	
   

  	
  19

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.17

  	
  Notices

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.18

  	
  Duplicate
  Originals; Counterpart Execution

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.19

  	
  Disclosure
  of Financial and Other Information

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.20

  	
  Integrated Agreement and Subsequent
  Amendment

  	
   

  	
  24

  

 

iii

 

LOAN AND SECURITY
AGREEMENT

 

This Loan and Security
Agreement is made and entered into by and between Summit Financial Resources,
L.P., CORGENIX MEDICAL CORPORATION, and CORGENIX, INC.

 

For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

1.             Definitions

 

1.1           Definitions

 

Terms defined in the
singular shall have the same meaning when used in the plural and vice
versa.  As used herein, the term:

 

“Accounts” shall have the
meaning set forth in the definition of Collateral.

 

“Accounting Standards”
means (i) in the case of financial statements and reports, conformity with
generally accepted accounting principles and fully and fairly representing the
financial condition as of the date thereof and the results of operations for
the period or periods covered thereby, consistent with other financial
statements of that company previously delivered to Lender, and (ii) in the
case of calculations, definitions, and covenants, generally accepted accounting
principles consistent with those used in the preparation of financial
statements of Borrower previously delivered to Lender.

 

“Banking Business Day”
means any day not a Saturday, Sunday, legal holiday in the State of Utah, or
day on which national banks in the State of Utah are closed.

 

“Borrower” means,
individually and collectively, jointly and severally, CMC and CORGENIX, or
either of them.

 

“CMC” means CORGENIX
MEDICAL CORPORATION, a corporation organized and existing under the laws of the
State of Nevada, its successors, and, if permitted, assigns.

 

“Collateral” means the
following personal property of Borrower, wherever located, now owned or
existing or hereafter acquired or created, all additions and accessions
thereto, all replacements, insurance or condemnation proceeds, all documents
covering any of the Collateral, all leases of any of the Collateral, all rents,
revenues, issues, profits and proceeds arising from the sale, lease, license,
encumbrance, collection, or any other temporary or permanent disposition of any
of the Collateral or any interest therein, all amendments, modifications,
renewals, extensions, and replacements thereof, and all products and proceeds
thereof: (a) all inventory (the “Inventory”); (b) all accounts (the
“Accounts”); (c) all equipment, goods and motor vehicles (collectively,
the “Equipment”); (d) all general intangibles, including any and all
patents, trademarks and copyrights (registered or unregistered), trade secrets,
domain names and addresses, and intellectual property licenses; (e) any
and all promissory notes and instruments payable to or owing to Borrower or
held by Borrower; any and all leases under which Borrower is the lessor; any
and all chattel paper in favor of, owing to, or held by Borrower, including, 

 

1

 

without limitation, any
and all conditional sale contracts or other sale agreements, whether Borrower
is the original party or the assignee; and any and all security agreements,
collateral and titles to motor vehicles which secure any of the foregoing
obligations; all deposit accounts, including without limitation, all interest,
dividends or distributions accrued or to accrue thereon, whether or not due;
all investment property, including all interest, dividends or distributions
accrued or to accrue thereon, whether or not due, all documents; all
letter-of-credit rights; and all supporting obligations (collectively, the
“Financial Obligations”); and (f) all balances, deposits, debts or any
other amounts or obligations of Lender owing to Borrower, whether or not due.

 

“CORGENIX” means
CORGENIX, INC., a corporation organized and existing under the laws of the
State of Delaware, its successors, and, if permitted, assigns.

 

“Default Rate” means the
default interest rate provided in the Promissory Note.

 

“Effective Date” shall
mean the date the parties intend this Loan and Security Agreement to become
binding and enforceable, which is the date stated at the conclusion of this
Loan and Security Agreement.

 

“Eligible Equipment”
means Equipment which (i) is subject to no security interest, lien, or
encumbrance of any nature whatsoever with priority over the security interest
created by the Loan Documents and the Financing Agreement, except any liens for
current taxes and assessments which are not delinquent; (ii) meets all
applicable representations and warranties concerning the Collateral set forth
in Section 3.2 Representations and Warranties Concerning Collateral
and Section 3.3 Covenants Concerning Collateral; and (iii) is
located on the Borrower’s premises; but excluding any Equipment which, in the
sole discretion of Lender, is damaged, out-dated, obsolete, or otherwise
unacceptable to Lender.

 

“Event of Default” shall
have the meaning set forth in Section 7.1 Events of Default.

 

“Equipment” shall have
the meaning set forth in the definition of Collateral.

 

“Equipment Appraisal”
means a third-party appraisal of the Equipment that is acceptable to Lender, in
Lender’s reasonable discretion.

 

“Financing Agreement”
means that certain Financing Agreement, and all amendments, modifications, and
addenda thereto, by and between Lender and Borrower of approximate even date
herewith.

 

“First Loan Advance”
shall have the meaning set forth in Section 2.4 Disbursements of
Promissory Note.

 

“Inventory” shall have
the meaning set for in the definition of Collateral.

 

“Lender” means Summit
Financial Resources, L.P., a Hawaii limited partnership, its successors, and
assigns.

 

“Liquidation Costs” means
the reasonable costs and out of pocket expenses incurred by Lender in obtaining
possession of any Collateral, in storage and preparation for sale, lease or 

 

2

 

other disposition of any
Collateral, in the sale, lease, or other disposition of any or all of the
Collateral, and/or otherwise incurred in foreclosing on any of the Collateral,
including, without limitation, (a) reasonable attorneys fees and legal
expenses, (b) transportation and storage costs, (c) advertising
costs, (d) sale commissions, (e) sales tax and license fees, (f) costs
for improving or repairing any of the Collateral, and (g) costs for
preservation and protection of any of the Collateral.

 

“Loan” means the loan to
be made pursuant to Section 2 Loan Description.

 

“Loan and Security
Agreement” means this agreement, together with any exhibits, amendments,
addendums, and modifications.

 

“Loan Documents” means
the Loan and Security Agreement, Promissory Note, Security Documents, all other
agreements and documents contemplated by any of the aforesaid documents, and
all amendments, modifications, addendums, and replacements, whether presently
existing or created in the future.

 

“Material Adverse Effect”
means a material adverse effect on Borrower’s financial condition, conduct of
its business, or ability to perform its obligations under the Loan Documents.

 

“Organizational
Documents” means, in the case of a corporation, its Articles of Incorporation
and By-Laws; in the case of a general partnership, its Articles of Partnership;
in the case of a limited partnership, its Articles of Limited Partnership; in
the case of a limited liability company, its Articles of Organization and
Operating Agreement or Regulations, if any; in the case of a limited liability
partnership, its Articles of Limited Liability Partnership; and all amendments,
modifications, and changes to any of the foregoing which are currently in
effect.

 

“Permitted Encumbrances”
means (i) liens for taxes and assessments not yet due and payable or, if
due and payable, those being contested in good faith by appropriate proceedings
and for which appropriate reserves are maintained, (ii) security interests
and liens created by the Loan Documents, (iii) security interests and
liens created by the Financing Agreement, (iv) security interests and
liens granted in favor of Benefactor Funding Corp. that shall be terminated by
Borrower prior to or immediately in connection with Lender making the First
Loan Advance, and (v) security interests and liens authorized in writing
by Lender.

 

“Promissory Note” means
the promissory note to be executed by Borrower pursuant to Section 2.3 Promissory
Note and any and all renewals, extensions, modifications, and replacements
thereof.

 

“Qualified Bank Financing”
means financing provided directly by a full service commercial bank whose
deposits are insured by the Federal Deposit Insurance Corporation in the form
of a revolving line of credit for which the primary collateral is Client’s
Accounts.  Financing provided by a
subsidiary, affiliate or division of such a bank does not qualify as Qualified
Bank Financing.

 

“Second Loan Advance”
shall have the meaning set forth in Section 2.4 Disbursements of
Promissory Note.

 

3

 

“Security Documents”
means all security agreements, including this Loan and Security Agreement,
assignments, pledges, financing statements, and other documents which create or
evidence any security interest, assignment, lien or other encumbrance in favor
of Lender to secure any or all of the obligations created or contemplated by
any of the Loan Documents, and all amendments, modifications, addendums, and
replacements, whether presently existing or created in the future.

 

“Uniform Commercial Code”
means the Uniform Commercial Code as adopted now or in the future in the State
of Utah.

 

2.             Loan Description

 

2.1           Amount of Loan

 

Upon fulfillment of all
conditions precedent set forth in this Loan and Security Agreement, and so long
as no Event of Default exists, and no other breach has occurred under the Loan
Documents, Lender agrees to loan Borrower up to two hundred fifty thousand
dollars ($250,000).

 

2.2           Nature and Duration of Loan

 

The
Loan shall be a term loan payable in full upon the date and upon the terms and
conditions provided in the Promissory Note.

 

2.3           Promissory Note

 

The Loan shall be
evidenced by the Promissory Note.  The
Promissory Note shall be executed and delivered to Lender upon execution and
delivery of this Loan and Security Agreement.

 

2.4           Disbursements of Promissory Note

 

The proceeds of the Promissory Note shall be disbursed
as follows:

 

a.             One disbursement to be made upon the execution and
delivery of the Loan Documents (the “First Loan Advance”).  The First Loan Advance shall be in the amount
of one hundred twenty-five thousand dollars ($125,000).

 

b.             One disbursement to be made upon the completion of the
Equipment Appraisal (the “Second Loan Advance”).  The Second Loan Advance shall be in an amount
that when combined with the First Loan Advance shall equal the lesser of (i) two
hundred fifty thousand dollars ($250,000), or (ii) sixty percent (60%) of
the net orderly liquidation value of Eligible Equipment as set forth in the
Equipment Appraisal.  In the event the
net orderly liquidation value of Eligible Equipment as set forth in the
Equipment Appraisal is not greater than two hundred eight thousand three
hundred thirty-three and 34/100 dollars ($208,333.34), Borrower shall not be
entitled to any Second Loan Advance or any additional advances or disbursements
under the Promissory Note.

 

4

 

2.5           Administration Fee

 

Borrower shall pay Lender a monthly administration fee
in an amount equal to one and forty-five hundredths percent (1.45%) of the
average outstanding monthly principal balance on the Promissory Note each
month.  The administration fee shall be
payable monthly in arrears.  Lender is
irrevocably authorized to disburse a sufficient amount of funds pursuant to the
Financing Agreement each month to pay the administration fee.

 

The administration fee is not intended to be and shall
not be construed to be interest.

 

2.6           First Loan Advance Fee

 

As consideration for making the First Loan Advance
prior to the completion of the Equipment Appraisal, Borrower shall pay to
Lender a fee equal to two thousand two hundred fifty dollars ($2,250) for each
month, or portion thereof, until the Equipment Appraisal has been completed;
provided, however, the First Loan Advance fee shall not exceed three thousand
three hundred seventy-five dollars ($3,375). 
Lender is irrevocably authorized to disburse a sufficient amount of
funds pursuant to the Financing Agreement each month to pay the First Loan
Advance fee.

 

The First Loan Advance fee is not intended to be and
shall not be construed to be interest.

 

2.7           Early Termination Fee

 

If Borrower elects to terminate the Loan at any time
prior to the maturity of the Promissory Note, Borrower shall provide at least
sixty (60) days written notice of intent to terminate.  Upon such termination, or if an Event of
Default accelerates payment of the Loan, Borrower shall pay Lender an early
termination fee equal to one percent (1%) of the face amount of the Promissory
Note; provided, however, that in the event Borrower obtains Qualified Bank
Financing to replace the Loan and the financing provided under the Financing
Agreement, Lender shall waive the foregoing early termination fee so long as
Borrower provides at least sixty (60) days written notice of its intent to
replace the Loan and the financing provided under the Financing Agreement with
Qualified Bank Financing, which notice shall itemize the material financial
terms of the Qualified Bank Financing. 
In the event Borrower provides Lender written notice of its intent to
replace the Loan and the financing provided under the Financing Agreement with
Qualified Bank Financing, Lender may, within thirty (30) days of receipt of
such notice, provide written notice to Borrower that Lender will match the
material terms of the proposed Qualified Bank Financing whereupon Lender and
Borrower shall amend the Loan Documents and the Financing Agreement, as
necessary, to match the material financial terms of the proposed Qualified Bank
Financing and the Loan Documents and the Financing Agreement shall remain in
force.

 

2.8           Loan Payments

 

As to all amounts owing to Lender by Borrower under
the Loan Documents, Lender (i) may, and is irrevocably authorized to,
disburse a sufficient amount of funds pursuant to the Financing Agreement to
pay any such amounts in full, (ii) may, if there are insufficient
Reserves, as defined in the Financing Agreement, demand payment from Borrower
whereupon Borrower 

 

5

 

shall promptly pay all such amounts to Lender, or (iii) may
exercise any combination of the foregoing alternatives set forth in this Section or
available under the Loan Documents, at law, or in equity.

 

2.9           Excess Interest

 

It is the intent of the parties to comply with any
usury law applicable to the Loan and to all amounts owing pursuant to the Loan
Documents and it is understood and agreed that in no event and upon no
contingency shall Borrower be required to pay interest in excess of the rate
allowed by any laws of any state which are determined to be applicable and
governing.  The intention of the parties
being to conform strictly to any applicable usury laws, the Loan Documents
shall be held to be subject to reduction to the amount allowed under any
applicable and governing usury laws as now or hereafter construed by the courts
having jurisdiction.  In the event Lender
receives any interest under the Loan Documents in excess of any highest
permissible rate under any applicable and governing law, such excess interest
(including simple interest thereon at the interest rate at the highest
permissible rate which is applicable and governing) shall be promptly applied
to any unpaid principal balance owed by Borrower.  To the extent such excess interest is greater
than the unpaid principal balance, Lender shall promptly remit such overage to
Borrower.

 

3.             Security for Loan

 

3.1           Grant of Security Interest

 

Borrower hereby grants
Lender a security interest in the Collateral. 
Borrower and Lender acknowledge their mutual intent that all security
interests contemplated herein are given as a contemporaneous exchange for new
value to Borrower, regardless of when advances to Borrower are actually made or
when the Collateral is created or acquired.

 

The Collateral shall
secure all of Borrower’s present and future debts, obligations, and liabilities
of whatever nature, and without any limitation whatsoever, to Lender,
including, without limitation, (a) the Loan, (b) the Promissory Note,
(c) all obligations of Borrower under the Loan Documents, (d) all
advances of the same kind and quality relating to this transaction, (e) all
obligations of Borrower under the Financing Agreement, and (f) transactions
in which the documents evidencing the indebtedness refer to this grant of
security interest as providing security thereof.

 

Borrower’s obligations
under this Loan and Security Agreement may also be secured by other collateral
as may be evidenced by other documentation apart from this Loan and Security
Agreement.

 

3.2           Representations and Warranties Concerning Collateral

 

Borrower represents and
warrants that:

 

a.             Borrower is the sole owner of the Collateral.

 

6

 

b.                                      The Inventory and Accounts are not
subject to any security interest, lien, prior assignment, or other encumbrance
of any nature whatsoever except Permitted Encumbrances.

 

c.                                       The Accounts and Financial Obligations,
if any, are each a bona fide obligation of the obligor identified therein for
the amount identified in the records of Borrower, except for normal and
customary disputes which arise in the ordinary course of business and which do
not affect a material portion of the Accounts and Financial Obligations.

 

d.                                      There are no defenses or setoffs to
payment of the Accounts and Financial Obligations, if any, which can be
asserted by way of defense or counterclaim against Borrower or Lender, except
for normal and customary disputes which arise in the ordinary course of
business and which do not affect a material portion of the Accounts and
Financial Obligations.

 

e.                                       There is presently no default or
delinquency in any payment of the Accounts and Financial Obligations, if any,
except for any default or delinquency which has been reserved against by
Borrower in accordance with Accounting Standards and the Accounts and Financial
Obligations will be timely paid in full by the obligors, except for normal and
customary disputes which arise in the ordinary course of business and which do
not affect a material portion of the Accounts and Financial Obligations.

 

f.                                         Borrower has no knowledge of any fact or
circumstance which would materially impair the ability of any obligor on the
Accounts and Financial Obligations, if any, to timely perform its obligations
thereunder, except those which arise in the ordinary course of business and
which do not affect a material portion of the Accounts and Financial
Obligations.

 

g.                                      Any services performed or goods sold
giving rise to the Accounts and Financial Obligations, if any, have been
rendered or sold in compliance with applicable laws, ordinances, rules, and
regulations and in the ordinary course of Borrower’s business.

 

h.                                      There have been no extensions,
modifications, or other agreements relating to payment of the Accounts and
Financial Obligations, if any, except those granted in the ordinary course of
business and which do not affect a material portion of the Accounts and
Financial Obligations and except those agreements with Benefactor Funding Corp.
that shall be terminated by Borrower prior to or immediately in connection with
Lender making the First Loan Advance.

 

3.3                                 Covenants Concerning Collateral

 

Borrower covenants that:

 

a.                                       Borrower hereby authorizes Lender to file
UCC Financing Statements concerning the Collateral.  Borrower will execute and deliver any
documents (properly endorsed, if necessary) reasonably requested by Lender for
perfection or enforcement of 

 

7

 

any security interest or lien, give good faith,
diligent cooperation to Lender, and perform such other acts reasonably
requested by Lender for perfection and enforcement of any security interest or
lien, including, without limitation, obtaining control for purposes of
perfection with respect to Collateral consisting of deposit accounts,
investment property, letter-of-credit rights, and electronic chattel
paper.  Lender is authorized to file,
record, or otherwise utilize such documents as it deems necessary to perfect
and/or enforce any security interest or lien granted hereunder.

 

b.                                      Borrower shall keep the Equipment in good
repair, ordinary wear and tear and obsolescence excepted, and be responsible
for any loss or damage to the Equipment. 
Borrower shall pay when due all taxes, license fees and other charges on
the Equipment.  Borrower shall not sell,
misuse, conceal, or in any way dispose of the Equipment or permit it to be used
unlawfully or for hire or contrary to the provisions of any insurance
coverage.  Risk of loss of the Equipment
shall be on Borrower at all times unless Lender takes possession of the
Equipment.  Loss of or damage to the
Equipment or any part thereof shall not release Borrower from any of the
obligations secured by the Equipment. 
Lender or its representatives may, at any time and from time to time,
enter any premises where the Equipment is located and inspect, audit and check
the Equipment; provided, however, that so long as no Event of Default has
occurred, Lender will only enter any premises where the Equipment is located
upon twenty-four (24) hours notice to Borrower.

 

c.                                       Borrower agrees to insure the Equipment,
at Borrower’s expense, against loss, damage, theft, and such other risks as
Lender may request to the full insurable value thereof with insurance companies
and policies satisfactory to Lender. 
Proceeds from such insurance shall be payable to Lender as its interest
may appear, shall name Lender as an additional insured and as a loss payee, and
such policies shall provide for a minimum ten (10) days written
cancellation notice to Lender.  Upon
request, policies or certificates attesting to such coverage shall be delivered
to Lender.  Insurance proceeds may be
applied by Lender toward payment of any obligation secured by this Loan and
Security Agreement, whether or not due, in such order of application as Lender
may elect.

 

d.                                      Borrower will at all times keep accurate
and complete records of the Collateral. 
Lender or its representatives may, at any time and from time to time,
enter any premises where the Collateral and/or the records pertaining to the
Collateral are located and inspect, inventory, audit, check, copy, and
otherwise review the Collateral and the records concerning the Collateral;
provided, however, that so long as no Event of Default has occurred, Lender
will enter any premise where the Collateral and/or records pertaining to the
Collateral are located upon twenty-four (24) hours notice to Borrower.

 

8

 

4.                                       Conditions to Loan Disbursements

 

4.1                                 Conditions to Loan Disbursements

 

Lender’s obligation to
disburse any of the Loan is expressly subject to, and shall not arise until all
of the conditions set forth below have been satisfied.  All of the documents referred to below must be
in a form and substance acceptable to Lender.

 

a.                                       All of the Loan Documents and all other
documents contemplated to be delivered to Lender prior to funding have been
fully executed and delivered to Lender.

 

b.                                      All of the documents contemplated by the
Loan Documents which require filing or recording have been properly filed and
recorded so that all of the liens and security interests granted to Lender in
connection with the Loan will be properly created and perfected and will have a
priority acceptable to Lender.

 

c.                                       All other conditions precedent provided
in or contemplated by the Loan Documents or any other agreement or document
have been performed.

 

d.                                      As of the date of disbursement of all or
any portion of the Loan, the following shall be true and correct:  (i) all representations and warranties
made by Borrower in the Loan Documents are true and correct as of the date of
such disbursement; and (ii) no Event of Default has occurred and no
conditions exist and no event has occurred, which, with the passage of time or
the giving of notice, or both, would constitute an Event of Default.

 

e.                                       All conditions precedent to advances
under the Financing Agreement have been fully satisfied in Lender’s sole
discretion.

 

All conditions precedent
set forth in this Loan and Security Agreement and any of the Loan Documents are
for the sole benefit of Lender and may be waived unilaterally by Lender.

 

4.2                                 No Default, Adverse Change, False or
Misleading Statement

 

Lender’s obligation to
advance any funds at any time pursuant to this Loan and Security Agreement and
the Promissory Note shall, at Lender’s reasonable discretion, terminate upon
the occurrence of any Event of Default or upon the reasonable determination by
Lender that any of Borrower’s representations made in any of the Loan Documents
were false or materially misleading when made. 
Upon the exercise of such discretion, Lender shall be relieved of all
further obligations under the Loan Documents.

 

5.                                       Representations and Warranties

 

5.1                                 Organization and Qualification

 

CMC represents and warrants that it is a corporation
duly organized and existing under the laws of the State of Nevada, and that CMC
is qualified and in good standing as a foreign corporation in the State of
Colorado.

 

9

 

CORGENIX represents and warrants that it is a
corporation duly organized and existing under the laws of the State of
Delaware, and that CORGENIX is qualified and in good standing as a foreign
corporation in the State of Colorado.

 

CMC represents and warrants that it has delivered to
Lender or Lender’s counsel accurate and complete copies of CMC’s Organizational
Documents which are operative and in effect as of the Effective Date.

 

CORGENIX represents and warrants that it has delivered
to Lender or Lender’s counsel accurate and complete copies of CORGENIX’s
Organizational Documents which are operative and in effect as of the Effective
Date.

 

The complete and exact name of CMC is CORGENIX MEDICAL
CORPORATION.

 

The complete and exact name of CORGENIX is CORGENIX,
INC.

 

The organizational identification number, if any,
assigned to CMC by CMC’s state of organization is C6200-1994.

 

The organizational identification number, if any,
assigned to CORGENIX by CORGENIX’s state of organization is 2235854.

 

Borrower’s chief executive office is located at 11575
Main Street, #400, Broomfield, Colorado 80020.

 

Borrower’s place of business is located at 11575 Main
Street, #400, Broomfield, Colorado 80020.

 

During the five (5) years
preceding the date of this Loan and Security Agreement, Borrower has not (i) been
known by nor used any legal, fictitious or trade name except REAADS Medical
Products, Inc.; (ii) changed its name in any respect; (iii) been
the surviving entity of a merger or consolidation; or (iv) has not
acquired all or substantially all of the assets of any person or entity.

 

5.2                                 Authorization

 

CMC represents and warrants that the execution,
delivery, and performance by CMC of the Loan Documents has been duly authorized
by all necessary action on the part of CMC and are not inconsistent with CMC’s
Organizational Documents or any resolution of the Board of Directors of CMC, do
not and will not contravene any provision of, or constitute a default under,
any indenture, mortgage, contract, or other instrument to which CMC is a party
or by which it is bound, and that by the execution and delivery thereof, CMC
intends that the Loan Documents will constitute legal, valid, and binding
agreements and obligations of CMC, enforceable in accordance with their respective
terms.

 

CORGENIX represents and warrants that the execution,
delivery, and performance by CORGENIX of the Loan Documents has been duly
authorized by all necessary action on the part of CORGENIX and are not
inconsistent with CORGENIX’s Organizational Documents or any 

 

10

 

resolution
of the Board of Directors of CORGENIX, do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract,
or other instrument to which CORGENIX is a party or by which it is bound, and
that by the execution and delivery thereof, CORGENIX intends that the Loan
Documents will constitute legal, valid, and binding agreements and obligations
of CORGENIX, enforceable in accordance with their respective terms.

 

5.3                                 Accuracy of Financial Statements

 

Borrower
represents and warrants that all of its audited financial statements heretofore
delivered to Lender have been prepared in accordance with Accounting Standards.

 

Borrower represents and
warrants that all of its unaudited financial statements heretofore delivered to
Lender fully and fairly represent Borrower’s financial condition as of the date
thereof and the results of Borrower’s operations for the period or periods
covered thereby and are consistent with other financial statements previously
delivered to Lender absent footnote disclosures.

 

Borrower represents and
warrants that since the dates of the most recent audited and unaudited
financial statements delivered to Lender, there has been no event which would
have a Material Adverse Effect on its financial condition.

 

Borrower represents and
warrants that all of its pro forma financial statements heretofore delivered to
Lender have been prepared consistently with Borrower’s actual financial
statements and fully and fairly represent Borrower’s anticipated financial
condition and the anticipated results of Borrower’s operation for the period or
periods covered thereby.

 

5.4                                 Full and Accurate Disclosure

 

Borrower represents and
warrants that this Loan and Security Agreement, the financial statements
referred to herein, any loan application submitted to Lender, and all other
statements furnished by Borrower to Lender in connection herewith contain no
untrue statement of a material fact and omit no material fact necessary to make
the representations and warranties contained in this Section 5 not
misleading.  Borrower represents and
warrants that it has not failed to disclose in writing to Lender any fact that
would have a Material Adverse Effect.

 

5.5                                 Compliance with All Other Applicable Law

 

Borrower represents and
warrants that it has complied with all applicable statutes, rules, regulations,
orders, and restrictions of any domestic or foreign government, or any
instrumentality or agency thereof having jurisdiction over the conduct of
Borrower’s business or the ownership of its properties, which may have a
Material Adverse Effect.

 

5.6                                 Operation of Business

 

Borrower represents and
warrants that Borrower possesses all material licenses, permits, franchises,
patents, copyrights, trademarks, and trade names, or rights thereto, to conduct
its business substantially as now conducted and as presently proposed to be
conducted, and 

 

11

 

Borrower is not in
violation of any valid material rights of others with respect to any of the
foregoing.

 

5.7                                 Payment of Taxes

 

Borrower represents and
warrants that Borrower has filed all tax returns (federal, state, and local)
required to be filed and has paid all taxes, assessments, and governmental
charges and levies, including interest and penalties, on Borrower’s assets,
business and income, except such as are being contested in good faith by proper
proceedings and as to which adequate reserves are maintained.

 

6.                                       Borrower’s Covenants

 

Borrower makes the
following agreements and covenants, which shall continue so long as this Loan
and Security Agreement is in effect and so long as Borrower is indebted to
Lender for obligations arising out of, identified in, or contemplated by this
Loan and Security Agreement.

 

6.1                                 Eligible Equipment

 

Borrower shall at all times maintain Eligible
Equipment so that the total, outstanding balance owing under the Promissory
Note equals or is less than the amount equal to sixty (60%) of the net orderly
liquidation value of the Eligible Equipment as set forth in the Equipment
Appraisal or any subsequent appraisal of the Equipment acceptable to Lender, in
Lender’s sole discretion.  If at any time
the total, outstanding balance owing under the Promissory Note exceeds this
formula, Borrower shall promptly make payment to Lender in a sufficient amount
to bring the total outstanding balance owing under the Promissory Note in
compliance with this formula, and if such payment is not immediately made,
interest shall accrue on such amount at the Default Rate, regardless of whether
Lender waives the Event of Default caused by such non-payment.

 

6.2                                 Continued Compliance with Applicable Law

 

Borrower shall conduct
its business in a lawful manner and in material compliance with all applicable
federal, state, and local laws, ordinances, rules, regulations, and orders;
shall maintain in good standing all licenses and organizational or other
qualifications reasonably necessary to its business and existence; and shall
not engage in any business not authorized by and not in accordance with its
Organizational Documents and other governing documents.

 

6.3                                 Payment of Taxes and Obligations

 

Borrower shall pay when
due all taxes, assessments, and governmental charges and levies on Borrower’s
assets, business, and income, and all material obligations of Borrower of
whatever nature, except such as are being contested in good faith by proper
proceedings and as to which adequate reserves are maintained.

 

12

 

6.4                                 Financial Statements and Reports

 

Borrower shall provide
Lender with such financial statements and reports as Lender may reasonably
request.  Audited financial statements
and reports shall be prepared in accordance with Accounting Standards.  Unaudited financial statements and reports
shall fully and fairly represent Borrower’s financial condition as of the date
thereof and the results of Borrower’s operations for the period or periods
covered thereby and shall be consistent with other financial statements
previously delivered to Lender absent footnote disclosures.

 

6.5                                 Insurance

 

Borrower shall at all
times maintain all insurance policies as may be required under the Financing
Agreement.

 

6.6                                 Inspection

 

Borrower shall at any
reasonable time and from time to time permit Lender or any representative of
Lender to examine and make copies of and abstracts from the records and books
of account of, and visit and inspect the properties and assets of, Borrower,
and to discuss the affairs, finances, and accounts of Borrower with any of
Borrower’s officers and directors and with Borrower’s independent accountants.

 

6.7                                 Operation of Business

 

Borrower shall maintain
all licenses, permits, franchises, patents, copyrights, trademarks, and trade
names, or rights thereto, necessary or advisable to conduct its business and
Borrower shall not violate any valid rights of others with respect to any of
the foregoing.  Borrower shall continue
to engage in a business of the same general type as now conducted.

 

7.                                       Default

 

7.1                                 Events of Default

 

Time is of the essence of
this Loan and Security Agreement.  The
occurrence of any of the following events shall constitute a default under this
Loan and Security Agreement and under the Loan Documents and shall be termed an
“Event of Default”:

 

a.                                       Borrower fails in the payment or
performance of any obligation, covenant, agreement, or liability created by any
of the Loan Documents.

 

b.                                      Any material representation, warranty, or
financial statement made by or on behalf of Borrower in any of the Loan
Documents, or any document contemplated by the Loan Documents, is false or
misleading.

 

c.                                       Default occurs or Borrower fails to
comply with any term in any of the Loan Documents.

 

13

 

d.                                      Any indebtedness of Borrower under any
note or indenture or default of Borrower under any contract, agreement, or
undertaking is accelerated which results in a Material Adverse Effect.

 

e.                                       Default or an event which, with the
passage of time or the giving of notice or both, would constitute a default, by
Borrower, occurs on any note, indenture, contract, agreement, or undertaking
which results in a Material Adverse Effect.

 

f.                                         Default or an event which, with the
passage of time or the giving of notice or both, would constitute a default, by
Borrower, occurs under the Financing Agreement or Lender’s financing of
Borrower’s Accounts under the Financing Agreement terminates for any reason
whatsoever.

 

g.                                      Borrower is dissolved or substantially
ceases business operations.

 

h.                                      A receiver, trustee, or custodian is
appointed for any part of Borrower’s property, or any part of Borrower’s
property is assigned for the benefit of creditors.

 

i.                                          Any proceeding is commenced or petition
filed under any bankruptcy or insolvency law by or against Borrower.

 

j.                                          Any judgment or regulatory fine is
entered against Borrower which results in a Material Adverse Effect.

 

k.                                       Borrower becomes insolvent or fails to
pay its debts as they mature.

 

l.                                          Any change occurs in Borrower’s condition
or any event occurs which may have a Material Adverse Effect.

 

7.2                                 No Waiver of Event of Default

 

No course of dealing or
delay or failure to assert any Event of Default shall constitute a waiver of
that Event of Default or of any prior or subsequent Event of Default.

 

8.                                       Remedies

 

8.1                                 Remedies upon Event of Default

 

Upon
the occurrence of an Event of Default, and at any time thereafter, all or any
portion of the obligations due or to become due from Borrower to Lender,
whether arising under this Loan and Security Agreement, the Promissory Note,
the Security Documents or otherwise, at the option of Lender and with notice to
Borrower, which notice shall not be required to be in writing, of the exercise
of such option, shall accelerate and become at once due and payable in full,
and Lender shall have the following rights and remedies, in addition to all
other rights and remedies existing at law, in equity, or by statute or provided
in the Loan Documents:

 

a.                                       Lender shall have the right, immediately
and without prior notice or demand, to set off against Borrower’s obligations
to Lender, whether or not due, all 

 

14

 

money and other amounts owed by Lender in any capacity
to Borrower, including, without limitation, all amounts owing under the
Financing Agreement.

 

b.                                      Lender shall have all the rights and
remedies available under the Uniform Commercial Code.

 

c.                                       Lender shall have the right to enter upon
any premises where the Collateral or records relating thereto may be and take
possession of the Collateral and such records.

 

d.                                      Upon request of Lender, Borrower shall,
at the expense of Borrower, assemble the Collateral and records relating
thereto at a place designated by Lender and tender the Collateral and such
records to Lender.

 

e.                                       Without notice to Borrower, Lender may
obtain the appointment of a receiver of the business, property and assets of
Borrower and Borrower hereby consents to the appointment of Lender or such
person as Lender may designate as such receiver.

 

f.                                         Lender may sell, lease or otherwise
dispose of any or all of the Collateral and, after deducting the Liquidation
Costs, apply the remainder to pay, or to hold as a reserve against, the
obligations secured by this Loan and Security Agreement.

 

g.                                      Lender shall have all the rights and
remedies available under the Financing Agreement.

 

Borrower shall be liable for all deficiencies owing on any obligations
secured by this Loan and Security Agreement after liquidation of the
Collateral.  Lender shall not have any
obligation to clean-up or otherwise prepare any Collateral for sale, lease, or
other disposition.

 

8.2                                 Rights and Remedies Cumulative

 

The rights and remedies herein conferred are cumulative and not
exclusive of any other rights and remedies and shall be in addition to every
other right, power and remedy herein specifically granted or hereafter existing
at law, in equity, or by statute which Lender might otherwise have, and any and
all such rights and remedies may be exercised from time to time and as often
and in such order as Lender may deem expedient. 
No delay or omission in the exercise of any such right, power or remedy
or in the pursuance of any remedy shall impair any such right, power or remedy
or be construed to be a waiver thereof or of any default or to be an
acquiescence therein.

 

8.3                                 No Waiver of Rights

 

No delay or omission in
the exercise or pursuance by Lender of any right, power, or remedy shall impair
any such right, power, or remedy or shall be construed to be a waiver thereof.

 

15

 

9.                                       General Provisions

 

9.1                                 Governing Agreement

 

In the event of conflict
or inconsistency between this Loan and Security Agreement and the other Loan
Documents, excluding the Promissory Note, the terms and provisions of this Loan
and Security Agreement shall govern.

 

9.2                                 Borrower’s Obligations Cumulative

 

Every obligation,
covenant, condition, provision, warranty, agreement, liability, and undertaking
of Borrower contained in the Loan Documents shall be deemed cumulative and not
in derogation or substitution of any of the other obligations, covenants,
conditions, provisions, warranties, agreements, liabilities, or undertakings of
Borrower contained herein or therein.

 

9.3                                 Payment of Expenses and Attorney’s Fees

 

Borrower shall pay all
reasonable expenses of Lender relating to the negotiation, drafting of
documents, documentation of the Loan, and administration and supervision of the
Loan, including, without limitation, appraisal fees, environmental inspection
fees, field examination expenses, title insurance, recording fees, filing fees,
and reasonable attorneys fees and legal expenses, whether incurred in making
the Loan, in future amendments or modifications to the Loan Documents, or in ongoing
administration and supervision of the Loan.

 

Upon occurrence of an
Event of Default, Borrower agrees to pay all costs and expenses, including
reasonable attorney fees and legal expenses, incurred by Lender in enforcing,
or exercising any remedies under, the Loan Documents, and any other rights and
remedies.  Additionally, Borrower agrees
to pay all Liquidation Costs.  Any and
all such costs, expenses, and Liquidation Costs shall be payable by Borrower
upon demand, together with interest thereon from the date of the advance until
repaid, both before and after judgment, at the Default Rate.

 

Borrower agrees to pay
all expenses, including reasonable attorney fees and legal expenses, incurred
by Lender in any bankruptcy proceedings of any type involving Borrower, the
Loan Documents, or the Collateral, including, without limitation, expenses
incurred in modifying or lifting the automatic stay, determining adequate
protection, use of cash collateral or relating to any plan of reorganization.

 

9.4                                 Right to Perform for Borrower

 

Lender may, in its sole
discretion and without any duty to do so, elect to discharge taxes, tax liens,
security interests, or any other encumbrance upon the Collateral or any other
property or asset of Borrower, to pay any filing, recording, or other charges
payable by Borrower, or to perform any other obligation of Borrower under this
Loan and Security Agreement or under the Security Documents.

 

16

 

9.5           Assignability

 

Borrower may not, without
Lender’s prior written consent, assign or transfer any of the Loan Documents
and any such purported assignment or transfer is void.  Lender may assign or transfer any of the Loan
Documents.  Funding of this Loan may be
provided by an affiliate of Lender.

 

9.6           Third Party Beneficiaries

 

The Loan Documents are
made for the sole and exclusive benefit of Borrower and Lender and are not
intended to benefit any other third party. 
No third party may claim any right or benefit or seek to enforce any
term or provision of the Loan Documents.

 

9.7           Governing Law

 

The Loan Documents shall
be governed by and construed in accordance with the laws of the State of Utah,
except to the extent that any such document expressly provides otherwise.

 

9.8           Severability of Invalid Provisions

 

Any provision of this
Loan and Security Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction only, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

9.9           Interpretation of Loan and Security Agreement

 

The article and section
headings in this Loan and Security Agreement are inserted for convenience only
and shall not be considered part of the Loan and Security Agreement nor be used
in its interpretation.

 

All references in this
Loan and Security Agreement to the singular shall be deemed to include the
plural when the context so requires, and vice versa.  References in the collective or conjunctive
shall also include the disjunctive unless the context otherwise clearly requires
a different interpretation.

 

9.10         Survival and Binding Effect of Representations,
Warranties, and Covenants

 

All agreements,
representations, warranties, and covenants made herein by Borrower shall
survive the execution and delivery of this Loan and Security Agreement and
shall continue in effect so long as any obligation to Lender contemplated by
this Loan and Security Agreement is outstanding and unpaid, notwithstanding any
termination of this Loan and Security Agreement.  All agreements, representations, warranties,
and covenants made herein by Borrower shall survive any bankruptcy proceedings
involving Borrower.  All agreements,
representations, warranties, and covenants in this Loan and Security Agreement
shall bind the party making the same, its successors and, if permitted by
Lender, assigns, and all rights and 

 

17

 

remedies in this Loan and
Security Agreement shall inure to the benefit of and be enforceable by each
party for whom made, their respective successors and, if permitted by Lender,
assigns.

 

9.11         Indemnification

 

Borrower shall indemnify
Lender for any and all claims and liabilities, and for damages which may be
awarded or incurred by Lender, and for all reasonable attorney fees, legal expenses,
and other out-of-pocket expenses incurred in defending such claims, arising
from or related in any manner to the negotiation, execution, or performance by
Lender of any of the Loan Documents, but excluding any such claims based upon
breach or default by Lender or gross negligence or willful misconduct of
Lender.

 

Lender shall have the
sole and complete control of the defense of any such claims.  Lender is hereby authorized to settle or
otherwise compromise any such claims as Lender in good faith determines shall
be in its best interests.

 

9.12         Interest on Expenses and Indemnification, Collateral,
Order of Application

 

All expenses,
out-of-pocket costs, attorneys fees and legal expenses, amounts advanced in
performance of obligations of Borrower, and indemnification amounts owing by
Borrower to Lender under or pursuant to this Loan and Security Agreement, the
Promissory Note, and/or any Security Documents shall be due and payable upon
demand.  If not paid upon demand, all
such obligations shall bear interest at the Default Rate from the date of
disbursement until paid to Lender, both before and after judgment.  Lender is irrevocably authorized to disburse
funds under the Financing Agreement for payment of all such obligations.

 

Payment of all such obligations
shall be secured by the Collateral and by the Security Documents.

 

All payments and
recoveries shall be applied to payment of the foregoing obligations, the
Promissory Note, and all other amounts owing to Lender by Borrower in such
order and priority as determined by Lender. 
Unless provided otherwise in the Promissory Note, payments on the
Promissory Note shall be applied first to accrued interest and the remainder,
if any, to principal.

 

9.13         Limitation of Consequential Damages

 

Lender and its officers,
directors, employees, representatives, agents, and attorneys, shall not be
liable to Borrower for consequential damages arising from or relating to any
breach of contract, tort, or other wrong in connection with the negotiation,
documentation, administration or collection of the Loan.

 

9.14         Revival Clause

 

If the incurring of any
debt by Borrower or the payment of any money or transfer of property to Lender
by or on behalf of Borrower should for any reason subsequently be determined to
be “voidable” or “avoidable” in whole or in part within the meaning of any
state or federal law (collectively “voidable transfers”), including, without
limitation, fraudulent conveyances or preferential transfers under the United
States Bankruptcy Code or any other 

 

18

 

federal or state law, and
Lender is required to repay or restore any voidable transfers or the amount or
any portion thereof, or upon the advice of Lender’s counsel is advised to do
so, then, as to any such amount or property repaid or restored, including all
reasonable costs, expenses, and attorneys fees of Lender related thereto, the
liability of Borrower shall automatically be revived, reinstated and restored
and shall exist as though the voidable transfers had never been made.

 

9.15         Consent to Utah Jurisdiction, Exclusive Jurisdiction
of Utah Courts, and Jury Waiver

 

The parties acknowledges
that by execution and delivery of the Loan Documents, they have transacted
business in the State of Utah and the parties voluntarily submit to, consent
to, and waive any defense to the jurisdiction of courts located in the State of
Utah as to all matters relating to or arising from the Loan Documents and/or
the transactions contemplated thereby. 
EXCEPT AS EXPRESSLY AGREED IN WRITING BY THE PARTIES, THE STATE AND
FEDERAL COURTS LOCATED IN THE STATE OF UTAH SHALL HAVE SOLE AND EXCLUSIVE
JURISDICTION OF ANY AND ALL CLAIMS, DISPUTES, AND CONTROVERSIES, ARISING UNDER
OR RELATING TO THE LOAN DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY.
NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THE
LOAN DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY MAY BE COMMENCED OR
PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING BY EACH PARTY.

 

THE PARTIES HEREBY
IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT AT LAW OR IN EQUITY, ARISING
OUT OF OR IN ANY WAY RELATED TO THE LOAN DOCUMENTS.

 

9.16         Nature of Borrower’s Obligations

 

a.             All obligations pursuant to this Loan and
Security Agreement and the Loan Documents shall be the joint and several
obligations of each of Borrower.  Each
reference to “Borrower” hereunder shall be deemed to refer to each Borrower
individually and collectively and each obligation to be performed by “Borrower”
hereunder shall be performed by each Borrower. 
Lender shall have no responsibility to inquire into the apportionment,
allocation or disposition of any advances made under the Loan.  Each Borrower hereby irrevocably appoints the
other as its agent and attorney-in-fact for all purposes of the related
documents, including, without limitation, the giving and receiving of notices
and other communications and the making of all certifications and reports
required pursuant to this Loan and Security Agreement and the Loan
Documents.  The action of any Borrower
with respect to any advance made under the Loan and the requests, notices,
reports and other materials submitted by any Borrower shall bind each Borrower.

 

b.             Each Borrower hereby agrees to indemnify
Lender and hold Lender harmless from and against any and all liabilities,
expenses, losses, damages and/or claims 

 

19

 

of any damage or
injury asserted against Lender by Borrower or any other person arising from or
incurred by reason of the joint nature of the borrowings hereunder or any
action taken by Lender pursuant hereto.

 

c.                                       Each Borrower represents and warrants to
Lender that the request for joint borrowing was made by each Borrower and that
each Borrower is engaged in operations that require financing on such a joint
basis.  Each Borrower expects to derive
benefit, directly or indirectly, from the Loan.

 

d.                                      Each Borrower shall be a direct, primary
and independent obligor and shall not be deemed to be a guarantor,
accommodation party or other person secondarily liable for the Obligations
under the Loan Documents.  “Obligations”
as used in this Section means, as the context requires, the duties and
obligations under the Loan Documents from time to time.  Without limiting the foregoing, however, each
Borrower represents, warrants, covenants and agrees as follows:

 

(i)            Lender may enforce the Loan and
Security Agreement and the Loan Documents against any property, interests in
property, and rights to property securing any or all Obligations arising
pursuant to the related documents without first having sought enforcement of
Loan and Security Agreement and any related documents against any Borrower or
any other Collateral.

 

(ii)           Such Obligations shall not be
affected by any of the following:  (A) the
bankruptcy, disability, dissolution, incompetence, insolvency, liquidation, or
reorganization of any Borrower; (B) any defense of either Borrower to payment
or performance of any or all Obligations or enforcement of any and all liens
and encumbrances; (C) the discharge, modification of the terms of, reduction in
the amount of, or stay of enforcement of any or all liens and encumbrances or
any or all Obligations under the related documents in any bankruptcy,
insolvency, reorganization, or other legal proceeding or by law, ordinance,
regulation, or rule (federal, state, or local); (D) the cessation of liability
of either Borrower or any or all Obligations; (E) any claim or dispute by any
other Borrower concerning the occurrence of any default in performance of any
Obligations, or any other matter.

 

(iii)          Lender may do the following acts or
omissions from time to time with notice to Borrower, which notice shall not be
required to be in writing, but without the consent of any Borrower and without
receiving payment or other value, nor shall the following acts or omissions
affect, delay or impair any of such Obligations or any or all liens and
encumbrances:  (A) Lender may obtain
Collateral or additional Collateral; (B) with the agreement of one Borrower,
Lender may substitute for any or all Collateral regardless of whether the same
type or greater or lesser value; (C) Lender may release any or all Collateral; (D)
Lender may compromise, delay enforcement, fail to enforce, release, settle or
waive any rights or remedies of Lender as to any or all Collateral; (E) Lender
may sell or otherwise dispose of any Collateral in accordance with the related
documents and in such manner or order as Lender determines; (F) Lender may fail
to perfect, fail to protect the priority of, and fail to ensure any or all
liens or 

 

20

 

encumbrances;
(G) Lender may fail to inspect, insure, maintain, preserve or protect any or
all Collateral; (H) Lender may obtain additional obligors for any or all such
Obligations; (I) with the agreement of one Borrower, Lender may increase or
decrease any or all Obligations or otherwise change terms of any or all
Obligations; (J) Lender may release any Borrower; (K) Lender may compromise,
delay enforcement, fail to enforce, release, settle or waive any Obligations of
any Borrower with the agreement of that Loan Party; (L) Lender may make
advances to, or grant other financial accommodations for any Borrower; (M) Lender
may fail to file or pursue a claim in any bankruptcy, insolvency,
reorganization or other proceeding as to any or all liens and encumbrances or
any or all Obligations; (N) Lender may amend, modify, extend, renew, restate,
supplement or terminate in whole or in part the obligation of any Loan Party
with the agreement of that Loan Party; (O) Lender may take or fail to take any
other action with respect to any Loan Document or Loan Party; and (P) Lender
may do any other acts or make any other omissions that result in the
extinguishment of the obligation of any Loan Party.  As used herein, “Loan Party” means Borrower, and each other person that from time
to time is or becomes obligated to Lender under this Loan and Security
Agreement and any Loan Documents or grants any lien or encumbrance to Lender
with respect to any Collateral.

 

(iv)          Each Borrower waives any and all
rights and benefits under any laws that limit the liability or exonerate
guarantors or sureties s now or hereafter in effect and any other statutes or rules
now or hereafter in effect that purport to confer specific rights upon or make
specific defenses or procedures available to any Borrower.

 

(v)           Each Borrower waives any rights that
require Lender, and Lender shall have no obligation to, provide to Borrower any
information concerning the performance of any other Borrower, the Obligations
of Borrower hereunder or under the related documents, or the ability of the
other to perform the Obligations or any other matter, regardless of what
information Lender may from time to time have. 
Borrower waives any and all present and future claims, remedies and
rights against the other or any other Borrower, the Collateral and any other
property, interest in property or rights to property of any other Loan Party (A)
arising from any performance hereunder, (B) arising from any application of any
Collateral, or any other property, interest in property or rights to property
of any other Borrower, or (C) otherwise arising in respect of this Loan and
Security Agreement and the Loan Documents, regardless of whether such claims,
remedies and rights arise under any present or future agreement, document or
instrument or are provided by any law, ordinance, regulation or rule (federal,
state or local) (including, without limitation, any and all rights of
contribution, exoneration, indemnity, reimbursement, and subrogation and any
and all rights to participate in the rights and remedies of Lender, against any
Borrower).  To the fullest extent that
rights of contribution, exoneration, indemnity, reimbursement and subrogation
are not waivable, such rights are hereby made subordinate and subject to all
rights, liens and claims of Lender.

 

21

 

e.                                       Each Borrower hereby represents and
warrants to Lender that:

 

(i)            As of the date hereof and after
giving effect to the execution and delivery of this Loan and Security Agreement
and the obligations hereby assumed, the sum of each Borrower’s debts is less
than all of such Borrower’s assets at fair valuation.

 

(ii)           Borrower is not entering into this
Loan and Security Agreement, granting any security in connection with this Loan
and Security Agreement, or otherwise making any transfer in connection with
this Loan and Security Agreement, with actual intent to hinder, delay or
defraud any creditor of Borrower, whether such creditor now exists or may
hereafter arise.

 

(iii)          Borrower acknowledges that Lender’s
commitment to lend certain amounts to Borrower pursuant to this Loan and
Security Agreement constitutes reasonably equivalent value in exchange for the
execution and delivery by Borrower of this Loan and Security Agreement, the
granting of security in connection with this Loan and Security Agreement, and
all transfers made by Borrower in connection with this Loan and Security
Agreement.  Borrower agrees that the
execution of this Loan and Security Agreement, the joint borrowing contemplated
by this Loan and Security Agreement, the Loan Documents, and the other related
documents and the other terms and conditions of the Loan Documents, even though
entailing some risks, have been determined by Borrower to be the most desirable
form of financing for Borrower’s operations and to provide to Borrower more
availability of funds and flexibility in satisfying Borrower’s need for funds.

 

(iv)          Borrower is not engaged or about to be
engaged in a business or transaction for which the assets of Borrower (after
giving effect to the granting of any security in connection with the execution
and delivery of this Loan and Security Agreement and any other transfer made or
contemplated to be made in connection with the execution and delivery of this
Loan and Security Agreement) would be unreasonably small in relation to the
business or transaction.

 

(v)           Borrower does not intend to incur, or
believe that it will, incur debts beyond its ability to pay such debts as they
become due.

 

(vi)          As used in this Section, the term “transfer” shall include every mode,
direct or indirect, absolute or conditional, voluntary or involuntary, of
disposing of or parting with an asset or an interest in an asset and includes
payment of money, release, lease, and creation of a lien or other encumbrance.

 

f.                                         Indemnity Obligations:

 

(i)            Each Borrower acknowledges that
pursuant to the terms of this Loan and Security Agreement, each Borrower is
jointly and severally liable for all of the Obligations, whether or not the
Obligations represent amounts actually advanced to an individual Borrower.  Accordingly, each Borrower has expressly 

 

22

 

assumed the risk that
such Borrower may be held liable for, and such Borrower’s property may be
applied to payment of, amounts advanced pursuant to this Loan and Security
Agreement to or for the direct benefit of another Borrower.  Nothing contained in this Loan and Security
Agreement shall in any way limit the obligations of any Borrower to Lender or
otherwise limit the joint and several nature of all of the obligations of each
Borrower.  Each Borrower shall be fully
liable to Lender pursuant to Loan Documents without regard to any allocation of
losses and liabilities by virtue of such indemnity provisions or otherwise.

 

(ii)           In any action or proceeding involving
any state law, or any state or federal bankruptcy, insolvency, reorganization,
or other law affecting the rights of creditors generally, if the obligations of
any Borrower would otherwise, taking into account the provisions of this
Section, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any their creditors, on account of the amount of
its liability under the related documents, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by such Borrower, Lender, or any other person, be
automatically limited and reduced to the highest amount which is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

 

9.17         Notices

 

All notices or demands by
any party to this Loan and Security Agreement shall, except as otherwise
provided herein, be in writing and may be mailed, postage prepaid.  Notices so mailed shall be deemed given three
(3) days after being deposited in a United States post office box, postage
prepaid, properly addressed to Borrower or Lender at the mailing addresses
stated herein or to such other addresses as Borrower or Lender may from time to
time specify in writing.  Any notice so
addressed and otherwise delivered shall be deemed to be given when actually
received by the addressee.

 

Mailing addresses:

 

Lender:

 

Summit Financial
Resources, L.P.

2455 E. Parleys Way, Suite
200

Salt Lake City, Utah 84109

Attention:  Chief Credit Officer

 

Borrower:

 

CORGENIX MEDICAL
CORPORATION]

CORGENIX, INC.

11575 Main Street, #400

Broomfield, Colorado 80020

Attention:  President

 

23

 

9.18         Duplicate Originals; Counterpart Execution

 

Two or more duplicate
originals of the Loan Documents may be signed by the parties, each duplicate of
which shall be an original but all of which together shall constitute one and
the same instrument.  Any Loan Documents
may be executed in several counterparts, without the requirement that all
parties sign each counterpart.  Each of
such counterparts shall be an original, but all counterparts together shall
constitute one and the same instrument.

 

9.19         Disclosure of Financial and Other Information

 

Borrower hereby consents
to Lender disclosing to any other lender who may participate in the Loan any
and all information, knowledge, reports, and records, including, without
limitation, financial statements, relating in any manner whatsoever to the Loan
and Borrower.

 

9.20         Integrated Agreement and Subsequent Amendment

 

The Loan Documents
constitute the entire agreement between Lender and Borrower, and may not be
altered or amended except by written agreement signed by Lender and Borrower.

 

All prior and
contemporaneous agreements, arrangements and understandings between the parties
hereto as to the subject matter hereof are, except as otherwise expressly
provided herein, rescinded.

 

[Remainder of Page
Intentionally Left Blank]

 

24

 

Effective Date: September
30, 2009.

 

 

	
   

  	
  Lender:

  
	
   

  	
   

  
	
   

  	
  Summit Financial
  Resources, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Borrower:

  
	
   

  	
   

  
	
   

  	
  CORGENIX MEDICAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:  William Critchfield

  
	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  CORGENIX, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:  William Critchfield

  
	
   

  	
  Title:  Chief Financial Officer

  
				

 

25

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