SUBSCRIPTION AGREEMENT 3% CONVERTIBLE SENIOR SECURED PROMISSORY NOTE
Exhibit
10.1
|
Name
of Subscriber:
|
|
|
(Please
Print Your Name
Here)
|
3%
CONVERTIBLE SENIOR SECURED PROMISSORY NOTE
MiMedX Group,
Inc.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Re:
|
3%
Convertible Senior Secured Promissory Note of MiMedX
Group, Inc.
|
ARTICLE
1
SUBSCRIPTION
Section
1.1 Subscription. The
undersigned subscriber (“Subscriber”) hereby irrevocably subscribes for and
agrees to purchase a 3% Convertible Senior Secured Promissory Note (the “Note”)
from MiMedX Group,
Inc., a Florida corporation (the “Company”),
in the principal amount set forth below, on the terms and conditions described
in this subscription agreement (this “Subscription
Agreement”), the Note and the Security and Intercreditor Agreement (the
“Security Agreement”) attached hereto.
Amount And Dollar Value Of Note
Subscribed For $__________________________________
THE
UNDERSIGNED SUBSCRIBER IS REQUIRED TO CHECK THE APPROPRIATE BOX ON THE
ACCREDITED INVESTOR CERTIFICATION FOUND ON PAGE 7 HEREOF TO CERTIFY HIS, HER OR
ITS STATUS AS AN ACCREDITED INVESTOR.
Section
1.2 Collateral. The
Note is secured by a first priority security interest (subject to future
subordination described below) in all assets of Mimedx, Inc., a
wholly owned subsidiary of the Company, except for the equity securities of
SpineMedica LLC which is a wholly owned subsidiary of MiMedx, Inc., pursuant to
a security interest in favor of Subscriber and the Other
Purchasers. Subscriber acknowledges that the declaration of an event
of default, and the exercise or waiver of rights as a
secured party under the Security Agreement is subject to the decision of the
holders of a majority in dollar value of the Notes held by Subscriber
and the Other Purchasers (the “Majority in Interest”). A Collateral Agent will
be appointed under the Security Agreement, who is authorized to take action on
behalf of the holders of the Notes, upon the decision of the Majority in
Interest.
Section
1.3 Subordination.
The rights of Subscriber are subordinate to payment and lien rights to bank debt
hereafter incurred by the Company in an amount not to exceed $5.0 million (the
“Permitted Senior Indebtedness”), as provided in the Security
Agreement.
Section
1.4 Conversion.
The Notes are convertible into common stock of the Company at $0.50 per share at
any time at the election of the Subscriber, and are also convertible at said
price at the election of the Company if the common stock of the Company closes
at not less than $1.50 per share for a certain period of time, as more
particularly described in the Note.
Section
1.5 Acceptance or
Rejection. The undersigned understands that the Company will
accept this subscription (and only with respect to it) only after the
undersigned has executed and delivered this Subscription Agreement and the
Counterpart Signature Pages to the Note and the Security
Agreement. The undersigned acknowledges that the undersigned may not
withdraw this subscription, but that the Company reserves the right, in its sole
discretion, to accept or reject this subscription, in whole or in
part.
In the
event this subscription is rejected in part by the Company, there shall be
returned to the undersigned the difference between the subscription amount paid
to it and the subscription price allocable to the Note accepted. In the event
this subscription is rejected in its entirety, the subscription amount paid will
be promptly returned to the undersigned without deduction and without interest,
and this Subscription Agreement shall have no force or effect.
Section
1.6 Other Subscription
Agreements; Closings. The Company has entered into or expects
to enter into separate subscription agreements (the “Other
Subscription Agreements”) with other purchasers (the “Other
Purchasers”), providing for the sale to the Other Purchasers of
Notes. This Subscription Agreement and the Other Subscription
Agreements are separate agreements, and the sales of Note(s) to you and the
Other Purchasers are to be separate sales. The Note, Security
Agreement, and a copy of the fully executed Subscription Agreement will be
delivered to you promptly after the closing.
ARTICLE
2
INVESTOR
REPRESENTATIONS, WARRANTIES AND COVENANTS
The
undersigned makes the following representations, warranties and covenants with
the intent that the same will be relied upon by the Company:
Section
2.1 Information. The
undersigned acknowledges that the undersigned has been offered the opportunity
to obtain information, to verify the accuracy of the information received by
him, her or it and to evaluate the merits and risks of this investment and to
ask questions of and receive satisfactory answers concerning the terms and
conditions of this investment. The undersigned understands that
information regarding the Company is on file with the Securities and Exchange
Commission (“SEC”), and
the undersigned has reviewed such documents and information as he, she or it has
deemed necessary in order to make an informed investment decision with respect
to the investment being made hereby. The Company has made its officers available
to the undersigned to answer questions concerning the Company and the investment
being made hereby. In making the decision to purchase the Note, the
undersigned has relied and will rely solely upon independent investigations made
by him, her or it. The undersigned is not relying on the Company with
respect to any tax or other economic considerations involved in this
investment. Other than as set forth in Article 3 hereof, no
representations or warranties have been made to the undersigned by the
Company. To the extent the undersigned has deemed it appropriate, the
undersigned has consulted with his, her or its own attorneys and other advisors
with respect to all matters concerning this investment.
Section
2.2 Not a Registered
Offering. The undersigned understands that the Note issued
hereunder (including any securities issuable upon conversion thereof) has not
been and is not being registered with the SEC nor with the governmental entity
charged with regulating the offer and sale of securities under the securities
laws and regulations of the state of residence of the undersigned and are being
offered and sold pursuant to the exemption from registration provided in Section
4(2) of the Securities Act of 1933, as amended (the “1933
Act”), and Rule 506 of Regulation D (“Regulation
D”) promulgated under the 1933 Act by the SEC and limited exemptions
provided in the “Blue Sky” laws of the state of residence of the undersigned,
and that no governmental agency has recommended or endorsed the Note or made any
finding or determination relating to the fairness for investment of the Note
(including any securities issuable upon conversion thereof) or of the adequacy
of the information on file with the SEC or this Subscription
Agreement. The undersigned is unaware of, and is in no way relying
on, any form of general solicitation or general advertising in connection with
the offer and sale of the Note (including any securities issuable upon
conversion thereof). The undersigned is purchasing the Note without
being furnished any offering or sales literature or prospectus.
Section
2.3 Purchase for
Investment. The undersigned is subscribing for the Note solely
for his, her or its own account for investment purposes and not with a view to,
or with any intention of, a distribution, sale or subdivision for the account of
any other individual, corporation, firm, partnership, limited liability company,
joint venture, association or person. The undersigned represents that he,
she or it understands that there is no public market for the Note and that no
such market will ever exist. The undersigned represents that
if he, she, or it has received certain
confidential information concerning a transaction by which it is contemplated
that the Company may acquire another company, he, she, or it understands that
such information is speculative in nature and that there is no guarantee that
such possible acquisition transaction will be consummated, or, if consummated,
will be successful or result in an increase in shareholder
value.
- 2
-
Section
2.4 Accredited Investor and
other Investment Representations. The undersigned represents
and warrants that the undersigned is an “accredited investor” as defined in Rule
501(a) of Regulation D under the 1933 Act and that the undersigned has
accurately completed the Accredited Investor Certification, which precedes the
signature page to this Subscription Agreement.
Section
2.5 Restrictions on
Transfer.
(a) The
undersigned understands and agrees that because the offer and sale of the Note
subscribed for herein have not been registered under federal or state securities
laws, the Note (including any securities issuable upon conversion thereof)
acquired may not at any time be sold or otherwise disposed of by the undersigned
unless it is registered under the 1933 Act or there is applicable to such sale
or other disposition one of the exemptions from registration set forth in the
1933 Act, the rules and regulations of the SEC thereunder and applicable state
law. The undersigned further understands that the Company has no
obligation or present intention to register the Note (including any securities
issuable upon conversion thereof) or to permit its sale other than in strict
compliance with the 1933 Act, SEC rules and regulations thereunder, and
applicable state law. The undersigned recognizes that, as a result of
the aforementioned restrictions, there is no and will be no public market for
the Note subscribed for hereunder. The undersigned expects to hold
the Note (and any securities issuable upon conversion thereof) for an indefinite
period and understands that the undersigned will not readily be able to
liquidate this investment even in case of an emergency.
(b) The
Note (and the securities to be issued to the undersigned upon conversion
thereof) shall have endorsed thereon legends substantially as
follows:
“THE
SECURITIES REPRESENTED BY THIS PROMISSORY NOTE (AND THE SECURITIES INTO WHICH IT
IS CONVERTIBLE) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING THESE SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNDER APPLICABLE
STATE SECURITIES LAWS.”
Section
2.6 Investment Risks. The
undersigned represents that he, she or it has read and understands all of the
“Risk Factors” set forth in the Company’s most recent Form 10-K and Form 10-Q on
file with the SEC. Without limiting the foregoing, the undersigned
has such knowledge and experience in financial and business matters that he, she
or it is capable of evaluating the merits and risks of an investment in the
Note. The undersigned recognizes that the Company is a development
stage company with an extremely limited financial and operating history, that
the development of medical devices is difficult, time consuming, and expensive,
and that an investment in the Company involves very significant
risks. The undersigned further recognizes that (A) an investment in
the Company is highly speculative, (B) an investor may not be able to liquidate
his, her or its investment, (C) transferability of the Note is extremely
limited, (D) in the event of a disposition, the investor could sustain a loss of
his, her or its entire investment, (E) the Company will require significant
additional financing in order to continue its business, (F) the Company has
never had any revenues and may not have any significant revenues for the
foreseeable future, and (G) the Company intends to raise additional funds in the
near future through the sale of equity, and that any such sale below the
conversion events set forth in the Note may be on terms to investors that are
more favorable than the terms to the undersigned. The undersigned is
capable of bearing the economic risks of an investment in the Note, including,
but not limited to, the possibility of a complete loss of the undersigned’s
investment, as well as limitations on the transferability of the Note, which may
make the liquidation of an investment in the Note difficult or impossible for
the indefinite future. The undersigned acknowledges that legal advice
has been provided to the Company by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC,
and that such law firm has neither provided advice to the Subscriber nor
performed any due diligence on the Subscriber’s behalf. The
undersigned acknowledges that he, she or it has been advised to seek his, her or
its own independent counsel from attorneys, accountants and other advisors with
respect to an investment in this offering.
- 3
-
Section
2.7 Residence. The
undersigned, if a natural person, is a bona fide resident of the state set forth
in his or her address on the signature page to this Subscription
Agreement. The undersigned, if an entity, has its principal place of
business at the mailing address set forth on the signature page of this
Subscription Agreement.
Section
2.8 Investor Information;
Survival of Representations and Warranties and Covenants. The
representations, warranties, covenants and agreements contained in this Article
2 shall survive the date hereof. Any information that the undersigned
is furnishing to the Company in this Subscription Agreement is correct and
complete as of the date of this Subscription Agreement and if there should be
any material change in such information prior to his, her or its admission as a
shareholder of the Company, the undersigned will immediately furnish such
revised or corrected information to the Company.
Section
2.9 Due
Organization. If the undersigned is a corporation, partnership
or limited liability company, the undersigned is duly organized, validly
existing and in good standing under the jurisdiction of its organization, has
all requisite power and authority to own, lease and operate its properties, to
carry on its business as currently being conducted, to enter into this
Subscription Agreement and to perform its obligations hereunder and
thereunder.
Section
2.10 Due
Authorization. If the undersigned is a corporation,
partnership or limited liability company, the execution, delivery and
performance by the undersigned of this Subscription Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the undersigned.
Section
2.11 Capacity. If
the undersigned is an individual, the undersigned has the capacity to execute,
deliver and perform this Subscription Agreement.
Section
2.12 Enforceability. This
Subscription Agreement will be, upon its execution and delivery, a valid and
binding obligation of the undersigned, enforceable against the undersigned in
accordance with its terms.
Section
2.13 No
Conflicts. Neither the execution, delivery or performance by
the undersigned of this Subscription Agreement, nor the consummation by the
undersigned of the transactions contemplated hereby will (A) conflict with or
result in a breach of any provision of the undersigned’s certificate of
incorporation, bylaws or other organizational documents, (B) cause a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any agreement, instrument or
obligation to which the undersigned is a party or (C) violate any law, statute,
rule, regulation, judgment, order, writ, injunction or decree of any court,
administrative agency or governmental body, in each case applicable to the
undersigned or its properties or assets.
Section
2.14 No
Approvals. No filing with, and no permit, authorization,
consent or approval of, any person (governmental or private) is necessary for
the consummation by the undersigned of the transactions contemplated by this
Subscription Agreement.
Section
2.15 Brokerage Commissions and
Finders’ Fees. Neither the undersigned nor anyone acting on
the undersigned’s behalf has taken any action which has resulted, or will
result, in any claims for brokerage commissions or finders’ fees by any person
in connection with the transactions contemplated by this Subscription
Agreement.
- 4
-
ARTICLE
3
COMPANY
REPRESENTATIONS AND WARRANTIES
The
Company makes the following representations and warranties with the intent that
the same may be relied upon by the undersigned:
Section
3.1 Due
Organization. The Company is a corporation duly organized,
validly existing and in good standing under the jurisdiction of its
organization, has all requisite power and authority to own, lease and operate
its properties, to carry on its business as currently being conducted, to enter
into this Subscription Agreement and to perform its obligations
hereunder.
Section
3.2 Due
Authorization. The execution, delivery and performance by the
Company of this Subscription Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company.
Section
3.3 Enforceability. This
Subscription Agreement is, or upon its execution and delivery will be, a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms.
Section
3.4 No
Conflicts. Neither the execution, delivery or performance by
the Company of this Subscription Agreement, nor the consummation by the Company
of the transactions contemplated hereby, will (A) conflict with or result in a
breach of any provision of the Company’s certificate of incorporation or
by-laws, (B) cause a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any agreement, instrument or obligation to which the Company is a party or
(C) violate any law, statute, rule, regulation, judgment, order, writ,
injunction or decree of any court, administrative agency or governmental body,
in each case applicable to the Company or its properties or assets.
Section
3.5 No
Approvals. Assuming the accuracy of the representations and
warranties contained in Article 2, no filing with, and no permit, authorization,
consent or approval of, any person (governmental or private) is necessary for
the consummation by the Company of the transactions contemplated by this
Subscription Agreement, other than filings under Federal and state securities
laws.
ARTICLE
4
MISCELLANEOUS
PROVISIONS
Section
4.1 Notices and
Addresses. All notices required to be given under this
Subscription Agreement shall be in writing and shall be mailed by certified or
registered mail, hand delivered or delivered by next business day
courier. Any notice to be sent to the Company shall be mailed to the
principal place of business of the Company or at such other address as the
Company may specify in a notice sent to the undersigned in accordance with this
Section. All notices to the undersigned shall be mailed or delivered
to the address set forth on the signature page to this Subscription Agreement or
to such other address as the undersigned may specify in a notice sent to the
Company in accordance with this Section. Notices shall be effective
on the date three days after the date of mailing or, if hand delivered or
delivered by next day business courier, on the date of delivery; provided,
however, that notices to the Company shall be effective upon
receipt.
Section
4.2 Governing Law;
Jurisdiction. (A) THIS SUBSCRIPTION AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
FLORIDA WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES, (B) THE UNDERSIGNED
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FLORIDA STATE COURT OR
UNITED STATES FEDERAL COURT SITTING IN THE STATE OF FLORIDA, OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT OR ANY
AGREEMENT CONTEMPLATED HEREBY, AND (C) THE UNDERSIGNED HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND
DETERMINED IN SUCH FLORIDA STATE OR FEDERAL COURT. THE UNDERSIGNED
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH COURT AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH COURT ON THE BASIS OF A NON-CONVENIENT
FORUM. THE UNDERSIGNED FURTHER AGREES THAT ANY ACTION OR PROCEEDING
BROUGHT AGAINST THE COMPANY SHALL BE BROUGHT IN SUCH COURTS. THE
UNDERSIGNED AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT
OR AGREEMENT CONTEMPLATED HEREBY.
- 5
-
Section
4.3 Assignability. This
Subscription Agreement and the rights, interests and obligations hereunder are
not transferable or assignable by the undersigned and the undersigned
acknowledges and agrees that any transfer or assignment of the Note shall be
made only in accordance with all applicable laws.
Section
4.4 Successors and
Assigns. This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto, and each of their respective legal
representatives and permitted successors.
Section
4.5 Counterparts. This
Subscription Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which shall constitute one
instrument.
Section
4.6 Modifications To Be in
Writing. This Subscription Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof
and no amendment, restatement, modification or alteration will be binding unless
the same is in writing signed by the party against whom any such amendment,
restatement, modification or alteration is sought to be enforced. The Note(s)
may be amended or any provision thereof waived with the written consent of the
Company and the Holder(s) (as defined in the Note) of a majority of
the aggregate then outstanding principal amount of the Note(s); provided,
however, that any such amendment or waiver that disproportionately affects any
Holder of a Note shall require the written consent of such Holder.
Section
4.7 Captions. The
captions are inserted for convenience of reference only and shall not affect the
construction of this Subscription Agreement.
Section
4.8 Validity and
Severability. If any provision of this Subscription Agreement
is held invalid or unenforceable, such decision shall not affect the validity or
enforceability of any other provision of this Subscription Agreement, all of
which other provisions shall remain in full force and effect.
Section
4.9 Statutory
References. Each reference in this Subscription Agreement to a
particular statute or regulation, or a provision thereof, shall be deemed to
refer to such statute or regulation, or provision thereof, or to any similar or
superseding statute or regulation, or provision thereof, as is from time to time
in effect.
****
- 6
-
Accredited Investor
Certification
YOU
MUST BE ABLE TO CHECK OFF AT LEAST ONE OF THE BOXES BELOW IN ORDER TO PURCHASE
THE NOTE.
|
o
|
The
undersigned is a natural person who had individual income of more than
$200,000 in each of the most recent two years or joint income with his
spouse in excess of $300,000 in each of the most recent two years and
reasonably expects to reach that same income level for this year; “income”,
for purposes hereof, should be computed as follows: individual
adjusted gross income, as reported (or to be reported) on a federal income
tax return, increased by (a) any deduction of long-term capital gains
under section 1202 of the Internal Revenue Code of 1986 (the “Code”),
(b) any deduction for depletion under Section 611 et seq. of the Code, (c)
any exclusion for interest under Section 103 of the Code and (d) any
losses of a partnership as reported on Schedule E of Form
1040;
|
|
o
|
The
undersigned is a natural person whose individual net worth (i.e., total
assets in excess of total liabilities), or joint net worth with his
spouse, will at the time of purchase of the Note be in excess of
$1,000,000;
|
|
o
|
The
undersigned is a corporation, Massachusetts or similar business trust,
partnership, or limited liability company, or any organization described
in Section 501(c)(3) of the Internal Revenue Code, not formed for the
specific purpose of acquiring the Note, with total assets in excess of
$5,000,000;
|
|
o
|
The
undersigned is a trust (other than a revocable grantor trust), which trust
has total assets in excess of $5,000,000, which is not formed for the
specific purpose of acquiring the Note offered hereby and whose purchase
is directed by a sophisticated person as described in Rule 506(b)(2)(ii)
of Regulation D and who has such knowledge and experience in financial and
business matters that he is capable of evaluating the risks and merits of
an investment in the Note;
|
|
o
|
The
undersigned is an employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, and either: (a) the
investment decision will be made by a plan fiduciary, as defined in
Section 3(21) of such act, which is either a bank, insurance company, or a
registered investment adviser; or (b) the employee benefit plan has total
assets in excess of $5,000,000; or (c) the employee benefit plan is a
self-directed plan, including an Individual Retirement Account, with the
meaning of Title I of such act, and the person directing the purchase is
an Accredited Investor**;
|
**NOTE. If the
undersigned is relying solely on this item for its Accredited Investor status,
please print the name of the person directing the purchase in the following
space and furnish a completed and signed Accredited Investor Certification for
such person.
|
o
|
The
undersigned is an investor otherwise satisfying the requirements of
Section 501(a)(1), (2) or (3) of Regulation D promulgated under the 1933
Act, which includes, but is not limited to, a self-directed employee
benefit plan where investment decisions are made solely by persons who are
“accredited investors” as otherwise defined in Regulation
D;
|
|
o
|
The
undersigned is a member of the Board of Directors or an executive officer
of the Company; or
|
|
o
|
The
undersigned is an entity (including an ▇▇▇ or revocable grantor trust but
other than a conventional trust) in which all of the equity owners meet
the requirements of at least one of the above
subparagraphs.
|
- 7
-
SUBSCRIPTION
AGREEMENT
COUNTERPART
SIGNATURE PAGE
If the
subscriber is an INDIVIDUAL, or if purchased as JOINT TENANTS, as TENANTS IN
COMMON, or a COMMUNITY PROPERTY:
|
Print
Name(s)
|
Social Security Number(s) | |||||
|
Signature(s)
of subscriber(s)
|
Signature(s) of subscriber(s) | |||||
| Address: | ||||||
|
Date
|
|
|||||
|
If
the subscriber is a PARTNERSHIP, CORPORATION, LLC or
TRUST:
|
||||||
|
Name
of Entity
|
Federal Taxpayer ID Number | |||||
|
By:
|
||||||
|
|
Name: | State of Organization | ||||
|
|
Title:
|
|||||
| Address: | ||||||
|
Date
|
|
|||||
SUBSCRIPTION
ACCEPTED AND AGREED TO this _____ day of _______________ 2009.
MiMedX Group,
Inc.
|
By:
|
|||
|
|
Name: | ||
|
|
Title: |