EXHIBIT 10.22
CONSULTING AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 22nd day of
May, 1998 by and between TransGlobal Financial Corporation ("TGF"), a Florida
corporation having a place of business at 00000 X.X. Xxxxxxx 0, Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx 00000 and, CORGENIX MEDICAL CORPORATION ("the Company"), a Nevada
corporation having a place of business at 00000 Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company desires to obtain general financial advisory and
investment banking services from TGF; and
WHEREAS, TGF desires to perform these services for the Company on terms
and conditions as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and TGF hereto agree
as follows:
1. Engagement of TGF. Subject to the terms of this Agreement, the
Company does hereby appoint and engage TGF as a consultant and TGF hereby
accepts its appointment and engagement by the Company as a consultant to the
Company with respect to the services specified in paragraph 2 of this Agreement
for the compensation set forth in paragraph 4 of this Agreement.
2. Services.
(a) As mutually determined from time to time by TGF and the
Company, during the term specified in paragraph 3 of this Agreement, TGF shall
undertake to consult with and advise the Company, by telephone or in person,
with respect to financial and business matters, including but not limited to
assistance with fund raising to implement the Company's business plans,
implementation of the Company's efforts to review capitalization, raise funding,
or pursue mergers, acquisitions or divestitures and other transactions, on an
exclusive basis.
(b) TGF agrees to spend a reasonable amount of time needed to
accomplish its services under this Agreement, and to be available for telephone
calls, meetings and other matters on as needed basis.
3. Term. Except as otherwise specified in paragraph 4 hereof, this
Agreement shall be effective for three (3) years from its execution by TGF and
the Company.
4. Compensation.
(a) As full consideration for the services to be provided
pursuant to paragraph 2 of this Agreement (and in addition to the expenses
provided for in paragraph 5 hereof), the Company shall pay TGF the following
fees:
(i) Retainer Fee. The Company hereby agrees to pay TGF or
TGF's designee(s), an aggregate of One Hundred Eighty Thousand Dollars
($180,000), payable in thirty-six (36) monthly installments of $5,000 on
or before the tenth (10th) day of each month during the term of this
Agreement.
(ii) Transaction Fees.
(1) For financing secured on behalf of the Company
by or through TGF on terms and conditions reasonably acceptable
to the Company, the Company will pay TGF cash fees at the closing
of such financing in an amount equal to: (a) five percent (5%) of
any and all funds committed and available to the Company in any
equity financing, and (b) three percent (3%) of any and all funds
committed and available to the Company in any debt financing.
(2) In the event that TGF represents the Company
with respect to a merger, acquisition, investment, exchange, or
other disposition of securities or assets of the Company and/or a
merger or acquisition candidate, then the Company shall pay TGF a
Transaction Fee equal to 5% of the total market value on the day
of the closing of stock, cash, assets and all other property
(real or personal) exchanged or received, directly or indirectly
by the Company or any of its security holders in connection with
any such transaction, which Transaction Fee shall be payable by
the Company in the same form in which consideration is payable to
the Company or its security holders pursuant to such merger,
acquisition, investment, exchange or other disposition of
securities or assets.
(3) In the event TGF introduces the Company to a
joint venture partner or customer and sales develop as a result
of the introduction, the Company hereby agrees to pay a fee of
five percent (5%) of the before tax income generated from this
introduction during the life of the venture following the date of
the first sale. For the computation of the before tax income,
sales shall be cash receipts less any applicable refunds,
returns, allowances, credits and shipping charges and monies paid
by the Company by way of settlement or judgment arising out of
claims made by or threatened against the Company. Commission
payments shall be paid on the 15th day of each month following
the receipt of customer's payment. In the event any adjustments
are made to the total sales after the commission has been paid,
the
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Company shall be entitled to an appropriate refund or credit
against future payments under this Agreement.
(b) All fees to be paid pursuant to this Agreement, except as
otherwise specified, are due and payable to TGF at the closing or closings of
any transaction specified in paragraph 4 hereof. In the event that this
Agreement shall not be renewed or if terminated for any reason, notwithstanding
any such non-renewal or termination, TGF shall be entitled to a full fee as
provided under paragraph 4 and expense reimbursement as provided in paragraph 5
hereof, for any transaction for which the discussions were initiated during the
term of this Agreement and which is consummated within a period of twelve months
after non-renewal or termination of this Agreement.
(c) The Company and TGF mutually agree that the status of TGF is
that of an independent contractor operating at its own risk. TGF agrees that it
is not and will not act, represent, describe or hold itself out in any way,
directly or by implication, as a partner, joint venturer or agent of the Company
and will not describe itself as a representative for the Company, except with
respect to the performance of the services contemplated by paragraph 2 of this
Agreement.
(d) The obligation of the Company to pay the fees described in
subparagraph 4 of this Agreement shall be absolute and unconditional as long TGF
performs its obligations under this Agreement, and shall be payable without
offset, deduction or claim of any kind or character.
(e) The Company hereby acknowledges and consents that TGF may
receive additional fees or other compensation from one or more of the lenders,
subscribers, customers, investors or parties to any transaction described in
paragraph 4(a)(ii), or any sources of funding identified by TGF, for various
services which may include, in part, services related to this Agreement.
5. Expenses. In addition to the fees payable hereunder, and regardless
of whether any transaction set forth in paragraph 4 hereof is proposed or
consummated, the Company shall reimburse TGF for all fees and disbursements of
TGF's counsel and TGF's travel and out-of-pocket expenses incurred in connection
with the services performed by TGF pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and long distance calls, but
excluding any expenses incurred by TGF in connection with any action, suit or
proceeding between TGF and the Company relating to the services to be performed
by TGF pursuant to this Agreement.
6. Liability of TGF.
(a) The Company acknowledges that all opinions and advice
(written or oral) given by TGF to the Company in connection with TGF's
engagement are intended solely for the benefit and use of the Company in
considering the transaction to which they relate, and the Company agrees that no
person or entity other than the Company shall be entitled to make use of
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or rely upon the advice of TGF to be given hereunder, and no such opinion or
advice shall be used for any other purpose or reproduced, disseminated, quoted
or referred to at any time, in any manner or for any purpose, nor may the
Company make any public references to TGF, or use TGF's name in any annual
reports or any other statements, reports or releases of the Company without
TGF's prior written consent.
(b) The Company acknowledges that TGF makes no commitment
whatsoever as to making or causing others to make a market in the Company's
securities or as to recommending or advising its clients to purchase the
Company's securities. Research reports or corporate finance reports that may be
prepared by TGF will, when and if prepared, be done solely on the merits, and
will be based upon the independent judgment and analysis of TGF or any senior
corporate finance personnel of TGF. TGF agrees to use its best efforts to secure
the financing necessary to implement the Company's reasonable business plans.
7. TGF's Services to Others. The Company acknowledges that TGF or its
affiliates are in the business of providing financial advisory and investment
banking consulting advice to others. Nothing contained in this Agreement shall
be construed to limit or restrict TGF in conducting such business with others,
or in rendering such advice to others, except to any competitors of the Company.
8. Company Information.
(a) The Company recognizes and confirms that, in advising the
Company and in fulfilling its engagement hereunder, TGF will use and rely on
data, material and other information furnished to TGF by the Company. The
Company acknowledges and agrees that in performing its services under this
Agreement, TGF may rely upon the data, material and other information supplied
by the Company without independently verifying the accuracy, completeness or
veracity of such data, material or other information.
(b) Except as contemplated by the terms of this Agreement or as
required by applicable law, TGF shall keep confidential all material, non-public
information provided to it by the Company, and shall not disclose such
information to any third party, other than such of its employees and advisors as
TGF determines have a need to know.
9. Indemnification.
(a) (i) The Company shall indemnify and hold TGF harmless against
any and all liabilities, claims, lawsuits, including any and all awards and/or
judgments to which it may become subject under the Securities Act of 1933, as
amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or any other federal or state statue, at common law or
otherwise, insofar as said liabilities, claims and lawsuits (including awards
and/or
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judgments) arise out of or are in connection with the services rendered by TGF
or any transactions in connection with this Agreement, except for any
liabilities, claims and lawsuits (including awards and/or judgments), arising
out of and proximately caused by the reckless acts or omissions of TGF, or with
respect to which TGF is obligated to indemnify the Company under paragraph
9(b)(i) of this Agreement. In addition, the Company shall also indemnify and
hold TGF harmless against any and all costs and expenses, including reasonable
counsel fees, incurred or relating to the foregoing.
(ii) TGF shall give the Company prompt notice of any such
liability, claim or lawsuit which TGF contends is subject to the
Company's indemnification obligations under this Agreement, and the
Company thereupon shall be granted the right to take any and all
necessary and proper action, at its sole cost and expense, with respect
to such liability, claim and lawsuit, including the right to settle,
compromise and dispose of such liability, claim or lawsuit, excepting
therefrom any and all proceedings or hearings before any regulatory
bodies and/or authorities.
(b) (i) TGF shall indemnify and hold the Company harmless against
any and all liabilities, claims and lawsuits, including any and all awards
and/or judgments to which it may become subject under the Securities Act, the
Exchange Act or any other federal or state statue, at common law or otherwise,
insofar as said liabilities, claims and lawsuits (including awards and/or
judgments) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact required to be stated or necessary to make the
statement therein, not misleading, which statement or omission was made in
reliance upon information furnished in writing to the Company by TGF for
inclusion in any registration statement or prospectus or any amendment or
supplement thereto in connection with any transaction to which this Agreement
applies, except for any liabilities, claims and lawsuits (including awards
and/or judgments) with respect to which the Company is obligated to indemnify
TGF under paragraph 9(a)(i) of this Agreement. In addition, TGF shall also
indemnify and hold harmless the Company against any and all costs and expenses,
including reasonable counsel fees, incurred or relating to the foregoing.
(ii) The Company shall give to TGF prompt notice of any
such liability, claim or lawsuit which the Company contends is the
subject to TGF's indemnification obligations under this Agreement, and
TGF thereupon shall be granted the right to take any and all necessary
and proper action, at its sole cost and expense, with respect to such
liability, claim and lawsuit, including the right to settle, compromise
or dispose of such liability, claim or lawsuit, excepting therefrom any
and all proceedings or hearings before any regulatory bodies and/or
authorities.
(c) In order to provide for just and equitable contribution under
this Agreement in any case in which (i) any person entitled to indemnification
under this paragraph 9 makes claim for indemnification pursuant hereto but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
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the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this paragraph 9 provides for indemnification
in such case, or (ii) contribution under this Agreement may be required on the
part of any such person in circumstances for which indemnification is provided
under this paragraph 9, then, and in each such case, the Company and TGF shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after any contribution from others) in such proportion taking
into consideration the relative benefits received by each party from the
transactions in connection with this Agreement, the parties' relative knowledge
and access to information concerning the matter with respect to which the claim
was assessed, the opportunity to correct and prevent any statement or omission
and other equitable considerations appropriate under the circumstances;
provided, however, that notwithstanding the above, in no event shall TGF shall
be required to contribute any amount in excess of 5% of the public offering
price of any equity securities, and 3% of the public offering price of any debt
securities offered in connection with this Agreement; and provided, that, in any
such case, no person guilty of a fraudulent misrepresentation (within the
meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Within fifteen (15) days after receipt by any party to this Agreement
(or its representative) of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect thereof is
to be made against another party (the "Contributing Party"), notify the
Contributing Party of the commencement thereof, but the omission so to notify
the Contributing Party will not relieve it from any liability which it may have
to any other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party or his or its representative of the commencement thereof
within the aforesaid fifteen (15) days, the Contributing Party will be entitled
to participate therein with the notifying party and any other Contributing Party
similarly notified. Any such Contributing Party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution without the written
consent of the Contributing Party. The indemnification and contribution rights
contained in this paragraph 9 are in addition to any other rights and remedies
which either party hereto may have at law, in equity or otherwise.
10. Covenants of the Company. The Company covenants and agrees that it
will:
(a) For the duration of this Agreement, furnish to TGF copies of
such financial statements and other periodic and special reports as the Company
from time to time furnish generally to holders of any class of its securities or
to its directors and officers, and promptly furnish TGF (i) a copy of each
periodic report the Company shall be required to file with the Securities and
Exchange Commission ("Commission"), (ii) a copy of every press release and every
news item and article with respect to the Company or its affairs which was
released by the Company, and (iii) such
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additional documents and information with respect to the Company or its affairs
or any future subsidiaries of the Company, as TGF may from time to time
reasonably request.
(b) Apply the net proceeds from any funding arranged by TGF
according to the "Use of Proceeds" that the Company shall be obligated to
prepare prior to any such funding; and provide to TGF any periodic reports
requested by TGF showing the actual disbursements of funds to monitor whether
the "Use of Proceeds" shall have been complied with. The Company will not apply
funds in any manner inconsistent with such "Use of Proceeds" except with TGF's
prior written consent.
(c) Provide TGF, upon its request, at the Company's sole expense,
with access to daily consolidated financial transfer sheets relating to the
Company's securities.
(d) Cause two (2) designees selected by TGF to be elected to the
Company's Board of Directors (the "Board") during each year of the term of this
Agreement and notify TGF of each meeting of the Board ("Representatives"). The
Representatives shall be entitled to receive reimbursement for all reasonable
costs incurred in attending such meetings. The Company further agrees that,
during the term of this Agreement, the number of seats on the Board shall be
five (5), which number shall not be changed without the prior written consent of
TGF, and the Company shall schedule no less than four (4) formal and in person
meetings of its Board per year, which meetings shall be held quarterly each year
and thirty (30) days advance written notice of such meetings shall be given to
the Representatives, provided that upon issuance to Consultant, or to purchasers
identified by Consultant, in connection with Consultant's exercise of an Option
of even date herewith, of an aggregate of Two Hundred Fifty Thousand (250,000)
or more shares of the Company's 5% Series A Convertible Preferred Stock and
Warrants to purchase an aggregate of Two Hundred Fifty Thousand (250,000) or
more shares of the Company's Common Stock, Consultant's right to designate
members of the Board shall cease and Consultant shall have a right to have an
observer designated by Consultant present at all meetings of the Board and to
receive notices of Board meetings and copies of any written consents of the
Board of Directors. The Company agrees to indemnify and hold TGF and the
Representatives harmless against any and all claims, actions, damages, costs and
expenses, and judgments arising solely out of the attendance and participation
of the Representatives at any such meeting described herein. In the event that
the Company shall maintain a liability insurance policy affording coverage for
the acts of its officers and directors, it shall include the Representatives as
an insured under such policy, if possible.
(e) Not issue any shares of Common Stock, Preferred Stock or any
warrants, options or other rights to purchase Common Stock or Preferred Stock
exceeding 5% of each class of aforesaid securities, in a single or a series of
related transactions, without the reasonable prior, written consent of TGF.
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11. Notices. All notices, demands and requests required and permitted to
be given under the provisions of this Agreement shall be deemed duly given if
and when delivered personally or mailed by certified mail, postage prepaid,
addressed as follows or to such other address as The Company or TGF may
hereafter specify in writing:
If to The Company:
CORGENIX MEDICAL CORPORATION
00000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, President
If to TGF:
TransGlobal Financial Corporation
00000 X.X. Xxxxxxx 0, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Mustafoglu, President
12. General.
(a) This Agreement embodies the entire agreement and
understanding between the Company and TGF with respect to the subject matter
hereof and it is expressly agreed that any prior agreements or understandings
between The Company and TGF relating to the subject matter of this Agreement,
whether oral or written, are canceled by execution of this Agreement
(b) This Agreement shall be construed and governed in accordance
with the laws of the State of Florida.
(c) This Agreement shall be binding upon and inure to the benefit
of the Company and TGF and their respective successors and assigns. Neither
party shall have the right to assign this Agreement, however, without the prior
written consent of the other party to this Agreement.
(d) No modifications or waiver of any provisions of this
Agreement shall be valid unless it is in writing and duly executed by the party
to be charged. No waiver at any time of any provision of this Agreement shall be
deemed a waiver of any other provision of this Agreement at that time or a
waiver of that or any other provision of this Agreement at any other time.
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IN WITNESS WHEREOF, The Company and TGF have executed this Agreement as
of the day and year first above written.
CORGENIX MEDICAL CORPORATION:
By: /S/ XXXXXXXX X. XXXXXXX
------------------------------------
Its: President
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TransGlobal Financial Corporation:
By: /S/ XXXX X. MUSTAFOGLU
------------------------------------
Xxxx X. Mustafoglu
President
