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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
GLOBAL MED TECHNOLOGIES, INC.
----------------------------------------
(Name of Issuer)
$0.01 Par Value Common Stock
----------------------------------------
(Title of Class of Securities)
37935E 10 1
----------------
(CUSIP Number)
Gary L. Cook, 1700 Lincoln Street, 32nd Floor,
Denver, CO 80203 (303) 860-1700
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 11, 1998
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
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CUSIP No. 37935E 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Heng Fung Holdings Company Limited
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
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3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 12,138,300 shares - 79.7%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
12,138,300 shares - 79.7%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,138,300 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
79.7%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
HC
-------------------------------------------------------------------------
2
<PAGE>
CUSIP No. 37935E 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Fai H. Chan
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 250,000 shares - 3.0% (consists of 250,000 shares
BENEFICIALLY underlying presently exercisable option)
OWNED BY ----------------------------------------------------
EACH 8. SHARED VOTING POWER
REPORTING 12,138,300 shares - 79.7%
PERSON ----------------------------------------------------
WITH
9. SOLE DISPOSITIVE POWER
250,000 shares - 3.0% (consists of 250,000 shares
underlying presently exercisable option)
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
12,138,300 shares - 79.7%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,388,300 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
81.4%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
-------------------------------------------------------------------------
3
<PAGE>
CUSIP No. 37935E 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Heng Fung Capital [S] Private Limited
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Singapore
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 12,138,300 shares - 79.7%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
12,138,300 shares - 79.7%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,138,300 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
79.7%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------
4
<PAGE>
CUSIP No. 37935E 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Heng Fung Finance Company Limited
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 12,138,300 shares - 79.7%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
12,138,300 shares - 79.7%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,138,300 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
79.7%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------
5
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the $0.01 par value common stock ("Common
Stock") of Global Med Technologies, Inc. ("Issuer"). The Issuer's principal
executive offices are located at 12600 West Colfax, Suite A-500, Lakewood,
Colorado 80215.
ITEM 2. IDENTITY AND BACKGROUND.
I-A. (a) Heng Fung Holdings Company Limited ("Heng Fung Holdings").
(b) The principal office address of Heng Fung Holdings is 10th Floor
Lippo Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal business of Heng Fung Holdings is a holding company.
(d) During the last five years, Heng Fung Holdings has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Heng Fung Holdings has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Heng Fung Holdings is a Hong Kong corporation.
I-B. (a) Fai H. Chan is a director, the Chairman, the Managing Director and
a control person of Heng Fung Holdings.
(b) The business address of Fai H. Chan is 10th Floor Lippo Protective
Tower, 231- 235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Fai H. Chan is Chairman and Managing
Director of Heng Fung Holdings Company Limited and its subsidiaries.
(d) During the last five years, Fai H. Chan has not been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Fai H. Chan has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Fai H. Chan is a Canadian citizen.
I-C. (a) Kwok Jen Fong is a director of Heng Fung Holdings.
(b) The business address of Kwok Jen Fong is 7 Temasek Boulevard,
#43-03 Suntec Tower One, Singapore 038987.
(c) The principal occupation of Kwok Jen Fong is advocate, solicitor
and managing partner of Fong Jeya Partnership.
(d) During the last five years, Kwok Jen Fong has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
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<PAGE>
(e) During the last five years, Kwok Jen Fong has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Kwok Jen Fong is a Singaporean citizen.
I-D. (a) Mabel Keow Yoke Chan is a director and an Executive Director of
Heng Fung Holdings.
(b) The business address of Mabel Keow Yoke Chan is 10th Floor, Lippo
Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Mabel Keow Yoke Chan is an Executive
Director of Heng Fung Holdings.
(d) During the last five years, Mabel Keow Yoke Chan has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mabel Keow Yoke Chan has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Mabel Keow Yoke Chan is a Canadian citizen.
I-E. (a) Mary-ann Sook Jin Chan is a director and an Executive Director of
Heng Fung Holdings.
(b) The business address of Mary-ann Sook Jin Chan is 10th Floor,
Lippo Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
7
<PAGE>
(c) The principal occupation of Mary-ann Sook Jin Chan is an Executive
Director of Heng Fung Holdings.
(d) During the last five years, Mary-ann Sook Jin Chan has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mary-ann Sook Jin Chan has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Mary-ann Sook Jin Chan is a British citizen.
I-F. (a) Suk King Chan is the Secretary of Heng Fung Holdings.
(b) The business address of Suk King Chan is Hang Seng Building, Rooms
706-707, 77 Des Voeux Road Central, Hong Kong.
(c) The principal occupation of Suk King Chan is Senior Manager,
Corporate Services, and Consultant of Graham H.Y. Chan & Co., CPA.
(d) During the last five years, Suk King Chan has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Suk King Chan has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Suk King Chan is a Chinese citizen.
I-G. (a) Man Tak Lau is the Financial Controller of Heng Fung Holdings.
(b) The business address of Man Tak Lau is 10th Floor Lippo Protective
Tower, 231- 235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Man Tak Lau is Financial Controller of
Heng Fung Holdings.
(d) During the last five years, Man Tak Lau has not been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Man Tak Lau has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Man Tak Lau is a British, Hong Kong citizen.
I-H. (a) Robert H. Trapp is a director of Heng Fung Holdings.
(b) The business address of Robert H. Trapp is 1700 Lincoln Street,
32nd Floor, Denver, Colorado 80203.
(c) The principal occupation of Robert H. Trapp is Managing Director
of Fronteer Financial and President of American Fronteer Financial
Corporation.
8
<PAGE>
(d) During the last five years, Robert H. Trapp has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Robert H. Trapp has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Robert H. Trapp is a Canadian citizen.
II. (a) Fai H. Chan.
(b) through (f) - See Item I-B above.
III-A.(a) Heng Fung Capital [S] Private Limited ("Heng Fung Private").
(b) The principal office address of Heng Fung Private is 7 Temasek
Boulevard, #43- 03 Suntec Tower One, Singapore 038987.
(c) The principal business of Heng Fung Private is an investment
holding company.
(d) During the last five years, Heng Fung Private has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Heng Fung Private has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Heng Fung Private is a Singaporean corporation.
III-B.(a) Fai H. Chan is a director, the Chairman and the Managing
Director of Heng Fung Private.
(b) through (f) - See Item I-B above.
III-C. (a) Mabel Keow Yoke Chan is a director of Heng Fung Private.
(b) through (f) - See Item I-D above.
III-D. (a) Kwok Jen Fong is a director of Heng Fung Private.
(b) through (f) - See Item I-C above.
III-E. (a) Heng Fung Holdings is sole shareholder of Hung Fung Private.
(b) through (f) - See Item I-A above.
IV-A (a) Heng Fung Finance Company Limited ("Heng Fung Finance").
(b) The principal office address of Heng Fung Finance is 10th Floor
Lippo Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal business of Heng Fung Finance is finance.
(d) During the last five years, Heng Fung Finance has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Heng Fung Finance has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Heng Fung Finance is a Hong Kong corporation.
9
<PAGE>
IV-B.(a) Fai H. Chan, a director, Chairman and Managing Director of Heng
Fung Finance.
(b) through (f) - See Item I-B above.
IV-C.(a) Mabel Keow Yoke Chan is a director and the Secretary of Heng Fung
Finance.
(b) through (f) - See Item I-D above.
IV-D.(a) Man Tak Lau is a director of Heng Fung Finance.
(b) through (f) - See Item I-G above.
IV-E.(a) Heng Fung Private is the sole shareholder of Hung Fung Finance.
(b) through (f) - See Item III-A above.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER
CONSIDERATION.
The securities in the transactions reported herein were acquired in
consideration of the following:
(a) An agreement by Heng Fung Finance to provide the Issuer with a loan of
up to $1,500,000 ("Heng Fung Loan") pursuant to the terms of a Loan Agreement
between Heng Fung Finance and the Issuer dated August 12, 1998, effective for
all purposes May 7, 1998 ("Heng Fung Loan Agreement"). The loan funds were
provided from the working capital of Heng Fung Holdings and its subsidiaries.
(b) An agreement by Fronteer Capital, Inc. ("Fronteer Capital") to provide
the Issuer with a loan of up to $1,650,000 ("Fronteer Loan") pursuant to the
terms of a Loan Agreement between Fronteer Capital and the Issuer dated August
12, 1998 ("Fronteer Loan Agreement"). Fronteer Capital is a wholly owned
subsidiary of Fronteer Financial Holdings, Ltd. ("Fronteer Financial"). The
funds for the Fronteer Loan will be provided from the working capital of
Fronteer Capital.
(c) An agreement between the Issuer, Fronteer Capital and Fronteer
Development Finance, Inc., a partially owned subsidiary of Fronteer Financial
("Fronteer Development"), dated September 11, 1998, whereby Fronteer Capital
assigned and Fronteer Development assumed all of Fronteer Capital's rights,
duties and obligations under the Fronteer Loan.
(d) An agreement between the Issuer, Heng Fung Finance and Fronteer
Development dated October 7, 1998, whereby Heng Fung Finance sold and Fronteer
Development purchased for $1,100,000 a portion of a warrant to purchase
6,000,000 shares of the common stock of the issuer which is equal to a warrant
to purchase 4,000,000 shares of the common stock of the Issuer and a series of
promissory notes which equal the right to payment from the Issuer of $1,000,000
in principal amount, together with interest accruing thereon ("Development
Purchase"). The funds for the Development Purchase were provided from the
working capital of Fronteer Development.
10
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ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the acquisition of the Issuer's securities was to provide
funding to enable the Issuer to prepare for the anticipated release of the
Issuer's new transfusion service that is in beta testing, to enable the Issuer
to continue sales and support of the Issuer's current products and to enable the
Issuer to increase its international presence.
(a) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals to acquire additional securities of the Issuer or dispose of
securities of the Issuer, other than the issuance of additional warrants, the
possible exercise of warrants and the possible conversion of the amounts due
under the Notes (as described in Item 5(c) below);
(b) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries;
(d) Pursuant to the terms of the Heng Fung Loan Agreement, the Issuer
increased the number of members of the board of directors to nine and has
appointed five members selected by Heng Fung Finance and/or Fronteer Capital to
the Issuer's board of directors. In August 1998, one of those newly appointed
members resigned from the board of directors. Also pursuant to the terms of the
Heng Fung Loan Agreement, each current member of the board of directors of the
Issuer, other than any such member appointed by Heng Fung Finance or Fronteer
Capital, and each management personnel or key employee of the Issuer, delivered
to Heng Fung Finance his or her letter of resignation, which letters of
resignation are being held in escrow by Heng Fung Finance, subject to all the
terms and conditions of the Heng Fung Loan Agreement. If the Issuer defaults on
the Heng Fung Loan, Heng Fung Finance may:
(i) demand the resignation of any or all of the members of the board
of directors of the Issuer (other than those members appointed by Heng Fung
Finance and/or Fronteer Capital) and if such members refuse to resign, deliver
to the Issuer the letters of resignation held by Heng Fung Finance in escrow,
and thereafter Heng Fung Finance shall have the right to appoint such resigned
or terminated member's replacement to the board of directors of the Issuer; and
(ii) demand the resignations of any or all of the management personnel
of the Issuer and/or any and all of the key employees of the Issuer, and if such
management personnel or key employees refuse to resign, deliver to the Issuer
the letters of resignation held by Heng Fung Finance in escrow; and
(iii) convert any or all of the amounts due under any of the
promissory notes evidencing the Heng Fung Loan ("Notes") into shares of Common
Stock of the Issuer at $0.05 per share;
(e) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for any material change in the present capitalization or dividend
policy of the Issuer;
(f) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for any other material change in the Issuer's business or corporate
structure;
11
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(g) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Act"); or
(j) Heng Fung Holdings and its subsidiaries do not have any plans or
proposals for any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date of this Schedule 13D, Heng Fung Holdings, which is a
public company traded on the Hong Kong Stock Exchange, through its subsidiaries,
Heng Fung Private and Heng Fung Finance, and through Fronteer Financial,
beneficially owns warrants to purchase 12,138,300 shares ("Shares") of the
Common Stock of the Issuer which constitute approximately 79.7% of the
outstanding Common Stock of the Issuer. This amount consists of the following:
(1) 2,000,000 shares underlying presently exercisable warrants owned
by Heng Fung Finance, a wholly owned indirect subsidiary of Heng Fung Holdings;
(2) 9,000,000 shares underlying presently exercisable warrants owned
by Fronteer Development;
(3) 1,000,000 shares underlying presently exercisable warrants owned
by Fronteer Capital; and
(4) 138,300 shares underlying a presently exercisable warrant to
purchase 46,100 units which is held by American Fronteer Financial Corporation
(formerly R A F Financial Corporation) ("American Fronteer"), a wholly owned
subsidiary of Fronteer Financial. The warrant is exercisable at any time until
January 14, 2002. Each unit consists of two shares of Common Stock and one
Common Stock purchase warrant. Each Common Stock purchase warrant entitles the
holder to purchase one share of Common Stock.
Heng Fung Holdings, through its subsidiaries, Heng Fung Private and
Heng Fung Finance, beneficially owns approximately 75.8% of the outstanding
Common Stock of Fronteer Financial. Fai H. Chan, an officer and director of Heng
Fung Holdings, Heng Fung Private and Heng Fung Finance, beneficially owns
approximately 10.73% of the outstanding stock of Heng Fung Holdings.
Accordingly, Heng Fung Holdings, Heng Fung Private, Heng Fung Finance and Fai H.
Chan may be deemed to be beneficial owners of the Shares described in paragraphs
(2), (3) and (4) above.
12
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(b) Heng Fung Holdings, through its subsidiaries, Heng Fung Private and
Heng Fung Finance, has shared voting and dispositive power over the Shares. Fai
H. Chan, by virtue of his shareholdings in Heng Fung Holdings, has shared voting
and dispositive power over the Shares. In addition, Mr. Chan owns a presently
exercisable option to purchase 250,000 shares of the Issuer's Common Stock, over
which Mr. Chan has sole voting and dispositive power. Heng Fung Private, by
itself and through its subsidiary, Heng Fung Finance, has shared voting and
dispositive power over the Shares. Heng Fung Finance has shared voting and
dispositive power over the Shares.
(c) Heng Fung Finance
(1) As described in Item 3 above, effective May 7, 1998, Heng Fung
Finance, a wholly owned subsidiary of Heng Fung Private, entered into the Heng
Fung Loan Agreement with the Issuer. The interest on the Heng Fung Loan is 12%
per annum, payable at the end of each month. The Heng Fung Loan matures on April
15, 1999. Pursuant to the Heng Fung Loan Agreement, Heng Fung Finance was issued
warrants to purchase 6,000,000 shares of the Common Stock of the Issuer. The
warrants to purchase 6,000,000 shares may be exercised at any time until April
13, 2008, at an exercise price of $0.25 per share and may be exercised in full
or in minimum amounts of at least $250,000. On October 7, 1998, Heng Fung
Finance sold to Fronteer Development a portion of the Heng Fung Loan equal to
the right to payment of $1,000,000 in principal amount, together with interest
accruing thereon and a portion of the warrant to purchase 6,000,000 shares of
the Common Stock of the Issuer which is equal to a warrant to purchase 4,000,000
shares of the Common Stock of the Issuer.
Pursuant to the terms of the Heng Fung Loan Agreement, the Issuer
increased the number of members of the board of directors to nine and has
appointed five members selected by Heng Fung Finance and/or Fronteer Capital to
the Issuer's board of directors. In August 1998, one of those newly appointed
members resigned from the board of directors. Also pursuant to the terms of the
Heng Fung Loan Agreement, each current member of the board of directors of the
Issuer, other than any such member appointed by Heng Fung Finance or Fronteer
Capital, and each management personnel or key employee of the Issuer, delivered
to Heng Fung Finance his or her letter of resignation, which letters of
resignation are being held in escrow by Heng Fung Finance, subject to all the
terms and conditions of the Heng Fung Loan Agreement.
If the Issuer shall fail to pay when due, after the expiration of all
cure periods, any installment of principal or interest due under the Heng Fung
Loan Agreement and/ or violates any terms of the Heng Fung Loan Agreement, the
Issuer will be in default. If the Issuer defaults on the Heng Fung Loan, Heng
Fung Finance may:
(i) demand the resignation of any or all of the members of the
board of directors of the Issuer, other than those members appointed by Heng
Fung Finance and/or Fronteer Capital, and if such members refuse to resign,
deliver to the Issuer the letters of resignation held by Heng Fung Finance in
escrow, and thereafter Heng Fung Finance shall have the right to appoint such
resigned or terminated member's replacement to the board of directors of the
Issuer; and
(ii) demand the resignations of any or all of the management
personnel of the Issuer and/or any and all of the key employees of the Issuer,
and if such management personnel or key employees refuse to resign, deliver to
the Issuer the letters of resignation held by Heng Fung Finance in escrow; and
13
<PAGE>
(iii) convert any or all of the amounts due under any of the
Notes into Common Stock of the Issuer at an exercise price of $0.05 per share.
The terms of the transaction are more fully set forth in the Heng Fung
Loan Agreement attached to the original Schedule 13D as Exhibit 2 and
incorporated by reference to this Amendment Number 1 to Schedule 13D and the
Loan and Warrant Purchase and Sale Agreement attached to this Schedule 13D as
Exhibit 9.
As of the date of this Schedule 13D, Heng Fung Finance has advanced a
total of $1,500,000 to the Issuer against the Heng Fung Loan Agreement.
(c) Fronteer Capital/Fronteer Development
(2) As described in Item 3 above, on August 12, 1998, Fronteer Capital
entered into the Fronteer Loan Agreement with the Issuer. The interest on the
Fronteer Loan is 12% per annum, payable at the end of each month. The Fronteer
Loan matures on April 15, 1999. Pursuant to the Fronteer Loan Agreement,
Fronteer Capital was issued warrants to purchase 1,000,000 shares of the Common
Stock of the Issuer. On September 11, 1998, Fronteer Capital assigned all of its
rights, duties and obligations under the Fronteer Loan Agreement to Fronteer
Development. On October 30, 1998, the Issuer made its first draw in the amount
of $400,000 against the Fronteer Loan. As a result, as additional consideration
for Fronteer Development making the loan to Issuer, the Issuer issued to
Fronteer Development an additional warrant entitling Fronteer Development to
purchase 5,000,000 shares of the Common Stock of the Issuer at an exercise price
of $0.25 per share. The warrants issued may be exercised at any time until
October 30, 2008, at an exercise price of $0.25 per share and may be exercised
in full or in minimum amounts of at least $250,000.
Pursuant to the terms of the Fronteer Loan Agreement, the Issuer has
increased the number of members of its board of directors to nine and has
appointed five members selected by Fronteer Capital and/or Heng Fung Finance to
the Issuer's board of directors. In August 1998, one of those newly appointed
members resigned from the board of directors. Also pursuant to the terms of the
Fronteer Loan Agreement, each current member of the board of directors of the
Issuer, other than any such member appointed by Fronteer Development or Heng
Fung Finance, and each management personnel or key employee of the Issuer,
delivered to Fronteer Development his or her letter of resignation, which
letters of resignation are being held in escrow by Fronteer Development, subject
to all the terms and conditions of the Fronteer Loan Agreement. If the Issuer
shall fail to pay when due, after the expiration of all cure periods, any
installment of principal or interest due under the Fronteer Loan Agreement
and/or violates any terms of the Fronteer Loan Agreement, the Issuer will be in
default. If the Issuer defaults on the Fronteer Loan, Fronteer Development may:
(i) demand the resignation of any or all members of the board of
directors of the Issuer, other than those members appointed by Fronteer
Development and/or Heng Fung Finance, and if such members refuse to resign,
deliver to the Issuer the letters of resignation held by Fronteer Development in
escrow, and thereafter Fronteer Development shall have the right to appoint such
resigned or terminated member's replacement to the board of directors of the
Issuer; and
14
<PAGE>
(ii) demand the resignations of any or all of the management
personnel of the Issuer and/or any and all of the key employees of the Issuer,
and if such management personnel or key employees refuse to resign, deliver to
the Issuer the letters of resignation held by Fronteer Development in escrow;
and
(iii) convert any or all of the amounts due under any of the
Notes into Common Stock of the Issuer at an exercise price of $0.05 per share.
The Issuer has agreed to pay American Fronteer a finder's fee equal to
9% of the amount of the Fronteer Loan drawn upon by the Issuer. As of the date
of this Schedule 13D, Fronteer Development has advanced a total of $400,000 to
the Issuer against the Fronteer Loan Agreement.
The terms of the transaction are more fully set forth in the Fronteer
Loan Agreement attached to the original Schedule 13D as Exhibit 3 and
incorporated by reference to this Amendment Number 1 to Schedule 13D and the
Assignment, Assumption and Consent Agreement attached to this Schedule 13D as
Exhibit 8.
Michael I. Ruxin, M.D., the Chief Executive Officer of the Issuer, has
executed a Personal Guaranty for the Fronteer Loan, which is attached to the
original Schedule 13D as Exhibit 4 and incorporated by reference to this
Amendment Number 1 to Schedule 13D.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
7,138,300 shares.
(e) Not applicable.
15
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER.
None.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Agreement to File One Statement on Schedule 13D.
Exhibit 2 - Loan Agreement between Heng Fung Finance Company Limited and
Global Med Technologies, Inc. dated August 12, 1998, effective May 7, 1998.
Incorporated by reference to Exhibit 2 to the Schedule 13D filed by Reporting
Person on September 11, 1998.
Exhibit 3 - Loan Agreement between Fronteer Capital, Inc. and Global Med
Technologies, Inc. dated August 12, 1998. Incorporated by reference to Exhibit 3
to the Schedule 13D filed by Reporting Person on September 11, 1998.
Exhibit 4 - Personal Guaranty of Fronteer Loan by Michael I. Ruxin, M.D.
Incorporated by reference to Exhibit 4 to the Schedule 13D filed by Reporting
Person on September 11, 1998.
Exhibit 5 - Warrant to Purchase Common Shares of Global Med Technologies,
Inc. in the amount of 6,000,000 shares in the name of Heng Fung Finance Company
Limited. Incorporated by reference to Exhibit 5 to the Schedule 13D filed by
Reporting Person on September 11, 1998.
Exhibit 6 - Warrant to Purchase Common Shares of Global Med Technologies,
Inc. in the amount of 1,000,000 shares in the name of Fronteer Capital, Inc.
Incorporated by reference to Exhibit 6 to the Schedule 13D filed by Reporting
Person on September 11, 1998.
Exhibit 7 - Promissory Notes from Global Med Technologies, Inc. to Heng
Fung Finance Company Limited. Incorporated by reference to Exhibit 7 to the
Schedule 13D filed by Reporting Person on September 11, 1998.
Exhibit 8 - Assignment, Assumption and Consent Agreement dated September
11, 1998 between Global Med Technologies, Inc., Michael L. Ruxin, M.D., Fronteer
Capital, Inc. and Fronteer Development Finance, Inc.
Exhibit 9 - Loan and Warrant Purchase and Sale Agreement dated October 7,
1998 between Heng Fung Finance Company Limited, Fronteer Development Finance,
Inc. and Global Med Technologies, Inc.
Exhibit 10 - Warrant to Purchase Common Shares of Global Med Technologies,
Inc. in the amount of 5,000,000 shares in the name of Fronteer Development
Finance, Inc. dated October 30, 1998.
Exhibit 11 - Promissory Note from Global Med Technologies, Inc. to Fronteer
Development Finance, Inc. dated October 30, 1998.
16
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
HENG FUNG HOLDINGS COMPANY LIMITED
a Hong Kong corporation
Date: November 12, 1998
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
/s/ Fai H. Chan
-----------------------------------------------
Fai H. Chan, individually
HENG FUNG CAPITAL [S] PRIVATE LIMITED
a Singaporean corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
HENG FUNG FINANCE COMPANY LIMITED
a Hong Kong corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
17
Exhibit 1
Agreement to File One Statement on Schedule 13D
Pursuant to Rule 13d-1(k)(1)(iii) of the Securities Exchange Act of 1934,
as amended, the undersigned agree that the Schedule 13D to which this Exhibit 1
is attached is filed on behalf of each of the undersigned.
HENG FUNG HOLDINGS COMPANY LIMITED
a Hong Kong corporation
Date: November 12, 1998
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
/s/ Fai H. Chan
-----------------------------------------------
Fai H. Chan, individually
HENG FUNG CAPITAL [S] PRIVATE LIMITED
a Singaporean corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
HENG FUNG FINANCE COMPANY LIMITED
a Hong Kong corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
Exhibit 8
ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT ("Agreement") is made and
entered into this 11th day of September, 1998 by and between GLOBAL MED
TECHNOLOGIES, INC., a Colorado corporation ("Global"), MICHAEL I. RUXIN, M.D.,
an individual ("Ruxin"), FRONTEER CAPITAL, INC., a Delaware corporation
("Capital"), and FRONTEER DEVELOPMENT FINANCE, INC., a Delaware corporation
("Development").
WHEREAS, Global and Capital entered into that certain Loan Agreement dated
August 12, 1998 ("Loan Agreement") whereby Capital agreed, subject to certain
terms, provisions and conditions, among other things, to make available to
Global a loan in the maximum principal balance of $1,650,000.00 pursuant to one
or more Promissory Notes ("Notes") from Global to Capital;
WHEREAS, the obligations of Global to Capital under the Loan Agreement and
Notes are guaranteed by Ruxin pursuant to that certain Personal Guaranty dated
August 12, 1998 ("Guaranty");
WHEREAS, Capital desires to assign and Development desires to assume all of
the rights, duties and obligations under the Loan Agreement, Notes and Guaranty;
WHEREAS, Global and Ruxin desire to consent to the assignment of Capital's
rights, duties and obligations to Development under the Loan Agreement, Notes
and Guaranty; and
WHEREAS, capitalized terms not defined in this Assignment, Assumption and
Guaranty Agreement which are defined in the Loan Agreement shall have the
meanings set forth in the Loan Agreement.
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Assignment. For value received, Capital hereby assigns, transfers and
conveys to Development all of Capital's rights, duties and obligations under the
Loan Agreement, Notes and Guaranty.
2. Assumption. Development hereby agrees to assume and be bound by and
perform all covenants, conditions, obligations and duties of Capital under the
Loan Agreement, including, but not limited to, funding the loan evidenced by the
Loan Agreement and Notes.
3. Consent. Global and Ruxin hereby consent to the assignment of Capital's
rights, duties and obligations under the Loan Agreement, Notes and Guaranty to
Development, agree to look solely to Development for all covenants, conditions,
obligations and duties of Capital under said agreements and instruments and
shall treat Development as the Lender under the Loan Agreement, the Holder under
the Notes, and the Beneficiary under the Guaranty for all purposes as if
Developer was an original party to such agreements and instruments in such
capacities.
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<PAGE>
4. Release. The parties hereto agree that Capital hereby forever waives all
of its rights under the Loan Agreement, Notes and Guaranty and is therefore
forever released from any further duty or obligation under the Loan Agreement.
The parties hereto further agree that Development, as Lender under the Loan
Agreement, as modified, shall be subject to all of the duties and obligations as
Lender under the Loan Agreement, as modified, and therefore shall enjoy all of
the rights of Lender under the Loan Agreement, Notes and Guaranty, as modified.
5. Warrant. The parties hereto agree that the warrant granted to Capital,
effective April 20, 1998, shall remain the property of Capital.
6. Confirmation of Terms of Loan Agreement. In all other respects, the Loan
Agreement and Guaranty, described above, shall remain uneffected, unchanged and
unimpaired by reason of this Agreement. All Notes assigned by Global under the
Loan Agreement shall be modified to comply with the terms of this Agreement.
Executed as of the day and year first above written.
FRONTEER CAPITAL, INC.,
a Delaware corporation
By: /s/ Gary L. Cook
---------------------------------------
Its: Treasurer
FRONTEER DEVELOPMENT FINANCE, INC.,
a Delaware corporation
By: /s/ Gary L. Cook
---------------------------------------
Its: Treasurer
GLOBAL MED TECHNOLOGIES, INC.,
a Colorado corporation
By: /s/ Michael I. Ruxin
---------------------------------------
Its: CEO
/s/ Michael I. Ruxin
-------------------------------------------
Michael I. Ruxin, M.D., individually
2
Exhibit 9
LOAN AND WARRANT PURCHASE AND SALE AGREEMENT
THIS LOAN AND WARRANT PURCHASE AND SALE AGREEMENT ("Agreement") is made and
entered into this 7th day of October, 1998 by and between HENG FUNG FINANCE
COMPANY LIMITED, a Hong Kong corporation ("Heng Fung Finance"), FRONTEER
DEVELOPMENT FINANCE, INC., a Delaware corporation ("Development"), and GLOBAL
MED TECHNOLOGIES, INC., a Colorado corporation.
WHEREAS, Heng Fung Finance entered into that certain Loan Agreement dated
April 14, 1998 with Global whereby Heng Fung Finance agreed, subject to certain
terms, provisions and conditions, among other things, to make available to
Global a loan in the maximum principal amount of $1,500,000 ("Loan") pursuant to
one or more promissory notes from Global to Heng Fung Finance;
WHEREAS, pursuant to the Loan Agreement, Heng Fung Finance was granted a
warrant to purchase 6,000,000 shares of Global's common stock ("Original
Warrant");
WHEREAS, Global borrowed at least $1,150,000 of the maximum principal
amount of the Loan, evidenced by a series of promissory notes dated May 7, 1998
for $250,000, June 4, 1998 for $400,000, June 30, 1998 for $250,000 and August
5, 1998 for $250,000 ("Original Notes"); and
WHEREAS, Heng Fung Finance desires to sell and Development desires to
purchase a portion of the Loan which is evidenced by the Original Notes and a
portion of the Original Warrant.
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Purchase and Sale. Heng Fung Finance agrees to sell and Development
agrees to purchase: (i) the Original Notes dated May 7, 1998 for $250,000, June
4, 1998 for $400,000, June 30, 1998 for $250,000 and $100,000 out of the
$250,000 Original Note dated August 5, 1998 which is equal to the right to
payment of $1,000,000 in principal amount, together with interest accruing
thereon out of the Original Notes ("Development Note") and (ii) a portion of the
Original Warrant which is equal to a warrant to purchase 4,000,000 common shares
of Global ("Development Warrant").
2. Issue of Notes and Warrants. Upon receipt of the Original Notes and
Original Warrant, Global agrees to issue two new promissory notes and two new
warrants, under the same terms and conditions as the Original Notes and Original
Warrant, as follows:
(a) Warrant to Heng Fung Finance to purchase an aggregate of 2,000,000
shares of Global's common shares;
(b) Warrant to Development to purchase an aggregate of 4,000,000
shares of Global's common shares;
1
<PAGE>
(c) Promissory note evidencing a loan from Heng Fung Finance to Global
representing $150,000; and
(d) Promissory note evidencing a loan from Development to Global in
the amount of $1,000,000.
3. Payment for Loan. Upon receipt of the Development Warrant and
Development Note from Global, Development agrees to pay to Heng Fung Finance,
the sum of $1,100,000.
4. Confirmation of Terms of Loan Agreement. In all respects, the Loan
Agreement, described above, shall remain unaffected, unchanged and unimpaired by
reason of this Agreement.
Executed as of the day and year first above written.
FRONTEER DEVELOPMENT FINANCE, INC.,
a Delaware corporation
By: /s/ Gary L. Cook
---------------------------------------
Its: Treasurer
HENG FUNG FINANCE COMPANY LIMITED,
a Hong Kong corporation
By: /s/ Fai H. Chan
---------------------------------------
Its: Chairman
GLOBAL MED TECHNOLOGIES, INC.
a Colorado corporation
By: /s/ Michael I. Ruxin
---------------------------------------
Its: CEO
2
Exhibit 10
Void After 3:30 P.M., Mountain Time, on October 30, 2008
WARRANT TO PURCHASE COMMON SHARES
GLOBAL MED TECHNOLOGIES, INC.
This is to Certify That, FOR VALUE RECEIVED, FRONTEER DEVELOPMENT FINANCE,
INC., 1700 Lincoln Street, 32nd Floor, Denver, Colorado 80203 ("Holder"), is
entitled to purchase, subject to the provisions of this Warrant, from GLOBAL MED
TECHNOLOGIES, INC. ("Company"), a Colorado corporation, at any time until 3:30
P.M., Mountain Time, on October 30, 2008 ("Expiration Date"), 5,000,000 Common
Shares of the Company at a purchase price of $0.25 per common share during the
period this Warrant is exercisable. The number of Common Shares to be received
upon the exercise of this Warrant and the price to be paid for a Common Share
may be adjusted from time to time as hereinafter set forth. The purchase price
of a Common Share in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price." This Warrant is or
may be one of a series of warrants identical in form issued by the Company to
purchase an aggregate of 5,000,000 Common Shares of the Company and the term
"Warrants" as used herein means all such Warrants (including this Warrant). The
Common Shares, as adjusted from time to time, underlying the Warrants are
hereinafter sometimes referred to as "Warrant Shares" and include all Common
Shares that have been issued upon the exercise of the Warrants and all unissued
Common Shares underlying the Warrants.
(a) Exercise of Warrant. This Warrant may be exercised in whole or in
minimum amounts which at the time of exercise would require Holder to deliver to
the Company cash or value of at least $250,000 at any time or from time to time
until the Expiration Date or if the Expiration Date is a day on which banking
institutions are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, with the Purchase
Form annexed hereto duly executed and accompanied by payment of the Exercise
Price for the number of shares specified in such Form, together with all federal
and state taxes applicable upon such exercise. The Company agrees not to merge,
reorganize or take any action that would terminate this Warrant unless
provisions are made as part of such merger, reorganization or other action which
would provide the holders of this Warrant with an equivalent of this Warrant as
specified in Section (i) hereof. The Company agrees to provide notice to the
Holder that any tender offer is being made for the Company's Common Shares no
later than three business days after the day the Company becomes aware that any
tender offer is being made for the outstanding Common Shares of the Company. If
this Warrant should be exercised in part only, the Company shall, upon surrender
of this Warrant for cancellation, execute and deliver a new Warrant evidencing
the right of the Holder to purchase the balance of the Common Shares purchasable
hereunder. Upon receipt by the Company of this Warrant at the office of the
Company or at the office of the Company's stock transfer agent, in proper form
for exercise and accompanied by the Purchase Form and the Exercise Price, the
Holder shall be deemed to be the holder of record of the Common Shares issuable
upon such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Common Shares shall
not then be actually delivered to the Holder.
<PAGE>
(b) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of Common Shares as shall be required for issuance or
delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a Common Share called for upon any exercise hereof,
the Company shall, upon receipt by the Company or the Company's stock transfer
agent of the Exercise Price on such fractional share, pay to the Holder an
amount in cash equal to such fraction multiplied by the current market value of
such fractional share, determined as follows:
(1) If the Common Shares are listed on a national securities exchange
or a foreign exchange, are admitted to unlisted trading privileges on such an
exchange, or are listed for trading on a trading system of the National
Association of Securities Dealers, Inc. ("NASD") such as The Nasdaq SmallCap
Market ("SCM") or the Nasdaq National Market ("NNM") or the OTC Bulletin Board,
then the current value shall be the last reported sale price of the Common
Shares on such an exchange or system on the last business day prior to the date
of exercise of this Warrant or if no such sale is made on such day, the average
of the closing bid prices for the Common Shares for such day on such exchange or
such system shall be used; or
(2) If the Common Shares are not so listed on such exchange or system
or admitted to unlisted trading privileges, the current value shall be the
average of the last reported bid prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date of the exercise of this
Warrant; or
(3) If the Common Shares are not so listed or admitted to unlisted
trading privileges and if bid prices are not so reported, the current value
shall be an amount, not less than book value, determined in such reasonable
manner as may be prescribed by the board of directors of the Company.
(d) Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations entitling the Holder thereof to
purchase (under the same terms and conditions as provided by this Warrant) in
the aggregate the same number of Common Shares purchasable hereunder. This
Warrant may not be sold, transferred, assigned, or hypothecated except in
compliance with federal and state securities laws. Any transfer or assignment
shall be made by surrender of this Warrant to the Company or at the office of
its stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and with funds sufficient to pay any transfer tax; whereupon the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled. This Warrant may be divided or combined with other
Warrants which carry the same rights upon presentation hereof at the office of
the Company or at the office of its stock transfer agent, if any, together with
a written notice specifying the names and denominations in which new Warrants
are to be issued and signed by the Holder hereof. The term "Warrant" as used
herein includes any warrants issued in substitution for or replacement of this
Warrant, or into which this Warrant may be divided or exchanged. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
2
<PAGE>
of like tenor and date. Subject to such right of indemnification, any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
(e) Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) Adjustment Provisions.
(1) Adjustments of the Exercise Price.
(A) If the Company subdivides its outstanding Common Shares into
a greater number of Common Shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately
reduced. Conversely, if the Company combines its outstanding Common
Shares into a lesser number of Common Shares, the Exercise Price in
effect immediately prior to such combination shall be proportionally
increased. In case of a subdivision or combination, the adjustment of
the Exercise Price shall be made as of the effective date of the
applicable event. A distribution on Common Shares, including a
distribution of Convertible Securities, to shareholders of the Company
on a pro rata basis shall be considered a subdivision of Common Shares
for the purposes of this subsection (1)(A) of this Section, except
that the adjustment will be made as of the record date for such
distribution and any such distribution of Convertible Securities shall
be deemed to be a distribution of the Common Shares underlying such
Convertible Securities.
(B) If the Company shall at any time distribute or cause to be
distributed to its shareholders, on a pro rata basis, cash, assets, or
securities of any entity other than the Company, then the Exercise
Price in effect immediately prior to such distribution shall
automatically be reduced by an amount determined by dividing (x) the
amount (if cash) or the value (if assets or securities) of the
holders' of Warrants (as such term is defined in the first paragraph
hereof) pro rata share of such distribution determined assuming that
all holders of Warrants had exercised their Warrants on the day prior
to such distribution, by (y) the number of Common Shares issuable upon
the exercise of Warrants (as such term is defined in the first
paragraph hereof) by the holders thereof on the day prior to such
distribution.
(3) No Adjustment for Small Amounts. Anything in this Section (f) to
the contrary notwithstanding, the Company shall not be required to give effect
to any adjustment in the Exercise Price unless and until the net effect of one
or more adjustments, determined as above provided, shall have required a change
of the Exercise Price by at least one cent, but when the cumulative net effect
of more than one adjustment so determined shall be to change the actual Exercise
Price by at least one cent, such change in the Exercise Price shall thereupon be
given effect.
(4) Number of Shares Adjusted. Upon any adjustment of the Exercise
Price, the Holder of this Warrant shall thereafter (until another such
adjustment) be entitled to purchase, at the new Exercise Price, the number of
Common Shares, calculated to the nearest full share, obtained by multiplying the
number of Common Shares initially issuable upon exercise of this Warrant by the
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<PAGE>
Exercise Price specified in the first paragraph hereof and dividing the product
so obtained by the new Exercise Price.
(5) Definitions.
(A) Whenever reference is made in this Section (f) to the
distribution of Common Shares, the term "Common Shares" shall mean the
Common Shares of the Company authorized as of the date hereof and any
other class of stock ranking on a parity with such Common Shares.
However, subject to the provisions of Section (i) hereof, Common
Shares issuable upon exercise hereof shall include only Common Shares
of the class designated as Common Shares of the Company as of the date
hereof.
(B) Whenever reference is made in this Section (f) to the
distribution of Convertible Securities, the term "Convertible
Securities" shall mean options or warrants or rights for the purchase
of Common Shares of the Company or for the purchase of any stock or
other securities convertible into or exchangeable for Common Shares of
the Company.
(6) AntiDilution Provisions.
(A) Adjustments of Exercise Price. If the Company should at any
time or from time to time hereafter issue or sell any of its Common
Shares without consideration or for a consideration per share less
than the Exercise Price in effect immediately prior to the time of
such issue or sale, then forthwith upon such issue or sale, the
Exercise Price shall be automatically adjusted to a price (computed to
the nearest cent) determined by dividing (i) the sum of (x) the number
of Common Shares outstanding immediately prior to such issue or sale
multiplied by the Exercise Price in effect immediately prior to such
issue or sale, and (y) the consideration, if any, received by the
Company upon such issue or sale, by (ii) the total number of Common
Shares outstanding immediately after such issue or sale. For purposes
of this Section (6)(A), the following provisions (i) and (ii) shall
also be applicable:
(i) Rights, Options, or Warrants. In case at any time
hereafter the Company shall in any manner grant any right to
subscribe for or to purchase, or any option or warrant for the
purchase of Common Shares or for the purchase of any stock or
securities convertible into or exchangeable for Common Shares
(such convertible or exchangeable stock or securities being
hereinafter referred to as the "Underlying Convertible
Securities") and if the minimum price per share for which Common
Shares are issuable, pursuant to such rights, options, warrants
or upon conversion or exchange of such Underlying Convertible
Securities (determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the
granting of such rights, options, or warrants plus the minimum
aggregate amount of additional consideration payable to the
Company upon the exercise of such rights, options, or warrants
under the terms of such rights, options, or warrants at the time
of making such computation, plus, in the case of such Underlying
Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the conversion or
exchange thereof under the terms of such Underlying Convertible
Securities at the time of making such computation, by (ii) the
total maximum number of Common Shares issuable pursuant to such
rights, options, or warrants or upon the conversion or exchange
of the total maximum amount of such Underlying Convertible
Securities issuable upon the exercise of such rights, options, or
warrants under the terms of such rights, options, warrants or
Underlying Convertible Securities at the time of making such
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<PAGE>
computation) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such rights or
options, then the total maximum number of Common Shares issuable
pursuant to such rights, options, warrants or upon conversion or
exchange of the total maximum amount of such Underlying
Convertible Securities issuable upon the exercise of such rights,
options, or warrants under the terms of such rights, options,
warrants or Underlying Convertible Securities at the time of
making such computation shall (as of the date of granting of such
rights, options, or warrants) be deemed to be outstanding and to
have been issued for said price per share as so determined;
provided, that no further adjustment of the Exercise Price shall
be made upon the actual issue of Common Shares so deemed to have
been issued unless the price per share received by the Company
upon the actual issuance of Common Shares so deemed to be issued
differs from the price per share which was last used to adjust
the Exercise Price or unless by the terms of such rights, options
or warrants or Underlying Convertible Securities the price per
share which the Company will receive upon any such issuance of
Common Shares differs from the price per share which was last
used to adjust the Exercise Price, in either of which events the
Exercise Price shall be adjusted upon the occurrence of either
such event to reflect the new price per share of Common Stock;
and further provided, that, upon the ex piration of such rights
(including rights to convert or exchange), options or warrants
(a) the number of shares of Common Stock deemed to have been
issued and outstanding by reason of the fact that they were
issuable pursuant to such rights, options, or warrants (including
rights to convert or exchange) that were not exercised, shall no
longer be deemed to be issued and outstanding, and (b) the
Exercise Price shall forthwith be adjusted to the price which
would have prevailed had all adjustments been made on the basis
of the issue only of the Common Shares actually issued upon the
exercise of such rights, options, or warrants or upon conversion
or exchange of such Underlying Convertible Securities. Such
adjustments upon expiration shall have no effect on Warrants
exercised prior to such expiration.
(ii) Convertible Securities. If the Company shall in any
manner issue or sell any Convertible Securities other than the
rights, options, or warrants described in Section 6(A)(i) hereof
and if the minimum price per share for which Common Shares are
issuable upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount received
or receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof under the terms
of such Convertible Securities at the time of making such
computation, by (ii) the total maximum number of Common Shares
issuable upon the conversion or exchange of all such Convertible
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<PAGE>
Securities under the terms of such Convertible Securities at the
time of making such computation) shall be less than the Exercise
Price in effect immediately prior to the time of such issue or
sale, then the total maximum number of Common Shares issuable
upon conversion or exchange of all such Convertible Securities at
the time of making such computation shall (as of the date of the
issue or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued for said price per share as
so determined; provided, that no further adjustment of the
Exercise Price shall be made upon the actual issue of Common
Shares so deemed to have been issued unless the price per share
received by the Company upon the actual issuance of Common Shares
so deemed to be issued differs from the price per share which was
last used to adjust the Exercise Price or unless by the terms of
such Convertible Securities the price per share which the Company
will receive upon any such issuance of Common Shares differs from
the price per share which was last used to adjust the Exercise
Price, in either of which events the Exercise Price shall be
adjusted upon the occurrence of either such event to reflect the
new price per share of Common Shares; and, further provided that
if any such issue or sale of such Convertible Securities is made
upon exercise of any right to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which an
adjustment of the Exercise Price has been or is to be made
pursuant to the provisions of Section 6(A)(i) then no further
adjustment of the Exercise Price shall be made by reason of such
issue or sale unless the price per share received by the Company
upon the conversion or exchange of such Convertible Securities
when actually issued differs from the price per share which was
last used to adjust the Exercise Price or unless by the terms of
such Convertible Securities the price per share which the Company
will receive upon any such issuance of Common Shares upon
conversion or exchange of such Convertible Securities differs
from the price per share which was last used to adjust the
Exercise Price, in either of which events the Exercise Price
shall be adjusted upon the occurrence of either of such events to
reflect the new price per share of Common Shares; and, further
provided, that, upon the termination of the right to convert or
to exchange such Convertible Securities for Common Shares, (a)
the number of Common Shares deemed to have been issued and
outstanding by reason of the fact that they were issuable upon
conversion or exchange of any such Convertible Securities, which
were not so converted or exchanged, shall no longer be deemed to
be issued and outstanding, and (b) the Exercise Price shall
forthwith be adjusted to the price which would have prevailed had
all adjustments been made on the basis of the issue only of the
number of Common Shares actually issued upon conversion or
exchange of such Convertible Securities. Such adjustments upon
expiration shall have no effect on Warrants exercised prior to
such expiration.
(B) Determination of Issue Price. In case any Common Shares or
Convertible Securities shall be issued for cash, the consideration
received therefor, which shall be the gross sales price for such
security without deducting therefrom any commission or other expenses
paid or incurred by the Company for any underwriting of, or otherwise
in connection with, the issuance thereof, shall be deemed to be the
amount received by the Company therefor. In case any Common Shares or
Convertible Securities shall be issued for a consideration part or all
of which shall be other than cash, then, for the purpose of this
Section (6), the Board of Directors of the Company shall determine the
fair value of such consideration, irrespective of accounting
treatment, and such Common Shares or Con- vertible Securities shall be
deemed to have been issued for an amount of cash equal to the value so
determined by the Board of Directors. The reclassification of
securities other than Common Shares into securities including Common
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<PAGE>
Shares shall be deemed to involve the issuance for a consideration
other than cash of such Common Shares immediately prior to the close
of business on the date fixed for the determination of security
holders entitled to receive such Common Shares. In case any Common
Shares or Convertible Securities shall be issued together with other
stock or securities or other assets of the Company for consideration,
the Board of Directors of the Company shall determine what part of the
consideration so received is to be deemed to be consideration for the
issue of such Common Shares or Convertible Securities.
(C) Determination of Date of Issue. In case the Company shall
take a record of the holders of Common Shares for the purpose of
entitling them (i) to receive a dividend or other distribution payable
in Common Shares or in Convertible Securities or (ii) to subscribe for
or purchase Common Shares or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the Common
Shares deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.
(D) Treasury Shares. For the purpose of this Section (f), Common
Shares at any relevant time owned or held by, or for the account of,
the Company shall not be deemed outstanding.
(g) Officer's Certificate. Whenever the Exercise Price shall be adjusted as
required by the provisions of Section (f) hereof, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office, and with its stock transfer and warrant agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided
and setting forth in reasonable detail the facts requiring such adjustment. Each
such officer's certificate shall be made available at all reasonable times for
inspection by the Holder and the Company shall, forthwith after each such
adjustment, deliver a copy of such certificate to the Holder.
(h) Notices to Holders. So long as this Warrant shall be outstanding and
unexercised (i) if the Company shall pay any dividend or make any distribution
upon the Common Shares or (ii) if the Company shall offer to the holders of
Common Shares for subscription or purchase by them any shares of stock of any
class or any other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then, in any such case, the Company shall
cause to be delivered to the Holder, at least 10 days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
7
<PAGE>
to be fixed, as of which the holders of Common Shares of record shall be
entitled to exchange their Common Shares for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.
(i) Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding Common
Shares of the Company (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of an issuance of
Common Shares by way of dividend or other distribution or of a subdivision or
combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding Common
Shares of the class issuable upon exercise of this Warrant) or in case of any
sale or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company shall cause effective
provision to be made so that the Holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind and amount of shares of stock and
other securities and property which the Holder would have received upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance had this Warrant been exercised prior to the consummation of
such transaction. Any such provision shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassifications, capital reorganizations and
changes of Common Shares and to successive consolidations, mergers, sales or
conveyances. In the event the Company spins off a subsidiary by distributing to
the shareholders of the Company as a dividend or otherwise the stock of the
subsidiary, the Company shall reserve for the life of this Warrant, shares of
the subsidiary to be delivered to the Holders of the Warrants upon exercise to
the same extent as if they were owners of record of the Warrant Shares on the
record date for distribution of the shares of the subsidiary.
(j) Registration Under the Securities Act of 1933.
(1) On or before December 31, 1998, the Company will file and
cause to become effective a registration statement under the
Securities Act of 1933, as amended (the "Act"), registering the
Warrants and the Warrant Shares; provided however, that so long as the
Company has used its reasonable best efforts to file such registration
statement and responded to any comments relating thereto in a timely
manner, the Company will not be in default of its obligations relating
to such filing if the registration statement does not become effective
by December 31, 1998.
(2) The Company shall:
(A) Supply to each selling Holder a copy of the registration
statement and a reasonable number of copies of the preliminary,
final and other prospectus in conformity with requirements of the
Act and the Rules and Regulations promulgated thereunder and such
other documents as the Holders shall reasonably request.
(B) The Company shall bear the complete cost and expense
(other than any selling commissions relating to the sale of the
Warrants and Warrant Shares, which shall be paid by the sellers
thereof) of such registrations or qualifications except those
filed under subsection (j)(3) which shall be at the Holder(s)
cost and expense.
8
<PAGE>
(C) Keep effective such registration statement until all of
the registered Warrant Shares issued by the Company either before
or after the effective date of such registration statement have
been publicly sold under such registration statement.
(D) Use its best efforts to register or qualify the Warrants
and Warrant Shares for sale in those states requested by the
person selling the Warrants or Warrant Shares; provided that, the
Company shall not be required to register or qualify the Warrants
and Warrant Shares for sale in any state in which the sale of the
Warrants or Warrant Shares by the person selling the Warrants or
Warrant Shares would be exempt from having to be registered or
qualified in such state. The determination of whether or not such
an exemption exists shall be made by counsel for the Company and
such determination shall be provided in writing to the person
desiring to sell Warrants or Warrant Shares in a state.
(E) Indemnify and hold harmless each such Holder and each
underwriter, within the meaning of the Act, who may purchase from
or sell for any such Holder, any Warrants or Warrant Shares, from
and against any and all losses, claims, damages, and liabilities
(including but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing, defending or
settling any claim) arising from (i) any untrue or alleged untrue
statement of a material fact contained in any registration
statement furnished pursuant to clause (A) of this subsection, or
any prospectus included therein or (ii) any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading (unless such untrue statement or omission or such
alleged untrue statement or omission was based upon information
furnished or required to be furnished in writing to the Company
by such Holder or underwriter expressly for use therein), which
indemnification shall include each person, if any, who controls
any such Holder or underwriter within the meaning of the Act;
provided, however, that the Company shall not be so obligated to
indemnify any such Holder or underwriter or controlling person
unless such Holder and underwriter shall at the same time
indemnify the Company, its directors, each officer signing any
registration statement or any amendment to any registration
statement and each person, if any, who controls the Company
within the meaning of the Act, from and against any and all
losses, claims, damages and liabilities (including, but not
limited to, any and all expenses whatsoever reasonably incurred
in investigating, preparing, defending or settling any claim)
arising from (i) any untrue or alleged untrue statement of a
material fact contained in any registration statement or
prospectus furnished pursuant to Clause (A) of this subsection,
or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, but the indemnity of such
Holder, underwriter or controlling person shall be limited to
liability based upon information furnished, or required to be
furnished, in writing to the Company by such Holder or
underwriter or controlling person expressly for use therein. The
Company shall not be liable for amounts paid in settlement of any
such litigation if such settlement was effected without the
consent of the Company. The indemnity agreement of the Company
herein shall not inure to the benefit of any such underwriter (or
to the benefit of any person who controls such underwriter) on
account of any losses, claims, damages, liabilities (or actions
9
<PAGE>
or proceedings in respect thereof) arising from the sale of any
of such Warrants or Warrant Shares by such underwriter to a
person if such underwriter failed to send or give a copy of the
prospectus furnished pursuant to Clause (A) of this subsection,
as the same may then be supplemented or amended (if such
supplement or amendment shall have been furnished to the Holders
pursuant to said Clause (A)), to such person with or prior to the
written confirmation of the sale involved.
(3) As a condition to the Company's obligation in subsection
(j)(1) hereof, each Holder shall supply such information as the
Company may reasonably require from such Holder, or any underwriter
for such Holders, for inclusion in such registration statement or
posteffective amendment.
(4) The Company's agreements with respect to the Warrants and
Warrant Shares in this Section will continue in effect regardless of
the exercise or surrender of this Warrant.
(5) Any notices or certificates by the Company to the Holder and
by the Holder to the Company shall be deemed delivered if in writing
and delivered personally or sent by certified mail, return receipt
requested, to the Holder, addressed to the Holder at the Holder's
address as set forth on the Warrant or stockholder register of the
Company, or, if the Holder has designated, by notice in writing to the
Company, any other address, to such other address, and, if to the
Company, addressed to it at 12600 West Colfax Avenue, Suite A-500,
Lakewood, Colorado 80215-3735. The Company may change its address by
written notice to the Holder.
(k) Transfer to Comply with the Securities Act of 1933. The Company may
cause the following legend, or one similar thereto, to be set forth on the
Warrants and on each certificate representing Warrant Shares or any other
security issued or issuable upon exercise of this Warrant not theretofore
distributed to the public or sold to underwriters for distribution to the public
pursuant to Section (j) hereof; unless legal counsel for the Company is of the
opinion as to any such certificate that such legend, or one similar thereto, is
unnecessary:
"The securities represented by this certificate may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement made under the
Securities Act of 1933 (the "Act") and under any applicable
state securities law, or pursuant to an exemption from
registration under the Act and under any applicable state
securities law, the availability of which is to be established
to the satisfaction of the Company."
(l) Exchange Provisions.
(1) For purposes of this Section (l), this Warrant shall be deemed to
represent the same number of Warrants as there are Warrant Shares
underlying this Warrant. For example, if there are 10,000 Warrant Shares
underlying this Warrant, then for purposes of this Section (l) the Holder
shall be deemed to hold 10,000 Warrants.
(2) For purposes of this Section (l), the following terms shall have
the following meanings:
(A) "Current Market Value of a Warrant Share" shall be the value
of a Warrant Share as determined under Section (c)(1) or (2) hereof
except that the time of the determination thereunder shall be the last
business day prior to the day the Company receives a notice from the
Holder under this Section (l).
10
<PAGE>
(B) "Warrant Value" shall mean the Current Market Value of a
Warrant Share minus or less the Exercise Price payable under this
Warrant as of the close of business on the last business day prior to
the day the Company receives a notice from the Holder under this
Section (l).
(3) The Holder shall have the right to exchange, in a cashless
transaction, all or part of the Holder's Warrants for Common Shares issued
by the Company at anytime prior to the Expiration Date of such Warrants by
providing written notice ("Notice") to the Company. Such Notice shall set
forth the number of Warrants which the Holder elects to exchange for Common
Shares.
(4) Within 10 days after receipt of such Notice by the Company, the
Company shall issue the number of Common Shares of the Company to the
Holder which is determined by dividing the Warrant Value of the Warrants
being exchanged by the Current Market Value of a Warrant Share as of the
date the Notice is received by the Company.
(5) The Holder shall surrender the Warrant which the Holder is
exchanging for Common Shares upon receipt thereof. If the entire Warrant is
being exchanged by the Holder for Common Shares, the Company shall cancel
the entire Warrant. If less than the entire Warrant is being exchanged for
Common Shares, the Company shall issue a new Warrant to the Holder
representing the portion of this Warrant which was not exchanged for Common
Shares.
(m) Applicable Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the state of Colorado.
Dated October 30, 1998.
GLOBAL MED TECHNOLOGIES, INC.
By: /s/ Michael I. Ruxin
----------------------------------------
Michael I. Ruxin, Chairman of the Board
and Chief Executive Officer
11
<PAGE>
PURCHASE FORM
Dated: , 19
-------------------------- --
The undersigned hereby irrevocably elects to exercise the Warrant to the
extent of purchasing ____________ shares of Common Shares and hereby makes
payment of $_______________ in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF SHARES
Name:
--------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address:
------------------------------------------------------------------------
Signature:
----------------------------------------------------------------------
ASSIGNMENT FORM
Dated: , 19
-------------------------- --
FOR VALUE RECEIVED,
------------------------------------------------------------
hereby sells, assigns and transfers unto
Name:
---------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address:
------------------------------------------------------------------------
the right to purchase Common Shares represented by this Warrant to the extent of
Common Shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint, attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Signature:
------------------------------------
12
Exhibit 11
PROMISSORY NOTE $400,000
PROMISSORY NOTE
U.S. $400,000 Denver, Colorado
October 30, 1998
FOR VALUE RECEIVED, GLOBAL MED TECHNOLOGIES, INC., a Colorado corporation
("Maker"), promises to pay to the order of FRONTEER DEVELOPMENT FINANCE, INC., a
Delaware corporation, having an address at 1700 Lincoln Street, 32nd Floor,
Denver, Colorado 80203, or its successors or assigns (sometimes referred to
herein as "Holder"), the principal sum of FOUR HUNDRED THOUSAND DOLLARS (U.S.
$400,000) with interest from the date hereof at the rate of TWELVE percent (12%)
per annum, payable in accordance with terms hereof.
All payments of interest shall be due and payable on the last day of each
month based on the accrued interest for that month.
The principal sum, together with all accrued but unpaid interest, shall be
due, if not sooner paid, on April 15, 1999.
All payments shall be payable to Holder at the address set forth above, or
at such other place as Holder hereof may designate from time to time in writing.
All payments shall be first applied to the payment of interest due hereunder,
then to the payment of any other sums payable hereunder and finally to the
principal amount then remaining unpaid.
The indebtedness evidenced by this Note may be prepaid in whole or in part
without notice, penalty or premium.
If any payment due hereunder is not received by Holder on or before the
seventh (7th) day after such payment is due, then Maker shall be deemed in
default hereunder. In the event Maker shall default in any of the payments due
hereunder or any other obligations owed to Holder or its successors or assigns,
the full amount remaining unpaid hereunder, together with all accrued and unpaid
default interest thereon shall, at the option of the Holder, be accelerated and
become immediately due and payable.
This Note is given pursuant to the terms of that certain Loan Agreement
between Maker and Fronteer Capital, Inc. dated August 12, 1998 and that certain
Assignment, Assumption and Consent Agreement between, among others, Maker and
Holder dated September 11, 1998. A default under the Loan Agreement or the
Assignment, Assumption and Consent Agreement shall be deemed a default
hereunder. Further, in the event of default, Holder shall, in addition to
exercising all rights hereunder, be entitled to exercise all rights set forth in
the Loan Agreement and the Assignment, Assumption and Consent Agreement.
<PAGE>
Maker waives delinquency in collection, demand for payment, presentment for
payment, protest, notice of protest, notice of dishonor and all duties or
obligations of Holder to effect, protect, perfect, retain or enforce any
security for payment of this Note or to proceed against any collateral before
otherwise enforcing this Note. This Note shall be binding upon Maker, its
successors and assigns.
Maker unconditionally guarantees prompt satisfaction when due, whether by
acceleration or otherwise, of the entire outstanding principal balance and all
accrued and unpaid interest, and amounts of any additional advancements of this
Note, and further agrees to immediately pay to Holder hereof, upon demand, all
losses, costs and expenses (including attorneys' fees) incurred by Holder for
collection and enforcement of this Note in the event of default or otherwise.
Each individual executing this Note represents and warrants that he or she
duly is authorized to execute and deliver this Note on behalf of the person or
entity for which he or she is so executing and that this Note is binding upon
the undersigned Maker in accordance with its terms, except to the extent that
enforcement of remedies is limited by applicable bankruptcy, insolvency, and
other laws affecting the enforcement of creditors' rights generally.
This Note shall be interpreted and enforced in accordance with the laws of
the State of Colorado. In the event of default, Maker consents to the
enforcement of this Note in the District Court for the City and County of
Denver, Colorado, and waives any rights to contest venue or jurisdiction of that
court.
MAKER:
GLOBAL MED TECHNOLOGIES, INC.
/s/ Michael I. Ruxin
-------------------------------------------
Michael I. Ruxin, Chairman of the Board and
Chief Executive Officer
Attest:
By: /s/
---------------------------------
Title: /s/
2
