<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1996
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ATHENA MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
NEVADA 8070 33-0202574
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification
No.)
</TABLE>
10180 S.W. NIMBUS AVENUE, SUITE J-5
PORTLAND, OREGON 97223
(503) 968-8800
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
WILLIAM H. FLEMING
PRESIDENT AND CHIEF OPERATING OFFICER
ATHENA MEDICAL CORPORATION
10180 S.W. NIMBUS AVENUE, SUITE J-5
PORTLAND, OREGON 97223
(503) 968-8800
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
------------------------
COPIES TO:
Patrick J. Simpson, Esq.
Cynthia Clarfield Hess, Esq.
PERKINS COIE
1211 S.W. Fifth Avenue, Suite 1500
Portland, OR 97204
(503) 727-2000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box: /X/
------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 5,638,294 $3.375 $19,029,242.25 $6,562.00
<FN>
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457. The offering price has been estimated and the registration fee
has been computed pursuant to Rule 457(c), on the basis of the final sales
price of the Common Stock as quoted on NASD's OTC Bulletin Board on March
25, 1996, which was $3.375 per share.
</TABLE>
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
5,638,294 SHARES
ATHENA MEDICAL CORPORATION
COMMON STOCK
------------------
The shares of common stock, par value $.01 per share, offered hereby (the
"Shares") are shares of Athena Medical Corporation, a Nevada corporation (the
"Company"), being sold by certain shareholders of the Company (the "Selling
Shareholders"). See "Principal and Selling Shareholders." The Company will not
receive any part of the proceeds from the sale of the Shares in this offering
(the "Offering").
The Common Stock is traded in the over-the-counter market under the symbol
"AFEM." On March 25, 1996, the last reported sales price for the Common Stock as
reported on the National Association of Securities Dealers' OTC Bulletin Board
(the "NASD OTC Bulletin Board") was $3.375 per share.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
SHARES.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC (1) COMMISSIONS (1) COMPANY SHAREHOLDERS (2)
<S> <C> <C> <C> <C>
Per Share..................... $3.375 $-- $0 $3.375
Total......................... $19,029,242.25 $-- $0 $19,029,242.25
</TABLE>
(1) The Selling Shareholders may sell the Shares to or through dealers at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The above computations are based on
the last reported sales price of a share of Common Stock as of March 25,
1996 and do not necessarily reflect the prices of shares to the public on
the dates the transactions are actually effected.
(2) Expenses of this Offering, estimated at $82,500.00, are payable by the
Company.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE>
ADDITIONAL INFORMATION
The Company has filed a Registration Statement on Form S-2 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., with respect to the Shares offered hereby. The
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the
Company and the Shares, reference is made to the Registration Statement and the
exhibits thereto. Statements made in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
The Registration Statement is available for review at the Commission's
offices in Washington, D.C. All or part of the Registration Statement may be
inspected and copied, upon payment of the prescribed fees, at the Public
Reference Section of the Commission, 450 Fifth Street N.W., Judiciary Plaza,
Washington, D.C. 20549-1004.
In addition, the Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at, and copies of such material obtained at prescribed
rates from, the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004 and at the
Commission's regional offices located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511.
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1994 and the Company's Quarterly Report on Form 10-QSB for the
period ended September 30, 1995 are being delivered with this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed with the Commission pursuant to the Exchange
Act is incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year ended December
31, 1995.
In addition, all documents filed by the Company pursuant to Section 13, 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this Offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus and the Registration
Statement of which it is a part to the extent that a statement contained herein
or in any other subsequently filed Incorporated Document or in an accompanying
prospectus supplement modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or such Registration
Statement.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the Incorporated Documents, other than exhibits
to such documents, unless such exhibits are specifically incorporated by
reference therein. Requests should be directed to David Porter, Vice President
and Chief Financial Officer, Athena Medical Corporation, 10180 S.W. Nimbus
Avenue, Suite J-5, Portland,
2
<PAGE>
Oregon 97223, telephone (503) 968-8800. The information relating to the Company
contained in this Prospectus does not purport to be comprehensive and should be
read together with the information contained in the Incorporated Documents.
RISK FACTORS
Prospective investors should consider the following factors, among others,
in making a decision concerning purchase of the shares of Common Stock offered
hereby:
LACK OF REVENUES FROM PRODUCTS; EARLY STAGE OF PRODUCT DEVELOPMENT. The
Company's current product -- the Fresh 'n Fitr-Registered Trademark- interlabial
pad (the Padette), and products in development, the Tampette collection device,
the AWARE-TM- pregnancy test (the "Pregnancy Test") and other contemplated
diagnostic products -- are in the early stages of development or marketing. See
"-- Government Regulation." There have been no significant revenues from the
Padette and there have been no revenues at all from the Tampette-TM-, the
Pregnancy Test or from the diagnostic products in development. Potential
investors should be aware of the problems, delays, expenses and difficulties
encountered by any company whose products are in an early stage of development,
many of which may be beyond the Company's control. These include, but are not
limited to, unanticipated developmental, testing, regulatory compliance,
manufacturing and marketing costs and competition. In addition, the Company's
products are subject to the risks inherent in new products. These risks include
the absence of any assurance that products in development will be successfully
developed, or that the Company's products, once developed, can be successfully
manufactured, will be commercially successful or will not become obsolete within
a short time after their development. Moreover, the costs of research and
development and clinical trials for new products cannot be reliably forecast and
may substantially exceed the Company's expectations and financial resources.
OPERATING LOSSES. During the nine months ended September 30, 1995, the
Company incurred losses of $3,090,023. In 1996 the Company expects losses to
continue as the costs of marketing, research and development and related
administrative activities are expected to exceed income from product sales.
These losses are expected to be funded from the Company's revenues, cash
reserves and future financing, if any. See "-- Need for Funds."
NEED FOR FUNDS. The Company expects to raise additional funds through
equity and/or debt financing for the development, manufacture and marketing of
its planned products. These funds may not be available or available on terms
favorable to the Company or its shareholders. The inability of the Company to
obtain such financing could adversely affect the Company. In addition, future
financing could have a dilutive effect on holders or purchasers of the Shares.
MANUFACTURING RISKS. The Company currently manufactures the Padette. As a
manufacturer, the Company will continually face risks regarding the availability
and costs of raw materials and labor, the potential need for additional capital
equipment, increased maintenance costs, plant and equipment obsolescence,
quality control and excess capacity. A disruption in the Company's production or
distribution could have a material adverse effect on the Company's financial
results. The Company currently purchases certain raw materials from one
supplier. Although the Company does not believe it would be difficult to replace
these suppliers, the Company has not approved other suppliers for the sale of
certain raw materials to the Company.
UNCERTAIN ABILITY TO MANAGE GROWTH. The Company anticipates that in order
to achieve success in its industry, the Company will be required to increase
rapidly its sales, production and employee base. The Company anticipates these
increases will place significant demands on the Company's management, working
capital and financial and management control systems. The Company may not be
able to meet the demands of future growth. Any inadequacies in these areas could
have a material adverse effect on the Company's business, financial condition
and results of operations.
RISKS OF INTERNATIONAL BUSINESS. The Company's business is and will be
subject to the risks generally associated with doing business internationally,
including changes in demand resulting from
3
<PAGE>
fluctuations in exchange rates, foreign governmental regulation and changes in
economic conditions. These factors, among others, could influence the Company's
ability to sell its products in international markets. In addition, the
Company's business is subject to the risks associated with legislation and
regulation relating to imports, including quotas, duties or taxes and other
charges, restrictions and retaliatory actions on imports to other countries in
which the Company's products may be sold or manufactured.
POTENTIAL ADVERSE IMPACT OF OFFERING ON MARKET PRICE OF COMMON STOCK. The
number of Shares being offered pursuant to the Prospectus by the Selling
Shareholders represents approximately 52 percent of the total common stock of
the Company outstanding at December 31, 1995, assuming the exercise of all
options and warrants held by the Selling Shareholders covering Shares being
registered hereby. See "Principal and Selling Shareholders." Each Selling
Shareholder intends to offer his, her or its Shares at such time and in such
manner as he, she or it deems appropriate. Other than certain contractual volume
limitations relating to the sale of Shares by certain Selling Shareholders,
there are no agreements between the Selling Shareholders and the Company or, to
the Company's knowledge, among the Selling Shareholders, with respect to the
sale of Shares. If Selling Shareholders were simultaneously to offer a large
amount of Shares in the market, the market price of the Company's common stock
could be adversely affected. See "Principal and Selling Shareholders" and "Plan
of Distribution."
TRADING MARKET FOR SHARES. Trading of the Company's common stock is
currently conducted in the over-the-counter market on the NASD OTC Bulletin
Board or the "pink sheets." As a result, stockholders may find it more difficult
to dispose of, or obtain accurate quotations as to the price of, common stock
than if the common stock were listed on the National Association of Securities
Dealers Automated Quotation System (the "NASDAQ") or another national stock
exchange. In addition, the volume of trading in the common stock may be very
limited on a daily basis.
VOLATILITY OF STOCK PRICE. There has been significant volatility in the
market price of the Company's common stock. During 1995, the price of the
Company's common stock ranged from $7 3/4 per share to $2 1/2 per share. In
addition, there has been significant volatility in the market price of
securities of early stage companies, technology companies generally and
biotechnology companies in particular. Various factors, including but not
limited to announcements by the Company or its competitors concerning product
developments, patents or proprietary rights, may significantly affect the
Company's business and the market price of the common stock. These factors as
well as general economic conditions such as recessions or high interest rates
may adversely affect the market price of the Company's common stock.
PENDING LEGAL PROCEEDINGS. The Company has been named as a defendant in a
civil action brought in the Circuit Court of Oregon for Washington County by
Kassia International Incorporated (the "Plaintiff"). The complaint alleges that
the Company breached its obligations to complete the purchase of the Plaintiff
in the spring of 1995 and seeks damages of up to $6 million under various
theories. Although the Company intends to vigorously defend against such
lawsuit, the Company cannot predict the outcome of the lawsuit. An award of
damages or the expenditure of significant sums even in the successful defense of
the case could have a material adverse effect on the Company's financial
condition and results of operations. See "Recent Developments."
COMPETITION. The Company's current products and products in development
will compete with products from other companies that have more employees and
substantially greater research, financial and marketing resources than the
Company. Many of these competitors also have the resources to manufacture and
market their own products, which in many cases the Company may not be able to
do.
PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION. In 1987 the Company
acquired exclusive worldwide license to six U.S. patents (one of which has since
expired) and additional foreign patents in the United Kingdom, Germany, Canada
and Japan, covering the Padette. Additionally, the Company was assigned a patent
issued in 1991 used in manufacturing the Padette and has filed for additional
applications of its own. The Company also anticipates filing patent applications
for protection on
4
<PAGE>
future products and technology. The term for patents issuing on applications
filed on or after June 8, 1995 is 20 years from the date of application or, if
the application contains a specific reference to an earlier filed application
under 35 U.S.C. SectionSection120, 121 or Section365(c), 20 years from the date
on which the earliest such application was filed. The term of patents issuing on
applications filed before June 8, 1995, is the greater of the 20-year term
described above or 17 years from grant, depending on the amount of time between
application and issuance. There can be no assurance that patents will be issued
or upheld or that additional patents will be obtained or that patents will
provide significant protection or be beneficial to the Company.
The issuance of patents to the Company or to a licensor is not conclusive as
to validity or as to the enforceable scope of claims therein. The validity and
enforceability of a patent can be challenged by litigation after its issuance,
and, if the outcome of such litigation is adverse to the owner of the patent,
the owner's rights could be diminished or withdrawn. The issuance of patents
covering any of the Company's products may be insufficient to prevent
competitors from essentially duplicating the product by designing around the
patented aspects. The patent laws of other countries may differ from those of
the United States as to the patentability of the Company's products and
processes. Moreover, the degree of protection afforded by foreign patents may be
different from that in the United States.
The technologies used by the Company may infringe upon patents or
proprietary technology of others. The cost of enforcing the Company's patent
rights in lawsuits that the Company may bring against infringers or defending
itself against infringement charges by other patent holders may be high and
could adversely affect the Company.
The Company has trademarks in Fresh n'Fit and a butterfly logo. The Company
has received notice from another company claiming that such other company has
the prior right to use the "Athena" name. The Company is currently in
discussions with such company. The Company may in the future be required to
refrain from using the "Athena" name. To date, the Company has not prominently
featured the "Athena" name on its products and therefore the Company believes
that refraining from its use on products in the future will not have a material
adverse effect on the Company.
Trade secrets and confidential know-how are important to the Company's
scientific and commercial success. Although the Company seeks to protect its
proprietary information through confidentiality agreements and appropriate
contractual provisions, others may develop independently the same or similar
information or gain access to proprietary information of the Company.
GOVERNMENT REGULATION. Many of the Company's activities are subject to
regulation by various local, state and federal regulatory authorities in the
United States and by governmental authorities in foreign countries where its
products may be marketed.
Some of the Company's contemplated products will require Food and Drug
Administration ("FDA") approval and approval from similar authorities in other
countries. Obtaining such approvals may be a lengthy and expensive proceeding
often involving extensive testing and clinical trials to demonstrate safety,
reliability and efficacy. In addition, the process of obtaining FDA approval may
be subject to change in regulations resulting in unexpected costs and
uncertainty. The Company may not be able to comply with the applicable
requirements and necessary approvals may not be granted. Moreover, the extent
and impact of future governmental regulation cannot be predicted. Failure to
comply with the regulatory requirements applicable to the Company may result in
fines, injunctions, civil penalties, recall or product seizure, among other
penalties.
The Padette has received approval for over-the-counter marketing in the
United States under a 510(k) pre-market notification submission to the FDA as a
Class II device. No further FDA requirements for clinical evaluation are
expected. Requests for regulatory approval for marketing in several countries
have been made. Regulatory approval has been obtained in China. The Company
cannot predict when or whether approvals in other countries will be obtained.
The Tampette and the Company's contemplated diagnostic products are still in the
development stage and have yet to
5
<PAGE>
complete clinical trial. See "-- Lack of Revenues from Products; Early State of
Product Development." The Company anticipates submitting data to the FDA for the
Tampette and the Pregnancy Test. There can be no assurance, however, as to when,
if ever, such data will be submitted to the FDA or necessary FDA approval will
be obtained.
DEPENDENCE ON MANAGEMENT AND CONSULTANTS. The Company depends to a large
extent upon the abilities and continued participation of its current directors,
executive officers and consultants. The loss of any of these people could have a
serious adverse effect upon the Company's business. The Company may not be able
to attract and retain key personnel with the skills and expertise necessary to
manage its business. The Company does not have key-man life insurance on the
lives of any of its personnel. The Company has employment contracts with William
H. Fleming, the Company's President, Chief Operating Officer, Secretary and
Director; and John F. Perry, the Company's Chief Executive Officer and Chairman
of the Board. In addition, the Company has contracts with most of its
consultants. Competition for management and scientific staff in the
biotechnology, biomedical and health care fields is intense. The Company may not
be able to continue to employ personnel and consultants with sufficient
expertise to satisfy the Company's needs.
PRODUCT LIABILITY. The Company could be subject to claims for personal
injuries or other damages resulting from its products. The Company carries
general liability insurance, including products liability insurance in the
amount of $2,000,000. While there have been no product liability claims against
the Company, in the event any claims for amounts exceeding its insurance
coverage were successful, they could have a material adverse effect on the
Company. The Company's insurance may not adequately protect the Company against
all such liabilities. The Company's insurance does not cover actions brought in
countries other than the United States. The Company's current product is not
intended for internal use and therefore the Company does not consider claims
relating to toxic shock syndrome to be a risk to the Company. However, the
Company cannot guarantee that the product will not be used internally by persons
misusing the product. Toxic shock syndrome is excluded from the Company's
insurance policy.
EXERCISE OF WARRANTS AND OPTIONS; POTENTIAL ADVERSE IMPACT OF SHARES
ELIGIBLE FOR FUTURE SALES. As of February 29, 1996, 2,136,530 shares of Common
Stock were subject to outstanding stock options under the Company's Stock Option
Plan at a weighted average exercise price of $1.57 per share and 3,352,900
shares were issuable upon exercise of outstanding warrants at a weighted average
exercise price of $1.66 per share. While outstanding warrants and options are
exercisable, the holders thereof have the opportunity to profit from a rise in
the market price of the common stock. The Company may find it more difficult to
raise additional equity capital while the warrants and options are outstanding.
At any time when the holders might be expected to exercise their warrants and
options, the Company would probably be able to obtain additional equity capital
on terms more favorable than those provided in the warrants and options being
exercised. Holders of warrants and options do not have any of the rights or
privileges of stockholders of the Company prior to exercise of the warrants and
options.
Sales of substantial amounts of the Company's common stock in the public
market by existing shareholders could adversely affect the price of the common
stock. In addition to the 5,638,294 shares of common stock offered hereby,
2,435,729 shares are freely tradable under the federal securities laws to the
extent they are not held by affiliates of the Company or are not subject to
certain contractual volume restrictions. In February 1996, an additional
1,295,847 shares became eligible for resale subject to compliance with Rule 144
under the Securities Act and in June 1996, an additional 1,197,120 shares will
be eligible for resale under Rule 144. In general, under Rule 144 as currently
in effect, any person (or persons whose shares are aggregated) who has
beneficially owned restricted securities for at least two years is entitled to
sell, within any three-month period, a number of shares that does not exceed the
greater of (i) 1% of the then outstanding shares of the issuer's common stock
and (ii) the average weekly trading volume during the four calendar weeks
preceding such sale, provided that certain public information about the issuer
as required by Rule 144 is then available and the seller complies with certain
other requirements. A person who is not an affiliate, has not been an
6
<PAGE>
affiliate within three months prior to sale, and has beneficially owned the
restricted securities for at least three years is entitled to sell such shares
under Rule 144(k) without regard to any of the limitations described above.
The Company intends to file a registration statement on Form S-8 under the
Securities Act by late 1996. Such registration statement would cover shares of
Common Stock reserved for issuance under the Company's Stock Option Plan and
certain warrants that are not being registered pursuant to this offering.
ABSENCE OF DIVIDENDS. The Company has not paid any dividends on its Common
Stock since its inception and does not anticipate paying any dividends in the
foreseeable future. Earnings of the Company, if any, are expected to be used to
finance the development and expansion of the Company's business. Any future
decision with respect to dividends will depend on future earnings, future
capital needs and the Company's operating and financial condition, among other
factors. See "Description of Securities -- Common Stock."
7
<PAGE>
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth information as of March 1, 1996 regarding the
beneficial ownership of common stock by (a) each person who is known to the
Company to be the beneficial owner of greater than five percent of the
outstanding shares of common stock, (b) each director of the Company, (c) the
Chief Executive Officer of the Company and other officers who received in excess
of $100,000 in compensation for 1995, (d) the directors and officers of the
Company as a group and (e) each Selling Shareholder:
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING (3)
----------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
5% SHAREHOLDERS, DIRECTORS AND OFFICERS OWNED (1) FOR SALE (2) SALES SALES (4)
- ----------------------------------------------------- ------------------- ------------------- ---------- ----------
<S> <C> <C> <C> <C>
Robert L. Buck....................................... 150,000(5) -- 1.6% 1.6%
10180 S.W. Nimbus Ave., Suite J-5
Portland, OR 97223
Capital Consultants, Inc. ........................... 3,170,000(6) 3,120,000 35.2% *
2300 SW First Ave.
Portland, OR 97201
Cort MacKenzie Securities, Inc. 1,354,335(7) 1,084,335(7) 13.3% 2.6%
5335 S.W. Meadows Road, Suite 270
Lake Oswego, OR 97035
William H. Fleming................................... 807,595(8) -- 8.3% 8.3%
10180 S.W. Nimbus Ave., Suite J-5
Portland, OR 97223
John F. Perry........................................ 960,710(9) -- 10.0% 10.0%
4 Sawgrass Village, Suite 220B
Ponte Vedra, FL 32082
James E. Reinmuth.................................... 219,500(10) -- 2.4% 2.4%
5171 Solar Heights Drive
Eugene, OR 97405
Carol A. Scott....................................... 0(11) -- * *
1834 Park Blvd.
Palo Alto, CA 94306
RoseAnna Sevcik...................................... 12,500(12)(13) -- * *
1300 W. Mockingbird Lane
Dallas, TX 75247-4921
Sovereign Ventures L.L.C............................. 897,135(14) -- 10.0% 10.0%
Attn: Michael C. Hubbard
Suite 1105
One S.W. Columbia
Portland, OR 97258
Mark T. Waller....................................... 460,000(12)(15) 500,000(15)(16) 4.9% 0%
1820 North Shore Road
Lake Oswego, OR 97034
All directors and officers as a group
(seven)............................................. 2,200,305(17) -- 20.5% 20.5%
<CAPTION>
PERCENTAGE OF
OUTSTANDING (3)
----------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
OTHER SELLING SHAREHOLDERS OWNED (1) FOR SALE (2) SALES SALES (4)
- ----------------------------------------------------- ------------------- ------------------- ---------- ----------
<S> <C> <C> <C> <C>
John Robert Booth.................................... 17,411(18) 17,411(18) * 0%
Esler Stephens & Buckley............................. 90,000(12) 100,000(16)(19) * 0%
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING (3)
----------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
OTHER SELLING SHAREHOLDERS OWNED (1) FOR SALE (2) SALES SALES (4)
- ----------------------------------------------------- ------------------- ------------------- ---------- ----------
<S> <C> <C> <C> <C>
Charles E. Finegan, Jr............................... 173,300(20) 18,000(12) 1.9% 1.7%
First Coast Sales, Inc............................... 8,333(12) 5,000(12) * 0%
G. Dale Garlow....................................... 302,199(21) 302,199(21) 3.4% 0%
Lane Powell Spears Lubersky.......................... 18,400(12) 18,400(12)(22) * 0%
Donald P. Leach...................................... 302,199(21) 302,199(21) 3.4% 0%
H. Thad Morris....................................... 10,000(12) 10,000(12) * *
Richard T. Schroeder................................. 383,428(23) 52,000 4.2% 3.5%
Michael D. Stewart................................... 35,000(12) 35,000(12) * 0%
Alfred E. Thurber, Jr. .............................. 170,000(20) 18,000(12) 1.9% 1.7%
Julie Tooze.......................................... 5,500(24) 2,750(24) * *
Donald Weckstein..................................... 20,000(12) 20,000(12) * 0%
James R. Wilson...................................... 283,428(25) 32,000 3.1% 2.8%
John S. Woolley...................................... 1,000(12) 1,000(12) * 0%
</TABLE>
- --------------------------
* Less than 1%.
(1) "Beneficial Ownership" is defined pursuant to Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and generally means
any persons, who directly, or indirectly, have or share voting or
investment power with respect to a security. A person shall be deemed to
be the beneficial owner of a security if that person has the right to
acquire beneficial ownership of such security within sixty days, including
but not limited to, any right to acquire such security through the
exercise of any option or warrant or through the conversion of a security.
(2) Includes shares that may be sold pursuant to this Prospectus. However, in
some cases these shares may instead be sold pursuant to Rule 144 under the
Securities Act and in some cases may not be sold at all during the time
this Prospectus may be used for sales. See "Plan of Distribution."
(3) Percent of class for any shareholder listed is calculated without regard
to shares of common stock issuable to others upon exercise of outstanding
stock options or warrants. Any shares a shareholder is deemed to own by
having the right to acquire by exercise of an option or a warrant are
considered to be outstanding solely for the purpose of calculating that
shareholder's ownership percentage.
(4) Assumes the sale pursuant to the Offering of all shares listed in the
"Shares Registered for Sale" column. Also assumes that none of the listed
shareholders sells shares not listed in such column or purchases
additional shares in this Offering or otherwise except pursuant to certain
outstanding options or warrants.
(5) Consists solely of shares subject to options exercisable within 60 days
after March 1, 1996. Does not include 150,000 shares subject to options
exercisable more than 60 days after March 1, 1996.
(6) Capital Consultants, Inc. ("CCI") is an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940 and has, on
behalf of certain of its clients, the sole voting power and the sole
investment power with respect to the shares. Includes 31,200 shares owned
by CCI. Includes 50,000 shares subject to warrants held by CCI on behalf
of certain of its clients exercisable within 60 days after March 1, 1996.
(7) Includes 1,224,750 shares subject to warrants exercisable within 60 days
after March 1, 1996. 270,000 shares listed in the shares beneficially
owned column are beneficially owned by Thomas C. Stewart, President of
Cort MacKenzie Securities, Inc. 308,750 of the shares registered for sale
are beneficially owned by Cort MacKenzie & Thomas, Inc. ("CMT"). CMT has
agreed not to sell, within
9
<PAGE>
any three-month period, the greater of (i) 1% of the then outstanding
shares of the Company's common stock and (ii) the average weekly trading
volume during the four calendar weeks preceding such sale.
(8) Includes 5,170 shares owned by William H. Fleming's wife, the beneficial
ownership of which Mr. Fleming disclaims. Includes 672,140 shares subject
to options exercisable within 60 days after March 1, 1996. Does not
include 75,000 shares subject to options exercisable more than 60 days
after March 1, 1996.
(9) Includes 692,140 shares subject to options exercisable within 60 days
after March 1, 1996. Does not include 75,000 shares subject to options
exercisable more than 60 days after March 1, 1996.
(10) Includes 12,500 shares subject to options exercisable within 60 days after
March 1, 1996. Includes 160,000 shares subject to warrants exercisable
within 60 days after March 1, 1996. Does not include 37,500 shares subject
to options exercisable more than 60 days after March 1, 1996.
(11) Ms. Scott has options for 60,000 shares exercisable more than 60 days
after March 1, 1996.
(12) Consists solely of shares subject to warrants or options exercisable
within 60 days after March 1, 1996.
(13) Does not include 37,500 shares subject to options exercisable more than 60
days after March 1, 1996.
(14) Sovereign Ventures L.L.C. is an Oregon limited liability company owned
equally by Michael C. Hubbard and Denis R. Burger. Mr. Hubbard
beneficially owns an additional 150,000 shares. Yamhill Valley Vineyards,
which is owned by Mr. Burger and his wife, beneficially owns an additional
75,000 shares.
(15) Shares registered for sale include 40,000 shares subject to warrants
exercisable if the Company's stock does not trade at a minimum of $8.00
per share for five consecutive trading days before August 15, 1996.
(16) Mr. Waller and Esler Stephens & Buckley have agreed that, during the
period that the Registration Statement is effective, they shall sell
shares only during a 60-day period beginning two days after the filing by
the Company of each 10-QSB or 10-KSB and that each of them shall not sell
in any single trading day more than the greater of (i) 1% of the average
daily reported volume of trading of the Company's shares for the four
preceding calendar weeks or (ii) 2,500 shares (with respect to Mr. Waller)
or 1,000 shares (with respect to Esler Stephens & Buckley).
(17) Includes 1,749,280 shares subject to options and warrants exercisable
within 60 days after March 1, 1996. Includes 5,170 shares owned by William
H. Fleming's wife, the beneficial ownership of which Mr. Fleming
disclaims.
(18) Includes 1,540 shares subject to warrants exercisable within 60 days after
March 1, 1996.
(19) Includes 10,000 shares subject to warrants exercisable if Company's stock
does not trade at $8.00 or above for five consecutive trading days before
August 15, 1996.
(20) Includes 160,000 shares subject to warrants exercisable within 60 days
after March 1, 1996.
(21) Includes 26,730 shares subject to warrants exercisable within 60 days
after March 1, 1996. Messrs. Garlow and Leach have agreed that they will
not sell the greater of (i) in any single trading day more than 1% of the
average daily reported volume of trading of the Company's shares for the
four preceding calendar weeks or (ii) 12,500 shares in any five
consecutive trading days.
(22) Lane Powell Spears Lubersky has agreed not to sell in any single trading
day more than 3,000 shares.
(23) Includes 260,000 shares subject to warrants exercisable within 60 days
after March 1, 1996. Also includes 30,000 shares owned by Richard T.
Schroeder's wife, the beneficial ownership of which Mr. Schroeder
disclaims.
(24) Consists solely of 2,750 shares subject to options and 2,750 shares
subject to warrants exercisable within 60 days after March 1, 1996.
(25) Includes 160,000 shares subject to warrants exercisable within 60 days
after March 1, 1996.
10
<PAGE>
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 33,000,000 shares of
common stock, $.01 par value per share. As of December 31, 1995, there were
8,948,243 shares of common stock outstanding. All of the outstanding shares of
Common Stock are fully paid and nonassessable.
Holders of Common Stock are entitled to receive dividends as may from time
to time be declared by the Board of Directors out of funds legally available
therefor and to one vote per share on all matters on which the holders of Common
Stock are entitled to vote. The current policy of the Company is to retain
earnings to provide funds for the operation and expansion of its business. The
Company has never paid any cash dividends, and the Board of Directors does not
anticipate paying cash dividends in the foreseeable future. See "Risk Factors --
Absence of Dividends." Holders of common stock do not have any cumulative voting
rights or conversion, pre-emptive, redemption or sinking fund rights. In the
event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to share equally and ratably in the Company's assets,
if any, remaining after the payment of all liabilities of the Company.
The holders of Common Stock are entitled to one vote for each share held on
all matters submitted to the shareholders.
CERTAIN ANTIDILUTION RIGHTS
Holders of common stock who owned shares of Common Stock on February 17,
1994 have the right to receive additional shares of Common Stock (without
consideration) sufficient to maintain their percentage ownership if the Company
issues Common Stock (or warrants or options to acquire Common Stock) on or after
February 17, 1994 and before February 17, 1997 at a price of less than $.40 per
share. No other holders of Common Stock have antidilution rights.
CHANGE IN CONTROL
The Nevada Control Share Acquisition Act places certain restrictions on
acquisition of control shares, similar to those found in other jurisdictions.
The Company has opted, as permitted by Nevada law, to provide in its bylaws that
this Act does not apply to acquisition of shares of the Company's stock. The
Company's articles and bylaws do not contain any provisions that would delay,
defer or prevent a change in control of the Company.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Twelve of the Company's Articles of Incorporation, as amended, and
Article VIII of the Company's Bylaws provide that the Company is required to
indemnify current or former directors, officers, employees or agents of the
Company to the fullest extent permitted by Nevada law. The rights of
indemnification under the Articles and Nevada law are not exclusive of any other
rights of indemnification to which the persons indemnified may be entitled under
any agreement, vote of shareholders or directors or otherwise. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders, or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made in the over-the-counter market or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Shares may be sold by one or more of the following:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) a purchase by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; and
11
<PAGE>
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
such sales. In addition, any Shares covered by this Prospectus that qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
Under agreements that may be entered into by the Selling Shareholders,
dealers who participate in the distribution of the Shares may be entitled to
indemnification by the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act.
Certain of the dealers may be customers of, including borrowers from, engage
in transactions with, and perform services for, the Company, a Selling
Shareholder or one or more of their affiliates in the ordinary course of
business.
The Shares offered hereby may be distributed to purchasers in the states of
Florida, Georgia, New Jersey, New York, Oregon and Washington.
RECENT DEVELOPMENTS
LEASE LINE OF CREDIT. In January 1996 the Company received a lease line of
credit commitment from First Portland Leasing Corporation ("FPLC") which the
Company accepted (the "Commitment"). FPLC has agreed to lease up to an aggregate
of $300,000 of equipment. Each lease term will be either 36 months at a monthly
rate factor of .03475 or 24 months at a monthly rate factor of .0495. At the
maturity of each lease term, the Company will have the option to purchase the
equipment at its fair market value at such time, renew the lease annually at the
fair rental value at such time or return the equipment to FPLC. Payment under
the leases will be secured by other equipment owned by the Company. The
Commitment states that all equipment must be delivered and accepted by the
Company by July 31, 1996.
BOARD OF DIRECTORS. In May 1995 the Company's Board of Directors elected
James E. Reinmuth and RoseAnna Sevcik as new members of the Board to fill
vacancies. Mr. Reinmuth was elected Treasurer of the Company at the same
meeting. Information with respect to Ms. Sevcik and Mr. Reinmuth is set forth
below:
Mr. Reinmuth, age 55, has served as a director of the Company since May
1995. Since July 1994, Mr. Reinmuth has served as the Charles H. Lundquist
Distinguished Professor of Business at the University of Oregon. Mr.
Reinmuth also serves as President and Chief Executive Officer of Fuji
Advanced Filtration, an industrial filter manufacturer. From 1976 until July
1994, Mr. Reinmuth served as Dean of the College of Business at the
University of Oregon. Mr. Reinmuth also has served in several administrative
positions within the University of Oregon from 1988 until the present. Mr.
Reinmuth is a director of Antivirals, Inc., a pharmaceutical company, W.E.
Simon and Sons Asia Ltd., a merchant bank in HongKong, Asia Capital Ltd., an
investment bank in Sri Lanka, and Capital Consultants, Inc., an investment
firm that is a Selling Shareholder in this offering.
Ms. Sevcik, age 32, has served as a director of the Company since May
1995. Since February 1993, Ms. Sevcik has served as Vice President-Senior
Portfolio Manager of the Life Insurance Company of the Southwest. From
February 1990 to February 1993, Ms. Sevcik served as Senior Portfolio
Manager-Securities Analyst at Securities Management and Research, an
investment management services company.
Jeffrey Grayson and Karen Anderegg resigned as Directors of the Company in
December 1995 and February 1996, respectively. There were no disagreements
between the Company and either Mr. Grayson or Ms. Anderegg.
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<PAGE>
At the May 1995 meeting of the Board, the Company established an Audit
Committee comprised of John F. Perry, James E. Reinmuth and Carol A. Scott,
Ph.D. The Audit Committee oversees actions taken by the Company's independent
auditors.
CONSULTING AGREEMENTS. In November 1995, the Company entered into a
Consulting Agreement with Peter Loftis for consulting services in the area of
trade relations, sales and marketing. Pursuant to the agreement, the Company has
agreed to pay Mr. Loftis a fee of $10,000 per month. The Company has also
granted Mr. Loftis warrants to purchase 100,000 shares of the Company's common
stock at a purchase price of $2.88 per share, one-third of which vested
immediately, one-third of which will vest after six months of service and the
remainder of which vest after 12 months of service. The Consulting Agreement is
terminable by either party with 60 days' prior notice.
In June 1995, the Company entered into a Consulting Agreement with David
Pitassi for consulting services in the area of sales, marketing, product
development and manufacturing. Pursuant to the agreement, the Company has agreed
to pay Mr. Pitassi $1,000 per month as a minimum payment. In addition, services
rendered over and above one day per month will be compensated at the rate of
$250 per hour. The Company has granted to Mr. Pitassi warrants to purchase
100,000 shares of the Company's common stock at a purchase price of $2.88 per
share, one-third of which vested immediately, one-third of which will vest on
June 30, 1996 and the remainder of which will vest on June 30, 1997. The
agreement may be terminated by either party with 30 days' prior notice.
DISTRIBUTION OF PRODUCTS. In July 1995, the Company entered into a
Distributor's Agreement with OSSCA International, Inc. ("OSSCA") with respect to
the nonexclusive distribution of the Padette to the United States military and
other United States government agencies. The term of the Agreement is three
years and may be extended annually thereafter by the parties. Pursuant to the
Agreement, OSSCA agreed to an initial order of 1,000,000 Padettes, and 6,000,000
Padettes per year. The parties have agreed that OSSCA will take delivery of
Padettes as soon as the Company's products are in distribution in the United
States.
In December 1995, the Company entered into an agreement with Chinese
Business Services ("CBS") pursuant to which CBS became the exclusive distributor
for direct sales of the Padette within China. The term of the agreement is two
years with automatic one year renewals. The Agreement may also be terminated by
the Company if, among other reasons, CBS fails to meet certain minimum purchase
orders. The Company has also agreed to issue to CBS a warrant to purchase 10,000
shares (subject to decrease in the event minimum purchase requirements are not
met) of the Company's common stock at a purchase price of $4.00 per share.
The Company and Beijing Kang Mei Biological Products, Ltd., a joint venture
comprised of Cort MacKenzie & Thomas, Inc., and Fang-Hai Science and Technology
(the "Joint Venture") previously entered into a distribution arrangement
relating to certain countries in the Far East which was recently terminated
pursuant to an Amendment of Agreement (the "Amendment"). The parties agreed that
their prior agreements are terminated and the Company has agreed to pay to the
Joint Venture one-quarter of one U.S. cent for each Padette sold by the Company
within China during the three-year term commencing on the effective date of the
Amendment; provided, however, that such payments shall not exceed $100,000 in
any 12-month period.
LEGAL PROCEEDINGS. The Company has been named as a defendant in a civil
action brought in the Circuit Court of Oregon for Washington County by Kassia
International Incorporated (the "Plaintiff"). The complaint alleges that the
Company breached its obligations to complete the purchase of the Plaintiff in
the spring of 1995 and seeks damages of up to $6 million under various theories.
Although the Company intends to vigorously defend against such lawsuit, the
Company cannot predict the outcome of the lawsuit. See "Risk Factors."
The Company was in a dispute with G. Dale Garlow, Donald P. Leach and John
R. Booth, shareholders of the Company who claimed they were entitled to certain
registration rights, among other matters (collectively, "GL&B"). In February
1996, the Company and GL&B entered into a
13
<PAGE>
Settlement Agreement, Registration Rights Agreement and Release (the "Settlement
Agreement"), pursuant to which the Company agreed to deliver warrants to
purchase an aggregate of 30,000 shares of the Company's common stock at an
exercise price of $1.50 per share and 25,000 shares of the Company's common
stock at an exercise price of $3.00 per share. The Company also agreed to
register all the shares owned by GL&B as well as the shares of common stock
underlying the warrants granted to GL&B pursuant to the Settlement Agreement. In
addition, the Company has agreed to pay to the Shareholders an aggregate of
$30,000. Messrs. Leach and Garlow have each agreed to certain volume limitations
in the sale of their shares. See "Principal and Selling Shareholders."
LEASED OFFICE FACILITY. In January 1996 the Company entered into a new
lease for its office space within the same office complex as its existing office
space. The lease is for approximately 7,100 square feet, significantly larger
than the Company's existing office facility. The term of the lease is March 1,
1996 through February 28, 1999 at a monthly rental amount of $6,635, with an
increase to $6,967 per month in March 1998.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon by
Perkins Coie, Portland, Oregon.
EXPERTS
The financial statements incorporated by reference in this Prospectus to the
Annual Report on Form 10-KSB for the year ended December 31, 1994 have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and so incorporated herein in reliance upon
the authority of said firm as experts in auditing and accounting in giving said
report.
14
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY OF THE SELLING SHAREHOLDERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT
RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO
WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE
SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Additional Information.................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Risk Factors.............................................................. 3
Principal and Selling Shareholders........................................ 8
Description of Securities................................................. 11
Plan of Distribution...................................................... 11
Recent Developments....................................................... 12
Legal Matters............................................................. 14
Experts................................................................... 14
Additional Information.................................................... II-1
</TABLE>
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UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
5,638,294 SHARES
ATHENA MEDICAL
CORPORATION
COMMON STOCK
, 1996
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
AMOUNT
---------
<S> <C>
SEC Registration Fee............................................................... $ 6,562
Accounting Fees and Expenses*...................................................... 3,000
Legal Fees and Expenses*........................................................... 60,000
Blue Sky Fees and Expenses*........................................................ 10,000
Printing, including Registration Statement, Prospectus, etc.*...................... 1,000
Miscellaneous Expenses*............................................................ 1,938
---------
TOTAL EXPENSES*................................................................ $ 82,500
---------
---------
</TABLE>
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*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada General Corporation Law (the "Nevada Act") requires the
indemnification of an individual made a party to a proceeding because the
individual is or was a director, officer, employee or agent of the corporation
against expenses, including attorney fees, actually and reasonably incurred, to
the extent that the individual is successful on the merits or otherwise in the
individual's defense in the proceeding, or in defense of any claim, issue or
matter therein. In addition, the Nevada Act allows the corporation to indemnify
such an individual if:
(a) The conduct of the individual was in good faith;
(b) The individual reasonably believed that the individual's conduct was
in the best interest of the corporation, or not opposed to its best
interests; and
(c) In the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual's conduct was unlawful.
In the case of any proceeding by or in the right of the corporation, the
individual must also meet the standards set forth above to be entitled to
indemnification, but may still not be indemnified if the individual is adjudged
liable to the corporation or for amounts paid in settlement to the corporation,
unless ordered by a court of competent jurisdiction upon application.
Article Twelve of the articles of incorporation of the registrant requires
that the bylaws of the registrant shall provide for the indemnification of the
registrant's directors, officers, employees and agents to the fullest extent
permitted by Nevada law. Article VIII of the bylaws of the registrant requires
the registrant to indemnify any current or former director, officer, employee or
agent from and against expenses actually and reasonably incurred, including
attorney fees, judgments, fines and amounts paid in settlement, in connection
with any action, suit or proceeding to which the individual is a party because
of service to registrant, provided that the individual acted in good faith and
in a manner the individual reasonably believed to be in or not opposed to the
best interests of the registrant and, with respect to any criminal action or
proceeding, the individual had no reasonable cause to believe the individual's
conduct was unlawful. The same indemnification obligation applies to actions by
or in the right of the corporation if the foregoing standards are met, but shall
not apply if the individual is adjudged liable to the corporation or to amounts
paid in settlement, unless ordered by a court of competent jurisdiction. This
right to indemnification does not exclude any other rights to which an
individual may be entitled under the articles of incorporation or any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise. Article
Eight of the bylaws further requires the indemnification of an individual made a
party to a proceeding because the individual is or was a director, officer,
employee or agent of the corporation against expenses, including attorney fees,
II-1
<PAGE>
actually and reasonably incurred, to the extent that the individual is
successful on the merits or otherwise in the individual's defense in the
proceeding, or in defense of any claim, issue or matter therein.
In addition to the rights to indemnification set forth above, the registrant
has, in Article Thirteen of its articles of incorporation, eliminated the
liability of each director and officer of the corporation for damages for any
breach of fiduciary duty, except that a director or officer shall be liable for
damages which result from:
(a) Acts or omissions which involve intentional misconduct, fraud or
knowing violation of law;
(b) The willful or grossly negligent payment of any improper dividend or
distribution; or
(c) Acts or omissions which occurred prior to March 18, 1987.
This provision is consistent with the Nevada Act, which allows the elimination
of personal liability for officers and directors in the articles of
incorporation, except in the situations described in subsections (a) and (b)
above.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
5.1 Opinion of Perkins Coie.**
10.1 License Agreement dated April 30, 1986 between Shalom Z. Hirschman,
M.D., and Marvin P. Loeb & Company. Incorporated by reference to
Exhibit 10.1 to the Company's Form S-2, SEC File No. 33-88230 (the
"S-2").
10.2 Limited License & Option Agreement between Marvin Loeb & Company and
the Company dated December 30, 1986. Incorporated by reference to
Exhibit 10.2 to the S-2.
10.3 Consulting Agreement between Shalom Hirschman, M.D. and the Company
dated June 23, 1987. Incorporated by reference to Exhibit 10.3 to the
S-2.
10.4 Consulting Agreement between the Company and Roland Gertstenberger
dated January 31, 1996.*
10.5 Consulting Agreement between the Company and Karen K. Anderegg dated
January 5, 1995. Incorporated by reference to Exhibit 10.28 to the
Company's Annual Report on Form 10-KSB for the year ended December
31, 1994.
10.6 Consulting Agreement between the Company and Peter Loftis dated
November 6, 1995.*
10.7 Consulting Agreement between the Company and David M. Pitassi dated as
of February 1995.*
10.8 Share Exchange Agreement among Xtramedics, Inc., Athena Profem, Inc.,
and Athena shareholders dated February 17, 1994. Incorporated by
reference to Exhibit 1 to the Company's Quarterly Report on Form
10-QSB/A for the period ended March 31, 1994 (the "March 31, 1994
10-QSB/A").
10.9 Assumption of Employment Agreement between the Company and John F.
Perry dated February 17, 1994. Incorporated by reference to Exhibit 2
to the March 31, 1994 10-QSB/A.
10.10 Employment Agreement between Athena Medical Corporation (an Oregon
corporation) and John F. Perry dated as of July 1, 1993. Incorporated
by reference to Exhibit 2 to the March 31, 1994 10-QSB/A.
10.11 Assumption of Employment Agreement between the Company and William H.
Fleming dated February 17, 1994. Incorporated by reference to Exhibit
2 to the March 31, 1994 10-QSB/A.
</TABLE>
II-2
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<TABLE>
<C> <S>
10.12 Employment Agreement between Athena Medical Corporation (an Oregon
corporation) and William H. Fleming dated as of July 1, 1993.
Incorporated by reference to Exhibit 2 to the March 31, 1994
10-QSB/A.
10.13 Business Park Lease between the Company, Petula Associates, Ltd. and
Koll Portland Associates dated March 1, 1996.*
10.14 Agreement dated July 1, 1994 between Sovereign Ventures and Athena
Medical Corporation. Incorporated by reference to Exhibit 10.10 to
the S-2.
10.15 Registration Rights Agreement between Athena Medical Corporation and
Capital Consultants, Inc., dated December 29, 1994. Incorporated by
reference to Exhibit 10.15 to the S-2.
10.16 Form of Registration Rights Agreement used for Mr. Waller, Esler,
Stephens & Buckley and Lane Powell Spears Lubersky.*
10.17 Athena Medical Corporation's 1994 Incentive and Non-Qualified Stock
Option Plan dated as of June 7, 1994. Incorporated by reference to
Exhibit 10.14 to the S-2.
10.18 Purchase Warrant issued to Richard Schroeder for 100,000 shares of
common stock dated May 3, 1994. Incorporated by reference to Exhibit
10.16 to the S-2.
10.19 Form of Purchase Warrant issued to Cort MacKenzie for 346,000 shares
of common stock dated March 1996.*
10.20 Purchase warrant issued to Alexander V. Sharp for 35,000 shares of
common stock dated October 3, 1995.*
10.21 Purchase Warrant issued to Cort MacKenzie for 300,000 shares of common
stock dated July 11, 1994. Incorporated by reference to Exhibit 10.17
to the S-2.
10.22 Purchase Warrant issued to Charles E. Finegan, Jr. for up to 90,000
shares of common stock dated October 2, 1994. Incorporated by
reference to Exhibit 10.18 to the S-2.
10.23 Purchase Warrant issued to Alfred E. Thurber, Jr. for up to 90,000
shares of common stock dated October 2, 1994. Incorporated by
reference to Exhibit 10.19 to the S-2.
10.24 Purchase Warrant issued to Financial Management Consulting Group for
up to 50,000 shares of common stock dated October 28, 1994.
Incorporated by reference to Exhibit 10.22 to the S-2.
10.25 Purchase Warrant issued to Cort MacKenzie & Thomas, Inc. for 308,750
shares of common stock dated November 18, 1994.*
10.26 Purchase Warrant issued to James E. Reinmuth for 160,000 shares of
common stock dated April 28, 1995.*
10.27 Purchase Warrant issued to Richard T. Schroeder for 160,000 shares of
common stock dated April 28, 1995.*
10.28 Purchase Warrant issued to James R. Wilson for 160,000 shares of
common stock dated April 28, 1995.*
10.29 Purchase Warrant issued to Karen K. Anderegg for 100,000 shares of
common stock dated May 18, 1995.*
10.30 Purchase Warrant issued to Charles E. Finegan, Jr. for 70,000 shares
of common stock dated May 18, 1995.*
10.31 Purchase Warrant issued to Alfred E. Thurber, Jr. for 70,000 shares of
common stock dated May 18, 1995.*
10.32 Purchase Warrant issued to Mark T. Waller for up to 500,000 shares of
common stock dated September 29, 1995.*
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.33 Purchase Warrant issued to Esler Stephens & Buckley for up to 100,000
shares of common stock dated September 29, 1995.*
10.34 Purchase Warrant issued to Capital Consultants, Inc. for 50,000 shares
of common stock dated October 5, 1995.*
10.35 Purchase Warrant issued to David M. Pitassi for 100,000 shares of
common stock dated December 29, 1995.*
10.36 Purchase Warrant issued to Peter Loftis for 100,000 shares of common
stock dated December 29, 1995.*
10.37 Distributor's Agreement between the Company and OSSCA International,
Inc. dated July 30, 1995.*
10.38 Commission Agreement between the Company and OSSCA International, Inc.
dated July 30, 1995.*
10.39 Distribution Agreement between the Company and Meix Corporation dba
Chinese Business Services, dated December 30, 1995.*
10.40 Commitment Letter between First Portland Leasing Corp. and the Company
dated January 9, 1996.*
10.41 Form of Amendment of Agreement between the Company and Beijing Kang
Mei Biological Products, Ltd. (a joint venture comprised of Cort
MacKenzie & Thomas, Inc., and Fang-Hai Science and Technology).*
10.42 Form of Purchase Warrant issued to Thomas C. Stewart for 270,000
shares of common stock dated December 29, 1995.*
10.43 Form of Purchase Warrant issued to Michael D. Stewart for 35,000
shares of common stock dated December 29, 1995.*
13. The Company's Quarterly Reports on Form 10-QSB for the quarters ended
March 31, 1995, June 30, 1995 and September 30,1995. Incorporated by
reference to such filings with the Commission on May 15, 1995, August
15, 1995 and November 15, 1995, file number 0-17119.
24.1 Consent of Arthur Andersen LLP.*
24.2 Consent of Perkins Coie.** Included in Exhibit 5.1.
</TABLE>
- ------------------------
* Filed herewith.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
II-4
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on March 29, 1996.
ATHENA MEDICAL CORPORATION
By: /s/ WILLIAM H. FLEMING
-----------------------------------
William H. Fleming
PRESIDENT AND CHIEF OPERATING
OFFICER
Each person whose individual signature appears below hereby authorizes and
appoints William H. Fleming and David S. Porter, and each of them, with full
power of substitution and full power to act without the other as his or her true
attorney-in-fact and agent to act in his or her name, place and stead and to
execute in the name and on behalf of each person, individually and in each
capacity stated below, and to file any and all amendments to this Registration
Statement, including any and all post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on March 29, 1996 by the following
persons in the capacities indicated:
<TABLE>
<C> <S>
SIGNATURE TITLE
- ------------------------------------------------------ ---------------------------------------------------
/s/ WILLIAM H. FLEMING
------------------------------------------- President, Chief Operating Officer, Secretary and
William H. Fleming Director (Principal Operating Officer)
/s/ JOHN F. PERRY
------------------------------------------- Chairman, Chief Executive Officer and Director
John F. Perry
/s/ DAVID S. PORTER
------------------------------------------- Chief Financial Officer (Principal Accounting
David S. Porter Officer)
/s/ JAMES E. REINMUTH
------------------------------------------- Director
James E. Reinmuth
/s/ CAROL A. SCOTT
------------------------------------------- Director
Carol A. Scott
/s/ ROSEANNA SEVCIK
------------------------------------------- Director
RoseAnna Sevcik
</TABLE>
II-6
<PAGE>
CONSULTING AGREEMENT
This AGREEMENT, dated 31 January, 1996 is between ATHENA Medical
Corporation (the "Company"), a Nevada Corporation, located at 10170 S.W. Nimbus
Ave, Suite H-1, Portland, Oregon, 97223, and Roland Gerstenberger, ("RGT"),
President, RG. Technical Associates, Inc., P.O. Box 828, 3424 Sweeten Creek
Road, Arden, North Carolina, 28704
In consideration of their mutual promises and for other good and valuable
consideration, the parties hereto agree as follows:
I. RGT agrees to serve as a Manufacturing and Product Development
Consultant to the Company for a period of two (2) years from January 31, 1395.
RGT agrees to devote his time as he and the Company reasonably determine are
necessary to the performance of said duties, provided, however, that the
rendering of services pursuant to this Consulting Agreement shall not prevent
RGT from reasonably fulfilling his obligations under his employment agreement
with RG. Technical Associates, Inc.
A. RGT will report to the Production Plant Manager of the Company
and agrees to use his best efforts to update, expand and continue his design
work related to the Interlabial Padette, and to assist the Company to
successfully maintain and expand manufacturing operations.
B. The Company shall pay RGT a flat rate of US $1,800 per month,
beginning on the date hereon, for his efforts to improve, continue and expand
manufacturing and patent coverage of the Interlabial Pad, for a period of one
year. The fee will be payable within 7 days of invoice receipt.
C. RGT will account for all hours worked and submit this
information, along with any approved travel and accrued expenses, in invoice
form to the Company on the first of every month for the previous month. Any pre-
approved hours above 24 hours for a given month will be payable at the rate of
S75 per hour, in addition to the monthly rate. All invoiced hours and expenses
must be detailed and approved prior to invoicing, the Company. The invoices will
be due when received.
II. This agreement may not be terminated by either party hereto for a
period of twelve (12) months from the date hereon. Following this initial term,
this Agreement my be terminated by either party by providing sixty (60) days
written
<PAGE>
notice to the other party. Termination of this agreement will not constitute
termination of the License Agreement.
III. This Agreement may not be assigned by RGT without the written consent
of the Company.
IV. This Agreement shall be construed in accordance with the laws of
Nevada.
V. This Agreement represents the entire agreement of the parties and
supersedes the consulting agreement signed 31 January, 1995 between these same
parties.
VI. RGT hereby consents to the disclosure of this Agreement and the terms
thereof in any Registration Statement of the Company, or as required in other
public documents.
WITNESS the due execution hereof as of the date first above written.
Agreed:
ATHENA MEDICAL CORPORATION
By:/s/ William H. Fleming
-------------------------------
William H. Fleming, President
R.G. TECHNICAL
By:/s/ Roland Gerstenberger
-------------------------------
Roland Gerstenberger, President
<PAGE>
CONSULTING AGREEMENT
This Consulting Agreement is entered into this 6th day of November, 1995,
by and between ATHENA Medical Corporation (hereinafter ATHENA), a publicly-owned
corporation organized primarily to develop, manufacture and market female
healthcare products, and Peter Loftis (hereinafter CONSULTANT).
WITNESSETH:
WHEREAS, ATHENA has need for a consultant capable of providing consulting
services in the area of trade relations and sales and marketing support
according to the policies and directions directed by ATHENA; and
WHEREAS, CONSULTANT has considerable experience in the area of trade
relations and desires to enter into a consulting relationship with ATHENA;
NOW, THEREFORE, in consideration of the mutual promises more particularly
set forth hereinafter, the above parties have entered in this Consulting
Agreement, agreeing as follows:
1. CONSULTANT agrees to perform consulting services (including necessary
travel) over the next twelve-month period for ATHENA as ATHENA shall direct.
The services shall include but not be limited to the following:: development of
sales strategies to the trade; development of brokerage and wholesale network
and retail service companies for the initial and possibly subsequent rollout,
advertising and promotional materials development for the trade; various
packaging parameters (UPC, planograms, etc.); key account management with major
retail grocery and drug chains.
2. In consideration for the services performed by CONSULTANT, ATHENA
agrees to pay CONSULTANT a fee of $10,000 per month (payable on the 15th of each
calendar month) for time and efforts spent performing consulting services and in
necessary travel authorized by ATHENA. In addition, CONSULTANT shall receive
warrants to purchase shares (one warrant = one share) of Athena Common Stock
subject to, and as approved by, Athena's board of directors.
3. Whenever ATHENA has authorized travel by CONSULTANT, ATHENA will
reimburse CONSULTANT for the preapproved cost of such travel, including the
costs of reasonable hotel accommodations and subsistence and approved
entertainment. ATHENA reserves the right to direct the mode of travel and to
set reasonable limits on the amount of reimbursable hotel accommodations and
subsistence.
4. CONSULTANT understands that it is his responsibility to conform to the
appropriate IRS regulations as an independent contractor.
5. CONSULTANT may neither assign nor subcontract the work assigned to by
ATHENA.
6. CONSULTANT agrees to perform the services covered by this contract
according to the policies, directions, and requirements specified by ATHENA.
<PAGE>
7. All written material or other properties, tangible or intangible
arising out of or resulting from the performance of this agreement, and all
proprietary rights, including copyrights, therein, shall belong to ATHENA.
CONSULTANT will not use or give to others any such property without Athena's
written permission. Except as otherwise provided herein, CONSULTANT shall keep
all data and information obtained in the course of this agreement concerning
ATHENA confidential and shall not disclose of otherwise use and such material
without the prior written consent of ATHENA. CONSULTANT shall not be restricted
in the use of any material which is publicly available, or which is already in
CONSULTANT's possession or known to CONSULTANT without restriction, or which is
rightfully obtained by CONSULTANT from sources other than ATHENA.
8. Any specifications, drawings, sketches, models, samples, data, computer
programs or documentation or other technical or business information (all of
which is hereinafter referred to in this paragraph as "information") furnishes
or disclosed to CONSULTANT here under shall be deemed the property of and, when
in tangible form, shall be returned to ATHENA by CONSULTANT. Unless such
information was previously known to the CONSULTANT free of any obligation to
keep it confidential, or has been -- or is subsequently -- made public by ATHENA
or a third party, it shall be held in confidence by CONSULTANT, shall be used
only for the purposes hereunder, and may be used for other purposes only under
such terms and conditions as may be consented to in written permission by
ATHENA.
9. CONSULTANT grants, and agrees to grant, to ATHENA an unrestricted,
nonexclusive, royalty-free license for all purposes on all inventions, and all
patents issued thereon, made, conceived or first reduced to practice by
CONSULTANT, in contemplation of, or in the course of, or as a result of, work
done hereunder. The license so granted to ATHENA shall continue for the lives
of such patents and shall include the right -- within the scope thereof -- to
grant sub-licenses to clients or representatives of ATHENA.
10. Promptly upon expiration or termination of this agreement, CONSULTANT
shall make complete disclosure to ATHENA of all discoveries and inventions or
other information within the scope of Paragraphs 7 through 9, which discoveries,
invention or other information has not been previously disclosed to ATHENA. In
addition, CONSULTANT shall certify in writing such disclosures are complete.
11. CONSULTANT shall not advertise, market or otherwise make known to
others any information relating to the services performed under this contract,
including mentioning or implying the name of ATHENA, or any of its personnel,
without prior written consent of ATHENA.
12. CONSULTANT recognizes that services performed under this contract will
be done for ATHENA and for clients of ATHENA and, thus, CONSULTANT will likely
have numerous contacts directly with said client. CONSULTANT agrees not to use
said contacts in any way to create an ability on CONSULTANT's part to contract
directly with said client without written permission from ATHENA. CONSULTANT
further agrees not to steal said client and not to interfere with, of cause
interference with, said client's contractual relations with ATHENA.
13. Either party to this agreement may terminate for any reason the
consultant relationship created by this contract by providing the other party
with 60 days written notice.
<PAGE>
Termination does not relieve either party from obligations incurred prior to
termination, nor does it imply any obligation following termination, except as
otherwise noted herein.
14. The failure of either party hereto to enforce any rights under this
contract shall not be construed to be a waiver of that right, or of damages
caused thereby or of any other rights under this contract.
15. This contract encompasses the entire agreement of the parties and
there are no other agreements or understandings -- either written or oral.
16. This contract may not be modified or amended except in writing with
the same degree of formality with which this contract has been executed.
17. The construction, interpretation, and performance of this contract,
and all transaction under it, shall be governed by the laws of the State of
Florida.
IN WITNESS WHEREOF, the parties hereto have executed this CONSULTANT
AGREEMENT as of the day and year written above.
/s/ Pete Loftis
------------------------------------
CONSULTANT
BY /s/ John Perry
--------------------------------
Chairman, CEO
ATHENA MEDICAL CORPORATION
<PAGE>
CONSULTING AGREEMENT
This AGREEMENT, dated June 1, 1995, is between ATHENA Medical Corporation, a
Nevada Corporation, located at 10170 SW Nimbus, Suite H-1, Portland, Oregon
97223 (the Company) and David M. Pitassi, Consultant.
In consideration of their mutual promises and for other good and valuable
consideration, the parties agree as follows:
1. Pitassi agrees to serve as a sales, marketing, product development and
manufacturing Consultant to the Company.
2. Pitassi will to serve as a Consultant and the Company will engage
Pitassi as a Consultant for so long as is mutually agreed to by the
parties.
3. This agreement may be terminated by either party with thirty days
written notice to the addresses as shown below.
4. The Company will compensate Pitassi at the rate of $3,000.00 per month
for a minimum of one day incurred for efforts which are mutually
agreed upon by the parties in advance. Time incurred over and above
one day per month will be compensated at the rate of $250 per hour.
Additional compensation To Pitassi will be provided in the form of
100,000 warrants for the Company's common stock at its closing price
at the date of this agreement. Vesting will be 33% upon 30 days after
the date of this agreement; 33% on June 30, 1996; and 33% on June 30,
1997 and assuming Pitassi continues to provide services to the Company
at each date of vesting. Discontinuation of services will cause the
forfeiture of any warrants which have not vested.
Pitassi understands the stock underlying these warrants will not be
registered with the Securities and Exchange Commission at the date of
grant. The Company will use its best efforts to register the stock in
a future filing; at dates and in amounts which are in the best
interest of the Company and its stockholders.
5. The Company will reimburse Pitassi for out-of-pocket expenses incurred
on behalf of the Company and with the Company's advance approval of
those expenses.
6. This Agreement may not be assigned by either party without the written
consent of the other party.
7. This Agreement shall be governed in accordance with the laws of the
state of Oregon.
8. This Agreement represents the entire agreement of the parties and
supersedes prior discussions or understandings between the parties.
9. Pitassi hereby consents to the disclosure of this Agreement and the
terms thereof in any Registration Statement, or other filing, with the
Securities and Exchange Commission or as required in other public
documents.
<PAGE>
Pitassi, page 2
WITNESS the due execution hereof as of the date first above written.
ATHENA Medical Corporation David M. Pitassi
By: /s/ William H. Fleming /s/ David Pitassi
------------------------------- ---------------------------------
William H. Fleming, President
10170 SW Nimbus, Suite H1 5/23/95
---------------------------------
Portland, Oregon 97223
---------------------------------
<PAGE>
PAGE
1. BASIC LEASE TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
a. DATE OF LEASE EXECUTION . . . . . . . . . . . . . . . . . . . . . . .1
b. TENANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
c. LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
d. TENANT'S USE OF PREMISES. . . . . . . . . . . . . . . . . . . . . . .1
e. PREMISES AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
f. PROJECT AREA. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
g. AGREED UPON PREMISES PERCENT OF PROJECT . . . . . . . . . . . . . . .1
h. TERM OF LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
i. BASE MONTHLY RENT . . . . . . . . . . . . . . . . . . . . . . . . . .1
j. RENT ADJUSTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . .1
(1) Cost of Living . . . . . . . . . . . . . . . . . . . . . . . . .1
(2) Step Increase. . . . . . . . . . . . . . . . . . . . . . . . . .1
k. ANNUAL EXPENSE BASE . . . . . . . . . . . . . . . . . . . . . . . . .1
l. PREPAID RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
m. TOTAL SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . .1
n. BROKER(S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
o. GUARANTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
a. Base Monthly Rent . . . . . . . . . . . . . . . . . . . . . . . . . .2
b. Rent Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . .2
(1) Cost of Living Adjustment. . . . . . . . . . . . . . . . . . . .2
(2) Step Increase. . . . . . . . . . . . . . . . . . . . . . . . . .2
c. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
(1) Expenses Defined . . . . . . . . . . . . . . . . . . . . . . . .2
(2) Annual Estimate of Expenses. . . . . . . . . . . . . . . . . . .2
(3) Monthly Payment of Expenses. . . . . . . . . . . . . . . . . . .2
(4) Rent Without Offset and Late Charge. . . . . . . . . . . . . . .3
5. PREPAID RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
6. DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
7. USE OF PREMISES AND PROJECT FACILITIES . . . . . . . . . . . . . . . . . .3
8. SIGNAGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
9. PERSONAL PROPERTY TAXES. . . . . . . . . . . . . . . . . . . . . . . . . .4
10. PARKING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
11. UTILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
12. MAINTENANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
13. ALTERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
14. RELEASE AND INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . .4
15. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
16. DESTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
17. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
a. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
b. Obligations to Be Governed by Lease . . . . . . . . . . . . . . . . .5
c. Total or Partial Taking . . . . . . . . . . . . . . . . . . . . . . .5
d. Landlord's Election . . . . . . . . . . . . . . . . . . . . . . . . .5
e. Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
18. ASSIGNMENT OR SUBLEASE . . . . . . . . . . . . . . . . . . . . . . . . . .5
19. DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
20. LANDLORD'S REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
21. ENTRY ON PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
22. SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
23. NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
24. WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
25. SURRENDER OF PREMISES; HOLDING OVER. . . . . . . . . . . . . . . . . . . .7
26. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . .7
27. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . .7
a. Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . .7
b. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
c. Landlord's Consent. . . . . . . . . . . . . . . . . . . . . . . . . .7
d. Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
e. Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
f. Landlord's Successors . . . . . . . . . . . . . . . . . . . . . . . .7
g. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
h. Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
i. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
28. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE. . . . . . . . . . . . . . .8
a. Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
b. Storage and Use . . . . . . . . . . . . . . . . . . . . . . . . . . .8
(1) Storage. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
(2) Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
c. Disposal of Waste . . . . . . . . . . . . . . . . . . . . . . . . . .8
(1) Refuse Disposal. . . . . . . . . . . . . . . . . . . . . . . . .8
(2) Sewage Disposal. . . . . . . . . . . . . . . . . . . . . . . . .8
(3) Disposal of Other Waste. . . . . . . . . . . . . . . . . . . . .8
d. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . .8
e. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . .8
f. Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . .8
g. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
29. SPACE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
<PAGE>
BUSINESS PARK LEASE
1. BASIC LEASE TERMS.
a. DATE OF LEASE EXECUTION:
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b. TENANT: Athena Medical Corporation
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Trade Name:
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Address (Leased Premises): 10180 SW Nimbus Ave. Portland, OR 97223
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Building/Unit: J/5 & 6
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Address (For Notices): Same as above
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c. LANDLORD: Petula Associates Ltd., and Koll Portland Associates
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Address (For Notices): c/o Forum Properties, Inc.
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10240 SW Nimbus Ave., Ste. L/3 Portland, OR 97223
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d. TENANT'S USE OF PREMISES: Administration and production of feminine
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products, storage of inventory.
e. PREMISES AREA: Approximately 7,104 Square Feet
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f. PROJECT AREA: Approximately 187,762 Square Feet
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g. AGREED UPON PREMISES PERCENT OF PROJECT: 3.7 %
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h. TERM OF LEASE Commencement: 3/1/96 Expiration: 2/28/99
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Number of Months: 36
----
i. BASE MONTHLY RENT: $ 6,635.00
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j. RENT ADJUSTMENT (Initial One):
LANDLORD (2) Step Increase. If this provision is initialed, the step
-------- adjustment provisions of Section 4.b(2) apply as follows:
TENANT
Effective Date of New Base
Rent Increase Monthly Rent
3/1/98 , 19 $6,967.00
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, 19 $
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, 19 $
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, 19 $
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, 19 $
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k. ANNUAL EXPENSE BASE: YEAR
Expense Rate
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Premises Area Square Feet
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Annual Expense Base Year 1996
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l. PREPAID RENT: $6,635.00
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m. TOTAL SECURITY DEPOSIT: $6,964.00, including a $175.00 nonrefundable
-------- ------
cleaning fee. The Security Deposit shall be paid by a separate check made
payable to the Landlord.
n. BROKER(S): Greg Hume/Hume Meyers
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o. GUARANTORS: N/A
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2. PREMISES.
Landlord leases to Tenant the premises described in Section 1 and in
Exhibit A (the "Premises"), located in the project described on Exhibit B
(the "Project"). Landlord reserves the right to modify Tenant's percentage of
the Project as set forth in Section 1 if the Project size is increased
through the development of additional property. By taking occupancy of the
Premises, Tenant acknowledges that it has examined the Premises and accepts
the Premises in their then present condition, subject only to any work which
Landlord has herein agreed to perform prior to commencement which Landlord
and Tenant identify in writing, prior to occupancy, as not completed.
3. TERM.
The term of this Lease is for the period set forth in Section 1, commencing
on the date in Section 1. If Landlord, for any reason, cannot deliver possession
of the Premises to Tenant upon the scheduled commencement date set forth in
Section 1, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting from such delay. In that
event, however, Landlord shall deliver possession of the Premises as soon as
practicable and the commencement date shall be the date of such delivery with
the term of the Lease remaining unchanged, and all other terms and conditions of
this Lease remaining in full force and effect. However, if Landlord is delayed
in delivering possession to Tenant for any reason attributable to Tenant, this
Lease (including the obligation to pay all rents) shall commence on the
scheduled commencement date set forth in Section 1 above. If Landlord, for any
reason not attributable to Tenant, is unable to deliver possession of the
Premises within ninety (90) days following the scheduled commencement date,
either party may terminate this Lease by written notice given within ten (10)
days following expiration of such period.
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4. RENT.
a. Base Monthly Rent. Tenant shall pay to Landlord base monthly rent in the
initial amount in Section 1 which shall be payable monthly in advance
on the first day of each and every calendar month ("Base Monthly
Rent"); provided, however, the Base Monthly Rent for the first month of
the term (or the first month following any rental abatement period, if
applicable) is due upon execution of this Lease by Tenant. If the term
of this Lease contains any rental abatement period, Tenant hereby
agrees that if Tenant breaches the Lease and/or abandons the Premises
before the end of the Lease term, or if this Lease or Tenant's right to
possession is terminated by Landlord because of Tenant's breach of the
Lease, Landlord shall, at its option, (1) void the rental abatement
period, and (2) recover from Tenant, in addition to all other damages
due Landlord, rent for the duration of the rental abatement period at a
rental rate equivalent to the highest Base Monthly Rent specified
herein. All charges and sums due from Tenant to Landlord hereunder
shall be deemed rent.
For purposes of Section 467 of the Internal Revenue Code, the parties to
this Lease hereby agree to allocate the stated rents, provided herein, to
the periods which correspond to the actual rent payments as provided under
the terms and conditions of this agreement.
b. Rent Adjustment.
(2) Step increase. If Section 1.j(2) is initialed, Base Monthly Rent shall
be increased periodically to the amounts and at the times set forth in
Section 1.j(2).
c. Expenses. The purpose of this Section 4.c is to ensure that Tenant bears a
share of all Expenses related to the use, maintenance, ownership, repair or
replacement, and insurance of the Project. Accordingly, beginning
January 1, 1997, Tenant shall pay to Landlord that portion of Tenant's
share of Expenses related to the Project which is in excess of the Annual
Expense Base Year, if any, shown in Section 1.
(1) Expenses Defined. The term "Expenses" shall mean all costs and
expenses incurred by Landlord with respect to the ownership,
operation, maintenance, repair or replacement, and insurance of the
Project, including without limitation, the following costs:
(a) All supplies, materials, labor, equipment, and utilities used in
or related to the operation and maintenance of the Project;
(b) All management, janitorial, legal, accounting, insurance, and
service agreement costs related to the Project;
(c) All maintenance, replacement and repair costs relating to the
areas within or around the Project, including, without
limitation, air conditioning systems, sidewalks, landscaping,
service areas, driveways, parking areas (including resurfacing
and restriping parking areas), walkways, building exteriors
(including painting), signs and directories, repairing and
replacing roofs, walls, etc. These costs may be included either
based on actual expenditures or based on establishment of
reasonable reserves.
(d) Amortization (along with reasonable financing charges) of
capital improvements made to the Project which may be required
by any government authority or which will improve the operating
efficiency of the Project (provided, however, that the amount
of such amortization for improvements not mandated by
government authority shall not exceed in any year the amount of
costs reasonably determined by Landlord in its sole discretion
to have been saved by the expenditure either through the
reduction, or minimization of increases, of costs which would
have otherwise occurred).
(e) All Real Property Taxes, which shall mean and include all
taxes, assessments (general and special) and other impositions
or charges which may be taxed, charged, levied, assessed or
imposed upon all or any portion of or in relation to the
Project or any portion thereof, any leasehold estate in the
Premises or measured by rent from the Premises, including any
increase caused by the transfer, sale or encumbrance of the
Project or any portion thereof. "Real Property Taxes" shall
also include any form of assessment, levy, penalty, charge or
tax (other than estate, inheritance, net income or franchise
taxes) imposed by any authority having a direct or indirect
power to tax or charge, including, without limitation, any
city, county, state, federal or any improvement or other
district, whether such tax is (1) determined by the area of the
Project or the rent or other sums payable under this Lease; (2)
upon or with respect to any legal or equitable interest of
Landlord in the Project or any part thereof; (3) upon this
transaction or any document to which Tenant is a party creating
a transfer in any interest in the Project; (4) in lieu of or as
a direct substitute in whole or in part of or in addition to
any real property taxes on the Project; (5) based on any
parking spaces or parking facilities provided in the Project;
or (6) in consideration for services, such as police
protection, fire protection, street, sidewalk and roadway
maintenance, refuse removal or other services that may be
provided by any governmental or quasi-governmental agency from
time to time which were formerly provided without charge or
with less charge to property owners or occupants. "Real
Property Taxes" shall also include all assessments under
recorded covenants or master plans and/or by owner's
associations.
(2) Annual Estimate of Expenses. At the commencement of each calendar year
the Annual Expense Base Year, Landlord shall estimate Tenant's portion
of Expenses for the coming year based on the Tenant's portion of the
Project Area set forth in Section 1.
(3) Monthly Payment of Expenses. If Tenant's portion of said estimate of
Expenses shows an increase for subsequent calendar years over the
Annual Expense Base Year, if any, as set forth in Section 1, Tenant
shall pay to Landlord, as additional rent, such estimated increase in
monthly installments of one-twelfth (1/12) beginning on January 1 of
the forthcoming calendar year, and one-twelfth (1/12) on the first day
of each succeeding calendar month. As soon as practical following each
calendar year, Landlord shall prepare an accounting of actual
2
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Expenses incurred during the prior calendar year and such accounting
shall reflect Tenant's share of Expenses. If the additional rent paid by
Tenant under this Section 4.c(3) during the preceding calendar year was
less than the actual amount of Tenant's share of Expenses, Landlord shall
so notify Tenant and Tenant shall pay such amount to Landlord within 30
days of receipt of such notice. Such amount shall be deemed to have
accrued during the prior calendar year and shall be due and payable from
Tenant even though the term of this Lease has expired or this Lease has
been terminated prior to Tenant's receipt of this notice. Tenant shall
have thirty (30) days from receipt of such notice to contest the amount
due; failure to so notify Landlord shall represent final determination of
Tenant's share of expenses. If Tenant's payments were greater than the
actual amount, then such overpayment shall be credited by Landlord to all
present rent due under this Section 4.c(3).
(4) Rent Without Offset and Late Charge. All rent shall be paid by Tenant
to Landlord monthly in advance on the first day of every calendar
month, at the address shown in Section 1, or such other place as
Landlord may designate in writing from time to time. All rent shall be
paid without prior demand or notice and without any deduction or
offset whatsoever. All rent shall be paid in lawful currency of the
United States of America. All rent due for any partial month shall be
prorated at the rate of 1/30th of the total monthly rent per day.
Tenant acknowledges that late payment by Tenant to Landlord of any
rent or other sums due under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs
being extremely difficult and impracticable to ascertain. Such costs
include, without limitation, processing and accounting charges and
late charges that may be imposed on Landlord by the terms of any
encumbrance or note secured by the Premises. Therefore, if any rent or
other sum due from Tenant is not received when due, Tenant shall pay
to Landlord an additional sum equal to 10% of such overdue payment.
Landlord and Tenant hereby agree that such late charge represents a
fair and reasonable estimate of the costs that Landlord will incur by
reason of any such late payment and that the late charge is in
addition to any and all remedies available to the Landlord and that
the assessment and/or collection of the late charge shall not be
deemed a waiver of any default. Additionally, all such delinquent rent
or other sums, plus this late charge, shall bear interest at the prime
rate of the U.S. National Bank of Oregon, plus 2%, on a fully floating
basis (herein the "Default Rate"), from the date first due until the
date paid in full. Any payments of any kind returned for insufficient
funds will be subject to an additional handling charge of $25.00, and
thereafter, Landlord may require Tenant to pay all future payments of
rent or other sums due by money order or cashier's check.
5. PREPAID RENT.
Upon the execution of this Lease, Tenant shall pay to Landlord the prepaid
rent set forth in Section 1, and if Tenant is not in default of any provisions
of this Lease, such prepaid rent shall be applied toward the Base Monthly Rent
due for the first month of the term (or the first month following any Base
Monthly Rent abatement period, if applicable). Upon a default by Tenant prior to
such application, Landlord shall have the right, without waiver of the default
or prejudice to other remedies, to use the prepaid rent or any of it to cure the
default or to compensate Landlord for all or any damages resulting from the
default. Landlord's obligations with respect to the prepaid rent are those of a
debtor and not of a trustee, and Landlord can commingle the prepaid rent with
Landlord's general funds. Landlord shall not be required to pay Tenant interest
on the prepaid rent. Landlord shall be entitled to immediately endorse and cash
Tenant's prepaid rent; however, such endorsement and cashing shall not
constitute Landlord's acceptance of this Lease. In the event Landlord does not
accept this Lease, Landlord shall return said prepaid rent.
6. DEPOSIT.
Upon execution of this Lease, Tenant shall deposit the security deposit
set forth in Section 1 with Landlord as security for the performance by
Tenant of the provisions of this Lease. Upon a default by Tenant, Landlord
shall have the right, without waiver of the default or prejudice to other
remedies, to use the security deposit or any portion of it to cure the
default or to compensate Landlord for any damages resulting from Tenant's
default. Upon demand, Tenant shall immediately pay to Landlord a sum equal to
the portion of the security deposit expended or applied by Landlord to
maintain the security deposit in the amount initially deposited with
Landlord. In no event will Tenant have the right to apply any part of the
security deposit to any rent or other sums due under this Lease. If Tenant is
not in default at the expiration or termination of this Lease, Landlord shall
return the entire security deposit to Tenant, except for the portion
designated in Section 1, if any, which Landlord shall retain as a
nonrefundable cleaning fee. Landlord's obligations with respect to the
deposit are those of a debtor and not of a trustee, and Landlord can
commingle the security deposit with Landlord's general funds. Landlord shall
not be required to pay Tenant interest on the deposit. Landlord shall be
entitled to immediately endorse and cash Tenant's security deposit; however,
such endorsement and cashing shall not constitute Landlord's acceptance of
this Lease. In the event Landlord does not accept this Lease, Landlord shall
return said security deposit. If Landlord sells its interest in the Premises
during the term hereof and deposits with or credits to the purchaser the
unapplied portion of the security deposit, thereupon Landlord shall be
discharged from any further liability or responsibility with respect to the
security deposit.
7. USE OF PREMISES AND PROJECT FACILITIES.
Tenant shall use the Premises solely for the purposes set forth in
Section 1 and for no other purpose without obtaining the prior written
consent of Landlord. Tenant acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Premises or the Project
for the conduct of Tenant's business, nor has Landlord agreed to undertake
any modification, alteration or improvement to the Premises or the Project,
except as provided in writing in this Lease. Tenant acknowledges that
Landlord may from time to time, at its sole discretion, make such
modifications, alterations, deletions or improvements to the Project as
Landlord may deem necessary or desirable, without compensation or notice to
Tenant. Tenant shall promptly and at all times comply with all federal, state
and local statutes, laws, ordinances, orders and regulations affecting the
Premises and the Project (herein "Laws"), as well as all master plans,
restrictive covenants, and also any rules and regulations that Landlord may
adopt from time to time. Tenant shall not do or permit anything to be done in
or about the Premises or bring or keep anything in the Premises that will in
any way increase the premiums paid by Landlord on its insurance related to
the Project or which will in any way increase the premiums for fire or
casualty insurance carried by other tenants in the Project. Tenant will not
perform any act or carry on any practices that may injure the Premises or the
Project; that may be a nuisance or menace to other tenants in the Project; or
that shall in any way interfere with the quiet enjoyment of such other
tenants. Tenant shall not use the Premises for sleeping, washing clothes,
cooking or the preparation, manufacture or mixing of anything that might emit
any objectionable odor, noises, vibrations or lights onto such other tenants.
If sound insulation is required to muffle noise produced by Tenant on the
Premises, Tenant at its own cost shall provide all necessary insulation.
Tenant shall not do anything on the Premises which will overload any existing
parking or service to the Premises. Pets and/or animals of any type shall not
be kept on the Premises.
8. SIGNAGE.
All signage shall comply with rules and regulations set forth by
Landlord as may be modified from time to time. Current rules and regulations
relating to signs are described on Exhibit C. Tenant shall place no window
covering (e.g., shades, blinds, curtains, drapes, screens, or tinting
materials), stickers, signs, lettering, banners or advertising or display
material on or near exterior windows or doors if such materials are visible
from the exterior of the Premises, without Landlord's prior written consent.
Similarly, Tenant may not install any alarm boxes, foil protection tape or
other security equipment on the Premises without Landlord's prior written
consent. Any material violating this provision may be destroyed by Landlord
without compensation to Tenant.
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9. PERSONAL PROPERTY TAXES.
Tenant shall pay before delinquency all taxes, assessments, license
fees and public charges levied, assessed or imposed upon its business
operations as well as upon all trade fixtures, leasehold improvements,
merchandise and other personal property in or about the Premises.
10. PARKING.
Landlord grants to Tenant and Tenant's customers, suppliers, employees
and invitees, a nonexclusive license to use the designated parking areas in
the Project for the use of motor vehicles during the term of this Lease.
Landlord reserves the right at any time to grant similar nonexclusive use to
other tenants, to promulgate rules and regulations relating to the use of
such parking areas, including reasonable restrictions on parking by tenants
and employees, to designate specific spaces for the use of any tenant, to
make changes in the parking layout from time to time, and to establish
reasonable time limits on parking. Overnight parking is prohibited and any
vehicle violating this or any other vehicle regulation adopted by Landlord is
subject to removal at the owner's expense.
11. UTILITIES.
Tenant shall pay for all water, gas, heat, light, power, sewer,
electricity, telephone or other service metered, chargeable or provided to
the Premises. Landlord reserves the right (i) to install separate meters for
any such utility and to charge Tenant for the cost of such installation, or
(ii) to pay the costs of such utilities and to treat the same as an "Expense"
(subject to a right of Landlord to elect to require Tenant to pay its actual
portion of such Expense in lieu of its percentage share).
12. MAINTENANCE.
Landlord shall maintain, in good condition, the structural parts of the
Premises, which shall include only the foundations, bearing and exterior
walls (excluding glass), subflooring and roof (excluding skylights), the
unexposed electrical, plumbing and sewerage systems, including without
limitation, those portions of the systems lying outside the Premises,
exterior doors (excluding glass), window frames, gutters and downspouts on
the Building and the heating, ventilating and air conditioning system
servicing the Premises; provided, however, the cost of all such maintenance
shall be considered "Expenses" for purposes of Section 4.c. Except as
provided above, Tenant shall maintain and repair the Premises in good
condition, including, without limitation, maintaining and repairing all
walls, floors, ceilings, interior doors, exterior and interior windows and
fixtures as well as damage caused by Tenant, its agents, employees or
invitees. Upon expiration or termination of this Lease, Tenant shall
surrender the Premises to Landlord in the same condition as existed at the
commencement of the term, except for reasonable wear and tear or damage
caused by fire or other casualty for which Landlord has received all funds
necessary for restoration of the Premises from insurance proceeds. Nothing
herein shall excuse Tenant from financial responsibility for property damage
caused by Tenant or Tenant's agents.
13. ALTERATIONS.
a. Tenant shall not make any alterations to the Premises, or to the Project,
including any changes to the existing landscaping, without Landlord's
prior written consent in each instance. If Landlord gives its consent to
such alterations, Landlord may post notices in accordance with the laws
of the state in which the Premises are located. Any alterations made
shall remain on and be surrendered with the Premises upon expiration or
termination of this Lease, except that Landlord may, within 30 days
before or 30 days after the expiration or termination of this Lease or
the termination of Tenant's right of possession, elect to require Tenant
to remove any alterations which Tenant may have made to the Premises. If
Landlord so elects, at its own cost Tenant shall restore the Premises to
the condition designated by Landlord in its election, before the last day
of the term or within 30 days after notice of its election is given,
whichever is later.
b. Any request for Landlord's consent to alterations shall be made at least
thirty (30) days before any work may be commenced and shall be
accompanied by (i) detailed and costed plans and specifications for all
alterations, and (ii) Tenant's written agreement to provide, upon
completion of work, a complete set of as-built plans and specifications.
Landlord may withhold consent, in its sole discretion, or may issue such
consent subject to conditions. All alterations shall be constructed only
after obtaining Landlord's prior written consent and only in conformity
with all Laws. The issuance of Landlord's consent shall not be a waiver
of nor an opinion regarding Tenant's obligation to comply with all Laws.
c. Should Landlord consent in writing to Tenant's alteration of the
Premises, Tenant shall contract with a contractor approved by Landlord
for the construction of such alterations, shall secure all appropriate
governmental approvals and permits, and shall complete such alterations
with due diligence in compliance with the plans and specifications
approved by Landlord. All such construction shall be performed in a
manner which will not interfere with the quiet enjoyment of other tenants
of the Project.
d. Tenant shall pay all costs for construction of alterations and shall keep
the Premises and the Project free and clear of all liens which may result
from work by third parties authorized by Tenant. If any such lien is
filed, the same shall be an event of default hereunder. It shall be a
further event of default for Tenant to fail to remove such lien within
ten (10) days of the filing thereof.
14. RELEASE AND INDEMNITY.
As material consideration to Landlord, Tenant agrees that Landlord and
Landlord's partners, shareholders, officers, directors, employees and agents
(collectively the "Protected Parties") shall not be liable to Tenant for any
damage to Tenant or Tenant's property from any cause, and Tenant waives all
claims against Landlord for damage to persons or property arising for any
reason, except for damage resulting directly from Landlord's breach of its
express obligations under this Lease which Landlord has not cured within a
reasonable time after receipt of written notice of such breach from Tenant.
Tenant shall defend, indemnify and hold Landlord and all other Protected Parties
harmless from all claims, losses, causes of action, costs and expenses, and
damages arising out of (a) any damage to any person or property occurring in, on
or about the Premises, (b) use by Tenant or its agents of the Premises and/or
the Project or other properties of Landlord, and/or (c) Tenant's breach or
violation of any term of this Lease.
15. INSURANCE.
Tenant, at its cost, shall maintain public liability and property damage
insurance and products liability insurance with a single combined liability
limit of $1,000,000, insuring against all liability of Tenant and its authorized
representatives arising out of or in connection with Tenant's use or occupancy
of the Premises. Public liability insurance, products liability insurance and
property damage insurance shall insure performance by Tenant of the indemnity
provisions of Section 14. Landlord, Forum Properties, Inc. and the other
Protected Parties shall be
4
<PAGE>
named as additional insured and the policy shall contain cross-liability
endorsements. On all its personal property, at its cost, Tenant shall maintain a
policy of standard fire and extended coverage insurance with vandalism and
malicious mischief endorsements and "all risk" coverage on all Tenant's
improvements and alterations in or about the Premises, to the extent of at least
90% of their full replacement value. The proceeds from any such policy shall be
used by Tenant for the replacement of personal property and the restoration of
Tenant's improvements or alterations. All insurance required to be provided by
Tenant under this Lease shall release Landlord and the other protected parties
from any claims for damage to any person or the Premises and the Project, and to
Tenant's fixtures, personal property, improvements and alterations in or on the
Premises or the Project, caused by or resulting from risks insured against under
any insurance policy carried by Tenant and in force at the time of such damage.
All insurance required to be provided by Tenant under this Lease: (a) shall be
issued by insurance companies authorized to do business in the state in which
the Premises are located with a financial rating of at least an A+XII status as
rated in the most recent edition of Best's Insurance Reports; (b) shall be
issued as a primary policy; and (c) shall contain an endorsement requiring at
least 30 days prior written notice of cancellation to Landlord and Landlord's
lender, before cancellation or change in coverage, scope or amount of any
policy. Tenant shall deliver a certificate or copy of such policy together with
evidence of payment of all current premiums to Landlord within 30 days of
execution of this Lease. Tenant's failure to provide evidence of such coverage
to Landlord may, in Landlord's sole discretion, constitute a default under this
Lease.
16. DESTRUCTION.
If during the term, the Premises or Project is more than 25% destroyed
(based upon replacement cost) from any cause, or rendered inaccessible or
unusable from any cause, Landlord may, in its sole discretion, terminate this
Lease by delivery of notice to Tenant within 30 days of such event without
compensation to Tenant. If Landlord does not elect to terminate this Lease,
and if, in Landlord's estimation, the Premises cannot be restored within 180
days following such destruction, the Landlord shall notify Tenant and Tenant
may terminate this Lease by delivery of notice to Landlord within 30 days of
receipt of Landlord's notice. If Landlord does not terminate this Lease and
if in Landlord's estimation the Premises can be restored within 180 days,
then Landlord shall commence to restore the Premises in compliance with then
existing laws and shall complete such restoration with due diligence. In such
event, this Lease shall remain in full force and effect, but there shall be
an abatement of Base Monthly Rent between the date of destruction and the
date of completion of restoration, based on the extent to which destruction
interferes with Tenant's use of the Premises; provided, there shall be no
abatement if such damage is the result of Tenant's negligence or wrongdoing.
Tenant shall not be entitled to any damages or compensation for loss of use
or any inconvenience occasioned by damage or any repair or restoration.
17. CONDEMNATION.
Definitions. The following definitions shall apply. (1) "Condemnation"
means (a) the exercise of any governmental power of eminent domain,
whether by legal proceedings or otherwise by condemnor and (b) the
voluntary sale or transfer by Landlord to any condemnor either under
threat of condemnation or while legal proceedings for condemnation are
proceding; (2) "Date of Taking" means the date the condemnor has the
right to possession of the property being condemned; (3) "Award" means
all compensation, sums or anything of value awarded, paid or received
on a total or partial condemnation; and (4) "Condemnor" means any
public or quasi-public authority, or private corporation or
individual, having a power of condemnation.
b. Obligations to Be Governed by Lease. If during the term of the Lease
there is any taking of all or any part of the Premises or the Project,
the rights and obligations of the parties shall be determined pursuant to
this Lease.
c. Total or Partial Taking. If the Premises are totally taken by
condemnation, this Lease shall terminate on the Date of Taking. If any
portion of the Premises is taken by Condemnation, this Lease shall
terminate as to the part so taken as of the Date of Taking, but shall in
all other respects remain in effect, except that Tenant can elect to
terminate this Lease if the remaining portion of the Premises is rendered
unsuitable for Tenant's continued use of the Premises. If Tenant elects
to terminate this Lease, Tenant must exercise its right to terminate by
giving notice to Landlord within 30 days after the nature and extent of
the Condemnation have been finally determined. If Tenant elects to
terminate this Lease, Tenant shall also notify Landlord of the date of
termination, which date shall not be earlier than 30 days nor later than
90 days after Tenant has notified Landlord of its election to terminate;
except that this Lease shall terminate on the Date of Taking if the Date
of Taking falls on a date before the date of termination as designated by
Tenant. If any portion of the Premises is taken by condemnation and this
Lease remains in full force and effect, on the Date of Taking the Base
Monthly Rent shall be reduced by an amount in the same ratio as the total
number of square feet in the Premises taken bears to the total number of
square feet in the Premises immediately before the Date of Taking.
d. Landlord's Election. Notwithstanding anything herein to the contrary, if
the Project or any portion thereof is taken by Condemnation and the
portion taken does not, in Landlord's sole judgment, feasibly permit the
continuation of the operation of the Project by Landlord, then Landlord
shall have the right to terminate this Lease by written notice given
within thirty (30) days following the Date of Taking.
e. Award. Tenant shall have no right or claim to all or any portion of the
Award; provided this shall not limit Tenant's right to seek and to
receive compensation for relocation expenses or the value of its personal
property taken, so long as receipt of such compensation does not decrease
the Award otherwise payable to Landlord.
18. ASSIGNMENT OR SUBLEASE.
Tenant shall not assign or encumber its interest in this Lease or the
Premises or sublease all or any part of the Premises or allow any other person
or entity (except Tenant's authorized representatives, employees, invitees, or
guests) to occupy or use all or any part of the Premises without first obtaining
Landlord's consent which Landlord may withhold in its sole discretion. Any
assignment, encumbrance or sublease without Landlord's written consent shall be
voidable and at Landlord's election, shall constitute a default. If Tenant is a
partnership, a withdrawal or change, voluntary, involuntary or by operation of
law of any partner, or the dissolution of the partnership, shall be deemed a
voluntary assignment. If Tenant consists of more than one person, a purported
assignment, voluntary or involuntary or by operation of law from one person to
the other or to a third party shall be deemed a voluntary assignment. If Tenant
is a corporation, any dissolution, merger, consolidation or other reorganization
of Tenant, or sale or other transfer of a controlling percentage of the capital
stock of Tenant, or the sale of at least 25% of the value of the assets of
Tenant shall be deemed a voluntary assignment. The phrase "controlling
percentage" means ownership of and right to vote stock possessing at least 25%
of the total combined voting power of all classes of Tenant's capital stock
issued, outstanding and entitled to vote for election of directors. The
preceding two sentences shall not apply to corporations the stock of which is
traded through an exchange or over the counter. All rent received by Tenant from
its subtenants in excess of the rent payable by Tenant to Landlord under this
Lease (allocated on a square footage basis in cases of partial subleasing) shall
be paid to Landlord, and any sums to be paid by an assignee to Tenant in
consideration of the assignment of this Lease shall be paid to Landlord. If
Tenant requests Landlord to consent to a proposed assignment or subletting,
Tenant shall pay to Landlord, whether or not consent is ultimately given, $100
or Landlord's reasonable attorneys' fees incurred in connection with such
request, whichever is greater. No interest of Tenant in this Lease shall be
assignable by involuntary assignment through operation of law (including without
limitation the transfer of this Lease by testacy or intestacy). Each of the
following acts shall be considered an involuntary assignment: (a) if Tenant is
or becomes bankrupt or insolvent, makes an assignment for the benefit of
creditors, or institutes proceedings under the Bankruptcy Act in which Tenant is
the bankrupt; or if Tenant is
5
<PAGE>
a partnership or consists of more than one person or entity, if any partner of
the partnership or other person or entity is or becomes bankrupt or insolvent,
or makes an assignment for the benefit of creditors; or (b) if a writ of
attachment or execution is levied on this Lease: or (c) if in any proceeding or
action to which Tenant is a party, a receiver is appointed with authority to
take possession of the Premises. An involuntary assignment shall constitute a
default by Tenant and Landlord shall have the right to elect to terminate this
Lease, in which case this Lease shall not be treated as an asset of Tenant.
19. DEFAULT.
The occurrence of any of the following shall constitute a default by
Tenant: (a) A failure to pay rent or other charge when due; (b) Abandonment
and vacation of the Premises (failure to occupy and operate the Premises for
ten consecutive days shall be deemed an abandonment and vacation); or (c)
Failure to perform any other provision of this Lease.
20. LANDLORD'S REMEDIES.
a. Landlord shall have the following remedies if Tenant is in default. These
remedies are not exclusive; they are cumulative and in addition to any
remedies now or later allowed by law. Landlord may terminate this Lease
and/or Tenant's right to possession of the Premises at any time. No act
by Landlord other than giving notice to Tenant shall terminate this
Lease. Acts of maintenance, efforts to relet the Premises, or the
appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this Lease shall not constitute a termination of this
Lease. Upon termination of this Lease or of Tenant's right to possession,
Landlord has the right to recover from Tenant: (1) The worth of the unpaid
rent that had been earned at the time of such termination; (2) The worth
of the amount of the unpaid rent that would have been earned after the
date of such termination; and (3) Any other amount, including court,
attorney and collection costs, necessary to compensate Landlord for all
detriment proximately caused by Tenant's default. "The Worth," as used for
Item 20(1) in this Paragraph 20 is to be computed by allowing interest at
the Default Rate. "The worth" as used for Item 20(2) in this Paragraph 20
is to be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of termination of
Tenant's right of possession.
b. All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any abatement of rent. If Tenant shall fail to
pay any sum of money owed to any party other than Landlord, for which it
is liable hereunder, or if Tenant shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for
ten (10) days after notice thereof by Landlord, Landlord may, without
waiving such default or any other right or remedy, but shall not be
obligated to, make any such payment or perform any such other act to be
made or performed by Tenant. All sums so paid by Landlord and all
necessary incidental costs, together with interest thereon at the Default
Rate from the date of expenditure by Landlord, shall be payable to
Landlord on demand.
21. ENTRY ON PREMISES.
Landlord and its authorized representatives shall have the right to
enter the Premises at all reasonable times for any of the following purposes:
(a) To determine whether the Premises are in good condition and whether
Tenant is complying with its obligations under this Lease; (b) To do any
necessary maintenance and to make any restoration to the Premises or the
Project that Landlord has the right or obligation to perform; (c) To post
"for sale" signs at any time during the term, to post "for rent" or "for
lease" signs during the last 90 days of the term, or during any period while
Tenant is in default; (d) To show the Premises to prospective brokers,
agents, buyers, tenants or persons interested in leasing or purchasing the
Premises, at any time during the term; or (e) To repair, maintain or improve
the Project and to erect scaffolding and protective barricades around and
about the Premises but not so as to prevent entry to the Premises and to do
any other act or thing necessary for the safety or preservation of the
Premises or the Project. Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance or other damage
arising out of Landlord's entry onto the Premises as provided in this Section
21. Tenant shall not be entitled to an abatement or reduction of rent if
Landlord exercises any rights reserved in this Section 21. Landlord shall
conduct its activities on the Premises as provided herein in a manner that
will cause the least inconvenience, annoyance or disturbance to Tenant. For
each of these purposes, Landlord shall at all times have and retain a key
with which to unlock all the doors in, upon and about the Premises, excluding
Tenant's vaults and safes. Tenant shall not alter any lock or install a new
or additional lock or bolt on any door of the Premises without prior written
consent of Landlord. If Landlord gives its consent, Tenant shall furnish
Landlord with a key for any such lock.
22. SUBORDINATION.
Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and at the election of
Landlord or any mortgagee or any beneficiary of a Deed of Trust with a lien
on the Project or any ground lessor with respect to the Project, this Lease
shall be subject and subordinate at all times to (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Project, and (b) the lien of any mortgage or deed of trust which may now
exist or hereafter be executed in any amount for which the Project, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or Deed of Trust
is foreclosed or a conveyance in lieu of foreclosure is made for any reason,
Tenant shall, notwithstanding any subordination, attorn to and become the
Tenant of the successor in interest to Landlord, at the option of such
successor in interest. Tenant covenants and agrees to execute and deliver,
upon demand by landlord and in the form requested by Landlord any additional
documents evidencing the priority or subordination of this Lease with respect
to any such ground lease or underlying leases or the lien of any such
mortgage or Deed of Trust. Tenant hereby irrevocably appoints Landlord as
attorney-in-fact of Tenant to execute, deliver and record any such document
in the name and on behalf of Tenant.
Tenant, within ten days from notice from Landlord, shall execute and
deliver to Landlord, in recordable form, certificates stating that this Lease
is not in default, is unmodified and in full force and effect, or in full
force and effect as modified, and stating the modifications. This certificate
should also state the amount of current monthly rent, the dates to which rent
has been paid in advance, the amount of any security deposit and prepaid
rent, and such other matters as Landlord may request. Failure to deliver this
certificate to Landlord within ten days shall be conclusive upon Tenant that
this Lease is in full force and effect and has not been modified except as
may be represented by Landlord. In addition, in connection with any sale or
financing involving the Premises, Tenant shall deliver to Landlord, within
twenty (20) days of request by Landlord, a current audited financial
statement of Tenant and of each guarantor.
23. NOTICE.
Any notice, demand, request, consent, approval or communication desired by
either party or required to be given, shall be in writing and either served
personally or sent by prepaid certified first class mail, addressed as set forth
in Section 1. Either party may change its address by notification to the other
party. Notice shall be deemed to be communicated 48 hours from the time of such
mailing, or upon the time of service as provided in this Section 23.
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24. WAIVER.
No delay or omission in the exercise of any right or remedy by Landlord
shall impair such right or remedy or be construed as a waiver. No act or
conduct of Landlord, including without limitation, acceptance of the keys to
the Premises, shall constitute an acceptance of the surrender of the Premises
by Tenant before the expiration of the term. Only written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the
Premises and accomplish termination of the Lease. Landlord's consent to or
approval of any act by Tenant requiring Landlord's consent or approval shall
not be deemed to waive or render unnecessary Landlord's consent to or
approval of any subsequent act by Tenant. Any waiver by Landlord of any
default must be in writing and shall not be a waiver of any other default
concerning the same or any other provision of the Lease.
25. SURRENDER OF PREMISES; HOLDING OVER.
Upon expiration of the term or the termination of this Lease or of
Tenant's right of possession, Tenant shall surrender to Landlord the Premises
and all tenant improvements and alterations (except alterations which Tenant
has the right or obligation to remove) in good condition, except for ordinary
wear and tear. Tenant shall remove all personal property including, without
limitation, all wallpaper, paneling and other decorative improvements or
fixtures and shall perform all restoration made necessary by the removal of
any alterations or Tenant's personal property before the expiration of the
term, including for example, restoring all wall surfaces to their condition
prior to the commencement of this Lease. Landlord can elect to retain or
dispose of in any manner Tenant's personal property not removed from the
Premises by Tenant prior to the expiration of the term. Tenant waives all
claims against Landlord for any damages to Tenant resulting from Landlord's
retention or disposition of Tenant's personal property. Tenant shall be
liable to Landlord for Landlord's costs for storage, removal or disposal of
Tenant's personal property. If Tenant fails to surrender the Premises upon
the expiration of the term, or upon the termination of this Lease or of
Tenant's right of possession, Tenant shall defend, indemnify and hold
Landlord harmless from all resulting loss or liability, including without
limitation, any claim made by any succeeding tenant founded on or resulting
from such failure.
If Tenant, with landlord's consent, remains in possession of the Premises
after expiration of this Lease, such possession by Tenant shall be deemed to be
a month-to-month tenancy terminable on written 30-day notice at any time, by
either party. All provisions of this Lease, except those pertaining to term and
rent, shall apply to the month-to-month tenancy. Tenant shall pay Base Monthly
Rent in an amount equal to 125% of the Base Monthly Rent for the last full
calendar month during the regular term plus 100% of said last month's estimate
of Tenant's share of Expenses pursuant to Section 4.c(3).
26. LIMITATION OF LIABILITY.
In consideration of the benefits accruing hereunder, Tenant agrees that,
regarding any claim against Landlord and/or any other Protected Party, including
in the event of any actual or alleged failure, breach or default by Landlord:
a. The sole and exclusive remedy of Tenant shall be against the interest of
Landlord in the Project, and neither Landlord nor any other Protected
Party shall have any other liability whatsoever.
b. If Landlord is a partnership, the following provisions of this item b.
shall also apply: (i) No partner of Landlord shall be sued or named as a
party in any suit or action; (ii) No service of process shall be made
against any partner of Landlord (except as may be necessary to secure
jurisdiction of the partnership); (iii) No partner of Landlord shall be
required to answer or otherwise plead to any service or process; (iv) No
judgment may be taken against any partner of Landlord; (v) Any judgment
taken against any partner of Landlord may be vacated and set aside at any
time without hearing; and (vi) No writ of execution will ever be levied
against the assets of any partner of Landlord.
c. These covenants and agreements contained in this Section 26 are
enforceable both by Landlord and also by any other Protected Party.
d. Tenant agrees that each of the foregoing provisions shall be applicable
to any and all liabilities, claims and causes of action whatsoever,
including those based on any provision of this Lease, any implied
covenant, and/or any statute or common law principle.
27. MISCELLANEOUS PROVISIONS.
a. Time of Essence. Time is of the essence of each provision of this Lease.
b. Successor. This Lease shall be binding on and inure to the benefit of
the parties and their successors, except as provided in Section 18
herein.
c. Landlord's Consent. Any consent required by Landlord under this Lease
must be granted in writing. No such consent shall be unreasonably
withheld, but any consent may be issued subject to reasonable conditions.
As a condition to any consent, Landlord may require that any other party
or parties with a right of consent issue such consent on terms acceptable
to Landlord.
d. Commissions. Each party represents that it has not had dealings with any
real estate broker, finder or other person with respect to this Lease in
any manner, except for the broker identified in Section 1, who shall be
compensated by Landlord.
e. Other Charges. If Landlord becomes a party to any litigation concerning
this Lease, the Premises or the Project, by reason of any act or omission
of Tenant or any agent, guest or invitee Tenant, Tenant shall be
liable to Landlord for all attorneys fees and costs incurred by Landlord
in connection with such litigation, including any appeal or review.
In the event of litigation between Tenant and Landlord and/or any
other Protected Party, the prevailing party shall be entitled to
recover from the losing party all costs and attorneys fees incurred
both at and in preparation for trial and any appeal or review. If
Landlord employs a collection agency to recover delinquent charges,
Tenant agrees to pay all collection agency and attorneys' fees charged
to Landlord in addition to rent, late charges, interest and other sums
payable under this Lease. Tenant shall pay a charge of $75 to Landlord
for preparation of a demand for delinquent rent.
f. Landlord's Successors. In the event of a sale or conveyance by Landlord
of the Project or a portion thereof including the Premises, or of
Landlord's interest in the foregoing, the same shall operate to release
Landlord from any liability under this Lease, and in such event
Landlord's successor in interest shall be solely responsible for all
obligations of Landlord under this Lease.
g. Interpretation. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the Premises are located.
This Lease constitutes the entire agreement between the parties with
respect to the Premises and the Project, except for such guarantees or
modifications as may be executed in writing by the parties from time to
time. When required by the context of this Lease, the singular shall
include the plural, and the masculine shall include the feminine and/or
neuter. "Party" shall mean Landlord or Tenant. If more than one person or
entity constitutes Tenant, the obligations imposed upon Tenant shall be
joint and several. The enforceability, invalidity or illegality of any
provision shall not render the other provisions unenforceable, invalid or
illegal.
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h. THIRD PARTIES. The Protected Parties shall have the right to enforce the
provisions of this Lease which reference them. Except for the foregoing,
there are no third parties benefitted hereby, this Lease being intended
solely for the benefit of Landlord and Tenant. Notwithstanding the
foregoing, the beneficiary under a trust deed, or mortgagee, holding a
security interest in the Project shall be a third party beneficiary of
the Tenant's obligations set forth in Sections 28e. and 28f. hereof and
shall have the right to enforce such provisions.
i. SURVIVAL. The release and indemnity covenants of Tenant, the right of
Landlord to enforce its remedies hereunder, the attorneys fees provisions
hereof, the provisions of Section 26 hereof, as well as all provisions of
this Lease which contemplate performance after the expiration or
termination hereof or the termination of Tenant's right to possession
hereunder, shall survive any such expiration or termination.
28. EMISSIONS: STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. TENANT SHALL NOT:
(1) discharge, emit or permit to be discharged or emitted, any liquid,
solid or gaseous matter, or any combination thereof, into the
atmosphere, the ground or any body of water, which matter, as
reasonably determined by Lessor or any governmental entity, does, or
may, pollute or contaminate the same, or is, or may become,
radioactive or does, or may, adversely affect the (1) health or safety
of persons, wherever located, whether on the Premises or anywhere
else, (2) condition, use or enjoyment of the Premises or any other
real or personal property, whether on the Premises or anywhere else,
or (3) Premises or any of the improvements thereto or thereon
including buildings, foundations, pipes, utility lines, landscaping or
parking areas;
(2) Produce, or permit to be produced, any intense glare, light or heat
except within an enclosed or screened area and then only in such
manner that the glare, light or heat shall not be discernible from
outside the Premises;
(3) Create, or permit to be created, any sound pressure level which will
interfere with the quiet enjoyment of any real property outside the
Premises; or which will create a nuisance or violate any Law, rule,
regulation or requirement;
(4) Create, or permit to be created, any ground vibration that is
discernible outside the Premises;
(5) Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is harmful or
hazardous to any person or property in, on or about the Premises, or
anywhere else.
b. STORAGE AND USE.
(1) Storage. Subject to the uses permitted and prohibited to Tenant under
this lease, Tenant shall store in appropriate leak proof containers
all solid, liquid, or gaseous matter, or any combination thereof,
which matter, if discharged or emitted into the atmosphere, the ground
or any body of water, does or may (1) pollute or contaminate the same,
or (2) adversely affect the (i) health or safety of persons, whether
on the Premises or anywhere else, (ii) condition, use or enjoyment of
the Premises or any real or personal property, whether on the Premises
or anywhere else, or (iii) Premises or any of the improvements thereto
or thereon.
(2) Use. In addition, without Landlord's prior written consent, Tenant
shall not use, store or permit to remain on the Premises any solid,
liquid or gaseous matter which is, or may become, radioactive. If
Landlord does give its consent, Tenant shall store the materials in
such a manner that no radioactivity will be detectable outside a
designated storage area and Tenant shall use the materials in such a
manner that (1) no real or personal property outside the designated
storage area shall become contaminated thereby or (2) there are and
shall be no adverse affects on the (i) health or safety of persons,
whether on the Premises or anywhere else, (ii) condition, use or
enjoyment of the Premises or any real or personal property thereon or
therein, or (iii) Premises or any of the improvements thereto or
thereon.
c. DISPOSAL OF WASTE.
(1) Refuse Disposal. Tenant shall not keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and shall
regularly and frequently remove same from the Premises. Tenant shall
keep all incinerators, containers or other equipment used for the
storage or disposal of such materials in a clean and sanitary
condition.
(2) Sewage Disposal. Tenant shall properly dispose of all sanitary sewage
and shall not use the sewage system (1) for the disposal of anything
except sanitary sewage or (2) in excess of the lesser of the amount
(a) reasonably contemplated by the uses permitted under this Lease or
(b) permitted by any governmental entity. Tenant shall keep the sewage
disposal system free of all obstructions and in good operating
condition.
(3) Disposal of Other Waste. Tenant shall properly dispose of all other
waste or other matter delivered to, stored upon, located upon or
within, used on, or removed from, the premises in such a manner that
it does not, and will not, adversely affect the (1) health or safety
of persons, wherever located, whether on the Premises or elsewhere,
(2) condition, use or enjoyment of the Premises or any other real or
personal property, wherever located, whether on the Premises or
anywhere else, or (3) Premises or any of the improvements thereto or
thereon including buildings, foundations, pipes, utility lines,
landscaping or parking areas.
d. COMPLIANCE WITH LAW. Notwithstanding any other provision in the Lease to
the contrary, Tenant shall comply with all Laws in complying with its
obligations under this Lease, and in particular, Laws relating to the
storage, use and disposal of hazardous or toxic matter.
e. INDEMNIFICATION. Tenant shall defend, indemnify and hold Landlord, the
other Protected Parties, the Project and the beneficiary under a trust
deed, or mortgagee, holding a security interest in the Project harmless
from any loss, claim, liability or expense, including, without
limitation, attorneys fees and costs, at trial and/or on appeal and
review, arising out of or in connection with its failure to observe or
comply with the provisions of this Section 28. This indemnity shall
survive the expiration or earlier termination of the term of the Lease or
the termination of Tenant's right of possession and be fully enforceable
thereafter.
f. ADDITIONAL PROVISIONS. The following covenants and agreements shall in no
way diminish or limit the foregoing provisions of this Section 28. No use
may be made of, on or from the Premises relating to the handling,
storage, disposal, transportation, or discharge of Hazardous Substances
(as defined below). All of such use which does occur shall be in strict
conformance with all Laws. Tenant shall give prior written notice to
Landlord of any use, whether incidental or otherwise, of Hazardous
Substances on the Premises, or of any notice of any violation of any Law
with respect to such use. Landlord and any ground lessor or master lessor
of the Premises and/or the Project shall have the right to request and to
receive information with respect to use of Hazardous Substances on the
Premises in writing.
In addition to the indemnity obligations contained elsewhere herein,
Tenant shall indemnify, defend and hold harmless Landlord, the other
Protected Parties, the Premises, the Project, and the beneficiary under
a trust deed, or a mortgagee, holding a security interest in the
Project, from and against all claims, losses, damages, costs, response
costs and expenses, liabilities, and other expenses caused by, arising
out of, or in connection with, the generation, release, handling,
storage, discharge, transportation, deposit or disposal in, on, under or
about the Premises by Tenant or any of Tenant's Agents of the following
(collectively referred to as "Hazardous Substances"): hazardous
materials, hazardous substances, toxic wastes, toxic substances,
pollutants, petroleum products, underground tanks, oils, pollution,
asbestos, PCB's, materials, or contaminants, as those terms are commonly
used or as defined by federal, state, and/or local law or regulation
related to protection of health or the environment, including but not
limited to, the Resource Conservation and Recovery
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Act (RCRA) (42 U.S.C. (6901 at seq.); the comprehensive Environmental
Response, Compensation and Liability Act (CERCLA) (42 U.S.C. (9601. et.
seq.); the Toxic Substances Control Act (15 U.S.C. (2601, et. seq.); the
Clean Water Act (33 U.S.C. (1251, et. seq.); the Clean Air Act (42
U.S.C. (7401 et. seq.); and ORS Chapters 453, 465 and 466 as any of same
may be amended from time to time, and/or by any rules and regulations
promulgated thereunder. Such damages, costs, liabilities, and expenses
shall include such as are claimed by any regulating and/or administering
agency, any ground lessor or master lessor of the Project, the holder of
any Mortgage or Deed of Trust on the Project, and/or any successor of
the Landlord named herein. This indemnity shall include (a) claims of
third parties, including governmental agencies, for damages, fines,
penalties, response costs, monitoring costs, injunctive or other relief;
(b) the costs, expenses or losses resulting from any injunctive relief,
including preliminary or temporary injunctive relief; (c) the expenses,
including fees of attorneys and experts, of reporting the existence of
Hazardous Substances to an agency of the State of Oregon or of the
United States as required by applicable laws and regulations; (d) any
and all expenses or obligations, including attorney's and paralegal
fees, incurred at, before and after any trial or appeal therefrom or
review thereof, or an administrative proceeding or appeal therefrom or
review thereof, whether or not taxable as costs, including, without
limitation, attorney's fees, paralegal fees, witness fees (expert and
otherwise), deposition costs, photocopying and telephone charges and
other expenses related to the foregoing, all of which shall be paid by
Tenant to Landlord when such expenses are accrued. This indemnity shall
survive the expiration or earlier termination of the term of the Lease
or the termination of Tenant's right of possession and be fully
enforceable thereafter.
g. Information. Tenant shall provide Landlord with any and all information
regarding Hazardous Substances in the Premises, including contemporaneous
copies of all filings and reports to governmental entities, and any other
information requested by Landlord. In the event of any accident, spill or
other incident involving Hazardous Substances, Tenant shall immediately
report the same to Landlord and supply landlord with all information and
reports with respect to the same. All information described herein shall
be provided to Landlord regardless of any claim by Tenant that it is
confidential or privileged.
29. SPACE PLAN.
OWNER: PETULA ASSOCIATES, LTD., an Iowa
Corporation, and KOLL PORTLAND ASSOCIATES,
a California general partnership, operating
pursuant to a Joint Development Agreement,
doing business as KBC-Tigard I
PETULA ASSOCIATES, LTD., an Iowa
Corporation
By:
--------------------------------------
Its:
--------------------------------------
By:
---------------------------------------
Its:
--------------------------------------
TENANT: Athena Medical Corporation
By: /s/ William H. Fleming
---------------------------------------
Its: President
--------------------------------------
EXHIBITS
A - Premises
B - Project
E - Building Standard Improvements
F - Environmental Disclosure
9
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30. FINANCIAL STATEMENT
On or before February 1, 1997, Tenant will submit to Landlord a current
financial statement.
-10-
<PAGE>
[GRAPHIC]
<PAGE>
[GRAPHIC]
<PAGE>
EXHIBIT F
ENVIRONMENTAL DISCLOSURE AND CERTIFICATION STATEMENT
Scholls Business Center
------------------------------------
(Project Name)
DATE: January 18, 1996
---------------------------------------------------
Petula Associates Ltd., and
TO: N/A Koll Portland Associates and Forum Properties, Inc.
------------ and ----------------------------- -----------------------
(Lender) (Owner) (Manager, if applicable)
FROM: Name Bill Fleming
------------------------------------------------------------
Position President
------------------------------------------------------------
Company Athena Medical Corporation
------------------------------------------------------------
Address 10180 SW Nimbus Ave., Ste. J/5 & 6 Portland, OR 97223
------------------------------------------------------------
Phone
------------------------------------------------------------
RE: LEASE AGREEMENT BY AND BETWEEN
Petula Associates Ltd., and,
Koll Portland Associates, AS LANDLORD (THE "LANDLORD"), AND
-------------------------
Athena Medical Corporation, AS TENANT,
---------------------------
FOR THE LEASING OF THESE CERTAIN PREMISES DESCRIBED IN THE ATTACHMENT EXHIBIT
A (THE "LEASED PREMISES").
- --------------------------------------------------------------------------------
Notwithstanding anything to the contrary contained in the Lease Agreement, I,
Bill Fleming, acting with full authority, knowledge and on behalf of
- ------------
Athena Medical Corporation hereinafter called ("Company"), represent and
- --------------------------
warrant that the following disclosure accurately reflects Company's
operations as they pertain to the use or proposed use of hazardous materials,
petroleum, chemical and waste products in, on or about the Leased Premises. I
further certify that after careful review of all anticipated Company
operations and activities in Leased Premises and thorough inquiry into any
and all potentially applicable governmental rules and regulations pertaining
to health, safety and environmental control, Company will operate in the
Leased Premises in complete and full compliance with all required standards.
Furthermore, the company will obtain and renew, as required by Landlord, all
applicable environmental, health and safety permits, registrations and
applications needed for Company operations on or about the Leased Premises.
Company will continue to review and inspect operations, chemical use and waste
streams activities for the purpose of identifying and eliminating any potential
environmental, health and safety concerns that could contaminate the property
and environment or represent safety and health concerns or increase
environmental risk and liability.
Company assures Landlord and its Lender, representatives, affiliated entities,
successors and assignees that any and all potential problems will be
communicated to Landlord promptly, fixed and the risk eliminated. All potential
problems will be communicated to Landlord by Company and remedied within forty-
eight (48) hours of identification or at another time acceptable to Landlord;
such remediation to be approved in writing by Landlord first and to be in
conformance with paragraph 28 of the Lease Agreement.
--
Company understands that it will be fully accountable to Landlord and any and
all applicable governmental agencies for any non-compliance items and
environmental contamination to the Leased Premises or adjacent property.
Company also understands that this Environmental Disclosure and Certification
Statement is incorporated by reference into the Lease Agreement. Company agrees
to abide by the terms and conditions contained herein and in the Lease Agreement
at all times or at the sole discretion of Landlord, any such noncompliance will
be considered a default under the Lease Agreement. Landlord can then exercise to
the fullest extent any and all of its remedies in accordance with the Lease
Agreement and any other legal remedies available.
<PAGE>
Company also understands that this Environmental Disclosure and Certification
Statement be reissued by Company to Landlord annually within thirty (30) days of
the anniversary of the original lease date or at any other time during the term
of the Lease Agreement.
"Company will not use, generate, store, treat or dispose of any hazardous
materials or waste as defined by any and all federal, state or local
environmental, health and safety rules, regulation decrees and laws
(collectively the "Environmental Laws"), that may apply to Company's operations
or the Leased Premises unless otherwise described below.
Company also assures Landlord that all Company's operations in or about the
leased premises will be conducted in full compliance with all the Environmental
Laws as required by any and all agencies with jurisdiction over the company's
operation or the Leased Premises."
DESCRIPTION OF COMPANY'S OPERATIONS.
LIST ALL PETROLEUM PRODUCTS, CHEMICALS, AND WASTE TO BE USED OR GENERATED BY
COMPANY.
LIST CONTAINER SIZES, MAXIMUM AMOUNTS AT ANY GIVEN TIME AND ESTIMATED ANNUAL
THROUGHPUT DURING TERM OF LEASE AGREEMENT.
DESCRIBE STORAGE LOCATION AND METHOD FOR PETROLEUM, CHEMICAL, AND WASTES USED
AND GENERATED AT THE FACILITY.
LIST ALL POTENTIAL OPERATION DISCHARGES FROM PIPES, VENTS, FLUES AND TO BUILDING
DRAIN.
LIST ALL REQUIRED ENVIRONMENTAL PERMITS AND REGISTRATIONS, THEIR ASSIGNED NUMBER
AND EXPIRATION DATES.
COMPANY:
Athena Medical Corporation
-------------------------------------------------------------------
By: /s/ William H. Fleming
-------------------------------------------------------------------
Its: President
--------------------------------------------------------------------
<PAGE>
___________________ Standard improvements plus *nonstandard improvements
PARTITIONS:
CEILINGS: Replace damaged ceiling tiles
DOORS:
FLOOR COVERING: Replace carpet including cove base in office area. Remove
existing carpet and replace with VCT and cove base. see
Exhibit A for area.
PLUMBING:
LIGHTS: Replace damaged lens covers
SWITCHES:
WALL ELEC.
OUTLETS:
PHONE OUTLETS:
A/C OR VENT FAN:
PAINTING: Repaint walls
OTHER: Remove signage from H/ 1 & 2 and relocate to J/5 & 6.
Also rekey the space. The tenant improvement allowance
is $1.35 psf. If the improvements exceed the allowance
the overage will be paid for by the Tenant.
UNLESS OTHERWISE STATED, THE IMPROVEMENTS LISTED ABOVE WILL BE FINAL. ANY
ADDITIONS WILL BE PAID BY TENANT.
<PAGE>
REGISTRATION RIGHTS AGREEMENT
BETWEEN: ATHENA MEDICAL CORPORATION, a Nevada corporation ("Athena");
AND: __________________________________, a ____________________________
("Holder").
DATED: ____________________, 1996
R E C I T A L:
Athena has issued to Holder a Purchase Warrant Certificate exercisable to
purchase _________ shares of the common stock of Athena (the "Warrant"). The
Warrant provides that the parties will enter into a registration rights
agreement.
A G R E E M E N T:
1. DEFINITIONS.
1.1 The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended ("the
1933 Act"), and the declaration or ordering of effectiveness of such
registration statement or document by the Securities and Exchange Commission
(the "SEC").
1.2 The term "Registrable Securities" means the shares of the common stock
of Athena (the "Common Stock") issued pursuant to the Warrant, and any Common
Stock issued as a dividend or other distribution with respect to, or in exchange
for, or in replacement of, such shares of Common Stock. As to any particular
Registrable Securities, such securities will cease to be Registrable Securities
when: (a) they have been effectively registered under the 1933 Act and disposed
of in accordance with the registration statement covering them; or (b) they are
transferred pursuant to Rule 144 (or any successor provision then in force)
under the 1933 Act.
1.3 The term "Prospectus" means the prospectus included in a registration
statement, and any such prospectus as amended or supplemented by any prospectus
supplement, including post-effective amendments, and in each case including all
material incorporated by reference therein.
Page - REGISTRATION RIGHTS AGREEMENT (______________)
<PAGE>
2. REGISTRATION RIGHTS.
2.1 REGISTRATION ON FORM S-2. Athena shall prepare and file a
registration statement on Form S-2 to include all Registrable Securities not
later than March 29, 1996, and shall exert all appropriate and reasonable
efforts to cause the registration statement to be declared effective by the SEC
at the earliest practicable date thereafter. It is understood that the Form S-2
registration statement will also include shares of Common Stock held by other
Athena shareholders, option holders and/or warrant holders, and that the shares
registered thereby will not be underwritten. Athena agrees to keep the
registration statement effective for at least an ___-month period following its
effective date, or until all Registrable Securities are sold by Holder,
whichever is earlier.
2.2 LIMITATION ON SALES. Holder agrees that, during the period that the
registration statement is effective, Holder shall not sell in any single trading
day more than _______ Registrable Securities. If Athena's Prospectus is not in
compliance with the 1933 Act at any time while the registration statement is
effective, Athena shall take reasonably prompt action to update the Prospectus
to comply with the 1933 Act, and Holder shall not conduct any trading until the
Prospectus is updated.
3. OTHER OBLIGATIONS OF ATHENA.
3.1 Athena shall furnish to Holder such reasonable number of copies of the
Prospectus, in conformity with the requirements of the 1933 Act, and any
amendments or supplements thereto, as Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Holder.
3.2 Athena shall notify Holder, at any time when the Prospectus covered by
the registration statement is required to be delivered under the 1933 Act, of
the happening of any event as a result of which the Prospectus, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and promptly
file such amendments and supplements which may be required on account of such
event and use all appropriate and reasonable efforts to cause each such
amendment and supplement to become effective.
4. INFORMATION. It shall be a condition precedent to the obligations of
Athena to take any action pursuant to this Agreement that Holder shall furnish
to Athena such information regarding Holder, the Registrable Securities held by
Holder, and the intended method of disposition of such securities as shall be
required to effect the registration of Holder's Registrable Securities.
5. EXPENSES OF REGISTRATION. All expenses (other than commissions, transfer
taxes, if any, and fees and disbursements of counsel to Holder, if any) relating
to Registrable
Page 2 - REGISTRATION RIGHTS AGREEMENT (______________)
<PAGE>
Securities incurred in connection with their registration pursuant to this
Agreement, including without limitation all registration, filing and
qualification fees, printing and accounting fees, and fees and disbursements of
counsel for Athena, shall be borne by Athena.
6. INDEMNIFICATION. With respect to Registrable Securities included in a
registration statement under this Agreement:
6.1 ATHENA INDEMNIFICATION. To the extent permitted by law, Athena shall
indemnify and hold harmless Holder against any losses, claims, damages or
liabilities (joint or several) to which Holder may become subject under the 1933
Act, the Securities Exchange Act of 1934 (the "1934 Act"), or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (a "Violation") by Athena:
(a) any untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final Prospectus
contained therein or any amendments or supplements thereto;
(b) the omission therein of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or
(c) any violation of the 1933 Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the 1933 Act, the 1934 Act or
any applicable state securities law in connection therewith.
The indemnity agreement contained in this Section 6.1 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the prior consent of Athena (which consent
shall not be unreasonably withheld), nor shall Athena be liable to Holder in any
such case for any such loss, claim, damage, liability or action: (i) to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with information furnished expressly for use in
connection with such registration by or on behalf of Holder; or (ii) in the case
of a sale directly by Holder of Registrable Securities (including a sale of such
Registrable Securities through any underwriter retained by Holder to engage in a
distribution solely on behalf of Holder), if such untrue statement or omission
was corrected in a final or amended Prospectus, and Holder failed to deliver a
copy of the final or amended Prospectus at or prior to the confirmation of the
sale of the Registrable Securities to the person (or their successor) asserting
any such loss, claim, damage or liability in any case where such delivery is
required by the 1933 Act; and provided, further, that the indemnification
obligation of Athena shall, to the extent permitted by law, be limited to the
aggregate offering price of the Registrable Shares sold by Holder pursuant to
such registration.
6.2 HOLDER INDEMNIFICATION. To the extent permitted by law, Holder shall
indemnify and hold harmless Athena, each of its directors, each of its officers
who have signed the
Page 3 - REGISTRATION RIGHTS AGREEMENT (______________)
<PAGE>
registration statement, each person, if any, who controls Athena within the
meaning of the 1933 Act, each agent and any underwriter for Athena, and each
holder selling securities in such registration statement or any of its
directors, officers, partners, agents or employees or any person who controls
such holder or underwriter, against any losses, claims, damages or liabilities
(joint or several) to which Athena or any such director, officer, controlling
person, agent, underwriter, holder, or holder's director, officer, partner,
agent, employee or controlling person may become subject under the 1933 Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any Violation by Holder, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with information
furnished by or on behalf of Holder expressly for use in connection with such
registration.
The indemnity agreement contained in this Section 6.2 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the prior consent of Holder (which consent
shall not be unreasonably withheld); and provided, further, that the
indemnification obligation of Holder shall be limited to the aggregate public
offering price of the Registrable Securities sold by Holder pursuant to such
registration.
6.3 NOTICE, DEFENSE AND COUNSEL. Promptly after receipt by an indemnified
party under this Section 6 of notice of the commencement of any action
(including any governmental action), such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume and control the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 6 to the extent of
such prejudice, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 6.
6.4 SURVIVAL OF RIGHTS AND OBLIGATIONS. The obligations of Athena and
Holder under this Section 6 shall survive the completion of any offering of
Registrable Securities in any registration statement.
6.5 EFFECT ON OTHER DEALINGS. The indemnity provisions of this Section 6
apply only to the parties' relationship as issuer and warrant holder/shareholder
respectively, and are not intended to waive, amend or extend any other rights,
duties or dealings between them.
Page 4 - REGISTRATION RIGHTS AGREEMENT (______________)
<PAGE>
7. ASSIGNMENT OF REGISTRATION RIGHTS. The right to cause Athena to register
Common Stock pursuant to this Agreement may not be assigned or transferred
without the prior written consent of Athena.
8. AMENDMENT. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively) only with the written consent of
Athena and of Holder.
9. TERMINATION OF REGISTRATION RIGHTS. Holder shall not be entitled to
exercise any right provided for in this Agreement after three years following
the date hereof.
10. ATTORNEYS' FEES. In the event any legal action is brought by any party to
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and expenses in addition to any other relief
deemed appropriate by the trial court or any appellate court.
11. SUCCESSORS. Subject to Section 7 above, this Agreement shall be binding on
and operate to the benefit of the successors and permitted assigns of Athena and
Holder.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties with respect to its subject matter, and supersedes all prior
arrangements or understandings other than the Warrant.
13. NOTICES. Any notice or consent required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been given when
personally delivered to a party or 24 hours after deposit in the United States
Mail, first class postage prepaid by both first class and certified mail, return
receipt requested, or 24 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party as
follows:
If to Athena: Athena Medical Corporation
10180 SW Nimbus Avenue, Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
with a copy to: Kenneth A. Williams
Hagen, Dye, Hirschy & DiLorenzo, P.C.
One SW Columbia, Suite 1900
Portland, OR 97258
Page 5 - REGISTRATION RIGHTS AGREEMENT (______________)
<PAGE>
If to Holder: ________________________________
________________________________
________________________________
Attn: _____________________
or such other address as a party may specify by a notice in writing, given in
the same manner.
14. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
15. CAPTIONS. The captions heading the sections and subsections of this
Agreement are inserted for convenience of reference only, and are not to be used
to define, limit, construe or describe the scope or intent of any term,
provision, section or subsection of this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Oregon, without reference to conflict
of laws principles thereunder. All disputes relating to this Agreement shall be
tried before federal or state courts located in Multnomah County, Oregon, to the
exclusion of all other courts that might have jurisdiction.
EXECUTED by the parties as of the date first written above.
____________________________________ ATHENA MEDICAL CORPORATION
By: ________________________________ By: _________________________________
______________________, _________ William H. Fleming, President
HOLDER ATHENA
Page 6 - REGISTRATION RIGHTS AGREEMENT (______________)
<PAGE>
Exhibit 10.19
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
CORT MACKENZIE SECURITIES, INC.
Exercisable to Purchase
346,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 31, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before December 31, 1999, up to 346,000 Shares at the Exercise Price.
This Warrant supersedes in its entirety the warrant issued by the Company to the
Warrantholder dated October 12, 1994 for 417,000 Shares, following transfer of a
portion of such warrant (for 35,000 Shares) by the Warrantholder on October 3,
1995, and transfer of a further portion of such warrant (for 36,000 Shares) by
the Warrantholder on the date hereof.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.50 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is CORT MACKENZIE SECURITIES, INC.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows: none. The
Required Condition has been satisfied.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on December 31, 1999, by surrendering this Warrant Certificate, together
with appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10180 SW Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased. A registration statement
listing the Securities shall be filed as a "shelf registration" with the
Securities and Exchange Commission (the "SEC") not later than March 29,
1996. Thereafter, the Company shall promptly and diligently take all
appropriate and reasonable action to cause such registration statement to
become effective. The registration statement will include Common Stock and
other warrants or options therefor held by other persons. If the
Page 2 - Warrant Certificate
<PAGE>
Company's prospectus (including any amendments) included in the registration
statement is not in compliance with the Securities Act of 1933 (the "1933
Act") at any time while the registration statement is effective, the Company
will take reasonably prompt action to update the prospectus to comply with
the 1933 Act and the Warrantholder may not conduct any trading until the
prospectus is updated.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares or a dividend in stock is paid on the
Common Stock, the number of shares of Common Stock for which this
Warrant is then exercisable will be proportionately increased and the
Exercise Price will be proportionately reduced. Conversely, if the
outstanding shares of the Company's Common Stock are combined into a
smaller number of shares, the number of shares of Common Stock for
which this Warrant is then exercisable will be proportionately reduced
and the Exercise Price will be proportionately increased. The
increases and reductions provided for in this Subsection 3(a) will be
made with the intent and, as nearly as practicable, the effect that
neither the percentage of the total equity of the Company obtainable
on exercise of the Warrant nor the price payable for such percentage
upon such exercise will be affected by any event described in this
Subsection 3(a).
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company,
or other change in the capital structure of the Company, then, as a
condition of such change, lawful and adequate provision will be made
so that the Warrantholder will have the right thereafter to receive
upon the exercise of this Warrant the kind and amount of shares of
stock or other securities or property to which the Warrantholder would
have been entitled if, immediately prior to such event, the
Warrantholder had held the number of shares of Common Stock obtainable
upon the exercise of the Warrant. In any such case, appropriate
adjustment will be made in the application of the provisions set forth
herein with respect to the rights and interest thereafter of the
Warrantholder, to the end that the provisions set forth herein will
thereafter be applicable, as nearly as reasonably may be, in relation
to any shares of stock or other property thereafter deliverable upon
the exercise of this Warrant. The Company will not permit any change
in its capital structure to occur unless the issuer of the shares of
stock or other securities to be received by the holder of this
Warrant, if not
Page 3 - Warrant Certificate
<PAGE>
the Company, agrees to be bound by and comply with the provisions of
this Warrant Certificate.
(c) When any adjustment is required to be made in the number of shares of
Common Stock, other securities or other property purchasable upon
exercise of this Warrant, the Company will promptly determine the new
number of such shares purchasable upon exercise of this Warrant, and
(i) prepare and retain on file a statement describing in reasonable
detail the method used in arriving at the new number of such shares or
other securities or property purchasable upon exercise of this
Warrant, and (ii) cause a copy of such statement to be mailed to the
Warrantholder within 30 days after the date of the event giving rise
to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 3. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
4. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of this
Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of this Warrant.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant. This Warrant may be
sold, assigned, encumbered or otherwise transferred if: (a) the Company
receives an opinion of counsel to the Warrantholder, reasonably
satisfactory to the Company, that the proposed transfer is exempt from
registration under federal and applicable state securities laws or the
transaction is otherwise in compliance with the registration requirements
thereof; and (b) if a partial transfer is proposed, not fewer than 5,000
Securities per transferee are the subject thereof. Any warrant issued to
any such transferee may not be sold, assigned, encumbered or otherwise
transferred (except by will or the laws of intestacy), in whole or in part,
without the prior written consent of the Company and compliance with
applicable securities laws.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the
Page 4 - Warrant Certificate
<PAGE>
exercise and the issuance and delivery of such Securities shall comply
with all relevant provisions of law, including without limitation the
1933 Act and other federal and state securities laws and regulations,
and the requirements of any stock exchange upon which the Securities
may then be listed.
(b) Notwithstanding anything in Section 8 (a) above to the contrary, the
Company has agreed to register the Securities in accordance with
Section 2 above.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. Any notices required or permitted
to be given hereunder will be in writing and may be served personally or by
mail; and if served will be addressed as follows:
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Cort MacKenzie Securities, Inc.
5335 SW Meadows Road,
Suite 270
Lake Oswego, OR 97035
Attn: Thomas C. Stewart, President
Any notice so given by mail will be deemed effectively given 48 hours after
mailing when deposited in the United States mail, registered or certified
mail, return receipt requested, postage prepaid and addressed as specified
above. Any party may by written notice to the other specify a different
address for notice purposes.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED March ___, 1996 in replacement (following partial transfers) of the
warrant dated October 12, 1994, which replaced the warrant dated May 3, 1994.
ATHENA MEDICAL CORPORATION
By
----------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
________________________________
PURCHASE WARRANT CERTIFICATE
Issued to:
ALEXANDER V. SHARP
Exercisable to Purchase
35,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after May 1, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before May 1, 1999, up to 35,000 Shares at the Exercise Price.
This Warrant is issued pursuant to partial transfer on this date by Cort
MacKenzie Securities, Inc. to the Warrantholder of a warrant issued to such
transferor as of October 12, 1994.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.50 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is Alexander V. Sharp.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows: none. The
Required Condition has been satisfied.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on May 1, 1999, by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10170 SW Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
Page 2 - Warrant Certificate
<PAGE>
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within 30 days of receipt of such notice,
then this Warrant shall automatically terminate upon consummation of such
merger, change, liquidation or sale, and the Warrantholder will have no
further rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
Page 3 - Warrant Certificate
<PAGE>
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer thereof unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in
Page 4 - Warrant Certificate
<PAGE>
writing and will be deemed to have been given when personally delivered to
a party or 48 hours after deposit in the United States Mail, first class
postage prepaid by both first class and certified mail, return receipt
requested, or 48 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party
as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Alexander V. Sharp
5705 Broadway
West Linn, OR 97068
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED October 3, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
-------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
Exhibit 10.25
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
-------------------------------
REPLACEMENT
PURCHASE WARRANT CERTIFICATE
Issued to:
CORT MACKENZIE & THOMAS, INC.
Exercisable to Purchase
308,750 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after November 18, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder (hereafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue to
the Warrantholder, at any time on or before November 18, 1999, up to 308,750
Shares (hereafter defined) at the Exercise Price (hereafter defined).
This Warrant supersedes and replaces in its entirety the warrant issued by the
Company to the Warrantholder dated November 18, 1994, following renegotiation of
certain of such warrant's terms on the date hereof.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of the Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.50 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
the Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which the Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is CORT MACKENZIE & THOMAS, INC.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
none. The Required Condition has been satisfied as of December 28,
1994 by the consummation of a Stock Sale Agreement between the
Warrantholder and the Company dated November 18, 1994.
2. EXERCISE OF WARRANTS. Subject to the Required Condition, all or any part
of the Warrant may be exercised at any time on or before 5 p.m. Pacific
Time on November 18, 1999 by surrendering this Warrant Certificate,
together with appropriate instructions, duly executed by the Warrantholder
or by its duly authorized attorney, at the office of the Company, 10180 SW
Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office or
agency as the Company may designate. Upon receipt of notice of exercise,
the Company shall immediately instruct its transfer agent to prepare
certificates for the Securities to be received by the Warrantholder upon
completion of the Warrant exercise. When such certificates are prepared,
the Company shall notify the Warrantholder and deliver such certificates to
the Warrantholder or as per the Warrantholder's instructions immediately
upon payment in full by the Warrantholder, in lawful money of the United
States, of the Exercise Price payable with respect to the Securities being
purchased. Such Securities shall be registered with the Securities and
Exchange Commission on or before the next registration effected by the
Company, and thereafter certificates representing
Page 2 - Warrant Certificate
<PAGE>
them shall not bear a legend with respect to the Securities Act of 1933,
upon compliance with such registration and Section 8(b) of this Warrant.
Prior thereto, both the Securities and this Warrant shall be restricted,
and bear a legend to comply with federal and state law.
The Securities to be obtained on exercise of the Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of the Warrant not exercised.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the occurrence of certain events as
follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which the Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company
or other change in the capital structure of the Company, then the
Warrantholder will have 30 days to exercise the purchase right
hereunder, or lose all such rights.
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of the Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of the Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other securities will be
issued in connection with exercise of the Warrant.
(e) Notwithstanding anything herein to the contrary, there will be no
adjustment made under the Warrant on account of the sale of the Common
Stock or other Securities purchasable upon exercise of the Warrant.
Page 3 - Warrant Certificate
<PAGE>
4. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of the
Warrant upon the basis set forth above will at all times during the term of
the Warrant be reserved for exercise.
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of the
Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of the Warrant.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant. This Warrant may be
sold, assigned, encumbered or otherwise transferred if: (a) the Company
receives an opinion of counsel to the Warrantholder, reasonably
satisfactory to the Company, that the proposed transfer is exempt from
registration under federal and applicable state securities laws or the
transaction is otherwise in compliance with the registration requirements
thereof; and (b) if a partial transfer is proposed, not fewer than 5,000
Securities per transferee are the subject thereof. Any warrant issued to
any such transferee may not be sold, assigned, encumbered or otherwise
transferred (except by will or the laws of intestacy), in whole or in part,
without the prior written consent of the Company and compliance with
applicable securities laws.
8. COMPLIANCE WITH SECURITIES LAWS; LIMITATION ON SALES. By accepting this
Warrant, the Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) Notwithstanding anything in Section 8(a) above to the contrary, and as
provided in Section 2 above, the Company has agreed to register the
Securities. During the period that the Company's registration
statement is effective, the Warrantholder may not sell any of the
Securities acquired by exercise of this Warrant which, together with
all sales of restricted and other securities of the same class of the
Company for the account of the Warrantholder, exceed within any three-
month period the greater of (i) 1.0% of the Company's issued Common
Stock as shown on the most recent report or statement published by the
Company, or (ii) the average weekly reported volume of trading in such
Common Stock on all national securities exchanges and/or reported
through the automated quotation system of a registered securities
association during the four calendar weeks preceding receipt of the
order to execute the transaction by the Warrantholder's broker or the
date of execution of the transaction directly with a market maker. If
the Company's prospectus included in the registration statement
(including any amendments)
Page 4 - Warrant Certificate
<PAGE>
is not in compliance with the 1933 Act at any time while the
registration statement is effective, the Company will take reasonably
prompt action to update the prospectus to comply with the 1933 Act and
the Warrantholder may not conduct any trading until the prospectus is
updated.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. Any notices required or permitted
under this Warrant must be in writing and will be deemed to have been given
when personally delivered to a party or 48 hours after deposit in the
United States Mail, first class postage prepaid by both first class and
certified mail, return receipt requested, or 48 hours after delivery to a
recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Cort MacKenzie & Thomas, Inc.
5335 SW Meadows Road,
Suite 270
Lake Oswego, OR 97035
Attn: Thomas C. Stewart, President
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant Certificate will be governed by and construed
in accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant Certificate shall be tried before the courts of Oregon located in
Multnomah County, Oregon, to the exclusion of all other courts that might
have jurisdiction.
DATED March ___, 1996, in replacement of the warrant dated November 18, 1994.
ATHENA MEDICAL CORPORATION
By
----------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
Exhibit 10.26
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
JAMES E. REINMUTH
Exercisable to Purchase
160,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 23, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder (hereafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue to
the Warrantholder, at any time on or before December 23, 1999, up to 160,000
Shares (hereafter defined) at the Exercise Price (hereafter defined).
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of the Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $0.41 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
the Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which the Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is James E. Reinmuth.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon transfer or partial exercise of the Warrant
evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
The Required Condition has been satisfied as of April 28, 1995 by the
Company's receipt of full payment from Capital Consultants, Inc.
pursuant to its Common Stock and Convertible Debenture Purchase
Agreement with the Company dated December 29, 1994, as thereafter
amended.
2. EXERCISE OF WARRANTS. Subject to the Required Condition, all or any part
of the Warrant may be exercised at any time on or before 5 p.m. Pacific
Time on December 23, 1999 by surrendering this Warrant Certificate,
together with appropriate instructions, duly executed by the Warrantholder
or by his duly authorized attorney, at the office of the Company, 10170 SW
Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office or
agency as the Company may designate. Upon receipt of notice of exercise,
the Company shall immediately instruct its transfer agent to prepare
certificates for the Securities to be received by the Warrantholder upon
completion of the Warrant exercise. When such certificates are prepared,
the Company shall notify the Warrantholder and deliver such certificates to
the Warrantholder or as per the Warrantholder's instructions immediately
upon payment in full by the Warrantholder, in lawful money of the United
States, of the Exercise Price payable with respect to the Securities being
purchased. Such Securities shall be registered with the Securities and
Exchange Commission on or before the next registration effected by the
Company, and thereafter certificates representing them shall not bear a
legend with respect to the Securities Act of 1933, upon compliance with
Page 2 - Warrant Certificate
<PAGE>
such registration. Prior thereto, both the Securities and this Warrant
shall be restricted, and bear a legend to comply with federal and state
law.
The Securities to be obtained on exercise of the Warrant will be deemed to
have been issued, and any person exercising the Warrants will be deemed to
have become a holder of record of those Securities, as of the date of full
payment of the Exercise Price.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of the Warrant not exercised.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the occurrence of certain events as
follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which the Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company
or other change in the capital structure of the Company, then the
Warrantholder will have 30 days to exercise the purchase right
hereunder, or lose all such rights.
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of the Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of the Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other securities will be
issued in connection with exercise of the Warrant.
(e) Notwithstanding anything herein to the contrary, there will be no
adjustment made under the Warrant on account of the sale of the Common
Stock or other Securities purchasable upon exercise of the Warrant.
Page 3 - Warrant Certificate
<PAGE>
4. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of the
Warrant upon the basis set forth above will at all times during the term of
the Warrant be reserved for exercise.
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of the
Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of the Warrant.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled
to any rights of a shareholder of the Company.
7. NOTICE. Any notices required or permitted under this Warrant must be in
writing and will be deemed to have been given when personally delivered to
a party or 48 hours after deposit in the United States Mail, first class
postage prepaid by both first class and certified mail, return receipt
requested, or 48 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party
as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: James E. Reinmuth
5171 Solar Heights Drive
Eugene, OR 97405
or such other address as a party may specify by a notice in writing, given
in the same manner.
8. TRANSFER OF WARRANT. This is not a bearer warrant. The Warrant has not
been registered under the federal Securities Act of 1933 or any state
securities law. It may not be transferred, in whole or part, absent such
registration or exemption therefrom.
9. APPLICABLE LAW. This Warrant Certificate will be governed by and construed
in accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant Certificate shall be tried before the courts of Oregon located in
Multnomah County, Oregon, to the exclusion of all other courts that might
have jurisdiction.
DATED as of April 28, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
----------------------------------------
William H. Fleming, President
Page 4 - Warrant Certificate
<PAGE>
Exhibit 10.27
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
RICHARD T. SCHROEDER
Exercisable to Purchase
160,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 23, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder (hereafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue to
the Warrantholder, at any time on or before December 23, 1999, up to 160,000
Shares (hereafter defined) at the Exercise Price (hereafter defined).
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of the Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $0.41 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
the Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which the Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is Richard T. Schroeder.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon transfer or partial exercise of the Warrant
evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
The Required Condition has been satisfied as of April 28, 1995 by the
Company's receipt of full payment from Capital Consultants, Inc.
pursuant to its Common Stock and Convertible Debenture Purchase
Agreement with the Company dated December 29, 1994, as thereafter
amended.
2. EXERCISE OF WARRANTS. Subject to the Required Condition, all or any part
of the Warrant may be exercised at any time on or before 5 p.m. Pacific
Time on May 1, 1999 by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by his duly
authorized attorney, at the office of the Company, 10170 SW Nimbus, Suite
H-1, Portland, Oregon 97223, or at such other office or agency as the
Company may designate. Upon receipt of notice of exercise, the Company
shall immediately instruct its transfer agent to prepare certificates for
the Securities to be received by the Warrantholder upon completion of the
Warrant exercise. When such certificates are prepared, the Company shall
notify the Warrantholder and deliver such certificates to the Warrantholder
or as per the Warrantholder's instructions immediately upon payment in full
by the Warrantholder, in lawful money of the United States, of the Exercise
Price payable with respect to the Securities being purchased. Such
Securities shall be registered with the Securities and Exchange Commission
on or before the next registration effected by the Company, and thereafter
certificates representing them shall not bear a legend with respect to the
Securities Act of 1933, upon compliance with such registration. Prior
thereto, both the Securities and this Warrant shall be restricted, and bear
a legend to comply with federal and state law.
Page 2 - Warrant Certificate
<PAGE>
The Securities to be obtained on exercise of the Warrant will be deemed to
have been issued, and any person exercising the Warrants will be deemed to
have become a holder of record of those Securities, as of the date of full
payment of the Exercise Price.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of the Warrant not exercised.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the occurrence of certain events as
follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which the Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company
or other change in the capital structure of the Company, then the
Warrantholder will have 30 days to exercise the purchase right
hereunder, or lose all such rights.
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of the Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of the Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other securities will be
issued in connection with exercise of the Warrant.
(e) Notwithstanding anything herein to the contrary, there will be no
adjustment made under the Warrant on account of the sale of the Common
Stock or other Securities purchasable upon exercise of the Warrant.
4. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of the
Warrant upon the basis set forth above will at all times during the term of
the Warrant be reserved for exercise.
Page 3 - Warrant Certificate
<PAGE>
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of the
Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of the Warrant.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled
to any rights of a shareholder of the Company.
7. NOTICE. Any notices required or permitted under this Warrant must be in
writing and will be deemed to have been given when personally delivered to
a party or 48 hours after deposit in the United States Mail, first class
postage prepaid by both first class and certified mail, return receipt
requested, or 48 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party
as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Richard T. Schroeder
3170 SW 82nd Street
Portland, OR 97225
or such other address as a party may specify by a notice in writing, given
in the same manner.
8. TRANSFER OF WARRANT. This is not a bearer warrant. The Warrant has not
been registered under the federal Securities Act of 1933 or any state
securities law. It may not be transferred, in whole or part, absent such
registration or exemption therefrom.
9. APPLICABLE LAW. This Warrant Certificate will be governed by and construed
in accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant Certificate shall be tried before the courts of Oregon located in
Multnomah County, Oregon, to the exclusion of all other courts that might
have jurisdiction.
DATED as of April 28, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
----------------------------------------
William H. Fleming, President
Page 4 - Warrant Certificate
<PAGE>
Exhibit 10.28
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
JAMES R. WILSON
Exercisable to Purchase
160,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 23, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder (hereafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue to
the Warrantholder, at any time on or before December 23, 1999, up to 160,000
Shares (hereafter defined) at the Exercise Price (hereafter defined).
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of the Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $0.41 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
the Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which the Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is James R. Wilson.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon transfer or partial exercise of the Warrant
evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
The Required Condition has been satisfied as of April 28, 1995 by the
Company's receipt of full payment from Capital Consultants, Inc.
pursuant to its Common Stock and Convertible Debenture Purchase
Agreement with the Company dated December 29, 1994, as thereafter
amended.
2. EXERCISE OF WARRANTS. Subject to the Required Condition, all or any part
of the Warrant may be exercised at any time on or before 5 p.m. Pacific
Time on December 23, 1999 by surrendering this Warrant Certificate,
together with appropriate instructions, duly executed by the Warrantholder
or by his duly authorized attorney, at the office of the Company, 10170 SW
Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office or
agency as the Company may designate. Upon receipt of notice of exercise,
the Company shall immediately instruct its transfer agent to prepare
certificates for the Securities to be received by the Warrantholder upon
completion of the Warrant exercise. When such certificates are prepared,
the Company shall notify the Warrantholder and deliver such certificates to
the Warrantholder or as per the Warrantholder's instructions immediately
upon payment in full by the Warrantholder, in lawful money of the United
States, of the Exercise Price payable with respect to the Securities being
purchased. Such Securities shall be registered with the Securities and
Exchange Commission on or before the next registration effected by the
Company, and thereafter certificates representing them shall not bear a
legend with respect to the Securities Act of 1933, upon compliance with
Page 2 - Warrant Certificate
<PAGE>
such registration. Prior thereto, both the Securities and this Warrant
shall be restricted, and bear a legend to comply with federal and state
law.
The Securities to be obtained on exercise of the Warrant will be deemed to
have been issued, and any person exercising the Warrants will be deemed to
have become a holder of record of those Securities, as of the date of full
payment of the Exercise Price.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of the Warrant not exercised.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the occurrence of certain events as
follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which the Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company
or other change in the capital structure of the Company, then the
Warrantholder will have 30 days to exercise the purchase right
hereunder, or lose all such rights.
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of the Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of the Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other securities will be
issued in connection with exercise of the Warrant.
(e) Notwithstanding anything herein to the contrary, there will be no
adjustment made under the Warrant on account of the sale of the Common
Stock or other Securities purchasable upon exercise of the Warrant.
Page 3 - Warrant Certificate
<PAGE>
4. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of the
Warrant upon the basis set forth above will at all times during the term of
the Warrant be reserved for exercise.
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of the
Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of the Warrant.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled
to any rights of a shareholder of the Company.
7. NOTICE. Any notices required or permitted under this Warrant must be in
writing and will be deemed to have been given when personally delivered to
a party or 48 hours after deposit in the United States Mail, first class
postage prepaid by both first class and certified mail, return receipt
requested, or 48 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party
as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: James R. Wilson
P.O. Box 1125
Corvallis, OR 97339
or such other address as a party may specify by a notice in writing, given
in the same manner.
8. TRANSFER OF WARRANT. This is not a bearer warrant. The Warrant has not
been registered under the federal Securities Act of 1933 or any state
securities law. It may not be transferred, in whole or part, absent such
registration or exemption therefrom.
9. APPLICABLE LAW. This Warrant Certificate will be governed by and construed
in accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant Certificate shall be tried before the courts of Oregon located in
Multnomah County, Oregon, to the exclusion of all other courts that might
have jurisdiction.
DATED as of April 28, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
--------------------------------------
William H. Fleming, President
Page 4 - Warrant Certificate
<PAGE>
Exhibit 10.29
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
KAREN K. ANDEREGG
Exercisable to Purchase
100,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after May 18, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before May 18, 2000, up to 100,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.00 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is Karen K. Anderegg.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
- the first 33,333 Shares are exercisable immediately;
- the next 33,333 Shares are exercisable on or after December
31, 1995;
- the last 33,334 Shares are exercisable on or after December
31, 1996; but
- if the letter agreement of January 5, 1995 between the
Company and the Warrantholder is terminated prior to July 1,
1995, the right to exercise 66,667 Shares will automatically
terminate. If such letter agreement is terminated between
January 1, 1996 and June 30, 1996, the right to exercise
33,334 Shares will automatically terminate.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on May 18, 2000 by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10170 SW Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
Page 2 - Warrant Certificate
<PAGE>
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within 30 days of receipt of such notice,
then this Warrant shall automatically terminate upon consummation of such
merger, change, liquidation or sale, and the Warrantholder will have no
further rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
Page 3 - Warrant Certificate
<PAGE>
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act and accordingly will not be transferrable except as permitted
under an exemption contained in the 1933 Act, or upon satisfaction of
the registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act or an exemption from such registration is
available. The Warrantholder understands that the certificate(s)
evidencing the Securities will be imprinted with a legend which will
prohibit the transfer thereof unless they are registered or unless the
Company receives
Page 4 - Warrant Certificate
<PAGE>
an opinion of counsel reasonably satisfactory to the Company that such
registration is not required.
9. MISCELLANEOUS. By accepting this Warrant, the Warrantholder acknowledges
having considered the tax consequences of the Company's grant of it. No
amendment, waiver, termination or other change to this Warrant or any term
of it will be effective unless set forth in a writing signed by the party
sought to be bound. The captions heading the Sections of this Warrant are
inserted for convenience of reference only, and are not to be used to
define, limit, construe or describe the scope or intent of any term,
provision or section of this Warrant. Any notices required or permitted
under this Warrant must be in writing and will be deemed to have been given
when personally delivered to a party or 48 hours after deposit in the
United States Mail, first class postage prepaid by both first class and
certified mail, return receipt requested, or 48 hours after delivery to a
recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Karen K. Anderegg
6978 SW Foxfield Ct.
Portland, OR 97225
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of May 18, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
--------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
-------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
CHARLES E. FINEGAN, JR.
Exercisable to Purchase
70,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after July 1, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before the expiration date set forth below, up to 70,000 Shares at the Exercise
Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $3.50 per Share for the
first 35,000 shares, and $5.00 per share for the last 35,000 shares.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is Charles E. Finegan, Jr.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
-- the first 35,000 Shares are exercisable immediately; and
-- the last 35,000 Shares are exercisable after June 30, 1995.
2. EXERCISE OF WARRANT. Subject to the Required Condition, this Warrant may
be exercised at any time on or before 5 p.m. Pacific Time on May 18, 2000
as to the first 35,000 Shares, and on or before 5:00 p.m. Pacific Time on
July 1, 2000 as to the last 35,000 Shares, by surrendering this Warrant
Certificate, together with appropriate instructions, duly executed by the
Warrantholder or by the Warrantholder's duly authorized attorney, at the
office of the Company, 10170 SW Nimbus, Suite H-1, Portland, Oregon 97223,
or at such other office or agency as the Company may designate. Upon
receipt of notice of exercise, the Company shall as promptly as practicable
instruct its transfer agent to prepare certificates for the Securities to
be received by the Warrantholder upon completion of the exercise. When
such certificates are prepared, the Company shall notify the Warrantholder
and deliver such certificates to the Warrantholder or as per the
Warrantholder's instructions immediately upon payment in full by the
Warrantholder, in lawful money of the United States, of the Exercise Price
payable with respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
Page 2 - Warrant Certificate
<PAGE>
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within 30 days of receipt of such notice,
then this Warrant shall automatically terminate upon consummation of such
merger, change, liquidation or sale, and the Warrantholder will have no
further rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
Page 3 - Warrant Certificate
<PAGE>
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act and accordingly will not be transferrable except as permitted
under an exemption contained in the 1933 Act, or upon satisfaction of
the registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act or an exemption from such registration is
available. The Warrantholder understands that the certificate(s)
evidencing the Securities will be imprinted with a legend which will
prohibit the transfer thereof unless they are registered or unless the
Company receives an opinion of counsel reasonably satisfactory to the
Company that such registration is not required.
(c) The Warrantholder is not a broker or dealer. In addition to all other
requirements of federal and state securities laws, the Warrantholder
agrees to disclose the terms of this Warrant and any other agreement
or arrangement between the Warrantholder and the Company to any and
all third persons when discussing the Company's Common Stock or
otherwise in connection with the purchase or sale of such Common
Stock.
Page 4 - Warrant Certificate
<PAGE>
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Charles E. Finegan, Jr.
8120 SW Strowbridge Court
Beaverton, OR 97008
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of May 18, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
---------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
ALFRED E. THURBER, JR.
Exercisable to Purchase
70,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after July 1, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before the expiration date set forth below, up to 70,000 Shares at the Exercise
Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $3.50 per Share for the
first 35,000 shares, and $5.00 per share for the last 35,000 shares.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is Alfred E. Thurber, Jr.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
-- the first 35,000 Shares are exercisable immediately; and
-- the last 35,000 Shares are exercisable after June 30, 1995.
2. EXERCISE OF WARRANT. Subject to the Required Condition, this Warrant may
be exercised at any time on or before 5 p.m. Pacific Time on May 18, 2000
as to the first 35,000 Shares, and on or before 5:00 p.m. Pacific Time on
July 1, 2000 as to the last 35,000 Shares, by surrendering this Warrant
Certificate, together with appropriate instructions, duly executed by the
Warrantholder or by the Warrantholder's duly authorized attorney, at the
office of the Company, 10170 SW Nimbus, Suite H-1, Portland, Oregon 97223,
or at such other office or agency as the Company may designate. Upon
receipt of notice of exercise, the Company shall as promptly as practicable
instruct its transfer agent to prepare certificates for the Securities to
be received by the Warrantholder upon completion of the exercise. When
such certificates are prepared, the Company shall notify the Warrantholder
and deliver such certificates to the Warrantholder or as per the
Warrantholder's instructions immediately upon payment in full by the
Warrantholder, in lawful money of the United States, of the Exercise Price
payable with respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
Page 2 - Warrant Certificate
<PAGE>
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within 30 days of receipt of such notice,
then this Warrant shall automatically terminate upon consummation of such
merger, change, liquidation or sale, and the Warrantholder will have no
further rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
Page 3 - Warrant Certificate
<PAGE>
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act and accordingly will not be transferrable except as permitted
under an exemption contained in the 1933 Act, or upon satisfaction of
the registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act or an exemption from such registration is
available. The Warrantholder understands that the certificate(s)
evidencing the Securities will be imprinted with a legend which will
prohibit the transfer thereof unless they are registered or unless the
Company receives an opinion of counsel reasonably satisfactory to the
Company that such registration is not required.
(c) The Warrantholder is not a broker or dealer. In addition to all other
requirements of federal and state securities laws, the Warrantholder
agrees to disclose the terms of this Warrant and any other agreement
or arrangement between the Warrantholder and the Company to any and
all third persons when discussing the Company's Common Stock or
otherwise in connection with the purchase or sale of such Common
Stock.
Page 4 - Warrant Certificate
<PAGE>
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Alfred E. Thurber, Jr.
108 Birch Road
Briarcliff Manor, NY 10510
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of May 18, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
---------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
MARK T. WALLER
Exercisable to Purchase
460,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after May 1, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before May 1, 1999, up to 460,000 Shares at the Exercise Price.
This Warrant supersedes the Warrant Certificate of Mark Waller dated as of March
18, 1994, as amended by letter agreement dated March 16, 1995.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.00 per Share,
including Contingent Shares as provided in Section 2 below.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is MARK T. WALLER.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
2. CONTINGENT SHARES. The Shares the subject of this Warrant shall be
increased by 40,000 (to a total of 500,000 Shares) if and only if the
closing bid price of the Company's Common Stock in the New York over-the-
counter market (as reported by the National Association of Securities
Dealers, Inc.), or the closing selling price if the Company's Common Stock
becomes traded on the NASDAQ Small Cap Market or other exchange, is not
$8.00 or more per share for five consecutive trading days at any time
during the 12-month period beginning August 15, 1995. If the Warrantholder
becomes so entitled to exercise this Warrant as to the additional 40,000
Shares (the "Contingent Shares"), the Company shall deliver a written
acknowledgment to the Warrantholder, which acknowledgement shall be
attached to this Warrant Certificate. Upon the effective date of such
acknowledgment (August 15, 1996), all terms, conditions, representations
and restrictions applicable to the original Shares shall apply to the
Contingent Shares. Creation of rights to acquire the Contingent Shares
shall not extend the term of this Warrant.
3. EXERCISE OF WARRANT. Subject to compliance with the other conditions set
forth herein, all or any part of this Warrant may be exercised at any time
on or before 5 p.m. Pacific Time on May 1, 1999, either as provided in
Section 5 below, or by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10170 SW Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the
Page 2 - Warrant Certificate
<PAGE>
exercise. When such certificates are prepared, the Company shall notify the
Warrantholder and deliver such certificates to the Warrantholder or as per the
Warrantholder's instructions immediately upon payment in full by the
Warrantholder, in lawful money of the United States, of the Exercise Price
payable with respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
4. REGISTRATION RIGHTS.
(a) Subject to Section 4(b) below, the Company shall file a registration
statement with the Securities and Exchange Commission within 90 days
of the date of this Warrant covering the sale of Shares that may be
purchased by the Warrantholder under this Warrant. Thereafter, the
Company shall take all appropriate and reasonable action to cause such
registration statement to become effective. The registration
statement may include Common Stock or rights thereto held by other
persons. The registration statement will not constitute an
underwritten public offering.
(b) The Company's obligation under Section 4(a) above shall be subject to
the following conditions: (i) the completion by the Company's
securities counsel of its due diligence investigation of the Company;
(ii) the resolution by the Company of any outstanding issues with the
Securities and Exchange Commission relating to the recent withdrawal
of the Company's S-2 Registration Statement or to the Company's
compliance with all aspects of the Securities Act of 1933, as amended
(the "1933 Act"), or the Securities Exchange Act of 1934, as amended
(the "1934 Act"); and (iii) the Warrantholder shall have entered into
a Registration Rights Agreement with terms reasonably satisfactory to
the Warrantholder and the Company that contains the following
provisions:
(1) The Warrantholder shall agree that the Company shall be required
to keep the registration statement effective for at least an 18-month
period following its effective date, and that the 18-month period will
be increased to the extent that the Warrantholder has been unable to
sell Shares during the effective period through no fault of the
Warrantholder, so that the Warrantholder has an aggregate effective
selling period of at least 220 trading days during which the Shares
are registered;
(2) The Warrantholder shall agree that, during the period that the
registration statement is effective, he shall sell Shares only during
a 60-day period beginning two days after the filing by the Company of
each Form 10-Q (or 10-QSB) or Form 10-K (or 10-KSB), as applicable,
and in addition that he shall not sell in any single trading day more
than: (i) 1% of the average daily reported volume of trading of the
Company's shares for the four preceding calendar weeks; or (ii) 2,500
Shares, whichever is greater;
Page 3 - Warrant Certificate
<PAGE>
(3) If the Company's prospectus is not in compliance with the 1933
Act at any time while the registration statement is effective, the
Company shall have an obligation to take reasonably prompt action to
update such prospectus to comply with such Act and the Warrantholder
shall not conduct any trading until such prospectus is updated;
(4) The Registration Rights Agreement shall contain standard
indemnification language for both the Company and the Warrantholder;
and
(5) The Warrantholder and the Company shall agree to such other
reasonable covenants, conditions and representations as will ensure
compliance with the 1933 Act and the 1934 Act.
The Registration Rights Agreement will be prepared by the Company's counsel
as soon as practicable after execution of this Warrant.
5. SPECIAL ESCROW ARRANGEMENT. In the event the Warrantholder desires to
exercise all or a part of this Warrant during the time that the Shares are
the subject of an effective registration statement as set forth in Section
4 above, the Warrantholder may establish an escrow arrangement with
PaineWebber (or other registered broker/dealer mutually satisfactory to the
Warrantholder and the Company). The terms of the escrow shall provide
that:
(a) Upon receipt of a notice of intent to exercise in accordance with
Section 3 above, the Company shall within five business days deliver
into such escrow one or more certificates issued in the name of
PaineWebber and representing the number of Shares the subject of the
notice of intent to exercise. Delivery of such Shares and the
denominations of such certificates shall be handled in a fashion to
accommodate, so far as is reasonably practicable, the selling
limitations and restrictions set forth in Section 4 above.
(b) Within five trading days after receipt of the certificate(s) from the
Company, PaineWebber shall begin selling the Shares represented by the
certificate(s), but only if the selling price for the Shares equals or
exceeds the aggregate Exercise Price for the Shares plus PaineWebber's
brokerage and other fees.
(c) PaineWebber shall immediately after the sale by it of any Shares
deliver to the Company, by PaineWebber's check payable to the Company,
the aggregate Exercise Price of the Shares purchased. The remainder
of the sales proceeds, less PaineWebber's brokerage and any other
fees, may be remitted to the Warrantholder.
(d) PaineWebber shall immediately refrain from making any further sales of
the Shares if PaineWebber receives a facsimile notice from either the
Company or its attorneys that the Company is concerned that such sale
would not be made in compliance with federal or state securities laws.
The Company shall have no liability to the Warrantholder for any
trading losses he may incur while the stop transfer order is in effect
if the Company made such order in good faith and regardless of whether
such sale would have been made in compliance with such laws.
(e) The foregoing terms and conditions may be supplemented by the parties
to accommodate any reasonable restriction or additional terms that may
be required by PaineWebber or the Company's transfer agent.
Page 4 - Warrant Certificate
<PAGE>
(f) All other terms and conditions of this Warrant, including the
requirements of Section 3 not inconsistent with this Section 5, shall
remain in full force and effect.
6. MERGER OR SALE. If the Company proposes to merge with or into another
company (other than for the sole purpose of reincorporating the Company in
another jurisdiction), to otherwise reorganize, consolidate, reclassify or
make any other change in the Company's capital structure, to partially or
completely liquidate, or to sell all or substantially all the Company's
assets, the Company will give at least 30 days' prior written notice
thereof to the Warrantholder.
7. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 7(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and: (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares; and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 7. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
8. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during the term of
this Warrant be reserved for exercise.
Page 5 - Warrant Certificate
<PAGE>
9. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
10. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 11.
11. COMPLIANCE WITH SECURITIES LAWS. The Warrantholder represents,
acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the 1933 Act, and other federal and state securities laws
and regulations, and the requirements of any stock exchange upon which
the Securities may then be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act and accordingly will not be transferrable except as permitted
under an exemption contained in the 1933 Act, or upon satisfaction of
the registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act or an exemption from such registration is
available. The Warrantholder understands that the certificate(s)
evidencing the Securities will be imprinted with a legend which will
prohibit the transfer thereof unless they are registered or unless the
Company receives an opinion of counsel reasonably satisfactory to the
Company that such registration is not required. Notwithstanding the
foregoing, the Shares covered by this Warrant will be registered
within 90 days of the date of this Warrant as provided in Section 4
above.
12. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or Section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
Page 6 - Warrant Certificate
<PAGE>
If to the Warrantholder: Mark T. Waller
1820 North Shore Road
Lake Oswego, OR 97034
or such other address as a party may specify by a notice in writing, given
in the same manner.
13. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED September 29, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
--------------------------------------
William H. Fleming, President
Page 7 - Warrant Certificate
<PAGE>
Exhibit 10.33
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
ESLER STEPHENS & BUCKLEY
Exercisable to Purchase
90,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after May 1, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before May 1, 1999, up to 90,000 Shares at the Exercise Price.
This Warrant supersedes the Warrant Certificate of Mark Waller dated as of March
18, 1994, as amended by letter agreement dated March 16, 1995.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.00 per Share,
including Contingent Shares as provided in Section 2 below.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is ESLER STEPHENS & BUCKLEY.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
2. CONTINGENT SHARES. The Shares the subject of this Warrant shall be
increased by 10,000 (to a total of 100,000 Shares) if and only if the
closing bid price of the Company's Common Stock in the New York over-the-
counter market (as reported by the National Association of Securities
Dealers, Inc.), or the closing selling price if the Company's Common Stock
becomes traded on the NASDAQ Small Cap Market or other exchange, is not
$8.00 or more per share for five consecutive trading days at any time
during the 12-month period beginning August 15, 1995. If the Warrantholder
becomes so entitled to exercise this Warrant as to the additional 10,000
Shares (the "Contingent Shares"), the Company shall deliver a written
acknowledgment to the Warrantholder, which acknowledgement shall be
attached to this Warrant Certificate. Upon the effective date of such
acknowledgment (August 15, 1996), all terms, conditions, representations
and restrictions applicable to the original Shares shall apply to the
Contingent Shares. Creation of rights to acquire the Contingent Shares
shall not extend the term of this Warrant.
3. EXERCISE OF WARRANT. Subject to compliance with the other conditions set
forth herein, all or any part of this Warrant may be exercised at any time
on or before 5 p.m. Pacific Time on May 1, 1999, either as provided in
Section 5 below, or by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10170 SW Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the
Page 2 - Warrant Certificate
<PAGE>
exercise. When such certificates are prepared, the Company shall notify
the Warrantholder and deliver such certificates to the Warrantholder or as
per the Warrantholder's instructions immediately upon payment in full by
the Warrantholder, in lawful money of the United States, of the Exercise
Price payable with respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
4. REGISTRATION RIGHTS.
(a) Subject to Section 4(b) below, the Company shall file a registration
statement with the Securities and Exchange Commission within 90 days
of the date of this Warrant covering the sale of Shares that may be
purchased by the Warrantholder under this Warrant. Thereafter, the
Company shall take all appropriate and reasonable action to cause such
registration statement to become effective. The registration
statement may include Common Stock or rights thereto held by other
persons. The registration statement will not constitute an
underwritten public offering.
(b) The Company's obligation under Section 4(a) above shall be subject to
the following conditions: (i) the completion by the Company's
securities counsel of its due diligence investigation of the Company;
(ii) the resolution by the Company of any outstanding issues with the
Securities and Exchange Commission relating to the recent withdrawal
of the Company's S-2 Registration Statement or to the Company's
compliance with all aspects of the Securities Act of 1933, as amended
(the "1933 Act"), or the Securities Exchange Act of 1934, as amended
(the "1934 Act"); and (iii) the Warrantholder shall have entered into
a Registration Rights Agreement with terms reasonably satisfactory to
the Warrantholder and the Company that contains the following
provisions:
(1) The Warrantholder shall agree that the Company shall be required
to keep the registration statement effective for at least an 18-month
period following its effective date, and that the 18-month period will
be increased to the extent that the Warrantholder has been unable to
sell Shares during the effective period through no fault of the
Warrantholder, so that the Warrantholder has an aggregate effective
selling period of at least 220 trading days during which the Shares
are registered;
(2) The Warrantholder shall agree that, during the period that the
registration statement is effective, the Warrantholder shall sell
Shares only during a 60-day period beginning two days after the filing
by the Company of each Form 10-Q (or 10-QSB) or Form 10-K (or 10-KSB),
as applicable, and in addition that the Warrantholder shall not sell
in any single trading day more than: (i) 1% of the average daily
reported volume of trading of the Company's shares for the four
preceding calendar weeks; or (ii) 1,000 Shares, whichever is greater;
Page 3 - Warrant Certificate
<PAGE>
(3) If the Company's prospectus is not in compliance with the 1933
Act at any time while the registration statement is effective, the
Company shall have an obligation to take reasonably prompt action to
update such prospectus to comply with such Act and the Warrantholder
shall not conduct any trading until such prospectus is updated;
(4) The Registration Rights Agreement shall contain standard
indemnification language for both the Company and the Warrantholder;
and
(5) The Warrantholder and the Company shall agree to such other
reasonable covenants, conditions and representations as will ensure
compliance with the 1933 Act and the 1934 Act.
The Registration Rights Agreement will be prepared by the Company's counsel
as soon as practicable after execution of this Warrant.
5. SPECIAL ESCROW ARRANGEMENT. In the event the Warrantholder desires to
exercise all or a part of this Warrant during the time that the Shares are
the subject of an effective registration statement as set forth in Section
4 above, the Warrantholder may establish an escrow arrangement with
PaineWebber (or other registered broker/dealer mutually satisfactory to the
Warrantholder and the Company). The terms of the escrow shall provide
that:
(a) Upon receipt of a notice of intent to exercise in accordance with
Section 3 above, the Company shall within five business days deliver
into such escrow one or more certificates issued in the name of
PaineWebber and representing the number of Shares the subject of the
notice of intent to exercise. Delivery of such Shares and the
denominations of such certificates shall be handled in a fashion to
accommodate, so far as is reasonably practicable, the selling
limitations and restrictions set forth in Section 4 above.
(b) Within five trading days after receipt of the certificate(s) from the
Company, PaineWebber shall begin selling the Shares represented by the
certificate(s), but only if the selling price for the Shares equals or
exceeds the aggregate Exercise Price for the Shares plus PaineWebber's
brokerage and other fees.
(c) PaineWebber shall immediately after the sale by it of any Shares
deliver to the Company, by PaineWebber's check payable to the Company,
the aggregate Exercise Price of the Shares purchased. The remainder
of the sales proceeds, less PaineWebber's brokerage and any other
fees, may be remitted to the Warrantholder.
(d) PaineWebber shall immediately refrain from making any further sales of
the Shares if PaineWebber receives a facsimile notice from either the
Company or its attorneys that the Company is concerned that such sale
would not be made in compliance with federal or state securities laws.
The Company shall have no liability to the Warrantholder for any
trading losses the Warrantholder may incur while the stop transfer
order is in effect if the Company made such order in good faith and
regardless of whether such sale would have been made in compliance
with such laws.
(e) The foregoing terms and conditions may be supplemented by the parties
to accommodate any reasonable restriction or additional terms that may
be required by PaineWebber or the Company's transfer agent.
Page 4 - Warrant Certificate
<PAGE>
(f) All other terms and conditions of this Warrant, including the
requirements of Section 3 not inconsistent with this Section 5, shall
remain in full force and effect.
6. MERGER OR SALE. If the Company proposes to merge with or into another
company (other than for the sole purpose of reincorporating the Company in
another jurisdiction), to otherwise reorganize, consolidate, reclassify or
make any other change in the Company's capital structure, to partially or
completely liquidate, or to sell all or substantially all the Company's
assets, the Company will give at least 30 days' prior written notice
thereof to the Warrantholder.
7. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 7(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and: (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares; and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 7. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
8. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during the term of
this Warrant be reserved for exercise.
Page 5 - Warrant Certificate
<PAGE>
9. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
10. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 11.
11. COMPLIANCE WITH SECURITIES LAWS. The Warrantholder represents,
acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the 1933 Act, and other federal and state securities laws
and regulations, and the requirements of any stock exchange upon which
the Securities may then be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act and accordingly will not be transferrable except as permitted
under an exemption contained in the 1933 Act, or upon satisfaction of
the registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act or an exemption from such registration is
available. The Warrantholder understands that the certificate(s)
evidencing the Securities will be imprinted with a legend which will
prohibit the transfer thereof unless they are registered or unless the
Company receives an opinion of counsel reasonably satisfactory to the
Company that such registration is not required. Notwithstanding the
foregoing, the Shares covered by this Warrant will be registered
within 90 days of the date of this Warrant as provided in Section 4
above.
12. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or Section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
Page 6 - Warrant Certificate
<PAGE>
If to the Warrantholder: Esler Stephens & Buckley
1001 SW Fifth Ave., Ste. 2050
Portland, OR 97204
Attn: Michael J. Esler
or such other address as a party may specify by a notice in writing, given
in the same manner.
13. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED September 29, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
---------------------------------------
William H. Fleming, President
Page 7 - Warrant Certificate
<PAGE>
Exhibit 10.34
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
CAPITAL CONSULTANTS, INC.
Exercisable to Purchase
50,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after August 10, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before August 10, 2000, up to 50,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $4.25 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is Capital Consultants, Inc., an Oregon corporation
(itself and as agent).
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows: none.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on August 10, 2000 by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10170 SW Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate
Page 2 - Warrant Certificate
<PAGE>
(dated the date hereof), in form and tenor similar to this Warrant
Certificate, evidencing that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within 30 days of receipt of such notice,
then this Warrant shall automatically terminate upon consummation of such
merger, change, liquidation or sale, and the Warrantholder will have no
further rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this
Page 3 - Warrant Certificate
<PAGE>
Section 4. The number of full shares issuable shall be determined by
the Board of Directors of the Company or by the terms of any
assumption or substitution documents, and any such determination shall
be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer thereof unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified
Page 4 - Warrant Certificate
<PAGE>
mail, return receipt requested, or 48 hours after delivery to a recognized
national overnight carrier, with overnight shipping charges paid, and
addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Capital Consultants, Inc.
2300 SW First Avenue, Suite 200
Portland, OR 97201
Attn: Jeffrey L. Grayson, CEO
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED October 5, 1995, to be effective August 10, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
-------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
________________________________
PURCHASE WARRANT CERTIFICATE
Issued to:
DAVID M. PITASSI
Exercisable to Purchase
100,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after June 30, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before June 30, 2000, up to 100,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $2.88 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is DAVID M. PITASSI.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
- the first 33,333 Shares are exercisable immediately;
- the next 33,333 Shares are exercisable on or after June 30,
1996;
- the last 33,334 Shares are exercisable on or after June 30,
1997; but
- if the Consulting Agreement of June 1, 1995 between the
Company and the Warrantholder is terminated for any reason
or no reason prior to June 30, 1997, the right to purchase
those Shares which are not exercisable as of the date of
such termination shall automatically terminate. Termination
of the Consulting Agreement will not terminate the right to
purchase Shares which are then exercisable.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on June 30, 2000 by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10180 SW Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
Page 2 - Warrant Certificate
<PAGE>
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within such 30 day period, then this
Warrant shall automatically terminate upon consummation of such merger,
change, liquidation or sale, and the Warrantholder will have no further
rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
Page 3 - Warrant Certificate
<PAGE>
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer
Page 4 - Warrant Certificate
<PAGE>
thereof unless they are registered or unless the Company receives an
opinion of counsel reasonably satisfactory to the Company that such
registration is not required.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: David M. Pitassi
801 SE Assembly Ave.
Vancouver, WA 98661
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of December 29, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
--------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
________________________________
PURCHASE WARRANT CERTIFICATE
Issued to:
PETER LOFTIS
Exercisable to Purchase
100,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 29, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before December 29, 2000, up to 100,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $2.88 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is PETER LOFTIS.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows:
- the first 33,333 Shares are exercisable immediately;
- the next 33,333 Shares are exercisable on or after May 6,
1996;
- the last 33,334 Shares are exercisable after November 6,
1996; but
- if the Consulting Agreement of November 6, 1995 between the
Company and the Warrantholder is terminated for any reason
or no reason prior to November 6, 1996, the right to
purchase those Shares which are not exercisable as of the
date of such termination shall automatically terminate.
Termination of the Consulting Agreement will not terminate
the right to purchase Shares which are then exercisable.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on December 29, 2000 by surrendering this Warrant Certificate, together
with appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10170 SW Nimbus, Suite H-1, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
Page 2 - Warrant Certificate
<PAGE>
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within such 30 days, then this Warrant
shall automatically terminate upon consummation of such merger, change,
liquidation or sale, and the Warrantholder will have no further rights
under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the
Page 3 - Warrant Certificate
<PAGE>
new number of such shares purchasable upon exercise of this Warrant,
and (i) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the new number of
such shares, and (ii) cause a copy of such statement to be mailed to
the Warrantholder within 30 days after the date of the event giving
rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
purchased only for investment, for the Warrantholder's own account,
and without any present intention to sell or distribute this Warrant
or the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer thereof unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required.
Page 4 - Warrant Certificate
<PAGE>
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are
not to be used to define, limit, construe or describe the scope or intent
of any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10170 SW Nimbus Ave., Suite H-1
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Peter Loftis
6000-A Sawgrass Village Circle
Ponte Vedra, FL 32082
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. NOTICE TO FLORIDA WARRANTHOLDER. If sales of the Common Stock of the
Company, including the Securities, are consummated with five or more
persons in the state of Florida, the Warrantholder may, at the
Warrantholder's option, void the Warrantholder's purchase under this
Warrant within three days after the first tender of consideration is made
by the Warrantholder to the Company, an agent of the Company, or an escrow
agent.
11. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of December 29, 1995.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
-------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
DISTRIBUTOR'S AGREEMENT
This Agreement is made and entered into as of this 30th day of July, 1995,
by and between ATHENA Medical Corporation ("ATHENA"), having a principal address
of 10170 S.W. Nimbus Ave., Suite H1, Portland, OR 97223 and OSSCA International,
Inc., ("OSSCA"), having a principal address of 730-126th Ave., Treasure Island,
FL 33706, USA
RECITALS
WHEREAS ATHENA manufactures and sells female healthcare and feminine
hygiene products, including the Fresh 'n Fitt-Registered Trademark- interlabial
Padette-TM- ("Padette"), and
WHEREAS ATHENA is seeking a distributor for sales of the Padette for all
uses other than stress incontinence to the U.S. military, and other related U.S.
Government agencies, and
WHEREAS OSSCA wishes to become the exclusive distributor of the Padette for
the U.S military, and other related U.S. Government agencies, and represents
that it is experienced in the distribution of consumer products to the U.S.
military and such agencies.
THEREFORE, in exchange for proper and adequate consideration, the parties
hereby agree as follows:
1. SERVICES:
a. OSSCA will exert its best efforts to promote and make all necessary
contacts with the appropriate agencies of the U.S. military and other U.S.
Government agencies, for sale of the Padette. OSSCA will follow-up on these
contacts to complete requirements for distribution. OSSCA will maintain such
facilities, transportation and personnel as are adequate to perform its services
under this Agreement.
b. OSSCA will provide worldwide customer service, point-of-sale, other
marketing support and reasonable technical assistance to its customers, through
training that will be provided to OSSCA by ATHENA at ATHENA's facilities in
Ponte Vedra, Florida. ATHENA may at its election, provide customer service and
technical assistance directly.
c. OSSCA agrees to an initial order of 1,000,000 Padettes, and an annual
order rate of 6,000,000 Padettes. Failure of OSSCA for any reason to order and
PAGE 1
<PAGE>
accept fewer than 6,000,000 Padettes during the first year, and 3,000,000
Padettes during any subsequent consecutive 6-month period, beginning on the date
of this Agreement, will be considered a breach by OSSCA
d. OSSCA agrees to provide necessary support and documentation to
establish a credit line with ATHENA ' sufficient to cover payment of its largest
expected shipment, not less than 1,000,000 Padettes.
e. OSSCA will comply with and observe all applicable federal contracting
rules and policies, and promptly notify ATHENA of any of potential application
to ATHENA.
f. OSSCA will from time to time, as specified by ATHENA, submit written
reports detailing its promotional efforts, sales and commissions, with
supplemental telephone reports as requested.
2. EXCLUSIVITY OF CUSTOMERS
a. OSSCA will register with ATHENA in writing all entities to be serviced
under this Agreement;
b. ATHENA will, following approval of the entities, grant OSSCA non-
exclusivity to sell Padettes to all approved entities, for a period of three (3)
consecutive years beginning on the date of approval. ATHENA maintains the right
to initiate the sale of Padettes directly, or indirectly (via a third party),
with OSSCA's approved entities anytime during said three year period, with
ninety days notice of its intentions to do so.
c. Following the placement of an order by OSSCA for 1,000,000 or more
Padettes during the first six months of this agreement, and the receipt of full
payment for said order, ATHENA shall provide written notice of the conversion of
paragraph 2.b. to exclusivity.
3. NONCOMPETE PROVISIONS
Should OSSCA terminate this agreement for any reason whatsoever, other than
breach by ATHENA, OSSCA hereby agrees not to promote or sell any products to the
U.S. military or other U.S. Governmental agency, that are deemed substantially
equivalent to the Padette by patent or other trade laws, for a period of three
(3) consecutive years from the termination date of this agreement. In a like
manner, should ATHENA terminate this agreement for any reason whatsoever, other
than breach by OSSCA, ATHENA hereby agrees not to sell the Padette or any
similar products to the U.S. Government agencies listed on OSSCA's approved
list, for a
PAGE 2
<PAGE>
period of three (3) consecutive years from the termination date of this
agreement, unless ATHENA first agrees to pay OSSCA a 7% commission based upon
the net selling price received by ATHENA, for all Padettes sold, directly or
indirectly, to those entities listed on OSSCA's approved list, during said three
(3) year period.
4. PRODUCT PRICING AND PAYMENT PROVISIONS
ATHENA agrees to sell the Padettes to OSSCA, packaged and ready for retail
sale, at the following schedule of prices: (1) to 250,000 Padettes are $0.07US
per Padette; (2) 250,001 to 2,500,000 Padettes are $0.0575US per Padette; and
(3) 2,500,001 Padettes and above are $0.05US per Padette; F.O.B. Salt Lake City,
UT. OSSCA shall pay ATHENA, in full, within 60 days of receipt of each Padette
shipment from ATHENA. Overdue invoices will be subject to a charge of 1.5% per
month (18.0% annual), subject to increases in interest rates, based on the
percentage increase of the prime rate, on unpaid balances. ATHENA agrees to
provide OSSCA with a reasonable quantity of product samples, technical
information and sale literature for promotion of the Padette, free of charge.
Any labeling or packaging changes requested or required by the U.S. military or
other U.S. Government agency shall, if accepted by ATHENA, be implemented at the
cost of OSSCA and deducted from commissions owing or otherwise reimbursed to
ATHENA. ATHENA may also change labeling, package design, etc. in its sole
discretion, provided that ATHENA provides OSSA with samples of said changes at
least 14 days before retail shipment to OSSCA. All samples, technical
information, literature and other documents of ATHENA will be promptly returned
to ATHENA on termination or cancellation of this Agreement, or at any other time
upon request.
5. PRODUCT AVAILABILITY
ATHENA will provide shipments within 30 days of acceptance of an order
(maximum order of 1,000,000 Padettes per month, unless otherwise agreed by
ATHENA). ATHENA will not be liable for delays or inability to fill orders due
to governmental orders or actions, transportation conditions, weather, labor or
material shortages, strikes, riots, natural disaster or other unanticipated
cause beyond ATHENA's control.
6. CONFIDENTIALLY
The terms of this agreement, and all financial, trade secret and other
proprietary business information of each party, shall remain strictly
confidential. No party hereto shall have the right to disclose the terms of
this agreement, such information, or any part thereof, without the prior written
consent of the other party, unless required by government regulation.
PAGE 3
<PAGE>
7. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but no party hereto
shall have the right to assign this Agreement, or any part hereof, without the
prior written consent of the other.
8. TERMINATION
Unless canceled as set forth below, this Agreement shall remain in force
for an initial period of three (3) years, and may be extended for an indefinite
number of twelve (12) month periods, by mutual written consent of the parties.
a. CANCELLATION FOR BREACH: If this Agreement is canceled for reasons of
breach, the injured party shall no longer be obligated to comply with the terms
of said Agreement. Conversely, the - party found to be in breach shall continue
to remain fully obligated to comply with the terms of said Agreement.
Conversely, the party found to be in breach shall continue to remain fully
obligated and bound by the terms .this Agreement.
b. CANCELLATION FOR BANKRUPTCY: Should either party file for bankruptcy,
and said bankruptcy is not corrected within thirty (30) days, the other party
shall have the right to cancel this Agreement by written notice.
c. CANCELLATION FOR ANY OTHER REASON: Cancellation for any other reason,
including expiration o f this Agreement, shall not relieve either party from
fulfilling an remaining obligations set forth herein, for whatever the time
period prescribed.
9. CHOICE OF LAW
This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Oregon.
10. REMEDIES
In the event of the breach or threatened breach of the Agreement by either
party, the injured party shall be entitled to seek injunctive relief, both
preliminary and permanent, enjoining and restraining such breach or threatened
breach. Such remedy shall be in addition to all of the remedies available to
the injured party at law or in equity, including the right of the injured party
to recover any and all damages that may be sustained as a result of the breach.
PAGE 4
<PAGE>
11. ATTORNEY FEES
In the event of any dispute; or breach under this Agreement, the prevailing
party shall be entitled, whether or not any action is instituted, to recover
from the other party its reasonable costs, disbursements and attorney fees,
including without limitation at trial, on appeal on denial of any petition for
review, and in connection with enforcement of any judgment.
12. SCOPE
This Agreement applies only to sales by ATHENA of the Padette for
distribution to the U.S. military and other U.S. Governmental agencies for
feminine hygiene protection use. It does not apply to therapeutic, diagnostic
or other uses. In addition, OSSCA has no authority to make any express or
implied warranties or other representations respecting the Padette other than
those supplied in writhing by ATHENA.
13. FINAL AGREEMENT; MODIFICATION; SAVINGS CLAUSE
This Agreement is the entire agreement of the parties with respect to the
subject matter and supersedes all prior or contemporaneous oral or written
communications or agreements between the parties. It shall not be modified in
any way except in writing signed by the parties. If any part of this Agreement
shall be determined invalid, all other provisions of .this Agreement shall,
nevertheless less, remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly Authorized officers as of the date first written,
hereinabove.
For: For:
Athena Medical Corporation OSSCA International, lnc.
/s/ William H. Fleming /s/ Jack W. Frankel
- ------------------------------ --------------------------------
William H. Fleming Jack W. Frankel
President President
(Corporate Seal)
PAGE 5
<PAGE>
Exhibit 10.38
ATHENA MEDICAL CORPORATION
COMMISSION AGREEMENT
This agreement is made and entered into as of this 30th day of July, 1995, by
and between Athena Medical Corporation, Suite H1, Portland, OR 97223 and OSSCA
International, Inc., having a principal address of 730-126th Ave., Treasure
Island, FL 33706, USA.
RECITALS
WHEREAS, ATHENA Medical Corporation, its assigns and successors, ("ATHENA")
manufactures and sells female healthcare and feminine hygiene products,
including the Fresh 'n Fit-Registered Trademark- interlabial Padette-TM-
("Padette");
WHEREAS, ATHENA wishes to distribute its products in Mexico;
WHEREAS, OSSCA International, Inc. ("OSSCA") represents that it is
experienced in the distribution of products in Mexico and can introduce
ATHENA to distributors in Mexico.
THEREFORE, in exchange for proper and adequate consideration, the parties
hereby agree as follows:
1. SERVICES:
a. OSSCA will introduce Mexican distributors to ATHENA who have the
ability to distribute the Padette in one or more states in Mexico.
b. OSSCA will assist ATHENA in obtaining governmental registration and
certification of the products to be sold in Mexico.
2. EXCLUSIVITY OF DISTRIBUTORS: OSSCA will register with ATHENA in writing
all entities to be introduced under this Agreement, and ATHENA will, for
all entities not already known to ATHENA, in turn grant OSSCA exclusivity
for all entities introduced, for a period of two (2) consecutive years,
beginning on the date of registration. Should ATHENA initiate the sale of
Padettes in Mexico directly or indirectly with entities introduced by OSSCA
anytime during said two year period, the full force of this Agreement shall
take effect.
3. COMMISSIONS: ATHENA agrees to pay OSSCA a commission of five (5 1/2%)
percent of the net sales proceeds received by ATHENA for each Padette sold
to distributors provided by OSSCA, for a period of three (3) consecutive
years from the date of first sale to the first such distributor, or a
maximum of $250,000, whichever occurs first.
4. PROMOTIONAL ITEMS: ATHENA will provide a reasonable amount of samples and
promotional literature to OSSCA, free of charge. All samples, literature
and other documents of ATHENA will be promptly returned to ATHENA on
termination or cancellation of this Agreement, or at any other time upon
request. ATHENA may change labeling, packaging design, etc., in its sole
discretion.
PAGE 1
<PAGE>
5. OTHER SUPPORT: OSSCA shall assist in obtaining all required Mexican
regulatory and governmental filings required for the importation and sale
of Padettes in Mexico.
6. PAYMENT SCHEDULE: OSSCA will receive commission payments within thirty
(30) days after ATHENA receives payment from the distributor.
7. CONFIDENTIALITY: The terms of this Agreement, and all financial, trade
secret and other proprietary business information of each party, shall
remain strictly confidential. No party hereto shall have the right to
disclose the terms of this Agreement, such information, or any part
thereof, without the prior written consent of the other party, except as
required by valid, applicable agency rule or court order.
8. ASSIGNMENT: This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, but no
party hereto shall have the right to assign this Agreement, or any part
hereof, without the prior written consent of the other, which shall not be
unreasonably withheld.
9. TERMINATION: Unless canceled as set forth below, this Agreement shall
remain in force for one (1) year, and may be extended for an indefinite
number of additional one (1) year periods, by mutual written consent of the
parties.
a. CANCELLATION FOR BREACH: If this Agreement is canceled for reasons of
breach, the injured party shall no longer be obligated to comply with
the terms of said Agreement. Conversely, the party found to be in
breach shall continue to remain fully obligated and bound by the terms
of this Agreement.
b. CANCELLATION FOR BANKRUPTCY: Should either party file for bankruptcy,
and said bankruptcy is not corrected within thirty (30) days, the
other party shall have the right to cancel this Agreement by written
notice.
c. CANCELLATION FOR ANY OTHER REASON: Cancellation for any other reason,
including expiration of this Agreement, shall not relieve either party
from fulfilling all remaining obligations set forth herein, for
whatever the time period prescribed.
10. CHOICE OF LAW: This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Oregon.
11. REMEDIES: In the event of the breach or threatened breach of the Agreement
by either party, the injured party shall be entitled to seek injunctive
relief, both preliminary and permanent, enjoining and restraining such
breach or threatened breach. Such remedy shall be in addition to all of
the remedies available to the injured party at law or in equity, including
the right of the injured party to recover any and all damages that may be
sustained as a result of the breach.
12. ATTORNEY FEES: In the event of any dispute or breach under this Agreement,
the prevailing party shall be entitled, whether or not any action is
instituted, to recover from the other party its reasonable costs,
disbursements and attorney fees, including without limitation at trial, on
appeal, on denial of any petition for review, and in connection with
enforcement of any judgment.
PAGE 2
<PAGE>
13. SCOPE: This Agreement applies only to sale by ATHENA of the Padette for
ultimate retail distribution in the feminine hygiene market in Mexico. It
does not apply to therapeutic, diagnostic or other ruses.
14. FINAL AGREEMENT; MODIFICATION; SAVINGS CLAUSE: This Agreement is the
entire agreement of the parties with respect to the subject matter and
supersedes all prior or contemporaneous oral or written communications or
agreements between the parties. It shall not be modified in any way except
in writing signed by the parties. If any part of this Agreement shall be
determined invalid, all other provisions of this Agreement shall,
nevertheless, remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the date first written, hereinabove.
For: For:
Athena Medical Corporation OSSCA International, Inc.
/s/ William H. Fleming /s/ Jack W. Frankel
- ------------------------------- ---------------------------------------
William H. Fleming Jack W. Frankel, Ph.D.
President President
(Corporate Seal)
PAGE 3
<PAGE>
DISTRIBUTION AGREEMENT
BETWEEN: ATHENA MEDICAL CORPORATION, a Nevada corporation ("AFEM");
AND: MEIX CORPORATION, dba CHINESE BUSINESS SERVICES, an Oregon
corporation ("Distributor").
DATED: December 30, 1995.
R E C I T A L S:
A. AFEM is engaged in the business of developing, manufacturing and
selling female healthcare and feminine hygiene products for domestic sale and
for export. AFEM's products include the Fresh 'n Fit-Registered Trademark-
interlabial Padette-TM- (the "Padette").
B. Distributor is engaged in the direct marketing and sale of consumer
products at retail in China. Distributor represents that it has the facilities
and ability to promote the sale of AFEM's Padette and other products in China.
C. The parties desire that AFEM grant to Distributor the right to develop
a market for and sell the Padette and other products in the Territory described
below.
A G R E E M E N T:
In consideration of the foregoing Recitals, which are by this reference
incorporated in this Agreement, and in consideration of the mutual covenants,
terms and conditions set forth below, the parties agree as follows:
1. APPOINTMENT. AFEM appoints Distributor as the exclusive distributor for
direct sales of the Padette within the country of China, including all its
provinces (the "Territory"), upon the terms and conditions set forth in this
Agreement. For purposes of this Agreement, "direct sales" means sales to
consumers as end-users (such as door-to-door sales by representatives of
Distributor or its contractors), not sales to distributors, merchants or others
for resale. Distributor may not sell Padettes in any area outside the Territory
(including sales within the Territory with knowledge that resales of them
outside the Territory will be offered or made) without AFEM's prior written
consent in each instance.
The parties may agree to add or substitute other products of AFEM for
distribution and sale pursuant to this Agreement by written addendum attached to
this Agreement and signed by authorized representatives of AFEM and Distributor.
All terms and conditions of this Agreement shall apply to such additional or
substituted products except as expressly set forth in such addendum.
2. TERM. This Agreement and the appointment of Distributor under it shall
continue for a term of two years commencing on the date of this Agreement, but
subject to earlier termination as provided in Section 11 below during such term
(or during any renewal term). This Agreement shall be renewed automatically for
consecutive renewals of one year each, except that either party may terminate
this
Page 1 - DISTRIBUTION AGREEMENT
<PAGE>
Agreement for any reason or for no reason at the end of the initial or any
renewal term by giving the other party not less than 60 days' notice of
termination prior to the end of the initial or any renewal term.
3. OPERATIONS.
3.1 ACCEPTANCE OF ORDERS; FILING. All orders received by AFEM for the
Padette (and for any other product of AFEM the subject of this Agreement) are
subject to acceptance by AFEM. Each order of Padettes shall be a minimum of
1,200,000. No more than 6,000,000 Padettes will be ordered in any 30-day period
without AFEM's prior written agreement. AFEM will use its best efforts to fill
accepted orders as promptly as practicable, subject to delays caused by
government orders, actions or requirements, transportation conditions, inclement
weather, labor or material shortages, strikes, riots, fire, natural disaster or
other cause beyond AFEM's control. In all cases, AFEM will use its best efforts
to advise Distributor in advance of any inability to make full and timely
delivery of products ordered by Distributor. AFEM may ship partial orders, and
Distributor shall make payment therefor, provided the entire order is delivered
as provided above.
3.2 DISTRIBUTOR'S EFFORTS, FACILITIES AND PERSONNEL. Distributor agrees
to use its best efforts to promote demand for and sale of Padettes (and any
other product of AFEM the subject of this Agreement) throughout the Territory.
Distributor will at all times maintain sales, warehouse, distribution and other
facilities and properties as are adequate and appropriate to perform
Distributor's duties under this Agreement. Distributor will appoint, train and
support such sales representatives and other marketing personnel as are adequate
and appropriate to serve the Territory for AFEM's products. AFEM may, through
its employees or authorized representatives, inspect Distributor's facilities
and properties, wherever located, to determine and assure Distributor's
compliance with the terms of this Agreement. Distributor shall be responsible
for and pay all costs of promoting and advertising AFEM's products within the
Territory, but AFEM shall have the right, upon its request, to approve and
disapprove all advertising, sales and promotional materials and procedures.
3.3 PRICES CHARGED BY DISTRIBUTOR. Distributor may charge to and collect
from its purchasers such prices for AFEM's products as Distributor may
determine, provided that Distributor does not sell for less than its actual
costs, and provided Distributor otherwise complies with applicable laws.
3.4 RETURN OF PRODUCTS. Unless AFEM has authorized in writing the return
of any products, AFEM shall not be obligated to accept from Distributor or any
other person any products, nor to make any exchange therefor, nor to credit
Distributor therefor. Distributor shall not make any claim against AFEM for any
damaged or defective products except for damage or defect attributable solely to
AFEM, as provided in Section 5 below.
3.5 COMMON CARRIERS. Whenever AFEM shall deliver or cause to be delivered
to a common carrier any products ordered by Distributor, whether or not the
particular carrier has been designated in the shipping or routing instructions
of Distributor, AFEM shall not be responsible for any delays or damages in
shipment, and the common carrier is hereby declared to be the agent of
Distributor.
3.6 CHANGE TO PRODUCTS BY AFEM. AFEM reserves the right to change the
design or appearance of any product sold pursuant to this Agreement, or of any
packaging therefor, without notice to Distributor. If any such change is made,
AFEM may (but is not obligated to) make the change to products or packaging
thereafter shipped on the orders of Distributor.
Page 2 - DISTRIBUTION AGREEMENT
<PAGE>
3.7 CHANGE TO PRODUCTS BY DISTRIBUTOR. Distributor shall not have the
right to change the design, appearance or packaging of any product sold to
Distributor under this Agreement without AFEM's prior written consent. The
parties will cooperate to develop packaging that Distributor may recommend for
use in the Territory, subject to their mutual agreement as to the cost thereof.
3.8 RIGHT TO USE NAME. AFEM grants to Distributor the revocable, non-
exclusive, non-transferrable right to use the names "Athena", "Fresh 'n Fit" and
"Padette" in promotional materials and advertising employed by Distributor in
selling the Padette during the term of this Agreement. In using such names,
Distributor will endeavor to comply with all applicable laws relating to
trademarks and copyrights then in force, including compliance with marking
requirements. However, AFEM makes no representation as to its ownership of or
rights to any name or mark in the Territory. Upon termination of this
Agreement, or upon request by AFEM at any time, Distributor agrees to
discontinue use of any or all such names and marks directly or indirectly in
connection with Distributor's business, and further agrees not to use any other
name, mark, title or expression so nearly resembling any such name as would
likely lead to confusion or to deceive the public.
3.9 CONFIDENTIALITY. Each party agrees that the terms of this Agreement,
and all financial, trade secret and other proprietary business information of
the other party, shall remain strictly confidential. Neither party shall have
the right to copy, divulge, summarize or otherwise disclose the terms of this
Agreement, such information, or any part of it, without the other party's prior
written consent, unless required by valid court order or government regulation.
3.10 NONCOMPETITION. Distributor agrees not to manufacture, make,
assemble, market, sell, distribute or support, or cooperate with any other
person to manufacture, make, assemble, market, sell or distribute any product of
any competitor of AFEM within the Territory during the term of this Agreement or
for a period of two years after termination of it for any reason.
4. PAYMENT.
4.1 PRICES. Distributor agrees to pay to AFEM $0.045 for each individual
Padette ordered by Distributor. All prices are and shall be FOB port of entry
________, China (CIF, but without duty or other fee, tax or charge). AFEM may
change the described price at any time and from time to time after the initial
term of this Agreement, but will provide Distributor at least 30 days' prior
written notice of a change and its effective date.
4.2 TERMS. Distributor agrees to pay AFEM for products ordered by
irrevocable confirmed letter of credit drawn on Bank of America Oregon (or other
U.S. bank reasonably acceptable to AFEM) issued prior to shipment of such
products by AFEM from port of _______________, U.S.A., and payable on sight 60
days after such shipment.
4.3 LATE PAYMENT. Unpaid amounts will bear interest at 1.5% per month
(18% per annum) from the due date until paid in full, calculated on a daily
basis, in addition to AFEM's other rights and remedies set forth in Sections 12
and 16 below.
4.4 TITLE; RISK OF LOSS. Title to ordered products will pass to
Distributor upon the later of tender of delivery or payment. Risk of loss will
pass to Distributor upon tender of delivery.
Page 3 - DISTRIBUTION AGREEMENT
<PAGE>
5. LIMITED WARRANTY OF AFEM. AFEM warrants to Distributor that the Padettes
and any other products it sells to Distributor under this Agreement will be free
from material defects in workmanship or materials. Any products proven to be so
defective within a period of 30 days after delivery of them to Distributor will
be replaced by AFEM upon their return (by common carrier) to AFEM within 30 days
of such timely discovery of defectiveness, without cost to Distributor. This is
Distributor's sole remedy for defective products. Except as expressly provided
above, AFEM shall not be liable for any damages, costs, expenses or claims, or
for breach of any warranty, express or implied, or for any other obligation or
liability on account of the products covered by this Agreement, including
consequential damages, even if advised thereof. Except as expressly provided
above, AFEM disclaims all warranties with respect to its products, express or
implied, including warranties of merchantability and of fitness for a particular
purpose. Distributor agrees that it is not authorized to make any warranty or
representation respecting AFEM's products.
6. RECORDS. Distributor shall maintain accurate and complete business records
with respect to its promotion, sales and followup efforts respecting the AFEM
products promoted, ordered, sold and paid for by it. Such records shall be kept
in such form as is customary in the consumer product direct sales business.
Distributor shall make the originals of such records available to AFEM's
employees or authorized representatives for inspection and copying during
Distributor's regular business hours. In addition, Distributor shall deliver to
AFEM, at Distributor's expense, certified copies and summaries of any such
records as AFEM may from time to time reasonably request, and whether or not a
default or breach has been declared by AFEM.
7. NO CONFLICTS. Distributor represents and warrants to AFEM that Distributor
is not a party to any agreement or covenant with any other person or authority,
and knows of no law, ordinance, regulation, rule, order or decree of
governmental authority, which prohibits or restricts it from entering into and
performing pursuant to this Agreement.
8. RELATIONSHIP BETWEEN PARTIES. Nothing in this Agreement shall be construed
as creating an agency or partnership relationship between AFEM and Distributor.
Distributor is an independent contractor. AFEM is interested only in the
results obtained by Distributor, which shall have sole control of the manner and
means of performing under this Agreement. Except as expressly set forth in this
Agreement, AFEM shall not have the right to require Distributor to collect
accounts, attend sales meetings, periodically report to AFEM, conform to any
fixed or minimum number of hours devoted to selling effort, follow prescribed
itineraries, make adjustments, bind AFEM, conform to particular promotional or
solicitation policies of AFEM, or do anything else which would jeopardize the
relationship of independent contractor between AFEM and Distributor. All
expenses and disbursements, including but not limited to those for travel and
maintenance, entertainment, office, clerical and general selling expenses, that
may be incurred by Distributor in connection with this Agreement shall be borne
wholly and completely by Distributor, and AFEM shall not be responsible or
liable therefor. Distributor does not have, nor shall it hold itself out as
having, any right, power or authority to create any contract or obligation,
either express or implied, on behalf of, in the name of, or binding upon AFEM,
or to pledge AFEM's credit, or to extend credit in AFEM's name. Distributor
shall have the right to appoint or otherwise designate suitable and desirable
employees, agents and sales representatives (collectively referred to as
"Distributor's Representatives"). Distributor shall be solely responsible for
Distributor's Representatives and their acts. Distributor's Representatives
shall be at Distributor's own risk, expense and supervision, and Distributor's
Representatives shall not have any claim against AFEM for salaries, commissions,
items of cost or other form of compensation or reimbursement. Distributor
represents,
Page 4 - DISTRIBUTION AGREEMENT
<PAGE>
warrants and covenants that Distributor's Representatives shall be subordinate
to Distributor and subject to each and all of the terms, provisions and
conditions applicable to Distributor under this Agreement. AFEM shall be solely
responsible for and bear all expenses of supplying and producing, assembling and
packaging the products, and for all expenses of the operation of AFEM's offices,
plants, equipment and facilities, and its business activities as a whole. AFEM
shall have no right or authority to commit Distributor in any matter without the
prior written consent of Distributor, or to use Distributor's name in any way
not authorized by this Agreement.
9. NO SUBLICENSING OR ASSIGNMENT. Distributor agrees not to sublicense,
assign or transfer this Agreement or any rights or duties under it, voluntarily
or by operation of law, without the prior written consent of AFEM. Any
attempted sublicensing, assignment or transfer without such consent shall be
void and of no force or effect. A reorganization or merger with another
corporation or other person shall not itself constitute a prohibited assignment.
10. HOLD HARMLESS. Each party shall save the other harmless from and against
and shall indemnify the other for any liability, loss, costs, expenses or
damages caused by reason of any injury (whether to body, property, or personal
or business character or reputation) sustained by any person or to any person or
to property by reason of any act, neglect, default or omission of it or any of
its agents, employees or other representatives. If either party is sued in any
court for damages by reason of any act of the other party referred to in this
Section 10, such other party shall defend the action (or cause same to be
defended) at its own expense and shall pay and discharge any judgment that may
be rendered in such action. If such other party fails or neglects to so defend
the action, the party sued may defend the same and any expenses, including
reasonable attorneys' fees, which it may pay or incur in defending the action,
and the amount of any judgment which it may be required to pay, shall be
promptly reimbursed upon demand. Nothing in this Section 10 is intended to nor
shall it relieve either party from liability for its own act, omission or
negligence, nor shall it be construed to void AFEM's exclusion of warranties set
forth in Section 5 above.
11. TERMINATION. This Agreement will terminate on the occurrence of any of the
following events, whichever first occurs:
11.1 As provided in Section 2 above.
11.2 Ten days after notice to Distributor by AFEM of non-payment pursuant
to Section 4 above.
11.3 Thirty days after notice by one party to the other of material breach
of any other term, covenant or condition of this Agreement that is not cured or
fully performed within such period to the satisfaction of the notifying party.
11.4 By AFEM in its sole discretion if Distributor for any reason orders
and timely pays for fewer than the number Padettes described below during any
12-month period of the initial term or during a described renewal term of this
Agreement (or fewer than an agreed number of other products of AFEM which may
become the subject of this Agreement):
Page 5 - DISTRIBUTION AGREEMENT
<PAGE>
<TABLE>
<CAPTION>
Term Minimum Purchase of Padettes
---- ----------------------------
<S> <C>
First year 6,000,000
Second year 15,000,000
Third year 18,000,000
Fourth year 21,600,000
Fifth year 25,920,000
Sixth and additional as agreed in writing at least 90 days
years prior to expiration of fifth year
</TABLE>
11.5 Automatically, without prior notice, upon either party: filing a
voluntary petition under the bankruptcy laws of its own country or other
applicable jurisdiction; being the subject of an involuntary petition in
bankruptcy which is not dismissed within 60 days thereafter; or becoming
insolvent, making an assignment for the benefit of creditors, or having a
receiver or trustee appointed for it.
12. EFFECT OF TERMINATION. Upon termination of this Agreement pursuant to
Section 2 or Section 11:
12.1 All rights, licenses and privileges granted to Distributor under this
Agreement shall immediately cease and terminate. However, any such termination
will not affect the rights and obligations of the parties respecting remedies
for breach of this Agreement.
12.2 All obligations arising out of events prior to the effective
termination date, including without limitation orders previously accepted and
obligations to pay for ordered products, shall be performed in accordance with
the terms and conditions of this Agreement.
12.3 Distributor shall discontinue its use of all names, trademarks and
other proprietary information of AFEM.
12.4 AFEM may, but shall not be obligated to, purchase from Distributor,
and Distributor agrees to sell to AFEM, any or all products of AFEM then owned
by Distributor. The purchase price shall be equal to the price (if any) paid by
Distributor to AFEM, plus freight and insurance necessary to transport the same
to AFEM's designated office. AFEM may reject any products not in original
containers or not in first class condition.
13. COMPLIANCE WITH LAWS. Distributor shall assist AFEM in obtaining and
maintaining all governmental registration and certification of AFEM's products
to be sold in the Territory pursuant to this Agreement. Distributor shall also
at all times comply with all laws, ordinances, rules and regulations applicable
to the sale and distribution of AFEM's products and to the operation of its
business in the Territory, including without limitation national, provincial and
local consumer protection laws. Distributor shall procure all permits, licenses
and insurance (including without limitation workers' compensation or similar
coverage) necessary or required by any governmental authority to perform its
obligations under this Agreement. Distributor shall, upon request by AFEM,
promptly provide to AFEM written evidence of all such compliance.
Page 6 - DISTRIBUTION AGREEMENT
<PAGE>
14. BONUS FEE. To defray Distributor's costs in promoting AFEM's products
pursuant to this Agreement and to promote the minimum sales goals by Distributor
of Padettes in the Territory, AFEM agrees to pay to Distributor a monthly fee of
$2,500.00. The first such monthly fee shall be payable 30 days after
commencement of this Agreement, and monthly fees shall be payable on the same
day of each succeeding month until the earlier of termination of this Agreement
by either party pursuant to Section 11 above or failure of Distributor to meet a
minimum Padette order requirement set forth in Section 11.4 for any annual
period for any reason (even if this Agreement is not terminated by AFEM by
reason thereof). Such monthly fee shall be noncumulative and shall not be
payable for any period after termination of this Agreement for any reason. No
liability of Distributor to AFEM (before or after termination) may be offset
against any monthly fees payable to Distributor by AFEM.
15. WARRANT. Contingent upon approval thereof by AFEM's Board of Directors
within 90 days of the date of this Agreement, AFEM agrees to issue to
Distributor a non-transferrable warrant to purchase up to 10,000 shares of the
common voting stock of AFEM at a price of $4.00 per share. Such warrant will be
in the standard form utilized by AFEM, will expire five years after the date of
this Agreement, and will contain restrictions on transferability absent
compliance with the registration requirements of U.S.A. and other applicable
securities laws. The warrant will be exercisable for up to 5,000 shares on the
first two anniversaries of the date of this Agreement, but decreased by 200% of
the percentage by which the minimum Padette order requirements set forth in
Section 11.4 above are not met for the annual period ending on the applicable
anniversary date, but not less than 0. By way of example, if Distributor orders
only 4,000,000 Padettes during the initial term, the number of shares which may
be exercised under the warrant will be reduced by 3,333 to 1,667 ((6,000,000 -
4,000,000) DIVIDED BY 6,000,000 x 2.00 x 5,000 = 3,333 reduction).
16. ENFORCEMENT.
16.1 INJUNCTION. Either party aggrieved by a breach or threatened breach
of this Agreement (other than for nonpayment) shall be entitled to bring an
action to prevent, stop or otherwise obtain redress, including specific
performance, injunctive relief or other available equitable remedy, without
having to post bond or other undertaking therefor, and without necessity of
providing 30 days' notice pursuant to Section 11.3. Each party waives any
defense it might have as a defendant in such action that the aggrieved party has
or had an adequate remedy at law, and agrees that monetary damages for any such
breach or threatened breach is and will be inadequate.
16.2 ATTORNEYS' FEES. If any action or other proceeding is instituted
relating to any term or condition of this Agreement or relating to any of the
rights, duties or obligations arising under it, the prevailing party shall be
entitled to recover from the other party, and the other party agrees to pay to
the prevailing party, whether or not the matter proceeds to final judgment or
decree, in addition to costs and disbursements allowed by law, such sum as the
trial and each appellate court may adjudge reasonable as attorneys' fees in such
action or other proceeding, and in any appeal of it.
16.3 REMEDIES NOT EXCLUSIVE. All rights and remedies afforded a party by
this Agreement are cumulative and shall be in addition to any other rights or
remedies allowed such party at law, in equity or otherwise.
16.4 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws and decisions of the state of Oregon, United States of
America, without regard to the conflicts
Page 7 - DISTRIBUTION AGREEMENT
<PAGE>
of law rules of such state. If litigation is instituted by a party to enforce
or interpret this Agreement, venue shall lie in Washington County or Multnomah
County, Oregon, U.S.A. Such venue is exclusive.
17. NOTICES. Any notice or consent required or permitted to be given under
this Agreement shall be in writing, in English, and shall be deemed to have been
given when personally delivered to an officer or other authorized representative
of a party or 48 hours after facsimile transmission (accompanied by deposit in
the U.S.A. mails, first class postage prepaid by certified or registered mail,
return receipt requested), or 48 hours after delivery to a recognized
international overnight carrier, with overnight shipping charges paid, and
addressed to such party as follows:
If to AFEM: AFEM Medical Corporation
Attn: President
10170 SW Nimbus Avenue #H-1
Portland, OR 97223, U.S.A.
Telephone: (503) 968-8800
Facsimile: (503) 639-3674
If to Distributor: Chinese Business Services
Attn: Haiyang R. Yuan, President
2665 Alder Street
Eugene, OR 97405-4117, U.S.A.
Telephone: (541) 342-1668
Facsimile: (541) 342-3676
or such other address as a party may specify by a notice in writing, given in
the same manner.
18. MISCELLANEOUS.
18.1 CURRENCY. All monetary amounts set forth in this Agreement, and all
payments required or permitted by this Agreement, are and shall be in U.S.
Dollars.
18.2 TAXES. Any and all taxes (including sales, value added, inventory and
use taxes), excises, assessments, levies, imports, duties, costs, charges and
penalties which may be assessed or imposed by any governmental agency in
connection with this Agreement shall be the sole obligation of Distributor,
except U.S. taxes on AFEM's income.
18.3 WAIVER OF BREACH. The waiver by either party of a breach of any term
or provision of this Agreement shall not be construed as a waiver of any
subsequent breach of the same or any other term or provision by either party.
18.4 SEVERABILITY. If any term or provision of this Agreement or the
application of it to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement and the application of such
term or provision to persons or circumstances other than those to which it is
held invalid or unenforceable shall not be affected thereby, and each term or
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
Page 8 - DISTRIBUTION AGREEMENT
<PAGE>
18.5 TIME OF THE ESSENCE; DAYS. Time is of the essence of this Agreement
in all particulars. The term "days" means calendar days.
18.6 MODIFICATION. This Agreement may not be amended or modified except by
written Agreement executed by the parties. For example (but not in limitation
of the above), expansion of the described Territory, and any change or addition
to AFEM's products covered by this Agreement, shall require such a writing.
18.7 PRONOUNS. As the context may require in this Agreement, the use of
any gender (male, female or neuter) shall include any other gender, and the
singular shall include the plural and the plural the singular. The word
"person" includes individual, joint venture, partnership, limited liability
company, corporation, association, trust or any other entity or organization.
18.8 CAPTIONS. The captions heading the sections and subsections of this
Agreement are inserted for convenience of reference only, and are not to be used
to define, limit, construe or describe the scope or intent of any term,
provision, section or subsection of this Agreement.
18.9 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
18.10 INTEGRATION. THIS AGREEMENT CONTAINS THE FINAL AND CONCLUSIVE
AGREEMENT AND UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF
IT, AND SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS, ORAL OR WRITTEN
(including without limitation the November 16, 1995 heads of agreement letter
between the parties). Except as set forth in this Agreement, there are no
promises, representations, agreements or understandings, oral or written, among
the parties relating to the subject matter of this Agreement. This Agreement
shall be interpreted in accordance with the plain English meaning of its terms.
EXECUTED by the parties through their duly authorized officers or
representatives as of the date first written above.
AFEM MEDICAL CORPORATION MEIX CORPORATION, dba
CHINESE BUSINESS SERVICES
By /s/ William H. Fleming By /s/ Haiyang R. Yuan
------------------------------- -----------------------------
William H. Fleming Haiyang R. Yuan
Its President Its President
AFEM DISTRIBUTOR
Page 9 - DISTRIBUTION AGREEMENT
<PAGE>
Exhibit 10.40
The loaned securities were fully collateralized by cash and U.S.
Government Securities as of December[|nb|]31, 1995.
January 9, 1996
Mr. David Porter
Athena Medical Corporation
10170 S.W. Nimbus Avenue, Suite H1
Portland, OR 97223
Dear David:
First Portland Leasing Corp. is pleased to submit a lease line offer for your
review and approval. The following are the terms and conditions of our
proposal:
LESSEE: Athena Medical Corporation
LESSOR: First Portland Leasing Corp.
EQUIPMENT Manufacturing and Laboratory Equipment
DESCRIPTION:
MAXIMUM DELIVERED The maximum delivered cost of the
COST: equipment shall not exceed $300,000
including any applicable sales, use or
similar taxes, permitted transportation
charges, assembly and installation
costs which Lessor may agree to pay.
This will be structured as a lease line
of credit with a minimum lease schedule
transaction size of $50,000.
MONTHLY RATE .03475
FACTOR:
LEASE TERM: 36 months
<PAGE>
Page 2
<TABLE>
<CAPTION>
SECURITY DEPOSIT: As a Percentage
of Leased Equipment
Invoice Amount
--------------
Terms Cash Security
(Months) Deposit Released*
----------- ---------------------- -----------------
<S> <C> <C>
36 17.5% 1/3 at 15 months
1/3 at 24 months
1/3 at 36 months
</TABLE>
* Subject to Lessor's normal release terms and
conditions.
Interest in the amount of 6% per year will accrue
on the security deposit.
ADDITIONAL A Blanket U.C.C. filing on existing equipment is
SECURITY: required.
LANDLORD WAIVER: Required where appropriate.
LESSEE'S OPTION AT At the maturity of the lease term, Lessee
MATURITY OF THE will have the following options, provided
LEASE TERM: that Lessee is in compliance with the terms
and conditions of each Lease Rental
Agreement:
1. Purchase the equipment at its then fair
market value.
2. Renew the lease of equipment on an annual
basis at its then fair market rental. Upon
completion of each annual rental, Lessee will
again have the option to purchase or renew
the lease of the equipment.
3. Return all equipment to Lessor.
<PAGE>
Page 3
NET LEASE: Each lease will be a net lease under which
all costs of operating, maintaining and
insuring the equipment, taxes, and other
claims associated with its use, will be paid
by Lessee. Lessee will comply with all the
laws and regulations concerning the use of
the equipment.
APPROVAL OF THE Each lease is subject to documentation
TRANSACTION: satisfactory to Lessor. Each Lease is
further conditioned upon Lessee's compliance
with the terms and conditions of all other
agreements with Lessor to which it is a
party.
DOCUMENTATION All instruments and documents, as Lessor may
FEES AND EXPENSES: reasonably request, shall be subject to final
review by Lessor and its counsel as to form
and substance. Expenses incurred by Lessor
in connection with the preparation of this
transaction will be paid by Lessor. Expenses
incurred by Lessee will be paid by the
Lessee. There is a non-refundable
documentation fee of $175 upon signing each
Lease.
LATEST DELIVERY It is anticipated that all of the equipment
DATE: will be delivered and accepted by July 31,
1996. If any item of the equipment is not
delivered to and accepted by Lessee on or
prior to that date, Lessor shall have no
prior obligation to lease such an item to
Lessee.
RENTALS: Lessee will make first and last payments
initially followed by 34 consecutive monthly
payments in advance for the 36 month lease
program.
EXPIRATION OF This proposal expires at the close of
THE PROPOSAL: business January 16, 1996.
You may indicate your acceptance of this proposal by executing the enclosed copy
of this letter and returning it to my attention.
<PAGE>
Page 4
By accepting this proposal, Lessee acknowledges that this letter contains the
entire Lease proposal (superseding all previous representations and agreements,
either oral or written) and that there are no promises, agreements, or
understandings outside this letter. Succeeding representations or amendment to
this proposal, if any, will be made by First Portland Leasing Corp. in writing.
We appreciate the opportunity to submit this proposal for your review and
approval. Should you or any member of your staff have any questions in the
interim, please call me directly.
Sincerely,
FIRST PORTLAND LEASING CORP.
/s/ David S. Dolezal
David S. Dolezal
Leasing Consultant
:pjr
Agreed to and accepted by Athena Medical Corporation
/s/ William H. Fleming
- ----------------------------------------
Its: President
-----------------------------------
Date: 1/12/96
----------------------------------
cc: Len Ludwig
Jim Johnson
<PAGE>
AMENDMENT OF AGREEMENT
BETWEEN: ATHENA MEDICAL CORPORATION ("AFEM");
AND: BEIJING KANG MEI BIOLOGICAL PRODUCTS, LTD., a joint venture
comprised of Cort MacKenzie & Thomas, Inc., and Fang-Hai Science
and Technology ("Kang Mei").
DATED: Effective November 1, 1995.
R E C I T A L:
The parties have previously entered into an arrangement, evidenced by
letters dated January 10, February 10 and February 12, 1995 (the "Agreement"),
under which Kang Mei would have the exclusive right to manufacture, distribute
and sell various current and future products of AFEM within China and other
countries and areas. The parties' relationship has not progressed as intended,
and the parties now desire to amend the arrangement on the terms and conditions
set forth below.
A G R E E M E N T:
In consideration of the foregoing Recital and the terms, covenants and
conditions set forth below, the parties agree as follows:
1. The Agreement is terminated as of the effective date of this Amendment
of Agreement (the "Amendment"). On and after such effective date of
termination, neither party has any obligation or liability to the other arising
out of any matter described or implied in the Agreement.
2. In consideration of the expense incurred by Kang Mei in obtaining
nationwide approval for sale of AFEM's Fresh 'N Fit-Registered Trademark-
interlabial Padette-TM- (the "Padette") in China, and in consideration of this
Amendment, AFEM agrees to pay to Kang Mei (through Cort MacKenzie & Thomas, Inc.
("CMT")) $0.0025 U.S. (1/4 of one U.S. cent) for each Padette sold by AFEM
within China during a three-year term commencing on the effective date of this
Amendment and terminating on the third anniversary thereof. Provided, however,
that no such payment shall exceed $100,000.00 U.S. in any twelve-month period
(beginning on the effective date of this Amendment). Amounts which would have
been payable to Kang Mei but for such limitation shall not be carried into
future years. For purposes of the above, the word "sold" means receipt by AFEM
of payment for such Padettes, but excludes receipts from Kang Mei or any partner
or affiliate of it. Payment by AFEM to Kang Mei pursuant to this Paragraph 2
will be made within 30 days after the end of each calendar quarter of the term,
with the first such payment due on April 30, 1996 (for the quarterly period
ending March 31, 1996 and the two months of the prior quarter). Kang Mei
recognizes that AFEM is not warranting any particular level of sales of Padettes
in China during any period or periods of the term.
3. Kang Mei may, on and after the date of this Amendment, place orders
for the purchase of products from AFEM for sale in China. All such orders shall
be subject to acceptance by AFEM in its sole discretion, and if accepted will be
payable by irrevocable confirmed letter of credit and on such other terms and
conditions as the parties may mutually agree in writing. Nothing in this
Section 3 shall be construed to prevent AFEM from entering into sales or
distribution arrangements with other third parties.
Page 1 - AMENDMENT OF AGREEMENT
<PAGE>
4. AFEM and Kang Mei entered into the Agreement, and have entered into
this Amendment, in good faith and with absolute confidence in the integrity of
each other. However, considerations of U.S. law make it necessary to address
the following matters formally and substantially. Nothing set forth in this
Paragraph 4 is to be interpreted negatively with regard to the business
practices of either party or any other person.
4.1 Kang Mei has not knowingly made and will not knowingly make, in
the performance of the Agreement or this Amendment, any payments, loans or gifts
or promises or offers of payments, loans or gifts of any money or anything of
value, directly or indirectly: (a) to or for the use or benefit of any official
or employee of any government or an agency or instrumentality of any such
government; (b) to any political party or official or candidate thereof; (c) to
any other person if Kang Mei knows or has reason to know that any part of such
payment, loan or gift will be directly or indirectly given or paid to any such
governmental official or employee or political party or candidate or official
thereof; or (d) to any other person, the payment of which would violate either
the laws or policies of any country in which the Agreement or this Amendment is
to be performed or the country or countries of such person.
4.2 Kang Mei will answer in reasonable detail any questionnaire or
other written or oral communications from AFEM or its outside auditors, to the
extent same pertains to compliance with the foregoing representations and
warranties.
4.3 The Agreement and this Amendment have been duly executed and
delivered by an authorized representative of Kang Mei, and neither the execution
and delivery of nor the performance of the provisions of the Agreement or this
Amendment conflict with or result in a breach of any law or of any regulation,
order, writ, injunction or decree of any court or governmental authority of any
country in which the Agreement or this Amendment is to be performed, so as to
have a materially adverse effect on AFEM, except as Kang Mei may otherwise
advise AFEM in writing.
4.4 Kang Mei represents that the provisions of this Amendment
relating to payment to Kang Mei are legal and binding under the laws and
policies of China (including without limitation taxation and exchange control
laws and regulations), and with respect to both to such payment provisions and
any payment pursuant thereto, no consent of or notice to such government, or any
agency thereof, is recorded or necessary, except as Kang Mei may otherwise
advise AFEM in writing.
5. Miscellaneous provisions:
5.1 Each party represents that it has not previously assigned,
encumbered or otherwise transferred any right, liability or interest it has
under the Agreement.
5.2 As the context may require in this Amendment, the use of any
gender (male, female or neuter) shall include any other gender, and the singular
shall include the plural and the plural the singular. As used in this
Amendment, the term "person" includes individual, sole proprietorship,
partnership, joint venture, trust, corporation, limited liability company,
association or any other entity or agency.
5.3 Any notice, advice or consent required or permitted to be given
under this Amendment shall be in writing and shall be deemed to have been given
when personally delivered to a party or 24 hours after deposit in the United
States Mail, first class postage prepaid by certified or
Page 2 - AMENDMENT OF AGREEMENT
<PAGE>
registered mail, return receipt requested, or 24 hours after delivery to a
recognized national overnight carrier, with overnight shipping charges paid, and
addressed to such party as follows:
If to AFEM: Athena Medical Corporation
Attn: William H. Fleming, President
10180 SW Nimbus Avenue, Suite J-5
Portland, OR 97223
If to Kang Mei: Beijing Kang Mei Biological Products, Ltd.
c/o Cort MacKenzie & Thomas, Inc.
Attn: Thomas C. Stewart, President
5335 Southwest Meadows Road, Suite 270
Lake Oswego, OR 97035
or such other address as a party may specify by a notice in writing, given in
the same manner.
5.4 This Amendment shall be governed by and construed in accordance
with the laws and decisions of the state of Oregon, without regard to the
conflict of laws rules of such state. If litigation is instituted by a party to
enforce or interpret this Amendment, venue shall lie in Multnomah or Washington
County, Oregon. Such venue is exclusive.
5.5 This Amendment is binding on and shall operate for the benefit of
Kang Mei and each partner of it. By executing this Amendment individually, CMT
represents to AFEM that CMT is authorized to execute and deliver and to receive
payments pursuant to this Amendment. CMT further agree to indemnify, defend
and hold harmless AFEM (and its directors, officers, employees, agents,
successors and assigns) from all claims (including expenses, reasonable attorney
fees and costs incurred by such indemnitees in investigating and defending such
claims) of and liabilities owed to any actual or purported joint venture partner
of CMT (including without limitation Fang-Hai Science and Technology) arising
out of or related to the Agreement, this Amendment, or performance by AFEM or
CMT pursuant to this Amendment.
5.6 THIS AMENDMENT CONTAINS THE FINAL AND EXCLUSIVE AGREEMENT AND
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF IT, AND
SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS, ORAL OR WRITTEN. EXCEPT AS
SET FORTH IN THIS AMENDMENT, THERE ARE NO PROMISES, REPRESENTATIONS, AGREEMENTS
OR UNDERSTANDINGS, ORAL OR WRITTEN, AMONG THE PARTIES RELATING TO THE SUBJECT
MATTER OF THIS AMENDMENT. This Amendment may not be modified except by a
writing signed by the party affected.
Page 3 - AMENDMENT OF AGREEMENT
<PAGE>
EXECUTED by the duly authorized representatives of each party, to be
effective as set forth above.
Athena Medical Corporation
By
------------------------------------
William H. Fleming, President
AFEM
Beijing Kang Mei Biological Products, Ltd.
By Cort MacKenzie & Thomas, Inc., partner
By
------------------------------------
Thomas C. Stewart, President
KANG MEI
Cort MacKenzie & Thomas, Inc., individually
By
------------------------------------
Thomas C. Stewart, President
CMT
Page 4 - AMENDMENT OF AGREEMENT
<PAGE>
Exhibit 10.42
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
--------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
THOMAS C. STEWART
Exercisable to Purchase
270,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 29, 2000
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before December 29, 2000, up to 270,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $2.00 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is THOMAS C. STEWART.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows: none. The
Required Condition has been satisfied.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on December 29, 2000 by surrendering this Warrant Certificate, together
with appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10180 SW Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate
Page 2 - Warrant Certificate
<PAGE>
(dated the date hereof), in form and tenor similar to this Warrant
Certificate, evidencing that portion of this Warrant not exercised.
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within such 30 day period, then this
Warrant shall automatically terminate upon consummation of such merger,
change, liquidation or sale, and the Warrantholder will have no further
rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this
Page 3 - Warrant Certificate
<PAGE>
Section 4. The number of full shares issuable shall be determined by
the Board of Directors of the Company or by the terms of any
assumption or substitution documents, and any such determination shall
be binding and conclusive.
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer thereof unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required.
9. MISCELLANEOUS. By accepting this Warrant, the Warrantholder acknowledges
having considered the tax consequences of the Company's grant of it. No
amendment, waiver, termination or other change to this Warrant or any term
of it will be effective unless set forth in a writing signed by the party
sought to be bound. The captions heading the Sections of this Warrant are
inserted for convenience of reference only, and are not to be used to
define, limit, construe or describe the scope or intent of any term,
provision or section of this Warrant. Any notices required or permitted
under this Warrant must be in writing and will be deemed to have been given
when
Page 4 - Warrant Certificate
<PAGE>
personally delivered to a party or 48 hours after deposit in the United
States Mail, first class postage prepaid by both first class and certified
mail, return receipt requested, or 48 hours after delivery to a recognized
national overnight carrier, with overnight shipping charges paid, and
addressed to such party as follows:
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Thomas C. Stewart
5335 SW Meadows Road, Suite 270
Lake Oswego, OR 97035
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of December 29, 1995.
ATHENA MEDICAL CORPORATION
By
------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
Exhibit 10.43
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
------------------------------
PURCHASE WARRANT CERTIFICATE
Issued to:
MICHAEL D. STEWART
Exercisable to Purchase
35,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after December 31, 1999
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before December 31, 1999, up to 35,000 Shares at the Exercise Price.
This Warrant is issued pursuant to partial transfer on this date by Cort
MacKenzie Securities, Inc. to the Warrantholder of a warrant issued to such
transferor as of October 12, 1994.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $1.50 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is MICHAEL D. STEWART.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means this Warrant is valid as follows: none. The
Required Condition has been satisfied.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on December 31, 1999, by surrendering this Warrant Certificate, together
with appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10180 SW Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased. A registration statement
listing the Securities shall be filed as a "shelf registration" with the
Securities and Exchange Commission (the "SEC") not later than March 29,
1996. Thereafter, the Company shall promptly and diligently take all
appropriate and reasonable action to cause such registration statement to
become effective. The registration statement will include Common Stock and
other warrants or options therefor held by other persons. If the Company's
prospectus (including any amendments) included in the registration
statement is not in compliance with the Securities Act of 1933 (the "1933
Act") at any time while the registration
Page 2 - Warrant Certificate
<PAGE>
statement is effective, the Company will take reasonably prompt action to
update the prospectus to comply with the 1933 Act and the Warrantholder may
not conduct any trading until the prospectus is updated.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares or a dividend in stock is paid on the
Common Stock, the number of shares of Common Stock for which this
Warrant is then exercisable will be proportionately increased and the
Exercise Price will be proportionately reduced. Conversely, if the
outstanding shares of the Company's Common Stock are combined into a
smaller number of shares, the number of shares of Common Stock for
which this Warrant is then exercisable will be proportionately reduced
and the Exercise Price will be proportionately increased. The
increases and reductions provided for in this Subsection 3(a) will be
made with the intent and, as nearly as practicable, the effect that
neither the percentage of the total equity of the Company obtainable
on exercise of the Warrant nor the price payable for such percentage
upon such exercise will be affected by any event described in this
Subsection 3(a).
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company,
or other change in the capital structure of the Company, then, as a
condition of such change, lawful and adequate provision will be made
so that the Warrantholder will have the right thereafter to receive
upon the exercise of this Warrant the kind and amount of shares of
stock or other securities or property to which the Warrantholder would
have been entitled if, immediately prior to such event, the
Warrantholder had held the number of shares of Common Stock obtainable
upon the exercise of the Warrant. In any such case, appropriate
adjustment will be made in the application of the provisions set forth
herein with respect to the rights and interest thereafter of the
Warrantholder, to the end that the provisions set forth herein will
thereafter be applicable, as nearly as reasonably may be, in relation
to any shares of stock or other property thereafter deliverable upon
the exercise of this Warrant. The Company will not permit any change
in its capital structure to occur unless the issuer of the shares of
stock or other securities to be received by the holder of this
Warrant, if not the Company, agrees to be bound by and comply with the
provisions of this Warrant Certificate.
Page 3 - Warrant Certificate
<PAGE>
(c) When any adjustment is required to be made in the number of shares of
Common Stock, other securities or other property purchasable upon
exercise of this Warrant, the Company will promptly determine the new
number of such shares purchasable upon exercise of this Warrant, and
(i) prepare and retain on file a statement describing in reasonable
detail the method used in arriving at the new number of such shares or
other securities or property purchasable upon exercise of this
Warrant, and (ii) cause a copy of such statement to be mailed to the
Warrantholder within 30 days after the date of the event giving rise
to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 3. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
4. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of this
Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of this Warrant.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant. This Warrant may be
sold, assigned, encumbered or otherwise transferred if: (a) the Company
receives an opinion of counsel to the Warrantholder, reasonably
satisfactory to the Company, that the proposed transfer is exempt from
registration under federal and applicable state securities laws or the
transaction is otherwise in compliance with the registration requirements
thereof; and (b) if a partial transfer is proposed, not fewer than 5,000
Securities per transferee are the subject thereof. Any warrant issued to
any such transferee may not be sold, assigned, encumbered or otherwise
transferred (except by will or the laws of intestacy), in whole or in part,
without the prior written consent of the Company and compliance with
applicable securities laws.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the 1933 Act and other federal and state securities laws
and regulations, and the requirements of any stock exchange upon which
Page 4 - Warrant Certificate
<PAGE>
the Securities may then be listed.
(b) Notwithstanding anything in Section 8 (a) above to the contrary, the
Company has agreed to register the Securities in accordance with
Section 2 above.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. Any notices required or permitted
to be given hereunder will be in writing and may be served personally or by
mail; and if served will be addressed as follows:
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: Michael D. Stewart
5335 SW Meadows Road,
Suite 270
Lake Oswego, OR 97035
Any notice so given by mail will be deemed effectively given 48 hours after
mailing when deposited in the United States mail, registered or certified
mail, return receipt requested, postage prepaid and addressed as specified
above. Any party may by written notice to the other specify a different
address for notice purposes.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED March ___, 1996.
ATHENA MEDICAL CORPORATION
By
--------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
Exhibit 24.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 20, 1996
included in Form 10-K for the year ended December 31, 1995 and to all
references to our firm included in this registration statement.
ARTHUR ANDERSON LLP
Portland, Oregon
March 29, 1996
