SUBSCRIPTION AGREEMENT 5% CONVERTIBLE PROMISSORY NOTE
Exhibit 10.1 Form of Subscription Agreement 5% Convertible Promissory Note
Name of Subscriber:
5% CONVERTIBLE PROMISSORY NOTE
Re: 5% Convertible Promissory Note of MiMedx Group, Inc.
ARTICLE 1
SUBSCRIPTION
SUBSCRIPTION
Section 1.1 Subscription. The undersigned subscriber (“Subscriber”) hereby
irrevocably subscribes for and agrees to purchase a 5% Convertible 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”) and the 5% Convertible Promissory Note (the “Note”) attached hereto.
Amount and Dollar Value of Note Subscribed For: Up to $500,000
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 Advances. Until December 31, 2010, the Subscriber may advance to the
Company up to $500,000 as requested by the Company to fund its working capital needs.
Section 1.3 Warrants. For each dollar of principal advanced under this Note, the
Subscriber shall receive a three- year warrant to purchase one (1) share of Common Stock of the
Company at an exercise price of $1.00 per share pursuant to the terms of the accompanying Warrant.
Section 1.4 Conversion. At any time at the election of the Subscriber prior to payment
in full of the Note, the Note may be converted into common stock and warrants of the Company on the
same terms as such common stock and warrants are offered to investors in any transaction that
closes on or before payment in full of the Note.
Section 1.5 Acceptance or Rejection. The undersigned understands that the Company
will accept this subscription) only after the Subscriber has executed and delivered this
Subscription Agreement, together with the accompanying Note and Warrant Agreement (the “Warrant”).
Copies of the fully executed Subscription Agreement, Note and Warrant will be delivered to you
promptly after acceptance.
ARTICLE 2
INVESTOR REPRESENTATIONS, WARRANTIES AND COVENANTS
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 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. 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.
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
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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 has had an
extremely limited financial and operating history, that the development and commercialization 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 had a limited operating history and has been operating at a deficit and may not
achieve profitability in the near or long term, and (G) the Company may need to raise additional
funds in the near future through the sale of equity, and that any such sale 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.
Section 2.7 Residence. The undersigned, if a natural person, is a bona fide resident
of the state set forth in his, her or its 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.
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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.
ARTICLE 3
COMPANY REPRESENTATIONS AND WARRANTIES
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.
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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
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 HIS. HER OR 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.
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.
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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, together
with the Note and Warrant, 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.
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.
****
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Accredited Investor Certification
YOU MUST BE ABLE TO CHECK OFF AT LEAST ONE OF THE BOXES BELOW IN ORDER TO PURCHASE THE NOTE.
| • | 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 or her 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; |
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| • | The undersigned is a natural person whose individual net worth (i.e., total assets, excluding
the value of the principal residence of the undersigned, in excess of total liabilities), or
joint net worth with his or her spouse, will at the time of purchase of the Note be in excess
of $1,000,000; |
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| • | 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; |
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| • | 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; |
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| • | 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**; |
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| ** | 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. |
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| • | 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; |
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| • | The undersigned is a member of the Board of Directors or an executive officer of the Company; or |
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| • | 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. |
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SUBSCRIPTION AGREEMENT
COUNTERPART SIGNATURE PAGE
COUNTERPART SIGNATURE PAGE
If the subscriber is an INDIVIDUAL, or if purchased as JOINT TENANTS, as TENANTS IN COMMON, or a
COMMUNITY PROPERTY:
| [Name of subscriber] | Social Security Number | |||||
| Signature of subscriber | Signature of subscriber | |||||
| Address: | ||||||
Date |
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SUBSCRIPTION ACCEPTED AND AGREED TO this
_____
day of
_____
2010.
| MiMedx Group, Inc. | ||||||
By: |
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| Name: | ||||||
| Title: | ||||||